California Free Press

Off the Top of My Head

Why the Republican Congress Will Drive the US into Default

by John Lawrence

Simply put it's in their interests to do so. They themselves will profit politically and financially. They will blame Biden for the default, and they will sell short their stock portfolios so that, when the stock market crashes, they will make money. Default doesn't mean that the US will not pay its debts. It means that going forward seniors on social security will not get their monthly checks. Neither will Federal workers or active duty military. However, since the US Treasury still has some money and money coming in from taxes, it will prioritize paying interest on Treasury bonds. So rich people that hold financial obligations of the US government will be paid while everyday average slobs will be left to suffer. This is exactly the type of solution Republicans have always sought. It fits in nicely with their modus operandi: cater to the rich and starve the poor and working class. Millionaires and billionaores will not suffer. Smart people who sell stocks short will not suffer. They will prosper. Financial wizards and private equity corporations will snap up distressed properties like a shark snapping up a school of fish.

The financial obligations of the US, money that has supposedly already been spent, is a misnomer. They represent money that has already been allocated by the previous Democratic controlled Congress. If Republicans had controlled the previous Congress instead, the money would never have been allocated. So it's not money that's already been spent, it's money that's already been allocated. The spending is in the future. The allocation was in the past. If Democrats controlled the present Congress, there would be no problem. Since it's up to the Congress both to allocate spending and to raise the debt limit, there is a whiplash if one party allocates the money and the other party is supposed to preside over the spending of the money. In a sense the Republican Congress is rebelling over the fact that, although they didn't allocate the money, they are supposed to preside over the spending of it.

Now Joe Biden could preempt the Congressional decision not to raise the debt limit by using unconventional but completely legal means, something that has never been done before. The Federal Reserve Act gives the power to print money to the Fed, However, the Coinage Act grants the Secretary of the Treasury rather broad coin seigniorage authority. The debt ceiling could be side stepped by ordering the West Point Mint to coin a 1 oz. $ 1 trillion coin. Treasury can then present the jumbo coin at the NY Fed to buy back $1 trillion in Fed-held debt (the Fed has to accept it, a creditor can’t refuse legal tender paid in to settle a debt). Or I see no reason why the Treasury couldn't simply deposit it in its account at the Fed thereby giving the US government the wherewithal to pay its bills. Esteemed economist Paul Krugman is all for the minting of the trillion dollar coin: "So go ahead, Democrats, and do whatever it takes to get through this. Gimmickry in the defense of sanity — and, in an important sense, democracy — is no vice."

Republicans would have you believe that spending is out of control. No, undertaxation is out of control especially undertaxing the rich. Economic inequality has soared reaching unprecedented new heights not seen even in the Gilded Age. As Joe Biden has proposed, the budget could easily be balanced and the debt paid down by taxing the rich. Republicans would have you believe that raising taxes is a policy that would have to be enforced on everyone including the poor and the middle class, but that, unfortunately for them, is not the case. It is not written in stone that raising taxes would have to apply to everyone. As Bernie Sanders, Elizabeth Warren, AOC and others have pointed out, raising taxes on the rich could not only balance the budget, but could solve the problem of social security shortfalls. Republicans are in the unenviable position of wanting to screw the working class while catering to the rich while holding on to their MAGA supporters, a large portion of whom are the working class.

So given the fact that Republicans don't care about social security or Medicare recipients, there is a good chance that they will not vote to raise the archaic debt ceiling and force the US into default not on its debt but on its ongoing payments to Federal workers, who they hate anyway, social security recipients, who they will cheerfully throw under the bus and active duty military who as MAGA supporters will cheer them on at their own expense. Meanwhile, Congressional Republicans, private equity corporations and billionaires will short the market and salivate over the cheap assets they will be able to snap up. In other words they will profit from a default.

Off the Top of My Head

The Solution to the Debt Crisis: Tax the Rich

by John Lawrence

Republicans want Biden to cut back spending. Democrats should want to increase taxation on the rich. The debt can be ameliorated either by reducing spending or increasing taxation. The debt is a result both of overspending and undertaxing. For all those who care about the size of the debt, they should be as concerned about undertaxing to the same extent they are concerned about overspending. Since the three wealthiest people in the United States — Bill Gates, Jeff Bezos, and Warren Buffett —now own more wealth than the entire bottom half of the American population combined, a total of 160 million people or 63 million households, the obvious culprit here is not overspending, it's under taxation of the rich. In addition to taxing the incomes of the rich, there needs to be instituted a wealth tax. Whoa, you say, this would discourage entrepreneurs who are responsible for inventing the next big thing which is what contributes the most to the American economy. We don't need another gadget; we need all hands on deck to fight global warming. This is being done by Joe Biden's infrastructure bill which is a government, not a private, solution. Private entrepreneurship is less important in a period of global warming than large scale government solutions. Therefore, discouraging entrepreneurship, except that which supports a solution to global warming, is actually a positive development.

America’s top 25 billionaires — a group the size of a major league baseball team’s active roster —together hold $1 trillion in wealth. These 25 have as much wealth as 56 percent of the population, a total 178 million people or 70 million households. The solution to government debt is to go where the money is and tap that. When asked why he robbed banks, Willie Sutton simply replied, “Because that's where the money is.” By the same token, the solution to the national debt is for the government to go where the money is: billionaires and Forbes 400 corporations. Americans don't need any new gadgets to spend their money on. In the World War II era consumption was both voluntarily and manditorily reduced in order to put more resources into the war effort. The war on global warming is even more important than World War II because, if we lose this war, the survival of the whole human species is at risk. Put simply we need to reduce consumption of the gadgets and entertainment provided by the private sector and increase expenditures on large scale projects which can ameliorate global warming. Of necessity those projects and that spending has to be initiated by government in cooperation with the private sector, but government has to lead the way and provide the money.

Income inequality is a major problem of American society. This problem can be resolved and the resources to prevent global warming provided for by taxing the rich. The problem is to reduce American consumption which is 70% of the US economy and increase government spending as long as that increased spending is spent on the solutions to global warming. At the same time the national debt can be reduced. The national debt in and of itself is not a problem, but interest on the national debt is. There are other solutions to decreasing the interest such as having the Fed create the money by quantitative easing. Instead of the Fed's depositing this money in the accounts of the big banks, it would deposit the money in the Treasury's account. "The whole idea of Modern Monetary Theory is that since a sovereign entity can borrow in its own currency, it can print more money when it needs to pay off all its debt. The central bank just needs to keep interest rates low," says Robert R. Johnson, professor of finance at the Heider College of Business at Creighton University. But there's the rub. As the Fed raises interest rates to control inflation, interest on the national debt also increases. That's why a mechanism needs to be found by which the Fed creates the money to run the government instead of the Treasury borrowing the money.

So in the meantime taxing the rich seems to be the best policy in order to bring the national debt down, to reduce economic inequality and to provide the money for government programs to combat global warming.

Blackstone’s Evil Scheme to Profit Off Every American Crisis

 

 

 

How Stephen A. Schwarzman got rich, from More Perfect Union's series The Class Room

 

Narrated by JT Chapman from Second Thought

March 1 2023, from More Perfect Union

In January a massively powerful landlord sued to evict hundreds of tenants across the country. 

The landlord had bought up billions of dollars of real estate when prices were low during the pandemic–taking advantage of the economic downturn that hurt so many. 

And now that eviction moratoriums are lifting, that landlord is starting to kick people out of their homes. 

Here he is at the height of the pandemic.

Stephen A. Schwarzman is the co-founder, chairman, and CEO of Blackstone Group, the world’s largest alternative asset firm with almost a trillion dollars in assets–including real estate.  The firm has made Schwarzman very, very rich. 

And he’s not afraid to flaunt it. 

One example: his 60th birthday party reportedly cost between 3 and 5 million dollars. 

It was hosted by Martin Short. Patti LaBelle sang a song written for Schwarzman. And it was held in an exact replica of Schwarzman’s apartment built for the party.

Here’s the egregious part: Schwarzman’s big bash was in 2007, just as the economy was on the precipice of a disaster caused by people like Schwarzman. 

That same year Blackstone had their IPO, netting Schwarzman hundreds of millions of dollars instantly. 

Sensing a theme here? It’s not just COVID and recession profiteering: 

Major economic downturns and national crises have coincided with hugely profitable milestones for Blackstone… and Stephen Schwarzman

This is The Class Room from More Perfect Union, and today we’re looking at how Stephen A Schwarzman got rich.

Like many great stories of people plundering America, this one starts at Harvard Business School. 

Schwarzman was raised in the suburbs of Philadelphia then went to Yale, where he joined Skull and Bones, the infamous and… kind of corny secret society.

Then to Harvard Business School and then on to the finance world. Schwarzman landed at Lehman Brothers, then a vastly powerful investment bank shortly after getting his MBA. 

At Lehman he worked in mergers and–helping the firm scoop up other businesses–until he eventually oversaw the absorption of Lehman Brothers itself into American Express. 

He left Lehman, and in 1985 started his own firm–Blackstone. He teamed up with his Lehman colleague Peter G. Peterson, former Secretary of Commerce under Nixon.

Despite the founders’ pedigree, they tried to push the scrappy startup image in the press. The New York Times wrote in 1987 that Blackstone “operates out of cramped quarters… where secretaries and bankers share offices and boxes are stacked in the hallways”

Blackstone started as a mergers and acquisitions consulting firm before transitioning into merchant banking and private equity. 

It wasn’t a great time for investing—but Blackstone got lucky: they had finished raising money for their investment firm just days before the crash. 

And it was all part of their strategy. The New York Times pointed it out that year with the headline, “A Big Fund Ready to Capitalize on Hard Times”

In the early profile, published right after Black Monday, Schwarzman’s business partner admitted that their strategy involved taking advantage of economic downturns. 

”There are going to be fascinating opportunities… There’s a good chance the dollar will continue to fall, interest rates over the long term will go up and we will experience slow growth… You raise capital when you can raise it, and then you move in opportunistically and make investments in distressed industries.” 

It’s a business model based on profiting when everyone else loses.

If we fast-forward through 20 years of Blackstone pioneering and perfecting the private equity and leveraged buyout, tearing apart businesses to maximize profit, we get to their IPO–that’s when a company goes from private to public so that anyone can buy shares on the stock market. 

The IPO made Schwarzman 500 million dollars. 

Once again months later, the greed of Schwarzman’s colleagues in finance made this happen

Because the collapse was directly linked to housing millions of working Americans had their homes foreclosed, meaning they were available to buy for cheaper-than-usual rates.

So Blackstone swooped in. According to reporting from the Neighborhood Assistance Corporation of America, “Blackstone was one of the first private equity firms to begin buying foreclosed homes in the wake of the financial crisis, fixing them up and renting them out.”

So as Americans suffered, Blackstone profited three times: their backers and investment companies were directly responsible for the crash, some of those entities got government bailouts, then after everything crashed, they bought up property at rock-bottom prices.

It’s the exact strategy Schwarzman’s business partner outlined in 1987: “you move in opportunistically and make investments in distressed industries.” 

Blackstone was able to buy millions of dollars in cheap housing, which gave a jumpstart to their real estate business. 

Post-recession exploitation was just one big push in Blackstone’s journey towards becoming one of the biggest landlords in America. 

Today, they own nearly 300 billion dollars in real estate. 

Real estate accounts for nearly half of their earnings. Schwarzman called their profiteering on housing “the most remarkable results in our history on virtually every metric.”

But then another downturn: COVID. When the pandemic that killed nearly 7 million people drove down real estate, Blackstone scooped up billions of dollars worth of homes.

And now that eviction moratoriums are starting to lift, Blackstone is kicking tenants out of their homes. And they’re happy about it: the Financial Times reported that on a global call with Blackstone staffers, the head of real estate optimistically shared that they’re allowed to start evicting people again.

They even brag about how inflation lets them jack up rents, gleefully pointing out in this investor document that rent went up more than inflation. 

Blackstone makes money when the rest of us suffer. It’s by their own admission a huge part of their business strategy. 

And Schwarzman fights to keep as much wealth as possible. When the Obama administration almost started taxing people like Schwarzman fairly, he compared them to Nazis.

That’s why he donates so much money to the GOP: they protect his interests. Blackstone earnings reports even say that a Democratic government is bad for their business. 

Blackstone admits they need unfair taxation legislation to make as much money as they do, they write to investors, “If we were taxed as a corporation, our effective tax rate would increase significantly…. it would materially increase our tax liability, which would likely result in a reduction of the value of our common units.”

And meanwhile Schwarzman tries to launder his image by making big donations to some of America’s most iconic institutions, and slapping his name all over their buildings–like at the New York Public Library, Yale, Harvard, and more. 

But like so many like him, Schwarzman will continue to exploit tax law, exploit economic tax returns, and continue to get richer while the rest of us suffer. 

Effective legislation hitting Schwarzman’s main sources of income–like carried interest–would make it harder for his entire industry to profit off working Americans’ losses.

Off the Top of My Head

Is Private Equity Firm, Blackstone Group, Taking Over San Diego's Rental Market?

by John Lawrence

In a deal with the Conrad Prebys Foundation, Blackstone Group, CEO'd by Steven Schwarzman, is buying 5800 rental units in San Diego. According to the San Diego Union, "The deal makes Blackstone one of the biggest real estate holders in San Diego County. It already owns $4.5 billion in assets here — including Legoland and the Hotel del Coronado. The transaction, which also includes Los Angeles-based investment firm TruAmerica as a partner, is expected to close in the next few weeks. The sale of the apartments was praised by Dan Yates, the president of the Conrad Prebys Foundation, who said the portfolio was assembled by Conrad Prebys — a San Diego developer — himself. Yates said the money from the deal will be used for grants primarily in San Diego."

“Conrad Prebys was a sharp businessman who found true joy in the act of giving, and I believe he would be honored to see the result of his life’s work dedicated to continuing his philanthropic legacy,” Yates wrote in an email." Billionaire Conrad Prebys died in 2016 so it's very unlikely he "assembled the deal himself." But, even if he did, and the money will be used for philanthropic grants, Conrad Prebys has his name on half he buildings in San Diego already. It seems that billionaires can't get enough of charitable giving when it gets their names on buildings even though it will probably mean that relatively affordable rental units will become unaffordable after Blackstone Group "fixes them up" and raises the rent and that the true beneficiaries will be the investors in the Blackstone Group. It is to be noted that California sanctions on evictions, put in place during the pandemic, will expire this June 30.

San Diego real estate analyst Gary London said, “To my knowledge, this is the largest real estate transaction in San Diego County history.” So the process goes like this: the tenants in Blackstone's newly acquired rental units will be given 30 day notices to leave so that Blackstone can do badly needed renovations. This is all perfectly legal. There is no need to "evict" unless the tenants refuse to leave even after given proper notice. The Union article goes on,"All the apartments are market-rate but Blackstone says it plans to partner with nonprofit Pacific Housing to provide services for residents, including after-school tutoring, financial literacy classes, and health and wellness initiatives at no cost. It did not address it directly, but the move seems to counteract earlier concern with the foundation’s sale of these holdings." The key word here is "market-rate." This means that once Blackstone puts in its "improvements," they can charge whatever rent they can get even if it's 50% more than what tenants were previously paying. This is how the game is played, and this is why there are fewer and fewer affordable apartments in San Diego. Investors buy up apartments with affordable rents and convert them into apartments at "market-rate." Ironically, Blackstone intends to provide new tenants with "financial literacy classes." Presumably this would mean tutoring them to the advisability of investing in the Blackstone Group. And what were the "earlier concerns with the foundation’s sale of these holdings." Could it be that the newly converted "market-rate" apartments would reduce the stock of affordable rental units in San Diego?

The most pathetic aspect of this deal was this: "A letter was sent to the foundation in early February from San Diego Mayor Todd Gloria, San Diego County Supervisors chair Nathan Fletcher and California Senate President Pro Tem Toni Atkins to urge them to take into account future affordability of the apartments when considering a sale." I'm sure they'll do that even if it means their investors will take a slight hit to their profuts. Get real, politicians! Your letter is a fig leaf and is worse than useless. The letter went on: “A substantial number of these units are home to working individuals and families,” they wrote, “and are some of the limited inventory in the region of non-deed restricted, naturally occurring affordable housing options for San Diegans.” And the most egregious oxymoron of the letter: "non-deed restricted, naturally occurring affordable housing options." There is no such thing as "natyrally occurring affordable housing" at least not when private equity firms like Blackstone see a profit-making opportunity. The fact that they are "non-deed restricted" means that they are fair game. In any event affordable housing is in the eye of the beholder. It means absolutely nothing unless it is deed restricted or publicly owned.

The article concludes with: "The Conrad Prebys Foundation gave more than $71 million to 112 organizations across San Diego County in March to bolster the arts, health care, medical research, animal conservation, education, and the welfare of young people. The biggest grant — $15 million — went to the San Diego Symphony." Of course! The symphony will always profit as long as billionaires want their names on more buildings and symphony programs. Meanwhile working class tenants lose.

Off the Top of My Head

US Weapons Manufacturers Profiting From War in Ukraine

by John Lawrence

So far the US has spent $13.6 billion on the war in Ukraine. The money includes weapons, military supplies and one of the largest infusions of U.S. foreign aid in the last decade. But it also covers the deployment of U.S. troops to Europe and money for domestic agencies to enforce sanctions. Stock prices for Lockheed-Martin, Northrop Grumman and Raytheon are up. They are making money from all the Javelins and Stinger missiles they are selling to the US government which is giving them to Ukraine free of charge. Raytheon Technologies and Lockheed Martin Corp jointly produce Javelins, while Raytheon makes Stingers. EU countries are buying even more US weaponry from the US military-industrial complex. Germany even wants F-35 aircraft from Lockheed Martin. U.S. weapons exports rose 2.8% to $175 billion in fiscal 2020. The Ukraine war is a field day for the weapons industry. As far as they're concerned, the more arms shipments to Ukraine the better. They are bullish. CEOs will probably get a substantial increase in pay, and the weapons contractors will be able to buy back more of their own stock boosting stock values even more. The US policy so far is no boots on the ground, but plenty of taxpayer money going up in smoke, money that could have been spent on bettering the lot of the American people.

The is always money available for war, but when it comes to Biden's Build Back Better package, Congress gets very stingy. So a localized war is more important than the fate of the whole planet due to global warming. Or it's more important than affordable health care. Or it's more important than imposing a tax on multi-billionaires who, by the way, are not paying for the war because they pay no taxes. If they have defense contractors in their portfolio, they are profiting from the war. Politico reported:

More than 25 nations have joined in purchasing and delivering weapons to support Ukraine’s war effort. The U.S. has sent billions of dollars in missiles, ammunition and other items to the front. The EU signed off on a €500 million ($551 million USD) package — a first for the 27-country European bloc — to help arm Ukraine. And both Finland and Germany have rewritten long-standing policy that barred exporting weapons into war zones.

At the same time, there are tens of thousands of troops being activated and deployed by NATO countries in Eastern Europe.

Using a resource guide retrieved from the Forum on the Arms Trade that mostly relies on official government statements and reports in the media — and backfilled with our own independent research — POLITICO has worked to track and compile weapons and materials that have been announced or directed to Ukraine by various countries since January.

This non-exhaustive list focuses on lethal weapons and some non-lethal material. It does not count humanitarian and developmental aid that has been sent to Ukraine in the same period. Arms trade research organizations have noted the timeline and official receipt of equipment is hard to confirm due to security concerns. In some cases, such as with France and Turkey, an official tally has not been made public.

While US taxpayers are paying for the war in Ukraine and for the delivery of weapons to Europe, Saudi Arabia and other places in the world, billionaires are paying nothing. Congress will not even pass a tax on billionaires so that they would be forced to pay, as Biden says, "their fair share." Their fair share is zero, zip according to Congress which is basically on the side of the billionaires. So planet earth diminishes in importance, as far as global warming is concerned, because fighting and paying for war is so much more important. In fact not only is war more important than peace, which doesn't move the stock market, it's more important than renewable energy. All of a sudden there is a need for more oil, more fossil fuel, all of which produces more greenhouse gasses. The attitude is if we need to destroy planet earth in order to win this war, then that is the price we'll have to pay.

Off the Top of My Head

According to Biden's BBB Plan, Buyers of Electric Vehicles Would Receive up to $12,500 in Tax Credits

by John Lawrence

So where is this incentive to buy electric vehicles now that gas (in CA) is about $6 a gallon? Now is the time when we need this subsidy, but, alas, the Democrats couldn't even stick together to pass this and other incentives and measures to get off fossil fuels. How about this as an incentive: preventing daily tornadoes in the heartland of the US? As extreme weather gets more extreme, Congress can't even pass programs to combat global warming and the consequent damage that's being done to people's lives and the economy in general. Not to mention the fact that major portions of the population will not be able to get property insurance which is happening right now and will only get worse. If you have a lot of brush around your house, you're an insurance liability. If you live in a flood plain, you're an insurance liability. We are told by people who know that we only have a few years to do something before we can expect catastrophic consequences from climate change and global warming. Yet we are taking our time getting off fossil fuels. There is even regret that we didn't go ahead with the Keystone pipeline.

The New York Times reported:

"In the coming decades, as global temperatures continue to rise, hundreds of millions of people could struggle against floods, deadly heat waves and water scarcity from severe drought, the report said. Mosquitoes carrying diseases like dengue and malaria will spread to new parts of the globe. Crop failures could become more widespread, putting families in places like Africa and Asia at far greater risk of hunger and malnutrition. People unable to adapt to the enormous environmental shifts will end up suffering unavoidable loss or fleeing their homes, creating dislocation on a global scale,[according to a recent UN report]."

We do know the things we need to be doing. It's just that we're not doing them or doing them at such a slow pace that we will still experience the worst effects of climate change. If you think the refugee problem is bad now, climate change will exacerbate and accelerate the refugee problem. People will be fleeing their homes and homelands when it becomes apparent that they can't make a living there. They will be coming to parts of the world where countries are wealthy enough to mitigate the worst effects of climate change. Basically, that means that people will flee poor countries and attempt at all costs to enter rich countries. That's why the US, as the richest country in the world, should be going full speed ahead to transition away from fossil fuels and into a new era that consists of renewable energy production and more environment friendly lifestyles. Instead, Americans are determined to lead lifestyles of maximum consumption right up to the hilt of their financial resources and beyond in a last gasp of over consumption.

Common Dreams reported:

In the wake of a United Nations report that activists said showed the "bleak and brutal truth" about the climate emergency, a leading economist on Friday highlighted a step that supporters argue could be incredibly effective at combating the global crisis: nationalizing the U.S. fossil fuel industry.

Writing for The American Prospect, Robert Pollin, an economics professor and co-director of the Political Economy Research Institute at the University of Massachusetts Amherst, noted the Intergovernmental Panel on Climate Change (IPCC) and high gas prices exacerbated by Russia's war on Ukraine.

"If we are finally going to start taking the IPCC's findings seriously," Pollin wrote, "it follows that we must begin advancing far more aggressive climate stabilization solutions than anything that has been undertaken thus far, both within the U.S. and globally. Within the U.S., such measures should include at least putting on the table the idea of nationalizing the U.S. fossil fuel industry."

Asserting that "at least in the U.S., the private oil companies stand as the single greatest obstacle to successfully implementing" a viable climate stabilization program, Pollin made the case that fossil fuel giants should not make any more money from wrecking the planet, nationalization would not be an unprecedented move in the United States, and doing so could help build clean energy infrastructure at the pace that scientists warn is necessary.

The expert proposed starting with "the federal government purchasing controlling ownership of at least the three dominant U.S. oil and gas corporations: ExxonMobil, Chevron, and ConocoPhillips."

"They are far larger and more powerful than all the U.S. coal companies combined, as well as all of the smaller U.S. oil and gas companies," he wrote. "The cost to the government to purchase majority ownership of these three oil giants would be about $420 billion at current stock market prices."

So for roughly half of the defense budget, the US taxpayers could own the oil industry and phase it out at the speed required to save the planet from the worst effects of global warming. Instead we're treated to the Big Oil CEO's defiance that they are not price gouging because prices are set by the world market. Does anyone question why prices have to be set by the world market? No. Obviously, the world market exists to serve the interests of the oil producers, not oil consumers. Maybe the US should get off the world market because we produce enough oil to meet all current consumer demands. So why do we even need the world market? The world market exists to serve the interests of the OPEC nations who won't even open their spigots in a time of crisis, and it exists to serve the interests of the western Big Oil corporations like ExxonMobil, Chevron and Shell.

Americans would like to have one more blast of consumption rather than buckle down and do what's necessary to combat climate change, an effort that would be at least as great as the effort and sacrifice put forth to fight World War II. Billionaire's would rather blast off into space than use their money to fight climate change. Their lifestyles are major contributors to the emission of greenhouse gasses. They don't want to be told that they can't overconsume with numerous 27,000 square foot mansions and a fleet of luxury cars. That's the American Dream, or is it. It's soon going to turn into the American Nightmare but probably not for them. They have the resources to escape the worst effects of global warming. Instead the nightmare will be mostly visited on the least among us as well as randomly due to tornadoes, floods and fires.

The Rise of the Centibillionaires!

by Robert Reich,

Tuesday, March 29, 2022

The word “‘billionaire” didn’t even exist until 1844. Fifty years later, we got “multibillionaire.” And for the next 127 years, that was enough. 

But in 2020, while the working class faced near-record unemployment during the pandemic, the wealthiest Americans faced a different problem. Some of them had gotten so rich, there was no longer a word to describe just how rich they were. 

That’s why I want to bring you one of the newest additions to the English language: “centibillionaires,” people with $100 billion or more.  

What’s it like being one of history’s first centibillionaires? It’s hard to even imagine, but let’s try it by comparing them to the less fortunate. By which I mean just … regular … billionaires. 

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If you’re a regular billionaire, you can afford a private jet. If you’re a centibillionaire, you can afford a brand-new Gulfstream jet every single day for more than ten years. (Not sure what you’d do with a new Gulfstream every day — maybe give one to each of your closest 4,000 friends?)

A regular billionaire would struggle to buy their own professional baseball team. Sad, I know. But a centibillionaire could easily buy every team in the entire major league. 

If you’re a regular billionaire, you can donate to your alma mater and get your name on a building. If you’re a centibillionaire, you could single-handedly give every teacher in America an $8,000 raise for 5 straight years. 

Of course, that’s not all you could do. $100 billion is enough to wipe out all the medical debt in the United States. Or provide permanent shelter for every homeless person in America. Or buy Covid-19 vaccines for the entire world.

Basically what I’m saying is, $100 billion is a lot of money. 

More than two and a half million times what the average American worker makes in a year. 

So here’s the big question. Are these centibillionaires so rich because they work two and half million times harder than the average American? Are they really 100 times smarter than the typical billionaire?

I don’t think so. The reason for the rise of centibillionaires is that for decades, wealth hasn’t trickled down, it’s gushed up, all the way to the very top. 

That’s not an accident. As it turns out, the system that the super-rich themselves carefully crafted and lobbied for, benefits… the rich! 

