Robert Reich’s View On Bloomberg

Yesterday, I shared Jeff’s post about the possibility of Michael Bloomberg becoming the democratic nominee for the office of president.  While he is not my first choice, I do accept that if he manages to buy the nomination, I will certainly do everything in my power to help him beat the megalomaniacal incumbent.  Robert Reich, whose views I greatly respect and whose work I have shared here before, rings in on Michael Bloomberg as a candidate, and I think there is value in hearing a variety of opinions, so I am sharing his latest.  It’s a bit longer than my usual, but well worth the time.

Michael Bloomberg is trying to buy the presidency – that should set off alarms
Robert Reich

Robert ReichWe haven’t seen his name on any of the ballots in the first four states, but that’s about to change. I’m talking, of course, about multibillionaire presidential hopeful Michael Bloomberg.

Bloomberg has a chance of winning the presidency because his net worth is more than $60bn.

The yearly return on $60bn is at least $2bn – which is what Bloomberg says he’ll pour into buying the highest office in the land. It’s hardly a sacrifice for him, but it’s a huge sacrifice for American democracy.

Encouraged by the murky outcome from the Iowa caucuses and the notable lack of enthusiasm for Joe Biden, Bloomberg has decided to double his spending on TV commercials in every market where he is currently advertising, and expand his campaign field staff to more than 2,000.

He’s not competing in the first four states with caucuses and primaries but focusing instead on 3 March. So-called Super Tuesday will be more super than ever because it now includes California, Texas, Virginia, Minnesota, North Carolina and Massachusetts – a third of all delegates to the Democratic convention.

“It’s much more efficient to go to the big states, to go to the swing states,” Bloomberg told the New York Times. “The others chose to compete in the first four. And nobody makes them do it, they wanted to do it. I think part of it is because the conventional wisdom is, ‘Oh you can’t possibly win without them.’”

Later, he added: “Those are old rules.”

Yes, and the new rules are also to spend billions of your own money, if you have it.

In January alone Bloomberg spent more than $300m on advertising for his campaign. That’s more than Hillary Clinton spent on advertising during her entire presidential run in 2016. It’s multiples of what all other Democratic candidates have spent, leaving even Tom Steyer, another billionaire, in the dust.

The heart of Bloomberg’s campaign message is that he has enough money to blow Trump out of the water. As if to demonstrate this, Bloomberg bought a $10m Super Bowl ad that slammed Trump in the middle of the big game, then bashed Trump again in a national ad just hours before the State of the Union address.

“The Real State of the Union? A nation divided by an angry, out of control president,” a narrator says. “A White House besotted by lies, chaos and corruption.”

If Trump’s tweets are any barometer, Bloomberg’s tactics are getting under the thin-skinned president’s fragile epidermis. According to one Trump adviser, the president “thinks that money goes a long way” and those who believe Bloomberg has no hope are “underestimating him”. Another says Trump “takes money seriously. He’s a businessman.”

The Democratic National Committee is ready to boost Bloomberg into the top tier. Last Friday it abandoned one of its criteria for getting on to the coveted debate stage – the individual-donor threshold, which was used for the first eight debates including this week’s event in New Hampshire – presumably because Bloomberg doesn’t take donations.

To participate in the 19 February debate in Las Vegas, candidates will need to show at least 10% support in four polls released from 15 January to 18 February. Three candidates have met that threshold: Joe Biden, Bernie Sanders and Elizabeth Warren. Bloomberg’s wall-to-wall advertising is giving him a good shot.

Last Monday he tied with Warren for third place in a Morning Consult tracking poll. He’s in the top four in many Super Tuesday states. In Texas and North Carolina, he has overtaken Pete Buttigieg for fourth. He has the third-highest polling average in Florida, ahead of Warren, and fourth-highest in Michigan, Ohio, Georgia, Pennsylvania and New Jersey, whose primaries all fall after Super Tuesday. In the past week, polls have Bloomberg tied for second in New York and trailing only Biden in Missouri. He was also fourth in a Suffolk University poll of Utah, at 13%.

Amazing what money will buy, if there’s enough of it.

Bloomberg has some attractive public policy ideas: he’s for gun control, he wants to reverse climate change and he’s unveiled a plan to raise an estimated $5tn of new tax revenue from high earners and corporations, including a repeal of Trump’s 2017 tax cuts and a new 5% “surcharge” on incomes above $5m a year.

