CAPITALISM REPRESENTED ITSELF AS FREEING SERFS, SLAVES, ETC. FREEDOM BECAME CAPITALISM'S SELF-CELEBRATION WHICH IT LARGELY REMAINS. YET THE REALITY OF CAPITALISM IS DIFFERENT FROM ITS CELEBRATORY SELF-IMAGE. THE MASS OF EMPLOYEES ARE NOT FREE INSIDE CAPITALIST ENTERPRISES TO PARTICIPATE IN THE DECISIONS THAT AFFECT THEIR LIVES (E.G., WHAT THE ENTERPRISE WILL PRODUCE, WHAT TECHNOLOGY IT WILL USE, WHERE PRODUCTION WILL OCCUR, AND WHAT WILL BE DONE WITH THE PROFIT WORKERS' EFFORTS HELP TO PRODUCE). IN THEIR EXCLUSION FROM SUCH DECISIONS, MODERN CAPITALISM'S EMPLOYEES RESEMBLE SLAVES AND SERFS. YES, PARLIAMENTS, UNIVERSAL SUFFRAGE, ETC. HAVE ACCOMPANIED CAPITALISM - AN ADVANCE OVER SERFDOM AND SLAVERY. YET EVEN THAT ADVANCE HAS BEEN LARGELY UNDERMINED BY THE INFLUENCE OF THE HIGHLY UNEQUALLY DISTRIBUTED WEALTH AND INCOME THAT CAPITALISM HAS EVERYWHERE GENERATED.
RICHARD D. WOLFF ---------------------------------------------------------
The rapacity of contemporary capitalism is enabled by the weakness, dishonesty, and cowardice of the flaccid and collaborationist left.
Noam Chomsky: Consider this: Every time there is a crisis, the taxpayer is called on to bail out the banks and the major financial institutions. If you had a real capitalist economy in place, that would not be happening. Capitalists who made risky investments and failed would be wiped out. But the rich and powerful do not want a capitalist system. They want to be able to run the nanny state so when they are in trouble the taxpayer will bail them out. The conventional phrase is "too big to fail."
The IMF did an interesting study a few years ago on profits of the big US banks. It attributed most of them to the many advantages that come from the implicit government insurance policy -- not just the featured bailouts, but access to cheap credit and much else -- including things the IMF researchers didn't consider, like the incentive to undertake risky transactions, hence highly profitable in the short term, and if anything goes wrong, there's always the taxpayer. Bloomberg Businessweek estimated the implicit taxpayer subsidy at over $80 billion per year. -----------------------------------------------
“As soon as you're born they make you feel small By giving you no time instead of it all 'Til the pain is so big you feel nothing at all… Keep you doped with religion, and sex, and T.V. And you think you're so clever and classless and free But you're still fucking peasants as far as I can see…” — John Lennon, “Working Class Hero
Crony capitalism is defined as an economy tilted in favor of businesses that have close relationships with the government and lean on those relationships for special treatment — tax breaks or some other form of state intervention. To an extent, this arrangement has long been part of the American economy. But the problem has grown worldwide as globalization has taken off in the last two decades. This has meant a rise in billionaire wealth around the world and an enormous increase in the inequality gap between the world’s richest and poorest people.
*SEVENTY TOP HEALTH CARE CEOS RAKED IN $9.8 BILLION SINCE 2010 (ARTICLE BELOW)
*HOW MUCH IS A BOSS WORTH? (ARTICLE BELOW)
*CINDERELLA IS HOMELESS, ARIEL ‘CAN’T AFFORD TO LIVE ON LAND’: DISNEY UNDER FIRE FOR PAY(ARTICLE BELOW)
*THE BIOMASS INDUSTRY'S HOLLOW SELF-REGULATORY SCHEME HAS BEEN EXPOSED AS A SMOKESCREEN TO DESTROY FORESTS FOR CORPORATE PROFIT(ARTICLE BELOW)
*3 OF THE MOST OUTRAGEOUS WAYS THE RICHEST 1% AVOIDS PAYING TAXES(ARTICLE BELOW)
*STUDY: COMPANIES TALK INCLUSION, BUT FEW WALK THE WALK(ARTICLE BELOW)
*WHY CAN’T WE FIX OUR OWN ELECTRONIC DEVICES?(ARTICLE BELOW)
*THE DEATH OF BIG-BOX STORES IS SPEEDING UP SUBURBIA'S SLIDE INTO POVERTY(article below)
*U.S. BANKS FACE VARIETY OF RISKS, FINANCIAL PERFORMANCE STRONG: REGULATOR (ARTICLE BELOW)
*THERE'S NO GOOD REASON FOR YOUR BOSS TO MAKE 347 TIMES WHAT YOU DO (ARTICLE BELOW)
*MONOPOLY CAPITALISM IN ACTION: HOW AMAZON'S ACQUISITION OF WHOLE FOODS COULD AFFECT US ALL(ARTICLE BELOW)
*CEO-WORKER PAY RATIO GENERATES OUTRAGE, INSIGHT(ARTICLE BELOW)
*HOW THE HOME FLIPPING INDUSTRY IS PUSHING POOR PEOPLE OUT OF THEIR HOMES THE PROCESS IS TOXIC.(article below)
*GM TO COLOMBIAN WORKERS INJURED ON THE JOB: YOU’RE ON YOUR OWN(ARTICLE BELOW)
*UPS TO FREEZE PENSIONS FOR 70,000 NONUNION WORKERS TO CUT COSTS(article below)
*WHEN $11 MILLION IS TOO MUCH TO PAY FOR WORKERS’ LIVES CONSTRUCTION AND SHIPBUILDING COMPANIES WILL GET A PASS ON PROTECTING WORKERS FROM BERYLLIUM EXPOSURE(article below)
*'CONNED' BY TRUMP: HUNDREDS OF BOEING AND CARRIER WORKERS TO LOSE THEIR JOBS (article below)
*APPLE CEO TIM COOK THINKS A BIG CORPORATE TAX CUT IS “WHAT’S GOOD FOR AMERICA” (article below)
*NOW FIVE MEN OWN ALMOST AS MUCH WEALTH AS HALF THE WORLD'S POPULATION (article below)
*SUPREME COURT SPEEDS COPYCAT BIOLOGIC DRUGS TO MARKET(article below)
*AMERICANS ARE SUDDENLY DEFAULTING ON THEIR CREDIT CARDS(articles)
*CORPORATE ALLIES IN WASHINGTON TAKE AIM AT CEO PAY REFORM( excerpt below)
*NEW REPORT SHOWS CORPORATIONS AND WESTERN GOVERNMENTS CONTINUE TO PROFIT FROM LOOTING OF AFRICA(article below)
*WHEN WILL EXXON WILL BE WORTHLESS? NOT IF(article below)
*THE ASTOUNDING SIZE OF THE MARIJUANA ECONOMY DWARFS 10 OF AMERICA'S MOST POPULAR FOOD AND DRINK STAPLES(article below)
*WHOLE FOODS REPRESENTS THE FAILURES OF 'CONSCIOUS CAPITALISM'( article below)
*WALMART'S $237 MILLION MAN: HOW AMERICANS SUBSIDIZE INEQUALITY(article below)
*TESLA'S FUTURE IS COMPLETELY INHUMAN — AND WE SHOULDN'T BE SURPRISED(article below)
The reality of capitalism
...Magical thinking is not limited to the beliefs and practices of pre-modern cultures. It defines the ideology of capitalism. Quotas and projected sales can always be met. Profits can always be raised. Growth is inevitable. The impossible is always possible. Human societies, if they bow before the dictates of the marketplace, will be ushered into capitalist paradise. It is only a question of having the right attitude and the right technique. When capitalism thrives, we are assured, we thrive. The merging of the self with the capitalist collective has robbed us of our agency, creativity, capacity for self-reflection and moral autonomy. We define our worth not by our independence or our character but by the material standards set by capitalism—personal wealth, brands, status and career advancement. We are molded into a compliant and repressed collective. This mass conformity is characteristic of totalitarian and authoritarian states. It is the Disneyfication of America, the land of eternally happy thoughts and positive attitudes. And when magical thinking does not work, we are told, and often accept, that we are the problem. We must have more faith. We must envision what we want. We must try harder. The system is never to blame. We failed it. It did not fail us...
Reign of Idiots By Chris Hedges - apr 30, 2017
fundamentals of american capitalism
*always promote patriotism and american exceptionalism so the stupid public will think you are on their side
*nothing is more important than maximizing profits
*Never pass on opportunities to defraud CUSTOMERS
*when you get caught cheating on your taxes, make sure you have bribed enough government officials to minimize damage.
*maintain lobbyists, front groups, think tanks, etc. to lie and cover-up your corporate corruption.
*develop schemes to steal employee wages
*Maximize tax avoidance strategies
*hire part-time workers and deny them benefits
*always look to outsource labor to corrupt 3rd world countries to reduce labor costs
*sell mediocre products that never perform as advertised
*once your company is caught in scandal, mount an ad campaign portraying yourself as a wholesome organiZation
*never acknowledge guilt once your company is fined or sued
*hire lobbyist to bribe local politicians
*always scheme to avoid as many government regulations as possible
*make sure to defeat union organizing
*make sure that employees bare most of the cost of benefit packages
*underfund employees' pension plans
*make sure you can steal pension fund money through bankruptcy
*re-market and re-package old products as new and raise the price
Seventy Top Health Care CEOs Raked in $9.8 Billion Since 2010 Wednesday, July 26, 2017 By Jake Johnson, Common Dreams | Report
From Truthout: While the Senate GOP's plan to repeal the Affordable Care Act (ACA) has been denounced as potentially devastating to the poor, the sick, women, people of color, children, and those with pre-existing conditions, a new analysis published Monday finds that no matter what happens, the CEOs of large healthcare companies are likely to continue living lavishly.
Since the Affordable Care Act (ACA) passed in 2010, the "CEOs of 70 of the largest U.S. healthcare companies cumulatively have earned $9.8 billion," according to a report by Axios's Bob Herman. Herman goes on to add that the CEOs' earnings "far outstrip[ped] the wage growth of nearly all Americans."
"The richest year [for healthcare CEOs] was 2015, when 70 healthcare CEOs collectively made $2 billion," Herman notes. "That was an average of about $28.5 million per CEO and a median of about $17.3 million per CEO. The median household income in 2015 was $56,515, which the average healthcare CEO made in less than a day."
John Martin, former CEO of the pharma giant Gilead Sciences, topped Axios's list: he pulled in $863 million in the "ACA era."
Despite President Donald Trump's repeated insistence that Obamacare has been a "nightmare" and that the entire system is collapsing, Herman observes, "The ACA has not hurt the healthcare industry. Stock prices have boomed, and CEOs took home nearly 11 percent more money on average every year since 2010." And the Senate GOP's alternative, which Trump has enthusiastically endorsed, would likely be a further boon to industry executives, who would stand to benefit from the bill's massive tax cuts for the wealthy.
Axios's analysis focused on 70 of the largest publicly traded healthcare companies -- including some of the largest insurance and pharmaceutical companies -- in the United States.
Perhaps the most consequential component of healthcare CEO pay, Herman observes, is the fact that "a gigantic portion of what CEOs make comes in the form of vested stock, and those incentives drive their decision-making."
This means that CEOs are incentivized not to take actions that would benefit the healthcare system overall, but rather to "inflate stock prices" using methods "such as repurchasing shares or issuing dividends to shareholders."
Such moves lead to higher salaries for CEOs, but not to widely shared benefits. "Stock-heavy pay," Herman concludes, "drives CEOs to do the exact opposite of their buzzword-laden goals of creating a 'patient-centered' health system that focuses on 'value.'"
Some commentators portrayed the analysis as both indicative of the fundamental injustice at the heart of the for-profit insurance model and proof of the need for Medicare for All.
David Sirota ✔ @davidsirota The central healthcare initiative of the Dem Party is a policy that effectively subsidizes the pay of these execs https://www.axios.com/the-sky-high-pay-of-health-care-ceos-2442398819.html?utm_source=twitter&utm_medium=twsocialshare&utm_campaign=organic … 6:28 AM - 24 Jul 2017
How Much Is a Boss Worth? Thursday, July 20, 2017 By Lawrence S. Wittner, History News Network | Op-Ed
From Truthout: An awful lot of Americans are skeptical about the value of their nation's corporate executives. As a 2016 nationwide survey reveals, 74 percent of Americans believe that top corporate executives are overpaid. This public dismay with CEO compensation exists despite the fact that Americans drastically underestimate what top corporate executives are paid every year. In fact, the survey found that CEO compensation at Fortune 500 companies was approximately ten times what the typical American thought it was.
What are these CEOs actually paid? According to a study for the Associated Press by the executive data firm Equilar, in 2016 the typical CEO at the S&P 500 companies received $11.5 million in salary, stock, and other compensation.
Of course, this was the median CEO income. Some were paid a great deal more. Thomas Rutledge (Charter Communications Inc.) received $98 million during 2016; Leslie Moonves (CBS Corp.) $68.6 million; Robert Iger (Walt Disney Co.) $41 million; and David Zaslav (Discovery Communications Inc.) $37.2 million. A few CEOs didn't make the list because, as fantastically wealthy business owners (like Jeff Bezos and Mark Zuckerberg, collectively worth $146 billion), they didn't bother taking a salary from their companies.
CEO income during 2016 reflected substantial increases over the preceding year, with the typical CEO getting an 8.5 percent raise. Some, especially the best-paid, received far more. Rutledge received a raise of 499 percent, while Moonves's pay rose by 22 percent.
American workers haven't been doing nearly as well. According to the AFL-CIO (which estimated average corporate CEO pay in 2016 at $13.1 million), the average production or other nonsupervisory worker earned only $37,632 that year. Thus, in 2016, there was a CEO-to-worker pay ratio of 347-to-1.
This gap between CEO and worker pay has been widening substantially over the years. In the 1950s, the S&P 500 CEO-to-worker pay ratio was 20-to-1. Even as late as 1980, it was 42-to-1. But the rise of the political Right, the adoption of pro-corporate public policies, and the decline of union strength have led to a situation in which the average CEO of America's largest corporations has an annual income 347 times that of the average worker. In the last five years alone, corporate CEOs received percentage pay increases nearly double that of the US workforce.
This enormous and rapidly growing economic inequality between bosses and workers can certainly be challenged on the basis of social justice. Why, after all, should roughly 20 million Americans, working at full-time jobs (and, sometimes, two or three jobs), receive such pitiful incomes that they are forced to rely on food stamps and other forms of public assistance while their CEOs grow ever wealthier and enjoy an opulent lifestyle once limited to kings and princes?
In addition, are these extravagantly-paid corporate CEOs producing commensurate value for their companies? According to a detailed 2016 study by MSCI, an investment and corporate research firm, businesses that provided their CEOs with higher incomes delivered smaller financial returns to investors than did companies with lower compensation for their top executives. Favorably impressed by the study, a Forbes columnist concluded that “maybe it is time to rethink and restructure CEO compensation.” Indeed, some corporate boards have begun doing just that.
Although most Americans do not serve on the boards of major corporations, they do support sharp reductions in CEO compensation and other means of fostering greater economic equality. Indeed, a recent survey has found that a typical American favors limiting CEO pay to no more than six times the pay of the average worker. Furthermore, polls have found that most Americans support increasing taxes on the rich and substantially raising the pathetic federal minimum wage, long stuck at $7.25 per hour.
Cinderella is homeless, Ariel ‘can’t afford to live on land’: Disney under fire for pay
Activists protest Disneyland’s low wages saying it contributes to homelessness, after custodian living in her car was found dead outside gym where she showered
Paulina Velasco in Anaheim, California Monday 17 July 2017 09.53 EDT
From The Guardian: A woman dressed as the Little Mermaid walked past a sign that read: “Ariel can’t afford to live on land!” A young girl stared at bright-pink posters proclaiming “Disneyland pays poverty wages” and “No home for Cinderella in Anaheim”.
During a day of protest on Friday, tourists and Disney fans in the streets surrounding Disneyland were confronted with protesters condemning working conditions at the Los Angeles-area resort. The place that prides itself on being “the happiest place on earth” is, in their view, anything but for employees struggling with homelessness and low pay.
“Disney, we feel, is a contributor to the homeless problem here in Anaheim,” said protest organizer Jeanine Robbins, a longtime local resident. “There are Disney employees who live on the street. They live in their cars. They live in unstable housing.”
Occasionally, there are consequences of the most tragic kind.