And while you may not own more private jets than your average centibillionaire, you probably do pay a higher tax rate. And thanks to legal loopholes and the Trump tax cuts, when the wealthiest Americans die, they get to pass on most of their centibillions to their kids tax-free. 

We’ve got two choices as a country. We can tax the richest Americans fairly, and invest that money in ways that benefit all of us.

Or we can keep doing what we’re doing, and watch as centibillionaires get even richer while the rest of us get left behind. 

If you think wealth and power are too concentrated in the hands of a privileged few now, just imagine what a few more years of trickle-down nonsense will bring.

Of course, it won’t be all bad. At least “trillionaire” is easy to say.

How Wealth Inequality Spiraled Out of Control

by Robert Reich

Wednesday, November 3, 2021

Elon Musk’s wealth has surpassed $200 billion. It would take the median U.S. worker over 4 million years to make that much.

Wealth inequality is eating this country alive. We’re now in America’s second Gilded Age, just like the late 19th century when a handful of robber barons monopolized the economy, kept wages down, and bribed lawmakers. 

While today’s robber barons take joy rides into space, the distance between their gargantuan wealth and the financial struggles of working Americans has never been clearer. During the first 19 months of the pandemic, U.S. billionaires added $2.1 trillion dollars to their collective wealth and that number continues to rise. 

And the rich have enough political power to cut their taxes to almost nothing — sometimes literally nothing. In fact, Jeff Bezos paid no federal income taxes in 2007 or in 2011. By 2018, the 400 richest Americans paid a lower overall tax rate than almost anyone else.  

But we can not solve this problem unless we know how it was created in the first place.

Let’s start with the basics.

I. The Basics

Wealth inequality in America is far larger than income inequality. 

Income is what you earn each week or month or year. Wealth refers to the sum total of your assets — your car, your stocks and bonds, your home, art — anything else you own that’s valuable.Valuable not only because there’s a market for it — a price other people are willing to pay to buy it — but because wealth itself grows. 

As the population expands and the nation becomes more productive, the overall economy continues to expand. This expansion pushes up the values of stocks, bonds, rental property, homes, and most other assets. Of course recessions and occasional depressions can reduce the value of such assets. But over the long haul, the value of almost all wealth increases.

Lesson: Wealth compounds over time.

Next: personal wealth comes from two sources.The first source is the income you earn but don’t spend. That’s your savings. When you invest those savings in stocks, bonds, or real property or other assets, you create your personal wealth —  which, as we’ve seen, grows over time. 

The second source of personal wealth is whatever is handed down to you from your parents, grandparents, and maybe even generations before them — in other words, what you inherit. 

Lesson: Personal wealth comes from your savings and/or your inheritance.

II. Why the wealth gap is exploding

The wealth gap between the richest Americans and everyone else is staggering.
In the 1970s, the wealthiest 1 percent owned about 20 percent of the nation’s total household wealth. Now, they own over 35 percent. 

Much of their gains over the last 40 years have come from a dramatic increase in the value of shares of stock. 

For example, if someone invested $1,000 in 1978 in a broad index of stocks — say, the S&P 500 — they would have $31,823 today, adjusted for inflation. 

Who has benefited from this surge? The richest 1 percent, who now own half of the entire stock market. But the typical worker’s wages have barely grown. 

Most Americans haven’t earned enough to save anything. Before the pandemic, when the economy appeared to be doing well, almost 80 percent were living paycheck to paycheck.

Lesson: Most Americans don’t make enough to save money and build wealth.

So as income inequality has widened, the amount that the few high-earning households save — their wealth — has continued to grow. Their growing wealth has allowed them to pass on more and more wealth to their heirs. 

Take, for example, the Waltons — the family behind the Walmart empire — which has seven heirs on the Forbes billionaires list. Their children, and other rich millennials, will soon consolidate even more of the nation’s wealth. America is now on the cusp of the largest intergenerational transfer of wealth in history. As wealthy boomers pass on, somewhere between $30 to $70 trillion will go to their children over the next three decades. 

These children will be able to live off of this wealth, and then leave the bulk of it — which will continue growing — to their own children … tax-free. After a few generations of this, almost all of America’s wealth could be in the hands of a few thousand families.  

Lesson: Dynastic wealth continues to grow.

III. Why wealth concentration is a problem

Concentrated wealth is already endangering our democracy. Wealth doesn’t just beget more wealth — it begets more power. 

Dynastic wealth concentrates power into the hands of fewer and fewer people, who can choose what nonprofits and charities to support and which politicians to bankroll. This gives an unelected elite enormous sway over both our economy and our democracy.

If this keeps up, we’ll come to resemble the kind of dynasties common to European aristocracies in the seventeenth, eighteenth, and nineteenth centuries.

Dynastic wealth makes a mockery of the idea that America is a meritocracy, where anyone can make it on the basis of their own efforts. It also runs counter to the basic economic ideas that people earn what they’re worth in the market, and that economic gains should go to those who deserve them.

Finally, wealth concentration magnifies gender and race disparities because women and people of color tend to make  less, save less, and inherit less.
The typical single woman owns only 32 cents of wealth for every dollar of wealth owned by a man. The pandemic likely increased this gap. 

The racial wealth gap is even starker. The typical Black household owns just 13 cents of wealth for every dollar of wealth owned by the typical white household. The pandemic likely increased this gap, too. 

In all these ways, dynastic wealth creates a self-perpetuating aristocracy that runs counter to the ideals we claim to live by.

Lesson: Dynastic wealth creates a self-perpetuating aristocracy.

IV. How America dealt with wealth inequality during the First Gilded Age

The last time America faced anything comparable to the concentration of wealth we face today was at the turn of the 20th century. That was when President Teddy Roosevelt warned that “a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power” could destroy American democracy.

Roosevelt’s answer was to tax wealth. Congress enacted two kinds of wealth taxes. The first, in 1916, was the estate tax — a tax on the wealth someone has accumulated during their lifetime, paid by the heirs who inherit that wealth. 

The second tax on wealth, enacted in 1922, was a capital gains tax — a tax on the increased value of assets, paid when those assets are sold.

Lesson: The estate tax and the capital gains tax were created to curb wealth concentration.

But both of these wealth taxes have shrunk since then, or become so riddled with loopholes that they haven’t been able to prevent a new American aristocracy from emerging.

The Trump Republican tax cut enabled individuals to exclude $11.18 million from their estate taxes. That means one couple can pass on more than $22 million to their kids tax-free. Not to mention the very rich often find ways around this tax entirely. As Trump’s former White House National Economic Council director Gary Cohn put it, “only morons pay the estate tax.”

What about capital gains on the soaring values of wealthy people’s stocks, bonds, mansions, and works of art? Here, the biggest loophole is something called the “stepped-up basis.” If the wealthy hold on to these assets until they die, their heirs inherit them without paying any capital gains taxes whatsoever. All the increased value of those assets is simply erased, for tax purposes. This loophole saves heirs an estimated $40 billion a year.

This means that huge accumulations of wealth in the hands of a relatively few households can be passed from generation to generation untaxed — growing along the way — generating comfortable incomes for rich descendants who will never have to work a day of their lives. That’s the dynastic class we’re creating right now.

Lesson: The estate tax and the capital gains tax have been gutted.

Why have these two wealth taxes eroded? Because, as America’s wealth has concentrated in fewer and fewer hands, the wealthy have more capacity to donate to political campaigns and public relations — and they’ve used that political power to reduce their taxes. It’s exactly what Teddy Roosevelt feared so many years ago.

V. How to reduce the wealth gap

So what do we do? Follow the wisdom of Teddy Roosevelt and tax great accumulations of wealth. 

The ultra-rich have benefited from the American system — from laws that protect their wealth, and our economy that enabled them to build their fortunes in the first place. They should pay their fair share. 

The majority of Americans, both Democrats and Republicans, believe the ultra rich should pay higher taxes. There are many ways to make them do so: closing the stepped up basis loophole, raising the capital gains tax, and fully funding the Internal Revenue Service so it can properly audit the wealthiest taxpayers, for starters. 

Beyond those fixes, we need a new wealth tax: a tax of just 2 percent a year on wealth in excess of $1 million. That’s hardly a drop in the bucket for centi-billionaires like Jeff Bezos and Elon Musk, but would generate plenty of revenue to invest in healthcare and education so that millions of Americans have a fair shot at making it. 

One of the most important things you as an individual can do is take the time to understand the realities of wealth inequality in America and how the system has become rigged in favor of those at the top — and demand your political representatives take action to unrig it. 

Wealth inequality is worse than it has been in a century – and it has contributed to a vicious political-economic cycle in which taxes are cut on the top, resulting in even more concentration of wealth there – while everyone else lives under the cruelest form of capitalism in the world. 

We must stop this vicious cycle — and demand an economy that works for the many, not one that concentrates more and more wealth in the hands of a privileged few. 

'Indefensible': US Billionaires Became $2.1 Trillion Richer in 19 Months of Pandemic

Elon Musk, Tesla CEO, stands at a press event on the grounds of the Tesla Gigafactory in Brandenburg, Germany. Musk has rocketed past  Amazon co-founder Jeff Bezos to become the world's richest man. Nineteen months ago, Bezos was nearly five times richer than Musk. Now, after a meteoric eight-fold increase in his wealth, Musk is worth $209 billion while Bezos is worth $192 billion. (Photo: Patrick Pleul/picture alliance via Getty Images)

 

New analysis shows that just 745 individuals have combined $5 trillion in wealth—most of which will never be taxed—as nations reels from pain inflicted by Covid-19.

 

Jon Queally

October 18, 2021, from Common Dreams

American billionaires grew in number and expanded their collective fortunes by $2.1 trillion since Covid-19 sparked a worldwide pandemic nineteen months ago, according to a new analysis unveiled Monday.

"Targeted tax increases on billionaires, including the proposed Billionaire Income Tax, would rebalance the tax code and reduce these glaring abuses in who pays for the services we all depend on."

An overall 70% surge of wealth among the nation's richest individuals since March of 2020 has resulted in approximately 130 new billionaires, found the new report released by Americans for Tax Fairness  (ATF) and the Institute for Policy Studies (IPS). In a statement, the groups noted that there are now 745 people with "10-figure bank accounts" compared to the 614 that existed when the pandemic first hit.

In total, those 745 billionaires now hold $5 trillion in collective wealth, which the groups note is "two-thirds more than the $3 trillion in wealth held by the bottom 50% of U.S. households."

While ATF and IPS have been tracking the explosive growth of the uber-wealthy throughout the pandemic, the latest figures come as Democrats in Congress continue to negotiate with themselves over the cost and scope of President Joe Biden's 'Build Back Better' agenda which aims to provide expanded Medicare, paid family leave, universal childcare and pre-K, bold climate action, and an expanded childhood tax credit to alleviate childhood poverty and provide a more robust economic foundation for millions of working American families.

According to IPS/ATF:

The great good fortune of these billionaires over the past 19 months is all the more stark when contrasted with the devastating impact of coronavirus on working people. Almost 89 million Americans have lost jobs, over 44.9 million have been sickened by the virus, and over 724,000 have died from it. 

To put this extraordinary wealth growth in perspective, the $2.1 trillion gain over 19 months by U.S. billionaires is equal to:

• 60% of the $3.5 trillion ten-year cost of President Biden’s Build Back Better plan. 
• The entire $2.1 trillion in new revenues over ten years approved by the House Ways and Means Committee to help pay for President Biden’s Build Back Better (BBB) investment plan.

At the heart of their latest analysis, said ATF executive director Frank Clemente, is the failure to adequately tax these outrageous and growing fortunes.

"This growth of billionaire wealth is unfathomable, immoral, and indefensible in good times let alone during a pandemic when so many have struggled with unemployment, illness, and death," said Clemente. "For practical and moral reasons, Congress must start effectively taxing the outsized gains of billionaires."

Like other advocates, IPS and ATF are calling for much higher and stricter taxation on the windfall profits of the billionaire class—especially in light of the social needs that the pandemic has made so apparent.

Currently under consideration in Congress is the Billionaires Income Tax (BIT) bill, spearheaded by Sen. Ron Wyden (D-Oreg.), chairman of the Finance Committee, which Clemente and Chuck Collins, director of IPS' Program on Inequality and the Common Good, say is the best piece of legislation to target the wealth of the super-rich. As the new analysis notes:

Most of these huge billionaires’ gains will go untaxed under current rules and will disappear entirely for tax purposes when they’re passed onto the next generation. Under Wyden’s BIT, billionaires will start paying taxes on their increased wealth each year just like workers pay taxes on their paychecks each year. 

The tax will apply only to taxpayers whose wealth exceeds $1 billion: about 700 households. It will be assessed annually on tradable assets, such as stocks, where the value of the asset is known at the beginning and end of the year. For non-tradable assets, such as ownership in a business or real estate holdings, taxes will be deferred until the asset is sold. 

"Billionaires are undertaxed and playing hide-and-seek with their substantial wealth," said Collins. "Targeted tax increases on billionaires, including the proposed Billionaire Income Tax, would rebalance the tax code and reduce these glaring abuses in who pays for the services we all depend on."

In a statement last month following the release of a White House report on the average income tax rate of U.S. billionaires, Wyden said that it's shameful for the nation's wealthiest to pay lower tax rates than most working Americans.

"Billionaires are paying a mere 8 percent tax rate, lower than millions of working Americans," said Wyden.

"It's time for a Billionaire's Income Tax that ensures billionaires pay taxes just like the nurses and firefighters," he added. "Nurses treating Covid-19 patients pay their taxes with every paycheck, and they know it's fundamentally unfair that billionaires and their heirs may never pay tax on billions in stock gains. Instituting a Billionaire's Income Tax would go a long way toward creating one fair tax code, rather than one that's mandatory for working people and another that's optional for the fortunate few."

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Off the Top of My Head

Billionaires in Space and One on the Ground

by John Lawrence

We have been treated to media coverage of billionaires in space squandering their fortunes to have a "wonderful experience" while one has not gone to space. Instead he has spent billions eradicating disease and poverty in the world, furnishing children with computers and contributing to the effort to control the pandemic. In fact he warned us a pandemic was coming in 2015 in a Ted talk. Bill Gates is a true hero while Richard Branson and Jeff Bezos are spoiled brats relishing their "experiences" and astronaut wings. Of course it's Bill Gates who is denigrated on right wing media and those peddling conspiracy theories. Anyone who tries to do good in the world usually ends up with a similar fate. Such are human beings. For rich billionaires their rocket ships represent nothing more than "boys with their toys."

Bill Gates latest book, "How to Avoid a Climate Disaster," should be read by everyone and touted by the media. He didn't need to go to space and look back at the earth to have a mind altering experience. I'm so tired of these billionaires like Branson saying things like, "Well after I saw the curvature of the earth, it made me feel a common bond with all humanity." Yeah. Blah. Blah. Blah. Now he wants to do something about climate change? Well, let's see what. He is a mental and philanthropic lightweight compared to Gates. Where's his book about climate change and his Ted talk about the pandemic? He's all show and no action. It's all about showmanship and "wonderful experiences", and maybe you too will win a raffle and be able to go into space, or maybe some day when the price comes down, then you'll be able to go. Hooray and Hallelujah! It's just the way it is, you see. First the rich people get to go, and then some day it'll be cheap enough even for the middle class just like it was with air travel.

Google the Gates Foundation and these words come up: "We are a nonprofit fighting poverty, disease, and inequity around the world." This is what the other billionaires should be about as well as other rich nations of the world. I think the US, temporarily at least during the Biden administration, is about that. But that could change quicker than an augenblick if another Trump like government comes along. For the year ending in 2019, the Gates Foundation spent more than $5 billion on 1869 grants helping people all over the world. The US government by contrast spent $1 trillion on its military-industrial complex, something even Joe Biden has not had the nerve to change at least so far. He gets massive kudos, however, for ending the war in Afghanistan despite all the military-think Generals who want us to stay there in perpetuity just in case another bin Laden might be born some day.

Some good verbiage from the Gates website: "From poverty to health, to education, our areas of focus offer the opportunity to dramatically improve the quality of life for billions of people. So we build partnerships that bring together resources, expertise, and vision—working with the best organizations around the globe to identify issues, find answers, and drive change. Our work depends on grantees and partners across the United States and in more than 130 countries who have on-the-ground expertise, a deep understanding of the issues we care about, and strong ties with the communities in which we aim to make a difference. At the same time, we have learned the value of having foundation representatives based in key regions—to help us build relationships with partner organizations and governments, better understand the policy environment, and remain culturally sensitive. We focus on issues we think are the biggest barriers that prevent people from making the most of their lives. For each issue we work on, we fund innovative ideas that could help remove barriers. Some of the projects we fund will fail. We not only accept that, we expect it—because we think an essential role of philanthropy is to make bets on promising solutions that governments and businesses can’t afford to make. As we learn which bets pay off, we adjust our strategies and share the results so everyone can benefit."

Going into space is like getting a sugar high. The self indulgent billionaires who do it are wasting their money on frivolities. The Bill and Melinda Gates foundation, despite the fact that the Gates's are getting divorced, are doing the work that needs to be done to bring the planet into alignment with our best natures. At the same time others are peddling bullshit misinformation to make as much money as possible even if it kills people. Expect the Republican base to be decimated because of right wing talk hosts like Tucker Carlson who are discouraging people from getting vaccinated. His watchers are the ones who will die from COVID. Democrats can stand by and watch while their competitors in the Republican party losing their constituents. It is a war by other means that Democrats are winning by default. Less people voting Republican is not an entirely bad thing even though health care workers will be working overtime to do their best to save them. Oh what tangled webs we weave.

Off the Top of My Head

How to Pay For Infrastructure

by John Lawrence

Modern Monetary Theory (MMT) points out that neither social programs nor tax cuts need to be "paid for." A government such as the US with a sovereign currency can issue the money without having to tax first. Taxes are only necessary to control inflation. The biggest amount of inflation in the economy right now is the inflation of billionaires' wealth assets because their increases in wealth are not taxable. The IRS only taxes workers' incomes, not billionaires increasing asset wealth. That's why economic inequality is growing by leaps and bounds, and we need a wealth tax. But as for infrastructure, the Fed can just create the money in the Treasury's account at the Fed with a few keystrokes on a computer like it did when it bailed out Wall Street in 2008.

In The Deficit Myth, Stephanie Kelton writes (circa 2015):

"No one [on Capitol Hill] questioned the significant need for infrastructure investment. A trillion dollars, while ambitious, would have only taken a bite out of the problem. No one blanched at the price tag, but there was considerable debate about whether (and how) to pay for it.

"Before I tell you about that debate, it's important to understand what those words mean to lawmakers and their staffers on Capitol Hill. In truth, there is only one way to pay for anything. All federal spending is carried out in exactly the same way - that is, the Federal Reserve credits the appropriate bank account(s). But in Washington speak, you "pay for" your spending by showing that you can "find" enough money to cover the cost of whatever it is you're proposing to spend. It's all a game, really, and it's rooted in the flawed mental model [that the government needs to tax and/or borrow before it spends] that holds back so much of our potential. To avoid adding to the deficit, lawmakers look for ways to cover the costs of their proposed spending without borrowing. That means they usually go looking for new tax revenue."

As Kelton points out, the US doesn't need to tax before it can spend. Biden's wanting to pay for infrastructure by taxing the rich is not necessary to pay for infrastructure per se, but it is necessary to get unbounded economic inequality under control.

Kelton continues:

"So back to the debate over the trillion-dollar infrastructure ill. The conversation began with staffers being asked whether we thought a so-called pay-for should be attached to the bill. It was my first week on the job, so I was relieved when another staffer spoke up first. "No," this person began, "I think we should just do it as a clean bill." A clean bill meant writing a spending bill that didn't include any language abut how to pay for it. Another staffer agreed, and soon I echoed their sentiments. Our country desperately needed to make these investments. There was clearly enough fiscal space to do it, and infrastructure is one of the things that has traditionally enjoyed bipartisan support. Since the GOP was in control of the Senate, we reasoned, the bill would need at least some support from Republicans to pass. [Ha. Ha] Proposing a tax increase would guarantee defeat. Not everyone agreed. Another staffer objected that the press wouldn't take the legislation seriously unless it specified exactly how it would be paid for. In the end, the bill included a proposal to raise revenue by closing a variety of tax loopholes that overwhelmingly benefit the rich. Needless to say, the legislation did not pass. Meanwhile, the latest ASCE [American Society of Civil Engineers] report card shows how deferred maintenance is catching up with us, as the cost of our needed improvements has climbed to a whopping $4.59 trillion."

Is it deja vu all over again? Is it gridlock or spinning our wheels as infinitum? Is it Republicans thinking it is more important to defeat Obama's and now Biden's agendas than it is to prevent bridge collapses?

Kelton's point is that the US doesn't really need to "pay for" anything by taxing first or finding the money first. "In 2017, a 1215-page bill, known as the National Defense Authorization Act, sailed through the Senate with a vote of 89-9. The White House had requested $700 billion, but the Senate had authorized $737 billion, kicking in another $37 billion without hint of concern about where to "find" the money. They simply voted in an overwhelmingly bipartisan way to increase the Pentagon's discretionary budget."

Yet the Pentagon budget has not protected us from international ransomware attacks nor domestic terrorists. May I submit that the money is misspent and misdirected? Instead of going where the money is really needed it goes to the vested interests in the military-industrial complex who continue to justify war in order to line their own pockets.

Kelton continues: "That might seem like a double standard. As Congresswoman Alexandria Ocasio-Cortez put it, "We write unlimited blank checks for war. We just wrote a $2 trillion check for the GOP tax cut, and nobody asked those folks, 'How are they going to pay for it?' She's right. Somehow, there's always money for war and tax cuts. For just about everything else, however, lawmakers are expected to show that they can "pay for" their spending."

As MMT has shown, the US government does not need to tax or borrow in order to spend. Taxation is necessary to control inflation, to extract money from the economy if there is too much of it out there chasing too few goods or services. Right now there is too much money out there in the hands of billionaires that should be extracted in order to prevent runaway financial inequality. But it is not necessary to tax before money can be spent on infrastructure or anything else. There are limits, and the limits are the material and human resources that are available to soak up that money by providing constructive economic activity like building infrastructure. Hyperinflation like what happened in the Weimar Republic or even Greece cannot happen in the US because the US never has to go to the capital markets to borrow money at prevailng interest rates. The US central bank, the Fed, issues whatever money is necessary to pay US bills and that includes any money appropriated by Congress whether for war, tax cuts or building infrastructure.

https://www.youtube.com/watch?v=a9pAPIUYXxQ

 

'Biggest Tax Story of the Year, If Not the Decade': Analysis Shows Just How Little Richest .001% Pay in Taxes

Bill Gates and Warren Buffett speak at an event organized by Columbia Business School on January 27, 2017 in New York City. (Photo: Spencer Platt/Getty Images)

 

"The personal federal tax bill for the top 25 in 2018: $1.9 billion. The bill for the wage earners: $143 billion."

Jake Johnson, staff writer

June 8, 2021

A first-of-its-kind analysis of newly disclosed Internal Revenue Service data shows that the richest 25 billionaires in the United States paid a true federal tax rate of just 3.4% between 2014 and 2018—even as they added a staggering $401 billion to their collective wealth.

"Many will ask about the ethics of publishing such private data. We are doing so—quite selectively and carefully—because we believe it serves the public interest in fundamental ways, allowing readers to see patterns that were until now hidden."
—Richard Tofel & Stephen Engelberg, ProPublica

Published Tuesday by the investigative nonprofit ProPublica—which obtained a sprawling cache of IRS data on thousands of the nation's wealthiest people dating back 15 years—the analysis takes aim at "the cornerstone myth of the American tax system: that everyone pays their fair share and the richest Americans pay the most."

"Our analysis of tax data for the 25 richest Americans quantifies just how unfair the system has become. By the end of 2018, the 25 were worth $1.1 trillion," ProPublica notes. "For comparison, it would take 14.3 million ordinary American wage earners put together to equal that same amount of wealth. The personal federal tax bill for the top 25 in 2018: $1.9 billion. The bill for the wage earners: $143 billion."

"Many Americans live paycheck to paycheck, amassing little wealth and paying the federal government a percentage of their income that rises if they earn more," the outlet adds. "In recent years, the median American household earned about $70,000 annually and paid 14% in federal taxes."

The new analysis juxtaposes the recent wealth gains of U.S. billionaires—as estimated by Forbes—with the information in the newly obtained IRS data to derive the "true tax rate" paid by the mega-rich.

The results show that Amazon CEO Jeff Bezos—the world's richest man—and Berkshire Hathaway CEO Warren Buffett paid a true tax rate of 0.98% and 0.10%, respectively, between 2014 and 2018. In 2007, ProPublica notes, Bezos paid nothing in federal taxes even as his wealth grew by $3.8 billion.

Economist Gabriel Zucman, a professor at the University of California, Berkeley, said the ProPublica reporting is "full of incredible findings."

"Looks like the biggest tax story of the year, if not the decade," Zucman added.

ProPublica makes clear that, far from being the beneficiaries of a sprawling, illegal tax dodging scheme, "it turns out billionaires don't have to evade taxes exotically and illicitly—they can avoid them routinely and legally," a point that spotlights the systemic inequities of the U.S. tax system.

As the outlet explains:

Most Americans have to work to live. When they do, they get paid—and they get taxed. The federal government considers almost every dollar workers earn to be "income," and employers take taxes directly out of their paychecks.

The Bezoses of the world have no need to be paid a salary. Bezos' Amazon wages have long been set at the middle-class level of around $80,000 a year.

For years, there's been something of a competition among elite founder-CEOs to go even lower. Steve Jobs took $1 in salary when he returned to Apple in the 1990s. Facebook’s Zuckerberg, Oracle's Larry Ellison, and Google's Larry Page have all done the same.

Yet this is not the self-effacing gesture it appears to be: Wages are taxed at a high rate. The top 25 wealthiest Americans reported $158 million in wages in 2018, according to the IRS data. That's a mere 1.1% of what they listed on their tax forms as their total reported income. The rest mostly came from dividends and the sale of stock, bonds, or other investments, which are taxed at lower rates than wages.

To illustrate the consequences of a system that doesn't tax unrealized capital gains, ProPublica cites the example of Bezos' $127 billion explosion in wealth between 2006 and 2018. The Amazon CEO "reported a total of $6.5 billion in income" during that period and paid $1.4 billion in personal federal taxes—a 1.1% true tax rate.

"America's billionaires avail themselves of tax-avoidance strategies beyond the reach of ordinary people," ProPublica notes. "Their wealth derives from the skyrocketing value of their assets, like stock and property. Those gains are not defined by U.S. laws as taxable income unless and until the billionaires sell."

Richard Tofel, ProPublica's founding general manager and outgoing president, said Tuesday that he considers the tax analysis "the most important story we have ever published."

"In the coming months, we plan to use this material to explore how the nation's wealthiest people—roughly the .001%—exploit the structure of our tax code to avoid the tax burdens borne by ordinary citizens," Tofel and ProPublica editor-in-chief Stephen Engelberg wrote in a separate article Tuesday. "Many will ask about the ethics of publishing such private data. We are doing so—quite selectively and carefully—because we believe it serves the public interest in fundamental ways, allowing readers to see patterns that were until now hidden."

