California Free Press

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. 

Off the Top of My Head

The Infrastructure Bill and How to Pay for It Are Two Separate and Distinct Issues That Have Nothing to Do With Each Other

by John Lawrence

We know that the US government does not have to tax in order to spend since the US has a sovereign currency (See Modern Monetary Theory), and the Federal Reserve can just place the requisite amount of money for the infrastructure bill in the Treasury's account at the Fed. The problem is that, according to US law, if there is not enough money in the Treasury's account to pay for stuff, it must issue and sell Treasury bonds to make up the difference. These bonds then contribute to the deficit which is added to the national debt. We also know that the national debt never needs to be paid off, but Treasury bonds do need to be paid when the holder asks for the money when they come due. In addition interest does need to be paid on them. If the Fed keeps the interest rate for Treasuries at zero, this is not a problem. So why would anyone purchase Treasury bonds if they get zero interest? Well, countries that peg their currencies to the dollar (like China) need dollars in order to conduct business. Besides if someone comes to them with a basket full of renminbi and asks for US dollars, they have to be able to pay them the dollars and accept the renminbi. So there is always a market for US Treasury bonds. Even if there wasn't, the Fed would end up purchasing them and taking them onto its balance sheet where they would essentially disappear into a black hole never having to be paid back.

So what is the problem with just having the Fed create the money and place it in the Treasury's account without "paying for" it with taxes. No problem really. Joe Biden just wants to kill two birds with one stone. The first bird is the money for infrastructure. The second bird is doing something about the widening economic inequality by taxing the rich. There is no actual need to issue Treasuries in the first place except that US law requires it. The money could just go directly on the Fed's balance sheet without the intermediate step of selling Treasuries. There are however some good reasons for not taking too much advantage of this possibility. One is inflation. As more money floods into the economy through deficit spending, inflation could heat up whether or not the money comes from taxes. The other issue is that as other countries accumulate more and more Treasury bonds with or without interest being paid on them, they start to have the ability to use those dollars to purchase US assets. It's not inconceivable that a particular country - let's say China - couldn't accumulate enough Treasuries to buy up cities.

New York City has the most valuable real estate in the U.S. at $2.8 trillion — slightly more than the entire GDP of the United Kingdom for 2019. In fact, this is greater than the GDP of all but just five countries — India, Germany, Japan, China and the United States. The value of New York is comparable to the combined market value of tech giants Apple and Microsoft. China owns about $1.1 trillion in US Treasuries. If they demanded it all tomorrow, the Fed would have no problem paying them, but then they could buy up more than a third of New York City or almost all of San Francisco valued at $1.3 trillion. This could eventually become a problem so it would be better not to even make up the difference by issuing Treasuries in the first place. The alternative is for the Fed just to create the money and place it in the Treasury's account as authorized by Congress without the Treasury having to sell bonds to make up the difference between the amount of taxes and the amount of the authorization.

Then the issue becomes inflation. There is already wage inflation as employers are forced to pay more for employees, for a number of reasons, thus raising the price of products and services. This is "good" inflation since wage earners have not seen an increase in their income for 40 years. There is also "bad" inflation in that the increasing wealth of the upper 10% , and especially the upper 1%, is causing asset inflation in terms of the increasing cost of real estate and rent. Asset inflation is also happening in the stock market although it's hard to see how this is a bad thing except for the fact that about 50% of the people don't own stocks so that gap between rich and poor is only increasing. The third form of inflation occurs when there is too much money chasing too few goods and services. This could be caused by too much deficit spending. The fourth kind is the "super bad" inflation known as hyperinflation. This is the kind of inflation that affected the Weimar republic in Germany before the Second World War and also affects poor countries. It also recently affected Greece because Greece gave up its sovereign currency when it adopted the euro. Hyperinflation occurs when a country needs to borrow money from the capital markets subject to increasing interest rates. As their economy declines interest rates go up until finally they are paying more in interest than their economies can keep up with. The US can never be put in this position since it never has to go to the capital markets to borrow money. The Federal Reserve can just issue whatever money is needed and can set its own interest rate since the US dollar is a sovereign currency.

So while there are limits to the amount of prudent deficit spending, one of them is not paying for it through taxes. The US Federal government never has to tax in order to spend. It can pass a bill to build infrastructure with the only limitation being the physical and material resources that are available to do it.

https://www.cnbc.com/video/2019/03/01/stephanie-kelton-explains-modern-monetary-theory.html

 

Off the Top of My Head

Why is the Stock Market Surging in the Midst of Huge Unemployment

by John Lawrence

Simple answer is that the stock market has nothing to do any more with the Main Street economy. There are two economies: Main Street and Wall Street. There's the economy of rich investors, and the economy of the 90% who aren't investors. The stock market is dominated by large multinational corporations like Apple and Google, and is invested in by rich people from all over the world. As COVID has shown, we have a bifurcated economy. Secondly, interest rates for Treasury bonds are zero so why would an investor buy them when investing in stocks amounts to a self fulfilling prophecy? The more money going in, the greater the rate of return, and rich people are continuing to make huge amounts of money. Business Insider reported that billionaires saw their net worth increase by half a trillion dollars during the pandemic. All that money has to go somewhere. Meanwhile, middle class people with 401(k)s are draining them to meet expenses. Thirdly, the Federal Reserve has all but gifted rich investors trillions of dollars.

More than 1 in 4 Americans are raiding their retirement accounts after a coronavirus-related job loss. The unexpected loss in income is causing many Americans to tap their retirement savings just to make ends meet. And many people who lost a job — or have a spouse or partner whose income has declined — didn’t have much money saved in the first place. Half of Americans who were recently furloughed or let go have saved less than $500 for retirement in the past year — and 70% have saved less than $1,000, according to a report by fintech firm SimplyWise. Of those who have an individual retirement account, 401(k) plan or retirement savings account, 1 in 5 now plan to tap those funds. Of course rich investors don't suffer job losses because they don't have jobs other than managing their money. That they can do from home.

Some has been written about a K-shaped recovery from the pandemic. In a K-shaped recovery, the economic bounce-back is bifurcated like a "K": The wealthiest Americans are quickly rebounding, even thriving, while the middle- and lower-income set are not. As of the first quarter of 2020, the wealthiest 10% of American households owned 87% of all stocks and mutual funds, according to the Federal Reserve. So where does that leave the other 90%? Struggling. Waiting in line at food banks. Getting evicted and foreclosed on. Losing their small businesses in droves. The fact that a second relief package has not been implemented and in all probability won't be for another 2 months till after Biden takes office will hinder those people in the lower part of the K even more.

So what does this say about essential workers? Are rich investors essential workers? I don't think so. Are doctors and nurses? You bet. But they are being shafted by the American people who won't obey simple guidelines in the midst of a surge upon a surge in COVID. Many of them are committing suicide. Others will soon throw up their hands and quit their jobs rationalizing that their own families are more important than taking care of sick patients which puts them at risk. Multitudes of Americans traveled during the Thanksgiving holidays ignoring pleas to stay home. Now doctors and nurses will pay the price for those who exercised their "freedom" as Americans to ignore the pleas of others and only think of themselves. Even family members of these will pay the ultimate price. Another ghastly statistic: the US with 4% of the world's population has 19% of the world's COVID cases. An in November there were an average of a million new cases per week.

Having a President for the past four years who has dumbed down the American people has not been a big help in contributing to a better society for Americans or those in the rest of the world who had looked up to America. Now the question is to what degree the Biden administration can recover some semblance of American democracy and respectability among other world leaders and also economic equity for all Americans. A lot of it will hinge on whether or not Democrats will control the Senate after the two runoff elections in Georgia. If Republicans continue to control the Senate, we can expect four more years of gridlock and straitjacketing of Biden's ambitious agenda. This will be devastating for America and the world. The US will continue to diminish in importance in the world community. Economic inequality will be exacerbated, and global warming will get even worse as hurricane and fire seasons become normal year round events.