Amid an unprecedented regional homelessness crisis, there are almost 4,800 people experiencing homelessness in Orange County, where Anaheim is located, on any given night. More than half can be found on the streets or in other places unfit for habitation. It is unclear exactly how many are Disney employees, but it should perhaps come as no surprise that some face challenges.
The largest employer in Orange County, Disneyland is located in one of the most expensive metro housing markets in the US. According to the Orange County office of care coordination, the hourly wage needed to afford a median-priced, one-bedroom unit in Orange County last year was $25.46, complementing nationwide data suggesting that it is virtually impossible for those earning minimum wage, or near it, to find an affordable place to live anywhere in the country.
Protesters and Disney employees cited wages at the park in the low teens.
“I see a lot of people living paycheck to paycheck. I see a lot of people living in long-term motels or living in their cars,” said a Disneyland worker, who, like others interviewed for this story, spoke under condition of anonymity for fear of losing her job. She has worked in retail at the Anaheim park for over a decade and makes $12.10 an hour. “I love my job. It’s not the job that’s the problem; it’s the pay.”
Like many of her coworkers, she said, she commutes from a more affordable city nearby. She says that more than half her coworkers work two to three jobs to make ends meet.
Disneyland’s connection with Anaheim homelessness recently came into focuswhen the city removed several benches from bus shelters near the resort, which both Disney and the city said had not come at the company’s request. When asked about employees struggling with homelessness, a Disneyland spokeswoman, Suzi Brown, said the company provides “vast employee resources” for those in need.
“Specific to homelessness, we support a number of nonprofits [in the community] and have donated millions of dollars to support their efforts.”
Eve Garrow, a policy analyst at the ACLU of Southern California who attended the protest, disputes this. “Disneyland is nowhere in the picture” when it comes to solutions for homelessness, she said.
Friday’s Disneyland protests began in the morning outside D23, an exposition for Disney fans at the Anaheim convention center. Adults dressed in Disney costumes sweated under the bright California sun as they waited to enter, and glanced awkwardly at Robbins and the handful of homeless housing activists waving posters.
Robbins said she wasn’t finding many sympathetic ears. “We’re getting a lot of hostility from the Disney fans, saying if they aren’t making enough money, ‘why don’t they go work somewhere else? Why don’t they go live somewhere else if they can’t afford to live here?’”
In the evening, as fireworks burst above the Sleeping Beauty Castle, about 40 activists stationed themselves in the path of sunburned tourists streaming out of the gates.
The experiences of homeless Disney employees vary. One homeless couple began working at Disneyland several years ago after moving from the midwest. They found themselves inhabiting their car after leaving what they described as an unhealthy living situation, and now must get by on a single income after one of them was forced to stop working because of a traffic accident.
But they said that Disney was looking out for them. “They have a 24-hour helpline you can call,” said the husband. “We do call it, and we’re still working with them to find a place. It’s not easy finding anything in California.”
Another Disney employee said she believed that people slept in the staff parking lot, and knew of one coworker who does so when she’s too exhausted to drive home between shifts. The employee said she wasn’t aware of any resources to help people sleeping in their cars. “It’s a thing that happens, but from what I’ve heard it’s just a matter of ‘do whatever you have to do not to be late to your shift’.”
When a reporter approached the lot, which was bustling with cars and shuttle buses even at 11.30pm on Friday, a security guard barred entry.
On occasion, homelessness among Disney employees leads to heartbreaking outcomes. In December, a worker at Disney put out a message on social media seeking information on Yeweinishet Mesfin, a 61-year-old custodian who had gone missing.
According to police, Mesfin was found several days after a missing person’s report was filed. Her body was in her car outside the gym where she showered.
An immigrant from Eritrea, Mesfin “was always gregarious and all that, but her relatives in Los Angeles say she would never meet with them”, said her cousin Tsegai Emmanuel, who lives in Ruston, Louisiana. “Nobody ever met in her place – she was always meeting people elsewhere. Nobody knew how she lived, where she lived.”
An old acquaintance of Mesfin’s who now lives in Chicago, Lula Negussie, said she knew Mesfin affectionately as “Weyni”.
Late last year, Negussie received a call from Mesfin’s boss, who said she “had never missed work, she had never been late, they were worried, they went to her old apartment, she doesn’t live there any more. They couldn’t find her”.
Negussie had not spoken to her for many years and did not know she had fallen on hard times. Mesfin “was very sweet, very, very pretty”, Negussie said. “Just full of life.”
The Biomass Industry's Hollow Self-Regulatory Scheme Has Been Exposed as a Smokescreen to Destroy Forests for Corporate Profit
If we want clean air and a livable planet, cutting down trees for fuel is one of the most counterproductive things we can do. By Adam Macon, Sasha Stashwick / AlterNet July 14, 2017, 11:30 PM GMT
Standing forests are a critical tool in the fight against climate change. Cutting trees down to use as fuel in energy production—known as biomass energy or bioenergy—is one of the most counterproductive things we can do if our goal is clean air and a livable planet.
Despite this reality, policymakers around the world have invested heavily in bioenergy. Nowhere is this more true than in the European Union, where bioenergy policies in the U.K. and other member states enable billions in subsidies each year to flow to the balance sheets of large utility companies, padding their profits and financing the conversion of old coal-fired power plants to burn wood.
Meanwhile, the evidence of the climate and ecological harm wrought by the biomass industry continues to mount. Yet too many policymakers remain unwilling to acknowledge the impacts of bioenergy and adequately limit its growth. They argue that the industry’s impacts on the climate, forests, and people are still uncertain, that we need more studies, more "proof."
For five years running, leading media outlets, NGOs, climate scientists, health professionals, and even official government reports have offered this proof time and time again. Scientists tell us that burning whole trees and other large-diameter wood increases carbon pollution compared to coal for many decades.
Public health experts tell us burning biomass emits myriad harmful air pollutants, with serious consequences for air quality and public health.
Economists tell us biomass conversions are a bad investment compared to truly clean energy sources, such as solar and wind.
Communities tell us that they don’t want biomass producers in their backyards.
And for five years running, respected reporters and local and national NGOs have documented the unsustainable logging practices uses to source the biomass industry, putting some of the most biodiverse and valuable forests in the world in peril.
Unlike the biomass industry, these communities, advocates, reporters and researchers have no political or financial stake in bioenergy subsidies.
It’s time to turn the tables and place the burden of proof where it belongs—at the feet of the biomass industry and the policymakers who are its benefactors.
These policymakers are elected to advance the public’s interest. They pay out biomass subsidies under the guise of advancing national goals of increasing renewable energy production and taking meaningful action on climate change.
In exchange for the public’s generous support, biomass-burning utilities are assumed to deliver a public good: cleaner air and lower carbon emissions. Both parties should be held accountable for demonstrating that the public is getting what it’s paying for.
Enter the Sustainable Biomass Program. The SBP was created in 2013 by biomass companies to provide assurances that their wood pellets and other biomass fuel are sustainable and legally sourced. Unfortunately, from the start, this certification scheme was dominated by industry and built to allow the industry to effectively "self police." Now, a report by the Natural Resources Defense Council and the Dogwood Alliance reveals the program to be highly deficient and not a credible tool in assessing the carbon emissions or ecological impacts of biomass producers.
Amongst the key findings is that the program uses flawed and incomplete carbon accounting, lacks adequate independent audits and verification, leaving biomass producers to conduct their own risk assessments and choose their own verifiers and data sources, despite the obvious conflict of interest, and fails to provide performance-based thresholds and protections.
Put plainly, the SBP allows the biomass industry to hide their carbon emissions and destructive forestry practices to fuel an environmentally damaging energy industry. In doing so, it actually undercuts vital efforts to address climate change and protect forests and communities.
The impacts of industrial scale bioenergy are now well known and well documented. Hiding behind a smokescreen of an industry certification scheme such as the SBP doesn’t change the facts on the ground—or in the atmosphere The message to policymakers cannot be clearer: If they are looking to the SBP to provide assurances on the sustainability and carbon intensity of biomass fuels, they cannot be confident in using it.
The world has been generating electricity the same way since the 1880’s. Burning biomass is a step backwards, not forwards towards the 21st century clean energy system we deserve and our climate desperately needs. To truly act on climate change, European policymakers must end subsidies for dirty and destructive industrial-scale biomass and invest in truly clean and low-carbon energy sources like solar and wind and the protection and expansion of our standing forests.
Other key findings of the comprehensive analysis of the SBP include:
The SBP does not require calculation of emissions at the smokestack when biomass is burned, essentially classifying biomass ‘carbon neutral’, on a par with truly clean energy technologies such as wind and solar. As noted, recent scientific studies have concluded that burning biomass for electricity—in particular whole trees and other large-diameter wood—increases carbon emissions when compared to coal and other fossil fuel for decades.
The SBP ignores several crucial aspects for forest carbon accounting allowing assessments to be conducted with a fundamental lack of objectivity, consistency and connection to the management of actual source forests and rarely require on-the-ground verification.
The SBP Feedstock Standard lacks concrete, performance-orientated thresholds and protections, and thus provides little assurance regarding environmental or social protection in source forests.
The average 1% household increased its wealth by $3 million in 2016. Since much of that was in the form of stock gains, they paid tax on only a small part of their incomes, and then took an average of about $200,000 per household in tax subsidies. When all forms of taxes and income and capital gains are considered, the richest 1% pay lower tax rates than the poorest 20% of Americans.
The Rich Old White Guy's Safety Net: Retirement and Health Care
Wealthy people are living longer, so they're getting much more of the late-life benefits. A Brookings report estimates that lowest-quintile Americans born in 1960 will receive "only 78 percent of the lifetime Medicare benefits received by the top income quintile."
A Congressional Research Service report states: "When Social Security benefits are measured on a lifetime basis, low earners, who show little to no gains in life expectancy over time, are projected to receive increasingly lower benefits than those with high earnings."
Taking from the Poor American's Shredded Safety Net
Uninformed critics believe that government transfers go to the poorest Americans. They don't. According to the research team of Thomas Piketty, Emmanuel Saez and Gabriel Zucman, the government transfers go mostly to the middle class and the elderly. In 2014, the middle class—the 40% of American adults with incomes just below the top 10%—received more in safety net government transfers (Medicare, Medicaid, food stamps/SNAP, Veterans’ benefits, etc., but excluding Social Security) than the bottom 50% of Americans.
More Outrageous Tax Breaks for the Rich
Housing: Start with the homes, the expensive homes, the estates. For the mortgage interest deduction alone, households earning over $100,000 in 2012 claimed 77.3 percent of the total tax savings. For many of these well-positioned Americans, there are second homes with another mortgage deduction. Then, piling on, those with expensive homes can take a tax break of up to a half-million dollars when they sell their homes. Relatively few tax breaks go to low-income Americans. The total of mortgage and property tax subsidies is nearly double the amount spent on public housing programs.
Social Security: As noted, wealthy people are cashing in because of their longer lives. But there are more reasons for their late-life benefits. Lower-income earners are subsidizing the 10% of Americans who stop paying for Social Security when they reach the $127,200 income limit. Also subsidizing the rich are the unauthorized immigrants who pay for Social Security but are ineligible for benefits.
Savings: A wealthy household can make millions in capital gains and pay no tax as long as investments are held, and then bequeath the estate to heirs with little or no tax. Less fortunate Americans who have to rely on bank accounts get virtually no interest—and the majority of overdraft fees.
The Ultimate Safety Net
The super-rich are by far the top beneficiaries of U.S. security, tax laws, and the financial system. But rather than repaying society for these lopsided benefits, households with wealth over $40 million evade25 to 30 percent of their personal income and wealth taxes.
Senator Lindsey Graham once said, "It's really American to avoid paying taxes, legally...It's a game we play...I see nothing wrong with playing the game because we set it up to be a game."
It's not a game for the 200 million struggling Americans who depend on tax revenue for education and housing and health care.
Study: Companies talk inclusion, but few walk the walk By Marissa Lang July 13, 2017
From San Francisco Chronicle: Companies today know it’s not enough to do the job they set out to do and call it a day. Increasingly, customers demand that corporations stand for something, a new study found, and work to make the world a better, more equal place.Though this ideology is catching on among businesses and executives, few are actually being the change they want to see in the world.
In a study that compiled several Salesforce surveys of thousands of professionals and business leaders, the company found that 80 percent of professionals say “businesses have a responsibility to look beyond profit and make a positive impact on society.” But only 36 percent of them said their own company was doing that work internally.
As diversity remains a flash point for corporations and tech firms, studies like this seem to affirm what many diversity advocates have long theorized: Even socially conscious companies that speak out on behalf of underrepresented groups and social-justice issues may fail to bring that inclusivity to their own offices.
Salesforce, whose reputation as an aggressive ally for lesbian, gay, bisexual and transgender people earned chief executive Marc Benioff a 2016 GLAAD award and rallied other corporations to fight discriminatory legislation across the country, is not immune to this critique.
Former Salesforce employee and diversity advocate Kyle Graden, who identifies as pansexual and gender-nonconforming and uses the pronoun they instead of he or she, left their job late last year after becoming disillusioned with the tech giant.
Graden, who worked as a product marketing analyst, became a vocal member of Outforce, Salesforce’s internal group for LGBT employees.
Graden said that after working for more than a year to change the company’s culture around gender-nonconforming and nonbinary employes — those who do not fit neatly into the male, female gender binary — they concluded that the company Graden had long idealized and admired was more focused on its presence and presentation at the San Francisco Pride Parade than how to improve internal processes and inclusion.
“I went into Salesforce with a certain expectation of LGBTQ inclusion, but as I got more into it and as I started leading Outforce ... I just felt like we were getting nowhere,” said Graden, who now owns their own business as a gender solutions strategist. “All the emphasis and all the budget was put on Pride and marketing the company as inclusive, but meanwhile we still had people from underrepresented groups — LGBT, people of color, people with disabilities — who were being passed over for promotions and made to feel invisible.”
Salesforce did not immediately respond to a request for comment on Graden’s concerns.
According to Salesforce’s survey, which was released Thursday, only about a quarter of professionals believe their company cares about closing the gender pay gap. Just slightly more than a third, 36 percent, say their company “fosters an inclusive culture” and “actively works to be more diverse.”
Meanwhile, nearly half of professionals surveyed said they do not believe their company provides equal opportunities for all of its employees.
“I think when you get to a company that has these values, you think, at first, ‘Hey, this is great.’ Maybe it’s the first time you’re able to be out in the workplace, or the first time you have a support group for people like you,” Graden said. “But eventually, you start to realize that the company doesn’t quite internalize its message of inclusivity as much as they should. And that hits hard. It’s so disappointing.”
In the past, taking stands on social issues and effecting change was largely the domain of local businesses that were ingrained in their communities. They might donate to local nonprofits as a quiet show of support, or make it clear they welcomed certain groups as customers.
Experts who track the behavior of businesses say the attitudes of national corporations changed about 2008, when the recession and the rise of social media’s influence converged to create a tipping point.
Millennials, generally defined as those who born between 1980 and 2000, are 1½ times more likely to expect their employers and the businesses they patronize to stand for a social cause than Baby Boomer consumers.
Experts who track corporate advocacy have identified several choice issues that seem to have risen to the top of American corporate consciousness: the environment, social justice and LGBT rights.
Employees and customers should demand more from corporations than marching in a parade or taking a stand on Twitter, according to Graden.
“Companies need to incorporate that intersectional and intergenerational diversity into the leadership so it influences the company’s decision-making and changes how a company approaches these issues,” Graden said.
This advice mirrors Salesforce’s own recommendations, which advise other companies to demonstrate “an authentic commitment to a greater objective” by setting an example in their own businesses. “Actions speak louder than words,” Salesforce wrote. “Being open, transparent, and active in promoting equality in the workplace can earn enduring customer and employee trust.”
Why can’t we fix our own electronic devices?
Sara Behdad July 11, 2017 8.35pm EDT
From The Conversation: Traditionally, when a car breaks down, the solution has been to fix it. Repair manuals, knowledgeable mechanics and auto parts stores make car repairs common, quick and relatively inexpensive. Even with modern computer-equipped vehicles, regular people have plenty they can do: change oil, change tires and many more advanced upgrades.
Users’ right to repair – or to pay others to fix – objects they own is in jeopardy. However, in our surveys and examinations of product life cycles, my colleagues and I are finding that supporting people who want to repair and reuse their broken devices can yield benefits – including profits – for electronics manufacturers.
