Saturday, August 12, 2017


"More pervasive, however, is the impact of the devastating 
social crisis affecting broad layers of the working class. While 
President Donald Trump boasts of a booming economy, 
citing record high stock prices, and Federal Reserve Chair 
Janet Yellen talks of “full employment” and a full recovery 
from the post-2008 “Great Recession,” tens of millions are 
struggling to survive on the basis of poverty-level wages that 
have either stagnated or declined and part-time or temporary
employment in place of full-time jobs that have been 
permanently eliminated."

Sales declines at US department stores belie claims of economic recovery
By Barry Grey
12 August 2017
Major US retail chains this week reported continuing declines in same-store sales in the second quarter of 2017, sending their stock prices plummeting. On Thursday, Macy’s, Kohl’s and Dillard’s all reported negative sales results.
Same-store sales declined 2.8 percent at Macy’s and 0.4 percent at Kohl’s. Since 2015, Macy’s has experienced year-over-year sales declines in every quarter.
Macy’s shares fell 10 percent Thursday and Kohl’s dropped 5.8 percent. Macy’s stock price is now down over 40 percent this year. Kohl’s has fallen nearly 25 percent. On Thursday, Dillard’s stock plunged 15 percent, wiping out all of its gains for the year.
The declines continued Friday, with Macy’s losing another 0.24 percent, Kohl’s dropping 2.18 percent and Dillard’s closing with a loss of nearly 6 percent for the day.
On Friday, JC Penney, already teetering on the edge of bankruptcy, revealed a bigger quarterly loss than it had anticipated, sending its stock plunging more than 15 percent to close below $4 a share for the first time ever. The department store chain said it lost $62 million in the second quarter, a greater loss than in the same period of 2016. It also revealed that its same-store sales had fallen by more than 1 percent.
JC Penney stock has fallen by more than 50 percent so far in 2017 and plunged 85 percent over the past five years. At its peak in 1998, the firm’s market capitalization was $30 billion. Today, its market value is just over $1 billion.
Major retail chains that cater to moderate- and low-income consumers such as Macy’s, Kohl’s, JC Penney, Sears, Target and Kmart have all announced large-scale store closures in recent months, eliminating tens of thousands of jobs and placing in jeopardy many thousands more as the survival of the commercial malls they anchor grows increasingly precarious.
Macy’s is in the process of closing an additional 100 stores. Last month, Sears announced it was closing 43 more stores in the US on top of the 265 closings it announced earlier in the year. Its sales are down nearly 37 percent since early 2013.
In February, JC Penney announced plans to close between 130 and 140 stores as well as two distribution centers.
The wave of department store closings is part of a broader flood of retail closures and bankruptcies, on pace to surpass the numbers recorded at the height of the financial crisis and recession in 2008. As of July, US retailers had announced more than 3,200 store closures this year, with analysts expecting the figure to rise to more than 8,600.
Since October of 2016, retailers have eliminated more than 90,000 jobs. Since 2001, some 500,000 retail jobs have been slashed in the US.
Retail chains that filed for bankruptcy or liquidated so far this year include:
* Dollar Express, which closed all 323 locations, eliminating 3,000 jobs
* Payless Shoes, which filed for bankruptcy and announced plans to close 400 stores
* Clothing retailer Rue 21, HHGregg, Gordmans and Gander Mountain, which have either filed or are planning to file for bankruptcy
* American Apparel, which is liquidating its remaining stores and a factory in Los Angeles
* RadioShack, which filed for bankruptcy for the second time in two years and announced the closure of 552 stores
For the most part, those employed in retail are paid poverty-level wages. Currently there are over 32 million such workers, paid an average of $10.87 an hour, with cashiers receiving even less.
Two major factors are driving what CNN Money refers to as the “retail apocalypse.” One is the rise of online retailers, particularly Amazon, which are gaining increasing market share at the expense of so-called “brick and mortar” companies. Amazon, which accounted for 53 percent of all online sales growth in 2016, is expected to overtake Macy’s this year as the country’s largest apparel retailer.
More pervasive, however, is the impact of the devastating social crisis affecting broad layers of the working class. While President Donald Trump boasts of a booming economy, citing record high stock prices, and Federal Reserve Chair Janet Yellen talks of “full employment” and a full recovery from the post-2008 “Great Recession,” tens of millions are struggling to survive on the basis of poverty-level wages that have either stagnated or declined and part-time or temporary employment in place of full-time jobs that have been permanently eliminated.
Even as the stock market is driven upwards by unlimited subsidies from the Federal Reserve and unchecked financial speculation, real economic growth continues to stagnate. The US gross domestic product is rising at an anemic annual rate of 2 percent, far below the rates of previous post-World War II economic recoveries. And despite a nominal unemployment rate of just 4.3 percent, wages continue to rise a mere 2 percent on an annual basis, far more slowly than in previous post-recession periods and below the rate of prices increases for basic necessities.
Large sections of the working population lack the wherewithal to buy more than the bare necessities, which is why the retail slump is primarily hitting stores that cater to the working class.
That the destruction of decent-paying and stable employment is driving the retail crisis is confirmed by the announcement Thursday of plans to close up to 135 Applebee’s and up to 60 IHOP restaurants—two chains owned by parent company DineEquity. Both restaurant chains feature relatively low prices and appeal primarily to a working class clientele. Both recorded lower same-restaurant sales in the second quarter of 2017.



