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According to a new study by the Economic Policy Institute and Americans for Tax Fairness, corporate tax dodging is at record levels while corporate profits have reached record highs. U.S. corporations have stashed $2.4 trillion offshore. It is estimated corporations could owe as much as $700 billion on those profits, much of which are earned in the United States. Some of the findings are below. I should like to point out that a recent report in the Guardian stated that US corporations were the best at avoiding taxes.

hall-of-shame

1. Corporate profits are way up, and corporate taxes are way down. In 1952, corporate profits were 5.5 percent of the economy, and corporate taxes were 5.9 percent. Today, corporate profits are 8.5 percent of the economy, and corporate taxes are just 1.9 percent of GDP.

2, Corporations used to contribute $1 out of every $3 in federal revenue. Today, despite very high corporate profitability, it is $1 out of every $9.

3. Many corporations pay an effective tax rate that is one-half (or less) of the official 35 percent tax rate.

4. One thing not mentioned by the study is that many US corporations pay no taxes and sometimes receive tax rebates on taxes they never paid, Verizon, for instance, paid no Federal taxes in 2009, 2010 and 2013, and received tax rebates in each of those years.

5. As of 2015, U.S. corporations had $2.4 trillion in untaxed profits offshore. This is roughly a five-fold increase from $434 billion in 2005. It stems largely from anticipation of a tax holiday.
Just two industries—high-tech and pharmaceutical/health care—hold half the untaxed offshore profits.

6. Just 50 companies hold over 75 percent of untaxed offshore profits. Ten companies hold 39 percent of these profits. Just four companies—Apple, Pfizer, Microsoft, and General Electric—hold one-quarter of all untaxed offshore profits.

7. About 55 percent of U.S. corporate offshore profits are in tax-haven countries. Corporations pay an average tax rate of between just 3.0 percent and 6.6 percent on profits in tax havens.

8. U.S. corporations pay very low tax rates—6 percent to 10 percent, mainly to foreign governments—on all their offshore profits. A tax break known as “deferral” allows them to delay paying U.S. taxes until the profits are repatriated to the parent corporation in the United States.

9. The U.S. Treasury will lose $1.3 trillion over 10 years—about $126 billion a year—due to the deferral of taxes on offshore profits.

10. Income shifting—which are making profits earned in the United States look as if they were earned offshore—erodes our corporate tax base by over $100 billion a year. U.S. corporations increasingly manipulate transfer pricing and bilateral tax agreements to make their U.S. profits appear to be earned in tax havens. Think Panama Free Trade Agreement and the looming Trans-Pacific Partnership.

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Let’s assume that tariffs are raised in the near future to 35 percent on the goods US corporations export to the United States from their manufacturing facilities abroad. What would happen? Think Nike, Ford, United Technologies, Microsoft, Dell, Campbell’s Soups and thousands of other corporations.

The corporate news media will lie to you and say prices would go up, or the economy would tank. Totally wrong. Lies.

If select tariffs were enacted, the stock market bubble would deflate since corporate profits would decline. On the other hand, the Parasites of Wall Street are now so big that they are sucking the life out of the 99 percent. This means the stock markets are going to tank anyway, and sooner than you might expect. See The New Recession Is Knocking at the Door, and It’s Going to Be Worst Than the Last One–JohnHIvely.Wordpress.com.

The things that make up the wealth of nations are the things that are manufactured. The stock markets are a tool to redistribute income from those who actually produce the wealth of nations to those who produce nothing save for political and financial power. A vast decline in the stock markets would redistribute economic and political power back to those who produce the wealth of the United States.

The bond markets would tank too, if select tariffs were enacted. That means wealth inequality would decline in the USA. Currently, the top 1 percent own more wealth than the bottom 90 percent. Wealth are the things that you own, like houses, stocks, bonds, gold, cars, toys, smart phones, etc…. The video above was made years ago and the statistics the moderator uses are skewed even more to the ultrarich now than when the film was produced.

US manufacturing jobs would come home, probably by the millions. Wages would be forced up with so many jobs coming home. Demand for goods and services would accelerate and power the economy forward. The days of the bubble economies would be over. In other words, it would give life to the host that the Parasites of Wall Street, including all those hedge fund managers, have been sucking dry.

wealth-inequality1

Income inequality would decrease because more people would have decent paying jobs, while the rich would see their share of income decline. The rich now steal roughly 36 percent of all the income created every year in the United States, up from 8 percent in 1980. That’s precisely why the current economic expansion is the worst in modern US history in terms of job and wage growth, as well as growth in the Gross Domestic Product.

Our social safety nets, such as social security, medicare and medicaid, as well as our roads, schools, and other infrastructure would be financially strengthened.