A corporate quandaryAt least eight states – Nebraska, Kansas, Wyoming, Illinois, Massachusetts, Minnesota, New York and Tennessee – are considering laws that would require companies to let customers fix their broken electronics. The proposals typically make manufacturers sell parts, publish repair manuals and make available diagnostic tools, such as scanning devices that identify sources of malfunctions. In an encouraging move, the U.S. Copyright Office suggested in June that similar rules should apply nationwide. And the U.S. Supreme Court recently ruled that companies’ patent rights don’t prevent people from reselling their electronics privately.
Seen one way, these regulations put manufacturing companies in a tough spot. Manufacturers can earn a lot of money from selling authorized parts and service. Yet to remain competitive, they must constantly innovate and develop new products. To keep costs down, they can’t keep making and stocking parts for old and outdated devices forever. This leads to what’s called “planned obsolescence,” the principle that a company designs its items to have relatively short useful lives, which will end roughly around the time a new version of the product comes out.
Consumers want to fix their devicesEven as machines and devices have become less mechanical and more electronic, we have found that customers still expect to be able to repair and continue using electronic products they purchase. When manufacturers support that expectation, by offering repair manuals, spare parts and other guidance on how to fix their products, they build customer loyalty.
Specifically, we found that customers are more likely to buy additional products from that manufacturer, and are more likely to recommend that manufacturer’s product to friends. The math here is simple: More customers using a company’s products, whether brand-new or still kicking after many years, equals more money for the business.
Our research also shows that the failure of most electronic devices is due to simple accidents such as dropping a device or spilling water on it. The most common problem is a broken screen. There are other issues, too – such as batteries that no longer hold their charges or circuit boards that just stop working.
Even nontechnical users often want to pay someone to clean their devices and replace parts such as damaged screens and old batteries. If manufacturers provided access to replacement parts, more damaged items could be repaired, extending their usefulness. Apple could seize an opportunity here: It has just begun assembling older iPhone models in India, which means it is still making parts that others could use to fix the devices they already have.
Helping consumers, companies and the environmentTechnology manufacturers should take steps to promote customers’ right to repair their broken devices, which helps cut down on electronic waste and boost brand loyalty. But if they won’t, laws and regulations can help.
In France, for example, a 2015 law requires manufacturers to tell customers – before they purchase an item – for how long repair parts will be available. That lets consumers decide how much they want to factor in the possibility for repairs when deciding whether to buy something new.
Supporting repair rights can also bring economic benefits to more than just the technology sector. There were 4,623 consumer electronic repair and maintenance companies in 1998 in the U.S. By 2015, that number had dropped to 2,072. Independent vendors are creating online marketplaces where people can buy and sell used and repaired gadgets. Other companies like iFixit and Repair Cafe are creating networks of people who share information on repairing electronics, and even getting groups of people together in person to work on their devices.
Meanwhile 3-D printing continues to make it easier and cheaper for people to produce replacement parts for older devices.
Companies shouldn’t fear people taking too much into their own hands, though: While it’s been possible for a few years to 3-D print and hand-assemble entire computers, they’re not very good. People are much more likely to buy corporate-made devices; they just want to be able to repair them when they break down.
The death of big-box stores is speeding up suburbia's slide into poverty
From Business Insider: Poverty has been creeping into the suburbs for the last 20 years, and the rise of online retailers could be making it worse.
According to a new book, "Places in Need: The Changing Geography of Poverty," by University of Washington professor Scott Allard, American suburbs are facing economic hardship on a massive, if poorly understood, scale.
As of 2014, urban areas in the US had 13 million people living in poverty. Meanwhile, the suburbs had just shy of 17 million.
The Great Recession of 2008 helped accelerated much of the poverty that emerged in the early 2000s, Allard's research has found. But another disrupting factor was the technological shift that enabled — and continues to enable — online retailers like Amazon and other e-commerce sites to replace shopping malls and big-box stores.
This ongoing demise has hollowed out many of the jobs suburban Americans once turned to as a means of supporting themselves. "When we think about the current labor market, there's reason to be concerned about the disappearance of good-paying, low-skill jobs," Allard told Business Insider.
His research has found that even when the US began its climb to economic recovery in the 2010s, the suburbs continued to sink into poverty. More jobs sprang up, butnot the kinds that helped peoplelive secure lives. Most are part-time positions with low wages.
The kinds of jobs that do entice younger people — mostly higher-skill, white-collar work — are increasingly found in cities. Suburban office parks are becoming a thing of the past as millennials flock to nearby metropolitan areas for work, accelerating the speed at which the suburban workforce hollows out overall.
Allard said it's a reversal of several decades ago, when businesses moved to the suburbs to attract people who had recently vacated the city in search of a safer, greener place to live.
Manufacturing — which largely took place in cities in the 1960s and '70s -- left for the suburbs a few decades after. Today, Allard sees the manufacturing industry making yet another migration.
"I think those economic realities have happened in suburbs over the last twenty-five years with automation and jobs moving to other parts of the globe," he said. As a result, low-skill and low-education workers "are struggling to find good-paying jobs."
U.S. banks face variety of risks, financial performance strong: regulator
By Lisa Lambert | WASHINGTON
From Reuters: Many of the major risks U.S. banks face lay beyond their control, according to a review released by banking's top federal regulator on Friday that found the sector's financial performance remains strong.
The U.S. Office of the Comptroller of the Currency found that risks to banks lurk in competition from nonfinancial lenders and in the rapid evolution of money laundering and terrorism financing methods.
The OCC pointed to heavy reliance on third-party servicers and vendors as a place where banks could be vulnerable to a variety of threats, as they rely on outside firms to carry out critical activities or provide cyber security.
"Many banks have increasingly leveraged and become dependent on third-party service providers to support key operations within their banks. Over time, consolidation among service providers has resulted in large numbers of banks (becoming) reliant on a small number of service providers," according to the regulator.
It added that that can create "concentrated points of failure for certain lines of business or operational functions for a large segment of the banking industry."
Banks also could run the risk of falling afoul of multiple new or amended regulations in lending and real estate, because their vendors are not aware of regulatory changes, the OCC said. Banks may rely on outside firms or software to process loan applications, underwrite or close loans, which could open them to challenges in complying with the new regulations.
The OCC said loan growth in commercial real estate and looser underwriting standards are also top areas of risk.
The regulator is keeping its eye on a number of areas that could develop into systemic risks or may affect certain banks, as well: England's departure from the European Union known as Brexit, declines in commodity prices, auto loans and interest-rate changes.
The agency found that U.S. banks' revenue increased 3.6 percent in 2016 from 2015, mostly due to their net interest income - the difference between interest earned on assets and paid on liabilities - which had the largest gain since 2010. Meanwhile, residential mortgages began growing again last year, helping boost bigger banks.
There's No Good Reason for Your Boss to Make 347 Times What You Do Thursday, July 06, 2017 By Steven Clifford, OtherWords | Op-Ed
CEO pay at America's 500 largest companies averaged $13.1 million in 2016. That's 347 times what the average employee makes. So CEOs make a lot of money. But, some say, so do athletes and movie stars. Why pick on corporate bosses, then?
First, because the market sets compensation for athletes and movie stars, but not for CEOs. Teams and movie studios bid for athletes and movie stars. CEO pay is set by a rigged system that has nothing to do with supply and demand.
NBA teams bid for LeBron James because his skills are portable: He'd be a superstar on any team. CEOs' skills are much more closely tied to their knowledge of a single company -- its finances, products, personnel, culture, competitors, etc. Such knowledge and skills are best gained working within the company, and not worth much outside.
In fact, a CEO jumping between large companies happens less than once a year. And when they jump, they usually fail.
Lacking a market, CEO pay is set by a series of complex administrative pay practices. Usually a board, often dominated by other sitting or retired CEOs, sets their CEO's pay based on the compensation of other highly paid CEOs. The CEO can then double or triple this target by surpassing negotiated bonus goals.
This amount then increases target pay for his or her peer CEOs, giving another bump. Since 1978 these annual rounds of CEO pay leapfrog have produced a 1,000 percent inflation-adjusted increase in CEO pay. At the same time, the bottom 90 percent of American workers have seen their real incomes decrease by 3 percent.
American workers were once rewarded for productivity. Real wages and productivity rose in tandem at about 3 percent annually from 1945 through the mid-70s. But since then the bosses have taken it all. Although productivity growth increased real per capita GDP by 84 percent over the last 36 years, real wages have remained essentially flat.
Where did the money go? It went to the 1 percent, and especially to the 0.1 percent.
The latter group, a mere 124,000 households, pocketed 40 percent of all economic gains. Business executives, CEOs, or others whose compensation is guided by CEO pay constitute two-thirds of this sliver. In other words, it's business executives -- not movie stars, professional athletes, or heiresses -- who grabbed the dollars that once flowed to the American worker.
Outsize CEO compensation harms American companies, and not just in the tens of millions they waste on executive pay. The effects on employee morale are much more costly. When the boss makes 347 times what you do, it's difficult to swallow his canard that "there's no I in team."
Worse, CEO pay encourages a short-term focus. Instead of making productive investments, companies buy back their own stock to keep its price high, which boosts their own paycheck. From 2005 to 2014, stock buybacks by America's 500 largest public companies totaled $3.7 trillion. This consumed over half of their net income.
That $3.7 trillion could have been invested in plants and equipment, new technology, employee training, and research and development. Instead, corporate America cut R&D by 50 percent, essentially eating the seed corn.
If athletes and movie stars were paid less, team owners and studios would simply make more. The hundreds of millions paid to CEOs, on the other hand, hurts their companies, employees, and our economy. It's a principal driver of our country's startling income inequality.
One of the few checks on CEO pay is a rule under the Dodd-Frank financial reform law requiring companies to disclose the ratio of CEO to average worker pay. Congress is now considering repealing this rule.
If you think CEOs making 347 times what you do shouldn't be held secret, maybe it's time to let your representatives know.
Monopoly Capitalism in Action: How Amazon's Acquisition of Whole Foods Could Affect Us All By Alison Rose Levy, Truthout | Report
..."This is monopoly capitalism in action," said Marion Nestle, author of Food Politics and professor of nutrition, food studies and public health at New York University. "Whenever Amazon takes over more and more and more of any consumer area, that gives consumers less choice. And now it's food."
In the days to come, it remains to be seen whether the Amazon business model will substantively alter the organic commitments associated with the Whole Foods brand and, more broadly, whether organics can survive the interaction between a food monopoly and the current administration's takedown of regulations.
Will Organics Survive a Food Monopoly and the Trump Administration's Deregulation Agenda?
Antitrust laws were originally instated to level the playing field between businesses and consumers. The repeal in sector after sector has given the average American firsthand experience with monopolies. From cell phone service suppliers to cable companies, when moneyed entities face off and snuff the competition, both consumers and small businesses suffer.
It's well known that the outsized scale of Amazon's operations tends to first capture suppliers, and next, drive down their prices. To assess how this might translate to food and food agriculture, let's first look at how it's worked in other realms.
"[Amazon] has deflated prices in book publishing," noted journalist Matt Stoller. "And retailers across the board are terrified that Amazon is in the process of ripping their guts out…. It's quite clear that Amazon is a deflationary force, pushing down wages, prices, tax revenues, and new non-Amazon business activity."
Is a business monopoly the right foundation for the integrity, sustainability and growth of healthy foods? The bottom line is that, through this purchase, Amazon will join -- if not lead -- the ranks of corporations with a substantive share of the organic brand, corporations that regularly strive to water down the hard-won organic standards.
"Organics are always vulnerable," Marion Nestle told me, "because they are an explicit critique of the industrial agricultural system that is protected by the government and promoted by the US Department of Agriculture (USDA). Many industrial food producers would like to minimize the regulation of organic production so that the approved substances include as many different kinds of pesticides and herbicides as possible. So, there is a constant battle to keep the Organic Standards strict."
The Organic Standards are supposed to guarantee that food labeled organic is truly free of pesticides, herbicides, chemical additives, GMOs, hormones and toxicants. Even under the Obama administration -- and despite Michelle Obama's high-profile food initiatives -- the Standards were regularly assaulted in backstage USDA meetings. Under previous USDA Secretary Tom Vilsack, rule changes nibbled at the Organic Label. And with each additional nibble the label drew closer to what Naomi Klein in her book, No Logo, called a "hollow brand" -- a marketing label that claims to sell something it fails to deliver.
Sales of natural and organic food have been rising and now make up 5 percent of total food sales and are worth $47 billion. But at the same time, over the last five years, the health promise of organics has already been diluted, thanks to the backstage conflict between "big organics" (major companies selling organic products, whose ranks Amazon will join) and "little organics" (the growing movement of foodies, farmers and small companies infused with energized, next-generation foodies).
The most notable dilution occurred through the July 2016 defeat of GMO labeling, a federal legislative disaster that highlighted the innate incompatibility between big and little organics. Many food movement leaders charged the big organic companies with betraying the movement through backing a deal that killed the right to a universal and visually clear GMO label. The industry compromise was to replace the legible label with an inconsistently used and incomprehensible code system, signed into law by President Obama one day after the Democratic National Convention.
Even prior to this food movement loss, Whole Foods deviated from the call for universal labeling. Instead of throwing its full support to that effort, it sought to develop its own arcane form of labeling -- vowing that all products would be labeled for their GMO contents by 2018 -- six months from now.
It's unknown where Amazon will stand on GMOs, labeling or the struggle to maintain bona fide Organic Standards. Though under no obligation to disclose its plans, its acquisition of Whole Foods endows Amazon with the industry standing to degrade (or upgrade) organic foods, if Amazon and CEO Jeff Bezos so choose.
It's already well documented that Amazon has a take-no-prisoners philosophy in its existing retail business. It's not merely business foes who get mowed down; it can also be the company's own suppliers.
Corporate Monopoly Is Not a Viable Model for Future Healthy Food Supply
"By integrating across business lines, Amazon now competes with the companies that rely on its platform," writes New York Times author Lina M. Khan. "This decision to not only host and transport goods but to also directly make and sell them gives rise to a conflict of interest, positioning Amazon to give preferential treatment to itself."
Meanwhile, Matt Stoller has argued, "If you are a supplier to Amazon, you not only sell the company goods at cut-rate prices, but you are also effectively required to make Amazon a 0% loan that turns over as long as you have a relationship with the company. Amazon is a cannibal, running itself on the working capital of other, small companies."
This practice could be even more economically damaging to organic farmers, especially at a time when growers are struggling to supply enough goods to meet current demand. Switching to organic requires a three-year commitment before a farmer can charge organic prices. Every season thereafter, there are upfront costs, along with the risks of crop loss due to unpredictable weather. Although it's possible to climate control a book warehouse, one cannot do the same for the earth.
"When food becomes a thing -- a commodity -- and you have to produce a lot of that commodity as quickly as possible, you automatically think on a larger scale," said Fred Kirschenmann , a leader in sustainable agriculture and the president of Stone Barns Center for Food and Agriculture in Pocantico Hills, New York. "Farmers are pushed towards growing only a few food commodities: corn, wheat, soybeans and rice. These allow food suppliers to process foods at a cheap price."
What's more, the for-profit business culture that Amazon enacts "favors efficient design aimed at maximizing short-term returns," said Kirschenmann.
This dictates a specific type of structured design, which sociologist Charles Perrow calls "complex tightly coupled systems." Both monopolies and monocultures exemplify the use of complex tight coupling. In contrast, local and regional agricultural models, which sustainability experts consider more resilient, function as what Perrow calls "uncoupled systems."
According to Perrow's decades of research, the tightly coupled design is inherently more risk-prone, especially when not moderated by counter forces, such as regulations. So, what are the risks of an unmoderated use of the tightly coupled model?
Perrow, an emeritus professor in sociology at Yale, cautions that without regulation, "we get the concentration not just of economic power but … vulnerabilities in parts of our critical infrastructure, such as the Internet, electric power, transportation, and agriculture."
A major rationale for building local and regional food systems is that they enhance food security and resilience. The unpredictability and changes in the food system are easier to manage in smaller-scale, local relationships, because the person-to-person (or person-to-local-buyer) dynamic is relationship-based and therefore inherently more flexible, forgiving and adaptive than a contract between a farmer whose fields have flooded due to higher impact hurricanes and a multinational corporation.
Community Sponsored Agriculture (CSA), a signature food movement initiative, represents a decoupled and interdependent system that enlists customers to help farmers. Locals share the farmer's risks by helping to cover costs for the next growing season and collecting their boxes of veggies in season. This strategy supports the growth of organic farms and builds vibrant communities.
