Overview – Economic Justice

 Values

What Money Can’t Buy and why eco­nom­ics needs to be seen not as a sci­ence but a moral phi­los­o­phy

Poverty

The Real Numbers: Half of America in Poverty — and It’s Creeping toward 75%

The Republicans’ War on the Poor

The GOP Is in Total Denial About America’s Soaring Poverty Problems By Michelle Goldberg, The Nation, posted on Alternet.org, December 16, 2013

Inequality

one of the most important and controversial issues of our time: How Washington and Big Business colluded to make the super-rich richer and turn their backs on the rest of us.– Jacob Hacker and Paul Pierson, authors of Winner-Take-All Politics: How Washington Made the Rich Richer — And Turned Its Back on the Middle Class, argue that America’s vast inequality is no accident, but in fact has been politically engineered. – How, in a nation as wealthy as America, can the economy simply stop working for people at large, while super-serving those at the very top?…detail important truths behind a 30-year economic assault against the middle class….What government has done and not done, and the politics that produced it, is really at the heart of the rise of an economy that has showered huge riches on the very, very, very well off.”  politicians rewrote the rules to create a winner-take-all economy that favors the 1% over everyone else, putting our once and future middle class in peril.” Engineered Inequality – Jacob Hacker & Paul Pierson on Moyers & Company,  March 1, 2012

Class wars

Billionaires Against Social Security

Billionaires Unchained: The New Pay-As-You-Go Landscape of American “Democracy”

CEOs average $12.3 million in 2012, 354 times the average worker

CEO-To-Worker Pay Ratio Ballooned 1,000 Percent Since 1950

How the Billionaires Class Is Destroying Democracy

The Empathy Ceiling: The Rich Are Different — And Not In a Good Way

Transfer of wealth

Which is the more redis­tri­b­u­tion­ist of our two par­ties? In recent decades, as Repub­li­cans have devoted them­selves with laser-like inten­sity to redis­trib­ut­ing America’s wealth and income upward, the evi­dence sug­gests the answer is the GOP. The most obvi­ous way that Repub­li­cans have robbed from the mid­dle to give to the rich has been the changes they wrought in the tax code — reduc­ing income taxes for the wealthy in the Rea­gan and George W. Bush tax cuts, and cut­ting the tax rate on cap­i­tal gains to less than half the rate on the top income of upper-middle-class employees…The less widely under­stood way that Repub­li­cans have helped redis­trib­ute wealth to the already wealthy is by chang­ing the rules…Indeed, the United State­s has expe­ri­enced an upward redis­tri­b­u­tion so pro­found that it affects far more than incomes. Whole sec­tors of the econ­omy and regions of the coun­try have been dec­i­mated by these eco­nomic changes. The descent in all man­ner of social indexes is most appar­ent among poorly edu­cated whites… Many Democ­rats have been com­plicit in this calamity by their indif­fer­ence to the con­se­quences of dereg­u­la­tion and trade. But the tro­phy for pro­mot­ing the poli­cies that have redis­trib­uted wealth, fam­ily sta­bil­ity and longevity upward goes to the Repub­li­cans, whose standard-bearers are cham­pi­oning even more rad­i­cal ver­sions of these policies today… Redistributing wealth upward by Harold Meyerson, Washington Post, September 25, 2012 

The Biggest “Takers” and Societal Parasites Are the Rich, Not the Working Class and Poor by Paul Buchheit, Buzzflash at Truthout, May 13, 2013

The Shocking Redistribution of Wealth in the Past Five Years by Paul Buchheit, Common Dreams, December 30, 2013

Economic justice – race

…The racial economic gap — also present in other measures of economic well-being, such as wage and unemployment gaps — has persisted over time in the United States… What Do We Really Know About Racial Inequality? Labor Markets, Politics, and the Historical Basis of Black Economic Fortunes By Cynthia Thaler

Capitalism

… Capitalism — the logic of subordinating every aspect of life to the accumulation of profit (i.e. the “rules of the market”) — has become today’s “common sense.” …What sustains the tragic myth that There Is No Alternative? Those committed to building a more just future must begin re-thinking and revealing the taken-for-granted assumptions that make capitalism “common sense,” and bring these into the realm of mainstream public debate in order to widen horizons of possibility… Reclaiming Our Imaginations from ‘There Is No Alternative’ by Andrea Brower

“The Dumbest Idea in the World”: Corporate America’s False — and Dangerous — Ideology of Shareholder Value by Lynn Stout

Corporate Espionage and the Secret War Against Citizen Activism

Conservative Fantasies About the Miracles of the Market 

Corporate Power

…It’s not the powerless who corrupt democracies… it’s the powerful who corrupt democracies. And money is the source of that power…America’s fiscal problems are a direct result of the Billionaire Class working behind the scenes of our democracy and syphoning off massive amounts of wealth for themselves while paying lower taxes than they’ve paid in a half-century… How the Billionaires Class Is Destroying Democracy By Thom Hartmann and Sam Sacks 

“The corporate-policy network is highly centralized, at both the level of individuals and that of organizations. Its inner circle is a tightly interwoven ensemble of politically active business leaders…” William K. Carroll and Jean Philippe SapinskiMeet the Elite Business and Think-Tank Community That’s Doing Its Best to Control the World, By Andrew Gavin Marshall posted on Alternet.org June 19, 2013  

The Big Picture: A 40-Year Scan of the Right-Wing Corporate Takeover of America

Corporate social responsibility

….As consumers, employees and entrepreneurs, Millennials are shifting the norms of corporate America’s conduct, ethical imperatives and purpose…are more conscientious consumers than their predecessors, demanding greater honesty and accountability from businesses…A new generation of employees, consumers and entrepreneurs is stepping forward with a better way of doing business — putting its bets on the goodness of people rather than loading the dice in its own favor. Millennials to business: Social responsibility isn’t optional By Michelle Nunn

Economic justice – labor

… Money and budget deficits are the pretext for a larger battle to attack government and break public-sector unions for political reasons… What is really going on here is an effort by corporations and the GOP to dismantle one of the few remaining institutions in America that defy their power… Unions represented what John Kenneth Galbraith called a “countervailing power” on corporations…. Attacking unions: It’s not about the money, it’s about power By David Schultz, MinnPost.com

… the share of America’s work­force that’s union­ized hit a 97-year low…It’s a vicious cycle: as unions decline, fewer people see their fates as bound up with unions, which just accelerates the decline …when unions are stronger the economy as a whole does better… unions lift wages for non-union members too by creat­ing a higher prevailing wage…The weakness of labor is everyone’s problem — and its revival everyone’s opportunity. The Decline of Unions Is Your Problem Too By Eric Liu

Middle class

The Middle Class Faces Extinction—So Does the American Dream by Stewart Lansley, Los Angeles Review of Books, Alternet.org,  June 3, 2013

Big Lie: America Doesn’t Have #1 Richest Middle-Class in the World…We’re Ranked 27th! by Les Leopold

Biblical Capitalism

… ”Biblical Capitalism” or the belief that unregulated capitalism is biblically mandated. The Religious Right is well known for its regressive social activism, but less publicized is the role it has played in the war against progressive economic policy, labor unions, the regulatory structure and social safety net. The sacralizing of laissez-faire capitalism predates the Tea Party movement and has been a major theme of fundamentalist textbooks for more than three decades…American fundamentalism … was encouraged by some business leaders as a counter to the social gospel….Biblical Capitalism – The Religious Right’s War on Progressive Economic Policy by Rachel Tabachnick, Talk2action.org, Feb 01, 2011

 Prosperity Christianity, or what some call “health and wealth” religion…is the adoption of the logic of free enterprise and branding as a way of understanding, experiencing, and proselytizing Christian religious values.…. A focus on “free” enterprise—meaning (in part) an opposition to organized labor, state intervention, and public resources—made Christian enterprise compatible with conservative, anticommunist ideologies and the ideology of whiteness.… As a set of religious teachings and training, the theology is centered on the notion that God provides material wealth—prosperity—for those individuals he favors… the teaching that believers have a right to the blessings of health and wealth and that they can obtain these blessings through positive confessions of faith and the ‘sowing of seeds’ through the faithful payments of tithes and offerings.….a prioritizing of individualism, a privileging of the free market, a distrust in the state… How Christianity Became a Lucrative Brand By Sarah Banet-Weiser, New York Press, posted on Alternet.org, December 17, 2012

6 Facts About Hunger That Demonstrate the Shameful Excesses of American Capitalism

AlterNet [1] / By Paul Buchheit,  June 23, 2013

Of all the miseries placed on human beings in their everyday lives, the lack of food may be the most inexcusable. Even in a world controlled by unbending attitudes of self-reliance and individual responsibility, the reality of children and seniors and disabled citizens going hungry is a stain on humanity, a shameful testament to the capitalist goal of profit without conscience.