The rich would have less money to corrupt government and both political parties. Let’s face it. Income and wealth inequality is produced by political inequality.

Foreign governments would not need to retaliate since the products of their nation’s businesses would not be subject to the tariffs.

The time has come for placing tariffs on the goods of US corporations which have exported jobs to China, Mexico and elsewhere, and then exported the goods those jobs produce to the USA.

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child labor

A new report from the Economic Policy Institute (EPI) says that the decline of US private sector labor unions has resulted in lower pay for almost everybody. A summary of the report is below.

“Pay for private-sector workers has barely budged over the past three and a half decades. In fact, for men in the private sector who lack a college degree and do not belong to a labor union, real wages today are substantially lower than they were in the late 1970s.” The same holds true for women.

The report went on, “In the debates over the causes of wage stagnation, the decline in union power has not received nearly as much attention as globalization, technological change, and the slowdown in Americans’ educational attainment. Unions, especially in industries and regions where they are strong, help boost the wages of all workers by establishing pay and benefit standards that many nonunion firms adopt. But this union boost to nonunion pay has weakened as the share of private-sector workers in a union has fallen from 1 in 3 in the 1950s to about 1 in 20 today.”

There are some things missing from report. One of them is that the war on US labor unions brought about massive increases in profits for corporations, and much of this was redistributed to politicians in the form of perks (like high paying jobs after leaving office) and campaign contributions.

Martin Luther King

Eviscerating US labor unions via globalization and government legislation also redistributed much of the political power of the unions to corporations. The Republican Party today, for example, is completely owned by US corporations such as Walmart, Apple, Microsoft, JP Morgan/Chase, Goldman Sachs, a variety of hedge funds and Exxon Mobile. Labor unions have taken a back seat in the Democratic Party, and by a wide margin, to such corporate giants as Costco, Apple, Microsoft, JP Morgan/Chase, Goldman Sachs, and a variety of hedge funds. Notice any similarities between the twin political parties?

Globalization has never been inevitable as corporate, news and political leaders claim. Instead, it is an intentional political and economic power play to break US labor unions, bust foreign labor unions, push wages and benefits down, which boosts corporate bottom lines, which increases corporate share prices, all of which redistributes income and wealth from the 99 to the 1 percent.

In other words, globalization is not something that has been God ordained. This policy has been ordained by the rich and powerful. It is not and never has been inevitable except as an instrument wielded by the rich to wage economic war against the 99 percent of the world.

The primary purpose of globalization is to increase income and wealth inequality.

Check out the link below for EPI’s report.

Union decline lowers wages of nonunion workers: The overlooked reason why wages are stuck and inequality is growing

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According to the US Bureau of Labor Statistics (BLS), the U.S. manufacturing sector lost 14,000 jobs in August and has now lost 57,000 jobs since January of this year. This job loss is, according the Economic Policy Institute (EPI), in part, a consequence of the sharp rise of the dollar in 2014 and 2015, which has gained nearly 20 percent on a broad, trade-weighted basis, as shown below.

According to the EPI, these job losses are brought about by Chinese currency manipulation.

“The rising dollar has reduced the cost of imports,” according to EPI, “increased the cost of U.S. exports resulting in growing trade deficits. Growing exports support U.S. employment, but growing imports cost U.S. jobs, so the manufacturing decline was entirely predictable from the expected increase in the U.S. trade deficit, which responds to changes in the dollar with a lag of one to two years. Yet the U.S. government continues to do nothing about destructive exchange rate movements, whether they are caused by intentional currency manipulation or more recent, market-driven misalignments.” Italics mine. 

This is all true, but there’s a reason why the US government and the Federal Reserve do absolutely nothing but cry foul over this manipulation. The government and the Fed could easily counter Chinese manipulation of its currency vis-a-vis the US dollar by simply buying the Chinese Yuan on the open market, but neither will, because they won’t.

That’s because US corporations have exported millions upon millions of US jobs to China. When these corporations, such as Apple, Microsoft and Nike, manufacture things in China and then export their products to the US, their profits increase every time China manipulates its currency. That’s right! US corporate profits grow when China manipulates its currency. So for example, when the Chinese manipulate their currency via the dollar by 15 percent, it increases the profits of their goods made in China and exported to the US by roughly 45 to 225 percent. What corporate CEO would want the US government to counter Chinese currency manipulation under these circumstances? For more on this, click The Trans Pacific Partnership: The Op-ed the Liberal and Conservative Corporate Media Doesn’t Want You to See–JohnHively.wordpress.com.