Unfortunately, the CSA model is 180 degrees from the Amazon-style business deal, which engenders a double bind: If sellers reject an unfavorable deal, they can't sell products. But if sellers accept deals on poor terms, they may undergo financial hardship.
This sort of relationship typifies what Perrow calls "dependencies" in his book, The Next Catastrophe: Reducing Our Vulnerabilities to Natural, Industrial, and Terrorist Disasters. "Many dependencies can and should be avoided, and instead we should reorganize to maximize the values of interdependency," he writes. "In some notable cases, this increases economic efficiency as well as reducing vulnerabilities."
A farmer who sells to multiple outlets is functioning interdependently. This contrasts with a farmer who is entirely dependent on sales to one company.
"The old playbook is that you get labor and raw materials as cheaply as possible so that you can maximize the profits in your own business and externalize your environmental and social costs as much as possible," said Kirschenmann. "If companies continue to operate by the old playbook, they are not going to be that successful in the future because they will no longer have thriving communities in which to do business."
The old business playbook is also more vulnerable to catastrophe because a tightly coupled system is only as strong as its weakest link.
"The global food system in many parts of the world is no longer working because it's dependent on cheap energy. We are simply not going to have the cheap fossil fuels that sustained an industrial food system," said Kirschenmann.
Yet Amazon's model is based on using cheap fuels to sort, pack and ship goods long distances.
"Now they are centrally managed and operating on a large scale. They could potentially re-design themselves to operate as a bioregional system," said Kirschenmann. "But it's hard to imagine."
Jobless claims unexpectedly rise for a third straight week
Reuters - Thursday, July 6, 2017
The number of Americans filing for unemployment benefits unexpectedly rose for a third straight week last week, likely as some automakers closed assembly plants for the annual summer retooling.
Initial claims for state unemployment benefits increased 4,000 to a seasonally adjusted 248,000 for the week ended July 1, the Labor Department said on Thursday. Data for the prior week was unrevised. Economists polled by Reuters had forecast first-time applications for jobless benefits falling to 243,000 in the latest week.
It was the 122nd straight week that claims remained below 300,000, a threshold associated with a healthy labor market.'That is the longest such stretch since 1970, when the labor market was smaller. The labor market is near full employment, with the jobless rate at a 16-year low of 4.3 percent.
The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 750 to 243,000 last week.
A Labor Department official said there were no special factors influencing the claims data. Claims for six states and a territory, including California and Alabama, were estimated because of Tuesday's Independence Day holiday. That probably did not contribute to last week's increase as some of the estimates showed a decrease in applications.
Unadjusted claims for Michigan increased 1,159 last week. Automakers normally shut assembly plants for annual retooling at the start of July, which tends to push up claims.
Applications are likely to remain elevated as some companies like General Motors embark on extended summer shutdowns to deal will slower sales, which have led to an inventory bloat.
Motor vehicle manufacturers reported on Monday that auto sales fell in June for a fourth straight month. Even before the annual summer plant closures, automakers have been laying off workers in response to the softening demand.
Outside the auto sector, the labor remain strong, with record high job openings. Labor market tightness contributed to the Federal Reserve raising interest rates last month for the second time this year. Economists expect another rate hike and the U.S. central bank to start reducing its $4.2 trillion portfolio of Treasury bonds and mortgage-backed securities later this year.
Thursday's claims report also showed the number of people still receiving benefits after an initial week of aid increased 11,000 to 1.96 million in the week ended June 24. The so-called continuing claims have now been below 2 million for 12 straight weeks, pointing to diminishing labor market slack. The four-week moving average of continuing claims rose 6,750 to 1.94 million, remaining below the 2 million mark for 10 consecutive weeks.
CEO-worker pay ratio generates outrage, insight
Stephen Wilmot - The Wall Street Journal. - Thursday, July 6, 2017
A controversial new metric on executive pay is on Congress’s chopping block. Shareholders should want it to survive, even if it only provides a sliver of insight into the companies they own.
Beginning next spring, possible repeal notwithstanding, companies will be required to publish a Bigwig vs. Regular Joe pay ratio, or the total earnings of the chief executive compared with those of the median employee.
Supporters of the rule, part of the post-financial crisis Dodd-Frank Act, hope disclosure at an individual-company level might focus more attention on inequality and sky-high CEO pay. The ratio has ballooned since the 1970s: The bosses of America’s 350 largest companies made on average 276 times the money of their rank-and-file subordinates in 2015, up from 30 times in 1978, according to the left-leaning Economic Policy Institute.
Republicans want to repeal the requirement, along with other controversial bits of Dodd-Frank, as a way to trim compliance costs for companies. Some also argue the ratio isn’t instructive: Wal-Mart will have a higher one than Goldman Sachs, but that only indicates that Wal-Mart employs more unskilled workers than Goldman Sachs. Comparisons within the same sector are likely to get bogged down in discussions of how one company’s business model or geographic scope is different from another’s.
The rollback made it through a House of Representatives bill in June. Whether it can clear the Senate in time for next spring’s proxy-statement season is anyone’s guess.
If the ratio survives, however, shareholders might find it a modestly useful addition to their analytical toolbox. The key insights will come from seeing how it evolves for a specific company over time. A widening ratio could be a warning flag that a management team is getting greedy.
Executive pay ballooned in the financial sector before the 2008 banking crisis. Those companies that went bankrupt were particularly guilty of deteriorating pay practices, according to an analysis of governance ratings by analysts at Bank of America Merrill Lynch. Pay ratios could have made this more obvious at the time—and may help bring subsequent lapses to wider attention.
Knowing what the median employee at a company makes would also fill gaps in investors’ understanding, such as how the wage bill compares with other costs. Admittedly, the SEC only requires companies to update the calculation once every three years, so useful insights into how the median wage changes relative to profit, say, would take years to emerge.
That said, investors shouldn’t assume more thriftily paid bosses offer value for money. Simplistic studies can show an association between lower pay and higher returns, but this is partly because larger companies pay better while small-caps usually outperform large-caps.
Adjusting for size, using actual realized rather than the estimated target pay disclosed in proxy filings, and factoring in the performance of previously awarded shares, PricewaterhouseCoopers found a strongly positive correlation between executive pay and three-year total returns for big U.K. companies. This is logical, given how much executive pay is triggered by return thresholds these days.
Investors should welcome any move toward greater transparency, but wield their new analytical tool with caution.
How the Home Flipping Industry Is Pushing Poor People Out of Their Homes
The process is toxic. By Margie Burns / The Progressive Populist June 30, 2017, 1:30 PM GMT
From Alternet: The United States has entered a new phase of residential foreclosure. The basic narrative is shocking: House-flippers are being allowed to push troubled homeowners out of their houses. As a neighbor of mine said, succinctly, “It’s cheaper for them.”
In an ugly way, house flipping is a sweet deal in any area where the house market has rebounded, as in metropolitan Washington, D.C., where I live, with eager buyers and reduced home inventory.
Instead of waiting for a house to come on the market and negotiating with a voluntary seller who could make decent terms for the sale, the house flippers enter the foreclosure pipeline. Once the homeowner is pushed out, the flipper gets the house for a song. The price tends to be even lower than the price of a house already foreclosed, and vacant, where the seller would be the bank. The flipping company is already in touch with the lender (see below), so the process is fairly red-tape-free, especially when the company makes hundreds of these foreclosures. Then the flippers can sell the house quickly, because they sell below market price. They still make a handsome profit. And the houses — having been lived in — tend to be in better shape than vacant properties; often there is good equity to boot, since reluctant sellers may have been living in their home for some time. Selling the houses at a below-market price then depresses local house values.
How does all this happen? In a hideous irony, house flippers are allowed into the foreclosure process as “substitute trustees.” The bank or lender holding the mortgage is often based out of state. When a homeowner falls into financial difficulties — such as job loss or medical bills — the lender may, in effect, turn the delinquent account over to an in-state firm. Whether advertising as law firms, real estate investment facilitators, “creditors’ rights” companies or foreclosure attorneys, the firms are in effect debt collectors — agencies that buy up delinquent credit-card accounts on the cheap, and then try to recoup from the small debtors.
They are also, in effect, house flippers. The national passion for “house-flipping” has been fueled by television, where it is entertainment as well as finance. (Disclosure — while I myself have not done any flipping, I support home renovation and/or home improvement, preferably keeping as much debris as possible out of landfill.) But this is a different process than going into a vacant, derelict house and fixing it up to sell.
The practice is national, with some variation by local real estate market. For me, it is also personal and local, direct from a sixtyish neighbor of mine, weeping in my living room. From a hard-working immigrant family, she has lived in her home since 1998. She has been trying to stave off foreclosure since 2014. I know her; I have seen and copied some of the legal documents; I’ve been in her house. She is the rightful owner; she has a relative who can make terms on the payments. But a house flipper wants the house, and once the bank turns over the mortgage to a “substitute trustee” there is little legal obligation for him to make terms. My neighbor is not even upside-down on her mortgage, so this flipper — if he wins in court — will get substantial equity as well as a house in a good neighborhood.
The process is toxic. 1) The homeowner gets into trouble and falls behind on payments — like my neighbor, who paid many thousands in medical bills for her late parents instead of just defaulting on the bills. 2) The bank turns the mortgage over to a real estate-flipping company as “substitute trustees.” 3) The house flippers work first with the lender and then with some too-friendly judges to push out the homeowner via court action.
It goes without saying that the substitute trustees have better access to lawyers and courts than do the troubled homeowners. Legal aid for the indigent may not be available for someone who still owns her house — ironically. Help from friends and relatives, and the occasional pro bono legal work, may well be the only options. The option offered by advocacy groups or other realtors is too often only an unwanted “short sale,” i.e. loss of the house she is trying to keep.
Yet more ironically, the trustees are supposed to be assisting the courts and thus the public; hence the term “trustee.” Instead, as said, they have a direct pecuniary interest in getting persons out of their home instead of helping them stay in it. This process can involve illegal tactics as well as borderline legalities. But when the homeowner is already troubled, there is far too little redress even for open and apparent, documented illegality.
For the record, reducing the “foreclosure backlog” is not the same as reducing foreclosures. Cutting the Gordian knot is not always the best idea or in the public interest.
Tactics that this writer has seen and heard include posting a fake abandoned-property notice on the door of a house the owner is living in; filing fraudulent claims of ownership in courts which lack jurisdiction in foreclosure cases; getting court orders from courts which lack jurisdiction to grant foreclosure motions; and appearing in court claiming to be a third-party “intervenor” while actually a party (the house flipper) in the foreclosure.
Some foreclosure firms have become notorious, and on some there is information online. One source is attorney Neil Garfield’s website titled Living Lies (Livinglies.wordpress.com), which includes a list of known “foreclosure mills” (though somewhat outdated) by state. The non-profit Pro Publica (ProPublica.org) has also published information on foreclosure mills, as have the magazine American Prospect and the website Above the Law (AboveTheLaw.com). Some material has gone out of date, now that the immediate consequences of the 2008 mortgage-derivatives debacle are less feverish.
But the long-term consequences are still with us. One foreclosure group in Maryland is involved in hundreds of foreclosures, largely in Prince George’s County (D.C. suburbs). The county’s diverse population is officially “majority-minority” and the real estate market includes many immigrant families, first-time home buyers and members of historically excluded groups. And, as mentioned, this is a region where the real estate market is picking up and house hunters are eager to buy. All in all, it’s the perfect storm — houses easy to pick up, from a population easy to pick on, by judges who largely did not get picked by the public.
Police use water cannons and pepper spray against crowds in Hamberg, Germany July 6, 2017
GM To Colombian Workers Injured On the Job: You’re On Your Own
BY BRUCE VAIL - WEDNESDAY, JUN 28, 2017, 7:18 PM
From In These Times: A long-term protest by workers charging mistreatment by General Motors in Colombia received a slap in the face from the administration of President Donald Trump this month when one of the protest leaders was denied entry into the United States.
Former GM autoworker Jorge Parra was preparing to visit the United States when the U.S. Ambassador to Colombia abruptly cancelled his visa just 20 hours before his flight was scheduled to depart, says Paige Shell-Spurling, an activist with the Portland, Oregon-based Central America Solidarity Committee. The cancellation has not been officially explained, she says, and supporters suspect retaliation for the aggressive protest tactics employed by the Colombians.
Parra was headed to the United States to continue his seven-year struggle to win better treatment for workers injured at the GM plant in the Colombian capital of Bogota. Parra charges that he was among several hundred employees who were unfairly dismissed at the GM Colomotores assembly plant—and then denied financial help in recovering from injuries sustained on the job.
Among the protest tactics are erection of a tent encampment in front of the embassy in Bogota, a corporate pressure campaign aimed at top executives of GM, persistent complaints to U.S. and Colombian government officials and international appeals for grassroots support. This month, the Portland Solidarity Committee continued its long-running support campaign with a trip to Washington, D.C. and Baltimore, assisted in part by a local unit of the Industrial Workers of the World.
“Support from the United States makes it possible,” for protests to continue in front the American Embassy in Bogota, says Shell-Spurling, who translated a phone message from one of the protestors in Colombia during a Baltimore meeting.
Such support has enabled public protests aimed at confronting the multinational corporation’s top executives. Parra attended GM’s annual stockholders’ meeting in 2016, for example, to demand a response from CEO Mary T. Barra. The appearance was followed by a cross-country bicycle tour where activists made unannounced visits to the homes of GM board members. Protestors were at the 2017 stockholders meeting as well, keeping up the pressure on company executives.
Parra is the leader of an organization formed specifically for the GM workers: the Association of Injured Workers and Ex-Workers of General Motors Colomotores (ASOTRECOL). Said to represent hundreds of workers when it was first formed in 2011, the group has dwindled over the intervening years, Shell-Spurling says, as some discouraged workers have given up hope entirely, and others have accepted partial restitution from GM.
GM spokesman Patrick E. Morrissey told In These Times over email that “All allegations over the years have been taken seriously, and GM has devoted substantial and senior resources to conduct numerous investigations.”
“GM addressed the individual cases raised by the form GM Colmotores employees and offered retraining, but they refused the opportunity,” Morrissey continued, adding: “GM has put in place training, funding, and other resources so the Asotrecol members can return to productive work again and care for their families.” Shell-Spurling brushes aside GM’s statements, charging that the company has spent years denying the problem, or making insincere offers of partial restitution. GM exercises strong political influence in both the United States and Colombia, she adds, and the governments of both countries have generally supported GM in the struggle with ASOTRECOL. She cited the action of U.S. Ambassador Kevin Whitaker to cancel Parra’s visa a prime example of such support.
Although there has been no confirmation, Paige says there is some suspicion that Parra’s visa cancellation may have been related to a meeting that had been scheduled this month with U.S. Sen. Ron Wyden (D-Oregon). The Portland Solidarity Committee had pressed for the meeting, Shell-Spurling says, in hopes that Sen. Wyden’s attention would spur GM to finally settle with all the injured workers.
The long ASOTRECOL campaign has been dispiriting at times, but the injured workers take satisfaction in the belief the Colombian auto workers currently employed at GM are reaping some benefit, Shell-Spurling concludes. There is renewed attention to safety at the plant, she says, and GM plant managers are far less likely to unfairly dismiss injured workers as they had been before.
Even so, the goal of a fair settlement for the remaining injured workers shows no signs of being met anytime soon.
Police fire water cannons to disperse crowds in Hamberg, Germany
UPS to freeze pensions for 70,000 nonunion workers to cut costs
Mary Schlangenstein and Katherine Chiglinsky - Bloomberg - Tuesday, June 27, 2017
From Bloomberg: United Parcel Service Inc. will freeze a pension plan for about 70,000 nonunion U.S. employees because of escalating costs and volatility in determining future payments, replacing it with a different retirement benefit.
UPS joins companies including DuPont Co. and Lockheed Martin Corp. in freezing pensions, which means that some or all participants may stop accumulating benefits. UPS’s retirement obligations are on top of a $1 billion jump in capital spending being planned for this year to handle a surge in e-commerce shipments. “It’s not a red flag,” said Kevin Sterling, a Seaport Global Holdings analyst. “Combine how much money they are spending on automation and on planes, along with discount rates being low maybe forever, and they said ‘we have to cap this or we’ll continue to see funding shortfalls.’”