The facts presented here all touch on the lives of human beings, in the U.S. and beyond, who lack food or the means to pay for it.

1. Congress wants to cut a food program that feeds low-income children.

According to the Department of Agriculture [3], 48% of Supplemental Nutrition Assistance Program (SNAP) recipients in 2011 were children. Either unaware or indifferent to this, Congress is considering a new farm bill [4] that would cut food assistance by $2 billion a year while boosting the farm subsidies of big agriculture.

2. Some individuals make enough in two seconds to pay a SNAP recipient’s food bill for an entire year.

Americans [5] Bill Gates, Warren Buffett, Larry Ellison, two Kochs, and four Waltons made an average of $6 billion each from their stocks and other investments in 2012. A $6 billion per year person makes enough in two seconds (based on a 40-hour work-week) to pay a year’s worth of benefits to the average SNAP [6] recipient. Just 20 [5] Americans made as much from their 2012 investments as the entire SNAP budget [7] for 47 million people.

Capitalism encourages an individual to make as much money as possible, even without producing anything. Most Americans accept that. But questions should be raised about a system that allows the yearlong needs of a hungry person to flash by in two seconds of an investor’s life.

3. McDonald’s profits are double the total wages of all its food servers.

McDonald’s has 440,000 [8] employees, most of them food servers making the median [9] hourly wage of $9.10 an hour or less, for a maximum of about $18,200 per year. The company’s $8 billion profit, after wages are paid, works out to the same amount: $18,200 per employee.

As noted by MSN Money [10], the company pays its front-line workers minimum wage or very close to it. But instead of passing along part of its profits to employees, McDonald’s just announced plans for increased dividends and share repurchases.

4. Just 10 individuals made as much as all the fast-food counter workers in the U.S.

The 10 richest [5] on the Forbes list increased their combined wealth by almost $60 billion from 2011 to 2012. That’s approximately equivalent to the total annual salaries of 3,378,030 fast-food [11] counter employees if they were all able to work 40-hour weeks, 50 weeks a year.

5. Apple avoided enough in taxes to mount a global attack on malnutrition.

The World Bank estimates the total cost [12] for “successfully mounting an attack on malnutrition” would be about $10.3 to $11.8 billion annually. Apple [13] alone underpaid its 2012 taxes by $11 billion, based on a 35% rate on total global income. (The company paid $8,443 current taxes on $55,763 total income, or a little over 15%.)

6. Speculation on food prices has contributed to the impoverishment of 115 million people.

From 1996 to 2011 the portion of speculative [14] wheat market trades by Goldman Sachs and other players went from 12 percent to 61 percent. The price [15] of wheat went from $105 a ton in 2000 to $481 a ton in 2008.

Food prices dropped after the recession, but the World Bank [16] notes that they’ve jumped 43 percent since 2010. The World Food Program [17] reported that since 2008, high prices have pushed 115 million more people into hunger and poverty.

Speculation hasn’t hurt the speculators. According to the World Wealth Report 2013 [18], the number of high net worth individuals ($1 million or more in investable assets) increased by 11.5% in North America in 2012, the highest rate in the world.

Billionaires are on the rise, and a billion people are without adequate food. The speculators should be ashamed.

See more stories tagged with:

hunger [19]


Source URL: http://www.alternet.org/hard-times-usa/6-facts-about-hunger-demonstrate-shameful-excesses-american-capitalism

Links:
[1] http://www.alternet.org
[2] http://www.alternet.org/authors/paul-buchheit
[3] http://blogs.usda.gov/2011/06/24/fact-vs-fiction-usda%E2%80%99s-supplemental-nutrition-assistance-program/
[4] http://thecaucus.blogs.nytimes.com/2013/06/17/opposition-to-house-farm-bill-spans-political-spectrum/
[5] http://www.usagainstgreed.org/Forbes400_2011-12.xls
[6] http://www.fns.usda.gov/pd/18SNAPavg$PP.htm
[7] http://www.obpa.usda.gov/budsum/FY13budsum.pdf
[8] http://www.sec.gov/Archives/edgar/data/63908/000006390813000010/mcd-12312012x10k.htm
[9] http://www.bls.gov/oes/current/oes_nat.htm#35-0000
[10] http://money.msn.com/investing/5-companies-that-owe-workers-a-raise
[11] http://www.bls.gov/oes/current/oes_nat.htm#35-3020
[12] http://www.savethechildren.org.uk/resources/online-library/life-free-hunger-tackling-child-malnutrition
[13] http://www.sec.gov/Archives/edgar/data/320193/000119312512444068/d411355d10k.htm
[14] http://www.guardian.co.uk/commentisfree/2013/may/23/goldman-sachs-agm-drive-food-prices-up
[15] http://www.odi.org.uk/sites/odi.org.uk/files/odi-assets/publications-opinion-files/1630.pdf
[16] http://www.worldbank.org/en/news/feature/2012/09/13/america_latina_crisis_precio_alimentos
[17] http://home.wfp.org/stellent/groups/public/documents/newsroom/wfp204445.pdf
[18] http://www.capgemini.com/sites/default/files/resource/pdf/wwr_2013_1.pdf
[19] http://www.alternet.org/tags/hunger
[20] http://www.alternet.org/%2Bnew_src%2B

Big Lie: America Doesn’t Have #1 Richest Middle-Class in the World…We’re Ranked 27th!

AlterNet [1] / By Les Leopold [2]  June 18, 2013  |

Excerpt

America is the richest country on Earth. We have the most millionaires, the most billionaires and our wealthiest citizens have garnered more of the planet’s riches than any other group in the world. We even have hedge fund managers who make in one hour as much as the average family makes in 21 years! This opulence is supposed to trickle down to the rest of us, improving the lives of everyday Americans. At least that’s what free-market cheerleaders repeatedly promise us. Unfortunately, it’s a lie, one of the biggest ever perpetrated on the American people. Our middle class is falling further and further behind in comparison to the rest of the world. We keep hearing that America is number one. Well, when it comes to middle-class wealth, we’re number 27….Wealth is measured by the total sum of all our assets (homes, bank accounts, stocks, bonds etc.) minus our liabilities (outstanding loans and other debts). It the best indicator we have for individual and family prosperity…”Financialization means the increasing role of financial motives, financial markets, financial actors and financial institutions in the operation of the domestic and international economies.”…In short, financialization is when making money from money becomes more important that providing real goods and services….Once we unleashed Wall Street, their salaries shot up, while everyone else’s stood still…

Full text

America is the richest country on Earth. We have the most millionaires, the most billionaires and our wealthiest citizens have garnered more of the planet’s riches than any other group in the world. We even have hedge fund managers who make in one hour as much as the average family makes in 21 years!

This opulence is supposed to trickle down to the rest of us, improving the lives of everyday Americans. At least that’s what free-market cheerleaders repeatedly promise us.

Unfortunately, it’s a lie, one of the biggest ever perpetrated on the American people.

Our middle class is falling further and further behind in comparison to the rest of the world. We keep hearing that America is number one. Well, when it comes to middle-class wealth, we’re number 27.

The most telling comparative measurement is median wealth (per adult). It describes the amount of wealth accumulated by the person precisely in the middle of the wealth distribution—50 percent of the adult population has more wealth, while 50 percent has less. You can’t get more middle than that.

Wealth is measured by the total sum of all our assets (homes, bank accounts, stocks, bonds etc.) minus our liabilities (outstanding loans and other debts). It the best indicator we have for individual and family prosperity. While the never-ending accumulation of wealth may be wrecking the planet, wealth also provides basic security, especially in a country like ours with such skimpy social programs. Wealth allows us to survive periods of economic turmoil. Wealth allows our children to go to college without incurring crippling debts, or to get help for the down payment on their first homes. As Billie Holiday sings, “God bless the child that’s got his own.”

Well, it’s a sad song. As the chart below shows, there are 26 other countries with a median wealth higher than ours (and the relative reduction of U.S. median wealth has done nothing to make our economy more sustainable).
Why?

