The profound impact of social inequality on the lives of workers was further demonstrated by a recent study reporting that the rich in the US and UK are likely to have almost 10 more healthy years in late life than the poor
At Davos, Trump announces plans to cut Medicare and other social programs
President Donald Trump has indicated he is considering cutting funding to entitlement programs such as Medicare within the next year. In an interview at the World Economic Forum at Davos, Trump said social programs would be targeted to reduce the federal deficit.
A CNBC interviewer asked Trump whether cuts to entitlements would ever be on his agenda. He replied, “[A]t some point they will be.” When the interviewer pointed out that Trump’s statement directly contradicted his 2016 campaign promises not to touch these programs, Trump pointed to recent economic growth.
“We also have assets that we’ve never had. I mean we’ve never had growth like this. We never had a consumer that was taking in, through different means, over $10,000 a family. … Look, our country is the hottest in the world. We have the hottest economy in the world. We have the best unemployment numbers we’ve ever had. African American, Asian American. Hispanics are doing so incredibly. Best they’ve ever done.”
President Donald Trump departs Ocala International Airport after attending an event on Medicare [Credit: AP Photo/Evan Vucci]
The reality is that the majority of the American population has seen little benefit from the “booming” economy and the figure of $10,000 per family is a complete fabrication. Report after report indicates that the social situation of the working class is becoming increasingly dire, and life expectancy, the most elementary indicator of social well-being, has declined in every year of Trump’s presidency. Workers live without proper access to basic health care, decent paying jobs, and struggle to secure basic necessities. In fact, the rapid growth of the stock market is a direct product of deliberate attacks on the living conditions of the working class.
As for Trump’s plans to cut Medicare funding, his administration
has already proposed and enacted cuts to social safety-net
programs. His latest budget proposal called for a total of $1.9
trillion in cost-cutting measures for social programs such as
Medicare and Medicaid. The proposal also called
for a reduction of $26 billion in spending
for Social Security.
has already proposed and enacted cuts to social safety-net
programs. His latest budget proposal called for a total of $1.9
trillion in cost-cutting measures for social programs such as
Medicare and Medicaid. The proposal also called
for a reduction of $26 billion in spending
for Social Security.
Trump’s threatened cuts to Medicare would represent a huge assault on the program that has paid for health care for seniors and disabled individuals for over 50 years. According to the 2019 Medicare Trustees Report, Medicare provides health insurance for more than 60 million people. An increasing number of doctors refuse to accept Medicare, deeming the reimbursement too low, and there are considerable gaps in coverage, such as vision and dental, but the program is the main health care lifeline for older Americans.
In addition to cuts to Medicare, the Trump administration wants to grant states waivers allowing them to convert Medicaid funding to block grants. Medicaid is the primary source of health care for the poorest Americans, providing one in five low-income individuals with coverage. The program provides free health coverage for more than 74 million people, or 23 percent of the US population.
Currently, the program is jointly administered by the federal and state governments, and the federal and state governments share the cost, with the bulk of the money coming from Washington. Under a block grant system, states would be given a flat sum of money to spend on health care. As health care costs rise, state governments would respond by tightening eligibility requirements, imposing work requirements, and cutting coverage. Block grants would dismantle Medicaid as a guaranteed entitlement, inevitably leaving millions without health insurance.
Trump’s aggressive attacks on social programs take place against the backdrop of the impeachment trial. The Democratic Party is not seeking to remove Trump from office due to his assault on the basic rights of the working class—attacks on social programs, immigrants and basic democratic rights. Instead, the president has lost the confidence of the Democratic Party, the military and intelligence agencies to carry out the aims of American imperialism. In their obsession with “national security” and Russia, the Democrats are complicit in the social counterrevolution being waged against the working class.
The attacks on social programs are in fact a bipartisan policy. The massive cuts to social programs began in the Obama administration, which proposed billions in cuts to Medicare reimbursements to finance the Affordable Care Act (ACA). This law required workers without health insurance from their employer and ineligible for Medicaid to purchase health coverage from a private insurer. The ACA offered plans with high premiums and deductibles that left workers and their families nominally “insured,” but often with substandard coverage and care.
These policies, combined with Trump’s proposed cuts, affect the most vulnerable layers of the population. Trump’s recent proposed changes to eligibility for the Supplemental Nutrition Assistance Program (SNAP) would rob half a million children of free school meals. Furthermore, a rule change will go into effect this April which will deprive nearly 700,000 people of food stamp assistance through SNAP.
The human impact of the coordinated assault against the working class is laid bare by multiple social indicators. A 2019 study published by the Commonwealth Fund found that the decline in US life expectancy from 2015 to 2017 was tied to a sharp increase of “deaths of despair.” It also showed that the rise in deaths from drug overdose, alcohol abuse and suicide are tied to the lack of access to health care. Moves to slash funding to Medicare and Medicaid will only exacerbate this situation.