UPS’s pension plans in the U.S. had a $9.85 billion shortfall at the end of last year, meaning they were about 76 percent funded, according to regulatory filings.
The shift won’t occur until Jan. 1, 2023, giving affected workers more than five years to prepare, Atlanta-based UPS said Tuesday. Most of the employees, which account for about 16 percent of the workforce, are in administrative or management positions.
After accruals to the existing defined benefit retirement plan stop in 2023, UPS will begin a contribution program that will place between 5 percent and 8 percent of a worker’s eligible salary into a 401(k), depending on seniority. Some workers also will get a transition benefit.
Current retirees aren’t affected, said Steve Gaut, a company spokesman. UPS declined to comment on the cost of the changes but said the amount is reflected in its existing 2017 financial targets.
“It’s something that’s been contemplated for quite some time, studied in some detail,” Gaut said in an interview. “This just makes it more predictable for the company.”
Last year, about 22,000 former UPS employees accepted one-time lump sums of their vested pension benefit under a buyout offer, accelerating payments of $685 million, the company said.
About 39 percent of Fortune 500 companies with pensions had frozen them by the end of 2015, an increase from 21 percent in 2009, according to a study from Willis Towers Watson Plc. The plans became more expensive to maintain after interest rates fell during the financial crisis.
Firms including FedEx Corp. and Delta Air Lines Inc. issued debt this year to help fund retirement programs. Still, the 100 largest corporate defined-benefit pension plans faced a total shortfall of $279 billion at the end of May, according to actuarial firm Milliman.
When $11 Million Is Too Much To Pay For Workers’ Lives Construction and Shipbuilding Companies Will Get a Pass on Protecting Workers from Beryllium Exposure
Construction and shipbuilding businesses wouldn’t have to meet basic public health standards such as providing protective clothing and equipment or testing workers for illnesses caused by beryllium under a new proposal from the Occupational Safety and Health Administration (OSHA). Businesses in other industries would have to meet the stricter standards.
The metal produces toxic dust when it is cut or sanded.
Companies with the laxer regulations are expected to save an average of $957 for each of the estimated 11,486 employees who are exposed to beryllium or about $11 million. The OSHA proposal would keep a new standard set under former President Barack Obama that generally lowers beryllium exposure for workers, but Trump is removing public health standards for construction and shipbuilding companies.
Construction workers are often exposed to it in abrasive blasting, when a high-velocity stream of various gritty materials is used to prepare a surface for paint or some other type of coating. When the surface is metal and rust needs to be removed, the gritty material is often coal slag, a glassy, granularized byproduct of burned coal. Coal slag contains traces of beryllium.
“People live with the terrible suffering of not being able to breathe, having chronic coughs, having the terrible fatigue that comes with chronic beryllium disease,” said Dr. Lee Newman, a beryllium researcher. “It’s a very slow, wasting lung disease.”
In March, Rep. Bradley Byrne (R-Ala.), the chairman of the House Workforce Protections Subcommittee, wrote to Edward Hugler, then the acting Labor Secretary, to complain about what Byrne called “a midnight rule.”
“The agency must swiftly rein in the impermissible overreach,” Byrne wrote.
Studies have found that even short-term exposures below the new limit can lead to chronic beryllium disease. Regulations for beryllium were originally supposed to take effect In March, but that was delayed twice until Trump’s OSHA proposed watering down the regulation.
'Conned' by Trump: Hundreds of Boeing and Carrier Workers to Lose Their Jobs
"When he spoke at our plant, he acted like no one was going to lose their job." byJake Johnson, staff writer
From Common Dreams: In a move that appears to negate President Donald Trump's numerous vows to fight for American workers at risk of losing their jobs due to corporate outsourcing and layoffs, Boeing told CNN on Thursday that around 200 workers based in South Carolina would be fired in an effort to cut costs.
The layoffs, according to reports, will come from several factories throughout the state, including one Trump visited just a few months ago.
"The South Carolina plant was Trump's first company visit outside the Beltway after he became president," the Washington Post noted.
In a memo to employees on Thursday informing them of the layoffs, Joan Robinson-Berry, vice president and general manager of Boeing South Carolina, wrote that "there may be more to come."
The news comes just as Carrier, another company Trump has frequently criticized for outsourcing, is set to send 600 of its Indianapolis factory jobs to Mexico, a move many view as a direct refutation to Trump's boasts and a betrayal of his promises.
"The jobs are still leaving," Robert James, president of United Steelworkers Local 1999, told CNBC. "Nothing has stopped."
T.J. Bray, a long-time Carrier employee who will not lose his job due to seniority, characterized Trump's promises to workers as more show than substance.
"To me this was just political, to make it a victory within Trump's campaign, in his eyes that he did something great," Bray said in an interview with CNBC. "I'm very grateful that I get to keep my job, and many others, but I'm still disappointed that we're losing a lot."
In addition to promising workers he would fight for their jobs, Trump also bragged that he convinced Carrier to invest $16 million into the Indianapolis plant.
But, CNBC reported, "United Technologies CEO Greg Hayes [announced] in December that the money would go toward more automation in the factory and ultimately would result in fewer jobs."
Lawmakers and organizers warned shortly after Trump announced his "deal" with Carrier that it was a facade. Sen. Bernie Sanders (I-Vt.), argued "Carrier just showed corporations how to beat Donald Trump."
"In exchange for allowing United Technologies to continue to offshore more than 1,000 jobs, Trump will reportedly give the company tax and regulatory favors that the corporation has sought," Sanders wrote. "Wow! How's that for standing up to corporate greed? How's that for punishing corporations that shut down in the United States and move abroad?"
Chuck Jones, former president of United Steelworkers 1999, similarly characterized Trump's public proclamations as misleading.
"When he spoke at our plant, he acted like no one was going to lose their job. People went crazy for him," Jones wrote in an op-ed for the Washington Post. "All the while, I’m sitting there, thinking that's not what the damn numbers say."
"These plants are profitable, and the workers produced a good-quality product," Jones concluded. "Because of corporate greed, though, company leaders are racing to the bottom, to find places where they can pay the least. It's a system that exploits everyone."
Apple CEO Tim Cook thinks a big corporate tax cut is “what’s good for America”
No ally of progressives, the Apple CEO's anti-tax sentiments reveal how entrenched in the corporate elite he is
ANGELO YOUNG - SUNDAY, JUN 18, 2017 05:30 AM PDT
From Salon: In a recent interview with Bloomberg Businessweek, Apple CEO Tim Cook had a frank and forthright discussion about life, politics and the future of his company. In it, he showered the late Apple co-founder Steve Jobs with adulation. He talked about Apple’s new HomePod voice-controlled speaker. He was practically giddy about augmented reality technology. Then, the CEO — who is sometimes celebrated as a progressive hero for his social views — gave a political opinion that is on par with the policy papers issued by some of the most regressive, far-right think tanks. “The [corporate tax] rate [should] get as low as it can go,” Cook said.
“I don’t know what that would be. Maybe it can get to this 15 percent people are talking about. Maybe not. Maybe it’s 20,” he said, referring President Trump’s proposal to slash the corporate income tax rate from 35 percent to 15 percent. (Republican House Speaker Paul Ryan’s tax plan offers a less drastic reduction to 20 percent.)
Independent budget experts say reducing the federal corporate income tax rate to 15 percent would reduce federal revenue by $2.4 trillion over a decade, a loss that would balloon the national debt and inevitably lead to federal spending cuts.
Cook said the steep reduction could be partially offset with “zero deductions,” meaning that corporate accountants wouldn’t be able to whittle down the rate using loopholes. But even with no deductions, many of the country’s largest companies would still be able to chip away at their taxes with mechanisms like the research and development tax credit that Apple receives.
Earlier this year, the Institute on Taxation and Economic Policy, a nonpartisan liberal think tank, published research showing that few large profitable companies even come close to paying the 35 percent federal income tax rate on U.S. profits.
The study, which looked at 258 large U.S. companies that reported annual U.S.-based profit from 2008 to 2015, concluded that only one in four of these companies paid more than 30 percent in federal corporate income taxes on their profits. The average tax rate for these companies, which include well-known big names like General Electric and Priceline, was 21.2 percent.
“These findings refute the prevailing view inside the Beltway that America’s corporate income tax is more burdensome than the corporate income taxes levied by other countries, and that this purported (but false) excess burden somehow makes the U.S. ‘uncompetitive,’” the report said.
Now Five Men Own Almost as Much Wealth as Half the World's Population
While Americans fixate on Trump, the super-rich are absconding with our wealth. By Paul Buchheit / AlterNet June 12, 2017, 6:23 AM GMT
Last year it was eight men, then down to six, and now almost five.
While Americans fixate on Trump, the super-rich are absconding with our wealth, and the plague of inequality continues to grow. An analysis of 2016 data found that the poorest five deciles of the world population own about $410 billion in total wealth. As of June 8, 2017, the world's richest five men owned over $400 billion in wealth. Thus, on average, each man owns nearly as much as 750 million people.
Why Do We Let a Few People Shift Great Portions of the World's Wealth to Themselves?
Most of the super-super-rich are Americans. We the American people created the internet, developed and funded artificial intelligence, and built a massive transportation infrastructure, yet we let just a few individuals take almost all the credit, along with hundreds of billions of dollars.
Defenders of the out-of-control wealth gap insist that all is OK, because after all, America is a meritocracy in which the super-wealthy have earned all they have. They heed the words of Warren Buffett: "The genius of the American economy, our emphasis on a meritocracy and a market system and a rule of law has enabled generation after generation to live better than their parents did."
But it's not a meritocracy. Children are no longer living better than their parents did. In the eight years since the recession the Wilshire Total Market valuation has more than tripled, rising from a little over $8 trillion to nearly $25 trillion. The great majority of it has gone to the very richest Americans. In 2016 alone, the richest 1% effectively shifted nearly $4 trillion in wealth away from the rest of the nation to themselves, with nearly half of the wealth transfer ($1.94 trillion) coming from the nation's poorest 90% -- the middle and lower classes. That's over $17,000 in housing and savings per lower-to-middle-class household lost to the super-rich.
A meritocracy? Bill Gates, Mark Zuckerberg and Jeff Bezos have done little that wouldn't have happened anyway. All modern U.S. technology started with, and to a great extent continues with, our tax dollars and our research institutes and our subsidies to corporations.
Why Do We Let Unqualified Rich People Tell Us How To Live?
In 1975, at the age of 20, Bill Gates founded Microsoft with high school buddy Paul Allen. At the time, Gary Kildall's CP/M operating system was the industry standard. Even Gates' company used it. But Kildall was an innovator, not a businessman, and when IBM came calling for an OS for the new IBM PC, his delays drove the big mainframe company to Gates. Even though the newly established Microsoft company couldn't fill IBM's needs, Gates and Allen saw an opportunity, and so they hurriedly bought the rights to another local company's OS -- which was based on Kildall's CP/M system. Kildall wanted to sue, but intellectual property law for software had not yet been established. Kildall was a maker who got taken.
So Bill Gates took from others to become the richest man in the world. And now, because of his great wealth and the meritocracy myth, many people look to him for solutions in vital areas of human need, such as education and global food production.
Gates on Education: He has promoted galvanic skin response monitors to measure the biological reactions of students, and the videotaping of teachers to evaluate their performances. About schools he said, "The best results have come in cities where the mayor is in charge of the school system. So you have one executive, and the school board isn’t as powerful."
Gates on Africa: With investments in or deals with Monsanto, Cargill and Merck, Gates has demonstrated his preference for corporate control over poor countries deemed unable to help themselves. But no problem: according to Gates, "By 2035, there will be almost no poor countries left in the world."
Warren Buffett: Demanding To Be Taxed at a Higher Rate (As Long As His Own Company Doesn't Have To Pay)
Warren Buffett has advocated for higher taxes on the rich and a reasonable estate tax. But his company Berkshire Hathaway has used "hypothetical amounts" to pay its taxes while actually deferring $77 billion in real taxes.
Jeff Bezos: $50 Billion in Less Than Two Years, and Fighting Taxes All the Way
Since the end of 2015 Jeff Bezos has accumulated enough wealth to cover the entire $50 billion U.S. housing budget, which serves five million Americans. Bezos, who has profited greatly from the internet and the infrastructure built up over many years by many people with many of our tax dollars, has used tax havens and high-priced lobbyists to avoid the taxes owed by his company.
Mark Zuckerberg (6th Richest in World, 4th Richest in America)
While Zuckerberg was developing his version of social networking at Harvard, Columbia University students Adam Goldberg and Wayne Ting built a system called Campus Network, which was much more sophisticated than the early versions of Facebook. But Zuckerberg had the Harvard name and better financial support.
Now with his billions he has created a charitable foundation, which in reality is a tax-exempt limited liability company, leaving him free to make political donations or sell his holdings, all without paying taxes.
The False Promise of Philanthropy
Many super-rich individuals have pledged the majority of their fortunes to philanthropic causes. That's very generous, if they keep their promises. But that's not really the point.
American billionaires all made their money because of the research and innovation and infrastructure that make up the foundation of our modern technologies. They have taken credit, along with their massive fortunes, for successes that derive from society rather than from a few individuals. It should not be any one person's decision about the proper use of that wealth. Instead a significant portion of annual national wealth gains should be promised to education, housing, health research, and infrastructure. That is what Americans and their parents and grandparents have earned after a half-century of hard work and productivity.
Supreme Court speeds copycat biologic drugs to market
By Andrew Chung | WASHINGTON Mon Jun 12, 2017 | 11:02am EDT
From Reuters: The U.S. Supreme Court on Monday cut the time it will take for copycat versions of biologic drugs to get to the market in a pivotal ruling about an expensive class of medicines that can yield billions of dollars in sales for drug companies.
The justices, in a 9-0 ruling, overturned a lower court decision that had prevented Swiss pharmaceutical company Novartis AG (NOVN.S) from selling its copycat version of California-based Amgen Inc's (AMGN.O) Neupogen until six months after the U.S. Food and Drug Administration approved it.
The decision has major implications for the pharmaceutical industry because it will dictate how long brand-name makers of biologic drugs can keep near-copies, called biosimilars, off the market. Even the six months at issue in the case can mean hundreds of millions of dollars in sales.
Health insurers expect biosimilars to be cheaper than original brands, like generics, saving consumers billions of dollars each year.
The dispute involved a section of the 2010 Affordable Care Act, dubbed Obamacare, that created an expedited path for regulatory approval of biosimilars while trying to respect the patent rights of brand-name manufacturers.
Novartis complained that the 2015 ruling by the U.S. Court of Appeals for the Federal Circuit in Washington handed Amgen an extra six months of exclusivity on top of the 12 years already provided under the law.
Rising drug prices are a matter of concern for patients and policymakers. President Donald Trump has criticized the pharmaceutical industry over pricing practices, promising to encourage competition and bring down drug costs.
Unlike traditional drugs, biologics are made from living cells and cannot be copied exactly to make generic versions. They are used to treat a range of conditions, including Crohn's disease, ulcerative colitis, rheumatoid arthritis, plaque psoriasis, breast cancer and diabetes.
Novartis unit Sandoz in September 2015 began selling Zarxio, the first biosimilar drug to win U.S. regulatory approval. Amgen's Neupogen and Zarxio boost white blood cell counts in cancer patients to help fight infections.
After launch, Zarxio cost 15 percent less than Neupogen at list prices, according to Novartis. Sales of Neupogen, meanwhile, dropped from more than $1 billion in 2015 to $765 million last year, primarily due to competition in the United States, the company said in regulatory filings.
Biologics account for an ever-increasing share of U.S. prescription drug costs, according to an insurer trade group. It cited as an example AbbVie Inc's Humira, which costs more than $50,000 per year.
Amgen sued Sandoz in 2014 in San Francisco federal court alleging patent infringement and violations of the Affordable Care Act provision governing biosimilars.
The companies disagreed on how to apply that law's requirement that a biosimilar drug maker give the brand-name manufacturer 180 days notice before launching its copycat version.
In July 2015, the appeals court ruled that the 180-day notice must be given after FDA approval. Novartis appealed to the Supreme Court, with the Trump administration backing the company's arguments.
Americans are suddenly defaulting on their credit cards Alex Morrell
From Business Insider: The American economy has looked pretty robust of late — unemployment just hit a 16-year low, and stocks recently reached an all-time high.
This makes it all the more curious that Americans have suddenly stopped paying off their credit-card bills at a rapid rate.
In the past two fiscal quarters, banks reported a steep rise in credit-card charge-offs — debt that companies can't collect from their customers — according to a report from Moody's.