In Trump Era, U.S. Corporations See Best Earnings in 13 Years

As President Trump’s administration enters the last half of its first year, U.S. corporations are experiencing their best earnings in 13 years, a report finds.

Bloomberg reports that U.S. corporate profits in the second quarter “have beaten estimates at more than three-quarters of the Standard & Poor’s 500 member companies. In every sector, at least half of the companies have surpassed or met expectations, with many also getting a boost from a sinking U.S. dollar.”
“Growth was particularly strong in key regions of North America and Europe, where we grew sales greater than twice GDP, as well as throughout Asia-Pacific,” Dow Chief Executive Officer Andrew Liveris said.
Europe supported U.S. growth during the first three months of this year, but during the second three months, emerging markets came in strong for U.S. earnings.
Mark Luschini of financial service company Janney Montgomery Scott told Bloomberg that multinational corporations are seeing growth and higher earnings in both the U.S. and overseas operations.
Bloomberg reported:
Of the 454 companies in the S&P 500 that have so far reported second-quarter results, 68 percent have beaten analysts’ average estimates for revenue, and 78 percent have topped per-share earnings expectations, according to data compiled by Bloomberg. Earnings rose an average of 9.8 percent, while sales have climbed 5.5 percent.
Indeed, even as U.S. prospects rise, so has that of much of the world’s economy.
“More of the global economy is participating in this recovery simultaneously, and that’s what shows up in the top-line results, particularly in technology,” said Jim Paulsen, chief investment strategist at Leuthold Group.
The health care and banking sectors have also seen great growth.
Analysts expect this growth to continue into the third quarter.
Follow Warner Todd Huston on Twitter @warnerthuston or email the author at

WALL STREET TO THE AMERICAN PEOPLE: DIE YOUNG… your company pension dies with you!



"These figures present a scathing indictment of the social order that prevails in America, the world’s wealthiest country, whose government proclaims itself to be the globe’s leading democracy. They are just one manifestation of the human toll taken by the vast and all-pervasive inequality and mass poverty  


Millions of children go hungry as the super- rich gorge themselves.


"The top 10 percent of Americans now own roughly three-quarters of all household wealth."


"While telling workers there is “not enough money” for wage increases, or to fund social programs, both parties hailed the recent construction of the U.S.S. Gerald Ford, a massive aircraft carrier that cost $13 billion to build, stuffing the pockets of numerous contractors and war profiteers."


 How the Democrat party surrendered America to Mexico:

“The watchdogs at Judicial Watch discovered documents that reveal how the Obama administration's close coordination with the Mexican government entices Mexicans to hop over the fence and on to the American dole.”  Washington Times



"These figures present a scathing indictment of the social order that prevails in America, the world’s wealthiest country, whose government proclaims itself to be the globe’s leading democracy. They are just one manifestation of the human toll taken by the vast and all-pervasive inequality and mass poverty. 


The same period has seen a massive growth of social inequality, with income and wealth concentrated at the very top of American society to an extent not seen since the 1920s.

“This study follows reports released over the past several months documenting rising mortality rates among US workers due to drug addiction and suicide, high rates of infant mortality, an overall leveling off of life expectancy, and a growing gap between the life expectancy of the bottom rung of income earners compared to those at the top.”

THE LA RAZA PLAN: California’s final surrender to fly the Mexican flag within 4 years.

"The American Southwest seems to be slowly returning to the jurisdiction of Mexico without firing a single shot."  -- - EXCELSIOR --- national newspaper of Mexico

They claim all of North America for Mexico!