The profound impact of social inequality on the lives of workers was further demonstrated by a recent study reporting that the rich in the US and UK are likely to have almost 10 more healthy years in late life than the poor. Wealthy men and women in the two countries have an average of eight to nine more years of life without disability than the poorest.
All of this data points to an unprecedented health crisis. However, the crisis is not a natural phenomenon. It is a product of the greed and indifference of the American ruling class. Workers are told there is no money for social benefits, yet each year billions more dollars are allocated for the enrichment of the financial elite and the US war machine.
Trump’s threat to attack Medicare and other social programs raises the necessity for the working class to organize a struggle in defense of these social rights independently of the two big business parties. Workers and youth should not be hoodwinked by the pledges of Democratic presidential candidates Senators Bernie Sanders and Elizabeth Warren that they will enact “Medicare for All,” or any progressive changes to the US health care system, should they take the White House. These promises are made in full knowledge that both capitalist parties, the Democrats as much as the Republicans, defend for-profit health care and will oppose the implementation of any measures that threaten the profits of the drug companies, hospital chains and other corporate interests.
There is no way that the insurance and health care profiteers will peacefully relinquish their control over the health care delivery system in America. Workers must adopt an independent policy to fight for the interests of the working class that rejects the for-profit health care system and fights for the expropriation of the health care industry and its reorganization in the interests of the working class under the control of a workers’ government.
Mike Bloomberg: Don’t
Believe Trump – Our Economy Is Broken
Share market boom masks another
financial crisis in the making
TRUMPERNOMICS:
Billionaires’ wealth surged in 2019
28
December 2019
Bloomberg:
2019 a Good Year for Wealthy; Jeff Bezos Remains on Top Despite $9 Billion Loss
in Divorce
The Lessons of Theodore Roosevelt
Economists:
America’s Elite Pay Lower Tax Rate Than All Other Americans
The wealthiest Americans are paying a lower
tax rate than all other Americans, groundbreaking analysis from a pair of
economists reveals.
Census Says U.S. Income Inequality Grew ‘Significantly’ in 2018
The
Democrats’ opposition to Trump is not based on his imposition of austerity
measures, or his vicious assault on immigrants. While they will not mount a
serious challenge to a proposal that will literally take food out of the mouths
of school children, they were complicit in passing the Republicans’ $1.3
trillion tax cuts in 2017 and the record $738 billion defense budget agreed to
earlier this year.
Trump
proposal denies free school meals to half a million children
Josh
Hawley: GOP Must Defend Middle Class Americans Against ‘Concentrated Corporate
Power,’ Tech Billionaires
The Republican Party must defend America’s working and middle
class against “concentrated corporate power” and the monopolization of entire
sectors of the United States’ economy, Sen. Josh Hawley (R-MO) says.
The wealthiest
Americans are paying a lower tax rate than all other Americans, groundbreaking
analysis from a pair of economists reveals.
Census Says U.S.
Income Inequality Grew ‘Significantly’ in 2018
TRUMPERNOMICS:
Billionaires’ wealth surged in 2019
28
December 2019
The financial oligarchy go into the New
Year
celebrating their massive accumulation
of
wealth and the so-called mainstream
media
will continue to maintain the fiction
that the
US and, by extension, the global
economy,
remain sound. But the reality is that
the seeds
of another financial catastrophe have
not
only been planted but are rapidly
germinating.
Mike Bloomberg: Don’t
Believe Trump – Our Economy Is Broken
By
Michael R. Bloomberg
Democratic Presidential candidate Michael Bloomberg
addresses a crowd in North Carolina. Photograph by Melissa Sue
Gerrits/Getty Images
President
Donald Trump says our economy is “the best it has ever been,” and he is
planning to ride that false claim to a second term.
I won’t
let him get away with it. I have the track record—in business and government—to
show America what real economic leadership looks like.
Sure,
the stock market is at an all-time high. But almost half the country doesn’t
own any stocks. And yes, the unemployment rate is low. But nearly half
of all workers are in jobs that earn $18,000 at the median. In fact, the share
of national income going to workers—rather than investors—is near an all-time
low.
Too
much wealth is in too few hands. And while a handful of big cities are doing
well, a lot of the country is struggling; our middle class is being hollowed
out; and working Americans are being squeezed by higher prices on everything
from health care to housing.
As a
candidate, Trump promised to take on these issues. As president, he has been in
the pockets of the special interests that dominate Washington.
Remember
when candidate Trump promised to deliver for regular people—the forgotten
Americans?
Well,
President Trump pushed through the
biggest
tax cut for the wealthy in history, and
nearly
all the money goes to people like me,
who
don’t need it.
Remember
when candidate Trump stood in front of the GM factory in Lordstown, Ohio and
promised to keep it open?
In
2018, that plant closed down.