But he’s also a champion of Wall Street. He fought against the milquetoast reforms following the near-meltdown of 2008. His personal fortune is every bit as opaque as Trump’s. Through his dozen years as mayor of New York he refused to disclose his federal taxes. Even as a candidate for president, he still hasn’t given a date for their release. And, let’s not forget, he’s trying to buy the presidency.

America has had some talented and capable presidents who were enormously wealthy – Franklin D Roosevelt, Teddy Roosevelt, John F Kennedy, for example. The problem lies at the nexus of wealth and power, where those with great wealth use it to gain great power. This is how oligarchy destroys democracy.

The word “oligarchy” comes from the Greek word oligarkhes, meaning “few to rule or command”. It refers to a government of and by a few exceedingly rich people or families who control the major institutions of society. Oligarchs may try to hide their power behind those institutions, or excuse their power through philanthropy and “corporate social responsibility”. But no one should be fooled. An oligarchy is not a democracy.

Even a system that calls itself a democracy can become an oligarchy if power becomes concentrated in the hands of a corporate and financial elite. Their power and wealth increase over time as they make laws that favor themselves, manipulate financial markets to their advantage, and create or exploit economic monopolies that put even more wealth into their pockets.

Since 1980, the share of America’s wealth owned by the richest 400 Americans has quadrupled while the share owned by the entire bottom half of America has declined. The richest 130,000 families in America now own nearly as much as the bottom 90% – 117 million families – combined. The three richest Americans own as much as the entire bottom half of the population. According to Forbes, Michael Bloomberg is the eighth richest.

All this has been accompanied by a dramatic increase in the political power of the super-wealthy and an equally dramatic decline in the political influence of everyone else. Unlike income or wealth, power is a zero-sum game. The more of it at the top, the less of it anywhere else.

In the election cycle of 2016, the richest one-hundredth of 1% of Americans – 24,949 extraordinarily wealthy people – accounted for a record 40% of all campaign contributions. By contrast, in 1980 the top 0.01% accounted for only 15% of all contributions.

Make no mistake: the frustrations and insecurities that fueled Trump’s rise – and are still the basis of his support – have their origin in this power shift, which has left most Americans with a small slice of the nation’s prosperity and almost no voice in its politics.

A half-century ago, when America had a large and growing middle class, those on the left wanted stronger social safety nets and more public investment in schools, roads and research. Those on the right sought greater reliance on the free market.

But as power and wealth have moved to the top, everyone else – whether on the old right or the old left – has become disempowered and less secure. Today the great divide is not between left and right. It’s between democracy and oligarchy.

Bloomberg is indubitably part of that oligarchy. That should not automatically disqualify him but it should set off alarms. If the only way we can get rid of the sociopathic tyrant named Trump is with an oligarch named Bloomberg, we will have to choose the oligarch. Yet I hope it doesn’t come to that. Oligarchy is better than tyranny. But neither is as good as democracy.

The Rich Get Richer …

In a recent tweet, Donald Trump claimed, “I will keep fighting for the American people!”  Donald is not particularly literate, and thus his words often need some translation.  In this case, the translation only requires the addition of a single word:  wealthy.  “I will keep fighting for the wealthy American people!”  And by default, the rest of us can go to hell.  If you’ve been awake for the past 18 months and kept your eye on the ball, this will come as no surprise.  The 40% or so who still think Donald Trump is the greatest thing since sliced bread will, no doubt, continue to ignore the writing on the wall.

You will remember that last year Congress passed a tax bill that included tax cuts for the wealthy, but did very little for the average wage earner.  And the wealthy were happy, for they heard the ‘ka-ching’ of still more money hitting their bank accounts, so they donated some of that money to republican candidates so the republican candidates could buy more air time on national television to stay in office and ultimately give those wealthy people even more advantages.  It’s a vicious circle.

But apparently the glow of their tax cuts wore off, and now they want even more.  And guess what?  Trump and his minions want to give it to them!  Now, members of Congress are cognizant of the fact that there is an election in less than 100 days, and they don’t want to rock any boats right now by giving the wealthy more money, for they understand that the rest of us also get to vote on November 6th.  So, Trump & Co have found a way to do their reverse Robin Hood act without the blessings of Congress, and certainly without the blessings of We The People!

From The Washington Post

The Treasury Department is considering a tax cut for the wealthiest Americans through a change that would not need approval from Congress, officials said, a move that would follow a package of tax cuts last year that also benefited the super-rich.

The agency is studying whether to allow investment income, known as capital gains, to be adjusted for inflation in a way that shields more of it from taxation. Most capital gains are paid by wealthier Americans, who disproportionately hold large portfolios of investments.