Off the Top of My Head

How Joe Biden and the Democrats Can Attract Trump's Base to Their Side

by John Lawrence, November28, 2020

Aside from the entertainment value of the Trump Presidency, his main appeal and the main appeal of Republicans in general is that they stand for reducing taxes. Democrats can co-opt this issue. Here's how: before the next election, they announce that, if elected, they will reduce taxes on everyone making less than $400,000. Joe said he wouldn't raise taxes on that group, but he didn't go far enough. He needs to reduce taxes on everyone making less than $400,000 while raising them on everyone making more than $400,000. Trump's base, I assume, are people making less than $400,000. They are attached party wise to the wealthy Republicans who make up the top 1% with whom they have nothing in common economically. How will Joe pay for this? Simple: the money raised by raising taxes on the rich, making corporations pay their fair share, closing loopholes like the "carried interest" loophole and a financial transactions tax (FTT). And it wouldn't have to balance out equally. In other words the money raised in increased taxes on the rich would not have to equal the money spent on tax breaks for everyone making less than $400,000. It would represent the destruction of the Republican meme: "Democrats will raise your taxes."

The Federal budget need not balance out exactly. It hasn't done that since President Clinton balanced the budget in 2001. He had budget surpluses for fiscal years 1998-2001, the only such years from 1970-2020. Clinton's final four budgets were balanced budgets with surpluses, beginning with the 1997 budget. Since then Republicans, supposedly the guarantors of fiscal conservatism, have deficit spent by means of tax cuts going mainly to the rich. Even before Clinton, Reagan deficit spent with tax cuts in the 1980s. This meme that Republicans represent tax cuts and fiscal conservatism needs to come to an end and be exposed by Democrats for what it is. Evidently, the middle class Republican voters are satisfied with a meager tax cut and don't mind that the rich are getting a more hefty one. That's why Democrats have to take over this meme by giving tax cuts to the middle class and tax raises to the rich. This is the only way finally to get economic inequality under control.

Modern Monetary Theory and the Federal Reserve's own history prove that Deficits Don't Matter. The US dollar is a sovereign currency. The Federal Reserve can just print money and spend it into the economic system without adding it to the national debt. This is exactly what Abraham Lincoln did during the Civil War when he printed greenbacks instead of borrowing the money at interest which would have created huge debts for the United States. So there are two ways that money can be created by the Fed. 1) They can buy US Treasury bonds which would require Congress to deficit spend. 2) They can just print the money and pour it into Federal coffers. This does not add to the national debt but goes on the Fed's balance sheet. The bottom line is what is the money to be used for? If it's for a good cause like building green infrastructure and creating jobs in the process if the economy is less than fully employed, it probably won't create inflation. If it's just a gift to people in an already fully employed economy, it will most definitely create inflation or even hyper inflation.

So in the long run deficits do matter in the sense that, if the money is spent frivolously, inflation and potentially a loss in the value of the dollar on international markets could occur. However, if the money is spent constructively on building and repairing of infrastructure and other useful purposes, deficits won't matter. It boils down to prudent and responsible spending by government. Is Congress up to this task? Is the Fed? At this point a deal between the Executive branch and the Fed would seem more appropriate than running the whole thing through Congress where political ambitions of one party or the other can get in the way. The problem is that there is no consensus in Congress unless one party holds control over both Houses and the Presidency. Barring that, each party will try to limit the other party's spending goals which are tax breaks for the rich (Republicans) or government spending on social programs (Democrats). One way to break this stalemate is for Democrats to be the party of tax breaks for the 99% and tax increases for the 1% while maintaining their commitments to the social safety net.

Who Wins from Trump’s Final Travesty?

by Robert Reich

Tuesday, November 17, 2020

Leave it to Trump and his Republican allies to spend more energy fighting non-existent voter fraud than containing a virus that has killed 244,000 Americans and counting.

The cost of this misplaced attention is incalculable. While Covid-19 surges to record levels, there’s still no national strategy for equipment, stay at home orders, mask mandates or disaster relief.

The other cost is found in the millions of Trump voters who are being led to believe the election was stolen and who will be a hostile force for years to come – making it harder to do much of anything the nation needs, including actions to contain the virus.

Trump is continuing this charade because it pulls money into his newly formed political action committee and allows him to assume the mantle of presumed presidential candidate for 2024, whether he intends to run or merely keep himself the center of attention.

Leading Republicans like Senate majority leader Mitch McConnell are going along with it because donors are refilling GOP coffers.

The biggest beneficiaries are the party’s biggest patrons – the billionaire class, including the heads of the nation’s largest corporations and financial institutions, private-equity partnerships and hedge funds – whom a deeply divided nation serves by giving them unfettered access to the economy’s gains.

Their heist started four decades ago. According to a recent Rand study, if America’s distribution of income had remained the same as it was in the three decades following the second world war, the bottom 90% would now be $47 trillion richer.

A low-income American earning $35,000 this year would be earning $61,000. A college-educated worker now earning $72,000 would be earning $120,000. Overall, the grotesque surge in inequality that began 40 years ago is costing the median American worker $42,000 per year.

The upward redistribution of $47 trillion wasn’t due to natural forces. It was contrived. As wealth accumulated at the top, so did political power to siphon off even more wealth and shaft everyone else.

Monopolies expanded because antitrust laws were neutered. Labor unions shriveled because corporations were allowed to bust unions. Wall Street was permitted to gamble with other peoples’ money and was bailed out when its bets soured even as millions lost their homes and savings. Taxes on the top were cut, tax loopholes widened.

When Covid-19 hit, Big Tech cornered the market, the rich traded on inside information, and the Treasury and the Fed bailed out big corporations but let small businesses go under. Since March, billionaire wealth has soared while most Americans have become poorer.

How could the oligarchy get away with this in a democracy where the bottom 90% have the votes? Because the bottom 90% are bitterly divided.

Long before Trump, the GOP suggested to white working-class voters that their real enemies were Black people, Latinos, immigrants, “coastal elites,” bureaucrats and “socialists.” Trump rode their anger and frustration into the White House with more explicit and incendiary messages. He’s still at it with his bonkers claim of a stolen election.

The oligarchy surely appreciates the Trump-GOP tax cuts, regulatory rollbacks and the most business-friendly Supreme Court since the early 1930s. But the Trump-GOP’s biggest gift has been an electorate more fiercely split than ever.

Into this melee comes Joe Biden, who speaks of being “president of all Americans” and collaborating with the Republican party. But the GOP doesn’t want to collaborate. When Biden holds out an olive branch, McConnell and other Republican leaders will respond just as they did to Barack Obama – with more warfare, because that maintains their power and keeps the big money rolling in.

The president-elect aspires to find a moderate middle ground. This will be difficult because there’s no middle. The real divide is no longer left versus right but the bottom 90% versus the oligarchy.

Biden and the Democrats will better serve the nation by becoming the party of the bottom 90% – of the poor and the working middle class, of black and white and brown, and of all those who would be $47 trillion richer today had the oligarchy not taken over America.

This would require that Democrats abandon the fiction of political centrism and establish a countervailing force to the oligarchy – and, not incidentally, sever their own links to it.

They’d have to show white working-class voters how badly racism and xenophobia have hurt them as well as people of color. And change the Democratic narrative from kumbaya to economic and social justice.

Easy to say, hugely difficult to accomplish. But if today’s bizarre standoff in Washington is seen for what it really is, there’s no alternative.