Remember
when candidate Trump promised to “protect the farmers”?
Last
year, farmers lost billions of dollars, and many lost their farms, as a direct
result of his tariffs and trade wars.
Again
and again, candidate Trump made economic promises to working people that he had
no intention of keeping. And sure enough, he has broken all of them.
In
fairness, we faced serious economic problems before President Trump took
office. That’s one of the reasons he won. He promised to fix them.
Instead,
he has made them worse.
We need
to elect a leader who can actually deliver real change—not just talk about
it—and create more good jobs, with good salaries, all across America.
And I
know I can do that, because I’ve done it.
Coming
from a middle-class home, where my father never made more than $6,000 in a
year, I was lucky to get a good education and work my way up from an
entry-level job. When I got laid off, I started a company from scratch that now
employs 20,000 people. We pay good salaries and provide the best health
benefits money can buy, including six months of parental leave—at full pay.
As
mayor of New York, I helped create nearly 500,000 new jobs, most of them
outside of Manhattan.
When I
was first elected shortly after the terrorist attacks of 9/11, the question
everyone asked us was: Can you rebuild Lower Manhattan?
Our
answer was: Yes, but that’s not enough.
We set
out to rebuild every area of the city, starting with those outside Manhattan
that had faced decades of industrial abandonment and decay. We spread good jobs
with good salaries to those communities. I know we can bring about that kind of
progress all across America.
This
week on the South Side of Chicago, I announced some of the core elements of the
strategy I’ll take to create millions of good jobs where they are needed most,
by investing in areas of the country that have been hurt by globalization and
automation, and have been ignored by the federal government for too long.
To
start, I will dramatically increase spending on research and development, by
over $100 billion. Rather than sending that money to only a few places that
already have massive research budgets, like Harvard and Stanford, we’ll spread
it to places like Akron, Ohio, where I was today.
The way
we’ll do it is by funding new “job factories” in Akron and around the country,
with the goal of bringing opportunity to places that don’t have enough of it.
We call them job factories because that’s what they’ll produce: jobs. They’ll
do it by generating scientific breakthroughs in a wide variety of areas, which
will generate millions of good jobs in everything from green energy and
sustainable agriculture to advanced manufacturing and public health.
We’ll
also make sure Americans have the skills they need to do the work—supporting
community colleges, apprenticeships, and job-training programs all across our
country.
In
addition to preparing people for good jobs, we will modernize the social
contract between employee and employer—so laborers are protected, no matter
where they work.
We will
do that by working to guarantee paid sick leave and paid family leave for all
workers—just as we do at my company. We will support the right of all workers
to organize and bargain collectively—including gig, contract, and franchise
employees, many of whom have to work two or three jobs to put food on the
table.
I know
a lot of candidates say they’re going to create good jobs. But for me, creating
good jobs is not something I just talk about. It’s what I’ve spent my whole
career doing.
That’s
a key part of the message we need to beat Trump. I’m ready to take it directly
to him.
Michael R. Bloomberg, the
former mayor of New York City, is the founder of Bloomberg LP.
Share market boom masks another
financial crisis in the making
Wall Street stock market indexes are set
to finish the year at or near record highs in marked contrast to the end of
2018 when they experienced their worst December since 1931 in the midst of the
Great Depression.
The rise and rise of stock prices over
the course of the year—the S&P 500 is up by more than 29 percent—has been
the principal factor in the further escalation of the wealth of the ultra-rich
with Bloomberg reporting that their net worth has risen by $1.25 trillion, or
25 percent.
The escalation of the financial
markets,
however, is not an expression of
economic
health. Rather, the social disease of
ever-
rising inequality, coupled with
worsening
wages and living standards for millions,
is the
contradictory expression of a gathering
crisis
located at the very heart of the
financial
system itself.
The year 2019 will go
down in economic history as the great turnaround when the world’s major central
banks gave up on their attempt to return to “normal” monetary policy after
pumping trillions of dollars into the global financial system in response to
the crisis of 2008–9.
These extraordinary
actions, rewarding the very banks and financial institutions whose speculative
and in some cases outright criminal activities had sparked the crisis, were
justified on the basis that they were necessary to save the entire
system. When the crisis passed, it was maintained, such “unconventional”
monetary policies would cease and there would be a return to “normal.”
But it has become clear
over the course of the past decade that this day will never come because, like
a drug addict, the entire global financial system has become completely
dependent on the supply of ultra-cheap money for the accumulation of profit.
To give the US Federal
Reserve its due it did make an attempt to at least restrict the supply. It
carried out four interest rates rises in 2018, on the back of a slight upturn
in the US and global economy and foreshadowed more of the same in 2019. It even
committed itself to start winding down its massive holdings of financial assets
which, as a result of quantitative easing, had expanded to more than $4
trillion from $800 billion in 2007.