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Off the Top of My Head

Biden's Infrastructure Initiative: Don't Worry About How To Pay For It

by John Lawrence, March 30, 2021

Even Republicans agree that there is a need to upgrade the infrastructure of the US. But they don't want to raise taxes to pay for it. Good news! You don't need to pay for it with tax money. The US dollar is a sovereign currency. That means that the central bank, in this case the Fed, can just create the money. In fact this is how it's always been done. The deficit is just an accounting regime. Money created by the Fed need never be paid back. It just goes on the Fed's balance sheet. This is a fact known and agreed to by most economists but many politicians and the American public are totally ignorant of this basic fact about how the economy works. Modern Monetary Theory has attempted to explain it in books like "The Deficit Myth" by Stephanie Kelton. So why does Biden also propose tax increases on the rich to pay for it? These are really two separate issues. Taxes need to be raised on the rich to try to bring into balance the skyrocketing financial inequality that has been occurring, not to pay for the infrastructure bill. Why do politicians including President Biden continue to perpetuate the myth that appropriations bills need to be "paid for." Why don't they just come out and say the truth - that a nation with a sovereign currency can never run out of money?

When just a few people own most of the wealth, we're back in a neo-feudal society where the rich control the political process, and the rest of the people are merely peons who don't really have a stake in the society at all. The Republican attempts to change the voting laws to suppress the minority vote is a way to cement that fact in American society. That's why it's so important to liberalize the voting laws so that every American citizen is encouraged to vote, not discouraged from it. So the infrastructure initiative is really two or even three pronged: rebuild infrastructure such as roads, bridges, ports, rail lines, airports and broadband thus putting millions back to work in good paying jobs. Secondly, to build back better in the sense that, insofar as possible, address the problem of global warming, and, thirdly, to make a first step in addressing economic inequality. All these things are important.

The only thing to watch out for while spending all this money is inflation, and some economists like Larry Summers are already sounding alarm bells over that. By taxing the rich and corporations money will be sucked out of the economy thus tending to reduce inflation. If sucking money out of the economy reduces inflation, then the sucking must be addressed to those areas where excess money really exists: namely, the rich and corporations who have been getting away with murder for years under both Republic and Democratic administrations. Forbes reported that "The 3 Richest Americans Hold More Wealth Than Bottom 50% Of The Country." Forbes ought to know. Perhaps with Biden's plan to tax the rich, it'll take 10 of the richest to equal the bottom 50%'s share. As for inflation, so much money in so few hands has already produced asset inflation in the form of rising housing and rent prices making it problematic for the young and the poor to support themselves especially at a minimum wage that hasn't increased in 50 years. What Summers doesn't understand is that the inflation that has occurred has been in the money that has been made by the rich which is actually wealth inflation, not in the form of wage inflation of the poor and middle class. Therefore, in turning this process around Biden's infrastructure bill is actually pointing the American economy in the correct direction.

Off the Top of My Head

Taxing the Rich Will Lessen the Need for Deficit Spending

by John Lawrence, January 29, 2021

Billionaires are upset because their hedge fund ploys in the Wall Street casino went awry when a group of average Joes countered their short sales of GameStop. Oh the tears that were shed. Billionaires losing millions gambling? Outrageous! Bernie Sanders tweeted: "Oh look, another billionaire is mad that he might have to pay more taxes while children in America go hungry and veterans sleep on the street. Cry me a river," Joe Biden's $1.9 trillion COVID relief bill will mean a lot of deficit spending which can be offset, however, by taxing these billionaires. A financial transaction tax would raise $2.4 trillion over the next decade—"enough to make public colleges tuition free and cancel student debt."

Casino Capitalism Lesson 1: Selling short. Here's how billionaire hedge fund managers planned to make a killing. They knew that GameStop was losing money and probably going out of business. GameStop closed 321 stores in 2019 alone and planned on closing even more stores by the end of 2020. So knowing that GameStop's stock was going down (it didn't take a big brain to figure that out), they sold its stock short. What that means is that they "borrowed" the stock from people that already owned it. Then they sold the stock at its value at that time. Some time later when they would have to "return" the stock to those they borrowed it from, they planned to buy it back at a lower price (it having gone down in the meantime) and pocket the difference. One might ask why the original owners of the stock would loan it in the first place since they must have known that the stock would be worth less when it was returned to them.

However, a group of "amateur" investors foiled the plans of the billionaires by buying GameStop stock thereby bidding up the price making it worth more when the short sellers had to return it, not less. That would mean that the short sellers would lose money instead of making money. That's when the billionaires cried, "Ouch!" Then the "amateurs" who bid up the stock could sell it at the higher price and make money. Woo Haa! Leon Cooperman, whose net worth is estimated to be around $3 billion, sniffed that "the reason the market is doing what it's doing is, people are sitting at home, getting their checks from the government, basically trading for no commissions and no interest rates." In other words average people trading stocks are making the money that billionaires like him should have made. Boo Hoo!

Modern Monetary Theory maintains that all the money for the COVID relief bill could be raised from deficit spending because deficits don't matter without any need for increased taxation. Yet it would be prudent to raise taxes on the mega rich in order to decrease economic inequality which represents an enormous chasm between the billionaire class and everyone else. A new report found that the world’s 2,153 billionaires have more wealth than 4.6 billion people, underscoring the degree of global inequality. This would also offset any decrease in the value of the dollar that large deficit spending might bring about. In The Deficit Myth by Stephanie Kelton, she points out that the Federal Reserve which creates US dollars can never run out of money since the US dollar is a sovereign currency, but there is a concern about inflation if too much money is created which doesn't have a productive purpose in the economy. Since so many are unemployed and since there is a huge infrastructure deficit, this is not in danger of happening any time soon. There is no lack of money for government programs since they don't depend on tax flows, and money created by the Federal Reserve that ends up on the Fed's balance sheet never has to be paid back.

While the Fed can create as much money as it likes to bail out the banks without Congressional approval, which it did during the 2008 banking crisis, money created for government spending, such as the $1.9 trillion COVID relief bill, must have Congressional authorization. Fortunately, there is a process known as budget reconciliation which only requires a majority vote and the Democrats have the majority in the Senate. Therefore, the COVID relief bill cannot be filibustered by Republicans which they surely would do if they were in the majority. So it's clear that Republicans only represent the interests of the rich who will contribute to their campaigns and enrich them in return as long as they vote to nullify everything that might help the average person or raise taxes on them.

'Cry Me a River': Sanders Hits Back as Billionaire Investor Whines About Potential Tax Hikes Amid GameStop Fiasco

Published on Friday, January 29, 2021

by Common Dreams

"Oh look, another billionaire is mad that he might have to pay more taxes while children in America go hungry and veterans sleep on the street."

by Jake Johnson, staff writer

 

22 Comments

Billionaire investor Leon Cooperman speaks during an interview on CNBC on January 28, 2021. (Photo: CNBC/YouTube Screengrab)

As the ongoing GameStop saga sparked renewed calls for a financial transactions tax and other commonsense redistributive measures to tackle soaring inequality and Wall Street abuses, billionaire investor Leon Cooperman took to the airwaves Thursday to fume that the idea of compelling the mega-rich to pay their fair share is a "bullshit concept" and merely "a way of attacking wealthy people."

Sen. Bernie Sanders (I-Vt.), a longtime proponent of raising taxes on billionaires like Cooperman, was not impressed.

"Yes. We will make Wall Street billionaires pay their fair share of taxes and create an economy that works for all of us."
—Sen. Bernie Sanders

"Oh look, another billionaire is mad that he might have to pay more taxes while children in America go hungry and veterans sleep on the street. Cry me a river," the Vermont senator tweeted late Thursday. "Yes. We will make Wall Street billionaires pay their fair share of taxes and create an economy that works for all of us."

A hedge fund manager who was charged with insider trading by the Securities and Exchange Commission in 2016, Cooperman is one of several industry big-wigs who has appeared on financial networks like CNBC in recent days to complain about the retail investors who banded together to send GameStop shares into the stratosphere, blowing up a ploy by short-selling hedge funds to cash in on the company's seemingly imminent demise.

Cooperman, whose net worth is estimated to be around $3 billion, sniffed that "the reason the market is doing what it's doing is, people are sitting at home, getting their checks from the government, basically trading for no commissions and no interest rates."

"I'm not damning them. I'm just saying from my experience, this will end in tears," Cooperman said as the investing app Robinhood abruptly restricted trading on GameStock and other shares, prompting members of Congress such as Reps. Alexandria Ocasio-Cortez (D-N.Y.) and Rashida Tlaib (D-Mich.) to demand hearings and an investigation.

During the 2020 presidential campaign, Sanders proposed a Wall Street transaction tax aimed at both curbing reckless financial speculation and raising revenue that could be used to fund progressive agenda items, including tuition-free public colleges and universities.

Warren Gunnels, Sanders' staff director, noted in a tweet Thursday that Sanders' transaction tax would raise $2.4 trillion over the next decade—"enough to make public colleges tuition free and cancel student debt."

"If the working class could bail out Wall Street," Gunnels said, "Wall Street can bail out working families in America during a damn pandemic."

HuffPost's Zach Carter argued Wednesday that a financial transactions tax would be the "simplest solution" to an untenable status quo in which Wall Street titans are handsomely rewarded for engaging in "what is a mostly economically wasteful activity."

"We have plenty of roads and bridges to repair and a vastly outdated transportation system," Carter wrote. "Redistributing money from hedge funders in the Hamptons to a high-speed rail network or a national public housing program would do more for growth and productivity than all the shorts and put options in New York."

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Amid Warnings of Surging Worldwide Poverty, Planet's 500 Richest People Added $1.8 Trillion to Combined Wealth in 2020

Published on Saturday, January 02, 2021

by Common Dreams

"Surging billionaire wealth hits a painful nerve for the millions of people who have lost loved ones and experienced declines in their health, wealth, and livelihoods."

by Julia Conley, staff writer

 

109 Comments

Tesla CEO Elon Musk saw the greatest increase in personal wealth in 2020—reported to be the fastest wealth creation in history, according to Bloomberg.(Photo: Kevork Djansezian/Getty Images)

Bloomberg's year-end report on the wealth of the world's billionaires shows that the richest 500 people on the planet added $1.8 trillion to their combined wealth in 2020, accumulating a total net worth of $7.6 trillion. 

The Bloomberg Billionaires Index recorded its largest annual gain in the list's history last year, with a 31% increase in the wealth of the richest people.

The historic hoarding of wealth came as the world confronted the coronavirus pandemic and its corresponding economic crisis, which the United Nations last month warned is a "tipping point" set to send more than 207 million additional people into extreme poverty in the next decade—bringing the number of people living in extreme poverty to one billion by 2030. 

Even in the richest country in the world, the United States, the rapidly widening gap between the richest and poorest people grew especially stark in 2020.

As Dan Price, an entrepreneur and advocate for fair wages, tweeted, the 500 richest people in the world amassed as much wealth in 2020 as "the poorest 165 million Americans have earned in their entire lives."

 

Nine of the top 10 richest people in the world live in the United States and own more than $1.5 trillion. Meanwhile, with more than half of U.S. adults living in households that lost income due to the pandemic, nearly 26 million Americans reported having insufficient food and other groceries in November—contributing to a rise in shop-lifting of essential goods including diapers and baby formula. About 12 million renters were expected to owe nearly $6,000 in back rent after the new year. 

Tesla CEO Elon Musk enjoyed an historic growth in wealth last year, becoming the second richest person in the world and knocking Microsoft co-founder Bill Gates down to third place. Musk's total net worth grew by $142 billion in 2020, to $170 billion—the fastest creation of personal wealth in history, according to Bloomberg. 

Amazon founder Jeff Bezos is at the top of the list, with a net worth of $190 billion. Bezos added more than $75 billion to his wealth in 2020, as the public grew dependent on online shopping due to Covid-19 restrictions and concern for public health. 

While Bezos and a select few others in the U.S. have amassed historic gains in personal wealth in the last year, the federal government has yet to extend much in the way of meaningful assistance to struggling Americans. The Republican-led Senate on Friday continued to stonewall a vote on legislation that would send $2,000 checks to many American households.

Senate Majority Leader Mitch McConnell (R-Ky.) denounced the proposal as "socialism for rich people" even though the plan includes a phaseout structure and individuals making only up to $115,000 per year—not those in the highest tax brackets—would receive checks. 

"Surging billionaire wealth hits a painful nerve for the millions of people who have lost loved ones and experienced declines in their health, wealth, and livelihoods," Chuck Collins, director of the Program on Inequality and the Common Good at the Institute for Policy Studies, told Bloomberg this week. "Worse, it undermines any sense that we are 'in this together'—the solidarity required to weather the difficult months ahead." 

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7 Ways 2020 Exposed America

by Robert Reich
Monday, January 4, 2021

If America learns nothing else from these dark times, here are 7 lessons it should take away from 2020:

1. Workers keep America going, not billionaires.

American workers have been forced to put their lives on the line to provide essential services even as their employers failed to provide them with adequate protective gear, hazard pay, or notice of when COVID had infected their workplaces. Meanwhile, America’s 651 billionaires – whose net worth has grown by over $1 trillion since the start of the pandemic – retreated to their mansions, yachts and estates.

Amazon CEO Jeff Bezos sheltered in his 165,000-acre West Texas ranch while Amazon’s warehouse workers toiled in close proximity to each other, often without adequate masks, gloves, or sanitizers. The company offered but then soon scrapped a $2 an hour hazard pay increase for warehouse workers, even as Bezos’ wealth jumped by a staggering $70 billion since March, putting his estimated net worth at roughly $186 billion as the year came to an end.

2. Systemic racism is literally killing Black and Latino Americans.

Black and Latino Americans account for almost 40 percent of coronavirus deaths so far, despite comprising less than a quarter of the population. As they’ve borne the brunt of this pandemic, they’ve been forced to fight for their humanity in another regard — taking to the streets across the country to protest decades of unjust police killings of their community members, only to be met with more police violence.

Among Native American communities, the coronavirus figures are even more horrifying. The Navajo Nation has had a higher per-capita infection rate than any state but can’t adequately care for the sick, thanks to years of federal underfunding and neglect of its healthcare system.

Decades of segregated housing, pollution, lack of access to medical care, and poverty have left communities of color vulnerable to the worst of this virus, and the worst of America.

3. If we can afford to bail out corporations and Wall Street, we sure as hell can afford to help people.

Senate Majority Leader Mitch McConnell continues to insist we can’t “afford” $2,000 COVID survival checks for Americans. But the latest coronavirus relief legislation doled out over $220 billion to powerful business interests that could instead have been used to help struggling working families.

Another way of looking at it: The total cost of providing those $2,000 checks ($465 billion) is less than half the amount America’s 651 billionaires added to their wealth during the pandemic ($1 trillion).

4. Health care must be made a right in America.

Even before the pandemic, an estimated 28 million Americans lacked health insurance. After it struck, an additional 15 million lost employer-provided coverage because they lost their jobs. Without insurance, a hospital stay to treat COVID-19 cost as much as $73,000. Remember this the next time you hear pundits saying Medicare for All is too radical.

5. Our social safety nets are woefully broken.

No other advanced nation was as unprepared for the pandemic as was the United States. Our unemployment insurance system is over 80 years old, designed for a different America. We’re one of the few countries in the world that doesn’t provide all workers some form of paid sick leave.

Other industrialized nations kept their unemployment rates low by guaranteeing paychecks during the pandemic. But Americans who filed for unemployment benefits often got nothing or received them weeks or months late. Under new legislation they get just $300 a week of extra benefits to tide them over.

6. The Electoral College must be abolished

Biden won 7 million more popular votes than Trump. But Biden’s margin in Arizona, Georgia, and Wisconsin totaled just 45,000. Had Trump won these three states instead, he would have gained 37 more electoral votes, tying Biden in the electoral college. Under the Constitution, this would have pushed the election to the House of Representatives, with each state delegation getting just one vote. Even though Democrats have a majority in the House, more state delegations have Republican majorities. Trump would have been reelected.

The gap between the popular and electoral college vote continues to widen. The Electoral College is an increasingly dangerous anachronism.

7. Government matters.

For decades, conservatives have told us that government is the problem and that we should let the free market run its course. Rubbish. If nothing else, 2020 has shown that the unfettered free market won’t save us. After 40 years of Reaganism, it’s never been clearer: Government is in fact necessary to protect the public.  

It’s tragic that it took a pandemic, near-record unemployment, millions of people taking to the streets, and a near-calamitous election for many to grasp how broken, racist, and backwards our system really is. Biggest lesson of all: It must be fixed.   

Off the Top of My Head

Billionaires Get Bailed Out by Free Money From the Fed. A Green New Deal Has to be Funded by Increased Taxes? What's Wrong With This Picture? Socialism for the Rich. Capitalism for the Middle Class and Poor.

by John Lawrence, August30, 2020

The Federal Reserve has printed trillions of dollars to bail out Wall Street banks and billionaire Hedge Funds so they can continue to gamble in risky derivatives, interest rate swaps, collateral loan obligations, pooled mortgages, futures, options and other financial manipulations that do nothing except move money from one rich person's portfolio to another's. Meanwhile, those who advocate building and repairing crumbling bridges, dams, railroads, levees and airports and doing so by creating millions of good paying jobs are demonized by those who have received the free money - rich people and the politicians sucking at their teats. How ya gonna pay for it, they say. Y'all are going to have to raise taxes. Not necessarily if we use the same means and methods that the rich have used to balance their portfolios - the Fed printing trillions of dollars and then swallowing it in the Fed's black hole - no taxes necessary.

Modern Monetary Theory states that a nation can pay for goods, services, and financial assets without a need to collect money in the form of taxes or debt issuance in advance of such purchases. In short deficits don't matter which is based on observation of the real world in which the US adds at least another trillion to its national debt every year. The budget is never balanced nor need it be. The US can never be made to default because the Federal Reserve issues fiat money with debt being denominated in its own currency. Therefore, it can always print more money to pay its own debt. However, much of the US debt is held by foreign countries because the US dollar is the world's reserve currency. That means that most if not all financial transactions world wide are done in dollars. When the US treasury sells bonds, the Fed remains willing to buy them if the market does not provide buyers for all of them. So far this year during the pandemic, the Fed has seen to it that the richest Americans did not see any decreases in wealth. It did this by printing $3 trillion and basically giving it to the rich.

Between mid-March and mid-May, during the lockdown, the wealth of America’s 600-plus billionaires ballooned by $434 billion, according to a report by Americans for Tax Fairness, pushing the wealth of those 600 Americans to a combined $3.4 trillion. The Fed accomplished this by making sure asset prices, mainly the stock market, did not go down during the lockdown. The richest 10% of American households own 84% of the value of stocks, according to Federal Reserve data. When Fed Chairman Powell admitted that the Fed’s nearly $3 trillion in asset purchases caused asset prices (again the stock market) to increase, he said the goal was to “restore functioning markets,” which means markets where prices are rising, and markets where price discovery is not allowed to happen, and markets where investors are spared any losses.

So there we have the reason why the current pandemic caused depression did not result in the stock market tanking like it did in the infamous 1929 crash which led to the Great Depression. The Fed printed money and bought stocks. It's as simple as that. Yet the Fed resists doing the same thing for the middle class such as printing $3 trillion and spending it on a Green New Deal. Oh no, politicians whine, that would mean taxes would have to be raised. No they wouldn't if the Fed prints the money and spends it on infrastructure rather than buying stocks. The limitation on this money printing is only when the economy reaches full employment and/or inflation starts to rise. So far we're a long way from either of those events occurring.

The fact is that a Joe Biden Presidency could institute a program of Medicare for All and a Green New Deal and the forgiveness of student loan debt without increasing taxes. It would lead to huge deficits to be sure. Those deficits represent US Treasury bonds sold to the public. To the extent that the public doesn't want to purchase all of them, the Fed can step in, buy them up and disappear them on its balance sheet in just the same way it has propped up Wall Street after the Great Recession and the stock market presently during the Pandemic Recession. There is no reason why US policies should add huge amounts of wealth to the already rich while starving the country and most of its citizens of good paying jobs creating a green infrastructure. Both income and wealth taxes on the rich (but not on the poor or middle class) can then function to decrease economic inequality and mitigate the need for Fed money printing.

Off the Top of My Head

Obama Excoriates Trump by Name

by John Lawrence, August20, 2020

No mincing words, no beating around the bush, no pussyfooting around. For the first time Obama mentioned the name "Donald Trump" and then went on to give a scathing review of his Presidency. Normally circumspect and judicious, Obama called Trump out as an existential threat to democracy itself. This was unprecedented for a former US President to lambaste his successor in this way although Donald Trump deserved every word of Obama's take down.

Meanwhile, the court system has sped up getting access to Trump's financial records which undoubtedly will show criminal activity and tax fraud connected with his loans from Deutsche bank. Whether any of this will dissuade any of Trump's base from voting for him again is problematic. One can only conclude that 40% of the American people want a criminal and a fraudster in the White House if they think there's anything in it for them. This is what America has become: a place where you can cheat yourself to untold, insane riches. All the people the Democrats talk about - the first responders, the care givers, the farmers, the teachers, the truck drivers, the grocery workers - all these people have nothing to do with the real America of financial derivatives, Wall Street and hedge funds. This is the America where all the money resides and politicians are as greedy as Joe SixPack in clamoring to get their share of it.

We celebrate working America while the real America - the America where the money is - consists of Lockheed Martin, defense contractors, the defense industry, JP Morgan Chase, Goldman Sachs, Apple, Google and Facebook. There is no more small town America, at least in money terms. All the money resides in one place. Millionaires and billionaires have increased their fortunes since the pandemic started. Billionaires have gotten $637 billion richer during the coronavirus pandemic. This is an economic system that is out of control in terms of an equitable distribution of wealth which is necessary for a democracy to exist.

40 million Americans filed for unemployment during the pandemic, but billionaires saw their net worth increase by half a trillion dollars. This isn't the first time billionaires have seen gains while others dealt with loss, and it tends to tie back to two things. First, the government disproportionately gives more aid to larger companies. Then, when the stock market bounces back, the unequal bailouts mean that the wealthy still have money on hand to invest and thus profit, while the middle and lower classes do not.
Wealth-friendly tax laws and loopholes then keep billionaires at the top.

What's wrong with this picture? If Americans want to keep a democracy, then something structurally has to change or else the "working class," the "essential workers," will just become a bunch of serfs while the rich control everything from behind the scenes like Wizards of Oz.

 

 

 

 

 

 

Trump’s Worst Attacks on Workers

by Robert Reich

Tuesday, July 28, 2020

Donald Trump campaigned as an insurgent outside of the political establishment who would restore the long-neglected working class. That was a lie. As president, he’s turned his back on working people, governing instead as a lackey for billionaires, CEOs, and corporations. Even during a public health and economic crisis, Trump has left working people in the dust.

Consider his signature tax law, sold as a benefit to working people. More than 60 percent of its benefits have gone to people in the top 20 percent of the income ladder. In 2018, for the first time in American history, billionaires paid a lower tax rate than the working class.

Trump said every worker would get a $4,000 raise, but nothing trickled down. Instead, corporations spent their tax savings buying back shares of their own stock, boosting executive bonuses and doing nothing for workers. To make matters worse, some of the richest corporations are paying nothing in federal income taxes, despite making billions in profits.

Meanwhile, Trump’s corporate lobbyists and industry shills have systematically dismantled worker protections – rolling back child labor protections, undoing worker safeguards from exposure to cancerous radiation, gutting measures that shield workers from wage theft, and eliminating overtime for 8 million workers.

Trump has even asked the Supreme Court to take away the health insurance of 23 million American workers by invalidating the Affordable Care Act –  in the middle of a global health crisis, no less! If Trump gets his way, protections for people with pre-existing conditions will be eliminated.

Oh, and remember his promise to rein in drug prices so working people can afford the meds they need? Well, forget it. Remdesivir, a drug to reduce the severity of COVID-19, from pharma giant Gilead, was developed with $70 million of taxpayer funding, yet Trump is letting the company charge $3,000 per treatment. And he is omitting pricing protections from federal contracts to develop drugs for Covid-19 – making it likely that life-saving treatments and vaccines will be out of reach for people in need.

Donald Trump doesn’t give a fig for working-class Americans. He even wants to end the extra unemployment benefits that countless Americans are depending on to get through this crisis.

So whose side is Trump really on? 

Well, here’s a clue: Tucked away on page 203 of the COVID stimulus package backed by Trump, is an obscure provision that delivers a whopping $135 billion in tax breaks to millionaire real estate developers and hedge fund managers. One real estate tycoon who stands to profit handsomely from the provision is none other than the president’s son-in-law and senior adviser, Jared Kushner.
In total, the cash secretly spent on tax cuts for millionaires in the COVID-19 package is more than three times as much money as was included for emergency housing and food relief.

Kushner isn’t the only Trump insider getting paid off during the pandemic. Forty lobbyists with ties to Donald Trump have helped clients secure more than $10 billion in federal COVID aid. And if Trump succeeds in getting the Supreme Court to repeal the Affordable Care Act, the richest 0.1 percent of Americans will get an average additional tax cut of $198,000 each per year.

Donald Trump is no working-class champion. He’s a corporate con man – the culmination of a rigged-for-the-rich system that’s shafting working Americans at every turn.

 

 

 

 

 

To Keep Americans Safe, We Have to Get Billionaires Out of Politics

Published on Wednesday, July 08, 2020

Billionaires and the super rich have spent 40 years, since the beginning of the Reagan Revolution, telling us how wonderful America would be if only rich people ran the show. That's called oligarchy, not democracy.

by Thom Hartmann

 

15 Comments

President Donald Trump and Senate Majority Leader Mitch McConnell (R-Ky.) speak to the supporters during a rally in Lexington, Kentucky. (Photo: Preston Ehrler/SOPA Images/LightRocket via Getty Images)

Jim Jones, who only killed 900+ people, was a piker, perhaps because he just wasn't rich enough to be truly effective. Billionaire Donald Trump has beat him more than 130 times over—with far more death and destruction to come.

Canada, a country run by competent leaders and actual civil servants at the provincial and federal level, largely has the coronavirus under control and have closed their border to Americans.

The Guardian is reporting how Mexican border towns are asking Americans not to come, for fear of further spread of the virus there.

Parts of California are experiencing a surge in coronavirus infections, but can’t perform tests on people because they have run out of reagents. Our billionaire-led federal government, of course, has refused to invoke the Defense Production Act to make more reagent and testing kits.

The billionaire running our education department, Betsy DeVoss, is trying to force teachers back into the classroom nationwide regardless of their age or health, and regardless of the consequences of school children bringing the coronavirus home with them.

The billionaire Trump chose to run our commerce department, Wilbur Ross, says that the coronavirus spreading in China will be good for the American economy.

Over at Popular.info, Judd Legum is reporting that billionaire-led Facebook is spreading far and wide the nonsense story that if you wear masks you could suffer from an oxygen deficiency.