That’s how corrupt your government is. It will do nothing to save US jobs from being exported because the difference between the old higher US wages and the new and lower Chinese wages goes straight into the pockets of the super wealthy via higher corporate profits, surging dividends and skyrocketing share prices. The super wealthy take billions of those stolen dollars and put them right in the hands and campaign coffers of corrupt politicians.

The Trans Pacific Partnership (TPP) is the latest scam in redistributing income and wealth from the 99 to the 1 percent. Don’t let it happen. Call your congressional representatives. They do not want an aroused public.

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In the video above, in 2009, Bill Gates testifies that the United States needs more foreign high tech workers. He wants more of the “best and the brightest” from around the world to come to the United States and take jobs from US citizens, who are often forced to train their H1B Visa replacements.

Gates testifies that we should allow an “unlimited amount” of H1B immigrants. What Gates doesn’t mention is that wages have been stagnant in the US high tech industry since 1990. At least one study shows that 2/3rds of US high tech workers were unemployed in their field, as of 2012.

That’s precisely why Gates wants “unlimited” H1B visa recipients. The more the merrier for the bottom line of Microsoft. Reducing wages by increasing the labor supply increases corporate profits, share prices and dividends. This benefits the 1 percent at the expense of the 99 percent who are trying to make a living in the high tech sector. That’s the real story in a nutshell for the position of Bill Gates.

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H1 B Visa

Politico reports that the US Department of Labor (DOL) employs lower cost H1-B workers rather than US citizens. This comes at a time when 3/4 of US high tech workers are unemployed in their field, and when US high tech workers haven’t had a pay increase since 1990.

The DOL employs these people by hiring contracting companies to do the work. Those companies then employ the guest workers, usually at lower wages than US citizens. That doesn’t mean the Department of Labor is saving any money. The US military, for examples, hires contractors such as Blackwater at much higher costs to taxpayers than regular US military personal.

“The H-1B workers cleared to perform work at the Labor Department’s Frances Perkins Building on Constitution Avenue provide a range of IT services, including software consulting, system administrating and network engineering. Some of them, however, are classified as “Wage Level 1” employees, a classification usually reserved for workers with limited experience.”

In other words, these H1-B people are getting paid less than US citizens would, and the difference in pay between what US citizens would earn and what H1-B visa workers earn goes toward profits for the wealthy.

The H1-B visa is an income redistribution scam, and should be eliminated. It has been used to keep US high tech workers unemployed and underpaid so that Microsoft and Apple and other high tech firms can keep their profits and share prices high at the expense of high tech workers.

Read more: http://www.politico.com/story/2016/03/guest-workers-employed-at-labor-department-headquarters-220647#ixzz42hjG38al
Follow us: @politico on Twitter | Politico on Facebook

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Billionaires on a Bus-Simplified-01 1
According to a new report by the Oxfam Institute, An Economy for the 1 Percent, the richest 62 people in the world own more wealth than the bottom 50 percent of the world’s population.

According to Oxfam, “The gap between rich and poor is reaching new extremes. Credit Suisse recently revealed that the richest 1% have now accumulated more wealth than the rest of the world put together. 

Meanwhile, the wealth owned by the bottom half of humanity has fallen by a trillion dollars in the past five years. This is just the latest evidence that today we live in a world with levels of inequality we may not have seen for over a century. An Economy for the 1% looks at how this has happened, and why, as well as setting out shocking new evidence of an inequality crisis that is out of control. Oxfam has calculated that:

1.  In 2015, just 62 individuals had the same wealth as 3.6
 billion people at the bottom half of humanity. This figure is down from 388 individuals as recently as 2010.
2.  The wealth of the richest 62 people has risen by 44% in the five years since 2010that’s an increase of more than half a trillion dollars ($542 billion), to $1.76 trillion.
3.  Meanwhile, the wealth of the bottom half fell by just over a trillion dollars in the same perioda drop of 41%.
4.  Since the turn of the century, the poorest half of the world’s population has received just 1% of the total increase in global wealth, while half of that increase has gone to the top 1%.
5.  The average annual income of the poorest 10% of people in the world has risen by less than $3 each year in almost a quarter of a century. Their daily income has risen by less than a single cent every year
The Oxfam report doesn’t mention everything the rich have been able to purchase with their ill-gotten robberies, such as both major political parties in the USA, as well as in most other nations. Most government regulatory agencies throughout the world, such as the USDA, and the Securities and Exchange Commission, have also been bought and  managed by the 1 percent.
This corruption of governments is precisely why President Obama and Wall Street Senator Ron Wyden want to continue to redistribute income and wealth from the 99 to the 1 percent, a process that has been ongoing in the United States since Ronald Reagan became president.