Here’s a starter list:

  • We don’t have real universal healthcare. We pay more and still have poorer health outcomes than all other industrialized countries. Should a serious illness strike, we also can become impoverished.
  • Weak labor laws undermine unions and give large corporations more power to keep wages and benefits down. Unions now represent less than 7 percent of all private sector workers, the lowest ever recorded.
  • Our minimum wage is pathetic, especially in comparison to other developed nations [3]. (We’re # 13.) Nobody can live decently on $7.25 an hour. Our poverty-level minimum wage puts downward pressure on the wages of all working people. And while we secure important victories for a few unpaid sick days, most other developed nations provide a month of guaranteed paid vacations as well as many paid sick days.
  • Wall Street is out of control. Once deregulation started 30 years ago, money has gushed to the top as Wall Street was free to find more and more unethical ways to fleece us.
  • Higher education puts our kids into debt. In most other countries higher education is practically tuition-free. Indebted students are not likely to accumulate wealth anytime soon.
  • It’s hard to improve your station in life if you’re in prison, often due to drug-related charges that don’t even exist in other developed nations. In fact, we have the largest prison population in the entire world, and we have the highest percentage of minorities imprisoned. “In major cities across the country, 80% of young African Americans now have criminal records” (from Michelle Alexander’s 2010 book, The New Jim Crow: Mass Incarceration in the Age of Colorblindness).
  • Our tax structures favor the rich and their corporations that no longer pay their fair share. They move money to foreign tax havens, they create and use tax loopholes, and they fight to make sure the source of most of their wealth—capital gains—is taxed at low rates. Meanwhile the rest of us are pressed to make up the difference or suffer deteriorating public services.
  • The wealthy dominate politics. Nowhere else in the developed world are the rich and their corporations able to buy elections with such impunity.
  • Big Money dominates the media. The real story about how we’re getting ripped off is hidden in a blizzard of BS that comes from all the major media outlets…brought to you by….
  • America encourages globalization of production so that workers here are in constant competition with the lower-wage workers all over the world as well as with highly automated techonologies.

Is there one cause of the middle-class collapse that rises above all others?

Yes. The International Labor organization produced a remarkable study (Global Wage Report 2012-13) [4] that sorts out the causes of why wages have remained stagnant while elite incomes have soared. The report compares key causal explanations like declining bargaining power of unions, porous social safety nets, globalization, new technologies and financialization.

Guess which one had the biggest impact on the growing split between the 1 percent and the 99 percent?

Financialization!

What is that? Economist Gerald Epstein offers us a working definition [5]:

“Financialization means the increasing role of financial motives, financial markets, financial actors and financial institutions in the operation of the domestic and international economies.”

This includes such trends as:

  • The corporate change during the 1980s to make shareholder value the ultimate goal.
  • The deregulation of Wall Street that allowed for the creation of a vast array of new financial instruments for gambling.
  • Allowing private equity firm to buy companies, load them up with debt, extract enormous returns, and then kiss them goodbye.
  • The growth of hedge funds that suck productive wealth out of the economy.
  • The myriad of barely regulated world financial markets that finance the globalization of production, combined with so-called “free trade” agreements.
  • The increased share of all corporate profits that go to the financial sector.
  • The ever increasing size of too-big-to-fail banks.
  • The fact that many of our best students rush to Wall Street instead of careers in science, medicine or education.

In short, financialization is when making money from money becomes more important that providing real goods and services. Here’s a chart that says it all. Once we unleashed Wall Street, their salaries shot up, while everyone else’s stood still.

 

Do we still know how to fight!

The carefully researched ILO study provides further proof that Occupy Wall Street was right on the money. OWS succeeded (temporarily), in large part, because it tapped into the deep reservoir of anger toward Wall Street felt by people all over the world. We all know the financiers are screwing us.

Then why didn’t OWS turn into a sustained, mass movement to take on Wall Street?

One reason it didn’t grow was that the rest of us stood back in deference to the original protestors instead of making the movement our own. As a result, we didn’t build a larger movement with the structures needed to take on our financial oligarchs. And until we figure out how to do just that, our nation’s wealth will continue to be siphoned away.

Our hope, I believe, lies in the young people who are engaged each day in fighting for the basic human rights for all manner of working people—temp workers, immigrants, unionized, non-union, gays, lesbians, transgender—as well as those who are fighting to save the planet from environmental destruction. It’s all connected.

At some point these deeply committed activists also will understand that financialization both here and abroad stands in the way of justice and puts our planet at risk. When they see the beast clearly, I am confident they will figure out how to slay it.

The sooner, the better.

See more stories tagged with:

middle class [6]


Source URL: http://www.alternet.org/economy/americas-middle-class-27th-richest

Links:
[1] http://www.alternet.org
[2] http://www.alternet.org/authors/les-leopold
[3] http://en.wikipedia.org/wiki/List_of_minimum_wages_by_country
[4] http://www.ilo.org/wcmsp5/groups/public/—dgreports/—dcomm/—publ/documents/publication/wcms_194843.pdf
[5] http://www.peri.umass.edu/fileadmin/pdf/programs/globalization/financialization/chapter1.pdf
[6] http://www.alternet.org/tags/middle-class
[7] http://www.alternet.org/%2Bnew_src%2B

 

Guess What? Fewer Americans Call Themselves Economic Conservatives

By Lynn Stuart ParramoreAlterNetMay 30, 2013  |

2013 has not exactly been an inspiring year on the economic front so far: Between the news of banks too big to prosecute, consumer protection stalled, financial reform thwarted, corporate taxes dodged, privatization pushed, and Social Security attacked, it has been hard to find something to smile about. But then, suddenly, out comes a little ray of sunshine from behind the clouds.

A new Gallup survey [3] shows significant changes in the way we Americans see ourselves. The big news? We don’t like to call ourselves economic conservatives as much as we used to; in fact, that number is at a five-year low. On top of that, more of us say we’re social liberals.

What’s going on? How did something good happen when everything feels so bad?

After the shattering experience of WWI, Freud wrote about the pervasive discontent and unease with society, and he examined how humans tend to react to these feelings. In facing misery, would we throw in the towel? Would we become more aggressive? Or could we embrace the opportunity to improve our reality and transform our thinking? Freud, it must be said, was not overly optimistic about the answers to these questions.

Today, there’s a widespread feeling of skepticism about the form of capitalism we’re saddled with, which works well for a few and causes the rest of us various kinds of misery. Many Americans are beyond sick and tired of bankers, financiers and political hucksters. We see that crony capitalism is destroying our communities, our democracy, our economic well-being, and the natural world.

But will anything ever change it? I have been writing about economic matters since the Great Recession hit, trying to foster different ways of thinking. Honestly, most days it seemed like what I was trying to say was falling on deaf ears – that smart regulation was vital, that jobs must be our primary focus, that austerity was a foolish and deadly policy, and that, at a fundamental level, we need an economy that will serve society rather than the other way around.

Meanwhile, monopolies flourished, financial fraud ran rampant, deficit hawks commanded the scene in Washington, economic quacks were treated as oracles in the mainstream media, the rich got richer, and the poor got poorer.

Republicans won big-time in the 2010 midterm election, seizing control of the House and many state legislatures, including my home state of North Carolina, where they are bent on turning one of the most progressive states in the South into Mid-Atlantic Mississippi. Polls in 2010 showed that the number of Americans labeling themselves conservative, especially on the economy, jumped. Things looked pretty bleak.

Relinquishing old ways of thinking is a painful process, and more often not, a slow journey fraught with setbacks and reversals. It’s not easy to examine old assumptions about how we work, view money and allocate power. Older generations were also challenged to change the way they thought about the economy.  The Great Depression etched itself deeply into America’s collective memory: The idea that the government had to step in with jobs programs, education, housing, transportation, and research investments in order to save the economy from Wall Street-driven ruin impressed itself on our grandparents. That view held sway until Ronald Reagan came along and convinced everyone that government was the problem, not the solution, and recommended that the wild horses of capitalism be set free.

America became more “economically conservative.” The idea that economic conservatism equals prudence is an old association, dating all the way back to 18th-century thinker Edmund Burke, and it’s one that proponents of reckless free-market fundamentalism took full advantage of. They vigorously repeated the lie that markets can regulate themselves, that they are resistant to fraud, and that things would be fine if the government would just let the capitalists alone. They claimed, ad nauseum, that liberals were financially naive and irresponsible spendthrifts. They more or less got away with this package of deceit until the financial crash, which happened on the watch of a free-marketeer, and one who, by the way, had the worst record on job creation in modern history [4]. That was a serious blow to their mythology.