Billionaire Rupert Murdoch's Fox News is relentlessly promoting defiance of reasonable public health measures, leading to an explosion of hospitalizations and deaths in those states were Fox News is popular.

Arizona, where the governor is deeply in the pocket of billionaire interests, has now declared that some people are going to get treatment and others won't, based on a complicated formula about who is most likely to live the most years after they leave the hospital.

Multiple billionaires and their companies, it turns out, have received piles of cash from the monies Congress appropriated to help small businesses and average working people through this economic crisis.

Back in 2000, when George W. Bush lost the election by a half-million votes but the Supreme Court put him in the White House anyway, the media was celebrating the fact that he and Dick Cheney were both oil industry executives. They talked about how a "CEO presidency" would be a good thing for America. It didn't work out that way: instead, they lied us into two wars, gave away trillions of dollars to billionaires, and destroyed our reputation and credibility around the world.

Billionaires and the super rich have spent 40 years, since the beginning of the Reagan Revolution, telling us how wonderful America would be if only rich people ran the show.

That's called oligarchy, not democracy.

Until we get billionaires and the dirty money of corporations and the ultra-rich out of politics and and return competent leadership to all levels of government, Americans will continue to die in numbers even greater than we've seen in all the wars we've fought since 1945.

Thom Hartmann is a talk-show host and the author of The Hidden History of the Supreme Court and the Betrayal of America and more than 25 other books in print. 

Off the Top of My Head

Instead of Helping American Workers, the Fed Prints Money and Swallows US Debt

by John Lawrence, June 25, 2020

The Federal Reserve is printing trillions of dollars and buying US government debt. The market for US Treasury bonds is a hard sell these days because they pay so little interest: 1.37% for a 30 year bond, less than the inflation rate. China is dumping its Treasuries. It will probably accelerate the rate of dumping if tensions between the 2 countries continue. China was the US' largest creditor till recently when Japan took over that role. While the Federal Reserve has set interest rates effectively at zero, credit card companies are still charging as much as 30% interest which creates a huge number of Americans debtors especially when you throw in student loan debt which stands at $1.5 trillion. In fact, revolving consumer credit card debt reached nearly $1.1 trillion at the end of February 2020, according to the Federal Reserve G19 Report. Americans were paying as much as $121 billion in interest and fees combined by the end of 2019. That's no surprise since the Federal Reserve reported in February 2020 that the average interest rate on credit cards reached an astronomical 16.61%. While billionaires can borrow money at zero percent interest, average Americans pay 16% and up.

The effect of zero interest rates on savings accounts and Treasury bonds is to force everyone into the stock market which, although we're in a recession bordering on depression, continues to go up. It is totally divorced from reality; it wouldn't go down even in a depression like it did during the Great Depression. The Fed is keeping it artificially pumped up because so much American wealth is at stake there.

The Fed is buying Treasuries and mortgage backed securities (MBSs) to the tune of trillions of dollars. Wolf Street reported:

In March (2020) and April combined, the Fed monetized 100% of the additional Federal debt. Over the two-month period of March and April, the US government increased its debt by $1.56 trillion (most of it in April); and over the same two-month period, the Fed bought $1.56 trillion in Treasury securities (most of it in March) and thereby monetized 100% of the additional pile of debt during the two-month period.

The Fed is just swallowing all kinds of debt which is enriching the richest Americans and foreign banks even more. Problem is this forced feeding of cash by the Fed is not trickling down to the American people. It is not creating jobs. Now the Fed is creating even more ways to monetize debt by creating Special Purpose Vehicles (SPVs). These SPVs can buy assets the Fed is not allowed to buy, and they can lend to entities and rich individuals to buy certain assets. Under the arcane Federal Reserve Act, these SPVs require taxpayer backing from the Treasury Department to protect the Fed from losses. The SPVs can buy asset backed securities (ABSs) on a non-recourse basis which means that, if there are any problems, taxpayers take the losses. Indirectly via its Special Purpose Vehicles and its Primary Dealers, the Fed can buy even old bicycles, as long as taxpayers take the losses.

Wolf Street reported:

These ABS can be backed by credit card loans, auto loans, student loans, equipment loans, floor plan loans, insurance premium finance loans, some loans guaranteed by the Small Business Administration (SBA), and eligible loans on receivables. The loan amounts will be “equal to the market value of the ABS less a haircut and will be secured at all times by the ABS,” the Fed says.

A little history on Term Asset-Backed Securities Loan Facility (TALF) : At the end of 2010, under orders from Congress, the Fed released data on over 21,000 transactions it performed during the Financial Crisis, which revealed among many other outrageous acts, that the Fed lent to well-connected individuals and all kinds of hedge funds and others under its TALF program so that they would buy certain assets, such as these consumer loan ABS, drive up their prices, sell them to pension funds and others later for a huge profit, and pay back the loans to the Fed.

These well-connected individuals included John A. Paulson, Michael Dell, Christy K. Mack (wife of former Morgan Stanley CEO John Mack), Kendrick R. Wilson III (former Goldman executive and top aide to Hank Paulson Jr.), H. Wayne Huizenga (founder of AutoNation and Waste Management), Jonathan S. Sobel (head of Goldman’s mortgage department), etc. Some very wealthy people made a lot of money off the Fed’s bailout programs even as workers and the economy was in deep trouble.

So the Fed is paying John Paulson money by means of an SPV. Paulson is the guy who bet against the subprime mortgage market in 2007 and made one billion dollars in one day. Goldman Sachs had to pay him off, but eventually due to all the legerdemain in the financial markets, it was French and German taxpayers that paid him for his astute bet. That's casino capitalism at its best. Now he has direct access to the Federal Reserve's money printing press. Why? When there are so many poor and unemployed people in the US, why is the Fed intent on only bailing out financial markets, meaning rich people? Suffice it to say that the Fed is able to buy most anything from rich people and monetize their debt. Because of this and the fact that the rich can borrow at zero percent interest, they engage in risky bets. If they win, they pocket the money. If they lose, the Fed bails them out at zero percent interest.

Compare this with how the situation was dealt with during the Great Depression. Instead of force feeding wealthy people with interest free cash and adding trillions to the US National debt, FDR created the Reconstruction Finance Corporation (RFC). The original legislation establishing the RFC did not limit it to lending to financial institutions; it was also authorized to provide loans for railroad construction and crop lands. In other words it created jobs for average Americans. An amendment passed in July 1932 allowed the RFC to provide loans to state and municipal governments. The purpose of these loans was to finance projects like dams and bridges, and the money would be repaid by charging fees to use these structures. To help with unemployment, a relief program was created that would be repaid by tax receipts. Under the New Deal, the powers of the RFC were greatly expanded. The agency now purchased bank stock and extended loans for agriculture, housing, exports, businesses, governments, and disaster relief. The RFC actually made money on these loans.

So the RFC could actually create jobs for average working people (and not just for hedge fund managers) doing constructive things like building houses and infrastructure. Part of the New Deal was the Works Progress Administration (WPA) relief program which made the federal government by far the largest employer in the nation. A Green New Deal would create money much as the Fed does with a few keystrokes on a computer, but, instead of just providing liquidity to banks, hedge funds and rich people, it would provide money for productive jobs paid for by the government. The government needs to be employer of last resort in order to recreate a full employment economy.

A Green New Deal would convert the American economy from a fossil fuel dependent economy to one fueled by renewable energy. In so doing it would provide good paying jobs for those in American society who have been left out or left behind. The Fed should monetize the $3 trillion backlog in American infrastructure repair and rebuilding. Making the Fed a public bank instead of a bank whose main purpose is to swallow US government debt and give money to rich people in order to provide "liquidity" would go a long way to reducing inequality and bringing the American poor including minorities into the middle class. IMHO the COBID pandemic will insure that the old economy based on 70% consumerism is not coming back. The new normal will be based on government spending to create a Green New Deal or will sputter along at about half its former level.

Who’s Really Looting America?

by Robert Reich

Wednesday, June 17, 2020

As hundreds of thousands take to the streets to protest ruthless police killings of Black Americans and centuries of systemic racism, Donald Trump and his enablers have been quick to cast the protesters as violent “looters” – and distract from the real looters of America.

So far, over 10,000 Americans have been arrested during the wave of protests. Yet a decade ago, after Wall Street bankers looted America through predatory lending and securities fraud – often preying upon people of color and causing American households to lose roughly $19 trillion in total wealth – not a single top Wall Street executive went to prison. Instead, they received billions in taxpayer bailouts, and executives took home massive bonuses.

Now, during the coronavirus pandemic and an unprecedented economic crisis, America’s billionaires have seen their wealth soar by $434 billion. How? Their corporations lobbied for and got $500 billion in bailouts and they got $135 billion in tax breaks. And the Treasury Department and the Fed are erasing the corporate debt they amassed over the last few years so their corporations could buy back their shares of stock. Meanwhile, Amazon, Google, Facebook, Walmart, and other corporate giants are using their vast market power to rack up record profits.

The corporate looting doesn’t stop there. Just look at the epidemic of wage theft through misclassifying employees as independent contractors and denying workers the overtime pay they are due. Every year, American employers steal a combined $15 billion in income from their workers, whether white, black or brown.

The most profitable corporations in America are also looting America of billions in taxes through loopholes, write-offs, and special exemptions they’ve successfully lobbied for. Amazon paid just a 1.2 percent tax rate on $13 billion in profit in 2019. Other companies, including Chevron, Halliburton, and Netflix, haven’t paid a dime in federal taxes in recent years. The United States loses nearly $70 billion a year in tax revenue because corporations loot America by shifting their profits to tax havens overseas.

Meanwhile, entire industries loot Black and brown communities. Predatory payday lenders, focusing on communities of color, offer loans with sky-high interest rates and hidden fees that trap borrowers in a never-ending cycle of poverty. The bail bond industry profits from mass incarceration and the failed war on drugs, as does America’s prison-industrial complex – keeping over 2 million Americans behind bars, disproportionately black and brown. All these corporations have platoons of lobbyists that keep their looting going.

Here’s what Donald Trump and his corporate cronies will never admit: The worst looting in America isn’t breaking windows at Target or Wells Fargo. It’s billions of dollars in wage theft, unjustifiable tax breaks for the top 1 percent, corporate tax havens, predatory loans, bail bonds, mass incarceration, and crooked Wall Street bankers who have never been accountable to anything but their bottom line. 

By pitting us against each other – blaming immigrants, blaming liberals, and especially blaming people of color, and Black people in particular – they’ve divided us, and gotten away with it.

This needs to end. Stand together, and know the truth about the real looters in America.

Off the Top of My Head

The Power Structure Wants the Discussion Circumscribed to Systemic Racism, Not Systemic Inequality

by John Lawrence, June 17, 2020

Let's just talk about systemic racism and not about an economic system in which a few people control all the wealth and the rest get crumbs from the table. The power structure does not want the discussion extended into that area. Let's just integrate black people into the system so that they are not disproportionately poor, only poor proportionally to their percentage of the population. Blacks compose 12% of the American population. 27% of black people are in poverty so the good old American way is to reduce the percentage in poverty to 12%. Then blacks would be proportionately and not disproportionately poor. That's the American way. Don't question systemic poverty and inequality; Confine the discussion to systemic racism.

The American way is to have a few rich people among every ethnic group and then to use this as an example that anyone can get rich in America. So what if the majority are poor. It's more important that you have examples of huge wealth among black people, and that is certainly the case today. American black billionaires on the 2019 Forbes list included American investor Robert Smith with $5 billion, businessman David Steward with $3 billion, media mogul Oprah Winfrey with a net worth of $2.5 billion and American sports executive Michael Jordan with $2.1. There are 615 billionaires in the US; only 6 are black so to be proportionate we'd need about 74 more black billionaires.

Blacks comprised 13.6 percent of the U.S. population according to the 2010 Census, but account for only 1.4 percent of the top 1 percent of households by income. Whites are the overwhelming majority of the top 1 percent of households by income, comprising 96.2 percent. There are 18.6 million total millionaires in the US, but only an estimated 35,000 are black. That may sound like a lot, but the U.S. population of millionaires is 76 percent White. Blacks, Hispanics and Asians make up about 8 percent each. So problem solved if we add another 4% to the black millionaires list. Then they would be proportionately rich at least at the million dollar level.

Many black athletes and entertainers are millionaires or multi-millionaires. Take the NBA, for example, in which 80% of the players are black. The total annual revenue of the NBA is $8.7 billion of which about 50% goes to the players. Since there are 30 franchises with 15 players per franchise, there are 450 active players. That means that the share of NBA revenues going to black NBA athletes is ($8.7 billion)x(1/2)x(.8) = $3.48 billion or an average of $7.7 million per black player. Bingo! The NBA has created way more black millionaires than it has created white ones. That's for sure.

This is the thinking of the power structure, mainly the Republican power structure which is not threatened by having a few more black millionaires and billionaires. However, they are threatened when you talk about everyone, black or white, having a living wage, everyone, black or white having decent housing, medical care and free public education from pre-school through college. They are threatened by talk of taxing the wealthy, taking from the rich and giving to the poor, as it were. That would be socialism much like the People's Republic of France or the People's Republic of Germany or even the People's Republic of Sweden. The power structure can't tolerate that kind of debate. Let's just make black people equal in the number of millionaires, but not change anything else. Then all the poor blacks and whites, for that matter, can aspire to pull themselves up by their own bootstraps as many of their counterparts have done.

Whatever happens we can't change the system to make it inherently more equal, inherently more naturally producing of equal outcomes. Instead, it must produce inherently unequal outcomes so that those who make it in the system will feel like they have really accomplished something and can serve as role models for others to strive harder. Republicans recoiled at all the hippies in the 60s who were having too much fun and not working hard enough. They were even getting free tuition in the California University system and elsewhere. On August 23, 1971, prior to accepting Nixon's nomination to the Supreme Court, Lewis Powell wrote a memo to the US Chamber of Commerce entitled "Attack on the American Free Enterprise System," an anti-Communist and anti-New Deal blueprint for conservative business interests to retake America from the hippies and left wingers. It was based in part on Powell's reaction to the work of activist Ralph Nader, whose 1965 exposé on General Motors, Unsafe at Any Speed, put a focus on the auto industry putting profit ahead of safety, which triggered the American consumer movement. Powell saw it as an undermining of the power of private business and an ostensible step towards socialism.

So they changed the system to criminalize all sorts of behaviors mainly involving drugs so they could incarcerate mainly black people and so they could saddle mainly white people with a ton of student loan debt. Then they would have to work hard paying off their debt instead of partying, surfing, having free love and doing drugs. Well, it certainly has worked. In 2014, African Americans constituted 2.3 million, or 34%, of the total 6.8 million correctional population. About 1 in 3 black boys will have served some time in the penal system during their lifetimes. Profits are up for the private penitentiary corporations and American millenials are buckling at the knees from the weight of $1.5 trillion in student loan debt. So if the percentage of black people in prison gets down to 12%, then this should make the American system non-racist? Wouldn't it be better to eliminate the root causes of incarceration which have to do with poverty and get the incarceration rate down to zero for everyone?

Off the Top of My Head

The Solution for New York State's Budget Crisis: A Wealth Tax on Wall Street

John Lawrence

There's a storm a'brewing between Governor Andrew Cuomo and Mitch McConnell, the Senate majority leader. New York is facing a $15 billion revenue shortfall due to the coronavirus. Cuomo wants the Federal government to fill the gap, but Mitch has said, "Let the states go bankrupt." McConnell has told the blue states,"Drop Dead." New York state is a democratic state which won't vote for Donald Trump so McConnell is now all concerned about the budget deficit. The solution lies in the fact that New York City, the richest city in the world is located in New York state. Wall Street, home of the biggest and richest banks in the world is located in New York City. JPMorgan Chase's CEO Jamie Dimon is a billionaire. Goldman Sachs' CEO, Lloyd Blankfein, is a billionaire. Wall Street banks have just been given $1.5 trillion by the Federal Reserve. Besides that between 2008 and 2015, the Federal Reserve contributed about $4.5 in quantitative easing (QE) to the big Wall Street banks.

In addition New York is the hedge fund capital of the universe. They are worth trillions of dollars. So a wealth tax on Wall Street billionaires, banks and hedge funds could easily fill New York State's budget gap. In addition to that consider Manhattan real estate. The median price of homes currently listed in Manhattan is $1,550,000. At $238 million, 220 Central Park South penthouse is the most expensive home sold in the U.S. Come on, Governor Cuomo. Just raise the property taxes on Manhattan real estate. Property tax is a wealth tax. A wealth tax on New York City assets could easily fill the budget gap. What are you waiting for? Democrats control the majority in both houses of the New York State legislature. No Mitch McConnell there. The state can just vote to raise taxes on billionaires, banks and hedge funds.

OK, here's the likely scenario. If Cuomo proposes a wealth tax on Wall Street banks, hedge funds and billionaires, all of which have received massive bailouts from the Federal Reserve, the affected parties will massively lobby New York state legislators and Republicans at the national level including Mitch McConnell. According to New York Public Radio in 2012:

Hedge funds, hedge fund executives, and their immediate family members gave $23.4 million dollars to state and local politicians from the start of 2005 through February of this year, according to a report released Wednesday by Common Cause New York, an advocacy group that campaigns for open government.

While this is the first time Common Cause has tracked these donations in New York, contributions from the hedge funds in federal campaigns leapt from only $2.4 million in 2000 to $19 million in 2008.

I'm sure the affected parties have contributed much more since 2012 and will ride McConnell's ass and ply him and other Republicans with money, and then Congressional Republicans will change their tune regarding bailing out New York state. The result will be that New York state will not have to tax Wall Street although 15 billion is just a small blip on one billionaires' balance sheet. Remember a billion is a thousand million. C'mon, Governor Cuomo, it's a no brainer.

The System: Who Rigged It, How We Fix It

by Robert Reich

Tuesday, March 24, 2020

The coronavirus has starkly revealed what most of us already knew: The concentration of wealth in America has created a a health care system in which the wealthy can buy care others can’t. 

It’s also created an education system in which the super-rich can buy admission to college for their children, a political system in which they can buy Congress and the presidency,  and a justice system in which they can buy their way out of jail. 

Almost everyone else has been hurled into a dystopia of bureaucratic arbitrariness, corporate indifference, and the legal and financial sinkholes that have become hallmarks of modern American life.

The system is rigged. But we can fix it.

Today, the great divide in American politics isn’t between right and left. The underlying contest is between a small minority who have gained power over the system, and the vast majority who have little or none. 

Forget politics as you’ve come to see it – as contests between Democrats and Republicans. The real divide is between democracy and oligarchy.

The market has been organized to serve the wealthy. Since 1980, the percentage of the nation’s wealth owned by the richest four hundred Americans has quadrupled (from less than 1 percent to 3.5 percent) while the share owned by the entire bottom half of America has dropped to 1.3 percent [Saez & Zucman]. 

The three wealthiest Americans own as much as the entire bottom half of the population. Big corporations, CEOs, and a handful of extremely rich people have vastly more influence on public policy than the average American. Wealth and power have become one and the same.

As the oligarchs tighten their hold over our system, they have lambasted efforts to rein in their greed as “socialism”, which, to them, means getting something for doing nothing.

But “getting something for doing nothing” seems to better describe the handouts being given to large corporations and their CEOs. General Motors, for example, has received $600 million in federal contracts and $500 million in tax breaks since Donald Trump took office. Much of this “corporate welfare” has gone to executives, including CEO Mary Barra, who raked in almost $22 million in compensation in 2018 alone. GM employees, on the other hand, have faced over 14,000 layoffs and the closing of three assembly plants and two component factories.

Our system, it turns out, does practice one form of socialism – socialism for the rich. Everyone else is subject to harsh capitalism.

Socialism for the rich means people at the top are not held accountable. Harsh capitalism for the many, means most Americans are at risk for events over which they have no control, and have no safety nets to catch them if they fall.

Among those who are particularly complicit in rigging the system are the CEOs of America’s corporate behemoths. 

Take Jamie Dimon, the CEO of JPMorgan Chase, whose net worth is $1.4 billion. He comes as close as anyone to embodying the American system as it functions today.

Dimon describes himself as “a patriot before I’m the CEO of JPMorgan.”

He brags about the corporate philanthropy of his bank, but it’s a drop in the bucket compared to his company’s net income, which in 2018 was $30.7 billion – roughly one hundred times the size of his company’s investment program for America’s poor cities. 

Much of JP Morgan’s income gain in 2018 came from savings from the giant Republican tax cut enacted at the end of 2017 – a tax cut that Dimon intensively lobbied Congress for.

Dimon doesn’t acknowledge the inconsistencies between his self-image as “patriot first” and his role as CEO of America’s largest bank.
He doesn’t understand how he has hijacked the system.

Perhaps he should read my new book.

To understand how the system has been hijacked, we must understand how it went from being accountable to all stakeholders – not just stockholders but also workers, consumers, and citizens in the communities where companies are headquartered and do business – to intensely shareholder-focused capitalism.

In the post-WWII era, American capitalism assumed that large corporations had responsibilities to all their stakeholders. CEOs of that era saw themselves as “corporate statesmen” responsible for the common good.

But by the 1980s, shareholder capitalism (which focuses on maximizing profits) replaced stakeholder capitalism. That was largely due to the corporate raiders – ultra-rich investors who hollowed-out once-thriving companies and left workers to fend for themselves.

Billionaire investor Carl Icahn, for example, targeted major companies like Texaco and Nabisco by acquiring enough shares of their stock to force major changes that increased their stock value – such as suppressing wages, fighting unions, laying off workers, abandoning communities for cheaper labor elsewhere, and taking on debt – and then selling his shares for a fat profit. In 1985, after winning control of Trans World Airlines, he loaded the airline with more than $500 million in debt, stripped it of its assets, and pocketed nearly $500 million in profits.

As a result of the hostile takeovers mounted by Icahn and other raiders, a wholly different understanding about the purpose of the corporation emerged.

Even the threat of hostile takeovers forced CEOs to fall in line by maximizing shareholder profits over all else. The corporate statesmen of previous decades became the corporate butchers of the 1980s and 1990s, whose nearly exclusive focus was to “cut out the fat” and make their companies “lean and mean.”

As power increased for the wealthy and large corporations at the top, it shifted in exactly the opposite direction for workers. In the mid-1950s, 35 percent of all private-sector workers in the United States were unionized. Today, 6.4 percent of them are.

The wave of hostile takeovers pushed employers to raise profits and share prices by cutting payroll costs and crushing unions, which led to a redistribution of income and wealth from workers to the richest 1 percent. Corporations have fired workers who try to organize and have mounted campaigns against union votes. All the while, corporations have been relocating to states with few labor protections and so-called “right-to-work” laws that weaken workers’ ability to join unions.

Power is a zero-sum game. People gain it only when others lose it. The connection between the economy and power is critical. As power has concentrated in the hands of a few, those few have grabbed nearly all the economic gains for themselves.

The oligarchy has triumphed because no one has paid attention to the system as a whole – to the shifts from stakeholder to shareholder capitalism, from strong unions to giant corporations with few labor protections, and from regulated to unchecked finance.

As power has shifted to large corporations, workers have been left to fend for themselves. Most Americans developed 3 key coping mechanisms to keep afloat.

The first mechanism was women entering the paid workforce. Starting in the late 1970s, women went into paid work in record numbers, in large part to prop up family incomes, as the wages of male workers stagnated or declined. Then, by the late 1990s, even two incomes wasn’t enough to keep many families above water, causing them to turn to the next coping mechanism: working longer hours. By the mid-2000s a growing number of people took on two or three jobs, often demanding 50 hours or more per week.

Once the second coping mechanism was exhausted, workers turned to their last option: drawing down savings and borrowing to the hilt. The only way Americans could keep consuming was to go deeper into debt. By 2007, household debt had exploded, with the typical American household oweing 138 percent of its after-tax income. Home mortgage debt soared as housing values continued to rise. Consumers refinanced their homes with even larger mortgages and used their homes as collateral for additional loans.

This last coping mechanism came to an abrupt end in 2008 when the debt bubbles burst, causing the financial crisis. Only then did Americans begin to realize what had happened to them, and to the system as a whole. That’s when our politics began to turn ugly.  

So what do we do about it?

The answer is found in politics and rooted in power.

The way to overcome oligarchy is for the rest of us to join together and form a multiracial, multiethnic coalition of working-class, poor and middle-class Americans fighting for democracy.

This agenda is neither “right” nor “left.” It is the bedrock for everything America must do.

The oligarchy understands that a “divide-and-conquer” strategy gives them more room to get what they want without opposition. Lucky for them, Trump is a pro at pitting native-born Americans against immigrants, the working class against the poor, white people against people of color. His goal is cynicism, disruption, and division. Trump and the oligarchy behind him have been able to rig the system and then whip around to complain loudly that the system is rigged.

But history shows that oligarchies cannot hold on to power forever. They are inherently unstable. When a vast majority of people come to view an oligarchy as illegitimate and an obstacle to their wellbeing, oligarchies become vulnerable.

As bad as it looks right now, the great strength of this country is our resilience. We bounce back. We have before. We will again.

In order for real change to occur – in order to reverse the vicious cycle in which we now find ourselves – the locus of power in the system will have to change.

The challenge we face is large and complex, but we are well suited for the fight ahead.

Together, we will dismantle the oligarchy.

Together, we will fix the system.

Off the Top of My Head

China Out Capitalizes Capitalist Nations

by John Lawrence, March 23, 2020

Who would have thunk it? China has taken capitalist financial methods to the next level with the result that it is progressing more rapidly in material abundance and a consumer society than the proto-capitalist nations of the world: the US and Europe. Sure, politically, they are an authoritarian nation. But that expedites their development since all institutions are on the same wavelength. In particular their central bank, the People's Bank of China (PBC) funds infrastructure projects all over the world. This keeps China a full employment society. They put all the Chinese people to work building infrastructure which expands the money supply in a very widespread way. Essentially the PBC provides loans for all these projects which means it creates the money just as US banks do when they create loans or the Federal Reserve does when it provides "liquidity" to the markets through quantitative easing (QE).

The Federal Reserve has actually expanded the range of market interventions it can do. It used to be that the Fed could only set interest rates. That was it. Now it can buy corporate bonds, state and local bonds and give money directly to corporations to keep them afloat. In fact it can act more like the PBC which interacts directly in the Chinese economy. The Fed can take debts directly onto its balance sheet where they may remain forever. This is exactly what it did in the 2008 financial crash. It provided cash directly to banks in return for mortgage backed securities and Treasury bonds thus providing liquidity to the banks so that they would not go under. Now the banks are well capitalized, and, since they know that the Fed stands ready to bail them out again, they have no worries. In fact the term "bail them out" is actually a misnomer at this point. It can be replaced with "provide them with cash" as necessary.