Every US senator, President Obama, and most members of the US house of representatives know, or example, that the Trans Pacific Partnership (TPP) will force China to manipulate its currency vis-a-vis the US dollar by 15 percent, if this income redistribution agreement is rammed through congress. This will roughly double the profits of US corporations manufacturing things in China who happen to export these items to the United States, such as Dell, Microsoft, Nike, Adidas, Black and Decker, Gerber, and hundreds of others.

By the same process, this will make US exports to China profit losers, costing millions of US export jobs. But this forced currency manipulation will also encourage US companies who manufacture things for sale in the USA, as well as for export to nations other than China, to export millions of US jobs to China. What Corporate Chief Executive Officer wouldn’t export whatever jobs they could to China if their profits would double by doing so?

Every manufacturing job supports three other jobs, like the local waitress, teacher, plant manager, fire fighter, accountant, bookkeeper, retail clerk, plumber, contractor, and more. So that the exportation of say 5 million jobs will result in the loss of another 15 million. However, it is more than likely that the TPP will gut most of whatever is left of the US middle class by tens of millions.

Right now, 50 percent of US adults are considered middle class, down from 61 percent in 1970. Within three years of the enactment of the TPP, only 30-40 percent, or less, of US adults will be considered middle class. And that’s how the rich get richer.

When a corporation exports jobs, the difference between the old higher US pay and the new lower Chinese or Vietnamese pay goes straight into the pockets of the 1 percent via higher corporate earnings, rising share prices and surging dividends. The job losers might get several months of unemployment checks, if they’re lucky.

In other words, the TPP is a massive scam to force US companies to ship millions of US jobs to China, and gutting what remains of the US middle class, in the process. Wall Street senator’s such as Ron Wyden, Orrin Hatch and Mitch McConnell, as well as President Obama, are 100 percent behind this scam.

According to Oxfam, “The global inequality crisis is reaching new extremes. The richest 1% now have more wealth than the rest of the world combined. Power and privilege is being used to skew the economic system to increase the gap between the richest and the rest (such as the TPP). A global network of tax havens further enables the richest individuals to hide $7.6 trillion. The fight against poverty will not be won until the inequality crisis is tackled.”

The TPP will make income and wealth inequality grow. That’s what it’s all about. That’s what is has been negotiated to do.

 

 

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A new  study by the Social Security Administration shows that in 2014, slightly more than 51 percent of Americans made less than $30,000, and nearly 63 percent made less than $40,000. In other words, the middle class is dying and its being sucked dry by a parasite known as the 1 percent. At a time when the cost of living continues to rise across the country even as salaries have stagnated for years, it’s sobering—though not unexpected—news about the economic challenges facing a number of American families. The Trans-Pacific Partnership (TPP) is the latest assault to destroy the middle class. This middle class destroying accord has been ushered through the senate by Wall Street Senator Ron Wyden. Here’s how Wyden’s scam works.

Enactment of the Trans-Pacific Partnership (TPP) will force China to manipulate its currency more than is currently the case, and this will enrich wealthy US corporations that have shipped hundreds of thousand and millions of jobs to China, such as Nike, Microsoft, and Apple, as well as their rich shareholders, and CEOs, while destroying US export jobs, and redistributing massive amounts of income from the 99 to the 1 percent. The TPP will also send millions of undocumented immigrants into the USA, driving down wages here. But let’s begin with currency manipulation.

Vietnam is one of the nation’s involved in negotiating the Trans Pacific Partnership. China’s annual minimum wage is nearly twice that of Vietnam. The wages in China at those Nike and Microsoft and Apple and Hewlett-Packard factories and their suppliers and contractors and subcontractors have been going up rapidly over the past fifteen years. Those labor costs have been able to go up because the Chinese government has increased the profit margins of its US manufacturers by manipulating its currency. But there’s another reason why China needs to manipulate its currency vis-a-vis the dollar.