Gradually it become harder to argue that government should be shrunk to the size where it could be drowned in a bathtub because it grew obvious that government intervention and things like unemployment benefits (what economists call “automatic stabilizers”) kept us from plunging into a Great Depression. Slowly, painfully, Americans have begun to see that focusing on austerity and debt reduction is a road to nowhere, and that the economists whose work is frequently cited by proponents of this view doesn’t hold up to scrutiny [5]. We’re gradually getting the message that economic prudence means government making long-term commitments to investing in the kind of robust education, research and infrastructure that our future well-being depends on.

The new Gallup poll reveals that only 41 percent of Americans now characterize their economic views as “conservative,” or “very conservative,” the lowest since President Barack Obama was elected, and substantially lower than the 50 percent who labeled themselves that way in 2010. Thirty-seven percent of Americans now call themselves “economically moderate,” up from 32 percent last year. The percentage identifying themselves as economic liberals has stayed put since 2001, when Gallup started its annual Values and Beliefs poll. But part of this may be semantics – the association of the word “conservative” with “prudence” or “care” in economic matters is hard to shake. Yet the polls suggest that a shift may finally be happening. “Moderate,” at least, is a start. We may see a new notion of fiscal responsibility emerge that doesn’t involve casting people into unemployment and allowing our schools and roads to crumble.

Even conservatives are beginning to rethink what it means to be an economic conservative. They have begun to focus on breaking up the big banks, and a few, as Ryan Cooper reports in the Washington Monthly [6], are going even further and bringing out their closeted inner Keynesians. It remains to be seen whether or not they can get anywhere with their recalcitrant party, but there is dissent in the ranks.

The link between self-identification and voting is tricky. If you think about it, the fact that the number of Americans calling themselves economically conservative in 2010 increased in the polls might not have been so much a sincere expression of ideology as an expression of discontent with the political and economic status quo, whatever it happened to be. After the election, political scientist Thomas Ferguson noted [7] in an interview that in periods of turmoil, the prevailing sentiment is usually “throw the bums out.”

“What the election really shows,” Ferguson said, “is not that the parties can’t agree — Democrats and most of the GOP leadership finally agreed on the bank bailouts, for example — but that the American people will not accept the policies that leaders in both parties prefer.”

The Gallup poll also shows that the percentage of Americans describing their social views as “liberal” or “very liberal” has reached an all-time high: 30 percent. That’s considerably higher than the 22 percent who identified that way in 2010. (Thirty-five percent of Americans say they are conservative or very conservative on social issues, while 32 percent call themselves socially moderate.)

Maybe, just maybe, more people will realize that being socially liberal and economically liberal are really the same thing. That wanting gay people to have the right to marry and women to have the right to decide what to do with their bodies are intimately connected with economic equality and the influence of money in politics.

Until then, the idea that Americans are at least trying out new political identifications is a promising trend. It’s up to us on the left to make sure that “economically liberal” has a clear, positive meaning that a wider swath of people can get behind.

See more stories tagged with:

america [8],

barack obama [9],

Conservatism in the United States [10],

democratic party [11],

Edmund Burke [12],

mississippi [13],

north carolina [14],

north [15],

Person Career [16],

president [17],

Quotation [18],

republican party [19],

ronald reagan [20],

Ryan Cooper [21],

thomas ferguson [22],

washington [23],

bank bailouts [24],

mainstream media [25],

Political scientist [26],

the Washington Monthly [27],

transportation [28]


Source URL: http://www.alternet.org/news-amp-politics/guess-what-fewer-americans-call-themselves-economic-conservatives

Links:
[1] http://www.alternet.org
[2] http://www.alternet.org/authors/lynn-stuart-parramore
[3] http://www.gallup.com/poll/162746/fewer-americans-identify-economic-conservatives-2013.aspx
[4] http://blogs.wsj.com/economics/2009/01/09/bush-on-jobs-the-worst-track-record-on-record/
[5] http://www.alternet.org/economy/meet-28-year-old-student-who-exposed-two-harvard-professors-whose-shoddy-research-drove
[6] http://www.washingtonmonthly.com/magazine/may_june_2013/features/reformish_conservatives044510.php
[7] http://www.huffingtonpost.com/lynn-parramore/money-and-the-midterms-ar_b_782660.html
[8] http://www.alternet.org/tags/america
[9] http://www.alternet.org/tags/barack-obama
[10] http://www.alternet.org/tags/conservatism-united-states
[11] http://www.alternet.org/tags/democratic-party
[12] http://www.alternet.org/tags/edmund-burke
[13] http://www.alternet.org/tags/mississippi-0
[14] http://www.alternet.org/tags/north-carolina
[15] http://www.alternet.org/tags/north
[16] http://www.alternet.org/tags/person-career
[17] http://www.alternet.org/tags/president-0
[18] http://www.alternet.org/tags/quotation
[19] http://www.alternet.org/tags/republican-party
[20] http://www.alternet.org/tags/ronald-reagan
[21] http://www.alternet.org/tags/ryan-cooper
[22] http://www.alternet.org/tags/thomas-ferguson
[23] http://www.alternet.org/tags/washington-0
[24] http://www.alternet.org/tags/bank-bailouts
[25] http://www.alternet.org/tags/mainstream-media
[26] http://www.alternet.org/tags/political-scientist
[27] http://www.alternet.org/tags/washington-monthly
[28] http://www.alternet.org/tags/transportation
[29] http://www.alternet.org/%2Bnew_src%2B

The Middle Class Faces Extinction—So Does the American Dream

Stewart Lansley, Los Angeles Review of Books, Alternet.org,  June 3, 2013

This article first appeared in the Los Angeles Review of Books

Excerpt

Inequality is now one of the biggest political and economic challenges facing the United States…The return of inequality to levels last seen in the 1920s has had a profound effect on American society, its values, and its economy….One of the most significant effects…has been the capping of opportunities and the emergence of downward mobility amongst the middle classes, a process that began well before the recession. Around 100 million Americans — a third of the population — live below or fractionally above the poverty level. A quarter of the American workforce end up in low-paid jobs, the highest rate across rich nations, while the wealthiest 400 Americans have the same combined wealth as the poorest half — over 150 million people…The nation is at last waking up to what has been reality for years — the vaunted American Dream (the ability of citizens to go from rags to riches, and one of the country’s most enduring values) is increasingly a myth…The stagnating incomes of the bulk of Americans, along with the shrinking of the middle, are the mirror image of the rise of the plutocracy and the return of the gilded age…the long wage squeeze and the growing concentration of income at the top led to record corporate surpluses and an explosion of personal fortunes…the effect was the upward redistribution of existing wealth and the fueling of the bubbles — in property and business — that eventually brought the global economy to its knees. That inequality is also acting as a profound drag on the prospects of recovery…But unless Obama can find a way of breaking the firewalls created by the new plutocrats to protect their wealth from economic collapse and political interference, the likelihood is that the American middle class will go on shrinking, the American dream will further erode, and the nation’s economy will continue to stumble from crisis to crisis.

Full text

Inequality is now one of the biggest political and economic challenges facing the United States. Not that long ago, the gap between rich and poor barely registered on the political Richter scale. Now the growing income divide, an issue that dominated the presidential election debate, has turned into one of the hottest topics of the age.

Postwar American history divides into two halves. For the first three decades, those on middle and low incomes did well out of rising prosperity and inequality fell. In the second half, roughly from the mid–1970s, this process went into reverse. Set on apparent autopilot, the gains from growth were heavily colonized by the superrich, leaving the bulk of the workforce with little better than stagnant incomes.

The return of inequality to levels last seen in the 1920s has had a profound effect on American society, its values, and its economy. The United States led the world in the building of a majority middle class. As early as 1956, the celebrated sociologist, C. Wright Mills, wrote that American society had become “less a pyramid with a flat base than a fat diamond with a bulging middle.”

That bulge has been on a diet. The chairman of President Obama’s Council of Economic Advisers — Professor Alan Krueger — has shown how the size of the American middle class (households with annual incomes within 50 percent of the midpoint of the income distribution) has been heading backwards from a peak of more than a half in the late 1970s to 40 percent now. The “diamond” has gone. The social shape of America now looks more like a contorted “hourglass” with a pronounced bulge at the top, a long thin stem in the middle, and a fat bulge at the bottom.

One of the most significant effects of America’s hourglass society has been the capping of opportunities and the emergence of downward mobility amongst the middle classes, a process that began well before the recession. Around 100 million Americans — a third of the population — live below or fractionally above the poverty level. A quarter of the American workforce end up in low-paid jobs, the highest rate across rich nations, while the wealthiest 400 Americans have the same combined wealth as the poorest half — over 150 million people.