There was an interesting interview on 60 Minutes with Neel Kashkari, Obama's Assistant Secretary of the Treasury, who was in charge of the Troubled Assets Relief Program (TARP) during the Great Recession. He noted that TARP, which was supposed to help out actual people with their mortgages did not go far enough. They were too stingy with it, and not very many people got helped. He says that this prolonged the recession. Instead of being stingy as they were, they should have been "overly generous." That is the lesson he learned. So now in the coronavirus recession, his advice is that the Fed should be overly generous in providing relief to actual everyday people and not just to banks. At this time the banks are doing very well, thank you.

It is well known that money is created by the banks themselves when they create a loan which they do with a couple of keystrokes on a computer. Why is this possible? Because money has no relationship to gold or any other precious metal any more. That's why it's called "fiat money." So what bankers and economists are realizing (which has been the secret of China's success all along resulting in their bringing 800 million people out of poverty in 40 years) is that the US central bank, the Federal Reserve can do the exact same thing. It can create fiat money just like the banks do, like Wall Street does. The only concern is that money so created would lead to inflation, but, as Kashkari noted, there was no inflation even after the Fed created trillions of dollars in 2008 most of which went directly to bankers, hedge funds and rich individuals and not to the average American. Now Kashkari, who is President of the Minneapolis branch of the Federal Reserve, is saying that the Fed could provide liquidity to the American people and not just to the banks. How this will probably happen is by Congress passing a bill on the "fiscal side" as they say. Then they will sell more Treasury bonds to cover the increased deficit. Wall Street banks will buy them since other countries are decreasing their purchase of US debt, and then the Fed will provide liquidity (cash) to Wall Street taking the Treasury bonds onto its balance sheet where they will reside forever probably. This is why the national deficits and debt are no problem because the Fed can print money to cover them ad infinitum. It's as if the Fed provided money directly to the US economy, but, by law, they have to do so indirectly.

Ellen Brown understood this possibility long before Neel Kaskari had his "awakening."

America’s chief competitor in the trade war is obviously China, which subsidizes not just worker costs but the costs of its businesses. The government owns 80% of the banks, which make loans on favorable terms to domestic businesses, especially state-owned businesses. Typically, if the businesses cannot repay the loans, neither the banks nor the businesses are put into bankruptcy, since that would mean losing jobs and factories. The non-performing loans are just carried on the books or written off. No private creditors are hurt, since the creditor is the government, and the loans were created on the banks’ books in the first place (following standard banking practice globally).

Precisely! So no need to worry about another Great Recession or Depression. The US could effectively provide a Universal Basic Income (UBI) to its citizens indefinitely as Andrew Yang proposed.

As observed by Jeff Spross in a May 2018 Reuters article titled “China’s Banks Are Big. Too Big?”:

[B]ecause the Chinese government owns most of the banks, and it prints the currency, it can technically keep those banks alive and lending forever.…

It may sound weird to say that China’s banks will never collapse, no matter how absurd their lending positions get. But banking systems are just about the flow of money.

Spross quoted former bank CEO Richard Vague, chair of The Governor’s Woods Foundation, who explained, “China has committed itself to a high level of growth. And growth, very simply, is contingent on financing. Beijing will come in and fix the profitability, fix the capital, fix the bad debt, of the state-owned banks … by any number of means that you and I would not see happen in the United States.”

There is no reason why the US could not emulate China. From an economic point of view QE or a UBI would not be inflationary as long as the dollars provided to the system were either invested in new plants and equipment, infrastructure or consumption. What is needed now is about $10 trillion worth of Green Infrastructure, a Green New Deal funded indirectly by the Fed. This money can be provided to the American people and not only rich billionaires as was done in 2008 and as China is providing directly to its workers who are kept busy building infrastructure in the Belt and Road initiative. It would also ease economic inequality and not induce inflation as long as the money is widely distributed.

Off the Top of My Head

The Federal Reserve's Role is to Bail Out Wall Street, Not the American People

by John Lawrence, March 21, 2020

The purpose of the Federal Reserve is to bail out the banks, not to bail out you. During the Great Recession of 2008, the Fed gave trillions to the banks. The average Joe that couldn't pay his mortgage lost his home to foreclosure. Banks only keep a portion of their money as reserves. They create loans out of thin air. If someone can't make payments on a loan, the bank will foreclose. If the loan is secured by property, that property will become the bank's property. If at the same time more people want to take their deposits out of the bank than the bank has in reserves, the bank is in trouble. That's where the Federal Reserve comes in. It floods the bank with liquidity meaning the cash to pay out to the bank's customers who want their money back. At the same time the Fed may take the bank's non performing loans onto its balance sheet. No one cares if the Fed has a bunch of non performing loans on its balance sheet. They can just stay there ad infinitum.

What happened during the Great Recession was that, thanks to financial instruments called derivatives, banks were liable for a lot more money than simple mortgages and other retail loans. They had committed to covering bets like interest rate swaps or collateralized debt obligations (CDOs) without understanding the liabilities they had agreed to. Derivatives represent gambles. A hedge fund will bet that an underlying security will go up or go down. When they win their bets, as they did in 2008, mainly due to foreclosures, it is similar to a run on the bank only a lot more money is at stake. Certain banks and financial institutions did not have the money to pay off the bet. So the Fed stepped in and paid off the bet for them. This was how the financial crisis was resolved. All the gamblers were made whole by the Federal Reserve. All the bets were paid off and very few financial institutions had to go out of business. Lehman Brothers was one institution that did go bankrupt and was liquidated.

The Fed can control how much money is sloshing around in the economy by raising or lowering the prime interest rate. That's the interest rate a bank pays to borrow money. The bank then charges the average Joe a lot higher interest rate, and they make money on the spread. Obviously, the Fed doesn't want the retail banks to make foolish loans that won't be paid back because then it will have to bail out the banks that made such loans. However, this is exactly what led to the 2008 financial crisis. The banks were making "liar loans" base on stated income. A waitress could go into the bank and just state her income was $125,000. a year. There was no checking. She was given a mortgage to buy a house. Then, when she couldn't make the payments on the house, the bank foreclosed. When the bank couldn't resell the house and get its money back, the bank's reserves were diminished and finally it couldn't meet its obligations. That's when the Fed stepped in with more liquidity. The Fed just created money out of thin air the same way the banks created money for loans, and flooded the banking system with it.

Average people lost their homes and their jobs, but investors and gamblers who had bet that the economy would collapse were paid off. This is the solution that Obama oversaw that was created by his protege Tim Geithner, Obama's Secretary of the Treasury. Now the question might be asked why the gamblers who had bet that the economy would fail were paid in full because the Federal Reserve created the money out of thin air to pay them while there was no money created to bail out the American people who had lost their homes and their jobs. Why was their no money created to alleviate the suffering? That's because that's not the Fed's job. The Fed's job is to bail out the banks. Hedge fund manager John Paulson made an estimated $2.5 billion during the crisis by betting against the housing market.

It doesn't take a genius to see that the US might have better spent its money by more widely distributing the trillions that the Fed created rather than paying off a hedge fund manager to the tune of a couple billion dollars, but again that's not the Fed's job. It should have been Obama's job to step in and demand that investor/gamblers not be paid, and that the Fed's trillions of dollars that it created go to the average John and Jayne that lost everything. But that's not how things work in the US capitalist economy. The Fed is not beholden to the American people. It's only beholden to the banks, and even there, it can decide which ones it wants to fail (Lehman Bros.) and which ones it wants to bail out (every other bank).

The trillions of dollars created by the Federal Reserve in its Quantitative Easing (QE) program go directly into the hands of investors meaning rich people. This does not "trickle down" to the American public. So it's no mystery why economic inequality is increasing, why the rich are getting richer and the poor are getting poorer. Much is made about how the Federal Reserve is "independent" from the Federal government. That's because it is a privately owned, wholly owned subsidiary of the big banks. It is literally owned by Wall Street and it's only beholden to Wall Street. It only serves the American public in the sense that it keeps the financial system operating smoothly supposedly.

Consider the alternative. A public bank, one beholden to the American people or its representatives, would have been able to direct the money flow at least partially to the direct alleviation of suffering of the American people during a recession or a depression. The Reconstruction Finance Corporation served the role during the Great Depression of getting money directly to state and local governments and to the American people. It supported banks as well, but the monies also flowed directly into the economy without having to take the form of loans created by the Wall Street banks. It was more hands on in bailing out certain industries.

A public bank, such as exists in North Dakota, can make loans directly to people and small businesses. It doesn't deal in fancy derivatives and is accountable not to the banking system but to the people in general. In North Dakota's case it's accountable to the people of North Dakota to whom it returns its profits. The Central Bank of the United States could be a public bank on the national level which would replace the Federal Reserve with the mandate of supporting the American people directly as well as the banking structure. It would not deal in derivatives which only benefit hedge funds and drive inequality.

The coronavirus could induce another Great Depression depending on how long it lasts. However, don't expect the Federal Reserve to protect the American people although it will protect Wall Street. No investor/gambler need fear losing their money. In fact the John Paulsons of the world, who have probably already taken out fantastic bets that the economy will go down, stand to make billions supplied of course by the Federal Reserve which will create the money out of thin air. This sloshing around of money will be scooped up by the billionaire class. Then the Federal government will come through on the fiscal side to supply aid of some sort to the American people while adding all this money to the national debt.

Off the Top of My Head

Mike Bloomberg Might Have Better Spent $500 Million on Housing the Homeless

by John Lawrence, March 7, 2020

Mike Bloomberg spent $500 million on TV ads to advance his candidacy for President of the United States. His campaign lasted about 3 months from November 24, 2019 to March 4, 2020. That means he spent an astonishing $500 million in 101 days or almost $5 million per day. This is enough to gag a maggot that so much money was pissed down the drain. But it will hardly affect Bloomberg's net worth at all. He started 2020 with $58.4 billion so now he still has around $58 billion remaining and growing daily. He should be able to recover the $500 million he spent on his campaign in short order. So the $500 million amounted to basically just a rounding error. Each year his company, Bloomberg LP, which is privately owned by him,  makes $8 billion. So $500 million means nothing to him.

However, it would mean a lot to those 500,000 people who sleep on the street each night. Micro apartments are typically 200 square feet and are the equivalent of a single room occupancy unit (SRO) meant to be occupied by one person. The national average to build apartment construction is $125 a square foot. So a 200 square foot unit could be built for $25,000. Michael Bloomberg, instead of wasting $500 million on a foolhardy pursuit, could have built micro units which would have housed 20,000 homeless people. Scale that up by 10 and he could house 200,000 homeless for $5 billion, a mere 8.6% of his personal fortune. If he got one other billionaire involved, say Jeff Bezos, they could solve the homeless problem between the two of them, and they would hardly feel a blip in their accumulation of money which is continuing at the rate of $22 million a day for Bloomberg and $215 million a day for Bezos.

On the other hand, if there were a wealth tax which taxed away most of the billions that these billionaires own, say, leaving them with a net worth of only $1 billion, the same thing could be accomplished by the Federal government as well as all the other things Bernie Sanders and Elizabeth Warren have been talking about. I give Bezos, Bloomberg and the other billionaires credit for their entrepreneurial activities which have contributed greatly to the nation and to the world, but I think that anyone should be able to get by on one billion dollars. Invested at 10%, this gives them an income of $100 million a year. Isn't that enough?

I am a member of Amazon Prime, and I enjoy shopping from home so I certainly take advantage of Bezos' creation. Yet there is no way he can spend all the money he's making, and this holds true for Bloomberg as well although I am not a user of his product. In addition to contributing mightily to economic inequality, billionaires are completely distorting the political process with the result that the average middle class person in America, if there are any of them left, has virtually no power in the political process which is controlled by rich campaign contributors and lobbyists who have unlimited money to spend.

Off the Top of My Head

Sanders/Warren Will Forgive Student Loan Debt by Executive Action; Biden Voted to Take Away Bankruptcy Protection for Student Loan Debtors

by John Lawrence, May 3, 2020

It's clear. If you want student loans forgiven, vote Sanders/Warren. If you want to be in debt for the rest of your life, vote Biden. If you want an economy dominated by Wall Street, vote Biden. If you want an economy that works for the average person, vote Sanders/Warren. Biden was a key architect of and whip for the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act, which made it impossible for student loan debtors to declare bankruptcy. He's not middle class Joe; he's Wall Street Joe.

Lenders like Citigroup, Bank of America, JP Morgan, Chase and Wells Fargo aggressively lobbied for changes to the bankruptcy code. Delaware-based credit card company MBNA, which Bank of America acquired in 2006, was one of the most ardent supporters of the bill.Joe Biden got most of his campaign contributions from MBNA. He is even known as the Senator from MBNA. So if you want Wall Street to continue to dominate the economy and fuel economic inequality, vote for Joe. If you want the economy to work for average Americans, vote for Sanders/Warren. Biden will continue to support neoliberal Wall Street policies which means that you can forget about universal health care, an end to foreign nonwinning wars, trillion dollar budgets for the military-industrial complex, significant inroads into the global warming problem.

The Washington Examiner reported:

Biden’s senate campaign committees received $208,175 from MBNA employees from 1989 through 2010, the second-largest source of contributions, according to the Center for Responsive Politics’ OpenSecrets.org. In the 2006 election cycle, employees from Citigroup employees donated $18,825, those from Bear Stearns donated $15,000 and from Goldman Sachs donated $10,500.

In total, Biden received $1,126,375 from those in the securities and investment industry, $304,475 from finance and credit company workers, and $295,900 from commercial bank employees.

Biden’s ties to MBNA and banks span beyond political contributions from its employees. Home sales, family jobs, and free trips caused critics to dub him “the senator from MBNA.”

Why African Americans are supporting Biden is beyond me. They are the ones most likely to have crippling student loan debt. They are the ones likely to be most indebted to Wall Street credit card companies. The Fed lets Wall Street borrow money at zero percent interest while credit card companies charge 30-40% or more. Payday loan companies charge 300-400% interest, and African Americans are the most likely users of them. African Americans are most likely to have single parent families, and they represent those who need free child care and pre-K the most. They are the ones who could profit from Medicare for All the most. They are the ones who could profit from the jobs created by the Green New Deal the most.

Bloomberg is just as bad as Biden. He's part and parcel of Wall Street. The Bloomberg terminal is all about Wall Street. He made his fortune selling his terminal to Wall Street. He's making billions more each year from his privately held company - all the money comes from Wall Street. Bloomberg LP had $9.9 billion in revenue in 2018 - most  of it going directly into Bloomberg's pockets. He's a poster child for economic inequality to the tune of $8 to $10 billion dollars a year. You want runaway economic inequality - vote for Bloomberg.

It may be necessary t give up some of the 70% share of GDP going to consumption because consumption especially of airplane, car and ship travel increases global warming. This means that a recession would probably be salubrious for the planet earth if it means a reduction in greenhouse gas emissions while retooling for a green economy in which consumption could again increase without the consequent damage that the current oil based economy is doing.

Off the Top of My Head

Bernie Socks It To Them

by John Lawrence, February 25, 2020

The critics have piled on Bernie about how he's going to pay for his proposals for Medicare for All, a Green New Deal, forgiving student loan debt and free college tuition. Now Bernie has come out with a detailed plan about how to do it. The obvious answer is how do other countries do it? Most other advanced countries have free universal health care and free college tuition. They take it for granted. I had some passengers from Calgary, Alberta whom I asked 'how do you like the Canadian health care system?'. He replied, "It's free." I said, "Yeah, but don't you have to pay for it in your taxes?" He said, "I guess so." So he wasn't really concerned that he was paying taxes through the nose to pay for "free" health care. He didn't even know what percentage of his taxes went to health care. I suspect that once the tax structure changes here so that rich people pay more and poor people pay less that everything will be like that too.

It will cost $2.2 trillion to make public colleges, universities and trade schools tuition-free and to cancel all student debt over the next decade. It is fully paid for by a modest tax on Wall Street speculation that will raise an estimated $2.4 trillion over ten years. A Financial Transaction Tax has been talked about for years. Bernie is the only one bold enough to actually make it part of his campaign platform. It needs to be done. The financialization of the economy is what led to the 2008 economic debacle in which the banks were bailed out by the American people to the tune of trillions of dollars. So now even though it's years later, let them pay to bail out the American people. It's a good thing.

Bernie’s bill to expand Social Security will increase benefits for low-income senior citizens and people with disabilities by more than $1,300 a year. It is fully paid for by making the wealthiest 1.8 percent of Americans – those with incomes over $250,000 a year – pay the same rate into Social Security as working families. I like that a lot. Right now even though I'm still working and paying into social security, I'm receiving less than $700. a month in social security. Another $1300. a month would bring my social security up to $2000. a month. Why it's even enough to rent an apartment!

Bernie’s proposal to guarantee housing as a human right and to eliminate homelessness will cost $2.5 trillion over the next decade. It is fully paid for by a wealth tax on the top one-tenth of one percent – those who have a net worth of at least $32 million. (Bernie’s wealth tax will raise a total of $4.35 trillion.) A wealth tax on the rich! I love it. Eliminating homelessness and finally implementing the 1948 UN Declaration of Human Rights - priceless! It's time the millionaires and billionaires paid to eliminate poverty in this country. The wealth tax will also pay for universal child care and pre-school. By the way maybe the Congress should get on board and finally ratify the 1948 Declaration.

The Green New Deal will transform this country and be the first step in saving the planet from ultimate destruction. It needs to be extended to the rest of the world eventually as well. We need to cooperate with other countries to implement it and share renewable energy technology. This means joining China's Belt and Road initiative in terms of making sure everything under development is based on renewable energy and is non-polluting. It goes without saying that the US should rejoin the Paris Accords on climate change, but extend it even further.

All in all Bernie's plans are a wonderful and refreshing change of pace for the US of A and the rest of the world. If they come to pass, i will be proud of my country again for implementing both humanitarian policies and policies which will save the earth from a global warming catastrophe.

Off the Top of My Head

Bloomberg Should Use His Money to Help Other Democratic Candidates

by John Lawrence, February 21, 2020

We don't need another billionaire President. Michael Bloomberg is the quintessential billionaire being worth over $60 billion. He says he's a New Yorker, but he doesn't tell you about his $20 million home in the Hamptons, the $11.8 million 5.8-acre estate in Florida, 19 East 79th Street, New York: 5 units, the five story limestone townhouse at 17 East 79th Street, New York, the condo at 610 Park Avenue Apt. 5B, New York, the Farmhouse in North Salem, New York, Vail’s Mountain Haus: 292 E. Meadow Drive, Vail, Colorado, the $25 million mansion at 4 Cheyne Walk, London, United Kingdom, the $10 million mansion at Stokes Bay, Bermuda. He's a New Yorker alright. 10 times over.

This guy is a poster child for economic inequality in America. He could buy all the real estate in half the small towns in America. Paying millions for a house or a condo is nothing to someone who has $60 billion (and growing) to spend. So why doesn't the guy buy the election not for himself but for Bernie Sanders who represents the heart of the Democratic Party at this time if not the Democratic National Committee. As Bloomberg pointed out at the debate, Bernie himself is a millionaire who owns three houses, but this is nothing compared to the wealth Bloomberg owns. Let's have a discussion about how billionaires could pool their money to change the dynamics of this country.

Take climate change. What would a half a trillion dollars do to build out renewable energy. That's approximately the amount of wealth that the half dozen richest American billionaires own. If the US government can't come up with that amount of money, certainly these billionaires and their leveraged credit can. So what are they waiting for?

At a time when there are 500,00 homeless, Bloomberg could singlehandedly solve the homeless problem by selling off most of his real estate keeping only one condo in New York City which should be sufficient for himself and his family to live in. Instead he gorges himself on more real estate than he possible could live in. If he wants to ski at Vail, Colorado, he has the money to rent an apartment or stay in a hotel for the time he is skiing there. Instead he owns a huge property which probably lies vacant except for the relatively short ski season.

If he wants to visit London or has business interests there, I'm sure he could stay in a fine hotel instead of owning a $25 million mansion there. This guy in no way represents the heart of the Democratic party. He should stay on the sidelines and support Bernie Sanders' campaign with his money. He's not the solution; he's the problem.

Buying the Presidency

by Robert Reich

Friday, February 14, 2020

Bad enough that a tyrant is destroying American democracy. Now an oligarch is trying to buy the presidency. 

Michael Bloomberg’s net worth is over $60 billion. The yearly return on $60 billion is at least $2 billion – which is what Bloomberg says he’ll pour into buying the highest office in the land. 

I’m not saying that great wealth should disqualify you from becoming president. 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.

So far, Bloomberg spent over $380 million on campaign advertising. That’s more than Hillary Clinton spent on advertising during her entire presidential run. It’s multiples of what all other Democratic candidates have spent, including billionaire Tom Steyer.

Encouraged by the murky outcome from the Iowa caucuses and New Hampshire primaries, Bloomberg has doubled his spending on TV commercials in every market where he is currently advertising and is expanding his campaign’s field staff to more than 2,000.

That’s not the only way he’s using his billions to co-opt the election. He’s been endorsed by House Democrats and Democratic mayors who were the beneficiaries of his fortune during their campaigns. He’s also paying social-media “influencers” with large followings to promote his campaign. 

His paid staff is already three times as large as Trump’s, five times Joe Biden’s. He’s using his fortune to woo staffers away from other campaigns. 

Meanwhile, the Democratic National Committee is putting Bloomberg onto the debate stage by abandoning the individual-donor threshold that it used for the first eight debates, presumably because Bloomberg – the self-funded billionaire – doesn’t take donations.

To participate in the Feb. 19 debate in Las Vegas, Democratic candidates need to show at least 10 percent support in four national polls. Bloomberg’s wall-to-wall advertising makes that pretty much inevitable. He recently came in third place in a Morning Consult tracking poll, behind just Sanders and Biden. And he’s in the top four in many Super Tuesday states. 

Bloomberg has some attractive policy ideas about gun control, the environment, and a more progressive tax. 

But he’s also a champion of Wall Street. He fought against the reforms following the near meltdown of the Street in 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 because he hasn’t taken individual donations, hasn’t appeared on the debate stage, and bases his entire campaign on TV advertising, he isn’t being held accountable for his despicable record on race and criminal justice – the discriminatory stop-and-frisk policy he implemented when he was mayor, or his defense of red-lining.

And, remember, he’s trying to buy the presidency. 

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.

Since 1980, the share of America’s wealth owned by the richest four hundred Americans has quadrupled while the share owned by the entire bottom half of America has declined. 

The richest 130,000 families now own nearly as much as the bottom 90 percent – 117 million families – combined. The three richest Americans own as much as the bottom half. Michael Bloomberg is the eighth richest. 

Big money inevitably engulfs politics, which is why a handful of extremely rich people like Bloomberg have more influence than any comparable group since the robber barons of the early 20th century. 

Unlike income or wealth, power is a zero-sum game. The more of it at the top, the less of it anywhere else. And as power and wealth have moved to the top, everyone else has become dis-empowered. Today the great divide is not between left and right. It’s between democracy and oligarchy. 

Bloomberg is indubitably part of that oligarchy.

If the only way we can get rid of a sociopathic tyrant named Trump is with an oligarch named Bloomberg, we will be forced to choose the oligarch.

But let’s hope it doesn’t come to that. Oligarchy is better than tyranny. But neither is as good as democracy.

Off the Top of My Head

Homelessness is What Happens When You Let the Free Market System Take Over

by John Lawrence

In an article in The California Sunday Magazine titled "3 kids. 2 paychecks. No home." about a family with two working parents that can't afford a 2 bedroom apartment in Salinas, the industrial and economic center of Monterey County, California. Salinas is the hometown of John Steinbeck and where the Steinbeck Museum is located. Steinbeck was one of the most prolific of American authors. He wrote "The Grapes of Wrath" among other novels about the homeless and poverty stricken families in the Great Depression. He wrote about the homeless guys in Monterey who lived in a place they called the Palace Flophouse in "Cannery Row" Many of his books were turned into movies including Grapes of Wrath starring Henry Fonda, Jane Fonda's Dad.  Jane Fonda at age 81 is still getting herself arrested in Washington, DC for protesting about climate change.

So what's new? Steinbeck wrote about the poverty in the Salinas Valley. Candido and Brenda and their 3 kids are living out of a Toyota Sienna in a Salinas Food 4 Less parking lot.

"Now they were in the parking lot of Natividad Medical Center, just outside the emergency room. The lot was well lit, and there were bathrooms in the ER waiting room, open 24 hours. The hospital staff was mostly welcoming. At night, however, after everyone fell asleep, Candido had been noticing the tiny flicker of a lighter in a nearby pickup truck and the profile of an older man. Candido kept the van’s dome light on and made sure its doors were locked."

Steinbeck's "The Grapes of Wrath" was burned and banned. Steinbeck received death threats and the FBI put him under surveillance. He was called a communist. That was before he was awarded the Nobel Prize for Literature. The book was banned in many libraries and copies were symbolically burned in towns across America. There is in America a refusal to acknowledge the rights of its poorest citizens to a life of the barest necessities for them and their children. Steinbeck wrote about poverty in the 1930s and 40s. He probably thought that his novels might have convinced enough Americans that every citizen should be entitled to a basic level of existence, but he would have been wrong about that. Almost 100 years later the situation has only gotten worse for the homeless.

"Mornings were the hardest. Everyone was achy, tired from a bad night’s sleep, and on this morning, too, it was all they could do to keep to their routine. Brenda and Candido insisted on maintaining a semblance of order. “We’re not like some people,” Candido would tell the kids. “We wash our clothes. We don’t pee outside. We keep ourselves clean.” In the hospital bathroom, while Candido got ready to go to work and Brenda stayed behind with Adelene, Frankie helped wash and dress Josephat, brushing his brother’s teeth, then his own. Breakfast was whatever Pop-Tarts or granola bars were left over from the food bank. Finally, they straightened up the van, pulled the seats back into position, and put on their seat belts, Adelene in her car seat, Frankie and Josephat in their boosters. They drove the 15 or so minutes into town, fusing with the early traffic, indistinguishable from all the other families starting their day.

"When the van stopped, the boys hopped out. They went around to the trunk, grabbed their backpacks off the built-in clothing hooks, hugged their parents, and walked through the front gate of their elementary school."

Wages for working people haven't gone up indexed for inflation since the Reagan revolution of 1980 which ushered in the second Gilded Age. Meanwhile, billionaires have accumulated more and more money not by building railroads like Jay Gould did in the first Golden age or by developing the steel industry like Andrew Carnegie did, but by manipulating financial instruments. In many cases these financial industries were hedge funds which took over industries like the Hostess Baking Company, manufacturer of Twinkies, loaded it with debt, paid themselves handsomely and then let the industry go bankrupt while thousands of employees lost their jobs. Hedge funds engage in vulture capitalism which seeks to strip a functioning company of its assets, while management and executives feast on the carcass before it is stripped bare and the employees are left to rot, many of them on the streets.