Off the Top of My Head

Increase Taxes on the Rich. Reduce Taxes on the Middle Class

by John Lawrence, October22, 2020

Finally, the Democrats are getting smart. Republicans have won on one issue: reducing your taxes. Unfortunately, they reduce them a lot more on the rich than they do on the middle class. So now Joe Biden has introduced some nuance. Can the American people comprehend it? Reducing taxes on everyone making less than $400,00 per year and raising them on everyone making more than $400,000. What a great idea! What took them so long? It's absolutely necessary if we want to decrease economic inequality which is out of control. So Joe Biden would increase taxes only on the upper 1%. To be among the upper 1%, a family needs an income of $421,926. In terms of wealth the upper 1% owns 38.5% of the nation's wealth. The upper 1% owns more wealth than the bottom 90%. The bottom 80% of Americans are net debtors. Debt is negative wealth; that should be obvious, but many Americans are financially illiterate. Financial literacy should be a course in high school. Wealth and income are two separate but related issues. Middles class Americans who own homes pay a wealth tax: property taxes. Rich people don't pay wealth taxes on most of their assets which are in stocks and bonds.

Wealthier Americans don't spend all their income on consumption. A portion of it just goes to add to their wealth. Middle class and poor Americans spend all their income on consumption, even going into debt to consume. So the wealthy extract rent and interest from the middle class and the poor who devote a huge share of their incomes to rent and interest. Now more than ever, Americans are drowning in debt. Prior to the Great Recession of 2008, many Americans were struggling to keep their heads above water. When the bubble burst, those with the most debt were left drowning in a sea of financial insolvency. While the country has since recovered financially, the COVID-19 pandemic is threatening to derail the economy once more. In order to diminish not only income inequality but wealth inequality, policies should be undertaken to tax both the wealth and income of the wealthy while encouraging the middle class and poor to build wealth and get out of debt. A small financial transactions tax would tax the wealth of the rich which is mostly comprised of stocks and bonds and real estate. If every stock trade were taxed, this would create a huge pool of money which could be spent in more constructive ways than simply adding to the wealth of the rich.

While the rich can go bankrupt and bail themselves out with golden parachutes, most struggling student loan debtors have no such option. The laws preclude them from going bankrupt. They cannot discharge their debts in bankruptcy. In addition to student loan debt, most middle class people who own a home have a lot of mortgage debt. So they don't really own the home; the bank does. They have the privilege of making payments on a home which include a lot of interest. If they are successful in paying off their mortgage, they will have an asset which represents wealth. This is the main way the middle class creates wealth for itself. Unfortunately, this wealth takes a life time to create so is unavailable to most middle class people until it's too late to enjoy it. The good thing though is that their children can inherit it. This represents an intergenerational transfer of wealth so that their children or grandchildren start out not from zero, where most children of the poor start out, but from a positive accumulation of wealth no matter how small.

Since most Americans overconsume and under save in many cases by necessity but in some just by predilection, they have nothing to fall back on when there is a disruption in the economic system like a pandemic. Since American GDP is predicated on 70% consumption, the American economy cannot stay out of recession if people stop consuming. That's why the Republican controlled government, understanding this, came up with the CARES Act. It was not so much out of a concern for the middle class and the poor as it was a consideration to keep up consumption which is essential to maintaining GDP and hence a necessary economic statistic. A Joe Biden administration will get the economy back on the right track which will increase the income and wealth of the poor and middle class while diminishing that of the wealthy. Financial literacy should make clear the importance of not going into debt but of creating wealth no matter what your income statistics are at the beginning of this process.

Highlighting 'Extreme Carbon Inequality,' Oxfam Study Shows World's Richest 1% Emit More Than Twice as Much CO2 as Poorest 50%

Published on Monday, September 21, 2020

by Common Dreams

"The over-consumption of a wealthy minority is fueling the climate crisis, yet it is poor communities and young people who are paying the price," said study author Tim Gore. 

by Brett Wilkins, staff writer

 

13 Comments

A new study from the NGO Oxfam International found that the world's richest 1% are responsible for more than twice as much CO2 pollution as the poorest half of humanity. (Photo: isciencetimes.com)

The wealthiest 1% of the world's population is responsible for emitting more than twice as much carbon dioxide as the poorest 50% of humanity, according to new research published Monday by Oxfam International.

The study (pdf), which was conducted in partnership with the Stockholm Environmental Institute, analyzed data collected in the years 1990 to 2015, a period during which emissions doubled worldwide. It found that the world's richest 63 million people were responsible for 15% of global CO2 emissions, while the poorest half of the world's people emitted just 7%.

LATEST: The carbon emissions of the richest 1% of the world are more than *double* the emissions of the poorest half of humanity.

Over-consumption of the elites is fueling #ClimateCrisis yet it's poor communities & young people who pay the price.

👉🏾 https://t.co/15GwT9zlBf pic.twitter.com/f4cNGkMJQE

— Oxfam International (@Oxfam) September 21, 2020

The researchers reported that air and automobile travel were two of the main emission sources among the world's wealthiest people. The study revealed that during the 15-year period, the richest 10% blew out one-third of the world's remaining "carbon budget"—the amount of carbon dioxide that can be added to the atmosphere without causing global temperatures to rise above 1.5°C—as set under the Paris Agreement. It also found that annual emissions grew by 60% between 1990 and 2015, with the richest 5% responsible for 37% of this growth.

According to the study, "the per capita footprint of the richest 10% is more than 10 times the 1.5°C-consistent target for 2030, and more than 30 times higher than the poorest 50%."

The researchers noted a sharp drop in CO2 emissions during the coronavirus pandemic. However, they said that "emissions are likely to rapidly rebound as governments ease Covid-related lockdowns."

In 2020, climate change has fueled deadly cyclones in India and Bangladesh, massive locust swarms that have devastated crops throughout Africa, and intense heatwaves and wildfires in Australia and western North America, among many other events. 

Oxfam is calling for more taxes on high-carbon luxuries, including a frequent-flier tax, in order to invest in lower-emission alternatives and improve the lives of the world's poorest people, who are the least responsible for—but most affected by—the disasters and harm unleashed by global CO2 emissions. 

"The over-consumption of a wealthy minority is fueling the climate crisis, yet it is poor communities and young people who are paying the price," wrote study author Tim Gore, Oxfam's head of climate policy. "Such extreme carbon inequality is a direct consequence of our governments decades-long pursuit of grossly unequal and carbon intensive economic growth."

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Off the Top of My Head

Redefining the American Dream

by John Lawrence

I've heard a lot about the American Dream from the Republican convention. Put simply, the American Dream is having more stuff than your parents had. It's the freedom to accumulate wealth unconditionally. That's their definition of freedom. If I hear the phrase 'hard work and determination' one more time, I'm going to puke. By the way they can retire the words 'kitchen table' from politics as well. Conservatives maintain that equality is about equality of opportunity not equality of outcome. Supposedly everyone starts the race at the same starting line, but does everyone? Do black people who have suffered from the legacy of slavery, Jim Crow and redlining start from the same starting line? Even in golf they give handicaps to equalize the chances for all players regardless of ability. The point is that never does everyone start from the same starting line.

Take my sister for example. She was born before they measured the oxygen level of the baby in utero. The doctor wasn't there, and the nurse kept telling my mother to hold the baby back. As a result my sister was born with severe brain damage and was stuck with the mental capacity of a one year old her entire life. She never learned to talk or take any responsibility for herself. She needed caregivers her entire life and those caregivers primarily were my mother and father. Lucky for her that at least she was born into a family that had the capacity to love and take care of her.