Devastating toll of hunger on US school children

By Patrick Martin 

8 August 2017
Hunger is a growing problem for US children and increasingly affects their performance in school, making it more difficult for them to focus on their classes or do homework. It also contributes to behavior and discipline problems.
This was the finding of a report issued last week by the anti-hunger charity Share Our Strength, based on a survey of 500 low-income parents and their teenage children in public schools. Some 325 teachers were also interviewed. “Low-income” was defined as at or below 185 percent of the official poverty line, or $45,417 a year for a family of four.
Among children in low-income families, 59 percent said they had gone to school hungry. In the richest country in the world, with the largest concentration of billionaires, one in six children faces hunger, some 13 million in all.
The survey found that 59 percent of the parents reported that their food ran out before they could buy more; 48 percent couldn’t afford to buy enough food each month; and 23 percent had been forced to cut the size of their children’s meals because of a lack of money.
Children were under increasing stress from hunger. Some 55 percent of children knew their parents were worried about running out of money for food, while 35 percent shared their parents’ fear. Among those teenagers in low-income families, 42 percent experienced sadness caused by hunger and 41 percent experienced anger for the same reason. Many teenagers reported deliberately going hungry to make sure that younger siblings could have enough to eat.
One 15-year-old told the survey, “I feel like real hungry is different. It’s like when your stomach growls. It’s like when your stomach is almost in pain for me. That’s what real hungry is.” A 16-year-old said, “My focus is different when I’m hungry. I’m gonna be thinking about which one of my classmates has food. I’m gonna be thinking about which one of them might share.”
Among low-income families, 92 percent had at least one adult in the household working full-time, part-time or in multiple jobs. Hunger is thus the byproduct not only of poverty, but of the precarious and contingent character of so many jobs and the lack of any meaningful social safety net. Among low-income parents, 64 percent said that a single unexpected large bill—a $1,500 car repair or medical expense—would make it difficult to feed their children.
Hunger is an increasingly serious obstacle to learning. Among teachers questioned in the survey, 92 percent said that hunger had an impact on their students’ learning, 80 percent saw loss of concentration, 62 percent saw behavior problems, and 47 percent saw students suffering additional health problems.
Nearly three out of four teachers regularly saw students come to school hungry, and nearly two-thirds of teachers reported regularly buying food for students who were not getting enough to eat at home, spending an average of $300 a year of their own money.
Children had an overwhelmingly positive response to their schools providing breakfasts and lunches. Three quarters said school meals helped them feel better, pay more attention, behave in the classroom and get better grades.
Brian Minter, a spokesman for Share Our Strength’s “No Kid Hungry” campaign, said, “Hunger exists in nearly every community in America today. It’s an urban problem, it’s a rural problem, and it has come to our suburbs. It is also a solvable problem.”
He noted that programs like food stamps, school meals and WIC (Special Supplemental Nutrition Program for Women, Infants and Children) had a major impact in alleviating hunger. But these programs are targeted for severe cuts, if not outright destruction, in the budget proposals of the Trump administration and congressional Republicans.
According to a report published Thursday by the Center on Budget and Policy Priorities (CBPP), the House Republican budget plan, scheduled for a vote in early September, would slash $2.9 trillion from programs for low-income and moderate-income families over the next ten years.
This includes a cut of $150 billion from food stamps alone, a reduction of 40 percent. According to the CBPP, “A funding reduction of this magnitude would end food assistance for millions of low-income families, reduce benefits for tens of millions of such families, or some combination of the two.”
State governments would be enlisted to do the dirty work, by transferring to them the authority to reduce benefits and increase eligibility standards. The budget would also limit “community eligibility,” which allows schools in high-poverty areas to provide free school meals to all students without documenting the income of each individual student’s family. Cuts in low-income entitlement and discretionary programs account for half of all the cuts in nonmilitary programs proposed by the House Budget Committee, although these programs make up only one quarter of the federal budget.
The CBPP estimated that the Republican budget would cut the proportion of gross domestic product devoted to social spending for low-income and moderate-income families from 2.1 percent to only 1.0 percent in 2027, the lowest percentage figure since 1966, when the Johnson administration launched its so-called “War on Poverty.”
While the Trump administration and the congressional Republicans propose to deal with the deepening poverty and social misery by deliberately making the conditions worse, the Democratic Party offers no alternative. The Democrats are not demanding hearings over hunger or the impact of the proposed budget cuts.
During the month-long legislative recess, when senators and representatives sponsor political events in their states and districts to highlight issues of concern, the Democrats are focusing on allegations of Russian interference in the 2016 elections and alleged collusion by the Trump campaign as part of a broader effort to whip up a war fever directed against targets of the Pentagon and CIA, in the first instance Russia.
There are no events spotlighting the dire conditions of life for tens of millions of working people. As for the Democrats’ latest political offering, the so-called “Better Deal” program unveiled last week, it makes no mention of poverty, hunger, homelessness or even unemployment, proposing to use the power of the federal government to boost the interests of “small business and entrepreneurs” and defend “Main Street” against “Wall Street”—i.e., favor one section of business against another.