"Today, the region’s 91,000 farmworkers live with stagnant wages (the median pay for farmworkers is $12.79 per hour) and the constant threat of ICE (the majority of these laborers are undocumented). Public health officials describe an epidemic of malnutrition among the workers and their families, and hunger has become widespread. The perverse irony that “The Valley That Feeds the Nation,” the title of a colorful mural in nearby Soledad, is now struggling to feed itself has been lost on nobody. Activists argue that a lack of fair wages in agriculture, in particular, is a key driver of this food insecurity. But for now, charity is what the industry is willing to offer. Last year, at the Food Bank of Monterey County, much of the 12 million pounds of emergency food assistance it provided was donated by agricultural companies"

The Salinas Valley supplies the world with lettuce. Recently this lettuce has been banned because it has been contaminated with E. Coli. bacteria. A spokesman for the CDC said, “Heading into the Thanksgiving holiday, it is critically important to avoid buying or eating romaine lettuce from the Salinas growing area so you can protect yourself and your family.” Is this divine retribution for the many years that wealthy agricultural corporations have refused to pay their workers a living wage? A living wage would be one that allowed its workers to rent a 2 bedroom apartment in Salinas.

"By far the greatest difficulty facing Salinas families, though, is the disappearance of affordable rental housing. In recent years, tech workers from the Bay Area have been relocating to Monterey County, and there are currently plans for a commuter rail that would run from the heart of Silicon Valley to Salinas. This influx of higher-earning tenants into an already congested market has led to a rise in rents, which in turn — together with the exclusionary zoning, no-fault evictions, and barriers to new construction that have beleaguered the rest of the state — is creating unprecedented housing instability among Salinas’s working poor. Over the past eight years, there has been a 37 percent loss of low-rent units in the city, while rents have shot up by almost 60 percent since 2014 — roughly four times the national average. According to the National Low Income Housing Coalition, the “housing wage” necessary to afford a modest two-bedroom apartment in Salinas, whose costs now exceed those of Miami and Chicago, is $29.62 per hour."

It should be pointed out that waiting for the free market to build housing that poor people can afford is like Waiting for Godot. In the play, of course, Godot never arrives. The only trend line in the case of housing is for more and more people especially older and sicker people to be kicked out onto the street. That is the absolute right of landlords to do so if the tenants cannot come up with the rent. In California there is a tiny glimmer of hope, however, as a rent control law will go into effect January 1, 2020. This law will limit rent increases to 5% a year, small comfort to those whose wages will not go up by that amount and who cannot afford the inflated rental prices in the first place.

"Increasingly, the city’s residents have found themselves bereft of adequate shelter altogether. “There’s always been poverty here,” said Reyes Bonilla, who runs Community Homeless Solutions, a local nonprofit. “But homelessness on this scale? It’s an entirely new thing.” He added that many of those coming to his organization for support defy the stereotypes about homelessness: The vast majority of them are working and have simply been priced out of a place to live. Families are doubling and tripling up in overcrowded, substandard conditions; they’re resorting to garages and toolsheds, cars and abandoned properties. In Monterey County, approximately 8,000 schoolchildren were homeless last year, more than San Francisco and San Jose combined. For many of these kids, the safest, most dependable part of their lives is the school they attend."

If there is little hope for a better life even among families in which 2 parents are working full time, what does this say about the future of America? It is the recipe for more gang violence, more drug trafficing, more lives lived on the lam. If one cannot support one's family by legal means, people often resort to illegal means and violence usually goes right along with it. This is the recipe that has been followed in poverty stricken areas of Honduras and Guatemala resulting in mass migrations to the US border of people fleeing poverty and violence. But here, even if they got in, they would only find more poverty and the result of not even having a roof over their heads which they probably had where they came from where rents are not so outlandish.

The US could do a lot to ameliorate this situation not only here but abroad as well. Instead, America is focused on spending a trillion dollars a year on a military-industrial complex whose main job is to use violence towards poor people who have been driven to violence because they have no hope their situations will ever get better any other way. Economic inequality is only getting worse with larger and larger shares of GDP going to those who already have more money than they could possibly spend in a 100 life times while the poor, if they're lucky, live out of Toyota Siennas.

Why Billionaires Don’t Really Like Capitalism

by Robert Reich

Monday, November 11, 2019

Billionaires are wailing that Elizabeth Warren’s and Bernie Sanders’s wealth tax proposals are attacks on free market capitalism.

Warren “vilifies successful people,” says Jamie Dimon, CEO of JPMorgan Chase.

Rubbish. There are basically only five ways to accumulate a billion dollars, and none of them has to do with being successful in free market capitalism.    

The first way is to exploit a monopoly.

Jamie Dimon is worth $1.6 billion. That’s not because he succeeded in the free market. In 2008 the government bailed out JPMorgan and four other giant Wall Street banks because it considered them “too big to fail.”

That bailout is a hidden insurance policy, still in effect, with an estimated value to the big banks of $83 billion a year. If JPMorgan weren’t so big and was therefore allowed to fail, Dimon would be worth far less than $1.6 billion.

What about America’s much-vaulted entrepreneurs, such as Jeff Bezos, now worth $110 billion? You might say Bezos deserves this because he founded and built Amazon.

But Amazon is a monopolist with nearly 50 percent of all e-commerce retail sales in America, and e-commerce is one of the biggest sectors of retail sales. In addition, Amazon’s business is protected by a slew of patents granted by the U.S. government.

If the government enforced anti-monopoly laws, and didn’t give Amazon such broad patents, Bezos would be worth far less than $110 billion.

A second way to make a billion is to get insider information unavailable to other investors.

Hedge-fund maven Steven A. Cohen, worth $12.8 billion, headed up a hedge fund firm in which, according to a criminal complaint filed by the Justice Department, insider trading was “substantial, pervasive, and on a scale without known precedent in the hedge fund industry.” Nine of Cohen’s present or former employees pleaded guilty or were convicted. Cohen got off with a fine, changed the name of his firm, and apparently is back at the game.  

Insider trading is endemic in C-suites, too. SEC researchers have found that corporate executives are twice as likely to sell their stock on the days following their own stock buyback announcements as they are in the days leading up to the  announcements.

If government cracked down on insider-trading, hedge-fund mavens and top corporate executives wouldn’t be raking in so much money.

A third way to make a billion is to buy off politicians.

The Trump tax cut is estimated to save Charles and the late David Koch and their Koch Industries an estimated $1 to $1.4 billion a year, not even counting their tax savings on profits stored offshore and a shrunken estate tax. The Kochs and their affiliated groups spent some $20 million lobbying for the Trump tax cut, including political donations. Not a bad return on investment.

If we had tough anti-corruption laws preventing political payoffs, the Kochs and other high-rollers wouldn’t get the special tax breaks and other subsidies that have enlarged their fortunes.  

The fourth way to make a billion is to extort big investors.

Adam Neumann conned JP Morgan, SoftBank, and other investors to sink hundreds of millions into WeWork, an office-sharing startup. Neumann used some of the money to buy buildings he leased back to WeWork and to enjoy a lifestyle that included a $60 million private jet. WeWork never made a nickel of profit.

A few months ago, after Neumann was forced to disclose his personal conflicts of interest, WeWork’s initial public offering fell apart and the company’s estimated value plummeted. To salvage what they could, investors paid him over $1 billion to exit the board and give up his voting rights. Most other WeWork employees were left holding near-worthless stock options. Thousands were set to be laid off.

If we had tougher anti-fraud laws, Neumann and others like him wouldn’t be billionaires.

The fifth way to be a billionaire is to get the money from rich parents or relatives.

About 60 percent of all the wealth in America today is inherited, according to estimates by economist Thomas Piketty and his colleagues. That’s because, under U.S. tax law – which is itself largely a product of lobbying by the wealthy – the capital gains of one generation are wiped out when those assets are transferred to the next, and the estate tax is so tiny that fewer than 0.2 percent of estates were subject to it last year.  

If unearned income were treated the same as earned income under the tax code, America’s non-working rich wouldn’t be billionaires. And if capital gains weren’t eliminated at death, many heirs wouldn’t be, either.

Capitalism doesn’t work well with monopolies, insider-trading, political payoffs, fraud, and large amounts of inherited wealth. Billionaires who don’t like Sanders’s and Warren’s wealth tax should at least support reforms that end these anti-capitalist advantages.

Global Millionaires—Just 0.9% of Population—Now Own Nearly Half of World's $361 Trillion in Wealth, Study Shows

Published on Tuesday, October 22, 2019

by Common Dreams

The bottom 56 percent of the population owns just 1.8 percent of the world's wealth

by Jake Johnson, staff writer

 

18 Comments

Treasury Secretary Steve Mnuchin stands with others before President Donald Trump and first lady Melania Trump host French President Emmanuel Macron and his wife Brigitte Macron for a state dinner at the White House on Tuesday, April 24, 2018 in Washington, D.C. (Photo: Jabin Botsford/The Washington Post via Getty Images)

The millionaires of the world, who account for just 0.9 percent of the global population, now own nearly half of the planet's $361 trillion in wealth while the bottom 56 percent of the population owns just 1.8 percent.

That's according to the annual Global Wealth Report released Monday by Credit Suisse, which found that the number of millionaires in the world grew to 47 million between mid-2018 and mid-2019, with the United States leading the world in both new and total millionaires.

According to Credit Suisse, the U.S. added 675,000 new millionaires over the past year, bringing the country's total to 18.6 million.

Japan and China both added over 150,000 millionaires, while the U.K., France, Australia, and Italy were among the nations that saw a decline in millionaires.

Overall, the report shows the world's millionaires now own a combined $158.3 trillion, or 43.9 percent of all global wealth:

 

The new figures detailing vast inequities in wealth distribution globally and within individual nations come as two of the leading contenders for the Democratic presidential nomination in the U.S., Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.), have released proposals designed to combat wealth inequality through taxation.

Warren's "Ultra-Millionaire Tax" plan, unveiled in January, would impose a two percent tax on assets over $50 million and a three percent tax on assets over $1 billion.

Last month, Sanders released his "Tax on Extreme Wealth" proposal, which would would create a one percent tax on wealth between $32 and $50 million. The tax would progressively increase for richer Americans—those with over $10 billion in wealth would face an eight percent tax.

"At a time when millions of people are working two or three jobs to feed their families, the three wealthiest people in this country own more wealth than the bottom half of the American people," Sanders said. "Enough is enough."

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Off the Top of My Head

I Left My (Homeless) Heart in San Francisco

by John Lawrence, September 12, 2019

If you're going to San Francisco, be sure to wear a flower in your hair ... and bring money ...lots of it. If you want to rent a 2 bedroom, 2 bath apartment, 1000 square feet, it'll cost you $4100! And don't forget the $4100. deposit. Or you could rent a 600 square foot studio for $3300 plus a 2 month security deposit. So you're looking at about $10,000 either way. No wonder there are so many homeless there. Figures from 2018 showed that California had 129,972 homeless people — the biggest street population of any state and 24% of the nation's total. San Francisco, with perhaps the most visible problem of homelessness, has the state's highest rents, home costs and income inequity between rich and poor. San Francisco has officially about 10,000 homeless. However, unofficially , there are a lot more. The Federal point-in-time count does not count people living in RVs or other vehicles nor does it count families living in single rooms, shelters or studios.

San Francisco has more billionaires per capita than anywhere else in the world. It also has more people living in Third World conditions or worse than any city in the US. San Francisco's homeless count has jumped 30% since 2017. Elsewhere in the Bay Area the numbers were even worse. In the East Bay’s Alameda County there was a 43% increase since 2017. In Santa Clara County the number jumped 31% over the last two years. San Francisco city government has blamed the rise in homelessness on big tech companies that have moved to the area, including Twitter, Salesforce, NVIDIA and Eventbrite. They say the businesses have brought high-paying jobs with them, which has caused housing prices to soar and pushed people who can't afford to keep up financially out of the area or onto the streets.

Bingo! There is no rent control in San Francisco or most other California cities. But help is on the way. On September 11, 2019 California lawmakers passed a statewide cap on annual rent increases for most tenants, the boldest step yet to address an affordable housing crunch that has helped push people into the streets. Reuters reported:

The bill limits annual rent increases to 5% after inflation and takes effect from March of this year. It also imposes restriction on evictions without cause - a significant factor in the state’s burgeoning homeless population.

Democratic Gov. Gavin Newsom, who has put affordable housing at the top of his priorities since taking office in January, brokered the negotiations on the legislation. He said he would sign the bill, one of a batch of laws being passed in the final week of the legislative session.

“In this year’s State of the State address, I asked the Legislature to send me a strong renter protection package,” Newsom said in a statement after the bill passed. “Today, they sent me the strongest package in America.”

California is the third state to impose rent controls after Oregon and New York. But limiting rent increases to 5% will do little to solve the housing crisis because rents are already at levels many people cannot afford. In San Francisco average citizens cannot walk the streets without fear of being accosted by mentally deranged homeless. Sanitation conditions on the streets are deplorable with piles of garbage intermixed with human feces and garbage. Recent estimates at building "affordable" housing for the homeless came in at $600,000 per unit. That's because, just as rents and home costs have skyrocketed, so have construction costs.

The solution, in my opinion, is to create safe, sanitary outdoor spaces for the homeless at various locations throughout the city. Public campgrounds with areas for vehicle parking would allow them and the general public including backpackers a secure place to be free from the relentless "move on" of police who hound the homeless to get away from businesses when the owners complain. Public campgrounds could be set up at far less cost than public housing. They should include sanitation facilities, showers, dumpsters, security, lockers and other improvements which would represent a considerable improvement over living on public sidewalks both for the homeless and for the citizens walking the streets and utilizing businesses in areas which have become unsafe and unsanitary. Social services could be provided at such locations which are far more cost effective in getting homeless people back to a normal way of life than would be actual housing sans those services. Shelters would only be needed in inclement weather which there is not too much of in California. Transportation should be provided to homeless services or those services including meals could be dispersed to these public campgrounds which would be open to the public so that they could not be considered homeless concentration camps. These could be provided at minimal cost. The San Francisco Chronicle reports: "An estimated 100,000 homes are sitting empty in the San Francisco metro area." There is also a lot of vacant city owned land which could be turned into public campgrounds at minimal cost.

At the same time local ordinances could be passed forbidding camping on public sidewalks. So the streets would be cleaned up immediately. Average citizens could breathe a sigh of relief, and the homeless would be at least marginally better off. This is necessary because otherwise America is condoning the creation and permanent embodiment of an underclass of subhuman human beings. What they need is clean, secure places to be and social worker type help to address their problems whatever they are. Drug addiction is not confined to the homeless. Major segments of the population are also addicted to some type of drugs or at least they are users. Most that have money don't let their addiction land them up in the streets. They can be highly functioning.

To better understand the homeless situation, you must understand that homelessness is not the major problem. The major problem has to do with the fact that a whole bunch of people have lost their way and need help getting back on track. They need a helping hand or a guiding light more than they need a home. In years gone by, families helped and supported those who could not fend for themselves or make ends meet. It is important to understand that the homeless have no such people in their lives willing or capable of doing this. If they had family resources, their families would get them off the streets. It is not a function of drug addiction. There are some very highly functioning drug addicts. It is a function of not having the mental resources that would induce them to be living constructive lives. That's where a social worker comes in to help them get back on track. More money should be spent on this than on building unaffordable "affordable" housing.

The summer of love in Haight-Ashbury turns out to have been a summer of broken dreams and false hopes. Don't bother with wearing a flower in your hair if you're going to San Francisco. Tony Bennett left his heart (and his wallet) there.

'We Welcome Their Hatred': Sanders Unveils Anti-Endorsement List of Billionaire CEOs and Wall Street Bankers

Published on Wednesday, July 10, 2019

by Common Dreams

"I am proud to announce the modern-day oligarchs who oppose our movement."

by Jake Johnson, staff writer

 

44 Comments

Sen. Bernie Sanders (I-Vt.), a 2020 Democratic presidential candidate, speaks during a press conference to introduce college affordability legislation outside the U.S Capitol in Washington, D.C on June 24, 2019. (Photo: Saul Loeb/AFP/Getty Images)

Asking the American public to judge his 2020 Democratic presidential campaign by both its supporters and its powerful enemies, Sen. Bernie Sanders on Wednesday unveiled an "anti-endorsement" list consisting of prominent billionaires, Wall Street bankers, and corporate CEOs who have attacked his candidacy and policies.

"These people have a vested interest in preserving the status quo so they can keep their grip on power so they can continue to exploit working people across America."
—Sen. Bernie Sanders

 

"You can tell who is truly fighting for working families by the enemies they make, and we've made a lot of enemies," Sanders said in a statement. "We understand that nothing will fundamentally change for working Americans unless we have the guts to take on the most powerful corporate interests in this country."

"Therefore it should come as no surprise that corporate CEOs and billionaires have united against our movement," Sanders added. "These people have a vested interest in preserving the status quo so they can keep their grip on power so they can continue to exploit working people across America. We welcome their hatred."

The Sanders campaign lists the Vermont senator's anti-endorsements on a new webpage. The page includes billionaire Democratic mega-donor Haim Saban, who attacked Sanders as a "disaster zone" in an interview published Wednesday.

The rest of the list consists of:

• Billionaire Home Depot co-founder Kenneth Langone;
• Former CKE Restaurants CEO Andy Puzder;
• Former Verizon CEO Lowell McAdam;
• JPMorgan Chase CEO Jamie Dimon;
• Disney CEO Bob Iger;
• Former General Electric CEO Jeffrey Immelt;
• Former Goldman Sachs CEO Lloyd Blankfein;
• Former Federal Reserve chairman Alan Greenspan;
• Centrist think-tank Third Way;
• Former Goldman Sachs partner Leon Cooperman;
• Home Depot co-founder Bernard Marcus; and
• Billionaire hedge fund manager Stanley Druckenmiller.

"As we fight for an agenda that guarantees basic human rights for all Americans, we will be opposed by the most powerful forces in America," Sanders wrote on his website. "I am proud to announce the modern-day oligarchs who oppose our movement. In the words of President Franklin Delano Roosevelt: 'They are unanimous in their hate for me–and I welcome their hatred.'"

"We will overcome their greed," said Sanders, "and create an economy and a government that works for all, not just the one percent.

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Are America's Billionaires Turning Against Forever War?

by Ilana Novick

from truthdig, July 2, 2019

Charles Koch. (Fortune Brainstorm TECH / Flickr)

A new think tank is coming to Washington, D.C., this September, a development that might not elicit more than a shrug (or a groan) if not for the unlikely duo behind it. Two billionaires, George Soros, a liberal, and Charles Koch, a conservative, have teamed up to create the Quincy Institute for Responsible Statecraft, which will advocate for ending the United States’ forever wars. Stephen Kinzer of The Boston Globe, which first broke the story, calls the think tank “one of the most remarkable partnerships in modern American political history.”

A statement on the institute’s website says, “The foreign policy of the United States has become detached from any defensible conception of U.S. interests and from a decent respect for the rights and dignity of humankind.”

Aside from both being billionaires, at first glance Koch and Soros seem to have little in common politically. As Kelsey Piper explains in Vox, “Soros is, of course, widely hated on the right for his support of liberalized immigration and is frequently the target of anti-Semitic conspiracy theories. Koch, meanwhile, has come under fire for his contributions to the Republican Party and his opposition to climate policies.”

The institute, which will open in September before an official inauguration later in the fall, is named for former U.S. President John Quincy Adams who, Piper points out, “said in an 1821 speech that America ‘goes not abroad in search of monsters to destroy.’ ” Koch and Soros contributed half a million dollars each to the institute, which has received an additional $800,000 in contributions from individual donors.

Off the Top of My Head

Only Four Ways to Become a Billionaire?

by John Lawrence, July 3, 2019

In Robert Reich's latest blog he mentions that there are only four ways to become a billionaire. Reich says, "Billionaires themselves aren’t the problem. The real failure is in how our economy is organized." I agree that it has something to do with how the economy is organized, but there is one more way that people become billionaires, and that is at the heart of the economy itself. Many people become billionaires when their company "goes public." The IPO or Initial Public Offering turns many of them into instant billionaires. Why is this so? Because billions of dollars in investor money floods into the company. Most of it goes to enrich the owners of the company. Already rich people have access to as much money as they want at zero per cent interest so they deluge the newly "public" company with billions in return for equity shares.

Here are some examples of people that became billionaires when their companies went public. The three founders of Groupon all hit the jackpot in 2011 when their company went public, making billionaires out of Eric Lefkofsky, Andrew Mason, and Brad Keywell. Not bad for a company they started in 2008. David Filo and Jerry Yang co-founded Yahoo in 1994. Two years later, they took their company public, and by 1998, the search-engine pioneers had officially become billionaires. Pierre Omidyar launched eBay.com in 1995 at the age of 28 — the first item the auction site ever sold was a broken laser pointer. Three years later, the company went public at $18 a share. Within three months, stocks reached the $300 mark, making Omidyar a billionaire.

Jeff Bezos left his job as an investment banker to found Amazon with the help of a $300,000 loan from his parents. Three years later the company went public making Bezos and his parents billionaires. As a former investment banker Bezos certainly knew the ropes about going public. He's now worth about $157 billion. He wouldn't have made this much money if his revenues simply came form selling books online.

There are many more who became billionaires not by hard work over a long period of time, but by going public and letting the investor money flood in. One might ask why there is so much investor money available? The financialization of the economy has led to many making money off of money and from speculation. Hedge funds deal in billions of highly leveraged dollars. You and I don't have access to these funds. The ways that Reich mentions are also ways that billionaires become billionaires in a short period of time, some without much effort at all, but it's surprising that Reich doesn't mention the instant IPO billionaires.

The root of the problem is an economic system that allows this to happen. If people had to work for their money over a whole lifetime by selling widgets or providing a service, they would have a legitimate claim to their wealth. However, becoming a billionaire overnight with an IPO is a facet of capitalism that allows the wealthy to have a larger impact on the political and economic system than they deserve. What's wrong with a system where people make their money off of selling widgets or providing a service like most of the people who don't have access to the riches in the stock market. Some of these billionaires are not even involved with the companies they founded after a few years or their companies have failed. Take Yahoo for example.

In the final analysis it is the stock market itself in conjunction with IPOs that is at the heart of the economic divide. It separates the world of people who make their living from their labor, even high priced, highly educated labor, from the world of financiers who make their money by creating instant billionaires who then go on to replicate the process. It's not about labor being displaced by automation; it's about the billions created by Wall Street and the Federal Reserve which loan huge amounts of money to billionaires at zero interest who then flood the IPO markets making instant billionaires of proprietors.

Should We Abolish Billionaires?

by Robert Reich

Monday, July 1, 2019

America now has more billionaires than at any time in history, while most Americans are struggling to make ends meet. With such staggering inequality, it’s fair to ask: should we abolish billionaires?

There are basically only four ways to accumulate a billion dollars – and none of them is a product of so-called free market capitalism. 

Billionaires themselves aren’t the problem. The real failure is in how our economy is organized.

One way to make a billion is to exploit a monopoly. 

Jeff Bezos is worth $150 billion. You might say he deserves this because he founded and built Amazon. But Amazon is a monopoly with nearly 50 percent of all e-commerce retail sales in America (and e-commerce is one of the largest sectors of all retail sales). Consumers have few alternatives. 

Nor do many suppliers who sell through Amazon; for the first 25 years of its existence, Amazon wouldn’t let them sell at a lower price anywhere else. And Amazon’s business is protected by patents granted Amazon by the U.S. government and enforced by government. 

If we had tough anti-monopoly laws, and if the government didn’t grant Amazon so many patents and trademarks, Bezos would be worth far less.

The same applies to people like George Lucas, Oprah Winfrey, or any other figure whose brands, ideas or creations depend on copyrights and trademarks, which are laws that have been dramatically extended in recent decades. 

If these were shortened, these people would be worth far less, too.

A second way to make a billion is to get insider information unavailable to other investors. 

The hedge-fund maven Steven A. Cohen is worth an estimated $12.8 billion. Now, how did he do it? According to a criminal complaint filed by the Justice Department, insider trading at Cohen’s SAC Capital was “substantial, pervasive, and on a scale without known precedent in the hedge fund industry.” 

Eight of Cohen’s present or former employees pleaded guilty or convicted for using insider information. Cohen got off with a fine, changed the name of the firm, and apparently is still at it.

A third way to make a billion is to pay off politicians. 

The Trump tax cut was estimated to save Charlesand David Koch– each of whose net worth is estimated to be about $50 billion – and their Koch Industries – 1 to 1.4 billion dollarsa year,not even counting tax savings on offshore profits and a shrunken estate tax. 

The Kochs and their affiliated groups spent an estimated $20 million lobbying for the Trump tax cut, including major donations to politicians. 

Not a bad return on investment: More than a billion dollars a year back for $20 million put in.  

Koch Industries has also been a major beneficiary of government programs to fill the Strategic Petroleum Reserve, provide roads and access to virgin growth forests, use eminent domain to seize private land for oil and gas pipelines, get oil subsidies, andprofit off federal lands.

A fourth way to be a billionaire is to get the money from rich parents or relatives. 

About 60 percent of all the wealth in America today is inherited.

That’s because, under U.S. tax law – which is itself largely a product of lobbying by the wealthy – the capital gains of one generation are wiped out when those assets are transferred to the next, and the estate tax is so tiny that only 0.2 percent of estates were even subject to it in 2017. 

America is creating a new aristocracy of people who never worked a day in their lives.  

Let’s abolish billionaires by changing the way the economy is organized. 

This doesn’t mean confiscating the wealth and assets of the super rich. It does mean getting rid of monopolies, stopping the use of insider information, preventing the rich from buying off politicians, and making it harder for the super-rich to avoid paying taxes. 

In other words, creating a system in which economic gains are shared more widely.

Entrepreneurs like Jeff Bezos would be just as motivated by say, a $100 million or even $50 million. 

But the cost to our democracy of billionaires with enough wealth and power to dictate the rules of capitalism for their own benefit is incalculable.

'A Burning Indictment of Our Higher Ed System': Commencement Speaker Pays Off $40 Million in Student Debt

Published on Sunday, May 19, 2019

by Common Dreams

Billionaire's gift to nearly 400 graduating seniors of Morehouse College earned him praise—but also sparked criticism of the cost of education

by Jessica Corbett, staff writer

 

9 Comments

Morehouse College commencement speaker and billionaire Robert F. Smith announced Sunday he is wiping out an estimated $40 million in student debt for nearly 400 graduates. (Photo: Morehouse College/Twitter)

Commencement speaker Robert F. Smith garnered widespread praise Sunday when the billionaire investor announced he will wipe out an estimated $40 million in student debt for Morehouse College's nearly 400 graduating seniors—but the move also sparked intense criticism of the cost of higher education in the United States.

"People shouldn't be in a situation where they depend on a stranger's enormous act of charity for this kind of liberation to begin with."
—Rep. Alexandria Ocasio-Cortez<

/p>

"Two things are simultaneously true about this story: 1. This is a very cool thing to do," tweeted Current Affairs editor Sparky Abraham. "2. That this is so cool and necessary and has such a huge impact on the students' lives is a burning indictment of our higher ed system."

"The Morehouse graduating class has $40 million in student debt," he continued. "That is an enormous tragedy."

Smith's announcement Sunday at the all-male, historically black college in Atlanta, Georgia provoked impassioned calls for both making higher education free across the country and canceling student debt.