The American Dream as defined by Republicans is unsustainable. It is based on unlimited consumption which is killing our planet. We cannot continue to consume without limitation and have a healthy planet. The planet's resources are not unlimited. We cannot continue to consume fossil fuels without leading to a hell on earth. I think California wildfires and Hurricane Laura are proving that today. Unlimited fossil fuel production, as advocated by Republicans, is killing us. Taking away regulations that allow corporations to pollute our air and waterways freely is killing us while it maximizes profits. The Democratic version of the American Dream - a well paying job, a decent house in a decent neighborhood, medical care, educational opportunities and a dignified old age - is much more sustainable. Republicans cater to those among us that are favored by nature, that are favored by not having any physical or mental vulnerabilities, that are favored by access to capital, that are favored by living in neighborhoods having the best schools. Republicans are always pushing charter schools. That's because the funding for public schools comes from the tax base in the neighborhood where the school is located. if a school is in a poor neighborhood, the tax base is poor with the result that the school is poor. It's as simple as that. Change the way schools are funded so that schools in poor neighborhoods have the same resources as schools in rich neighborhoods, and that advantage for rich kids goes away. No need for privatized charter schools which, by the way, still want public money.

So where at the Republican convention were the real Republican constituents.Their real constituents are not truck drivers, first responders and nurses. Their real constituents are hedge fund managers, bankers and billionaires. Sure they give hypocritical lip service to the 'hard working middle class', but they are not about the middle class. Did Jamie Diamond, CEO of JPMorgan Chase and billionaire, speak? Did hedge fund manager of the Blackstone group, Stephen Schwarzman, worth over $118 billion, did he speak? No, the Republicans pandered to Joe SixPack and never mentioned the vast gap between the Lloyd Blankfeins (billionaire chairman of Goldman Sachs) and the Ray Dalios (Bridgewater Associates - salary $2 billion) and the rest of us. But these are the real constituents of the Republican Party. Of course they have their base of white supremicists as well. So where was the CEO of Lockheed Martin, Marillyn Hewson with a salary of $30 million? Where are the defense contractors who benefit from a bloated defense budget 3 times bigger than China's? Instead, they celebrated the fact that Trump added $54 billion to it, an amount almost as large as Russia's entire defense budget.

So what is a sustainable American Dream. It's one devoid of fossil fuels. It's one where there's no drilling in the Alaskan Wildlife Refuge. It's one of renewable energy. It's one that recognizes the threat of global warming. It's one that recognizes the need for Medicare for All or equivalent that covers everyone. It's one that recognizes the need to rebuild American infrastructure. It's one that recognizes the need to raise the wages of essential workers to a living wage. It's one that needs to pay caregivers. It's one that recognizes the need to deal with economic inequality by taxing the rich and using the money to fund free education from pre-K through graduate school without students having to go into a lot of debt. It's one that recognizes the responsibility to deal with the 40% of the world's population in dire poverty, without even a functioning sanitation system, especially the 60 million refugees that the US is responsible for creating so that they too can have a Dream. In short it's one that recognizes the role of Americans not simply as individual wealth creators and accumulators for themselves as individuals, but one in which we all endeavor to make the world a habitable place for all human beings now and in the future.

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?

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.

'Of, By, and For the 1%': Sanders Condemns Trump Budget as 'Immoral Document' Designed to Hurt Families and Children

"What kind of unbelievable moral framework allowed this White House to propose $182 billion in cuts to nutrition assistance from needy families, when nearly one in seven households with children are food insecure?"

by Jake Johnson, staff writer

 0 Comments

Copies of President Trump's FY2021 budget are shown after being delivered to the House Budget Committee on February 10, 2020 in Washington, D.C. (Photo: Mark Wilson/Getty Images)

Sen. Bernie Sanders on Monday condemned President Donald Trump's newly released $4.8 trillion budget blueprint as a "shameful" proposal that would strip nutrition assistance and healthcare from needy families while rewarding the wealthy and large corporations with more handouts.

"The Trump budget is an immoral document. It is a budget that takes our collective resources and hands them to the wealthiest families and largest corporations in this country and ignores the needs of the most vulnerable among us."
—Sen. Bernie Sanders

"The Trump budget for 2021 is a budget of, by, and for the one percent," Sanders, a 2020 Democratic presidential candidate and ranking member of the Senate Budget Committee, said in a statement. "It reflects profoundly unethical priorities and shows that the president is—and it gives me no great pleasure to say this—a liar."

Contrary to Trump's campaign promise to shield Medicare, Medicare, and Social Security, the FY2021 budget blueprint calls for more than a trillion in combined cuts to the three programs over the next decade—around $920 billion to Medicaid alone.

The proposal would also slash by billions of dollars the Children's Health Insurance Program (CHIP), the Supplemental Nutrition Assistance Program (SNAP), and federal student loan assistance.

Meanwhile, the plan would boost military spending to over $740 billion in fiscal year 2021, extend Trump's tax cuts for the rich, and provide $2 billion for the construction of a wall along the U.S.-Mexico border.

Trump promised he would not cut Social Security, Medicare and Medicaid. He lied. The budget Trump released today would:

- Cut Medicare by $500 billion
- Cut Social Security by $24 billion
- Cut Medicaid by hundreds of billions

All to pay for his massive tax breaks to the top 1%

— Warren Gunnels (@GunnelsWarren) February 10, 2020

"The old cliché is that a budget is a moral document," Sanders said. "What kind of unbelievable moral framework allowed this White House to propose $182 billion in cuts to nutrition assistance from needy families, when nearly one in seven households with children are food insecure? The Trump budget, outrageously, even cuts billions from a program that provides nutrition assistance for pregnant women, new moms, and their babies."

The SNAP cuts in Trump's budget are both massive and immediate. SNAP benefits are already small - just $1.40 per person per meal. Cutting the program by a quarter is extremely cruel. pic.twitter.com/IzXNqMbaOS

— Senate Budget Committee (@SenateBudget) February 10, 2020

Sanders vowed to do everything in his power to ensure Trump's plan doesn't make it through Congress.

"The Trump budget is an immoral document," said Sanders. "It is a budget that takes our collective resources and hands them to the wealthiest families and largest corporations in this country and ignores the needs of the most vulnerable among us. It is proof that this president did not care about the 'forgotten men and women' he said he would help—it appears he is too busy enriching his billionaire friends."

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'Staggering' New Data Shows Income of Top 1% Has Grown 100 Times Faster Than Bottom 50% Since 1970

Published on Monday, December 09, 2019 by Common Dreams

by Julia Conley, staff writer

"The bulk of a generation of economic growth has been captured and concentrated in a few hands, and many people have barely seen any of it."

New data released Monday explains the numbers behind Sen. Bernie Sanders' often-cited statistic that the three richest Americans hold more wealth than the 160 million people who make up the bottom 50% of the population.

Washington Post columnist Greg Sargent published what he called "stunning" findings from Stanford University economist Gabriel Zucman, showing how both an explosion in annual earnings by the rich and an increasingly regressive tax structure have combined to allow the top 1% of Americans' wealth to triple over the past five decades.

Meanwhile, working people are taking home just $8,000 more per year than they did in 1970.

In what Sargent called "the triumph of the rich, which is one of the defining stories of our time," the richer a household is, the more its take-home wealth has grown in the past 50 years.

New data:

For top 1%, average income has risen by $800,000 since 1970.

For top 0.1%, it has risen by $4 million.

For top .01%, it has risen $20 million.

Bottom 50%? $8,000.

All this is *after taxes and transfers.*

Great work from @gabriel_zucman:https://t.co/iaxntlHdvl

— Greg Sargent (@ThePlumLineGS) December 9, 2019

The top 1% of earners make an average of more than $1 million per year after accounting for taxes they pay, a 50-year increase of more than $800,000—100 times the growth rate of the bottom 50%.

The wealth of the top .1% is five times larger than it was in 1970, while that of the top .01% is seven times larger, at over $24 million in 2018.