There are nearly 313,000 Nike workers in Vietnam, and nearly 250,000 in China. Vietnam has lower labor costs than those in China. The Chinese government, however, has been able to offset its labor cost disadvantage by manipulating its currency. So it can keep those jobs in China, and still allow the wages of Chinese workers to expand. But that might not be the case should the Trans Pacific Partnership (TPP) become reality.
Tariff is another word for tax. When a US company like Nike manufactures its products in Vietnam, and then exports them to the US, a tariff is charged against the products of between 10 and 15 percent. So another $10 to $15 dollars is added to the cost of a $100 pair of Nike’s Vietnamese made shoes exported to the USA. That means less profits, lower dividends, and lower share prices than would otherwise be the case without tariffs. The US tariffs on US corporate goods manufactured in Vietnamese factories helps to offset some of the Vietnamese labor cost advantages vis-a-vis the cost of Chinese labor.
Under the TPP, those tariffs will be gone, giving Vietnam a much larger labor cost advantage over Chinese workers. In which case, the Chinese government will have two options; let millions of Nike and Dell and Apple and Microsoft jobs head south to Vietnam, along with the jobs of contractors and subcontractors, or manipulate its currency even more, which means all of those US corporations manufacturing stuff in China for export to the US will see unprecedented and explosive growth of their profits; and all of this will occur at the expense of small and medium sized US companies that make stuff in the United States and export them to China.
That means several unpleasant things will occur to the US economy:
1. US unemployment will grow with the TPP, as exports to China diminish.
2. Inequality in wealth and income will continue to increase, destabilizing the economy further.
3. The stock market bubble will continue to expand, and the coming stock market crash will be even worse than imaginable.
4. US businesses will need to export more US jobs to China, and all of these bad things will trickle down to more crowded classrooms, less government services, reduced wages, fewer jobs, more poverty, and much more negative stuff for the 99 percent, as the taxes from those jobs are shipped overseas.
5. All of which means the US trade deficit will become greater because all of those things made by US companies in China will continue to be exported to the US, and the number is bound to increase with the TPP.

The super rich will become even more super richer, while the middle class will continue to evaporate.
Take a look at the graph below. On the left side (the Y axis) is the Yuan, which is the Chinese currency. The US dollar is on the bottom line (the x axis). Now look at the two intersecting lines, which is the supply and demand for dollars. In this example, 600 yuan can purchase $100 in the currency markets, which is roughly what the two currencies currently exchange for.

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So when Nike, Microsoft or Apple Inc. manufacture a product in China that costs the consumers, say, 600 Yuan in China, given the exchange rate, the same product will cost $100 in the United States, after, of course, it is exported from China to the USA. Assume these US corporations have a 25% profit margin. That means these companies get 150 Y profits in China per product, and $25 profit when they export their products to the United States.
Under the same conditions, this is true for companies that manufacture products in the USA, and then export them to China. American manufacturing companies earn $25 per $100 of product sold in the USA, and 150 Y when their products are exported from the USA to China.

The government of China has often manipulated the value of its currency. So what happens when it does this? It purchases dollars. This shifts the D1 line to the left, because there are less dollars on the market, which is shown in the graph below as line D2. This makes the Yuan less expensive in terms of dollars.

11053693_10204447926978104_6739155664968129642_o
Why are the higher up folks at Nike, Microsoft, Apple and hundreds of other US corporations that are producing goods in China for export to the United States against any legislation that seeks to address Chinese currency manipulation? The answer is easy; it increases their profits!
When the Chinese government manipulates it’s currency by purchasing dollars, 800 Y will now purchase $75. Do the math; 600 Y will purchase now $56. What does that mean?

It means that when Nike manufactures a pair of shoes in China which costs 600 Y there, in the US it should cost $56 rather than $100, thanks to China’s currency manipulation, but that rarely happens. The US corporate propaganda machine will lie to you and tell you it makes Chinese imports less expensive. However, the truth is China’s currency manipulation increases the profits of Nike. Rarely, if ever, do prices go down for US citizens in this scenario.
Nike still gets 25%, or 150 Y, in profits when its shoes are sold in China. When it exports the same shoes to the USA from China, Nike still gets 25% profit on $56, which is $14 dollars. However, Nike still sells its shoes for $100 in the United States, which means another $44 in earnings per pair, in addition to the $14.
That means Nike’s profit margin on a $100 pair of shoes goes from 25% at the old exchange rate to 58% at the new exchange rate. This sends its earnings and stock prices higher. The same thing occurs with Microsoft, Dell, Hewlett-Packard, Apple, and all US corporations manufacturing in China, and exporting their products to the United States.
So who pays the price for this?
The 99 percent do; if you work for a living in the United States, or if you’re a small or medium size business owner. Here’s how.
Suppose you are a US manufacturer producing shoes in Oregon that sell in the USA for $100. You ship them to China at 600 Y for $100, and earn 150 Y, or $25, in profits. Now suppose the Chinese government manipulates its currency by purchasing tens of billions upon tens of billions of dollars. The supply of dollars on the international currency markets shrinks, making dollars more expensive, and as noted above, the D1 line shifts to D2, which represents the new supply of money. BTW, the space between D1 and D2 represents the amount of dollars the Chinese purchased.
Those $100 US made shoes now costs 1000 Y in China. Okay, my graph isn’t too high tech, but the actual figure is 1066 Y, if you do the math, but let’s stick with the 1000 Y, for simplicity sake. There’s still a 25% profit margin per pair of shoes, but at the 1000 Y price, there’s not a whole lot of buyers in China. The US manufacturer could lower the price of the shoes to 750 Y, but he or she isn’t making a penny at that price, and they’re still overpriced for the Chinese market. Say goodbye to the Chinese market for all US products at the new exchange rate.
US exports to China are going to shrink quite rapidly under this scenario. This means fewer American jobs, and declining wages for everyone. It means less tax dollars going to schools and other government services; it means no retirement pay for a larger percentage of the 99 percent.