The violent reaction of
Wall Street to these measures at the end of 2018, amid denunciations of the Fed
by President Trump, meant that even these limited measures were shelved. The
underlying weakness of the US economy and the fragility of the financial
system, where corporate debt has risen close to a record $10 trillion
(equivalent to 47 percent of the total economy) and some 50 percent of
corporate bonds are rated at BBB (just above junk status), meant it could not
sustain a base interest rate above the historically low rate of 2.5 percent.
Fed chairman Powell
started the year by making clear there would be no rates rises and in July made
the first of what were to be three interest rate cuts for the year. The winding
down of asset holdings was halted. These actions have been duplicated by the
European Central Bank which has further cut its base interest this year and
resumed its asset purchases, adding to the €2.6 trillion stock it already
holds, while the Bank of Japan continues its quantitative easing program.
The Fed has not
officially resumed quantitative easing but it has intervened aggressively in
the short-term financial market following a spike in the overnight repo rate
last September. The repo market is crucial to the day-to-day functioning of the
financial system as financial institutions borrow money overnight to close
their books at the end of the trading day. Under normal conditions, the repo
interest rate tracks the Fed’s base rate. But in mid-September it spiked to as
high as 10 percent.
Since then the Fed has
intervened to the
tune of hundreds
of billions of dollars and
reversed more than half
the previous
reduction of its asset
portfolio.
One of the most
significant effects of central bank policy has been in the market for
government bonds. It has been said that 2019 was the year when bond market
logic was turned on its head. Bond markets have traditionally functioned as an
arena for virtually risk-free investment at a relatively low rate of return.
Their operations have formed the basis for investments by pension funds and
insurance companies that have to balance their long-term liabilities with
secure assets.
But in the middle of
this year the mass of bonds yielding negative yields reached $17 trillion.
Since then the amount of bonds with negative yields has fallen to $12 trillion,
but this is still far beyond anything that has occurred in the past.
A negative yield occurs
when the price of a bond in the market has gone so high that if an investor
purchased it and held it to maturity they would make a loss. Of course, under
those conditions investors do not buy bonds in order to hold them to maturity.
They do so in anticipation that prices will rise even further and they will be
able to sell them and make a capital gain. And the converse applies. If
interest rates rise and the price of the bond falls (the two move in the
opposite direction) the investors will make a loss.
The emergence of
negative yields in bond markets as a result of central bank monetary policies
is the expression of a financial bubble in an area of the market that had
previously provided some stability.
In a recent comment on
Bloomberg entitled “When the ultimate refuge turns risky,” financial analyst
Satyaijit Das noted: “Until the financial crisis of 2008, government bonds were
the traditional haven for investors. More than a decade on, their nature has
fundamentally changed. In any future crisis, sovereign debt will be a
propagator of risk rather than a refuge.”
He warned that despite
record low interest rates and low inflation the risk on these supposedly safe
assets was increasing. Once they provided risk-free returns. Now, with yields
at record lows, they provide only return-free risks.
The danger is that
problems in the credit worthiness of government bonds of any country can
rapidly be transmitted throughout the financial system as losses on bond
holdings create selling pressure leading to rising debt costs. In a recent
report, the World Bank pointed to a “global debt wave” that had led to the
growth of debt in emerging market economies to a “towering” $55 trillion—the
largest in history. Emerging markets are not the only source of potential
instability. In the advanced economies government debt has risen to more than
100 percent of gross domestic product compared to 70 percent in 2007.
The significance of the
debt bubble in government bonds emerges in clearer focus when it is viewed in
the context of the financial crises of the past three decades. The stock market
crash of October 1987, when Wall Street experienced its largest one day fall in
history, was the result of a share price bubble. Then came the Asian crisis of
1997–98, set off by an emerging market bubble. It was followed by the collapse
of the tech bubble in the early 2000s and then the financial crash of 2008–9,
sparked by a bubble in the housing market which resulted in a crisis with the
onset of recessionary trends at the end of 2007.
Now there is a bubble
in the market for government bonds, which in previous periods has functioned as
the bedrock of the financial system. Moreover, the world’s major central banks
are directly involved because of their purchases of government bonds over the
past decade. As Das noted: “It is ironic that actions taken to preserve the
system and a key instrument—government bonds—now pose a key threat to financial
stability.”
The financial oligarchy go into the New
Year
celebrating their massive accumulation
of
wealth and the so-called mainstream
media
will continue to maintain the fiction
that the
US and, by extension, the global
economy,
remain sound. But the reality is that
the seeds
of another financial catastrophe have
not
only been planted but are rapidly
germinating.
TRUMPERNOMICS:
Billionaires’ wealth surged in 2019
28
December 2019
As the second decade of
the 21st century comes to a close, its most salient feature—the plundering of
humanity by a global financial oligarchy—continues unabated.