With a growing percentage of the current generation facing a lower living standard than their parents, more and more US citizens express a “fear of falling,” worried about a further loss of livelihood and their relative income status. The nation is at last waking up to what has been reality for years — the vaunted American Dream (the ability of citizens to go from rags to riches, and one of the country’s most enduring values) is increasingly a myth.

In a poll conducted for The Washington Post before the 2012 presidential election, respondents were asked which was the bigger worry: “unfairness in the economic system that favors the wealthy” or “over-regulation of the free market that interferes with growth and prosperity.” They chose unfairness by a margin of 52–37 percent. The mostly pro-self-reliant American public are perhaps coming to recognize that their much-heralded virtues of hard work and self-help are no longer an effective means to economic advancement.

The most damaging impact of growing inequality has been on the American — and global — economy. It has been one of the central rules of market economics that inequality is good for growth and stability. The idea was enshrined in the postwar writings of the New Right critics of the model of managed capitalism that emerged after the war. “Inequality of wealth and incomes is the cause of the masses’ well being, not the cause of anybody’s distress” wrote the Austrian-American economist Ludwig von Mises, one of the leading prophets of the superiority of markets, in 1955.

It was a theory that gained traction during the global economic crisis of the 1970s and with the publication in 1975 of a highly influential book, Equality and Efficiency: The Big Tradeoff, by the late American mainstream economist Arthur Okun. This theory — that you can have either more equal societies or more economically successful ones, but not both — has been used to justify the growth of inequality in the United States, a trend that has since spread to a majority of the rich world. One of the telling by-products of the current economic crisis is that this theory is now being challenged. It is now being increasingly argued that the levels of income concentration in recent times have had a significant negative effect on the economy, bringing slower growth and greater turbulence and contributing to both the 2008 crash and the lack of a sustained recovery.

Perhaps the most significant convert to these ideas is President Obama. A year ago, he remarked, “When middle-class families can no longer afford to buy the goods and services that businesses are selling, it drags down the entire economy from top to bottom.” Addressing delegates at the annual meeting of the World Economic Forum at Davos in January 2013, Christine Lagarde, head of the International Monetary Fund, endorsed this view, “I believe that the economics profession and the policy community have downplayed inequality for too long […] [A] more equal distribution of income allows for more economic stability, more sustained economic growth.”

This view goes against the grain of the economic orthodoxy of the last 30 years. As the Chicago economist Robert E. Lucas, Nobel prizewinner and one of the principal architects of the pro-market, self-regulating school that has dominated economic strategy in the Anglo-Saxon world, declared in 2003, “Of the tendencies that are harmful to sound economics, the most poisonous is to focus on questions of distribution.”

A growing body of evidence and opinion now holds that this idea is wrong. In fact, the “distribution question” — how the cake is divided, between wages and profits on the one hand, and between the top and bottom on the other — is critical to economic health. Over the last 30 years, the rich world, led by the United States, has steered a growing share of national output first to profits and ultimately to the top one percent. Across the 34 richest nations in the world, the share going to wages has fallen from over 66 percent in 1990 to less than 62 percent today. The result is a growing detachment of living standards from output. The stagnating incomes of the bulk of Americans, along with the shrinking of the middle, are the mirror image of the rise of the plutocracy and the return of the gilded age.

This decoupling of wages from output creates a critical structural fault that ultimately brings self-destruction. First, a growing pay-output gap sucks consumer lifeblood out of economies. To fill this growing demand gap, levels of personal debt were allowed to explode. In the US, the level of outstanding personal debt rose almost threefold in the decade from 1997 to $14.4 trillion. This helped to fuel a domestic boom from the mid-1990s, but one that was never going to be sustainable.

Secondly, the long wage squeeze and the growing concentration of income at the top led to record corporate surpluses and an explosion of personal fortunes. Instead of being used to create new wealth via an investment and entrepreneurial boom (as predicted by market theorists), these massive cash surpluses were used to finance a wave of speculative financial activity and asset restructuring. The effect was the upward redistribution of existing wealth and the fueling of the bubbles — in property and business — that eventually brought the global economy to its knees. That inequality is also acting as a profound drag on the prospects of recovery.

A central feature of the President’s annual State of the Union address on February 11 was its call to “grow the economy from the middle out,” to “reignite the true engine of America’s economic growth — a rising, thriving middle class.” In his call for more active government to reduce inequality — from a 25 percent hike in the minimum wage to higher taxes on the rich — Obama was adding some meat to his earlier call “to restore an economy where everyone gets a fair shot, and everyone does their fair share.” Yet, despite a succession of lofty speeches, the best evidence is that since 2008, growth has continued to be very unevenly shared. The economists Emmanuel Saez and Thomas Piketty have shown that over nine tenths of growth in 2010 was captured by the top one percent. This is in stark contrast to the 1930s, when the big gainers from recovery were most ordinary Americans and the big losers were the superrich.

Obama’s program for change fails to match the radicalism of Franklin D. Roosevelt in the 1930s or that of Lyndon Johnson’s War on Poverty three decades later. Of course, creating a more equal America is hardly a cakewalk. The United States has rarely been more divided on the politics of change. Before Congressman Paul Ryan became Mitt Romney’s controversial running mate, he had blasted Obama’s proposed (and modest) tax measures on the rich as “class warfare.” Other global leaders seem equally disempowered in the face of the might of a global billionaire class determined to preserve its privileges, muscle, and wealth.

But unless Obama can find a way of breaking the firewalls created by the new plutocrats to protect their wealth from economic collapse and political interference, the likelihood is that the American middle class will go on shrinking, the American dream will further erode, and the nation’s economy will continue to stumble from crisis to crisis.

See more stories tagged with:

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american dream [5],

economy [6],

state of the union [7],

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depression [11],

poverty [12]


Source URL: http://www.alternet.org/economy/income-inequality-defers-american-dream

Links:
[1] http://lareviewofbooks.org/
[2] http://www.alternet.org/authors/stewart-lansley
[3] http://lareviewofbooks.org/article.php?id=1657&fulltext=1
[4] http://www.alternet.org/tags/income-inequality-0
[5] http://www.alternet.org/tags/american-dream
[6] http://www.alternet.org/tags/economy-0
[7] http://www.alternet.org/tags/state-union
[8] http://www.alternet.org/tags/obama-0
[9] http://www.alternet.org/tags/council-economic-advisers
[10] http://www.alternet.org/tags/alan-krueger
[11] http://www.alternet.org/tags/depression
[12] http://www.alternet.org/tags/poverty-0
[13] http://www.alternet.org/%2Bnew_src%2B

 

The Astonishing Collapse of Black and Latino Household Wealth

By Adam Hudson, AlterNet, May 31, 2013 

Excerpt

…The Great Recession has increased racial inequality and set back the modest socioeconomic gains of the civil rights movement…while the racial wealth gap has existed for decades, it’s drastically expanded during the last 30 years….The 2007-2009 recession devastated the American economy and all families suffered decreasing wealth. However, African American and Latino families were hit the hardest… the racial wealth gap is not new. It has deep historical roots and current policies perpetuate and exacerbate it….Practices in employment and education also contribute to the racial wealth gap…

Full text

Despite growing economic inequality and mass unemployment, Washington is focused on austerity. Politicians and pundits debate how much to cut and how much revenue to raise rather than creating jobs or alleviating the suffering of millions of people. What also gets lost in the dominant discourse about the economy is the suffering of the black community. The Great Recession has increased racial inequality and set back the modest socioeconomic gains of the civil rights movement.

Recently, the Urban Institute released a study [3] on the racial wealth gap titled “Less Than Equal: Racial Disparities in Wealth Accumulation.” The study found that, while the racial wealth gap has existed for decades, it’s drastically expanded during the last 30 years. It says the “average wealth of white families was $230,000 higher than the wealth of black and Hispanic families in 1983.” In that year, white families had an average wealth of nearly $300,000 in 2010 dollars. Wealth for all families increased, but not evenly.

The 2007-2009 recession devastated the American economy and all families suffered decreasing wealth. However, African American and Latino families were hit the hardest. According to the study, “between 2007 and 2010, Hispanic families saw their wealth cut by over 40 percent, and black families saw their wealth fall by 31 percent.” In comparison, white family wealth “fell by 11 percent.”

The average wealth of white families, in 2010, was $632,000 but $110,000 for Latino families and $98,000 for African American families — a wealth gap of over half a million dollars. Median wealth shows the same trend: $91,000 for white families versus $10,000 for Latinos and $11,000 for African Americans in 1983; for 2010, it’s $124,000 for white families, $15,000 for Latino families, and $16,000 for African American families. These are all in 2010 dollars. Therefore, between 1983 and 2010, the racial wealth gap nearly tripled.