Over the past fourteen years, since China was granted most favored nation trade status, Nike’s stock price has risen over a thousand percent, from $10 a share to over a $100. Chinese currency manipulation has helped fuel this bubble. So if you purchased a million shares of Nike in the year 2000, today the value of those shares would be over $10 million. With the TPP and Chinese currency manipulation, the value of Nike’s stock will continue to increase, but only at the expense of everybody else. Much of the US stock market bubble is fueled by the same force, and that goes for the stock prices of Apple, Microsoft, Dell, Adidas, Hewlett-Packard and many more. And if the TPP passes through congress, more US manufacturers will need to shift production to China.
However, it’s going to be worse than you can imagine.
Millions of jobs in Mexico, Central America, Peru and Chile will also be threatened with exportation to Vietnam and China under the Trans Pacific Partnership (TPP). In which case, US exports will decline.
Maquiladora zones are located in Mexico and elsewhere in Latin America. These are free trade zones established by the United States and the host nations, such as Mexico, Honduras and El Salvador. The zones allow US manufacturers to assemble products in the zones, and then ship them duty free to the United States. Wages are bone poor in the Maquiladora zones, as low as $7.50 a day in Mexico’s northern zone, but they are higher than in Vietnam and China. China’s minimum wage is a little more than double Vietnam’s .28 cents per hour.
The parts assembled by US manufacturers in the Maquiladora zones must be made by US companies. This has been negotiated. In 2013, US corporations shipped $51 billion worth of parts manufactured in the United States to the over 3000 US factories in the northernmost Maquiladora zone in Mexico. That zone is twelve and a half miles deep and stretches from the Gulf of Mexico to the Pacific Ocean.
That 51 billion dollars of exports supports 250,000 American manufacturing jobs. The people who earn a living with those jobs spend their hard earned cash in their neighborhood grocery stores, stereo stores, clothing stores, computer stores, automobile dealerships, real estate companies, restaurants and more. That’s how those 250,000 manufacturing jobs keep another 400,000 to 800,000 people employed in other areas of the economy.
That doesn’t count the tens of thousands of Americans that mine the iron ore, or the rock, or chop the trees to make paper and houses, or manufacture cement, or who mold metal into products, and other producers of raw materials, or the people who operate the electric companies that power those 250,000 soon-to-be-lost manufacturing jobs. But that’s not all.
Just like the jobs that will be lost to Chinese currency manipulation via the TPP, all of these jobs pay state, federal and local taxes that support schools, road building and maintenance, forest service jobs, fire and police, and a lot more government jobs.
The TPP appears to be geared toward rendering obsolete the Maquiladora zones. Why else would Vietnam be a party to this agreement? The Vietnamese aren’t going to be purchasing a lot of American goods and services simply because those people can’t afford to do so.
When the TPP becomes law, kiss those jobs in the Maquiladora zones goodbye. Kiss that $51 billion dollars in US exports goodbye. And that’s just for the exports to one of these zones.
In El Salvador, 230,000 apparel workers will likely lose their jobs, which will be shipped to Vietnam if the TPP becomes law. Tens of thousands of workers in other central America nations will also lose their apparel manufacturing jobs in the zones. These people sew many of the clothes people wear in the United States and elsewhere.
Over 200,000 American workers supply the parts necessary to manufacture those clothes. Fabric, yarn and thread are made in US factories, and are then exported to Central America. Kiss those exports goodbye. Kiss those American jobs goodbye, as well as the hundreds of thousands of US jobs supported by those textile jobs.
If the TPP becomes law, we’re looking at the loss of billions of dollars of exports yearly, and millions of US jobs. And that’s only with the loss of two Maquiladora zones. Thank you Senator Wyden!
With the loss of jobs in the zones on such a massive scale, wages will drop like dead flies in Mexico and Central America. That happened in Mexico after Nafta, which drove millions of people into the USA illegally.
Hundreds of thousands, and perhaps millions, of people will be forced to migrate to the United States illegally, and not because they want to migrate. This will depress the wages of millions of American citizens and put incredible pressure on our social service tax dollars, which will be greatly weakened by the loss of jobs.
So who benefits from the TPP? The difference between the old higher wages and the new lower wages will go straight into the pockets of rich shareholders and CEOs via higher corporate profits, rising dividends, and soaring share prices. Working people will pay the price. In other words, the TPP will redistribute massive amounts of income from the 99 to the 1 percent. That’s what it has been negotiated to do.