Amidst trade war and
the growth of militarism and authoritarianism on the one side, and an eruption
of international strikes and protests by the working class against social
inequality on the other, the stock market is hitting record highs and the
fortunes of the world’s billionaires are continuing to surge.
On Friday, one day
after all three major US stock indexes set new records, Bloomberg issued its
end-of-year survey of the world’s 500 richest people. The Bloomberg
Billionaires Index reported that the oligarchs’ fortunes increased by a
combined total of $1.2 trillion, a 25 percent rise over 2018. Their collective
net worth now comes to $5.9 trillion.
To place this figure in
some perspective, these 500 individuals control more wealth than the gross
domestic product of the United States at the end of the third quarter of 2019,
which was $5.4 trillion.
The year’s biggest
gains went to France’s Bernard Arnault, who added $36.5 billion to his fortune,
bringing it above the rarified $100 billion level to $105 billion. He knocked
speculator Warren Buffett, at $89.3 billion, down to fourth place. Amazon boss
Jeff Bezos lost nearly $9 billion due to a divorce settlement, but maintained
the top position, with a net worth of $116 billion. Microsoft founder Bill
Gates gained $22.7 billion for the year and held on to second place at $113
billion.
The 172 American
billionaires on the Bloomberg list added $500 billion, with Facebook’s Mark
Zuckerberg recording the year’s biggest US gain at $27.3 billion, placing him
in fifth place worldwide with a net worth of $79.3 billion.
It is difficult to
comprehend the true significance of such stratospheric sums. In his 2016
book Global Inequality, economist Branko Milanovic wrote:
"A billion dollars
is so far outside the usual experience of practically everyone on earth that
the very quantity it implies is not easily understood… Suppose now that you
inherited either $1 million or $1 billion, and that you spent $1,000 every day.
It would take you less than three years to run through your inheritance in the
first case, and more than 2,700 years (that is, the time that separates us from
Homer’s Iliad) to blow your inheritance in the second case."
The vast redistribution
of wealth from the bottom to the top of society is the outcome of a
decades-long process, which was accelerated following the 2008 Wall Street
crash. It is not the result of impersonal and simply self-activating processes.
Rather, the policies of capitalist governments and parties around the world,
nominally “left” as well as right, have been dedicated to the ever greater
impoverishment of the working class and enrichment of the ruling elite.
In the US, the top one
percent has captured all of the increase in national income over the past two
decades, and all of the increase in national wealth since the 2008 crash.
The main mechanism for
this transfer of wealth has been the stock market, and the policies of the US
Federal Reserve and central banks internationally have been geared to providing
cheap money to drive up stock prices. The cost of this massive subsidy to the
financial markets and the oligarchs has been paid by the working class, in the
form of social cuts, mass layoffs, the destruction of pensions and health
benefits, and the replacement of relatively secure and decent-paying jobs with
part-time, temporary and contingent “gig” positions.
Since Trump was
inaugurated in January of 2017, pledging to slash corporate taxes, lift regulations
on big business and dramatically increase the military budget, the Dow has
surged by 9,000 points. This year, Trump and the financial markets applied
massive pressure on the Fed to reverse its efforts to “normalize” interest
rates. The Fed complied, carrying out three rate cuts and repeatedly assuring
the markets it had no plans to raise rates in 2020.
This windfall for the
banks and hedge funds was supported by the Democrats no less than the
Republicans. In fact, Trump’s economic policy has been given de facto support
by the Democratic Party all down the line—from his tax cuts for corporations
and the rich to his attack on virtually all regulations on business. Even in
the midst of impeachment—carried out entirely on the grounds of “national security”
and Trump’s supposed “softness” toward Russia—the Democrats have voted by wide
margins for Trump’s budget, his anti-Chinese US-Mexico-Canada trade pact and
his record $738 billion Pentagon war budget.
This has included
giving Trump all the money he wants to build his border wall and carry out the
mass incarceration and persecution of immigrants.
Trump’s pro-corporate
policies are an extension and expansion of those pursued by the Obama
administration. It allocated trillions in taxpayer money to bail out the banks
and flooded the financial markets with cheap credit, driving up stock prices,
while imposing a 50 percent across-the-board cut in pay for newly hired
autoworkers in its bailout of General Motors and Chrysler. Obama oversaw the
closure of thousands of schools and the layoff of hundreds of thousands of
teachers, and enacted austerity budgets that slashed social programs.
Two of those running
for the 2020 Democratic presidential nomination are billionaires—Tom Steyer and
Michael Bloomberg. The latter, with a net worth of $56 billion, is the ninth
richest person in the US. He entered the race as the spokesman for oligarchs
outraged over talk from Bernie Sanders and Elizabeth Warren of token tax
increases on the super-rich.