Abraham, in a piece for Current Affairs last month, argued: "Free college is the efficient, non-stigmatizing way to open up college access for everyone without the burdens of means-testing. It doesn't have to be regressive and, with any luck, it will follow the path of free high school: In short order it will be nearly universally accepted as a public good and a huge boon to everyone, especially those from poorer and working class backgrounds."

Responding to Smith's donation on Sunday, Waleed Shahid of Justice Democrats tweeted, "Taxing billionaires and Wall Street would allow every American to go to college for free while also canceling almost all student debt."

Rep. Alexandria Ocasio-Cortez (D-N.Y.) suggested in a series of tweets that this could serve as a "natural experiment" to demonstrate how lack of student debt impacts graduates' lives.

"It's important to note that people shouldn't be in a situation where they depend on a stranger's enormous act of charity for this kind of liberation to begin with (aka college should be affordable)," the congresswoman added.

Every Morehouse Class of 2019 student is getting their student debt load paid off by their commencement speaker.

This could be the start of what’s known in Econ as a ‘natural experiment.’ Follow these students & compare their life choices w their peers over the next 10-15 years. https://t.co/UM1qTJOxHf

— Alexandria Ocasio-Cortez (@AOC) May 19, 2019

"I've been teaching [at] Morehouse for 3 years now and I see firsthand the burden of costs for an education has on black folks," David Dennis Jr., a writer and adjunct professor of journalism at the college, said in a series of tweets. "Getting rid of their student loan debt is going to literally change the lives of every single graduate. Incredible."

Dennis also called attention to the banks and predatory lenders that will receive the estimated $40 million:

Also, think about the fact that just 400 students represented $40 million...with a large portion of that money going to banks and predatory lenders. Because that's $40 million without the added 10+% interest they were going to have to pay annually. From ONE small graduating class

— David Dennis Jr. (@DavidDTSS) May 19, 2019

One graduating Morehouse student interviewed by The Associated Press, 22-year-old finance major Aaron Mitchom, racked up $200,000 in loans, which eight of his family members co-signed so he could make it through four years of schooling.

Mitchom said that prior to Smith's announcement, he used a spreadsheet to figure how long it would take to pay off his debt—per his calculations, it worked out to 25 years at half his monthly salary.

Describing his reaction at the ceremony on Sunday, Mitchom told the AP: "I don't have to live off of peanut butter and jelly sandwiches. I was shocked. My heart dropped. We all cried. In the moment it was like a burden had been taken off."

Linking to the AP report that features Mitchom, New York Times writer Astead Herndon tweeted, "Yes, the Morehouse story is a beautiful moment provided by an unequal system."

Yes, the Morehouse story is a beautiful moment provided by an unequal system https://t.co/WfFOxFwHhV

— Steadman™ (@AsteadWesley) May 19, 2019

a-tweet-id="1130182212089987073" title="Twitter Tweet" frameborder="0">

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A 'Fundamentally Inhuman' Economy: 26 Billionaires Own as Much as World's 3.8 Billion Poorest People

Published on Monday, January 21, 2019 by Common Dreams

While the wealth of billionaires increased by $900 billion last year, or $2.5 billion a day, latest Oxfam report on inequality shows "this bonanza has not been felt by the poorest half of the world, which saw its wealth decline by 11 percent."

by Jake Johnson, staff writer

 

32 Comments

"People generally are beginning to realize that they have been sold a bad bill of goods," said Paul O'Brien, vice president for policy and campaigns at Oxfam America. (Photo: Market Watch via Getty Images)

With Wall Street titans, tech moguls, and other members of the global financial and political elite set to gather in Davos, Switzerland this week for the annual World Economic Forum, a report published late Sunday found that the planet's richest people saw their fortunes soar by $2.5 billion per day last year as the world's poorest lost wealth.

"The economy we have today is fundamentally inhuman."
—Paul O'Brien, Oxfam America<

/p>

Titled "Private Good or Public Wealth?" and conducted by Oxfam, the new analysis found that 26 billionaires now own as much wealth as the world's poorest 3.8 billion people combined.

According to Oxfam, the number of billionaires has doubled since the global financial crisis of 2008, even as average families have struggled mightily to recover.

In contrast to the soaring fortunes of the global financial elite, the wealth of the world's poorest fell by $500 million each day in 2018—an overall decline of 11 percent.

"The economy we have today is fundamentally inhuman," Paul O'Brien, vice president for policy and campaigns at Oxfam America, said in an interview with the Huffington Post.

As the world's elite gather at #WEF19, join us and share this video to send them a message to tax the rich fairly. #FightInequality and #BeatPoverty

Join the movement here→ https://t.co/HF57H0BFAU pic.twitter.com/uuqNtaYYi8

— Oxfam International (@Oxfam) January 21, 2019

Singling out U.S. President Donald Trump and the Republican Party's $1.5 trillion in tax cuts for the rich as the kind of upward redistribution that has worsened inequality at the expense of the world's poor and working class, O'Brien said that only transformative political and economic changes across the globe will be sufficient to close the gap between the rich and everyone else.

"Inequality is not inevitable, it's a political choice."
—Oxfam

 

"The recent U.S. tax law is a master class on how to favor massive corporations and the richest citizens," O'Brien said in a statement. "The law rewards U.S. companies that have trillions stashed offshore, encourages U.S. companies to dodge foreign taxes on their foreign profits, and fuels a global race to the bottom that benefits big business and wealthy individuals."

"The only winners in the race to the bottom on corporate tax are the wealthiest among us. Now is the time to work towards a new set of tax rules that work for the many, not the few," he continued, echoing the popular slogans of U.S. Sen. Bernie Sanders (I-Vt.) and U.K. Labour leader Jeremy Corbyn. "We need economic, political, and tax reform to level the playing field if we want to restore prosperity and opportunity for all, including women, girls whose needs are so often overlooked."

Stunning new data:

The world’s 2,200 billionaires grew 12 percent wealthier in 2018. Meanwhile, the bottom half of the world got 11 percent poorer.

Don’t be Pinkered into everything’s-getting-better complacency.

The few are monopolizing progress.https://t.co/89ZZWFpz6S

— Anand Giridharadas (@AnandWrites) January 21, 2019

Citing United Nations figures, Oxfam points out that crucial public services throughout the world—including in wealthy nations like the U.S. and the U.K.—are suffering from crippling austerity as the global financial elite and massive corporations hoard economic gains, thanks in large part to regressive government policies that allow them to pay minimal taxes and enrich executives with massive pay packages.

Meanwhile, workers are forced to scrape by on starvation wages.

"People generally are beginning to realize that they have been sold a bad bill of goods," O'Brien said. "Today, 262 million kids are going to stay home because there is no funding for their education, 10,000 people today will die because they don’t have access to basic healthcare that could easily be funded through proper fiscal systems."

Oxfam's analysis concludes that only a "human economy" that guarantees essential services like healthcare, education, and housing to all—funded by higher taxes on the ultra-rich—can begin to resolve the inequities that are producing mass suffering and threatening the existence of the planet.

According to Oxfam, "if the richest one percent paid an additional 0.5 percent tax on their wealth, an estimated $418 billion would be raised a year. This alone would ensure an education for the 262 million children currently not in school and provide healthcare that could save the lives of more than three million people."

"Inequality is not inevitable," Oxfam's report concludes, "it's a political choice."

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As Handful of Billionaire Families Grab Nation's Wealth for Themselves, New Report Details How Dynasties Rig US Economy

Published on Tuesday, October 30, 2018 by Common Dreams

"Today's extreme wealth inequality is perhaps greater than any time in American history. This is largely the result of rapidly growing wealth dynasties and a rigged economy."

by Jake Johnson, staff writer

 

20 Comments

"Because of changes in tax law and aggressive use of trusts and tax dodges, we are now witnessing a resurgence of dynastic inherited wealth," Collins of IPS observed in an op-ed for Common Dreams on Tuesday. (Images: Institute for Policy Studies)

Here are just a few startling facts that tell you nearly all you need to know about who the American economy has worked for—and against—over the past several decades:

• Amazon CEO Jeff Bezos, Microsoft founder Bill Gates, and financier Warren Buffett own more wealth than the bottom 50 percent of the U.S. combined;
• As median household wealth has declined since 1982, the Walton, Koch, and Mars families have seen their wealth grow 6,000 percent;
• A full-time Amazon employee making $15 an hour would have to work for 2.5 million years to earn $78.5 billion, the amount Bezos's fortune has expanded in the past year alone.

Published by the Institute for Policy Studies (IPS) on Tuesday in a new report—titled "Billionaire Bonanza 2018: The Role of Dynastic Wealth" (pdf)—these numbers paint a striking portrait of an economy designed to enrich a handful of individuals and family dynasties while leaving the rest of the American population with stagnant or falling wages, meager or even negative wealth, and soaring economic insecurity.

"Today's extreme wealth inequality is perhaps greater than any time in American history," Josh Hoxie, a co-author of the report, said in a statement. "This is largely the result of rapidly growing wealth dynasties and a rigged economy that enables the ultra-wealthy to grow their wealth to never-before-seen highs."

"These families have used their wealth and power to lobby and rig the rules to expand their wealth and power."
—Chuck Collins, Institute for Policy Studies

Citing economist Thomas Piketty's warning that the United States is operating under a system of "patrimonial capitalism" that allows the wealthy few to hoard their riches and pass them on to their heirs—fueling the rapid explosion of inequality since the 1970s—IPS found that "seven of the 20 wealthiest members of the Forbes 400 inherited their wealth from previous generations, often through companies founded by their ancestors."

These members, the report notes, include "Charles and David Koch of Koch Industries as well as Jim, Alice, and S. Robson Walton of Walmart and Jacqueline and John Mars of the Mars candy empire."

According to IPS, these three "wealth dynasties" own a combined $348.7 billion—over four million times the median wealth of American families.

When IPS looked at the 15 wealthiest American families with multiple members on the vaunted Forbes 400 list, it found that the wealth of each of these families "comes from companies started by an earlier generation, either a parent or more distant ancestor. Each of them also represents a wealth dynasty passing generation to generation free from interruption."

Combined, these families are worth $618 billion.

In total, IPS found, "136 out of the 400 members of the Forbes 400 derive their wealth from companies started by an earlier generation. That's 34 percent, or about a third, of the entire list."

As millions of American workers and households find themselves in an increasingly precarious economic position—unable, for instance, to afford a $400 emergency payment—these dynastic families have seen their already staggering wealth grow thousands of percentage points over the past three decades, contributing to the growing gulf between the ultra-rich and everyone else and giving a few billionaires disproportionate power to shape public policy.

"These families have used their wealth and power to lobby and rig the rules to expand their wealth and power," explained Chuck Collins, IPS senior scholar and co-author of the new report.

Contrary to the right-wing view that the vastly unequal wealth distribution in American society is the unavoidable result of "market forces" and ever-advancing technology, IPS argues that there is "nothing inevitable about dynastic wealth" and that such inequality is perpetuated by the wealthy themselves, who use a variety of "dynasty protection techniques" to undercut redistributive policies and escape taxes.

"There is now ample evidence that some billionaire families are engaged in aggressive practices to preserve dynastic wealth."
—Billionaire Bonanza 2018

"There is now ample evidence that some billionaire families are engaged in aggressive practices to preserve dynastic wealth. These include using their wealth to lobby for tax cuts and public policies that will further enrich their enterprises," the report notes. "They hire armies of tax accountants, wealth managers, and trust lawyers to create trusts, shell corporations, and offshore accounts to move money around and dodge taxation and accountability."

Curtailing the meteoric rise of dynastic wealth and bringing inequality under control will require bold policy interventions that are sure to face resistance from the billionaires used to getting their way in the political sphere.

In its new report, IPS outlines two possible solutions: a wealth tax and an inheritance tax.

"A direct tax on wealth paid by the wealthiest one tenth of one percent could generate significant revenue to be reinvested in creating and restoring opportunities for low wealth households to prosper," the report notes.

Pointing out that the federal estate tax has been "significantly weakened"—most recently by President Donald Trump and the GOP's $1.5 trillion tax bill—IPS argues that "[t]axing inherited wealth as income would help break up current and future wealth dynasties."

"Because of changes in tax law and aggressive use of trusts and tax dodges, we are now witnessing a resurgence of dynastic inherited wealth," Collins of IPS observed in an op-ed for Common Dreams on Tuesday. "To protect our democracy, we need to strengthen and expand taxes that reduce this concentration of wealth and power."

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'While the Rest of the World Burned,' Billionaires Made More Money in 2017 Than Any Other Year in History

Published on Friday, October 26, 2018 by Common Dreams

"The past 30 years have seen far greater wealth creation than the Gilded Age."

by Jake Johnson, staff writer

 

19 Comments

"The past 30 years have seen far greater wealth creation than the Gilded Age," the UBS's annual billionaires report notes. "That period bred generations of families in the U.S. and Europe who went on to influence business, banking, politics, philanthropy, and the arts for more than 100 years." (Photo: Super Yachts)

During a year in which so much of the world faced deep poverty, the corrosive effects of austerity, and extreme weather caused by the worsening human-caused climate crisis—from devastating hurricanes to deadly wildfires and floods—one class of individuals raked in more money in 2017 than any other year in recorded history: the world's billionaires.

"No money for health or infrastructure, all the money in the world for yachts."
—Josh Shepperd

According to the Swiss bank UBS's fifth annual billionaires report published on Friday, billionaires across the globe increased their wealth by $1.4 trillion last year—an astonishing 20 percent—bringing their combined wealth to $8.9 trillion.

"The past 30 years have seen far greater wealth creation than the Gilded Age," the UBS report notes. "That period bred generations of families in the U.S. and Europe who went on to influence business, banking, politics, philanthropy, and the arts for more than 100 years."

UBS estimates that the world now has a total of 2,158 billionaires, with 179 billionaires created last year. The United States alone is home to 585 billionaires—the most in the world—up from 563 in 2017.

Meanwhile, according to a June report by U.N. Special Rapporteur on Extreme Poverty and Human Rights Philip Alston, 18.5 million Americans live in extreme poverty and "5.3 million live in Third World conditions of absolute poverty."

World's greedy billionaires became 20% richer in 2017 while the rest of the world burned https://t.co/yEW0wHF2bx

— Domenicodimaro97 (@Domenicodmaro97) October 26, 2018

No money for health or infrastructure, all the money in the world for yachts. https://t.co/AYa5Mk8L9j

— Josh Shepperd (@joshshepperd) October 26, 2018

A significant percentage of the "newly created" billionaires are hardly the self-made men—and they are overwhelmingly men—of popular lore. According to UBS, 40 of the 179 new billionaires created last year inherited their wealth—a trend that has driven an explosion of wealth inequality over the past several decades.

According to UBS, this trend will continue to accelerate over the next 20 years, given that there are currently 701 billionaires over the age of 70.

"A major wealth transition has begun. Over the past five years (2012–2017), the sum passed by deceased billionaires to beneficiaries has grown by an average of 17 percent each year," the UBS report concludes. "Over the next two decades we expect a wealth transition of $3.4 trillion worldwide—almost 40 percent of current total billionaire wealth."

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One Man Could End World Hunger, but He Won’t

by Lee Camp, from truthdig, October 3, 2018

Billions and billions: Amazon CEO Jeff Bezos is doing his part to widen the income gap. (Composite image from Megapixel, Cliff Owen / AP)

I do not want to talk about Jeff Bezos.

But in order to not talk about Jeff Bezos, I have to talk about Jeff Bezos.

We all know the Lex Luthor-looking head of Amazon is the richest human in the world.

He’s achieved a net worth of more than $150 billion by selling everything that has ever existed … with free shipping. (It turns out the only thing stopping the human race from giving all our money to one man was that pesky $4.99 shipping fee.)

But let me stop right here. Even the way we talk about economics is influenced by a capitalist culture that tells us amassing money is the answer to everything. Did you notice I said Bezos “achieved” a net worth of $150 billion, and that seems like a normal way to phrase it? However, would you say, “Jeffrey Dahmer achieved eating the hearts of 10 different people?” No, that would sound odd to you. Yet having $150 billion is nearly as sociopathic, and still we use terminology as if it’s GREAT!

But, like I said, this column is not about Jeff Bezos. It’s about clean water.

Clean water is one of the most important things to anyone and everyone (second only to nacho cheese). Yet millions around the world don’t have clean water or struggle to get it. A report by the U.N. “estimated that 300 million people on the continent [of Africa], more than a third of the population, have no fixed supply [of clean water].” And 2.5 billion worldwide lack proper sanitation. The CDC says 2,200 children die a day from diarrheal diseases—mostly from unclean water.

Millions of people in total die each year from a lack of clean water. So how much would it cost to change that? It would cost $10 billion a year to bring pure water to the entire world.

Jeff Bezos himself could provide the world with clean water for the next 15 years.

He could save millions upon millions of lives. But instead of doing that, he will continue to enrich himself by delivering sex toys in a box with a smiley on it.

But this is not about Jeff Bezos. It’s about world hunger. According to UNICEF, 22,000 children die each day due to poverty while the U.N. in 2015 estimated it would cost $30 billion a year to end world hunger. Imagine—not a soul hungry! And big shock—when people aren’t hungry, there’s less crime, less hatred, better decision-making, and so forth. Hunger correlates with all kinds of shitty stuff, which means we all benefit when there’s no hunger. Think about it; you probably have coworkers who miss lunch and start spraying hate crimes around the office. Then you have to say, “Leslie, I think if you just had a taco, you would stop using the C-word so much.” Now imagine Leslie on a global scale.

Jeff Bezos himself could end world hunger for five straight years. If he teamed up with the Koch brothers, they could do it for eight to 10 years.

But Bezos wouldn’t do that. Instead, he’ll just make billions convincing people to put Amazon Echo spy systems into their own homes.

This column is not about Jeff Bezos. It’s about Flint, Mich.

You remember how upset we were about Flint’s water? It was poisoned with lead. It was destroying lives of people who were already poor to begin with. Then the authorities came to the conclusion it would cost $216 million to fix, and everyone was aghast. That’s an insane amount of money. How could ANY city afford that?!

Jeff Bezos could pay to repair Flint’s water supply 694 times over.

He could pay for it 690 times over and still have 864 million dollars left to pay for a cast of people to dance around him dressed like wood sprites and sprinkle glitter on his shining bald head for the rest of his fucking life. (So don’t say he wouldn’t be happy.)

But this column is not about Jeff Bezos. It’s about homelessness.

There are 554,000 homeless people in the U.S., one of the richest countries in the world. What would it cost to give each of these struggling people his or her own apartment? Recent numbers show the cheapest apartments to rent in America are in Wichita, Kan. (because why would ya? … unless you were heavily invested in grasshoppers). In Wichita an apartment costs $632 per month. (In San Francisco that’s the cost of the monthly utility bill for a dog house.) So $632 per month amounts to $7,584 per year. Therefore, the total cost to give every American houseless person an apartment in Wichita would be $4.2 billion.

Jeff Bezos could give every homeless person their own apartment for the next 36 YEARS.

This is one man we’re talking about! But Jeff Bezos would never do that. He’d rather push a bag of 3,000 live ladybugs on someone actually searching Amazon for “Lady Bugs” the Rodney Dangerfield film (which was apparently intended as a children’s movie, but now seems like a guidebook for how to become a #MeToo predator).

But this column is not about Jeff Bezos. It’s about education.

When people go to college without coming out stuck under immense debt, it often changes their whole lives. They can get better jobs, eat healthier, provide for their family. “According to the American Association of Community Colleges,” this source says, “the average yearly cost of tuition and fees for community college students in the U.S. is $3,347. …” It usually takes two years to graduate from community college, so the cost for two years is $6,694.

Jeff Bezos could pay for the entire community college education of 22.4 million students.

That’s more than the entire number of college students enrolled this year across our country. Of course you’d have to pay for your own beer bongs, posters of John Belushi in the “college” sweater, macaroni stuck to the floor and pregnancy tests. (But I know a guy who can get you a homemade pregnancy test for 35 cents. It’s made out of alkaline batteries and sawdust, but it’ll spot a freakin’ baby a mile away.)

However, this column is not about Jeff Bezos. It’s about the system that created Bezos.

If you removed Bezos from Amazon tomorrow and vacuumed all his money away, he would be replaced by another sick hoarder of egregious wealth. This is because we have a deathly ill economic system. Think about it this way—the goals of our economy (and any economy), according to Zeitgeist Movement founder Peter Joseph, and I agree, should be:

• Pursuit of abundance (all people’s basic needs are met)

• Sustainability (can the system keep going forever)

• Liberation of humanity from hard and dangerous labor (nobody doing jobs they hate)

• Adaptation to emerging technologies and variables

Makes sense—we should seek a sustainable system where nobody is dying or miserable. Here’s the problem—unfettered capitalism doesn’t even claim to be ATTEMPTING any of that. Our economy’s mission statement is basically to “… preserve inefficiency for the sake of monetary circulation, economic growth and power preservation.”

Profit over all else. It doesn’t matter how many people die or work at an Amazon warehouse for pennies. Does. Not. Matter. So it’s not that capitalism is failing in this new Gilded Age. Rather, capitalism is succeeding at what it was meant to do: amass all the money in a tiny number of hands and exploit everyone else.

That’s what this column is about.

—

If you think this column is important, please share it. This column is based on a segment performed and written by Lee Camp for his TV show “Redacted Tonight.” Also, check out Lee’s free weekly podcast, “Common Censored.”

Off the Top of My Head

Why Did Ancient Civilizations Disappear?

by John Lawrence, April 6, 2018

It seems quite obvious when you think about it. When a few hunter gatherers took up residence near a stream, there was no problem with getting food, water or waste disposal. As the tribe grew bigger, the problem of what to do with the sewage became greater. Most ancient civilizations probably flushed it down the river, but this started contaminating the river. When animals were brought into the picture the problem grew greater. Pretty soon they were living in their own shit. Drinking water was contaminated and diseases flourished. As long as there was vacant habitable land in the world, they moved on. That's probably why they migrated out of Africa in the first place.

Sewage disposal was probably the greatest problem of the ancient world. Next came firewood. Once that was gone, they had to move on. So fuel, drinking water and sewage disposal were the three major problems of the ancient world which they only were able to solve by migration. Degradation of the environment fueled migration to more pristine lands which were then in turn degraded. The establishment of cities depended on solving the problems of clean water and sewage disposal.The Romans solved the problem of water nicely with their aqueducts. They had a series of latrines that flushed out the waste, but it inevitably ended up in the river Tiber untreated. In many early cities even up to the 19th century, people just threw their waste out the window into the streets. No wonder there was so much sickness and disease.

There is no new habitable land such that the human species can just move on leaving their environmental destruction behind them. In addition to human and animal waste, homo sapiens has invented chemical waste that must be disposed of. All kinds of environmental destruction is caused by so-called externalities. Tailpipe emissions, smokestack emissions, anything that is pumped into the atmosphere is degrading the atmosphere and causing global warming. Plastic ends up in the oceans causing mires of waste. Fish ingest it.  It seems like properly disposing of all forms of waste is the major problem facing the human race today as it was in the ancient world. It is the major problem that has always faced the human race, but the human race has never really faced up to it, and now it's getting to the point where it may well be too late. We all may drown or suffocate because of the effects of improper waste disposal.

On Love and Meritocracy - Part 1

by John Lawrence

We Don't Need Another Gadget

What the world needs now is love... so wrote Hal David in 1965 with music by Burt Bacharach. It was true then and even truer now. We don't need another gadget, we don't need another smartphone, we don't need another IPO which only increases the economic divide between the 1% and the 99%. Economic progress has utterly failed us. It won't prevent the world going up in flames and/or being flooded out due to global warming. It hasn't prevented war and violence crowding out every other story on the evening news and getting worse by the day.

Economic progress fueled by an educational system that promotes Meritocracy has not produced the results by which men and women can live harmoniously with nature, nor the consequence that the material goods that sustain life are widely distributed. We commodify what we think of as intelligence. We grade people from pre-school to graduate school based on their IQ while ignoring their capacity for selfless love, agape, brotherly love, which is the form of love we are talking about here, as opposed to erotic love. We ignore the caregivers, the nurses, the teachers, those who have chosen to join the Peace Corps or AmeriCorps instead of the military whom we celebrate. There are no parades or medals of honor for the Peace Corps. There are no 'thank yous for your service'.

Thomas Frank writes in Listen Liberal, "Meritocracy ... is the conviction that the successful deserve their rewards, that the people on top are there because they are the best. This is the First Commandment of the professional-managerial class.

These days Meritocracy has come to seem so reasonable that many of us take it for granted as the true and correct measure of human value. Do well in school, and you will earn your credential. Earn your credential, and you are admitted into the ranks of the professions. Become a professional, and you receive the respect of the public plus the nice house in the suburbs and the fancy car and all the rest. Meritocracy makes so much sense to us that barely anyone thinks of challenging it..."

The Downside of Meritocracy

The downside of Meritocracy is that it contributes to the economic divide. Technology has produced scads of billionaires whose products mesmerize us without contributing one iota to making the world a better, safer or more life sustaining place or distributing prosperity more widely. Since the tech revolution of the 2000s, middle class wages have floundered, not increased, while incomes and wealth for the upper few percent have soared. Today the twenty richest individuals control more wealth than the bottom half of the population. That’s 152 million people living in 57 million households. The Walton family of Walmart owns more wealth than the bottom 40 percent of the American people. Many American billionaires are a tribute to the Meritocracy having got there by their own merits and not inherited wealth. They form a plutocracy, and their offspring will be the recipients of inherited wealth just as the aristocracy of the ancien regime was formed and perpetuated.

Tech start-ups get millions of dollars when they "go public." Wealth is concentrated among fewer and fewer people, but they're all celebrated because they are so smart. Many of these so-called entrepreneurs went to the best colleges and universities. However, some of them like Bill Gates, Larry Ellison, Steve Jobs and Jack Dorsey (inventor of Twitter and the Square) are actually college drop-outs. They are given credit for growing GDP when all they've done is to increase the economic divide, and their products have not been of the life sustaining variety. If someone creates a company and they do a billion dollars worth of business, this grows the economy or GDP by a billion dollars even though most of that money goes to just a few people. The economy grows and so does the economic divide.

As E. F. Schumacher says in Small is Beautiful, subtitled "Economics as if People Mattered," in order for economic progress to be wide spread what is needed, especially in the under developed parts of the world, is intermediate technology, technology which helps small farmers and entrepreneurs improve their businesses - not high tech. Progress, in Western terms, only "demoralizes the many and makes them the helpless dependents of the rich and expert few." High tech agriculture depopulates the countryside, crowds the cities and turns self sustaining farmers into dependents on the cash economy. NAFTA and globalization has ruined Mexican small farmers as American agricultural products priced them out of the markets.

Intermediate technology, such as simple smokeless stoves and simple solar panels, sufficient to keep one light burning, improves the lot of smallholders while keeping them on the land, but it is not seen as representing progress like GPS operated, automated tractors and GMO seeds which reduce the need for human labor while maximizing yields. Automated trucks being developed by Tesla and others will obviate the need for one of the largest occupational categories - truck drivers.