A brief explanation of capital gains …

When you sell stock, you likely realize either a capital gain or loss, which is the difference between the amount for which you sold it and the amount you initially paid for it.  If you paid $1,000 for 25 shares of XYZ stock in the year 2000, and you just sold it for $900, you have a capital loss of $100.  Conversely, if you sold that same stock for $1,100, you have a capital gain of $100 which is subject to income taxes.

MnuchinBut what Steve Mnuchin, Secretary of the Treasury Department, is suggesting is that the basis, or what you paid for that stock, should be adjusted for inflation in the calculation of capital gains.  Thus, it could be argued that the $1,000 you paid in 2000, adjusted for inflation, is equivalent to $1,100, thus wiping out your capital gain and BINGO — you now owe no taxes on that gain!  Now, when you consider that for the wealthy those capital gains may be in the millions of dollars, well you can only imagine how much they would save in taxes.  You and I won’t benefit more than a few dollars, if that, but people like Donald Trump, Betsy DeVos, and a host of others, stand to save hundreds of thousands in taxes.

The wealthiest 1% of American households own 40% of the country’s wealth.  That share is higher than it has been at any point since at least 1962, according to a study by economist Edward N. Wolff.  Meanwhile, you and I struggle to pay the bills and put food on the table, keep the 10-year-old car running for another year, and cut corners wherever we can.

Trump’s policies and the December donor tax cuts have already plunged the nation into deeper debt and increased the deficit.  This move further reduces the income without doing a single thing to reduce expenses.  And it can all be done without Congressional approval.  If you ever had any doubt whether Trump had the good of the nation and its people in mind, this should convince you.

Oh … and would you be interested in knowing Steve Mnuchin’s net worth?  $400 million.  Personally, if this is what Donald Trump means when he says he will “keep fighting for Americans”, I wish he would just stop fighting.  The wealthy, under Trump, are having a field day, but eventually, as those of us whose brains have not been replaced with dollar signs know, eventually the party comes to an end.  Debts come due and there are very real consequences when there is no money in the treasury to pay those debts.  And what about the rising poverty rates in this nation?  How do you explain to a poor person that you are cutting their food stamps because the rich people are paying less taxes and, well, sorry but there just isn’t enough money for you to feed your children?

That “great economy”, that rise in Gross Domestic Product (GDP) that he keeps bragging about?  Guess what, folks … it doesn’t mean a damn thing for the average citizen in the U.S.  Sure, unemployment is low, but wages haven’t risen.  Many lower income people still have to work 2 or even 3 jobs just to buy food and keep a roof over their heads!  But by all means, let us make the wealthy even wealthier.

United Nations vs Nikki Haley

The United Nations says the U.S. has a poverty problem.   Ambassador Nikki Haley says we don’t.  Who’s right?  The United Nations is indeed correct and Nikki Haley is naught but a Trump mouthpiece.  Ms. Haley claims that the U.S. is “the wealthiest and freest country in the world”.  Not so, Ms. Haley.  The UN report acknowledges that the U.S. is among the wealthiest societies, however it also states …

“But its immense wealth and expertise stand in shocking contrast with the conditions in which vast numbers of its citizens live. About 40 million live in poverty, 18.5 million in extreme poverty, and 5.3 million live in Third World conditions of absolute poverty.  It has the highest youth poverty rate in the Organization for Economic Cooperation and Development (OECD), and the highest infant mortality rates among comparable OECD States. Its citizens live shorter and sicker lives compared to those living in all other rich democracies, eradicable tropical diseases are increasingly prevalent, and it has the world’s highest incarceration rate, one of the lowest levels of voter registrations in among OECD countries and the highest obesity levels in the developed world.”

Read that one a couple of times, folks. This is a nation where there is indeed great wealth, and it is largely owned by the uber-wealthy.  The wealthiest 1% of this nation own more wealth than the lowest 90%.  That figure … that 40 million live in poverty?  That equates to roughly 12% of the population.  The report goes on to say …

“The United States has the highest rate of income inequality among Western countries.  The $1.5 trillion in tax cuts in December 2017 overwhelmingly benefited the wealthy and worsened inequality.”

Surprise, surprise … that tax cut was just what we said it was … a benefit for the wealthy.

“But in 2018 the United States had over 25 per cent of the world’s 2,208 billionaires.  There is thus a dramatic contrast between the immense wealth of the few and the squalor and deprivation in which vast numbers of Americans exist. For almost five decades the overall policy response has been neglectful at best, but the policies pursued over the past year seem deliberately designed to remove basic protections from the poorest, punish those who are not in employment and make even basic health care into a privilege to be earned rather than a right of citizenship.