Zucman and fellow economist Emmanuel Saez, his co-author of the new book "The Triumph of Injustice," provided a chart showing how each group of earners' take-home pay has changed since 1970. The wealthiest Americans' assets skyrocketed by millions of dollars even in the first decade of the 21st century—when people in the bottom 50% saw their average take-home income decrease.

For middle-income earners since 1970, income-plus-effective tax rates have gone from $44,000 to about $75,000—a greater increase than those in the bottom 50% of earners, "but still their income growth rate has been very low," Zucman told the Post.

Zucman, who with Saez advised Sen. Elizabeth Warren (D-Mass.) on her Ultra-Millionaires Tax, emphasized that both the explosion of yearly income at the top and the effective tax rates of people in all income brackets must be taken into account to understand the massive wealth gap.

"You have two trends reinforcing each other," Zucman told the Post. "There has been the rise in market income inequality—the rise in pretax income inequality. At the same time, the tax system has become much less progressive at the top of the income distribution."

"People have this idea that government redistribution has upset some of the rise in inequality, but essentially that's not the case," the economist added.

Zucman's findings were revealed two months after New York Times columnist David Leonhardt published a graphic showing how in 2018, for the first time in U.S. history, the 400 richest Americans paid less in taxes than any other income group.

The richest Americans have benefited from numerous changes to tax laws and enforcement in recent decades, Sargent wrote, "including domestic and international tax avoidance, the whittling away of the estate and corporate taxes, and the repeated downsizing of top marginal rates."

Tony Annett of the Center for Sustainable Development at Columbia University wrote that Zucman's research shows how "it is no longer meaningful to rely on GDP" as a measure of economic well-being, since the benefits of growth are no longer being shared among all earners as they were in previous eras.

With this kind of distribution, it is no longer meaningful to rely on GDP, not even accounting for its other deficiencies. GDP became a widely used measure of economic well-being at a time when the benefits of growth were shared widely. https://t.co/IIL5EYMMGy

— Tony Annett (@tonyannett) December 9, 2019

Seth D. Michaels of the Union of Concerned Scientists described Zucman's findings as showing how many people of his generation have seen the bulk of economic growth "captured and concentrated in a few hands."

even if you know that inequality is increasing, the scale is staggering to consider. the bulk of a *generation* of economic growth has been captured and concentrated in a few hands, and many people have barely seen any of it. https://t.co/XldPkUoIM9

— Seth D. Michaels (@sethdmichaels) December 9, 2019

"The tiny number of people raking in the overwhelming majority of the last 40 years of economic growth are distorting the economy and the political system like a black hole, everything falling toward their interests at high speed," Michaels wrote.

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Democratic Candidates Should Focus On Critical Societal Problems

by Frank Thomas

I may also go for Michael Bloomberg if he gets a high poll rating by October 2020.

Otherwise, I’ll being choosing between Warren and Sanders. Like many people, I'm getting more taken in by the urgent priority to defeat Trump. Besides climate change, there are also other extremely significant societal problems noted below that for some time have been tearing our country apart socially and economically. If these aren’t addressed convincingly by Bloomberg, I don't think Democrats will go for him in the nomination process. Things don't have to be revolutionarily ‘torn down,’ but major constructive changes are a necessity. Such an approach calls for a timely phasing in of well-targeted structural improvements in following areas: healthcare, income/wealth gap, infrastructure, poor quality pre-college education and burdensome college tuition costs that are adding to impoverishment millions of families caused by decades of stagnant wages.        

Right now, it's obvious the general public doesn't have a clue what Bloomberg's constituency is beyond the well-to-do, socially liberal and fiscally conservative types.

On the positive side, he doesn't need their money. Past issues he has focused most on are climate change, gun control and fighting the fiscal policies of the more liberal wing of the Democratic Party. But I doubt Bloomberg can win the nomination if he fails to address clearly his approach and solutions to following severely ingrained societal problems areas. They will only get much worse and complex, perhaps even become unsolvable, as a result of years of government reliance on incremental band aid improvements to Big structural problems. Political polarization and money interests have caused an absolutely deplorable ineffectiveness in bottom-up and top-down governance that meets societal wants, needs fairly and pragmatically for all.   

• HEALTHCARE: Quality healthcare for the average family has reached the insane cost level of $16,000-$19,000 annually in premiums, deductibles, copays for mediocre medical coverage. Extremely high healthcare and college costs combined with almost stagnant wage growth the past 40 years for over 80% of U.S. households is an 'economic high risk recipe' for an eventual  societal implosion. If EU countries can deliver universal healthcare plans for 10 to 80 million populations at half the household cost with better medical coverage, why can't we do the same - say, by developing a Medicare Plan For ALL Option (that incorporates Obamacare) for +-120 million households that are currently self-insured? Prove its superior benefits first with a smaller step that will eventually attract others.
• INCOME/WEALTH GAP: Since 1979, an incredibly huge income/wealth Gap has been taking place between the top 10% and bottom 90%. (see reference). The average yearly wage of the Bottom 90% was $29,608 in 1979 vs. $36,182 in 2017, a rise of  22.2%. The average yearly wage incomes of the Top 9% and 1% were $152,476 and $718,766 in 2017, an increase since 1979 of 57.4% and 157.3%, respectively. And the wage of the Top 0.1% since 1979 has been out of sight increasing from $622,018 to $2,756,865 in 2017, an increase of 343.2%. These wage figures exclude income from stocks, bonds, other investments. They reflect fact we have the lowest progressive tax rates and highest income (wealth) disparities of all world countries except perhaps China and India. U.S. highest progressive tax rate is 37% on incomes above $500,000 per year versus 51.75% in the Netherlands on incomes above $75,000 (euro 68,500).

Here’s a stark summary of U.S. average wage thresholds of the Top 10% and Bottom 90% wage earner groups.

WAGE GROUP SHARES Of TOTAL WAGES – 1979-2017

EARNER GROUP	WAGE THRESHOLD	% Of TOTAL WAGES
Top 0.1%	$2,756,900	5.2%
Top 1%	$718,766	13.4%
Top 5%	$299,810	28.0%
Top 10%	$118,400	39.1%
Bottom 90%	$ 36,182	60.9%

     

The Economic Policy Institute reports: “The Bottom 90% earned 69.8% of all wages in 1979 but just 60.9% in 2017. In contrast, the Top 1% increased its share of wages from 7.3% to 13.4% in 2017, a near doubling. The growth of wages for the Top 0.1% drives the Top 1`% share of wages which tripled Top 0.1%’s share of total wages from 1.6% in 1979 to 5.2% in 2017.”

Around 140 million of 168 million U.S. workers have been living on a near survival wage growth trend for a long time. A wage of less than $25,000 is earned by 42% of U.S. workers or ±70 million workers. The Top 1% of Americans own 40% of our nation's wealth. Several billionaires including JP Morgan Chase CEO Jamie Dimon, Bridgewater Associates, founder Ray Dalio, Warren Buffet of Berkshire Hathaway have said that current levels of income and wealth inequality are unsustainable.

It is well proven that savings and investments of ultra-wealthy Americans do not necessarily  "trickle down" in ways that grow the economy or benefit most Americans. Investments of the wealthy including billionaires are planted all over the world in exotic tax shelters, real estate, stocks, bonds, yachts and works of art. 

INFRASTRUCTURE & SCHOOLS: According to the American Society of Civil Engineers (ASCE), it will cost $4.6 trillion to bring America’s infrastructure to a good state of repair. But only 55% has been committed leaving a $2.1 funding gap. Improving roads and bridges alone would require $1.1 trillion more than the states, localities, and federal government have allocated. Schools need another $380 billion beyond what's invested. Waterways, ports, levees, dams need another $150 billion. (see reference). Other studies show that another $473 billion of investments is needed in drinking water treatment and distributions. These needs vary sharply by state due to differences in size, congestion, condition, and age of existing infrastructure.