The largest sources of wealth within black and Latino communities are homes and retirement. White families derive wealth from their homes and many other sources, such as stocks and other financial investments. Moreover, one needs to have a certain level of disposable income to make such investments. Low-income families have to spend their income on rent, supporting their families, and other necessities just to survive. As a result, they don’t have enough excess cash to save and invest. Those with higher incomes can afford not only to take care of themselves but have enough money to save and invest. Since white families have higher incomes than black and Latino families, they have more money to invest, hence their larger amounts of wealth.

The housing bubble seemed to provide an opportunity for blacks and Latinos to build up wealth, enter the middle class, and achieve the “American Dream.” However, this proved to be a ruse. Black and Latino communities were targeted by major banks, such as Wells Fargo [4] and JPMorgan Chase [5], for subprime mortgage loans, even if they qualified for normal prime loans. Subprime is a form of risky, high-priced lending to people with poor credit histories, giving the loans higher interest rates.

According to a 2009 NAACP study [6], “even when income and credit risk are equal, African Americans are up to 34 percent more likely to receive higher-rate and subprime loans” than whites. This drove up home ownership in those communities but the foundation was on a flimsy stack of cards. When the housing bubble burst and the recession hit, black and Latino communities were hit the hardest.

The Urban Institute study is not the only one to point this out. Other studies, such as a February 2013 study by Brandeis University [7] and another by Pew Research Center [8] in July 2011, while using different methodologies and coming up with different numbers, show the same trend — the racial wealth gap was large to begin and grew exponentially after the recession.

As shown in the studies, the racial wealth gap is not new. It has deep historical roots and current policies perpetuate and exacerbate it. Black African slaves were first imported from Sub-Saharan Africa to North America by European slave traders in the early 1600s. European colonists used African slave labor to work on plantations growing profitable cash crops like cotton, indigo and sugar. African labor was appealing to European colonizers because, unlike native Americans and indentured white European servants, it was plentiful (if one died, they could be replaced by another African), Africans had no connections to Americans land, and Africans knew how to grow cash crops, like cotton and sugar, that grew on the African continent, the Caribbean, and southeastern United States. Thus, the trans-Atlantic slave trade, which lasted from the early 1500s to mid-1800s, saw the importation and exploitation of anywhere between 12 to 30 million African slaves to European colonies in the Caribbean, South America and North America. 

The trans-Atlantic slave trade built [9] the foundation for modern capitalism and current racial inequality. Wall Street itself was a slave trading market [10] with many companies and financial institutions profiting from it, including [11] the Royal Bank of Scotland, Bank of America, Aetna Insurance, now-bankrupt Lehman Brothers, Wachovia, and J.P. Morgan Chase, with lawsuits [12] against many of them for their role in slavery. Banks, particularly predecessors of Wachovia and JPMorgan Chase, Bank of America, accepted [13] slaves as “collateral” and issued loans [14] to slave owners. If a slave owner defaulted on his loan, the slaves, since they were “property,” became owned by the bank. Aetna Insurance had a policy compensating slave owners for their loss of property, such as when a slave died. Slaves also produced commodities that were sold in international markets for profit, which is characteristic of modern capitalism.

The exploitation of black African labor by white slave owners transferred wealth from black African slaves, and their descendants, to white European slave masters, their progeny, and other whites who benefitted from the system. Since African slaves were not financially compensated, they had very little chance to accumulate and pass down wealth in their communities. Even after slavery ended, that transfer of wealth ensured that blacks would remain socioeconomically subordinate to whites for future generations. This is how the present racial wealth gap was formed.  

Just as there were laws protecting slavery, many policies, practices and institutions maintain the racial wealth gap. According to the Brandeis study [7], “homeownership, income, college education, inheritance, and unemployment” are the “major drivers of the racial wealth gap.” The study points out that “for many years, redlining [denying or raising price of insurance or other financial services to particular neighborhoods based on race], discriminatory mortgage-lending practices, lack of access to credit, and lower incomes have blocked the homeownership path for African Americans while creating and reinforcing communities segregated by race.” Many of these practices are perpetrated by the financial sector — the same sector whose roots go back to slavery.

Practices in employment and education also contribute to the racial wealth gap. Currently, black unemployment lies [15] at 13.8%, while 6.8% for whites. According to a Center for American Progress study [16], the weekly median earnings of African Americans (in 2011) were $674 compared to $549 for Latinos, $744 for whites, and $866 for Asian Americans. Much of this is due to “long-standing patterns of discrimination in hiring, training, promoting, and access to benefits” that make it “much harder for African Americans to save and build assets,” said the Brandeis study. In addition, neighborhoods are deeply segregated [17] by class [18] and race. This leaves many lower-income students, particularly students “isolated and concentrated in lower-quality schools, and less academically prepared to enter and complete college.”

The latest emphasis on austerity disproportionately harms African Americans, as well. Cuts to government spending forces the public sector lay off workers. This hurts [19] African Americans since they are 30% more likely to work in the public sector than the general workforce, according to [20] a United for a Fair Economy study. The private sector has a long history of racial discrimination against African Americans, which is why the public sector has been more reliable for black workers. Austerity, therefore, has a detrimental impact on African American employment. It curtails their ability to accumulate wealth, thereby, reinforcing the racial wealth gap. The latest round of sequestration will only exacerbate [21] this trend. This comes at a time when corporate America and Wall Street recovered very well [22] after the recession, experiencing high profits, while the rest of the country still suffers [23] unemployment, low wages, slow job growth, and poverty.

Wealth provides communities with a stable economic foundation. During hard economic times, when employment is difficult to find, possessing wealth helps people stay economically afloat. People can also have income from certain kinds of wealth, like stock or property, meaning that they can make money without working, simply by owning stuff. In addition, wealth can be passed on to future generations, which makes it easier for one’s children and grandchildren to survive economically. Put simply, wealth builds economically stable communities.

Depriving certain communities of opportunities to accumulate wealth makes it harder for them to survive economically. Those who have massive amounts of wealth do what they can to protect it, even influencing the political system [24]. This drives the wealth gap, especially the racial wealth gap, even wider and undermines democracy by putting political and economic power in the hands of a relative few. Tackling the racial wealth gap would advance racial equality, justice and true democracy.

See more stories tagged with:

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black [26],

latino [27],

urban institute [28],

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Source URL: http://www.alternet.org/economy/black-and-latino-household-wealth-has-collapsed

Links:
[1] http://www.alternet.org
[2] http://www.alternet.org/authors/adam-hudson
[3] http://www.urban.org/UploadedPDF/412802-Less-Than-Equal-Racial-Disparities-in-Wealth-Accumulation.pdf
[4] http://www.nytimes.com/2009/06/07/us/07baltimore.html?pagewanted=all
[5] http://www.nytimes.com/2011/12/01/opinion/kristof-a-banker-speaks-with-regret.html?_r=1
[6] http://www.naacplv.org/lending.pdf
[7] http://iasp.brandeis.edu/pdfs/Author/shapiro-thomas-m/racialwealthgapbrief.pdf
[8] http://www.pewsocialtrends.org/files/2011/07/SDT-Wealth-Report_7-26-11_FINAL.pdf
[9] http://www.bloomberg.com/news/2012-01-24/how-slavery-led-to-modern-capitalism-echoes.html
[10] http://adamhudson.org/2012/01/28/wall-street-was-founded-on-slavery/
[11] http://www.africaresource.com/rasta/sesostris-the-great-the-egyptian-hercules/the-slavers-of-wall-street-investment-banks-and-trans-atlantic-slave-trade-oguejiofo-annu/
[12] http://www.business-humanrights.org/Categories/Lawlawsuits/Lawsuitsregulatoryaction/LawsuitsSelectedcases/SlaveryreparationslawsuitreUSA
[13] http://www.workers.org/2008/us/lehman_1030/
[14] http://www.nbcnews.com/id/15037694/#.UZWPyyvwIRg
[15] http://www.huffingtonpost.com/2013/03/29/black-unemployment-nancy-ditomaso_n_2974805.html
[16] http://www.americanprogress.org/issues/poverty/report/2012/04/12/11423/the-state-of-communities-of-color-in-the-u-s-economy/
[17] http://www.huffingtonpost.com/2011/08/02/study-race-plays-bigger-r_n_916391.html
[18] http://www.pewsocialtrends.org/2012/08/01/the-rise-of-residential-segregation-by-income/
[19] http://www.nytimes.com/2011/11/29/us/as-public-sector-sheds-jobs-black-americans-are-hit-hard.html
[20] http://www.faireconomy.org/files/State_of_the_Dream_2011.pdf
[21] http://www.nytimes.com/2013/05/03/business/economy/government-spending-cuts-contribute-to-slower-growth.html
[22] http://www.nytimes.com/2013/03/04/business/economy/corporate-profits-soar-as-worker-income-limps.html?hp&_r=0
[23] http://www.theatlantic.com/business/archive/2013/03/corporate-profits-are-eating-the-economy/273687/
[24] http://adamhudson.org/2011/12/13/occupy-wall-street-a-movement-against-oligarchy/
[25] http://www.alternet.org/tags/household-wealth
[26] http://www.alternet.org/tags/black
[27] http://www.alternet.org/tags/latino
[28] http://www.alternet.org/tags/urban-institute
[29] http://www.alternet.org/tags/washington-0
[30] http://www.alternet.org/tags/usa-0
[31] http://www.alternet.org/tags/dc
[32] http://www.alternet.org/tags/economy-0
[33] http://www.alternet.org/tags/african-american-1
[34] http://www.alternet.org/%2Bnew_src%2B