Need I say more?  Nikki Haley had more to say:

“It is patently ridiculous for the United Nations to examine poverty in America. In our country, the President, Members of Congress, Governors, Mayors, and City Council members actively engage on poverty issues every day. Compare that to the many countries around the world, whose governments knowingly abuse human rights and cause pain and suffering.”

Wake up, Ms. Haley … members of Congress have been so busy for the past 17 months licking Trump’s boots and kissing his patootie that they haven’t given a thought to those who can barely pay for their medicine, buy food, pay rent, etc.  Her comments came just two days after the U.S. pulled out of the UN Human Rights Council, allegedly because Trump, and presumably Haley did not like the fact that the UN was holding Israel’s feet to the fire on human rights issues and its treatment of Palestinians.  I am inclined to believe that the withdrawal had more to do with the extreme human rights violations being committed by the U.S. in its treatment of immigrant children who are being separated from their families.

Also in the UN report …

“Defenders of the status quo point to the United States as the land of opportunity and the place where the American dream can come true because the poorest can aspire to the ranks of the richest. But today’s reality is very different. The United States now has one of the lowest rates of intergenerational social mobility of any of the rich countries. The equality of opportunity, which is so prized in theory, is in practice a myth, especially for minorities and women, but also for many middle-class White workers.”

The report suggests that the tax cuts will have long-term effects, “creating disparities in the education system, hampering human capital formation and eating into future productivity”.  In other words, as we suspected, the rich will get richer while the poor are kicked into the gutter.  I wonder who the rich people think will be around to build their fancy homes, manufacture their expensive automobiles, grow & harvest their food, clean their houses, educate their children, etc.?

Take a few minutes to read the report, at least the ‘Overview’ and ‘Conclusions and Recommendations’ sections, for they are interesting and enlightening. The full report is 20 pages long and you can view it here, or download it to a Word document.  It is well worth the read.    As for Nikki Haley?  She is just another sycophant whose opinion doesn’t merit further discussion.  The UN report is far more interesting than anything she has to say.

The Banana States of America — Part II

This morning I published Part I of this two-part series looking at the 8 criteria that, in part, define nations that might be considered ‘banana republics’ by the modern connotation.

Continued from Part I …

#5 – Inadequate Access to Healthcare.  The United States continues to be the only developed country that lacks universal healthcare.  The Affordable Care Act (ACA) of 2010 was a small step in the right direction of ensuring everyone would have at least basic health coverage, but did not go nearly far enough, and is being shredded by the current regime with no replacement in sight.  Add to that the fact that the U.S. has some of the highest medical expenses in the world, and you have many who are left untreated simply because they are not able or willing to go into bankruptcy to treat an illness.

#6 – Dramatic Gaps in Life Expectancy.  The disparity in life expectancy rates dramatically illustrates the severity of the growing rich/poor divide in the United States. A recent study by Washington University and published in the Journal of American Medicine Association (JAMA) indicates that average life expectancy now varies by more than 20 years depending on where you live in the United States. Life expectancy for males is 63.9 years in McDowell County, West Virginia compared to 81.6 years in affluent Fairfax County, Virginia or 81.4 in upscale Marin County, Calif. That is especially eye-opening when one considers that life expectancy for males was 68.2 in Bangladesh in 2012 and 64.3 for males in Bolivia, one of the poorest countries in Latin America, in 2011.

#7 – Hunger and Malnutrition.  The U.S. Department of Agriculture (USDA) defines food insecurity as a lack of consistent access to enough food for an active, healthy life.  Estimates vary, but most organizations put the number of Americans who suffer from food insecurity as being between 42 – 48 million, or about 1 in every 8 people. In the 1950s and ’60s, hunger was a word associated with developing countries, but the word can now be applied to the U.S. as well.  According to the organization Share Our Strength, more than 13 million children go to school hungry, and one in every five lives in a household that is food insecure, without sufficient resources to provide enough food.