The oligarchs are not
frightened by Sanders and Warren—two longstanding defenders of the American
ruling class, who seek to mask their subservience to capital with talk of
making the oligarchs pay “their fair share,” a euphemism for defending their
right to pillage the population. The billionaires are frightened by the growth
of mass opposition to capitalism that finds a distorted expression in support
for the phony “progressives” in the Democratic fold.
Between them, Bloomberg
and Steyer have already spent $200 million of their own money in an effort to
buy the election outright.
The impact of the
policy of social plunder is seen in the deepening of a malignant social crisis
in country after country. In the US, society is marching backwards, as the
crying need for schools, hospitals, affordable housing, pensions, the
rebuilding of decrepit roads, bridges, transportation, flood control, water and
sewage, fire control and electricity grids is met with the official response:
“There is no money.”
The result? Three
straight years of declining life expectancy, record addiction and suicide
rates, devastating wildfires and floods, electricity cut-offs by profiteering
utility companies. And a climate crisis that cannot be addressed within the
framework of a system dominated by a money-mad plutocracy.
Not a single serious
social problem can be addressed under conditions where the ruling elite—through
its bribed parties and politicians, aided by its pro-capitalist trade unions
and backed up by its courts, police and troops—diverts resources from society
to the accumulation of ever more luxurious yachts, mansions, private islands
and personal jets.
The watchword must
be—in opposition to the Corbyns, the Sanders, the Tsiprases and their
pseudo-left promoters—“Expropriate the super-rich!”
Bloomberg:
2019 a Good Year for Wealthy; Jeff Bezos Remains on Top Despite $9 Billion Loss
in Divorce
For the already wealthy and those
who struck gold for the first time, 2019 was a good year for the rich.
Bloomberg News’ billionaire index
is reporting on the money
made this past year, including Amazon founder and Washington Post owner Jeff
Bezos remaining on the top of the heap despite a divorce settlement with his
ex-wife that led to a $9 billion decrease in his portfolio:
The leveraging of a giant
social-media presence, a catchy tune about a family of sharks and a burgeoning
collection of junkyards are just a few of the curious ways that helped make
2019 a fertile year for fortunes to blossom around the world.
Kylie Jenner became the youngest
self-made billionaire this year after her company, Kylie Cosmetics, signed an
exclusive partnership with Ulta Beauty Inc. She then sold a 51% stake for $600
million.
It has been almost two months since
the Washington Nationals captured their first World Series championship, but
people around the world are still singing along to the baseball team’s adopted
rallying cry: “Baby Shark, doo-doo doo-doo doo-doo.” The Korean family that
helped popularize the viral earworm are now worth about $125 million.
The new wealthy includes Willis
Johnson of Oklahoma who has amassed a $1.9 billion fortune from building a
network of junkyards that sell damaged automobiles, according to Bloomberg
News.
Bloomberg reported that the 500
wealthiest people around the world added $1.2 trillion to their wealth,
“boosting their collective net worth 25 percent to $5.9 trillion.”
“Leading the 2019 gains was France’s
Bernard Arnault, who added $36.5 billion as he rose on the Bloomberg index to
become the world’s third-richest person and one of three centibillionaires —
those with a net worth of at least $100 billion,” Bloomberg reported.
Ironically, Bezos was one of 52
people who had a decline in their fortune, in his case because of a divorce
settlement with MacKenzie Bezos who is now on the billionaires list ranking No.
25 with a net worth of $27.5 billion.
Bloomberg reported on the winners:
- The 172 American billionaires on the
Bloomberg ranking added $500 billion, with Facebook Inc.’s Mark Zuckerberg
up $27.3 billion and Microsoft Corp. co-founder Bill Gates up $22.7
billion.
- Representation from China continued to
grow, with the nation’s contingent rising to 54, second only to the U.S.
He Xiangjian, founder of China’s biggest air-conditioner exporter, was the
standout performer as his wealth surged 79 percent to $23.3 billion.
- Russia’s richest added $51 billion, a
collective increase of 21 percent, as emerging-market assets from
currencies to stocks and bonds rebounded in 2019 after posting big losses
a year earlier.
And “losers”:
- Rupert Murdoch’s personal fortune
dropped by about $10 billion after proceeds from Walt Disney Co.’s
purchase of Fox assets were distributed to his six children, making them
billionaires in their own right.
- Interactive Brokers Group Inc.’s Thomas
Peterffy saw his wealth slump by $2.1 billion as investors weighed a
reshaped competitive landscape for brokerage businesses after rival
Charles Schwab Corp. eliminated commissions and agreed to buy TD
Ameritrade Holding Corp.
- WeWork’s Adam Neumann saw his fortune
implode — at least on paper — as the struggling office-sharing company’s
valuation dropped to $8 billion in October from an estimated $47 billion
at the start of the year. Still, SoftBank Group Corp.’s rescue package
left Neumann’s status as a billionaire intact.
And the new billionaires:
- White Claw, the “hard seltzer” that was
the hit of the summer among U.S. millennials, helped boost Anthony von
Mandl’s net worth to $3.6 billion.