This chart from the report shows how each bank has fared on charge-offs, with Capital One, First National of Nebraska, and Synchrony showing the worst performance over the period:
The sharp increase, the largest since 2009, is especially unusual given how strong the US employment market has been, Moody's noted. It suggests that American consumers haven't fallen on hard times so much as banks have started to loosen their standards and issue credit more aggressively.
Card issuers have been much stricter since the financial crisis and the passing of the Card Act in 2009, which added an array of protections for consumers. Getting a credit card got a lot tougher, especially if you had subprime credit.
Charge-offs and unemployment tend to be related: When people lose their jobs, credit cards tend to be one of the first bills people stop paying, as compared with loans for a home or a car in which people risk losing those crucial assets.
So, charge-offs spiking when unemployment claims are low indicates that banks have lowered their standards and are approving people for cards who aren't as creditworthy.
The ratio of charge-offs to unemployment claims had been hovering near all-time lows, but this chart shows that it's shot back up to the historical average in the past two quarters — meaning standards may have deteriorated "rapidly," according to Moody's. --- But if lending standards continue to degrade, things could get messy in a hurry if the economy takes a turn for the worse, according to Warren Kornfeld, a senior vice president at Moody's.
"Although card standards were extremely tight in the years following the financial crisis, if underwriting then loosened materially, as the rise in charge-offs suggests, asset quality could continue to deteriorate rapidly going forward, especially in the event of a recession," Kornfeld said in a statement.
Corporate Allies in Washington Take Aim at CEO Pay Reform
SARAH ANDERSON JUNE 7, 2017
From Prospect.org: It’s not easy defending America’s overpaid CEOs, but somebody’s gotta do it. At least that seems to be the sentiment of the corporate lobby groups, politicians, and regulators who make up what might be called Washington’s CEO Pay Apologists Club.
Lately, this bunch has been on quite a tear. House Republicans’ health-care law will eliminate an Obamacare tax penalty on excessive compensation among insurance executives. Their Wall Street reform plan, scheduled for a vote this week, nixes several Dodd-Frank executive-pay reforms, including a ban on risk-inducing Wall Street bonuses and a regulation requiring publicly held corporations to report their CEO-worker pay gap.
These assaults take a certain amount of political courage at a time when corporate CEOs are making even President Donald Trump look like Mr. Popularity. In a March 2017 Harris poll, Americans gave corporate chieftains a favorability rating of only 24 percent, about half the share who approve of Trump’s job performance.
Even a majority of self-identified Republicans favor a fixed ceiling on CEO pay. Of course, none of the modest Obama-era reforms now on the chopping block went anywhere near that far. But that hasn’t dampened GOP hostility toward them.
Overpaid CEOs’ biggest champion in Washington is Representative Bill Huizenga. The western Michigan Republican’s predecessor and former boss, Pete Hoekstra, was relatively soft on this issue. “CEO pay in America has gotten way out of hand,” Hoekstra declared in 2009, admitting, “I cringe every time I see those numbers.” But the long-time congressman’s protégé appears more than comfortable with executive paychecks that now typically run hundreds of times larger than those of average U.S. workers.
Since his 2010 election, Huizenga’s white whale has been the CEO-worker pay-ratio regulation. In every session, he’s introduced a bill to liberate corporate America from what he claims is the excessive burden of calculating how much they pay their typical worker (publicly held firms already report their CEO compensation).
The Securities and Exchange Commission (SEC) estimates that the ongoing annual cost of calculating this ratio will be $58,880 per company. That’s less than one half of 1 percent of the $13.1 million received by the average S&P 500 CEO last year. (read more)
New Report Shows Corporations and Western Governments Continue to Profit From Looting of Africa Monday, June 05, 2017 By Benjamin Dangl, Toward Freedom | Report
From Truthout: A recent report published by a coalition of African and British social justice organizations lays bare the truth that foreign corporations and wealthy governments continue to profit from the looting of the world's most impoverished continent.
In 2015, the year the most recent data is available, African nations received $162 billion in aid, loans, and remittances. At the same time, $203 billion was taken from these nations through resource extraction, debt payments, and illegal logging and fishing.
"We find that the countries of Africa are collectively net creditors to the rest of the world, to the tune of $41.3 billion in 2015," explain authors of the report, titled "How the World Profits from Africa's Wealth's Wealth."
"There's such a powerful narrative in Western societies that Africa is poor and that it needs our help," explained Aisha Dodwell, a campaigner with Global Justice Now, one of the organizations that authored the report.
"This research shows that what African countries really need is for the rest of the world to stop systematically looting them," Dodwell said. "While the form of colonial plunder may have changed over time, its basic nature remains unchanged."
For example, over half of the population of Africa lacks access to sufficient healthcare, with an average of only 14 health professionals for every 100,000 people.
However, Africa's wealth underground is extensive. In 2015, African nations exported some $232 billion worth of minerals and oil to the rest of the world, South Africa contains an estimated $2.5 trillion in mineral wealth, and the Democratic Republic of the Congo (DRC) holds an estimated $24 trillion in untapped mineral reserves.
Yet the poverty above ground persists, with 95% of the population in the DRC living on less than US $2 dollars per day.
The problem is that foreign companies profit the most from this resource extraction.
"Money is leaving Africa partly because Africa's wealth of natural resources is simply owned and exploited by foreign, private corporations," the report explains. "In only a minority of foreign investments do African governments have a shareholding."
Furthermore, when multinational companies do extract and export raw commodities, they typically pay very little taxes to the government, or they use tax havens to avoid paying taxes.
"Many African tax policies are the result of long standing policies of Western governments insisting on Africa lowering taxes to attract investment," the report found.
The report shows how the current model of development is futile while such plundering of the continent persists.
"'Development' is a lost cause in Africa while we are hemorrhaging billions every year to extractive industries, western tax havens and illegal logging and fishing," said Bernard Adaba, a policy analyst with Integrated Social Development Center, a research and advocacy organization in Ghana.
"Some serious structural changes need to be made to promote economic policies that enable African countries to best serve the needs of their people rather than simply being cash cows for Western corporations and governments," Adaba explained. "The bleeding of Africa must stop!"
As the Guyanese scholar and activist Walter Rodney wrote in his classic 1972 book How Europe Underdeveloped Africa, the root of the problem is global capitalism.
"African development," Rodney wrote, "is possible only on the basis of a radical break with the international capitalist system, which has been the principal agency of underdevelopment of Africa over the last five centuries."
When will Exxon will be worthless? Not if.
Steve Kretzmann, June 1, 2017
From Price of Oil: These are dizzying days. Our best advice is to stay woke, and pay attention. As we prepare for a day that will revolve around Trump’s Rose Garden speech to Make America Guzzle&Gush Again, it is worth taking a moment to focus on the amazing events in the background over the last few days:
Kinder Morgan’s Transmountain tar sands pipeline got politically flattened when the province of British Columbia elected the social democrats and the greens on their promise to kill the project;
China and Europe lept out of the gate announcing major new joint cooperation to take climate ambition to a new level in response to reports that denier-in-chief Trump is pulling out of the Paris agreement. A veritable “we won’t hesitate to leave you behind” was the message resonating around the world shortly after the news dropped;
The cautious, conservative, Financial Times trumpeted the “unstoppability” of renewables and the end of fossil fuels; and
ExxonMobil shareholders – lead by mainstream investment firms – voted decisively to demand the company disclose the risks of its massive fossil fuel reserves to the climate.
And this is just a sampling of what is becoming a very clear picture of a world that is changing faster than most can keep up with.
Let’s take a closer look at the ExxonMobil vote. To be clear, Exxon still hates your children, but now their shareholders are demanding that they stop lying about it. Investors voted with an astounding 62.3% majority to require the fossil fuel giant disclose the impacts their massive oil reserves will have on the climate.
Just as groundbreaking is that the measure was reportedly supported by some of the world’s biggest financial firms: BlackRock, Vanguard, and State Street. When firms like these start to come around, you can be pretty sure the tide is turning.
In addition to getting slammed on this vote (in spite of the company urging its shareholders to reject the resolution) ExxonMobil is also facing a suite of lawsuits at various levels (including by multiple Attorney Generals’) on its history of lies and deception covering up and discrediting climate science. The climate bad guys aren’t lurking in the shadows anymore, they have been pushed into plain sight and in response, investors are revolting, courts are pouncing, and people are finally starting to see past the spin.
It is important to note that acting on this resolution will come nowhere near to making Exxon a climate good-guy. They are not the first to deal with this shareholder demand, and those who have come before them have found ways of pulling rabbits out of hats by making in-house models work to show that their oil will somehow survive in a world that needs to decarbonize.
The bottom line is that Big Oil doesn’t have a future in a carbon-constrained world that stays within safe climate limits. This reality is a much tougher pill to swallow, but this is a striking example that the mainstream financial world is getting closer to a meaningful understanding of the end of oil. It is our job to push them to get there faster. After all, a worthless Exxon is not a matter of if, it is a matter of when, and no one is going to want to go down with that sinking ship.
The Astounding Size of the Marijuana Economy Dwarfs 10 of America's Most Popular Food and Drink Staples
Legal pot sales alone swamp some surprising product lines, but when you add in estimated black market sales, marijuana is a real monster. By Phillip Smith / AlterNet May 31, 2017, 12:14 AM PDT
Marijuana is legal in eight states and the District of Columbia, and medical marijuana is legal in nearly 30 (although often under quite restrictive regulatory schemes). Between the two, legal weed is generating total annual sales of between $4 billion and $4.5 billion.
But legal marijuana sales are dwarfed by sales in the black market, which according to a recent report in Marijuana Business Daily, accounts for about 10 times the size of the legal market, or about $45 billion to $50 billion.
While that's still only about half the size of the legal beer and tobacco market, it is nothing to sneeze at, and it puts marijuana well ahead of some major American economic sectors. Here are 10 products or services already being surpassed by pot, with the first five being smaller than the legal market and the second five being smaller than the estimated overall market, including both licit and illicit markets. Some of these industries could hope for synergistic effects, though. 1. Girl Scout cookies Thin Mints are the hands-down winner when it comes to Girl Scout cookies, accounting for 25% of all sales, but that's only around $200 million. All told, Americans shelled out $776 million for the treats last year. That's a lot of cookies, but that's less than one-quarter of the size of the legal pot market. 2. Tequila Shots with lime and salt, margaritas, Tequila sunrises…Americans gulp down a huge volume of the Mexican agave concoction every year, but the $2.3 billion in annual tequila sales is only half the size of the legal marijuana market. Of course, tequila is only a fraction of the alcohol industry, which still rocks compared to weed. Beer sales alone are more than $100 billion a year. 3. Music streaming services Who doesn't love music and want it handy on all their devices? Music streaming services such as Spotify, Pandora, Apple Music, and Amazon Music Unlimited are big, big, big, but at about $2.5 billion in annual sales, only half as big as legal weed. 4. Erectile dysfunction medication Viagra and Cialis can't stand up against legal marijuana, either. There's a huge potential market out there, with an estimated 52% of men experiencing erectile dysfunction at some point in their lives, but annual sales for the two drugs combined is still only $2.7 billion. 5. Frozen pizza From Tombstone to California Pizza Kitchen, take-home store-bought frozen pizzas are a traditional favorite of millions of Americans. And now, we're finally reaching sales parity with legal pot. Frozen pizzas account for $4.4 billion in sales each year, very near the amount spend on legally purchased marijuana.
6. Ice cream Retail ice cream sales come to $5.1 billion a year, just barely exceeding the high-end estimate for legal pot sales, but barely one-tenth the size of the estimated black and legal marijuana markets. That's still a lot of scoops, though. 7. Movie tickets Let's go to the movies! Even though movie tickets aren't exactly cheap, people still pay for that theatrical cinematic experience to the tune of $11.1 billion in ticket sales per year (not counting snacks). That's only about a quarter of the size of the overall pot market. Being stoned on weed could make some of those lame loser movies more palatable. 8. The NFL Pro football is a monster, dominating sports TV, radio, and internet for half the year and generating $13.3 billion in annual revenues. At the rate legal marijuana markets are expanding (just wait for California!), legal pot sales alone could surpass NFL revenues within just a few years, and the total estimated market is more than three times what the league is bringing in. 9. Gambling Pot is bigger than Vegas? Yep. And Reno and Atlantic City and all those casinos everywhere combined. Make no mistake—gambling is big business, with Americans burning through $34.6 billion a year, according to the American Gambling Association, but Americans are burning through even more weed, and we'd wager that's going to go up, too. 10. Daycare for kids Daycare for kids isn't exactly inexpensive and it's an issue for millions of American working families. According to IBISWorld’s market research, that's a $48 billion hit on the family budget. It's an awful lot of money. It's also more or less the amount Americans are spending on pot right now.
Whole Foods represents the failures of 'conscious capitalism' Nicole Aschoff
From The Guardian: It’s hard to think of a better poster child for “conscious capitalism” than Whole Foods Market, the high-end grocery store that made a name for itself selling organic produce in feel-good, mood-lit stores. These days, the chain is floundering and a potential buyout is on the horizon. What does that say about the conscious capitalism it championed?
Same-store sales have declined for six straight quarters, and Barclay analyst Karen Short estimates that 14 million Whole Foods customers walked away during the same period. Last month activist hedge fund Jana Partners swooped in, buying up 8.3% of the company’s shares and demanding an overhaul. Whole Foods responded by reshuffling its board, bringing in a handful of big box retail stars and promoting Gabrielle Sulzberger, who hails from private equity, to chairwoman.
A failing firm isn’t exactly news. In the dog-eat-dog world of global capitalism lots of companies have their moment in the sun only to crash and burn a few years later. But Whole Foods was supposed to be different.
John Mackey, the company’s chief executive, has long argued that Whole Foods is wired differently — that it runs on a “conscious capitalism” model that outsmarts the competitive pressures of our for-profit system through creativity and innovation.
In Liberating the Heroic Spirit of Business: Conscious Capitalism, Mackey argues that his conscious capitalism model achieves success by honoring not just shareholders, but all stakeholders, including workers, communities, and the environment.
The Whole Foods founder penned his treatise in response to the growing consensus that capitalism is doing irreparable harm to the planet and the people who live on it. Our for-profit system is increasingly viewed as a zero sum game in which ecological destruction, climate change, and rising inequality are firmly linked to the rapacious behavior of multi-national corporations.
Mackey agrees that humans are harming the planet, but he doesn’t think the problem lies in capitalism. Free market capitalism, according to Mackey, is actually a “beautiful,” “heroic,” system that, properly harnessed, can operate “in harmony with the fundamentals of human nature” and the planet.
We don’t need to rein in corporations through onerous labor and environmental regulations, he writes, because the virtuous feedback loop of honoring stakeholders plus innovation will leave “unconscious” firms like Walmart in the dust.
The conscious capitalism model is appealing. It’s simple, easy. We can avert looming environmental catastrophe by becoming conscious consumers who frequent conscious companies. After all, shopping at Whole Foods is a heck of a lot more fun than lobbying for regulations on corporations or convincing people to consume less. More Whole Foods, less Walmart. Problem solved.
Mackey was right about one thing. People do love to shop at Whole Foods, or at least they used to. These days that demon called competition has caught up with the Austin-based company. Behemoths like Kroger, Safeway, Target, and even Walmart now offer a wide-range of organic produce for considerably less than “Whole Paycheck.” Mackey’s conscious company has gone from Wall Street darling to Wall Street basket case in the blink of an eye.
The future of conscious capitalism appears equally bleak. To placate shareholders and mitigate declining same-store sales, last year the company jettisoned its unique purchasing model that wove together a network of autonomous regional production hubs of small farmers and mom-and-pop food startups.
It’s now prioritizing a centralized, bulk-buying strategy that looks a lot like, well, Walmart. It also initiated a $1.25bn share buyback program and has promised to cut costs by $300 million and raise same-store sales 2% by 2020.
But according to its 13D filing, Jana Partners — whose founder and fund manager Barry Rosenstein recently bought the most expensive home in America — wants even more. Like Whole Foods, Jana is experiencing a slump, suffering negative returns in 12 of the last 19 months; it’s expecting to cash in on its investment in the organics chain. A potential forced sale, most likely to private equity investors known for slash and burn tactics, remains on the near-term horizon.
The point of this dour appraisal is not to crow over Whole Foods’s misfortune. It’s to take a hard look at models that claim to solve the ills of capitalism without challenging the in-built drives of our for-profit system.