#8 – High Infant Mortality.  A report released in 2014 by Save the Children found that “the United States has the highest first-day death rate in the industrialized world” (babies dying the day they are born) and that the European Union has only about half as many first-day deaths as the United States: 11,300 in the U.S. vs. 5,800 in EU member countries. “Poverty, racism and stress are likely to be important contributing factors to first-day deaths in the United States,” said the report. Save the Children also reported that the U.S. had a rate of three first-day deaths per 1,000 births, the same rate the organization reported for developing countries like Egypt, Tunisia, Sri Lanka, Peru and Libya. Meanwhile, Mexico, Argentina, Chile, El Salvador and Costa Rica were among the Latin American countries that had only two first-day deaths per 1,000 births. So, a baby born in El Salvador or Mexico has a better chance of living to its second day than a baby born in the United States.infant mortalityData by Center for Disease Control

In my opinion, there is one other important criteria that should be added to this list, and that is ‘Education’, another area in which the U.S. lags pitifully behind in this 21st century, but perhaps I will address that in a separate post soon.

When I started this post a few days ago, I began with the intention of being a bit cheeky, rather a bit of my usual snark, but as I did more research into each of the above topics, my snark turned into genuine concern, and I lost the urge to crack a joke somewhere along the line.  No, we are not becoming, in the true sense of the word, a ‘banana republic’, nor are we likely to any time soon.   But we are on a downhill trajectory that, unless corrected, may find us at the bottom of the rubbish heap of industrialized nations.  Where we once were a leader, now we lag far behind the pack.  Where we once were the example other nations looked to, we are now looked down on as not even being on the same playing field – the farm team, as it were.

I need to make it perfectly clear, also, that much as I might like to, I cannot blame our current course on Donald Trump, for the trend began long before he took office.  However, I can and do blame him for failing to even see the problem and implement policies that might reverse these trends, for failing miserably in having any sense of what is right and good for the nation and its people. I blame him for being so concerned with his own self-image and “winning” that he has miserably failed We The People. The current administration and Congress have a delusional sense of values, a misguided notion that if they take care of only the wealthy, the wealthy will see to the rest of us.  I think the evidence is to the contrary, and without a government actively working to reverse the trends about which I spoke, we can only sink deeper into a hole we began digging decades ago.

I hope I have provided you with a bit of food for thought, as whatever the faults of this country, whatever mistakes we have made in our 230+ year history, I do not wish to see this nation fail, be turned into just another third-world country because a few wealthy people and a few corrupt politicians did not take their responsibility to the human race seriously.

The Banana States of America — Part I

dana milbankA recent OpEd piece in The Washington Post by journalist Dana Milbank, carried the same title as this post … yes, I ‘borrowed’ it from him.  The premise of the article was that this 115th Congress is the most authoritarian in the history of the United States.  An excerpt from Mr. Milbank’s column

“Hillary Clinton warns of a “full-fledged crisis in our democracy.” Rex Tillerson, the former secretary of state fired by President Trump, now warns that “American citizens are on a pathway to relinquishing our freedom.” (Too bad he didn’t say so when he was on the job.)

They are both correct, in a sense, but right now the fear of the United States going totalitarian doesn’t feel quite right. This crowd is too clownish to be Stalinist. Rather, the United States is turning into a banana republic …”

That is precisely what our friend Roger has been saying all along.  And he (Milbank, not Roger) goes on to cite some specific examples, such as …

“The president of the United States orders the Justice Department to investigate his political opponents. The Justice Department complies.

The president, The Post reports, personally urged the postmaster general to double the rate it charges Amazon, apparently because he doesn’t like the coverage by The Washington Post, owned by Amazon founder Jeffrey P. Bezos.”

But rather than dwell on the article, which you can read from the link above, I wanted to find out what, exactly, constitutes a ‘banana republic’, so I did some research.  Technically, the term ‘banana republic’ refers to a country that is politically unstable with an economy dependent upon the exportation of a limited-resource product, e.g. bananas, minerals, etc. But in today’s conversations, it became an epithet for a country whose governing institutions are corrupt, arbitrary, and generally inadequate.  Clownish.

I came across a list of ten criteria that defines a banana republic in the modern day usage.  The United States, at this point under the leadership of Donald Trump, fits the bill for 8 of the 10, the only two missing being ‘torture’ and ‘high unemployment rates’.  I think we should take a look at these points.  As I researched, pondered, and wrote, this piece well exceeded my self-imposed outer limit of 1,200 words, even though I trimmed as much as I felt it appropriate to trim.  Thus, this became, over the course of a few days, a two-part series.  This is Part I, and Part II will follow this afternoon.  I also subtly changed the direction of my thoughts as I read, studied and learned more.   Where feasible, I have included links for those who may wish to learn more. Please forgive my wordiness, but I do hope you will give some thought to what I am about to say.