- Mastering the art of fast-food
deliveries proved rewarding for Jitse Groen, whose
soaring Takeaway.com NV lifted his wealth to $1.5 billion.
- The popularity of soy milk gave eight
members of Hong Kong’s Lo family a combined $1.5 billion.
A new Gilded Age
has emerged in America — a 21st century version.
The
wealth of the top 1% of Americans has grown dramatically in the past four decades, squeezing both
the middle class and the poor. This is in sharp contrast to Europe and Asia,
where the wealth of the 1% has grown at a more constrained pace.
The Lessons of Theodore Roosevelt
To get out of our Second Gilded Age, look no
further than how we got out of the first one.
We’ve been rocked by
scandals over the past year involving the nation’s most wealthy and powerful.
We’ve learned that a twisted multimillionaire allegedly procured and raped
girls in his Manhattan mansion and on his private Caribbean Island; entitled
celebrities and corporate plutocrats paid millions of dollars in bribes to get
their kids into elite universities; pillars of the Hollywood and media
establishments have used their stature to sexually prey upon underlings; and,
yes, our president was caught lying about possibly violating campaign finance
laws with hush money payoffs to a porn star and Playboy bunny.
This
moral corruption is accompanied by the regressive government policies of a
scandal-stained administration. President Donald Trump is rolling back programs
that protect consumers, voting rights, the environment, and competitive
commerce faster than Congress can issue subpoenas. His cabinet includes
17 millionaires, two centimillionaires, and one billionaire with a combined
worth of $3.2 billion, according to Forbes. He presides over the most
corrupt administration in American history, one marked by nepotism and
self-dealing. His so-called “A Team” of senior officials has undergone a record
75 percent turnover since he took office—most of whom
resigned under pressure, often caught up in
scandal.
Commerce
Secretary Wilbur Ross, whose net worth is estimated at $600 million, reflected the arrogance and empathy
deficit that typifies the Trump White House during last winter’s record-long
government shutdown. He suggested that federal workers just take out loans
until they got paid.
But
nobody tops the swamp king, Trump himself. Forget the sleaze, forget the
obstruction of justice, forget the constant dissing of Congress. His defying
the Constitution’s emoluments clause alone would, in a normally functioning
American democracy, make him the subject of impeachment. Instead, he flouts the
rules as if they don’t apply to him. If he gets his way and hosts next year’s
G-7 summit at Mar-a-Lago, we may as well send the Constitution to the shredder.
And yet, as more recent controversies have shown us, including the Varsity
Blues college admissions scandal and Jeffery Epstein’s sex trafficking racket,
this kind of indifference to moral values is not confined to government
grandees.
So,
what gives? Is America drowning in a marsh of unchecked corruption and
entitlement brought on by latter-day Louis XVI’s and Marie Antoinettes? Are the
uber-wealthy out of control? There’s something rotten in America and, if we
don’t fix it soon, we invite a new wave of national decline and social
disintegration.
The
good news is that we have faced similar challenges before. Some prescriptions
from a previous era may provide a lodestar for a future Democratic president to
steer the country in the right direction. As Mark Twain, who coined the term
“the Gilded Age,” once said, “The external glitter of wealth conceals a corrupt
political core that reflects the growing gap between the very few rich and the
very many poor.” He was talking about the original Gilded Age, but that
diagnosis could just as easily apply to our current American condition.
The
first Gilded Age was marked by rapid economic growth, massive immigration,
political corruption, and a high concentration of wealth in which the richest
one percent owned 51 percent of property, while the bottom 44 percent had a
mere one percent. The oligarchs at the top were popularly known as “robber
barons.”
Theodore
Roosevelt, who was president at the time, understood that economic inequality
itself becomes a driver of a dysfunctional political system that benefits the
wealthy but few others. As he once famously warned, “There can be no real political democracy unless there is
something approaching economic democracy.”
His
response to the inequities of his times, which came to define the Progressive
Era, have much to teach us now about how to sensibly tackle economic
inequality. It’s worthwhile to closely examine the Rooseveltian playbook. For
instance, his “Square Deal” made bold changes in the American workplace,
government regulation of industry, and consumer protection. These reforms
included mandating safer conditions for miners and eliminating the spoils
system in federal hiring; bringing forty-four antitrust suits against big
business, resulting in the breakup of the largest railroad monopoly, and
regulation of the nation’s largest oil company; and passing the Meat Inspection
Act and Pure Food and Drug Act, which created the FDA. He prosecuted more than twice as many antitrust suits
against monopolistic businesses than his three predecessors combined, curbing
the robber barons’ power. And he relentlessly cleaned up corruption in the
federal government. One-hundred-forty-six indictments were brought against a
bribery ring involving public timberlands, culminating in the conviction and
imprisonment of a U.S. senator, and forty-four Postal Department employees were
charged with fraud and bribery.