Mackey has loudly declared unions akin to herpes and state regulation little more than “crony capitalism” — that all we need to solve things like the climate crisis are better, smarter, “conscious” capitalists. The crisis of Whole Foods belies this notion. There’s no way to “fix” corporations’ compulsion to produce ever more, ever more cheaply. It’s written into the DNA of global capitalism.
Attractive as the conscious capitalism model may be, we simply can’t rely on companies to deliver dignified workplaces, equitable models of food production or a better relationship between consumers and the planet.
All stakeholders are not equal in our global economy, and even the best-intentioned businesses run up against the implacable foes of profit and competition. Ultimately, the thorny problem of sustaining both decent livelihoods and a livable planet won’t be solved by buying better things. It’ll be solved through political struggle and demands that put people before profit.
Walmart's $237 Million Man: How Americans Subsidize Inequality Wednesday, May 24, 2017 By Sam Pizzigati, Inequality.org | News Analysis
From Truthout: How much does the typical employee earn at Walmart, America's largest private employer?
We don't know exactly and won't until next spring, when corporations begin disclosing figures on their median -- most typical -- worker pay. Federal regulations that went into effect just before Donald Trump took office now require this disclosure.
Walmart e-commerce chief Marc Lore last year pulled down, with a little help from America's taxpayers, the equivalent of well over $4 million per week.
In the meantime, we do already know how much Walmart's highest-paid people are making. Publicly traded companies like Walmart have to disclose what they pay their top execs. Most of what they pay comes in the form of stock, and calculating the value of these stock awards can get tricky. Accounting experts regularly disagree on which execs are actually making the most.
Earlier this month, business analysts at Bloomberg chimed in with their latest executive pay scorecard. In 2016, Bloomberg reports, four US corporate executives collected over $100 million each, and a fifth, Tesla CEO Elon Musk, came up just short at $99.7 million.
America's biggest executive pay package in 2016? That went, says Bloomberg, to an executive at Wal-Mart. Marc Lore, the CEO of Wal-Mart's e-commerce division, ended the year with a windfall worth an incredible $236.9 million.
Let's break that down a little. Lore essentially took in the equivalent of over $4.5 million per week. In effect, Lore earned in a single week what a Walmart worker paid $11 an hour would have to work 199 entire years to match.
This sort of discrepancy doesn't in the least bother big-time corporate compensation consultants like Steven Hall, the managing director at Steven Hall & Partners. Nine-digit executive pay packages, Hall readily acknowledges, can seem "startling." But, he adds, these nine-digit executives have "proven talents."
At Walmart, suggests Memphis retail worker union president Lonnie Sheppard, that magical "proven talent" just happens to include fleecing taxpayers. Walmart pays its workers so little, Sheppard notes, that huge numbers of them "are forced to rely on public assistance programs like food stamps, Medicaid, and subsidized housing."
In 2014, Americans for Tax Fairness has computed, providing that assistance cost American taxpayers $6.2 billion.
Average Americans, says Sheppard, are paying what amounts to a hidden "Walmart tax" -- and the only people who really benefit from this tax subsidy sit in Walmart's executive suites.
That situation, of course, ought to be reversed. Average Americans shouldn't be paying a hidden tax that benefits Walmart execs. The tax burden should rest instead on companies like Walmart that pay near-poverty wages -- and then expect taxpayers to foot the bill for the hurt that low wages leave in their wake.
So how could we shift the tax burden onto the Walmarts of the world? The British Labour Party has just advanced a new common-sense approach that builds on landmark local action that the Portland city council took this past December.
Labour wants to levy a new tax on corporations that pay executives excessively more than workers. Under the Labour plan, a corporation that pays any executives more than 20 times the national living wage -- a standard a bit above the minimum wage -- would pay 2.5 percent of that excess over 20 times in tax. And any corporation that pays over 20 times the national median wage, a higher figure, would have to pay a tax of 5 percent on the resulting excess.
Still another Labour proposal would deny all government contracts to companies that pay their top executives over 20 times what they pay their own workers,
Measures like these, says British economist Faiza Shaheen, would "force companies to think twice about unfair wages at the top."
Marc Lore, once upon a time, might have agreed on the need for that rethinking. Lore, before he joined Walmart, penned an online column entitled "Chasing Money Will Cripple Your Career."
Lore explained in that piece that he had started his own career in the financial industry, where the workplace culture measures success purely by the size of your bonus. A near-heart attack, writes Lore, changed his thinking. He came to realize, his piece concludes, "that success is not a measure of your salary, title or degree, but the impact you have others and the collective happiness of the people you touch."
Pay-ratio taxes, along the lines of what the Labour Party is proposing in the UK, just might help bring that "collective happiness" a little closer.
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Tesla's future is completely inhuman — and we shouldn't be surprised
From Business Insider: Tesla has been on an epic run since the beginning of 2017.
Its market cap, at around $50 billion, passed Ford's and now rivals General Motors. If all goes according to schedule, the Model 3 mass-market car will launch in about a month.
But not all is well in Tesla land. There's been chatter about a union-organizing effort at the company's Fremont, Calif. factory.
And a Guardian report this week saw some Tesla workers characterize the plant as a dangerous place to work, and the pace that the carmaker and CEO Elon Musk sets to be brutal.
Welcome to the auto industry. Building cars is demanding physically. On modern assembly lines, it isn't as tough as it used to be, but it's still demanding. And even though the industry has taken a leadership role in automation — auto plants have been heavily automated for decades — a lot of man- (and woman-) hours are required to bolt a vehicle together. Hundreds of thousands of people are employed in the US doing just that.
Auto manufacturing is about as efficient as it can be these days without a massive leap in technology. But a massive leap is what Musk wants. You could accuse Tesla of being somewhat unfriendly to human concerns, given its recent bad press around labor. But what Musk truly has in mind is something completely inhuman.
Or more accurately, something posthuman. His goal is to radically remake not simply auto manufacturing but all manufacturing by using a much higher degree of automation. To that end, Tesla bought a German firm, Grohmann Engineering, that specializes in automated processes.
But that's merely a baby step. When talking about his "Master Plan, Part Deux" last year, Musk outlined what he called the "alien dreadnought" factory — a plant so different from what we see today, even at the most advanced facilities, that it would be unrecognizable. It would be alien in its innovation.
Getting past human speed
The overarching goal is to get past the limits of human speed. A fully automated factory could, in Musk's thinking, be operated by a few human experts, but otherwise, raw materials would go in one end and finished cars would roll out the other. In between, robots would do everything, a very high speed — speeds too dangerous to risk around frail human bodies.
Now you might ask, "What about the people?" Doesn't Tesla want to keep employing California auto workers?
Actually, no. At some level, although Musk admires and appreciates the dedication of his workforce, he doesn't think auto assembly is the best use of human life. We can argue about whether he's right, but the dice is already cast. Tesla's next big vehicle, the Model Y compact SUV, will be an experiment in Musk's manufacturing ambitions. I expect it to be as much robot-built as current technology will allow.
Bear in mind that there will likely still be a place for people who want to build cars. I recently toured Ferrari's factory in Maranello, Italy and there I saw many powerfully engaged workers, on a high-tech assembly line, building Ferraris largely by hand. In fact, Ferrari uses almost now fully automated assembly systems — the only ones at the factory perform tasks that are too hazardous or awkward for human workers. Otherwise, most of a Ferrari is handmade.
And that's the way customers want it. Ferraris sell for over $200,000 (and up) and production is limited to under 10,000 units per years. Tesla wants to be delivering a million vehicles annually by 2020. Bespoke assembly isn't going to cut it.
Time for a new leap?
We should give Musk the benefit of the doubt here, even if his likely choice to use the Model Y as a test bed, given the importance of that vehicle to Tesla's future fortunes, is ill-advised. The last major advance in auto manufacturing was the so-called "Toyota Production System," which gave rise to "lean" or "just in time" assembly of cars. All the world's major carmaker have more or less adopted it as this point, and the quality of vehicles has dramatically improved.
The industry consensus has been that we'll continue to see steady refinement of lean manufacturing, perhaps with incremental improvements in automation. But no wholesale switch to autonomous systems.
Much as Musk doesn't want to tolerate the 40,000 annual auto-related deaths in the US alone — he wants to put self-driving tech in every Tesla to reduce that number — he doesn't like the 20th-century dangers of the auto factory. Robots and artificial intelligence are the solution there.
The plan is inhuman. But Musk aims to get the people out so Tesla can be more humane. Will he succeed? It's going to be tough. But if you'd said ten years ago that a startup electric-car company selling almost no vehicles would be worth as much as General Motors in a decade, no one would have taken you seriously.
Prepare for the inhuman alien dreadnought — and maybe welcome the invasion.
Paid family leave policies show corporate America's disdain for low-wage workers and their babies
By Laura Clawson Saturday May 20, 2017 · 7:01 AM PDT
From Daily Kos: Becoming a parent is one more aspect of life poisoned by economic inequality in the United States, with people who are paid more than $75,000 a year twice as likely to get paid leave as people who are paid less than $30,000. And even companies that have touted their parental leave programs leave many of their workers out, giving paid leave to their salaried staff at corporate headquarters but not to the workers standing behind the cash registers or making the cappuccinos or fried chicken. A new report from Paid Leave for the United States highlights the inequality within major U.S. companies:
Starbucks has one of the most unequal policies—they provide 18 weeks of fully-paid leave for new mothers and 12 weeks fully paid for new fathers in corporate headquarters, but only six weeks for birth moms who are in-store employees (like baristas) and nothing for dads or adoptive parents in this employment category. Starbucks employs ~5,000 people in its corporate headquarters and ~150,000 in stores; meaning their highly-touted policy affects about 3% of their total U.S. workforce.
The nation’s largest private employer, Walmart, provides twelve weeks of paid leave for birth mothers who are corporate employees—but only 6-8 weeks at partial pay for birth moms who are among the 1.2 million hourly employees in their stores - if they work full time.
Yum! Brands offers 18 weeks paid parental leave to birth mothers, and 6 weeks to dads and adoptive parents who work in the corporate office only. Field employees, who work for franchises such as KFC and Pizza Hut, receive no paid family leave.
A few companies do have equal leave policies for their corporate and frontline workers: Ikea, Levi’s, Nordstrom, Nike (though it leaves out part-time employees), Bank of America, Wells Fargo, JPMorgan Chase, Hilton, and Apple.
Just six percent of low-wage workers have any paid leave at all, which is why a quarter of new mothers are back on the job within 10 days. That means that not only are new mothers leaving their newborn babies, they’re working before they are physically recovered from childbirth. Read More
Cartoon: Our new free market-based regulation
By Ruben Bolling Thursday Mar 30, 2017 · 7:01 AM PDT
This Infographic Shows How Only 10 Companies Control All the World’s Brands
Tom Cahill | December 31, 2016
From U.S. Uncut: Almost all of the food and beverage brands we know are owned by just 10 global conglomerates, according to a blistering new report.
Oxfam’s 52-page “Behind the Brands” report goes into great detail about how just ten companies — Associated British Foods (ABF), Coca-Cola, Danone, General Mills, Kellogg, Mars, Mondelez International (previously known as Kraft), Nestle, PepsiCo, and Unilever — own basically every brand of food sold in grocery stores around the globe. The report is part of Oxfam’s GROW campaign, which seeks to provide a sustainable food supply to an estimated global population of nine billion by 2050.
The “Behind the Brands” report grades each company through a series of scorecards, gauging how attentive it is toward core issues like how it treats farm workers, women, small-scale farmers, local land and water supplies, its climate change policy, and a company’s transparency. By and large, the scorecards found that the so-called “Big 10” food companies shirk their responsibility to local populations and the environment, falling far short of where they could be given their tremendous resources and influence. In some cases, Big 10 companies actually undermine food security, natural resources, and human rights, according to Oxfam: • Companies are overly secretive about their agricultural supply chains, making claims of ‘sustainability’ and ‘social responsibility’ difficult to verify; • None of the Big 10 have adequate policies to protect local communities from land and water grabs along their supply chains; • Companies are not taking sufficient steps to curb massive agricultural greenhouse gas emissions responsible for climate changes now affecting farmers; • Most companies do not provide small-scale farmers with equal access to their supply chains and no company has made a commitment to ensure that small-scale producers are paid a fair price; • Only a minority of the Big 10 are doing anything at all to address the exploitation of women small-scale farmers and workers in their supply chains. In addition to those damning declarations from Oxfam, the report also found that despite the enormous financial wealth concentrated among the Big 10 companies (an estimated $872.8 billion market cap amongst all but Mars, which is privately owned), the farmers working the land owned by these companies live in abject poverty.
Globally, some 450 million men and women work in the agriculture sector, and 60 percent of those live in poverty.In a cruel ironic twist, 80 percent of the global population classified as “chronically hungry” are farmers. The “Behind the Brands” report outlined how the practices of the Big 10 companies exacerbate the global problem of chronic hunger:
“[T]he use of valuable agricultural resources for the production of snacks and sodas means less fertile land and clean water is available to grow nutritious food for local communities. And changing weather patterns due to greenhouse gas emissions – a large percentage of which come from agricultural production – continue to make these small-scale farmers increasingly vulnerable… [T]he sourcing of commodities – cocoa, sugar, potatoes, tomatoes, soy, coffee, tea and corn – is still plagued with injustice and inequity, much as it was 100 years ago.”
But these concerns aren’t just coming from one nonprofit — in conducting research for the report, Oxfam found that where food comes from and whether or not a food producer is being socially and environmentally responsible is a top concern for a wide majority consumers in developed countries. This could also produce economic blowback for companies that don’t adhere to sustainable business standards. Weber Shandwick — a New York-based public relations firm — found that 70 percent of American consumers avoid buying products from companies they don’t like....
...As far as the scorecard for the Big 10 is concerned, none of the world’s largest food producers scored in the 8-10 (“good”) range on any of the criteria used for the evaluation. While Nestle and Unilever lead their competitors in several areas, they still fall short in how they treat the land, women, and small-scale farmers. The three worst offenders — General Mills, Kellogg’s and ABF — didn’t score above a 3 out of 10 score (“poor”) except for a scant few categories. And out of a maximum score of 70, Nestle, who ranked at #1 among the Big 10, still only scored 38 (only 54 percent). If the scorecard was a college exam, Nestle would still score an F.
Federal revenue contributed by corporate taxes has dropped by two-thirds over the last six decades—from 32.1 percent in 1952 to 10.8 percent in 2015. Corporations used to contribute $1 out of every $3 in federal revenue. Today, they contribute just $1 out of every $9—at a time when they have never been more profitable.
The "Golden Age of Capitalism" Was an Era of Racism and Secret Coups
By Emma Caterine, Truthout
From Bernie Sanders calling violently anti-Communist President Eisenhower a socialist, to a plethora of op-eds hailing the allegedly great policies the Republicans had toward labor and refugees, you have probably seen at least one liberal in your life mourn the loss of the Republicans of the so-called "Golden Age of Capitalism," the 1950s. These arguments usually rest on the achievements of that time, such as the desegregation of the military, a corporate tax rate of 50 percent, a top income tax rate of 91 percent, a rate of profit that stood above 20 percent throughout the decade and annual average Gross Domestic Product growth of 3.13 percent.
While most of these achievements are objectively true, this argument of the "once-good" Republican Party can only be sustained when one ignores the context in which these policies were created, the violent campaign against Communism domestically and abroad, and the caveats and exceptions to the policies that predominantly created wealth and welfare at the expense of people of color.
While there are disagreements as to the level of responsibility, it is generally agreed by economists and historians that the United States escaped the Great Depression, at least in part, by its engagement in World War II. There are two facets of how the war improved the economy: (1) Governmental investment and even takeover of industry created jobs and recycled stagnant fixed capital, such as factories and machinery; and (2) By bombing the post-war foreign competition out of existence, at least for a significant amount of time. The positive effect of the war on the economy was undeniable at the time, and it was a reality that the small government Republicans had to accommodate to.
But that certainly does not mean that they did not try to push for deregulation and a "free market" in the little ways that were politically feasible. President Eisenhower's election was in part due to the capitalists of the time becoming fed up with the Democrats' intervention, such as President Truman's failed attempt to seize the Youngstown Sheet & Tube Company to end strikes. President Eisenhower would employ the virtually opposite tactic during the Steel Strike of 1959 by using the "back-to-work" provision of the Taft-Harley Act. Ironically, the dispute was only settled by a politically ambitious then-Vice President Richard Nixon stepping in and telling steelmakers it was better to settle before the Democratic Congress began hearings on the strike, which would not be as supportive of the companies as Eisenhower was.