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TPP_web

Wall Street President Barack Obama has come one step further along with the announcement that the Trans-Pacific Partnership (TPP) has been finalized in the Atlanta sessions that ended last weekend. His Democratic henchman, Wall Street Senator Ron Wyden, must have been smiling with the announcement, since he is the chief Democratic supporter of the TPP in the US senate.

The Democrats are desperate since they have been losing ground in congress and the polls since 2010. Their fundraising falls far short of Republican efforts, and their base is falling by the wayside for reasons described below. President Obama has been intent on securing the Trans-Pacific Partnership (TPP) for his Wall Street benefactors, as well as other sources of big campaign contributions and other sizable perks. If he can’t secure this for Big Donors, what good are the Democrats?

The TPP will show how adept the Democrats are at caving in to Republican Party since the TPP is falsely marketed as a trade agreement when it is designed to redistribute income and political power from the 99 to the 1 percent, just like all previous so-called trade agreements.

In order to get his deal, the president and his negotiators had to engage in serious back door deals with senators, congressional representatives and foreign trade negotiators. For example, in order to get the deal out of the gridlock of negotiations, the president and his team caved in to all of Japan’s demands on agriculture. See why-japan-did-americas-dirty-work-in-the-tpp-ustr-gave-away-the-agricultural-store–nakedcapitalism.com.

The president also made it easier for Japanese automobile parts manufacturers to export their stuff to the US, which will cost the US jobs. The price to get Japan in on the deal was destroy US jobs in auto parts.

The final battle against the middle class will now be waged in the halls of congress. It will be led by Wyden and Obama, along with a bevy of Big Cash politicians from the Republican Party. The news media will remain largely mum on the subject. It’s better to keep the little people illiterate about the issue, than arouse their indignation and protests via honest reporting.

The Democratic base has been falling by the wayside since Obama began his tenure as president. “Hope and change” was a nice slogan as the president gave the rich everything they wanted, including 95 percent of all income growth since Obama took office. The 1 percent steal 37 percent of the nation’s income, up from 8 percent in 1980. That’s what they’re buying with those campaign contributions and other perks.

Little by little the Democratic base has come to realize how indifferent the president is to their concerns, how much he actually favors the rich, what a lie “hope and change” was, since there was no “change,” and this is reflected in recent elections as more and more of the base has increasingly decided to stay home at voting time. That’s precisely why the Republicans have such large margins in both houses of the US congress.

If the TPP passes through congress, within a decade the 1 percent will steal 50 percent of the nation’s income, driving millions of people into poverty in the process.

Take China for example. China is not a part of the TPP, but Vietnam is. Wages in China are about twice is high as in Vietnam. In order to keep jobs in China, the Chinese government will be forced to manipulate its currency vis-a-vis the US dollar. Chinese exports will become cheaper in the US, while US exporters will be encouraged to export US jobs to China. But there is also a devious side to this situation. Prices of Chinese imports won’t decrease in the US. Instead, profit margins will increase.

Any company manufacturing in China will see an increase of its profits, and they won’t need to do a damn thing to make that happen. Corporations like Microsoft, Nike, Dell, and Apple will see massive rises earnings and their stock prices, as income is redistributed from US export workers losing their jobs to US manufacturers producing goods in China. Their rich shareholders will reap a massive bonanza at the expense of people who actually work for a living. See Four-graphs-that-will-make-you-boiling-mad-about-the-trans-pacific-partnership-or-why-president-obama-along-with-executives-from-nike-microsoft-apple-and-other-us-corporations-steadfastly-support–JohnHively.wordpress.com

This isn’t lost on everybody. Some people are already coming out against

AFL-CIO President Richard Trumka:

“We are disappointed that our negotiators rushed to conclude the TPP in Atlanta, given all the concerns that have been raised by American stakeholders and members of Congress. The Administration had a hard time reaching this deal for good reasons: it appears that many problematic concessions were made in order to finalize the deal. We ask the Administration to release the text immediately, and urge legislators to exercise great caution in evaluating the TPP. As we’ve said, rushing through a bad deal will not bring economic stability to working families, nor will it bring confidence that our priorities count as much as those of global corporations. We will evaluate the details carefully and work to defeat this corporate trade deal if it does not measure up.”

