Tag Archives: income disparity

Fact Vs Fiction

Posted on by under Economic issues, education, Global Issues, History, Political commentary

There are so many misconceptions and falsehoods swirling around the upcoming debt ceiling debate that people don’t know what to think.  Today’s newsletter from Robert Reich pushes aside the lies and cuts to the core of things, including why the nation needs to keep borrowing more to pay its bills.

The biggest story you’ve never heard about today’s federal debt

America’s wealthy used to pay taxes to support the nation. Now, they lend it money and collect interest from the rest of us.

Robert Reich

31 January 2023

Friends,

The dire warnings of fiscal hawks are once again darkening the skies of official Washington, demanding that the $31 trillion federal debt be reduced and government spending curtailed (thereby giving cover to Republican efforts to hold America hostage by refusing to raise the debt ceiling).

It’s always the same when Republicans take over a chamber of Congress or the presidency. Horrors! The debt is out of control! Federal spending must be cut!

Not only is the story false, but it leaves out the bigger and more important story behind today’s federal debt: the switch by America’s wealthy over the last half century from paying taxes to the government to lending the government money.

This back story needs to be told if Americans are to understand what’s really happened and what needs to be done about it. Republicans won’t tell it, so Democrats (starting with Joe Biden) must.

A half century ago, American’s wealthy financed the federal government mainly through their tax payments. Tax rates on the wealthy were high: Under Republican President Dwight Eisenhower, they were over 90 percent. Even after all tax deductions, the wealthy typically paid half of their incomes in taxes.

Since then — courtesy of Ronald Reagan, George W. Bush, and Donald Trump — the effective tax rate on wealthy Americans has plummeted. Even as they’ve accumulated unprecedented wealth, today’s rich are now paying a lower tax rate than middle-class Americans. (The 400 richest American families paid a tax rate of just 3.4 percent between 2014 and 2018, while the rest of us paid an average tax rate of 13.3 percent.)

One of the biggest reasons the federal debt has exploded is that tax cuts on wealthier Americans have reduced government revenue.

Meanwhile, America’s wealthy are financing America’s exploding debt by lending the federal government money, for which the government pays them interest.

As the federal debt continues to mount, those interest payments are ballooning — hitting a record $475 billion in the last fiscal next year (which ran through September). The Congressional Budget Office predicts that interest payments on the federal debt will reach 3.3 percent of the GDP by 2032 and 7.2 percent by 2052.

The biggest recipients of these interest payments are not foreigners but wealthy Americans who park their savings in treasury bonds held by mutual funds, hedge funds, pension funds, banks, insurance companies, personal trusts, and estates.

Hence the half-century switch: The wealthy used to pay higher taxes to the government. Now the government pays the wealthy interest on their loans to finance a swelling debt that’s been caused largely by lower taxes on the wealthy.

This means that a growing portion of your taxes are going to the wealthy in the form of interest payments, rather than paying for government services everyone needs.

So, the real problem isn’t America’s growing federal budget deficit. It’s the decline in tax revenue from America’s wealthy combined with growing interest payments to them.

Both are worsening America’s already horrific inequalities of income and wealth.

What should be done? Reduce the debt by raising taxes on the wealthy.

This back story needs to be told. Please spread the word.

Good People Doing Good Things – Dan Price (Redux)

Posted on by under Good people doing good things, Social commentary

Rarely do I redux a good people post, but Dan Price is one who is more than deserving of a replay.  In this day when corporations are making higher profits than ever and workers are suffering more than ever, it is so refreshing to see a company that takes care of its people first!  I think the CEOs of every major corporation should have to read about Dan Price and his company, Gravity Payments.  Since I first wrote about Dan back in June 2017 I have given a couple of updates and you’ll find the links to those at the end of this post.  You can also find Dan on Twitter.

“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.