• State dollars and borrowing pay for 72% of Infrastructure projects; the federal government pays just 28% for a very low 0.5% of GDP. State and local spending is now way down from 2.4% of GDP in the early 2000s to 1.87% in 2017 and now is at its lowest level since 1950. Investments in Public Infrastructure stirs economic growth, private productivity, jobs, and can improve a state's quality of life, opportunity, and the environment. Why aren't the private sector investments being made is the BIG question?  Is it lack of federal funding because of massive  federal deficits, debt and interest cost? Trump's tax cuts went largely to the Top 10% and corporations. These cuts are now contributing to our annual $1 trillion federal deficits.
• BUT, if our nation can raise ± $9 trillion in federal funds as we did to save our economy from collapsing during the Great Recession, why can't we come up with ± $3 trillion for critically needed infrastructure/education improvements? These and other societal investments needed can be funded in a major part by raising current maximum federal tax rate of 37% on incomes above $500,000 to 40% on incomes above $1 million – plus eliminating tax avoidance, tax deductions or special tax structures for real estate, loss carry forwards provisions, corporate earnings held abroad in tax havens. The aim should be to introduce fiscally economically constructive tax funding changes that are relatively easy to calculate and oversee, and deter steep rises in federal/state debt levels and interest cost

Frank Thomas The Netherlands November 30, 2019

References :

(1) Economic Policy Institute - Top 1.0% Reaches Highest Wages Ever - Up 157% Since 1979, Oct. 18, 2018

(2)  https://www.cbpp.org/research/state-budget-and-tax/its-time-for-states-to-invest-in-infrastructure

by Robert Reich

Tuesday, May 28, 2019

“Oligarchy” means government of and by a few at the top, who exercise power for their own benefit. It comes from the Greek word oligarkhes, meaning “few to rule or command.”

Even a system that calls itself a democracy can become an oligarchy if power becomes concentrated in the hands of a few very wealthy people – a corporate and financial elite.

Their power and wealth increase over time as they make laws that favor themselves, manipulate financial markets to their advantage, and create or exploit economic monopolies that put even more wealth into their pockets.

Modern-day Russia is an oligarchy, where a handful of billionaires who control most major industries dominate politics and the economy.

What about the United States?

According to a study published in 2014 by Princeton Professor Martin Gilens and Northwestern Professor Benjamin Page, although Americans enjoy many features of democratic governance, such as regular elections, and freedom of speech and association, American policy making has become dominated by powerful business organizations and a small number of affluent Americans.

The typical American has no influence at all.

This is largely due to the increasing concentration of wealth. In a 2019 research paper, Berkeley economics professor Gabriel Zucman determined that the richest 1 percent of Americans now own 40 percent of the nation’s wealth. That’s up from 25 to 30 percent of the nation’s wealth in the 1980s.

The only country Zucman found with similarly high levels of wealth concentration is … Russia.

America has had an oligarchy before – in the first Gilded Age, which ran from the 1880s until the early 20th century. 

Teddy Roosevelt called that oligarchy the “malefactors of great wealth,” and fought them by breaking up large concentrations of economic power–the trusts–and instituting a progressive federal income tax.

His fifth cousin, Franklin D. Roosevelt, further reduced their power by strictly regulating Wall Street, and encouraging the growth of labor unions. The oligarchy fought back but Roosevelt wouldn’t yield.

“Government by organized money is just as dangerous as Government by organized mob,” he thundered in 1936. “Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me—and I welcome their hatred.”

But the American oligarchy has returned. We are now in a second Gilded Age. As the great jurist Louis Brandeis once said, “We can have democracy in this country or we can have wealth concentrated in the hands of a few, but we cannot have both.”

We must, once again, make the correct choice and reduce the economic and political power of the American oligarchy.

'That Backfired': Watch Bernie Sanders Counter Right-Wing Talking Point, Make Case for Medicare for All on Fox News

Published on Tuesday, April 16, 2019 by Common Dreams

The Fox town hall audience cheered when moderator Bret Baier polled support for transitioning to a single-payer system

by Jake Johnson, staff writer

 

22 Comments

 Democratic presidential candidate Sen. Bernie Sanders (I-Vt.) participates in a Fox News town hall on April 15, 2019, in Bethlehem, Pennsylvania. (Photo: Mark Makela/Getty Images)

During a town hall hosted by Fox News Monday night, Sen. Bernie Sanders countered one of the most common right-wing talking points against Medicare for All and made the case for transitioning to a single-payer system—sparking applause from the Bethlehem, Pennsylvania audience.

"Democratic socialism, to me, is creating a government and an economy and a society which works for all, rather than just the top one percent."
—Sen. Bernie Sanders

 

"Millions of people, every single year, lose their health insurance. You know why? They get fired. Or They quit. And they go to another employer," said the Vermont senator and 2020 presidential contender after Fox moderator Bret Baier suggested 180 million Americans with employer-provided insurance would lose coverage under Medicare for All.

"Every year, millions of workers wake up in the morning and their employer has changed the insurance that they have," Sanders added. "So this is not new... Now what we're talking about actually is stability. That when you have a Medicare for All [program] it is there now and it will be there in the future."

Bernie counters talk-point about losing employer-based insurance. Points out that Medicare For All would provide everyone with long-term health care stability. #Bernie #BernieFoxTownHall #berniesanderstownhall pic.twitter.com/rdzZ7oB7Hh

— Digital Left (@DigitalLeft) April 16, 2019

When Baier polled the town hall audience to gauge support for switching to a Medicare for All system, most hands shot up and many cheered.

As activist Jordan Uhl put it, Baier's question "backfired spectacularly." According to recent polling, a majority of Republican voters support Medicare for All.

That backfired... #BernieTownHall pic.twitter.com/NCKNDIQauZ

— DSA for Medicare for All (@dsam4a) April 15, 2019

In addition to highlighting specific planks of his policy platform—from Medicare for All to tuition-free public college to a living wage—Sanders also used his Fox News town hall to explain his broader vision of a more egalitarian U.S. society, in which wealth and political power are not concentrated at the very top:

Democratic socialism, to me, is creating a government and an economy and a society which works for all, rather than just the top one percent. It means ending the absurd inequalities that exist today. And I want to lay this out, because you're not going to hear this much on Fox. And you're not going to hear this much in the media in general. And the American people have got to conclude whether we think it is appropriate, and what America is about... to have three families owning more wealth than the bottom half of American society—160 million people. Whether it's appropriate for the top one percent to own more wealth than the bottom 92 percent. 

Senator Bernard Sanders of Vermont on Fox News: "Democratic socialism to me is creating a governor and an economy that works for all rather than just the top 1%.. we want to create a political system based on one person one vote not billionaires buying elections" #BernieTownHall pic.twitter.com/NzBjhisfux

— People for Bernie (@People4Bernie) April 15, 2019

Sanders closed his Fox appearance with call-and-response with the town hall audience on a broad array of issues, including infrastructure, wages, and taxes on the ultra-wealthy:

.@BernieSanders closing statement at #BernieTownHall on @FoxNews pic.twitter.com/mrpB9jTgwn

— People for Bernie (@People4Bernie) April 15, 2019

Watch the full town hall:

Part 1

Part 2

---

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Off the Top of My Head

Fiat Money in the US and China

by John Lawrence, July 28, 2018

Most people are amazed to find out that, when a bank loans you money, it creates it out of thin air. It is not backed by gold or anything else. Nixon took us off the gold standard in 1971. Before that people could cash in US dollars for an equivalent amount of gold. Money not backed by anything is called fiat money. It is created by private banks in the US when they loan you money. In China the government creates the fiat money. A new wrinkle was added during the 2008 financial crisis. Money was also created by the US' central bank, the Federal Reserve which is privately not publicly owned. That money was given to the big banks to keep them solvent. It did not trickle down to the average citizen.