Celebrating Inequality

By GEORGE PACKER, New York Times, May 19, 2013

The Roaring ’20s was the decade when modern celebrity was invented in America. F. Scott Fitzgerald’s “Great Gatsby” is full of magazine spreads of tennis players and socialites, popular song lyrics, movie stars, paparazzi, gangsters and sports scandals — machine-made by technology, advertising and public relations. Gatsby, a mysterious bootlegger who makes a meteoric ascent from Midwestern obscurity to the palatial splendor of West Egg, exemplifies one part of the celebrity code: it’s inherently illicit. Fitzgerald intuited that, with the old restraining deities of the 19th century dead and his generation’s faith in man shaken by World War I, celebrities were the new household gods.

What are celebrities, after all? They dominate the landscape, like giant monuments to aspiration, fulfillment and overreach. They are as intimate as they are grand, and they offer themselves for worship by ordinary people searching for a suitable object of devotion. But in times of widespread opportunity, the distance between gods and mortals closes, the monuments shrink closer to human size and the centrality of celebrities in the culture recedes. They loom larger in times like now, when inequality is soaring and trust in institutions — governments, corporations, schools, the press — is falling.

The Depression that ended Fitzgerald’s Jazz Age yielded to a new order that might be called the Roosevelt Republic. In the quarter-century after World War II, the country established collective structures, not individual monuments, that channeled the aspirations of ordinary people: state universities, progressive taxation, interstate highways, collective bargaining, health insurance for the elderly, credible news organizations.

One virtue of those hated things called bureaucracies is that they oblige everyone to follow a common set of rules, regardless of station or background; they are inherently equalizing. Books like William H. Whyte’s “Organization Man” and C. Wright Mills’s “White Collar” warned of the loss of individual identity, but those middle-class anxieties were possible only because of the great leveling. The “stars” continued to fascinate, especially with the arrival of TV, but they were not essential. Henry Fonda, Barbara Stanwyck, Bette Davis, Jimmy Stewart, Perry Como, Joe DiMaggio, Jack Paar, Doris Day and Dick Clark rose with Americans — not from them — and their successes and screw-ups were a sideshow, not the main event.

Our age is lousy with celebrities. They can be found in every sector of society, including ones that seem less than glamorous. We have celebrity bankers (Jamie Dimon), computer engineers (Sergey Brin), real estate developers/conspiracy theorists (Donald J. Trump), media executives (Arianna Huffington), journalists (Anderson Cooper), mayors (Cory A. Booker), economists (Jeffrey D. Sachs), biologists (J. Craig Venter) and chefs (Mario Batali).

There is a quality of self-invention to their rise: Mark Zuckerberg went from awkward geek to the subject of a Hollywood hit; Shawn Carter turned into Jay-Z; Martha Kostyra became Martha Stewart, and then Martha Stewart Living. The person evolves into a persona, then a brand, then an empire, with the business imperative of grow or die — a process of expansion and commodification that transgresses boundaries by substituting celebrity for institutions. Instead of robust public education, we have Mr. Zuckerberg’s “rescue” of Newark’s schools. Instead of a vibrant literary culture, we have Oprah’s book club. Instead of investments in public health, we have the Gates Foundation. Celebrities either buy institutions, or “disrupt” them.

After all, if you are the institution, you don’t need to play by its rules. Mr. Zuckerberg’s foundation myth begins with a disciplinary proceeding at Harvard, which leads him to drop out and found a company whose motto is “Move fast and break things.” Jay-Z’s history as a crack dealer isn’t just a hard-luck story — it’s celebrated by fans (and not least himself) as an early sign of hustle and smarts. Martha Stewart’s jail time for perjury merely proved that her will to win was indomitable. These new celebrities are all more or less start-up entrepreneurs, and they live by the hacker’s code: ask forgiveness, not permission.

The obsession with celebrities goes far beyond supermarket tabloids, gossip Web sites and reality TV. It obliterates old distinctions between high and low culture, serious and trivial endeavors, profit making and philanthropy, leading to the phenomenon of being famous for being famous. An activist singer (Bono) is given a lucrative role in Facebook’s initial public offering. A patrician politician (Al Gore) becomes a plutocratic media executive and tech investor. One of America’s richest men (Michael R. Bloomberg) rules its largest city.

This jet-setting, Davos-attending crowd constitutes its own superclass, who hang out at the same TED talks, big-idea conferences and fund-raising galas, appear on the same talk shows, invest in one another’s projects, wear one another’s brand apparel, champion one another’s causes, marry and cheat on one another. “The New Digital Age,” the new guide to the future by Eric Schmidt and Jared Cohen of Google, carries blurbs from such technology experts as Henry A. Kissinger and Tony Blair. The inevitable next step is for Kim Kardashian to sit on the board of a tech start-up, host a global-poverty-awareness event and write a book on behavioral neuroscience.

This new kind of celebrity is the ultimate costume ball, far more exclusive and decadent than even the most potent magnates of Hollywood’s studio era could have dreamed up. Their superficial diversity dangles before us the myth that in America, anything is possible — even as the American dream quietly dies, a victim of the calcification of a class system that is nearly hereditary.

As mindless diversions from a sluggish economy and chronic malaise, the new aristocrats play a useful role. But their advent suggests that, after decades of widening income gaps, unequal distributions of opportunity and reward, and corroding public institutions, we have gone back to Gatsby’s time — or something far more perverse. The celebrity monuments of our age have grown so huge that they dwarf the aspirations of ordinary people, who are asked to yield their dreams to the gods: to flash their favorite singer’s corporate logo at concerts, to pour open their lives (and data) on Facebook, to adopt Apple as a lifestyle. We know our stars aren’t inviting us to think we can be just like them. Their success is based on leaving the rest of us behind.

George Packer, a staff writer at The New Yorker, is the author, most recently, of “The Unwinding: An Inner History of the New America.”

http://www.nytimes.com/2013/05/20/opinion/inequality-and-the-modern-culture-of-celebrity.html?nl=todaysheadlines&emc=edit_th_20130520

The Biggest “Takers” and Societal Parasites Are the Rich, Not the Working Class and Poor

by Paul Buchheit, Buzzflash at Truthout, May 13, 2013

Ayn Rand’s novel “Atlas Shrugged” fantasizes a world in which anti-government citizens reject taxes and regulations, and “stop the motor” by withdrawing themselves from the system of production. In a perverse twist on the writer’s theme the prediction is coming true. But instead of productive people rejecting taxes, rejected taxes are shutting down productive people.

Perhaps Ayn Rand never anticipated the impact of unregulated greed on a productive middle class. Perhaps she never understood the fairness of tax money for public research and infrastructure and security, all of which have contributed to the success of big business. She must have known about the inequality of the pre-Depression years. But she couldn’t have foreseen the concurrent rise in technology and globalization that allowed inequality to surge again, more quickly, in a manner that threatens to put the greediest offenders out of our reach.

Ayn Rand’s philosophy suggests that average working people are ‘takers.’ In reality, those in the best position to make money take all they can get, with no scruples about their working class victims, because taking, in the minds of the rich, serves as a model for success. The strategy involves tax avoidance, in numerous forms.

Corporations Stopped Paying

In the past twenty years, corporate profits have quadrupled while the corporate tax percent has dropped by half. The payroll tax, paid by workers, has doubled.