Dan-Price-1

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

Updates from 2019 and 2020:

2019

2020

The Wealthy Are Killing Us

Posted on by under Environmental Issues, Global Issues, Law and justice, Political commentary, Racism & Bigotry, Social commentary

Two things along similar lines caught my eye today, both dealing with the income disparity in the U.S.  The first was an email/newsletter I received from Robert Reich about how this nation’s people are suffering in numerous ways that could be alleviated if only the wealthy paid their fair share in taxes.  This is a topic I’ve addressed before and in my opinion, it is criminal that the top 1% of the wealthiest people in this country pay relatively almost no taxes, while those of us working hard just to survive pay the bulk of the taxes.

The second thing that drew my attention was a post by our friend Keith based on an article in US News called “The upward mobility ‘American Dream’ has been broken. Look at the numbers” by Bella Cangelosi.  The article outlines how far the U.S. has fallen in so many areas, largely because, again, the wealthy and corporations have been given so many tax dodges disguised as deductions that the nation can no longer afford to provide a helping hand to those who are trying to better their lives.

Below is Reich’s newsletter, and I hope you’ll take a few minutes to read Keith’s excellent piece.

Wealth. Tax. Now.

Robert Reich-4by Robert Reich

The United States is the richest country in the world, with financial assets more than 400 times greater than the poorest country per capita.

So why can’t we afford universal health care, high-quality affordable childcare, and free college, like virtually every other developed country?

The truth is that we can afford those things and much more, but Republicans have blocked them for decades with a Big Lie: the government is broke, and there’s nothing we can do about it.

But America is not broke. The problem is that the top 1% of people own 44% of the country’s wealth but pay the lowest tax rate. That’s why Elizabeth Warren and Bernie Sanders have proposed a small, common-sense wealth tax that will take just a few pennies on every dollar over $32 million (Sanders) or $50 million (Warren) so America can finally meet the needs of working people, just like every other country does.

The amount of money consolidated in the hands of the wealthiest people in the U.S. is hard to fathom. Just 400 people in this country control $3.2 trillion, which is more money than the bottom half of Americans. The top 10% controls 75% of the wealth.

And every day, that wealth grows into even more wealth, just by sitting in investments and taking advantage of the stock market. Jeff Bezos makes nearly $150,000 every minute by doing nothing.

While the rich get exponentially richer, those in the bottom 50% are getting crushed by the pandemic economy, creating the worst wealth inequality in history. And in the next thirty years, the ultra rich of the Boomer generation will pass down their fortunes to their children in the biggest transfer of wealth ever known.

This is the dynasty-building that the founding fathers were trying to avoid when this country began. These ultra wealthy use their money to exert outsized control over charities, the government, and business trends, making them de facto rulers in the U.S.

Worse, thanks to decades of the fairy tale of trickle-down economics culminating in the Trump tax cut, the wealthy pay nowhere near their fair share to keep the country going.

The majority of taxes that fund the government come from payroll and income taxes, but that’s not where real wealth is made or stored. That’s why the ultra wealthy have been experiencing exponential growth in their holdings while the government has been cutting programs and building the deficit.

No billionaire is going to suffer under either of these plans — even under the highest tax rate, Jeff Bezos and Bill Gates will still be worth tens of billions of dollars. That’s more money than most people could spend in a lifetime. But the tax dollars can pay for the basic items other countries take for granted that we’ve been denied: Universal health care. Childcare. Higher education.

The programs paid for by the wealth tax will both slow the money-hoarding taking place at the top and give the bottom 50% the programs they need to be able to build savings and eventually their own wealth.

economy-3economy-7

Filosofa Ponders …

Posted on by under Environmental Issues, Political commentary, Racism & Bigotry, Social commentary

Filosofa means ‘philosopher’ in Spanish.  When I first started this blog, my friend Herb suggested the name ‘Filosofa’s Word’ because he sees me as a philosopher of sorts.  I rarely philosophize these days, but tonight I am in a reflective mood, pondering and feeling the need to opine a bit.  Please bear with me.