#1 – Rising income inequality and a shrinking middle class.  This isn’t a new complaint, for five years ago, in 2013, a well-researched report in the Journal of Economic Perspectives asserted that the U.S. now has the highest income inequality and lowest upward mobility of any country in the developed world. They found that while the picture grows increasingly bleak for American’s embattled middle-class, “the share of total annual income received by the top 1% has more than doubled from 9% in 1976 to 20% in 2011.” And earlier this year, a report by the Organization for Economic Co-operation and Development OECD also found that the U.S. now leads the developed industrialized world in income inequality.

#2 – Unchecked Police Corruption and an Ever-Expanding Police State. Let me just throw out a few names for you, folks, starting with Trayvon Martin, Philando Castile, Samuel DuBose, Freddie Gray, Sandra Bland, Walter Scott, and the list goes on … and on.  Unarmed black men and women who were killed by police only for the crime of … being black.  And in every case except that of Walter Scott, the police who did the killing walked away scot free.  But more … add to that the way immigration raids by ICE are conducted, the way drug raids are conducted, enhancements to FISA, and you see a pattern of an authoritarian police force.

#3 – Highest Incarceration Rate in the World.  The U.S. has an incarceration rate of 737 per 100,000!  The next highest is Russia, with 615 per 100,000 people.  Does this mean that U.S. citizens are the most criminal in nature?  No, not at all.  Much of it is due to the ‘war on drugs’, which has emphasized draconian sentences for nonviolent offenses.  The prison industrial complex has become quite a racket. From prison labor to construction companies to companies specializing in surveillance technology, imprisoning people is big business in the United States—and the sizable prison lobby has a major stake in keeping draconian drug laws on the books.

#4 – Corrupt Alliance of Big Business and Big Government.  Need I say more than gun-makers, NRA and Republicans in Congress?  Consider Benito Mussolini’s definition of fascism: the merger of state and corporate power. Consider the previously unchecked power of the too-big-to-fail banks.  And now, with Trump rolling back the Dodd-Frank banking regulations, we are returning to that state.  Banks, oil & coal companies, the gun manufacturers and others are holding hands with the Trump administration and the 115th Congress as regulations to protect the environment and the people are demolished.

To be continued …

While we were distracted, look what oozed in through the keyhole – by musingsofanoldfart

Our friend Keith Wilson wrote this post a couple of weeks ago … 05 February … and I meant to re-blog it when I first read it.  I actually thought I had shared it with you all, but I eventually figured out that I hadn’t, and by that time the re-blog button had disappeared, so I waited.  Obviously, holding my breath for the return of the button is not working, so I will share Keith’s post in this manner, for this is too important and we really need to get the word out.

Please take just a minute to read the latest in our government’s attempt to help the rich get richer and ensure that the poor get poorer.

musingsofanoldfart

Independent views from someone who offers some historical context

KeithOn December 5, 2017, the Department of Labor under the guidance of the self-proclaimed populist President offered proposed regulations that would affect tipped employees. The 60 day comment period just expired, so unless the push back was convincing this proposal may become regulation. The proposal unwinds an Obama regulation which prohibits an employer from garnishing tips from workers who make at least the $7.25 minimum wage.

It should be noted that restaurant workers have a lesser minimum wage of only $2.13 which has been in place for twenty plus years. They can be paid an hourly wage this low, provided their tip income brings their total hourly pay to $7.25. As of May, 2017, the average combined wage and tip income for restaurant workers was $11.82 per hour.

In essence, the proposed regulation would allow an employer to garnish the extra tips above a total wage rate of $7.25. Now, the employer could be altruistic and reallocate this tip income to all workers, such as the cooks and buspeople (those that clean off the tables). This could also include the tipped worker who would receive a reallocated portion, but less than the direct tips garnished.

Read more

Many thanks, Keith, for allowing me to share this important information!

How Kind, Mr. Ryan …

Paul Ryan’s net worth is reported to be $7 million.  Not a lot by the standards of the top 1%, but a figure that is beyond imagining for most of us … the other 99%.  Yesterday, Ryan was apparently attempting to convince his Twitter followers how wonderful the tax bill passed by Congress in December was, when he tweeted …

Ryan-tweet$1.50 per week, $78 per year.  Mr. Ryan likely throws away $78 without a thought on any given day. I doubt there is an article of clothing in his closet that costs less than $78.  I am willing to bet that some members of Congress have paid that much for a pair of bloomin’ socks!  This, as much as anything, offers proof that our elected representatives are completely oblivious to the needs of those they supposedly represent.

After he came under fire from some of us in the 99%, he removed the tweet, but once seen, it cannot be forgotten, and fortunately it was seen by enough, recorded by the media, that it is not going away anytime soon.