Meritocracy Commodifies Human Worth

Meritocracy commodifies human intelligence and therefore human worth. The educational system does not promote people with big hearts; it promotes people with big brains. The economic system does the same. Every facet of human endeavor that has economic significance is commodified. However, the capacity to love and care for others is not. It is not thought worth commodifying or rated. It is not considered "talent." If it had economic significance, it would be commodified. Imagine if a college entrant had to provide their SAT score and a rating on a scale from 1 to 100 of their capacity to love or care for other human beings and the earth in general. It seems ludicrous to commodify love; yet people that have a capacity to love are needed now more than ever if the earth and its inhabitants are to survive. The Meritocracy's downside is that it does not value love, only "intelligence" or "talent."

But rather than commodify love, more importantly, we need to decommodify intelligence. The grading system should be done away with. It has a fascistic basis, the commodifyng of people into alphas, betas and gammas such as George Orwell predicted in his novel, Brave New World. True education would be learning that took place without students having to be ranked by grades. Where I went to school on scholarship, Phillips Academy Andover, they ranked everyone in the class from first to last. Besides that they had two honor rolls, first and second, and they did this ranking every quarter. When students have to compete for their rank, true education can not take place, but a lot of anxiety and depression can. Some of the titans of high tech have ignored the whole system, dropped out of college and still became billionaires as mentioned previously. Even though they have proved that grading students is inconsequential to high achievement, they still have contributed to the economic divide with their billion dollar IPOs. We should stop celebrating contributors to the economic divide.

Finland Decommodifies Education

Consider Finland's educational system. It's the total opposite of America's. Instead of control, competition, stress, standardized testing, there is warmth, collaboration and teacher-led encouragement and supportiveness. See How Finland broke every rule — and created a top school system. Yet in an apparent contradiction, Finland's students consistently do better than American students on standardized testing.

We have to revise our notion of progress. The twentieth century saw much "progress" including diesel engines which replaced steam engines on the railroad thereby reducing the number of necessary water stops and station agents. The automobile, the movies, the telephone, the airplane, labor saving appliances, the computer, the internet have all contributed to "progress" because they have created commodities which can be sold and/or billed to individual customers or corporations. Inventions which can't be commodified and sold do not grow the economy. The American economy is based on 70% consumer purchases so the emphasis is on the invention of things which can be commodified and sold rather on things which can help people be self sufficient outside the cash economy or things which can help people and the environment which cannot be bought or sold.

We left the "horse and buggy days" behind. But horses and buggies did not pollute, they did not exacerbate global warming. Diesel engines, automobiles and jet engines spewed greenhouse gasses until the earth started warming perceptibly. Renewable energy inventions have the promise of reducing greenhouse gasses and saving Mother Earth, but they need to be implemented on a larger scale than that of individual sales, and large scale government programs for this or any other form of infrastructure are not even being considered by Congress.

Progress didn't turn out to be progress after all if externalities and the sustainability of the earth are taken into account. High tech reduced the need for human labor, eliminating jobs and widely distributed financial gains. Progress took away the dignity gained from having a necessary and productive job and being able to make a living therefrom. Soon robots will eliminate the need for human labor altogether except that labor involved in service jobs. The Amish and the Mennonites, ridiculed for staying in the "horse and buggy" stage of development, have not contributed to global warming the way adopters of the latest technology have. Did they know something we don't know, were they prescient or did they just do the right thing for the wrong reasons?

Get Ready for the Market Crash and Recession of 2016

by John Lawrence from the San Diego Free Press

Oil is less than $30. a barrel. This is over three times less than what it costs just to buy the barrel itself! Iran has been accepted back into the world community and is revving up to sell its oil on the world market which will bring down the price of oil even more. Frackers and oil producers in the US have taken on a huge amount of debt under the assumption that it would pay off down the road. They hadn't counted on the price of oil plummeting. What will they do when we convert 100% to renewables?

The debt overhang in the US economy is, as The Donald would say, UUUUGE! All the Wall Street banks and hedge funds, which have bet on the US becoming oil independent and have bought derivatives up the ying yang, are on the losing end of their bets. This presages a crash similar to the mortgage based crash of 2008. Then the Big Banks will ask for another bailout. Or maybe they won't ask; they'll just tell us that we're bailing them out because, after all, they run the government.

Goldman Runs the Government While Committing Fraud

Goldman Sachs runs the government's finance department. Treasury Secretaries Robert Rubin (1995-99) and Hank Paulson (2006-2009) were at Goldman from 1966 to 1992 and 1974 to 2006 respectively. At Treasury, Paulson was aided by Chief of Staff Mark Patterson (Goldman lobbyist 2003-2008), Neel Kashkari (Goldman Vice President 2002-2006) , Under-Secretary Robert K Steel (Vice Chairman at Goldman, where he worked from 1976 to 2004), and advisors Kendrick Wilson (at Goldman from 1998 to 2008) and Edward C Forst (former Global Head of Goldman's Investment Management Division).

Paulson's successor, Timothy Geithner, a protege of Robert Rubin, was kept close to the Goldman fold with the usual tactic of paying him lucrative speaking fees, the same tactic they use to keep Hillary's ear. I could go on with Goldman's connections to the US government, but I don't want to bore you. For a fuller account I refer you to Michael Hudson's book, Killing the Host, How Financial Parasites and Debt Destroy the Global Economy.

This January 2016 Goldman admitted to committing massive fraud and was fined $5 billion. The Wall Street firm had agreed with federal prosecutors and regulators to resolve claims stemming from the marketing and selling of faulty mortgage securities to investors. These are the people who are running your democratic (ha, ha) government. While the 99% got screwed, Wall Street got bailed out because they ARE the government.

But not to worry. This looming market crash is a problem for the big guys, the billionaires, the investor class, not the 99%. The mortgage defaults of 2008, on the other hand, brought real pain to the middle class. While the banks got bailed out, the average middle class homeowner did not. HAMP, the Home Affordable Mortgage Program which was supposed to help homeowners stay in their homes with loan modifications, was a colossal failure.

The program gave permanent mortgage modifications to 1.3 million people, but 350,000 of them defaulted again on their mortgages and were evicted from their homes. Fewer than one million homeowners remain in the HAMP program – just a quarter of its target – and $28 billion of the funding remains unspent. The HAMP program, supposed to help homeowners save their houses, may have led them deeper into a bureaucratic swamp.

401ks - the Worst Idea Perpetrated on the American People

Now that that crisis has settled down, the main worry of the middle class is that, when the stock market tanks, so will their 401k. 401ks were one of the worst travesties visited on the average American worker. Folks lucky enough to have traditional pensions don't have to worry especially if it's a government pension. On the other hand those with traditional pensions from corporations have to worry about corporate raiders and hedge fund takeover artists raiding their pension funds. Those with 401ks are taking all the risk in their individual portfolios over which they have no control really. They are at the mercy of the market and Wall Street. God help them.

There is also widening inequality which means that American consumers have less money to spend to keep the economy going. US GDP depends on consumer purchases because they are 70% of the economy. If everyone goes to ground and starts growing their own vegetables and keeping their own chickens, all those nonpurchases at the supermarket will drive the economy down. 2015 was a big year for car sales; that means that 2016 will not be because consumers are carred up.

Robert Reich thinks the economy is on the edge of recession:

Consider: The median wage is 4 percent below what it was in 2000, adjusted for inflation. The median wage of young people, even those with college degrees, is also dropping, adjusted for inflation. That means a continued slowdown in the rate of family formation—more young people living at home and deferring marriage and children – and less demand for goods and services. 

At the same time, the labor participation rate—the percentage of Americans of working age who have jobs—remains near a 40-year low. 

The giant boomer generation won’t and can’t take up the slack. Boomers haven’t saved nearly enough for retirement, so they’re being forced to cut back expenditures.

Wall Street and hedge funds are running the economy. They are the central planners not the US government which is basically just a pawn in their hands. They borrow money from the Federal Reserve at extremely low rates and then buy Treasury bonds which amounts to making money off the spread or making money off their ability to finance the American government which boils down to us, the American taxpayers.

Fortunately, the US isn't dependent on Japanese or Chinese or Saudi Arabian investors to buy its bonds. Wall Street has taken over that role in a symbiotic Ponzi scheme which requires the Fed, Wall Street and the US Treasury to all play their parts. That means that now the Big Banks are really, really Too Big To Fail. They are an essential part of funding and running the US government!

Better to Put Your Money Under the Mattress

While Wall Street banks are too big to fail, the next banking crisis could trigger not a bail out but a bail in. According to Ellen Brown, the mechanics are already in place to loot depositors' bank accounts:

While the mainstream media focus on ISIS extremists, a threat that has gone virtually unreported is that your life savings could be wiped out in a massive derivatives collapse. Bank bail-ins have begun in Europe, and the infrastructure is in place in the US. Poverty also kills.

At the end of November, an Italian pensioner hanged himself after his entire €100,000 savings were confiscated in a bank “rescue” scheme. He left a suicide note blaming the bank, where he had been a customer for 50 years and had invested in bank-issued bonds. But he might better have blamed the EU and the G20’s Financial Stability Board, which have imposed an “Orderly Resolution” regime that keeps insolvent banks afloat by confiscating the savings of investors and depositors. Some 130,000 shareholders and junior bond holders suffered losses in the “rescue.”

Something to think about. Maybe hiding your money under the mattress is the best solution since it's not earning any interest in the bank anyway.

Thom Hartmann has written a book, The Crash of 2016: The Plot to Destroy America--and What We Can Do to Stop It. Marketwatch.com writes:

“The United States is more vulnerable today than ever before including during the Great Depression and the Civil War,” says Thom Hartmann, in “The Crash of 2016.” Why? “Because the pillars of democracy that once supported a booming middle class have been corrupted, and without them, America teeters on the verge of the next Great Crash.” Thanks to an obstructionist GOP, hell-bent on destroying Obama the past six years. [Thom's] indictment hits hard, but matching something you might hear from Rush Limbaugh on the Right.

“The United States is in the midst of an economic implosion that could make the Great Depression look like child’s play,” warns Hartmann. His analysis is brutal, sees that “the facade of our once-great United States will soon disintegrate to reveal the rotting core where corporate and billionaire power and greed have replaced democratic infrastructure and governance. Our once-enlightened political and economic systems have been manipulated to ensure the success of only a fraction of the population at the expense of the rest of us.” And he wrote that before Picketty’s “Capital in the 21st Century.”

The US has a boom bust economy. Unfortunately, the busts are becoming more frequent and the booms more superficial. People get all euphoric when the stock market goes up. As someone once said, it leads to "irrational exuberance." Then when it crashes, they sell leaving their 401ks and retirement incomes in shambles. That's what happens when investing is left in the hands of amateurs. The big guys, the hedge funds will make money either way - when the stock market goes up they go long; when it goes down they're short. They are high frequency traders and act on insider information. They commit fraud.

They have billions of dollars at their disposal from low interest loans from Wall Street. That's why they can buy entire corporations, break them up, lay off the employees, raid their pension funds and sell the remaining eviscerated hulk off to the unsuspecting and naive. The hedge (vulture) funds and Wall Street make out like bandits which is what they essentially are. The banks, whose function used to be capital formation to fund industry which created jobs, now functions as a conduit to hedge funds to wreak havoc with the American economy in pursuit of short term profits.

The world is polarized between the uber wealthy and the rest of us. Just 62 people own as much wealth as the 3.6 billion poorest. That's globalization for you. Nation states are no longer important or in control. The uber wealthy, the billionaires, who can buy and sell politicians and governments at their whim are the controllers. They - not the communists or socialists - are the central planners of the economy, and their plan for the economy is to benefit them and only them. The World Bank and the IMF are their henchmen.

The New Feudalism - Billionaires Replace the Nobility

This is from a recent report from Oxfam, AN ECONOMY FOR THE 1% How privilege and power in the economy drive extreme inequality and how this can be stopped:

The gap between rich and poor is reaching new extremes.  The richest 1 percent have now accumulated more wealth than the rest of the world put together… Meanwhile, the wealth owned by the bottom half of humanity has fallen by a trillion dollars in the past five years.”

The wealth of the richest 62 people has risen by 44 percent in the five years since 2010—that’s an increase of more than half a trillion dollars ($542 billion), to $1.76 trillion,” Oxfam noted. “Meanwhile, the wealth of the bottom half fell by just over a trillion dollars in the same period—a drop of 41 percent. Since the turn of the century, the poorest half of the world’s population has received just 1 percent of the total increase in global wealth, while half of that increase has gone to the top 1 percent.

There is really only one candidate for President who is addressing these issues - Bernie Sanders. Republicans want us to take our eyes off the ball of growing inequality and impoverishment of the 99% while the billionaires take on the role of oligarchs. They want us to focus on international terrorism and the threat that that brings to our everyday lives.

While that is surely a threat, ISIS cannot do major damage to the US. A few people can be blown up here and there and that is a tragedy. It's just not as great a tragedy as the gun violence done by Americans to other Americans on a daily basis which is orders of magnitude bigger.

If the economy takes a tumble, Hillary Clinton's ties to Wall Street will take on an even more ominous cloud over her campaign while the fact that Bernie Sanders has raised millions in small donations without the help of Wall Street or Super PACs will cast him in an even more favorable light. That might be the deciding factor. The Republicans will surely be left behind if they place all their bets on getting the American people to vote for them out of fear of ISIS.

Effective Altruism: Is It Up To Rich People To Save the World?

by John Lawrence from the San Diego Free Press

Peter Singer has written a book The Most Good You Can Do: How Effective Altruism Is Changing Ideas About Living Ethically (Yale University Press, 2015). Singer has been called "the world's greatest living philosopher" and is currently a Professor at Princeton so we must take his work seriously. Yet I'm bothered by the implications of his work as condensed in an essay: How You Can Do the Most Good: It's Not as Simple as You Think.

He tells about one of his students who, though caring to extreme about the plight of poor people in the world, nevertheless, chose to go to work on Wall Street when he graduated. His reasoning was that he could help the most poverty stricken by dedicating a large amount of his considerable salary to helping them rather than going to work as a volunteer working directly with them in Africa, for instance. A huge amount of money contributed to the right charities would alleviate the conditions of more people than would be helped by a person of meager resources who devoted his working efforts to their cause.

The utilitarian part of me can't argue with this approach to helping the poor. However, I'm bothered by the fact that this guy went to work for the Evil Empire (pardon my hyperbole) in order to do good for others. This isn't exactly the Robin Hood approach. Robin Hood didn't go to work for the devil; he stole from him. To my way of thinking this is an ethically better approach.

I consider many occupations to be unethical including working on Wall Street. To say that a greater good can be accomplished by taking ill gotten gains after contributing to an enterprise's evil activities can't be justified by saying that, on a utilitarian basis, more good can be accomplished than bad created. Singer is saying that those who go into teaching because their passion is helping children would do better by going into a profession in which they could earn far more money and then using a portion of that money to help the uneducated. This is pure nonsense. When taken to extremes he justifies the sacrifice of some people for the greater good of saving a larger number.

For example, suppose you were faced with the proposition that you could earn a million dollars by killing someone. With that million dollars you could help 100 poor children escape poverty. Does that justify killing one person? I don't think so.

Should One's Life Work Be Ethical?

I consider one's life work to be something that should be considered from an ethical viewpoint. There are jobs and occupations which, although legal, are from my viewpoint unethical. Take for example petroleum engineering. There are very high salaries for college graduates in this field and jobs are readily available. But in an age where climate change is being exacerbated by the burning of fossil fuels, I consider it unethical to go to work for the fossil fuel industry.

There are other jobs and professions I consider to be unethical and others that I consider ethical. This is just my own personal assessment. Others would disagree, but I consider working for the military-industrial complex unethical because it supports the war industry instead of putting time and energy and money into the Peace Corps and AmeriCorps. I consider working in the advertising industry unethical because it exists to convince people to part with their money for the enrichment of corporations while pretending to be concerned about the welfare of the individuals they seek to influence. It promotes "unbridled consumerism" as Pope Francis has said.

The pharmaceutical industry which charges what the market will bear for life saving drugs is clearly unethical. The drug, called Daraprim, was acquired by a former hedge fund manager. The price was immediately raised to $750 a tablet from $13.50, bringing the annual cost of treatment for some patients to hundreds of thousands of dollars.

I consider teaching, care giving, nursing, providing services to the local economy such as those provided by tradesmen or craftsmen to be ethical. Factory farms I consider to be unethical; organic farms I consider to be ethical. I could go on creating two lists: ethical and unethical jobs and occupations but I won't.

Other people can make up their own lists. Most Americans would probably consider any legal job or occupation to be ethical. I disagree obviously.

Here is Singer's very persuasive argument:

I met Matt Wage in 2009 when he took my Practical Ethics class at Princeton University. In the readings relating to global poverty and what we ought to be doing about it, he found an estimate of how much it costs to save the life of one of the millions of children who die each year from diseases that we can prevent or cure. This led him to calculate how many lives he could save, over his lifetime, assuming he earned an average income and donated 10 percent of it to a highly effective organization, such as one providing families with bed nets to prevent malaria, a major killer of children. He discovered that he could, with that level of donation, save about one hundred lives. He thought to himself, “Suppose you see a burning building, and you run through the flames and kick a door open, and let one hundred people out. That would be the greatest moment in your life. And I could do as much good as that!”

Two years later Wage graduated, receiving the Philosophy Department’s prize for the best senior thesis of the year. He was accepted by the University of Oxford for postgraduate study. Many students who major in philosophy dream of an opportunity like that—I know I did—but by then Wage had done a lot of thinking about what career would do the most good. Over many discussions with others, he came to a very different choice: he took a job on Wall Street, working for an arbitrage trading firm. On a higher income, he would be able to give much more, both as a percentage and in dollars, than 10 percent of a professor’s income. One year after graduating, Wage was donating a six-figure sum—roughly half his annual earnings—to highly effective charities. He was on the way to saving a hundred lives, not over his entire career but within the first year or two of his working life and every year thereafter.

Should One Sell His Soul to Wall Street in Order to Do Good?

So Singer apparently considers working for Wall Street a more ethical job than being a professor. I don't think so. He doesn't stop to consider the ethically corrupting influence that Wall Street will have on Wage himself who may at any time decide his money will be better spent on his own noncharitable predilections or may decide that selling his soul to Wall Street, even for a good cause, is something he can no longer do.

He doesn't stop to consider how much evil Wage will be participating in simply by doing his job. He doesn't consider the corrosive influence that working in a toxic environment will have on Wage's soul. He doesn't consider that Wage might not be able to tolerate working in that environment for more than a short time like many young people who went to work on Wall Street right after college. In short Wage is selling his soul for a mess of pottage, pottage to be sure that he intends to give away to help others, but pottage gained by losing his soul, his humanity and his integrity nevertheless.

Singer's argument suggests that it's up to rich people to save the world. In fairness rich people do a lot of good through their charities. But it's not an unmitigated good. The Bill and Melinda Gates Foundation has done much good in the world which wouldn't have been possible without the success of Microsoft Corporation. The Gates Foundation is not without controversy, however, including their support for GMOs and charter (privatized) schools. Gates and other rich people who have gotten rich off of technology naturally feel that there's a technological solution for every problem.

So is it up to billionaires to do the most good in the world because they possess the most resources? We also must consider that not all billionaires are up to doing good with their money. Many of them use their considerable resources, instead of helping people, to maintain a system of oppression over people lest those people take their resources away from them. That's why we can't trust that billionaires are going to save the world. Many of them are up to making it worse, particularly the plight of the least well off.

An article in Salon says it better:

As H.L. Mencken writes, "The urge to save humanity is almost always a false front for the urge to rule. Power is what all messiahs really seek: not the chance to serve." While some philanthropists support good causes (like Bloomberg’s fight against Big Tobacco), other pet causes are not so humanitarian. While we may applaud the work of Bill Gates, many philanthrocapitalists, like the Adelsons and the Kochs, have decided that their philanthropic venture will be empowering the Ted Cruzes of the world to wreak havoc. Wealth is power, and concentrated wealth is concentrated power. The most benevolent inventions are also the cruelest.

A better approach might be to limit the economic power that can be accumulated by corporations which then ends up in individual hands. Some billionaires do a lot of good in the world; some do bad, but not everyone can be a billionaire. Everyone can aspire to working in an ethical job or occupation. A system that results in the accumulation of economic power by the 1%, no matter how much resultant good comes with it, is not ethical especially when that means that the plight of the lower classes worsens from year to year. A good society would distribute economic well being more equitably and democratically. Then we all wouldn't be so dependent on the noblesse oblige of the rich.

Charity is Good But What About Justice?

Some make a distinction between charity and justice. Charity deals with the immediate needs of desperate people. Justice deals with setting things up so that they don't become desperate in the first place:

Justice directly confronts the challenge of preventing people from ending up in vulnerable situations. What causes over 15 million children in the U.S. to go to bed hungry each night? Why don’t we have universal public health care? Why aren’t public colleges and universities tuition-free like high schools in the U.S. and [colleges in] most western European countries? Why are our public works crumbling and creating unnecessary obstructions for disaster relief (reaching people stranded after hurricanes)?

It is advocacy promoting justice that seeks the prevention of the causes that lead to so much misery, institutional harm, poverty, and the loss of human life and potential. Repairing the wreckage of wars places huge demands on charity. Waging peace and negotiating arms control agreements places huge demands on justice.

Singer says, "Living a minimally acceptable ethical life involves using a substantial part of our spare resources to make the world a better place." You can't argue with that, but that applies to everyone in the economic spectrum not just to rich people. And many are so hobbled economically that they don't have any spare resources. They need an inflow of charitable or societal resources just to make ends meet. They should not be contributing to charity at all.

If society provided more opportunities for people to do good ^i.e. by transferring resources from the war machine to the Peace Corps for instance, more people could work in ethical occupations and pull themselves and others out of poverty at the same time. Too often, however, what the American society provides is opportunities to work in unethical occupations which are rewarded handsomely while working in ethical occupations is rewarded minimally or not at all. If the budgets of the military-industrial complex and those of the Peace Corps were transposed, a massive movement of those working in ethical occupations would provide a greater force for good than the combined forces of ethical billionaires.

Reliance on billionaires to do good in the world is a return to feudalism where kings were the only forces for good or bad in the world depending on whether they were enlightened despots like Catherine the Great and Frederick the Great or just plain despots like Ivan the Terrible or Caligula.

We must consider whether a society which creates "opportunities" for some people to become obscenely wealthy, even though they can then supposedly turn around and use their money to do good, is as good a society as one which creates opportunities for most people to work in ethical occupations and do good at the same time.

Singer's world view is one where everyone is well off and gives to charity without sacrificing any of their own self-interest at all. They needn't do that because after all they are billionaires and have much more money than they ever could spend on themselves. It's not the real world. It applies to a small fraction of rich people - those who want to use their money for good purposes. They barely, if at all, offset the rich who use their money to perpetuate bad purposes.

Perhaps Wage will find out that he cannot sacrifice his own soul to gain the world even if he gives half of it away.

In an article in Salon Sean McElwee says : Charity is great, but it won't bring real change — and worse, it perpetuates the myth that we need the ultra-rich:

Think of the planet’s best human being. Who are you thinking of? Pope Francis? Your parents? Justin Bieber? According to Business Insider, it’s Mark Zuckerberg. Why? Because he’s planning to donate $1 billion (less than 5 percent of his massive fortune) to charity. While it’s certainly welcome, philanthropy is far more insidious than it appears at first sight. It tends to lead to fawning press coverage, but little in the way of good reform. Worse, it perpetuates the myth that society’s problems can be solved by the rich and powerful. ...

There’s a very real sense in which it would be hard for Zuckerberg to have done less for the poor. After all, he and his rich Silicon Valley friends regularly use their wealth to lobby for policies that would make them even richer — even if in the guise of social responsibility.

Billionaires Do Not Always Use Their Money for Good Purposes

And that's the rub. The rich in addition to their charitable endeavors also use their money to perpetuate the system that made them wealthy in the first place even if that system fosters subjugation and oppression for the vast majority. McElwee writes: "In charity, the rich approach the poor not as equal citizens but rather [as] benefactor and serf. It perpetuates a class society, where the poor and middle class are dependent on the wealthy."

We must also consider the rationale and ethics of a society that makes some people insanely wealthy for inventing things of questionable and even trivial value. For instance, take Snapchat. Snapchat has made its corporate owners, Evan Spiegel and Bobby Murphy fabulously wealthy.  Using the application, users can take photos, record videos, add text and drawings, and send them to a controlled list of recipients. These sent photographs and videos are known as "Snaps". Users set a time limit for how long recipients can view their Snaps after which Snapchat claims they will be deleted from the company's servers.

The main purpose of SnapChat is so users of the application can take pictures of their "junk", send them out and then not have to worry that a prospective employer might view them. In June 2013, Snapchat raised $60 million in a funding round led by venture-capital firm Institutional Venture Partners. According to Forbes, Snapchat’s chief executive Evan Spiegel and co-founder Bobby Murphy, have made it to the 2015 Forbes 400 list. Mr. Spiegel, who is 25, is now the youngest billionaire in the world and currently his net worth sums up to $2.1 billion. Don't tell me that we live in an ethical society when a piece of crap like SnapChat can raise $60 million, make Spiegel a billionaire and poor kids go hungry.

In addition it turns out that Spiegle didn't even invent SnapChat. It was invented by former "friend", Reggie Brown, who was subsequently shut out of the company. This is reminiscent of Facebook's Mark Zuckerberg who shut out the Winkelvoss twins, who actually invented Facebook, and later settled with them for $65 million, a large amount to be sure, but not the $35.7 billion Zuckerberg is worth. Long story short, people screw their friends over huge amounts of money. This is an ethical society when things like this can happen and people can make huge amounts of money for crapola?

On May 9, 2013, Forbes reported that Snapchat photos do not actually disappear, and that the images can still be retrieved with minimal technical knowledge after the time limit expires. The Electronic Privacy Information Center consequently filed a complaint against Snapchat with the Federal Trade Commission, stating that Snapchat deceived its customers by leading them to believe that pictures are destroyed within seconds of viewing.

Snapchat eventually settled with the Federal Trade Commission over allegations it deceived users over the amount of personal data it collected and was responsible for a security breach that impacted 4.6 million customers. It will face privacy monitoring for 20 years.

That's the story in a nutshell. Unethical people making huge sums of money in unethical enterprises while the poor and people striving in ethical professions such as teaching and caregiving starve to death. Capitalism, especially as it is currently conceived, manifested and practiced, is unethical. Make no mistake about it: capitalism is not some absolute thing-in-itself that has always existed from time immemorial. It is a moving target, continuously being reinvented and updated to advantage the already rich with every new wrinkle that some financial expert can come up with.

In other words, it evolves and not necessarily in benign ways. Its original purpose, to develop pools of money that could be used in enterprises which would benefit society, has long been forgotten. It allows for despoiliation of the environment, the granting of huge rewards to insiders who come up with stuff that only degrades the culture and the complete neglect of the kinds of enterprises that are necessary to make peace in the world and build a better and stronger society.