Have you ever stopped and pondered the differences … the core differences, not the everyday cosmetic differences … between the two major political parties in the U.S.?  Most people are lifelong members of one party or another, while a small percentage are recent converts and another small percentage identify as Independents.

If you ask most people, they will give you a few key talking points, such as Republicans are for smaller government, big business, and a balanced budget, Democrats are for inclusiveness, more government regulations, etc., etc.  If you ask a die-hard republican what Democrats stand for, the first word out of his mouth will likely be: socialism.

I am neither a registered Republican nor Democrat, don’t label myself as either, though at this point, I see so much wrong with the Republican ideology that I suppose I’m far more aligned with the Democratic Party than the Republican.  But it occurs to me tonight that perhaps neither side actually understands what the other is fighting for.

I drew this conclusion after reading part of a statement issued by Florida Senator Rick Scott tonight.  In his statement he makes some truly absurd claims …

At the very same time these far-left radicals are trying to remake America in their image, and lead us into a disastrous, dystopian, socialist future, we have a parade of pundits and even Republican voices suggesting we should have a GOP civil war. NO.

This does not need to be true, should not be true, and will not be true. Those fanning these flames, in both the media and our own ranks, desire a GOP civil war. No, we don’t have time for that: The hour is late, the Democrats are planning to destroy our freedoms, and the threat in front of us is very real.

Yes, we are up against powerful elites headquartered in Washington and on the coasts, and they endlessly try to lecture, bully, and intimidate us. But we can beat them. The Republican Civil War is now cancelled.

You and I are being called upon to rescue our nation from a socialist experiment that always has a tragic finale, an ending that involves loss – loss of prosperity, loss of freedom and loss of life. Let’s work together, let’s focus forward, and let’s get to work to create the America our families want and deserve.

Say WHAT???  ‘Far left radicals’ … is that what I am?  What planet is this man living on?  Dystopian socialist future?  Destroy our freedoms?  Socialist experiment???  Loss of prosperity, freedom and life?  What the Sam Hell is he even talking about?

My first comment is that Rick Scott does not understand what ‘socialism’ is, and like so many in the Republican Party today is trying to use the word as a scare tactic.  Socialism, as I have clarified before, is:  a political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.

Nobody that I’m aware of is advocating that the means of production, distribution and exchange be owned and regulated by the government (the community as a whole, in this case).  Regulations, yes … ownership, no.  This is, for better or for worse, a market-driven capitalist nation.  Personally, I think the U.S. has taken capitalism too far, to the detriment of the people of this nation, but nobody asked me.  Regulations have only been imposed where corporations abused their freedom, such as in their treatment of employees, workplace safety, monopolistic practices, and most recently polluting the environment.

When Mr. Scott speaks of ‘loss of prosperity’, I have to wonder just whose prosperity he refers to, for the income gap in this country has been growing by leaps and bounds, leaving most of us scratching our heads when the word prosperous comes up in conversation.  But see, here’s the problem … too many people don’t understand most of this and when somebody tells them that they’re going to lose their prosperity or their freedom if a Democrat is elected, they believe it!  They don’t realize that they aren’t the ones with prosperity and freedom to begin with!  It is the owners of the companies they work for who are prosperous, at their expense.  It is the CEOs of the companies who manufacture the cars they drive, the appliances in their homes, the clothes they wear, and the food they eat that are prosperous.

The biggest difference between Mr. Scott’s Republican Party and the Democratic Party is people.  The Republican Party still adheres to Ronald Reagan’s ‘trickle down’ economic theory … a theory that has been deposed and dispelled so many times, and yet they keep telling the myth over and over.  And people believe it … over and over.  The theory goes that if we don’t regulate big business, if we don’t expect them to pay their fair share in taxes, then they will make lots ‘n lots of money and they will then share it by paying their workers more, and by starting new factories to hire even more workers.  It’s a lie.  A bald-faced lie.  But even today, people believe the lie.  Even after Republicans have blocked a raise in the federal minimum wage rate for twelve years, people believe the lie.