A recent comment on one of my posts noted that the ever-widening gap between “us” and “them” is likely to lead to the next civil war in the United States.  They may be right, for it is clear the people who are making the laws under which we all must live are not only out of touch with We The People, but that they plan to stay that way.

gianforteDo you know who the wealthiest member of Congress is?  Greg Gianforte, with a net worth of $315 million.  You remember Greg, right?  He’s the one who, on May 24, 2017,  the night before he was elected to the U.S. House of Representatives, beat up a reporter from The Guardian who was only doing his job, asking a question.  Gianforte didn’l like the question. He was conviceted of a misdemeanor, but was nonetheless elected and still has his $315 million.  If I had done that, I would still be in jail, and would still be poor.

Mind you, I have no problem with people who work hard, are innovative and earn their way, having millions of dollars.  None at all.  There surely must be rewards for hard work and innovation.  However, we do not need people representing us, people making decisions that affect our very lives, who cannot even comprehend what it is like to have to decide between paying the telephone bill or putting food on the table.

To see Mr. Ryan patting himself on the back for passing a bill that will benefit his wealthy friends to the tune of millions of dollars, while giving the secretary an extra $78 in a year is sickening and disgusting.  And it’s even worse than it appears on the surface, for in early 2019, when that secretary sits down to prepare her income tax return, she will find that $78 and possibly more is going right back to Uncle Sam, for she will no longer be allowed to take certain deductions that she was once able to.

The really sad part is that those who are seeing an extra dollar or two on their paychecks may well praise the republicans for their tax bill, may go to the polls in November, before they have seen the ultimate outcome of their “tax cut”, and vote the same rich candidates right back into office.

The upper 1% see the rest of us as fools, and perhaps we are.  It is time for us ‘fools’ to awaken from our dream where we believed that our elected officials were actually looking out for us, for our best interests, for they are not and perhaps never were.

We did not need that extra $1.50 nearly as much as we needed Congress to work toward fixing what was wrong with ACA, but instead they have fractured it to the point that it no longer guarantees affordable healthcare to all.  We did not need that $1.50 nearly as much as we needed regualtions on fossil fuels that would put us on the path to a cleaner environment.  We needed regulations on the banking industry that would prevent the likes of the Koch brothers from causing another crisis such as we saw in 2008, where many of us in the 99% lost a significant portion of our retirement funds.  We needed reforms in our education system that would make college more affordable for all, not just those in the upper echelons.  No, we did not need an extra $1.50 on our paychecks that is but an illusion to begin with.

Paul Ryan,  Mitch McConnell and most of all Donald Trump are so out of touch with the reality of the people they purport to represent that it is unconscionable.  I wonder how these people can look themselves in the eye when they shave or brush their teeth in the mornings.  I wonder how they fall asleep at night.

Think about this, republicans, as you boast and toast the fact that your guys have a majority in Congress, that your guys are in charge and leading the way toward “making America great again”, that your guys have those ‘liberal snowflake democrats’ under their heels.  They aren’t doing you any favours, and the only people for whom they are making the nation great are themselves.

As for you, Mr. Paul Ryan, you can take that $1.50 and put it you-know-where.  A civil war of the 1% vs the 99%?  Think it’s impossible?  I wouldn’t be too sure.  We in the 99% may be fools in believing you and your cohorts actually represent our best interests, but eventually the day will come when we say, “ENOUGH!!!!”

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Paul Ryan’s home

Other homes in Ryan’s hometown

Good People Doing Good Things – Dan Price

“It’s not about making money; it’s about making a difference.” – Dan Price, CEO Gravity Payments

Many times in the past few years, I have commented, snarkily, about the notorious 1% … the group of wealthy magnates who, though they account for only 1% of the population, control more than 90% of the wealth of the nation.  It is what we have come to think of as the ‘income divide’ or the ‘income gap’.  It is a vicious circle.  Rich people buy companies, the companies make money, the rich people who own the companies take that money and use it to buy more companies that make more money … Meanwhile, they balk at raising the federal minimum wage above $7.25 an hour, or about $15,000 per year.

The following came onto my radar through one of the sources I typically troll in search of ‘good people doing good things’, and as soon as I read the first paragraph, I knew I had found my good-person-of-the-week!  I almost backtracked, as I came upon some controversy & critique, but after reading everything I could find, considering the sources of the criticism, I concluded that this guy is the real deal and worthy of this post.  Allow me to introduce you to Mr. Dan Price, the CEO of Gravity Payments, a credit card processing company on the west coast.