In effect, corporations have decided to let middle-class workers pay for national investments that have largely benefited businesses over the years. The greater part of basic research, especially for technology and health care, has been conducted with government money. Even today 60% of university research is government-supported. Corporations use highways and shipping lanes and airports to ship their products, the FAA and TSA and Coast Guard and Department of Transportation to safeguard them, a nationwide energy grid to power their factories, and communications towers and satellites to conduct online business.

Yet as corporate profits surge and taxes plummet, our infrastructure is deteriorating. The American Society of Civil Engineers estimates that $3.63 trillion is needed over the next seven years to make the necessary repairs.

Turning Taxes Into Thin Air

Corporations have used numerous and creative means to avoid their tax responsibilities. They have about a year’s worth of profits stashed untaxed overseas. According to the Wall Street Journal, about 60% of their cash is offshore. Yet these corporate ‘persons’ enjoy a foreign earned income exclusion that real U.S. persons don’t get.

Corporate tax haven ploys are legendary, with almost 19,000 companies claiming home office space in one building in the low-tax Cayman Islands. But they don’t want to give up their U.S. benefits. Tech companies in 19 tax haven jurisdictions received $18.7 billion in 2011 federal contracts. A lot of smaller companies are legally exempt from taxes. As of 2008, according to IRS data, fully 69% of U.S. corporations were organized as nontaxablebusinesses.

There’s much more. Companies call their CEO bonuses “performance pay” to get a lower rate. Private equity firms call fees “capital gains” to get a lower rate. Fast food companies call their lunch menus “intellectual property” to get a lower rate.

Prisons and casinos have stooped to the level of calling themselves “real estate investment trusts” (REITs) to gain tax exemptions. Stooping lower yet, Disney and others have added cows and sheep to their greenspace to get a farmland exemption.
The Richest Individuals Stopped Paying

The IRS estimated that 17 percent of taxes owed were not paid in 2006, leaving an underpayment of $450 billion. The revenue loss from tax havens approaches $450 billion. Subsidies from special deductions, exemptions, exclusions, credits, capital gains, and loopholes are estimated at over $1 trillion. Expenditures overwhelmingly benefit the richesttaxpayers.

In keeping with Ayn Rand’s assurance that “Money is the barometer of a society’s virtue,” the super-rich are relentless in their quest to make more money by eliminating taxes. Instead of calling their income ‘income,’ they call it “carried interest” or “performance-based earnings” or“deferred pay.” And when they cash in their stock options, they might look up last year’s lowest price, write that in as a purchase date, cash in the concocted profits, and take advantage of the lower capital gains tax rate.
So Who Has To Pay?

Middle-class families. The $2 trillion in tax losses from underpayments, expenditures, and tax havens costs every middle-class family about $20,000 in community benefits, including health care and education and food and housing.

Schoolkids, too. A study of 265 large companies by Citizens for Tax Justice (CTJ) determined that about $14 billion per year in state income taxes was unpaid over three years. That’s approximately equal to the loss of 2012-13 education funding due to budget cuts.

And the lowest-income taxpayers make up the difference, based on new data that shows that the Earned Income Tax Credit is the single biggest compliance problem cited by the IRS. The average sentence for cheating with secret offshore financial accounts, according to theWall Street Journal, is about half as long as in some other types of tax cases.
Atlas Can’t Be Found Among the Rich

Only 3 percent of the CEOs, upper management, and financial professionals were entrepreneurs in 2005, even though they made up about 60 percent of the richest .1% of Americans. A recent study found that less than 1 percent of all entrepreneurs came from very rich or very poor backgrounds. Job creators come from the middle class.

So if the super-rich are not holding the world on their shoulders, what do they do with their money? According to both Marketwatch and economist Edward Wolff, over 90 percent of the assets owned by millionaires are held in a combination of low-risk investments (bonds and cash), personal business accounts, the stock market, and real estate.

Ayn Rand’s hero John Galt said, “We are on strike against those who believe that one man must exist for the sake of another.” In his world, Atlas has it easy, with only himself to think about.

 http://truth-out.org/buzzflash/commentary/item/17960-the-biggest-takers-and-societal-parasites-are-the-rich-not-the-working-class-and-poor

Paul Buchheit is a college teacher, a writer for progressive publications, and the founder and developer of social justice and educational websites (UsAgainstGreed.org, PayUpNow.org, RappingHistory.org).

CEO-To-Worker Pay Ratio Ballooned 1,000 Percent Since 1950

Report from Huffington Post, 04/30/2013

We’ve made progress on a lot of things since the 1950s and so have CEOs — in their quest for more money that is.

The ratio of CEO-to-worker pay has increased 1,000 percent since 1950, according to data from Bloomberg. Today Fortune 500 CEOs make 204 times regular workers on average, Bloomberg found. The ratio is up from 120-to-1 in 2000, 42-to-1 in 1980 and 20-to-1 in 1950.

“When CEOs switched from asking the question of ‘how much is enough’ to ‘how much can I get,’ investor capital and executive talent started scrapping like hyenas for every morsel,” Roger Martin, dean of the University of Toronto’s Rotman School of Management, told Bloomberg.

The findings come just one day after the S&P 500 soared to a new record, indicating that perhaps the only ones not reaping the benefits from the companies’ historic profitability are workers. Other reports have come to similar conclusions. An analysis from the AFL-CIO, the umbrella organization for many of America’s unions, found earlier this month that CEO pay was 354 times that of the average employee.

The Dodd-Frank financial reform law aimed to make it easier for the public to know how much CEOs are getting paid in comparison to their workers. The law includes a provision requiring public companies to disclose their CEO-to-worker pay ratios, but nearly three years after the law passed, the Securities and Exchange commission still hasn’t put the rule in place, thanks in part to business opposition to the proposal, according to ABC News.

Sen. Robert Menendez (D-N.J.), who authored the provision told ABC last year: “It might embarrass some companies to reveal that they pay their CEO in the range of 400 times what they pay their typical worker.”

It can be especially embarrassing when the CEO doesn’t perform. Former J.C. Penney head Ron Johnson, whose compensation was 1,795 times the average worker pay, according to Bloomberg, was recently ousted from his post after failing to turn around the struggling company.

http://www.huffingtonpost.com/2013/04/30/ceo-to-worker-pay-ratio_n_3184623.html

CEOs average $12.3 million in 2012, 354 times the average worker

by Laura ClawsonFollow for Daily Kos Labor, Apr 15, 2013

 Excerpt

The AFL-CIO is out with its Executive Paywatch. Here’s how some of the numbers break down:

  • In 2012, CEOs of S&P 500 Index companies averaged $12.3 million in total compensation, while rank-and-file worker wages averaged $34,645, for a ratio of 354 to one.
  • In Germany, the CEO-to-worker pay ratio is a relatively modest 147 to one. Workers make more—$40,223—and CEOs make less—$5,912,781. In Canada, it’s 206 to one. In Sweden, Australia, Japan, Norway, Poland, the United Kingdom, and other countries, the ratio is below 100 to one.

The comparisons with other nations and with our own past are a powerful reminder that how things are in this country right now is not how things have to be to have a healthy economy. The growing inequality in the United States that goes beyond a few CEOs isn’t good for our economy or our politics. But when you consider that 354 to one ratio, you understand the power that’s lined up against changing things for the better.

Full text

The AFL-CIO is out with its Executive Paywatch. Here’s how some of the numbers break down:

  • In 2012, CEOs of S&P 500 Index companies averaged $12.3 million in total compensation, while rank-and-file worker wages averaged $34,645, for a ratio of 354 to one.
  • CEO pay fell five percent from 2011 to 2012, but that’s mostly because of Apple CEO Tim Cook. The stock he got in 2011 vests over 10 years, but was counted all at once, skewing 2011 CEO pay data. If you take Cook out, average CEO pay increased five percent in 2012.
  • In Germany, the CEO-to-worker pay ratio is a relatively modest 147 to one. Workers make more—$40,223—and CEOs make less—$5,912,781. In Canada, it’s 206 to one. In Sweden, Australia, Japan, Norway, Poland, the United Kingdom, and other countries, the ratio is below 100 to one.

The comparisons with other nations and with our own past are a powerful reminder that how things are in this country right now is not how things have to be to have a healthy economy. The growing inequality in the United States that goes beyond a few CEOs isn’t good for our economy or our politics. But when you consider that 354 to one ratio, you understand the power that’s lined up against changing things for the better.

http://www.dailykos.com/story/2013/04/15/1201903/-CEOs-average-12-3-million-in-2012-354-times-the-average-worker