Republican US Imperialism at a Discount
With the current political debate around refugees, many liberals have pointed to the Refugee Relief Act of 1953 to shame the Republicans for their opposition to accepting more refugees. The Act did indeed result in 214,000 immigrants gaining admission to the country. But the problem is that under this Act, most -- if not all -- of the Syrian refugees would have been denied entry. The quotas for the Act were as follows: 90,000 West Germans and Austrians; 10,000 from NATO members, Turkey, Sweden, Iran and Trieste (now part of Italy); 2,000 Polish veterans; 60,000 Italians; 17,000 Greeks; 17,000 Dutch; 4,000 for those residing in US consulate districts in the "Far East;" 2,000 Chinese; and 2,000 for Jews and Palestinians of the new Israel who were part of the UN's refugee program.
These quotas show two things: (1) An obvious bias against people of color, with no quota whatsoever for North Africans who were affected by WWII and a pitifully small one for Chinese and Middle Eastern people; and (2) This Act was part of the Republican strategy against Communism abroad by rewarding NATO members and Western Europe. Iran is particularly notable because it was that same year, 1953, that Eisenhower's administration pioneered a new, cheaper version of overthrowing foreign democratic governments through a single CIA agent instigating a coup against the recently elected Prime Minister Mohammad Mosaddegh. The strategy was so successful that they did it again in Guatemala the next year, despite the previous Truman administration having aborted a similar mission in 1952 after public pressure.
Who Was Left Behind in the Golden Age?
US capitalism's "Golden Age" wasn't so golden for the people of color residing in the country. Despite the desegregation begun by President Truman and continued by President Eisenhower in the military, no effort was made to ensure that the Black veterans had equal access to the benefits of such service by either the Democrats or Republicans. President Eisenhower was the second Republican president in history get a plurality of the Southern votes during 1956, and despite his enforcement of the law at Little Rock, Arkansas (which he always maintained was not about integration, but about federal power), sympathized strongly with the Southern whites and their racist views on topics like "miscegenation."
The 83rd Republican-controlled Congress passed laws that criminalized affiliation with Communist organizations, which Attorney General Herbert Brownell, Jr., promptly used to shut down the Communist-affiliated Civil Rights Congress, which is most famous for the "We Charge Genocide" petition to the United Nations. Congress also began the privatization of the infamous Fannie Mae, ensuring that greed was prioritized over public good and setting the mortgage market down a path that has and continues to redline Black communities and systemically deprive them of wealth.
The Danger of Nostalgia
Many Bernie Sanders supporters have wondered why their candidate was not able to garner as much support from the Black community when his policy proposals were far more in favor of Black people than those proposed by Hillary Clinton. I have watched Senator Sanders' career for a long time, since I was a teenage community organizer lobbying for the Employee Free Choice Act, and I've observed him expressing the perverse kind of nostalgia that many older white leftists do for the 1950s and its middle class. Many women and people of color are justifiably skeptical about plans packaged as bringing back a "Golden Age" where they faced broad discrimination with little recourse. A political revolution against our current system would not be the return to a less megalomaniacal Republican Party, and certainly not the election of a xenophobic fascist billionaire who is an outsider in name only. The political revolution is happening every day, being carried about by the working class and the youth who know that this two-party system is a fraud. Consider this an invitation to join.
There’s No Such Thing as a ‘Free Market’
Capitalism with absolutely no government intervention is a myth — and always was.
By Jill Richardson
From Other Words: The debates leading up to the election this year will no doubt invoke the “American value” of capitalism. But what, exactly, does that mean? And what should it mean?
I’m no economist, but I took a few economics courses while earning an undergraduate business degree. Growing up in a capitalist society, I thought I understood the basic concepts underlying capitalism — free markets, competitive advantage, and so forth.
Then I actually read The Wealth of Nations by Adam Smith, the founding work that described what we call capitalism in the first place. That was a game changer.
We’re all probably familiar with Smith’s ideas at some level.
The market regulates itself, as each of us operates based on our own self-interest. Businesses try to earn profits, and consumers try to meet their needs at the best prices. The market ensures that the demand of consumers is met with supply from business.
The government’s job, the doctrinaire thinking goes, is to get the heck out of the way. It doesn’t set prices or quotas. It just lets the market function.
Adam Smith cast this arrangement in glowing terms in 1776. He was describing England during the Industrial Revolution. He thought it was amazing that millions of individual actors, each operating based on self-interest, could so efficiently revolutionize society without any central planning at all.
Only, he was wrong.
In fact, the growing British Empire was undertaking economic interventions on a colossal scale — and would do even more in the centuries to come. The British set out all over the globe, claiming colonies in the New World and later India and Africa, setting up trade policies that benefited the British at the expense of the colonized.
The British imported cotton from their colonies for their own factories, as well as wheat to feed British workers in the isles. Colonial India, meanwhile, suffered several massive famines. Even as tens of millions of Indians starved to death, record amounts of Indian wheat were exported to feed British factory workers laboring in a so-called free market.
Before the Industrial Revolution, Indian textiles reigned supreme. But British authorities kept industrial textile technologies out of India in order to capture the global textile market, impoverishing the colony further.
Other British staples — tea and sugar — were also imported from British colonies. That sugar was produced by enslaved Africans in the Caribbean.
Some invisible hand.
Smith also overlooked the utter misery textile workers lived in, even in Britain. The system “worked” at making some people rich. But the squalid and wretched lifestyles of laborers, including children — which inspired the writing of Charles Dickens — were its cost.
We in America have meddled in markets plenty in our own right — not least through historical crimes like slavery and colonialism. But we’ve also developed more benign interventions that can actually help people.
We ban child labor, for example, and enforce (admittedly inadequate) minimum wage protections. We require businesses to offer safe and healthy workplaces. We ban the sale of dangerous drugs. We try to regulate pharmaceuticals to make sure they’re safe and effective.
In other words, capitalism with absolutely no government intervention is a myth — and always was.
We can debate the pros and cons of specific regulations. But if you hear a candidate claiming that capitalism means doing away with all regulations — or that any government interference in the market equates to socialism or communism — they’re being dishonest.
Why Tax Havens Are Political and Economic Disasters
Seeking prosperity through lax business and tax regulations leaves countries worse off
by Brooke Harrington
From The Atlantic: In the early 1990s, economists coined the term "the resource curse" to describe a paradox they observed in countries where valuable natural resources were discovered: Rather than thriving, such countries often crumbled, economically and politically. The newfound wealth, instead of raising living standards for all, generated violence, as well as accelerating the growth of inequality and corruption. Terry Karl, a Stanford political science professor, dubbed this the "paradox of plenty." The same story has played out again and again all over the world, from Venezuela (where Karl did her research on the destruction wrought by oil wealth) to Sierra Leone (home of blood diamonds) and Afghanistan (which, despite $3 trillion in mineral wealth, remains among the poorest and most corrupt countries in the world).
A similarly insidious pattern has developed in recent years among the countries serving as offshore financial centers. Many, like the countries affected by the resource curse, are former colonial states struggling to stay fiscally viable; the "resource" they discover is human capital, in the form of a population literate and numerate enough to provide financial services, such as the filing and compliance tasks linked to offshore corporations, trusts, and foundations. For these economically and politically fragile countries, the influx of cash provided by involvement in international finance seems like an unmitigated blessing, offering jobs and revenues for a relatively small investment in infrastructure, such as high-speed internet access.
But as many are finding, becoming a tax haven has unexpected costs. Precipitous economic, political, and social declines have occurred so often in such states that observers have coined a new term for it: “the finance curse.” When the "finance curse" strikes a country, there is a recurrent pattern: While its democracy, economy, and culture remain formally intact, they are increasingly oriented to and co-opted by international elites. In other words, such countries gradually become organized around the interests of people who don't even live there, to the detriment of those who do. The services produced by these countries protect cosmopolitans’ wealth, but the riches never flow to the the local producers, undermining their capacity for self-governance and social cohesion, as well as the development of infrastructure and institutions.
This has led to increasing economic fragility for offshore financial centers, along with political corruption and social decline, as evidenced by a rise in crime and violence. I experienced the latter in my own research on the global wealth-management industry: In the course of visiting 18 tax havens in every major region of the world, I encountered this social decay directly through a number of experiences, including being robbed at Pae Moana in the Cook Islands. A local fisherman I met afterwards said the rise in burglary and violent crime in the islands began with the growth of the offshore industry. Not only the wealth it brought in, but also the new value system focused on exploitation and greed, meant that “everyone calls us the ‘Crook Islands’ now.” The finance industry had begun to eat away at the nation’s democratic institutions: Referring to a recent political-corruption scandal, the fisherman said, “They’ve got our government in their pockets. I hate what they've done to my country.”
But as I learned, the workings of the finance curse have shaped not only the development of small post-colonial nations like the Cook Islands, but also that of seemingly wealthy and well-established ones. For example, recent reporting on the Channel Island of Jersey has documented the crippling of the country's economy, government, and society in one of the world's leading financial centers—a place that was once considered a "miracle of plenty" and a role model for other would-be tax havens.
The corrosion described by the finance curse has affected even some of the wealthiest financial centers, such as Luxembourg, which is the domicile of choice for $3.5 trillion worth of mutual-fund shares and over 150 banks. As a result of a robust financial-services sector that contributes 27 percent of the country’s economic production, the Grand Duchy boasts the highest per capita GDP in the Europe, far outstripping its nearest rivals, Norway and Switzerland. At first blush, Luxembourg would appear to be in terrific shape: a wealthy democracy, thriving in the center of Western Europe.
However, as the economist Gabriel Zucman has shown, Luxembourg's role as a leading tax haven has benefitted foreigners at the expense of locals, across the board. Over 60 percent of the country’s workforce is comprised of foreigners, who reap virtually all the benefits of the wealth generated by the Duchy. The society, as a result, is fracturing along expat-versus-local lines, both in economic and political terms.
As Zucman documents, inequality in the Grand Duchy has skyrocketed, with poverty doubling since 1980, and real wages for ordinary Luxembourgers stagnating for the past 20 years. Meanwhile, salaries for expat wealth managers have exploded, tripling housing prices in Luxembourg City. However, even this new wealth has not benefitted the local economy: Due to Luxembourg’s tax policies, public institutions such as the educational system are in "accelerated decline," mainly to the detriment of locals. The result, Zucman observes, is that Luxembourg has become more of a free-trade zone than a state.[...]
Reverse mortgages: The final blow killing middle class wealth
From Demo Underground: Many fellow Americans that have worked their entire lives, weathered several recessions and depressions, put their children through school, helped many in need, and faithfully paid their mortgages for decades are now being taken advantage of once again. Most have followed all the rules necessary to be considered fiscally responsible, yet because of "legal fraud" by the financial sector and policies effected by purchased politicians, their years in retirement will be compromised.
The Plutocracy, the one percent has walked away with a large percentage of their 401Ks, their SEPs, and to some extent their financial security. Because of stagnant or falling real wages, much of the working middle class have maxed out on their credit in the attempt to maintain their standard of living. For a Plutocracy that feeds on perpetual growth, from where will it feed now? An old and well-crafted financial instrument known as the reverse mortgage is being marketed on steroids to a baby boomer population.
Most Americans amass most of their wealth within their homes. Each generation in a responsible family is better off when the previous generation wills their assets forward. Reverse mortgages are yet another financial instrument that stunts the growth of the middle class by encouraging home owners to extract the capital out of their homes and use it as a supplement to their retirement or to simply splurge. Inasmuch as most reverse mortgages are federally regulated, their upfront costs are very high. These costs amount to free cash for the bank and mortgage insurance companies, your money transferred to them for a marginal service.
The big dirty secret is that reverse mortgages, like student loans pre-Obama, are nothing but a no-risk gift to the bankers, a wealth transfer engine from the masses to a select few. When the "owner" of the home dies, the government pays the bank any difference between the amount owed (interest plus principal) less the sale price of the home. If the heirs want to keep the home, they must pay the loan off in full. If the amount owed is more than the value of the home, the heirs must pay 95 percent of what is owed to the bank with the government paying the rest. What is the reason for the bank being in the transaction? It is there simply to extract from the government and the homeowner. They have absolutely nothing at risk for the profits they make.
Reverse mortgages mask a systemic problem that affects the American worker, a backward and inhumane retirement system. Every American worker makes a vibrant economy possible by providing 40, 50 or more years of work, taxes, and spending. It is appalling that a worker is incapable of having Social Security capable of providing a decent living. No one should have to deplete all of their assets to survive.
America’s Future Depends on Containing Neoliberalism
By Frank Fear ~ LA Progressive
The Rise and Evolution of Neoliberalism
The concept was born in 1930s Europe in reaction to The New Deal in America and The Nazi Movement in Germany. Both expressions were seen as totalitarian, squelching individual freedom and initiative. Over time, Neoliberalism morphed, becoming especially attractive to those who favored reducing regulatory oversight, downsizing government, and accentuating capitalism as the coin of the realm.
“The market” would take care of things—literally all things—and the market metaphor expanded to embrace a variety of domains associated with social and economic life. In Monbiot’s view, “Neoliberalism sees competition as the defining characteristic of human relations…. The market ensures that everyone gets what they deserve.”
It wasn’t until the early 1980s—with Margaret Thatcher in power in Great Britain and Ronald Reagan in the U.S.—that a neoliberal philosophy became a guiding force for national and international affairs. In famously declaring, “There is no alternative,” Thatcher showed how dedicated she was to free markets, free trade, and global capitalism. The American analogue, “Reaganomics” (aka supply-side economics), focused on redressing “an undue tax burden, excessive government regulation, and massive public spending programs that hampered growth.”
“Call it Reaganism or Thatcherism, economism, or market fundamentalism,” William Deresiewicz writes, “neoliberalism is an ideology that reduces all values to money values. The worth of a thing is the price of the thing. The worth of a person is the wealth of the person. Neoliberalism tells you that you are valuable exclusively in terms of your activity in the marketplace — or, in Wordsworth’s phrase, your ‘getting and spending’.”
Neoliberalism was no short-term political fancy, either. It persisted and expanded, promulgated by powerful advocates, to the point that it changed the way America does business. Nobel Prize-winning economist Joseph Stiglitz believes that Neoliberalism has “rewritten the rules” of the U.S. economy by privileging elites. It did so by deregulating business affairs, privatizing public and human services, cutting social services, lowering taxes, and reducing government size and scope. In exchange, elites promised “trickle down benefits” and declared “A Thousand Points of Light” would take care of human and social needs.
Impacts of Neoliberalism
Neoliberalism proceeded, undeterred, without a counterweight. In so doing, though, it created a stink in social affairs. Today, America is something different from what it was before. The unimaginable now happens. Consider three examples.
•Flint, Michigan. There was a time when what happened to Flint wouldn’t have happened in this country. Today it does, in part, because of lower taxes, corporate dependency, limited regulations, and cost-savings for public services. But “Flint,” the city, isn’t just one place. Metaphorically it’s everywhere: a racially concentrated population in socioeconomic distress with an affluent population living comfortably distant.
•Infant mortality. It’s mindboggling to conceive that 21st Century America would struggle in this domain, but it does. The Centers for Disease Control and Prevention reported recently that about 25 industrialized countries are doing better than the U.S. in keeping children alive. A recent New York Times headline was harsh and direct: The U.S. Is Failing in Infant Mortality, Starting at One Month Old. •Income. According to a new report released by The Congressional Budget Office, American incomes increased differentially across income categories from 1975-2013. Incomes for the Top 1% increased nearly 200% during that 35-year period, but rose only 18% for those in the bottom four income quintiles. (Note: According The Economic Policy Institute, family income of about $400k per year is required in the U.S. to get into the 1% category; and the average income in that bracket is $1.2 million dollars. The average family income for everybody else is about $46k per annum). “Increased inequality is prominent,” conclude researchers at The World Bank. Stiglitz confirms that conclusion with this finding: “91% of all increases in income from 2009 to 2012 in the U.S. went to the wealthiest 1% of Americans.”
The challenge is clear: America won’t be America much longer—at least how we many of us perceive America to be—if circumstances and trends like these continue. But it won’t be easy to shift into a different gear. Neoliberalism is embedded in American psyche and culture. Around for such a long time, it has become “the way things are”—what’s “normal.”[...]