China uses fiat money to keep its workers employed. In addition to activities within China, they are building infrastructure in other countries recreating the Silk Road which was a trade route that connected the Eurasian land mass. It is called the Belt and Road initiative. Since the US government has no mechanism to create fiat money(despite the fact that Abraham Lincoln did it during the Civil War with the introduction of greenbacks), the only fiat money being created in the US goes to big banks and through them to hedge funds which have connections with the big banks.

Fiat money in the US fuels the class division between the 1% and the 99% because it is only made available to Wall Street which actually owns the Fed. In China fiat money not only keeps its workers employed, they are employed doing something constructive - building infrastructure. The only way the US could build much needed infrastructure in the US is  for the Treasury to issue more bonds which would only add to the national debt. If there were a true government owned central bank in the US, it could create money to build infrastructure thus creating jobs without the US government going into debt.

China just might have a better way to create fiat money and use it for a constructive purpose. The US fiat money goes mainly to hedge funds which use it to destroy businesses as was the case with the recent Toys R US and Hostess fiascoes. Instead of using fiat money to create jobs, in the US jobs are destroyed when a hedge fund takes a business bankrupt after loading it with debt, extracting money in management fees and shutting it down when it collapses under the weight of all that debt. Employees lose their jobs with no severance pay as was the case with Toys R Us.

China is using fiat money to build the economies of China and other nations from the ground up keeping its workers gainfully employed at the same time. The US is letting its infrastructure and its work force wither while making banks and bank connected hedge funds rich.

As Global 1% Seize Economy's Gains, 'Unprecedented Wage Stagnation' for Everyone Else

Published on Thursday, July 05, 2018 by Common Dreams

"With workers worldwide being left behind, says Oxfam, latest OECD reports shows "we need to build an economy that works for everyone, not just the few at the top."

by Jake Johnson, staff writer

 

6 Comments

Protesters hold signs as they march to Los Angeles City Hall during the 'Occupy Los Angeles' demonstration in solidarity with the 'Occupy Wall Street' protest in New York City on October 1, 2011 in Los Angeles, California. (Photo: Kevork Djansezian/Getty Images)

The world's largest economies have grown at a steady pace and unemployment has consistently fallen in the years following the greed-driven global financial crisis of 2008, but income gains during the so-called recovery have been enjoyed almost exclusively by the top one percent while most workers experience "unprecedented wage stagnation."

"Workers' share of national income [in the U.S.] dropped about eight percentage points between 1995 and 2013, faster than anywhere but Poland and South Korea over that time."
—Andrew Van Dam, Washington Post

 

That's according to the OECD's 2018 Employment Outlook (pdf) published Wednesday, which examines recent economic trends and finds that wage growth for most citizens in the 35 industrialized nations studied is "missing in action" due to a number of factors, including the the rapid rise of temporary low-wage jobs and the relentless corporate assault on unions.

The decline of union bargaining power has been particularly striking in the United States, where just "12 percent of U.S. workers were covered by collective bargaining in 2016—among all the nations the OECD tracks, only Turkey, Lithuania and South Korea have been lower at any point this millennium," notes the Washington Post's Andrew Van Dam. "Workers' share of national income [in the U.S.] dropped about eight percentage points between 1995 and 2013, faster than anywhere but Poland and South Korea over that time."

New report shows wages of the top 1% have grown much faster than those of other earners, across 9 @OECD countries. We need to build an economy that works for everyone, not just the few at the top. https://t.co/450Q8aW4aP

— Oxfam EU (@OxfamEU) July 5, 2018

In a statement on Tuesday, OECD Secretary General Angel Gurría said "[t]his trend of wageless growth in the face of a rise in employment highlights the structural changes in our economies that the global crisis has deepened, and it underlines the urgent need for countries to help workers."

"Well-targeted policy measures and closer collaboration with social partners are needed to help workers adapt to and benefit from a rapidly evolving world of work, in order to achieve inclusive growth," Gurría added.

In sharp contrast to the flat wages of average workers, those in the top one percent are seeing their incomes climb, continuing a decades-long trend.

The following graphic, published by the Guardian using OECD data, captures the long-term trend that continues in the present:

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Off the Top of My Head

Should Billionaires Help to House the Homeless?

by John Lawrence

Wouldn't it be nice if capitalism were modified so that those who are super successful would have their earnings capped at, say, $100 million, and whatever exceeded that went to build affordable housing for the homeless? Is any invention worth a billion dollars? Can anyone spend more than a hundred million? The capitalist system is set up in such a way that successful entrepreneurs attract huge amounts of capital from investors. Are they rich because people buy their products? No, they are rich because rich people buy their stock.

A person's riches should be capped and the excess should be spent on society in general. Society is getting the short end of the stick while rich entrepreneurs get more money than they could possibly spend. A wealth tax would accomplish the same goal. The system as it exists today sucks because it is set up in such a way that the rich get richer, and the poor lose their jobs and their housing. Most of the successful companies today use the internet and automation to eliminate jobs. The more jobs they eliminate, the more Wall Street likes them and bids up their stock.

Then besides this, Trump and the Republicans give them huge tax breaks. The tax burden is borne by the middle class and the poor while the rich corporations buy back their own stock making them even richer.

Bloomberg reports:

Why are people like Bill Gates, Jeff Bezos and Mark Zuckerberg so incredibly rich? Sure, they’re great businesspeople, and they had the right ideas at the right time. But most importantly, when their businesses succeeded, they owned a large portion of the equity.

Equity, or stock, is the riskiest type of asset ownership. It’s the most volatile, and it’s the first to get wiped out when a company goes bankrupt. But it also has unlimited upside -- the gains can, in theory, be infinite. It’s the entire upper tail. So of course the largest fortunes that we see -- the richest individuals -- were made through equity ownership.

But the big payouts to other stockholders are also responsible for much of the vast increase in wealth inequality. In 1980, the richest 5 percent of Americans owned half of the country’s wealth. In 2012, it was almost two-thirds.

Stock represents nothing more than rich people, who have access to cheap interest free money spewed out by the Federal Reserve, spending that money to buy stock which bids up the price. Then they cash in and pay off the loan. Riches are generated not by a company selling goods and services to the general population, but by financial manipulation of stock values. Any sane society would limit these types of activities since they do not further the interests of society in general. The net result is money creation that goes immediately into the hands of the rich making them even richer and in a position to control the political system, setting up the laws so that they favor the rich even more.

All-Time Highs for Stock Buybacks and Bank Profits as Workers Languish in Trump's America

Published on Tuesday, May 22, 2018 by Common Dreams

"We've got to repeal the outrageous corporate welfare of this tax plan and pass real tax reform that actually helps working families—not the one percent," said Sen. Bernie Sanders

by Jake Johnson, staff writer

 

8 Comments

For years, armies of bank lobbyists and executives have groaned about how financial rules are hurting them. But there's a big problem with their story—banks are making record profits," Sen. Elizabeth Warren (D-Mass.) concluded in a tweet on Tuesday. (Photo: Alex Proimos/Flickr/cc)

As America's largest corporations continue their unprecedented stock buyback spree in the wake of President Donald Trump's $1.5 trillion tax cut, new government data published on Tuesday showed that U.S. banks are also smashing records thanks to the GOP tax law, raking in $56 billion in net profits during the first quarter of 2018—an all-time high.

"The Trump/Republican tax plan has been nothing but a giant gift to corporations so that executives and shareholders can get richer."
—Sen. Bernie Sanders (I-Vt.)