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In March 2015, Dan Price was hiking with a friend, Valerie Molina, who lamented about being about being able to make ends meet on her $40,000 annual salary.  Listening to her was a bit of a wake-up call for Price, as many of his own 120 employees earned even less than his friend.  Then, he says, he recalled a paper by Nobel prize winners Daniel Kahneman and Angus Deaton, who found that people’s emotional well-being improves as their earnings rise, until their pay reaches about $75,000 a year, beyond which any additional earnings do nothing to increase happiness. Dan’s mind was made up that day, and he told his hiker-friend, “I’m going to pay all my employees minimum $70,000. I’m not sure exactly how I’m going to do it, I need to run the numbers, but I am. Is that crazy?”

And that is exactly what he did.  But that, in itself, is not the best part of the story in my view.  The best part is that he did it by reducing his own salary from $1.1 million annually to around $77,000 in order to cover the increases for his employees.  For the remainder, he has committed up to 80% of the company profits. According to Mr. Price, “That was the happiest I’ve ever felt. For me, it was the best money I’ve ever spent.”

But the road was not a smooth one, as he had his share of detractors, some disgruntled employees, and was even sued by his own brother!  Former Idiot of the Week, Rush Limbaugh:

“He is a good liberal, and he’s read that people are happy at 70 grand. What he doesn’t understand is, happiness does not equal productive. Happiness equals comfort. “Seventy grand, well, I can stop working hard,” is what it means.

Anyway, he’s not tying this to anything other than employment. He’s not tying it to performance. He’s not tying it to sales. This is pure, unadulterated socialism, which has never worked. That’s why I hope this company is a case study in MBA programs on how socialism does not work, because it’s gonna fail. My guess is that just like when Solyndra went south, there will not be a story on Gravity Payments succumbing to gravity and going under.”

Limbaugh wrote a very long-winded and critical piece on Mr. Price, the gist of which was that he is a socialist and his employees will become lazy and useless.  He has since been proven wrong, but remember … there is a reason he was Idiot of the Week last August.

Others were critical as well, saying he had an ulterior motive, or was doing it only for publicity.  Other entrepreneurs in the area were not happy, saying Price’s decision made them appear ‘stingy’.  And his brother, Lucas, who owned 30% of the company, filed a lawsuit claiming that Dan had “worked against his brother’s interest as a minority shareholder”.  Last July, a judge ruled in Dan’s favour, but nonetheless there is a rift now between the brothers.

Two employees resigned shortly after the announcement, saying that in their view it was unfair to double the pay of some new hires while the longest-serving staff members got small or no raises. There is some validity to that argument, but I still applaud what Mr. Price did, and perhaps if the employees had stayed, a compromise could have been reached.

The company’s success speaks for itself:  employee turnover is drastically reduced, business is booming, and net profits nearly doubled between 2014 and 2016.  While measuring happiness is not an exact science, the employees appear to be happy … so happy, in fact, that they all pitched in to buy Mr. Price a brand new Tesla automobile!

And perhaps even more important than what Mr. Price did for his own company is the ripple effect it has had, expanding to other companies who followed Price’s example:

  • Josh Ledbetter of Ledbetter, Inc., cut his own salary by 82% and used it to give his three employees substantial raises.

  • Tony Tran of Third and Loom was so inspired by Price that he raised the wages of all his employees in the U.S. and his factory workers in Vietnam to $70,000.

  • Mario Zahariev of Pop’s Pizza saved $7,000 annually in credit card fees when he became a customer of Gravity Payments.  He used it to give raises to all eight of his employees.

  • Andrew Green of Green Solutions gave all his employees raises beteen 35% – 50%, which doubled the pay of his lowest paid workers.

Megan Driscoll, chief executive of biopharmaceutical recruiting firm PharmaLogics Recruiting also took a page from Dan Price’s book after hearing him speak, and increased her employee’s salaries from $37,500 to $50,000 … with commissions they will be earning $70,000 or more.  She says the results are remarkable … employee turnover has reduced, revenue has more than doubled, and the profit margin is steady.

No one person is going to reduce the disparity in incomes in the U.S., but it seems to me that Dan Price has, despite some overwhelming odds, done his fair share.  “Income inequality has been racing in the wrong direction,” he said. “I want to fight for the idea that if someone is intelligent, hard-working and does a good job, then they are entitled to live a middle-class lifestyle.”

Dan Price – a man who cares more about people than money.

If you are interested in reading more about Dan Price, his decision, and his company:

Interview on Today Show

About Gravity Payments

The Gravity of $70k