The key difference in the two parties boils down to this:  people vs profit.  You’ve heard me use that term more than a few times but stop and consider it for a minute.  The Republicans support big business, unfettered by such things as taxes, workplace safety regulations, or environmental regulations that might cut into their obscene profit margin.  They believe that the working class should bear the bulk of the burden of supporting government and that government spending should largely be on such things as the military and show-stopping space exploration.  Democrats, on the other hand, would rather see people’s wages increased, access to affordable healthcare for all, and taking care of those who, for whatever reason, are not able to take care of themselves.  Yes, Democrats support what are called ‘social welfare’ programs that help people pull themselves up, help them feed, house, and clothe their families.  Is that really such a bad thing?

The simple fact is that not everyone has the opportunity to earn a college degree and get a high-paying job.  People have troubles, sometimes of their own making, sometimes not, but should they and their children have to die of starvation or a lack of healthcare, while others have billions of dollars stowed in offshore accounts?  What, exactly, is wrong with equality, with everyone contributing so that everyone has an opportunity to live a decent life?  This “I’ve got mine; you get your own” mentality is bullshit.  And the ultimate irony is that most of those who identify themselves as Republicans claim to be ‘Christians’.  I make no such claim, but I’ve always heard that Christianity was about sharing, giving, caring, helping.  Perhaps not so much anymore.

Universal Basic Income-Let’s Have a Conversation-Part one

Posted on by under Law and justice, Political commentary, Re-blogs, Social commentary

Here’s an idea that should start a few conversations! Universal Basic Income … you’ve heard the concept … now let Jeff tell you a little bit about it! Thanks Jeff!

On The Fence Voters

I wrote a post recently called An Economic Wakeup Call. In it, I suggested that our present form of capitalism is no longer viable. Scenes of long traffic jams at local food banks are now becoming commonplace. Never did I think that in the United States of America, the wealthiest country on the planet, would we ever see such a thing.

I argued that it’s way past time for us as a society to take a long hard look at our economic well-being. Because based on what I’m seeing, what we’re doing now is not working. Not only do we need a more compassionate and humane economy, but also one that works for everyone, not just a select few. Haven’t we had enough of trillion-dollar tax cuts that never seem to trickle-down to the rest of us?

So what can we do? Indeed, a higher minimum wage would go…

View original post 852 more words

Twelve Years of Bloomberg as Mayor: A New Yorker’s Perspective (Part Three)

Posted on by under Election 2020, Environmental Issues, Law and justice, Political commentary, Racism & Bigotry, Re-blogs

This is the third part of Brendan’s series on what he saw first-hand while living in New York City while Mike Bloomberg was Mayor. There are certainly some eye-openers here! Thank you, Brendan, for this excellent birds-eye view of the Mayor, and for your generous permission to share with my readers!

Blind Injustice

Those of you who’ve been on my blog during the last week or so will know that I’m doing a mini-series on what it was like to have current candidate for president Michael Bloomberg as Mayor of New York City. I explained in Part One why his record as mayor is relevant, and I explained in Part Two the multitude of problems he had with his treatment of others. Today is the third and finalpart of my mini-series, which will go into his record on some other issues, as well as where we should go from here with the Bloomberg candidacy.

One of the most important issues this campaign is that of trying to “save our democracy.” And rightfully so, because there is a genuine fear among many that President Trump is dangerous to American democracy. However, if Mayor Bloomberg’s record tells us anything, it’s that he would also be…

View original post 793 more words

Robert Reich’s View On Bloomberg

Posted on by under Election 2020, Law and justice, Political commentary, Social commentary

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 …

Posted on by under Election 2018, Political commentary, Rants, Social commentary

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

Posted on by under Global Issues, Political commentary, Social commentary

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

Posted on by under Political commentary, Social commentary

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.