Communications Workers of America President Chris Shelton:

“Negotiators from the 12 Trans-Pacific Partnership trade deal countries, meeting in Atlanta, have announced an agreement. Despite all the hype, and given what we’ve learned over the past many months and years of negotiations, it’s clear that this TPP remains a bad deal for working families and communities. The corporate lobbyists who make up the majority of U.S. trade advisers have been pushing hard for an agreement, mainly because they’ve known all along that what’s in the TPP represents a sweet deal for multinational corporations and the 1 percent. For the rest of us—U.S. working families and communities, and workers in the other TPP countries—this agreement is bad news.”

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The governors of the Federal Reserve Bank voted to keep interest rates at historic lows in their September 17, 2015 meeting. The bank has not raised interest rates in nearly a decade. Lucky us, or maybe unlucky us.

Chairwoman Janet Yellen cited a number of reasons why the bank decided to keep rates low. She mentioned, for example, the weakness of manufacturing in China.

However, she didn’t mention that nearly 50 percent of US manufacturing is done in China, which, quite naturally, indicates a slowing down of US outsourced manufacturing, which certainly impacts the US. Like a good politician, she also did not mention that the evil US trade deficit is fueled by US manufacturers exporting jobs overseas, like Microsoft, Apple, Nike and Adidas. These and hundreds of other companies manufacture their products in China and elsewhere, and export their stuff to the US.

a-group-of-economists-wrote-an-open-letter-in-favor-of-janet-yellen-and-the-list-of-names-is-stacked

This is precisely and the only reason why the US has a trade deficit. The US trade deficit, in other words, is with US job exporters, not with China, Pakistan, Mexico or elsewhere.

Anyway, keeping interest rates low was a good thing for the US economy. Typically, the Fed waits to raise interest rates until just after the US economy begins to slide into recession.

That process begins when US corporations see a slowdown in their earnings growth, in the aggregate. These businesses begin to lay people off, which jacks up their profits. Perhaps the folks running the Fed take this as some sort of sacred signal that everything is all right. However, laying enough people off throughout the economy ignites recessions in the process of jacking up those profits, because the demand for goods and services slackens, jobs and profits decline, and a recession begins even while corporate earnings expand.

This is why I mentioned the slowdown of Chinese manufacturing, which in all likelihood, represents something of a slowdown of US manufacturing abroad. Profit growth has been shaky the last two years, though still growing in fits and spurts with sudden quarterly declines followed by rapid growth.

In other words, the US and world economies are still quite weak, especially since the rich have stolen 95 percent of all income growth in the US since 2009, an historic high by a wide margin. This has meant sluggish US and world economic growth since the more money the 1 percent steal in the US and elsewhere, the weaker the demand for goods and services by the 99 percent.

Yellen has the brains to understand all of this. This is likely why the Fed has kept interest rates at historic lows for years. To maintain their standards of living, the 99 percent had to keep borrowing because they haven’t gotten a raise in 35 years on average and in real terms. Raise interest rates and the demand for goods and services begins to die.

Raising interest rates will likely be the straw that sends the world economy into the monstrous fangs of the biggest economic crisis since the Great Depression. This crisis may already be in its early less visible stages.

Not a single world leader has learned the lesson from the last Recession. The current US economic expansion is fueled by the same artificially created housing and stock market bubbles as the last recession. Wall Street executives are calling the economic shots in the White House, on Capital Hill and the US Supreme Court. That’s why nobody who could do anything did squat about the corrupt forces that brought about last recession, and now the bill is coming due.

The last recession was the worst since the Great Depression. The next one, as I have pointed out in my book, The Rigged Game: Corporate America and a People Betrayed, will be far more hideous.

The Fed has literally no tools to fight off this coming Great Depression, but it will print trillions of dollars to save billionaires and others from their foolish investment decisions. See breakdown-of-the-26-trillion-the-federal-reserve-handed-out-to-save-rich-incompetent-investors-but-who-purchase-political-power–JohnHively.wordpress.com

The federal government will be forced to expand the deficit, and instead of having 48 million people permanently on food stamps, the US will have 60 to 100 million, unless the madness of redistributing income from the 99 to the 1 percent via job exporting trade treaties, unsustainable and illogical immigration policies (both legal and illegal, HB1 visas), and privatization scams.

Much of this can be reversed simply by amending income redistribution schemes known as international trade agreements, limiting immigration by restricting the flow of people moving into the USA at least until wages begin to rise, enforcing current immigration laws, and putting a halt and reversing many privatization follies.

All three of these policies have stolen jobs from American citizens, while enriching the politically and financially affluent in the process, all at the expense of people who produce goods and services.

Of course, that is precisely what the corrupt US government (all three branches), and both corrupt major political parties, have been driven to do by the money unleashed in the political markets since and because of the Reagan tax cuts for the rich.

The ultimate end game of Reaganomics is coming to its ugly conclusion.

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