 

The new data, released by the Federal Deposit Insurance Corporation (FDIC), comes as the House of Representatives is gearing up to pass a bipartisan deregulatory measure that would reward massive Wall Street banks like JPMorgan Chase and Citigroup while dramatically increasing the risk of another financial crisis.

As Common Dreams reported, the Senate easily passed the bill in March with the help of 16 Democrats.

The banking industry's record-shattering profits fit with an entirely predictable pattern that has emerged following the passage of the GOP tax bill last December: America's most profitable corporations are posting obscene profits and using that cash to reward wealthy shareholders through stock buybacks while investing little to nothing in workers, despite their lofty promises.

"For years, armies of bank lobbyists and executives have groaned about how financial rules are hurting them. But there's a big problem with their story—banks are making record profits."
—Sen. Elizabeth Warren (D-Mass.)

 

According to a CNN analysis published on Sunday, "S&P 500 companies showered Wall Street with at least $178 billion of stock buybacks during the first three months of 2018." As Common Dreams reported earlier this month, major corporations are on track to send $1 trillion to rich investors through buybacks and dividend increases by the end of the year.

Most Americans, meanwhile, have said they are seeing very few noticeable benefits from the massive tax cuts and—according to a new study by United Way—nearly half of the U.S. population is still struggling to afford basic necessities like food, housing, and healthcare.

"The Trump/Republican tax plan has been nothing but a giant gift to corporations so that executives and shareholders can get richer," Sen. Bernie Sanders (I-Vt.) wrote in a Facebook post on Tuesday. "We've got to repeal the outrageous corporate welfare of this tax plan and pass real tax reform that actually helps working families—not the one percent."

How corporations are spending their tax breaks:

✅ Stock buybacks for their wealthy investors

❌ Long-term investments in their workershttps://t.co/sR1x3OYzoq

— Tax March (@taxmarch) May 22, 2018

Instead of addressing the deep-seated financial struggles much of the American public is facing even as the stock market continues to soar and as Trump boasts of an economic boom, Congress is preparing to provide an even greater windfall to wealthy bankers on Tuesday by gutting crucial post-crisis regulations and putting taxpayers on the hook for yet another bailout.

This morning, it was announced that America’s banking sector hit a new record high of $56 billion in net income in the first quarter of 2018.

This afternoon, the House is set to pass the #BankLobbyistAct to supposedly "provide relief" to the banking sector. What a shameful day. pic.twitter.com/OYNUc7FQf6

— Public Citizen (@Public_Citizen) May 22, 2018

"For years, armies of bank lobbyists and executives have groaned about how financial rules are hurting them. But there's a big problem with their story—banks are making record profits," Sen. Elizabeth Warren (D-Mass.) concluded in a tweet on Tuesday. "Congress has done enough favors for big banks—the House should reject the Bank Lobbyist Act."

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'We are the 99%': But Richest 1% Will Soon Own Two-Thirds Of World's Wealth

Published on Saturday, April 07, 2018 by Common Dreams

Anger over inequality reaches a ‘tipping point’

by Common Dreams staff

 

72 Comments

Occupy Oakland General Strike on October 2, 2011. (photo/cc/Brian Sims)

More than two-thirds of the world's entire wealth will be owned by the richest 1% of people by 2030, new research warns.

The shocking findings of the new report produced by the UK's House of Commons Library claims that if trends which began after the 2008 financial crisis continue, the 1% will control 64% of world's money in just 12 years' time.

The widening gap between the 1% and everyone else was first highlighted by the Occupy Wall Street movement, which started in 2011 and famously used the slogan: "We are the 99%."

The study claims that the wealth of the richest one percent grows at six percent annually, outstripping the three percent annual growth of everyone else, causing a continual movement of money to the top.

Polling that accompanies the study indicated that the majority of people are unhappy about wealth inequality. Thirty-four percent said that the super-rich would have the most power in 2030, more even than governments (28 percent). 

More than four in ten of those polled also said they worried that rising income inequality would lead to corruption or the "super-rich enjoying unfair influence on government policy".

Since 2008, the assets of the top 1% have been growing at twice the rate of the other 99%.

If that rate carries on, the 1% will own about $305 trillion by 2030, up from $139 trillion today.

The Guardian reports:

The research was commissioned by Liam Byrne, the former Labour cabinet minister, as part of a gathering of MPs, academics, business leaders, trade unions and civil society leaders focused on addressing the problem...

The hope is to create pressure for global action when leaders of the G20 group of nations gather for a summit in Buenos Aires in November. Byrne, who organised the first OECD global parliamentary conference on inclusive growth, said he believed global inequality was “now at a tipping point”.

“If we don’t take steps to rewrite the rules of how our economies work, then we condemn ourselves to a future that remains unequal for good,” he said. “That’s morally bad, and economically disastrous, risking a new explosion in instability, corruption and poverty.”

<

Finally, here’s the data tables on Britain’s attitudes to spiralling inequality by @OpiniumResearch https://t.co/ePm1kqe9EX

— Liam (@LiamByrneMP) April 7, 2018

 

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'World Economic Fiasco': Thousands March Ahead of Trump's Davos Arrival

Published on Wednesday, January 24, 2018 by Common Dreams

"The discussions between the richest one percent of the world and a man who fuels an aggressive atmosphere towards women and minorities has no place in Switzerland."

by Jessica Corbett, staff writer

 

1 Comments

Anti-capitalist and anti-Trump protesters took to the streets across Switzerland ahead of the U.S. president's expected arrival on Friday. (Photo: Tasnim News Agency/cc)

Ahead of U.S. President Donald Trump's arrival at the annual meeting of the World Economic Forum (WEF) in Davos, thousands of anti-Trump protesters took to the streets across Switzerland, decrying racism, sexism, capitalism, and dirty energy practices.

"We are protesting against both Trump and the WEF," Young Socialists of Switzerland president Tamara Funiciello told The Local, denouncing the U.S. president as well as the meeting that brings together businessmen and world leaders from across the globe.

"The discussions between the richest one percent of the world and a man who fuels an aggressive atmosphere towards women and minorities," Funiciello added, "has no place in Switzerland."

Right now: Thousands rally against Donald Trump in Zurich, Switzerland. #WEF18 pic.twitter.com/7QRSs02CBz

— Fabian Eberhard (@FabianEberhard) January 23, 2018

Thousands of people marched in Zurich while hundreds descended on Geneva, Lausanne, and Fribourg. Their signs declared: "Trump Not Welcome"; "Switzerland Is Hosting Nazis"; "World Economic Fiasco"; "Racist Sexist Capitalist"; "Don't Touch Women's Rights"; "There Is No Planet B"; and "No Trump, No Coal, No Gas, No Fossil Fuels."

Despite patrols by thousands of Swiss soldiers and a ban on protesting in Davos, where the meeting is being held, Reuters reports that on Tuesday, "About 20 demonstrators broke through security to reach the Davos Congress Centre, holding banners and shouting 'Wipe out WEF' before they were peacefully disbanded by police."

Swiss marchers protest against Trump, break through Davos security cordon: https://t.co/2nkMju4FMB More from #WEF18: https://t.co/p0M8jBb2I0 pic.twitter.com/N9dyKVmLdA

— Reuters Top News (@Reuters) January 23, 2018

"Trump is just one of the other people we disagree with. We've been protesting every year now against the World Economic Forum and if Trump comes or not we don't care," one protester in Davos, Alex Hedinger, told Reuters. "Trump is just, maybe he's just the best symbol of this world."

The U.S. president and several of his cabinet members are expected to arrive Friday, the final day of the WEF meeting, and Trump is scheduled to deliver a speech that White House adviser Kellyanne Conway said will bring the "America First" message to the world stage.

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