Should Trump Receive Credit for Surging Stock Prices?

Daniel Mitchell
 By Daniel Mitchell | August 10, 2017 | 8:47 AM EDT

President Donald Trump (Wikimedia Commons Photo)
I’m rather frustrated about the lack of real results from the Republicans in Washington.
Yet Trump and some GOPers want to take credit for a rising stock market, as if that is some sort of positive reaction to their non-accomplishments.
As you can see from this interview, I don’t completely reject this hypothesis. After all, stock values are a reflection of the market’s expectations of future after-tax profits. So if investors think that good reforms – such as a lower corporate tax rate – are going to happen, then it makes sense that the value of financial assets will increase.
By the way, I can’t resist commenting on the claim from the Economic Policy Institute that the stock market is a “meaningless indicator” that has nothing to do with the well-being of workers.
That’s nonsense. Assuming we’re looking at genuine and durable increases in stock values (rather than a bubble), that’s a reflection of a growing economy, which translates into more income for workers.
In the language of economists, capital and labor are complimentary goods. More of one increases the value of the other. Which is why I told the folks at Politifact that it’s good for workers in the long run when financial assets become more valuable since that presumably means more investment.
“Dan Mitchell, a scholar at the libertarian Cato Institute, agreed that ‘capital and labor compete for shares of income in the short run.’ Over the long term, however, ‘there is no trade-off between corporate profits and labor income,’ he said.”
But let’s focus on the bigger issue of whether Trump deserves any credit for the stock market’s performance.
Ira Stoll, writing for the New York Sun, shares some very appropriate caveats.
“The stock market, in other words, is like a lot of things: politicians want to take credit for it when news is good, but absolve themselves of responsibility when news is bad. One might hope for a more consistent perspective from journalists or from independent research organizations. Imagine, say, an election-day to election-day presidential job-performance dashboard that included data on measures such as stock market performance, the value of the dollar, job creation, unemployment, labor force participation, and real GDP growth. It can indeed be hard to isolate a president’s influence on all these things from other variables, such as, say, the composition of Congress. Should Mr. Obama or President Clinton get credit for the stock market booms in their terms? Or should the Republican Congresses under which they occurred? How does one accurately account for the period between the election and inauguration, when stock market gains may reflect anticipated improvements, but growth results measure existing budgets and policies?”
Having given lots of reasons to be cautious, Stoll nonetheless thinks investors are buoyed by the pro-growth parts of Trump’s agenda.
“… steps Mr. Trump takes — reducing regulation or slowing the growth of it, reducing corporate income tax rates, allowing more energy exploration — will outweigh any negatives. In other words, there’s a decent case that Mr. Trump does deserve at least some credit for the stock market gains.”
I don’t have any objection to this analysis.
Though allow me to add another caveat to the list. As I explained when discussing the same topic back in March (see final interview) and indirectly suggested in the above interview, Trump is playing a risky game.
What if the stock market is artificially inflated because of the Fed’s easy-money policy? If that’s the case, there almost certainly will be a correction and stock values will drop.
This won’t be Trump’s fault, but he’ll then be very vulnerable when opponents argue that he should be blamed. As the old saying goes, live by the sword, die by the sword.
In my humble opinion, politicians (at least the ones who support good policy on net, and I still don’t know whether Trump is in this category) should argue for good policy because that will lead to higher per-capita income over time.
And they also should say, in the interests of accuracy, that it generally takes time to see good results.
Consider the lesson of the Reagan years. The first couple of years were a bit bumpy, both because some of Reagan’s good reforms – particularly the tax cuts – were slowly phased in and because some short-run pain was inevitable as inflation was brought under control (an overlooked and very beneficial achievement). But once his policies kicked in, the economic results were very positive.
Daniel J. Mitchell is a top expert on tax reform and supply-side tax policy at the Cato Institute. Mitchell is a strong advocate of a flat tax and international tax competition.

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