Now,
we are in a Second Gilded Age, facing many of the same problems, and, in some
ways, to an even greater degree. The gap between the rich and everyone else is
even greater than it was during the late 19th Century, when the richest two
percent of Americans owned more than a third of the nation’s wealth. Today, the
top one percent owns almost 40 percent of the nation’s wealth, or more than the
bottom 90 percent combined, according to the
nonpartisan National Bureau of Economic Research. The first Gilded Age saw the
rise of hyper-rich dynastic families, such as the Rockefellers, Mellons,
Carnegies, and DuPonts. Today, three individuals—Jeff Bezos, Bill Gates, and
Warren Buffett—own more wealth than the bottom half of the country combined.
And three families—the Waltons, the Kochs, and the Mars—have enjoyed a nearly
6,000 percent rise in wealth since Ronald Reagan took the oath as president,
while median U.S. household wealth over the same period has declined by three percent.
The
consequences of this wealth gap are dire. Steve Brill explains in his book Tailspin that, by
manipulating the tax and legal systems to their benefit, America’s most
educated elite, the so-called meritocracy, have built a moat that excludes the
working poor, limiting their upward mobility and increasing their sense of
alienation, which then gives rise to the populist streak that allowed
politicians like Trump to captivate enough of the American electorate.
Similarly,
psychologist Dacher Keltner’s research shows that power in and of itself is a
corrupting force. As he documents in The Power Paradox, powerful people
lie more, drive more aggressively, are more likely to cheat on their spouses,
act abusively toward subordinates, and even take candy from children. Too
often, they simply do not respect the rules.
For
example, in monitoring an urban traffic intersection, Keltner found that
drivers of the least expensive vehicles virtually always yielded
to pedestrians, whereas drivers of luxury cars yielded only about half of the
time. He cites surveys covering 27
countries that show that rich people are more likely to admit that it’s
acceptable to engage in unethical behavior, such as accepting bribes or
cheating on taxes.“The experience of power might be thought of as having
someone open up your skull and take out that part of your brain so critical to
empathy and socially appropriate behavior,” says Keltner.
That’s
why we need to reform our political system if we are to survive the rampant
amorality and lawlessness of the Second Gilded Age. Simply put, so very few
should not wield so much sway over so many.
One
of the first priorities of an incoming administration should be to narrow the
wealth and income gap. French economist Thomas Picketty favors a progressive
annual wealth tax of up to two percent, along with a progressive income tax as
high as 80 percent on the biggest earners to reduce inequality and avoid
reverting to “patrimonial capitalism” in which inherited
wealth controls much of the economy and could lead essentially to oligarchy.
The
leading 2020 Democratic candidates favor raising taxes, as well. Elizabeth
Warren has proposed something commensurate to Picketty’s two percent wealth tax
for those worth more than $50 million, and a three percent annual tax on
individuals with a net worth higher than $1 billion. She has also proposed
closing corporate tax loopholes. Joe Biden wants to restore the top individual
income tax rate to a pre-Trump 39.6 percent and raise capital gains taxes.
Bernie Sanders has proposed an estate tax on the wealth of the top 0.2 percent
of Americans.
Following
Theodore Roosevelt’s example, we need to aggressively root out the tangle of
corruption brought on by Trump and his minions. This has already begun with
multiple and expanding investigations led by House Democrats into the
metastasizing malfeasance within the Trump administration. Trump’s successor,
however, should work with Congress to appoint a bipartisan anti-corruption task
force to oversee prosecutions and draw up reform legislation to prevent future
abuses.
“Of
all forms of tyranny, the least attractive and the most vulgar is the tyranny
of mere wealth, the tyranny of a plutocracy,” Roosevelt once warned. The free
market has made America the great success it is today. But history has shown
that unconstrained capitalism and a growing wealth gap leads to an unhealthy
concentration of wealth in the hands of a few. When the gap between the haves
and the have-nots goes unchecked, populism takes hold, leading to the election
of dangerous demagogues like Trump, and the disastrous politics they bring with
them. It is not too late to reverse course. But first, we need to re-learn the
lessons from our first Gilded Age if we are going to get out of the current
one.
Economists:
America’s Elite Pay Lower Tax Rate Than All Other Americans
The wealthiest Americans are paying a lower
tax rate than all other Americans, groundbreaking analysis from a pair of
economists reveals.
For the first time on record, the
wealthiest 400 Americans in 2018 paid a lower tax rate than all of the income
groups in the United States, research highlighted by the New York Times from
University of California, Berkeley, economists Emmanuel Saez and Gabriel
Zucman finds.
The analysis concludes that the country’s
top economic elite are paying lower federal, state, and local tax rates than
the nation’s working and middle class. Overall, these top 400 wealthy Americans
paid just a 23 percent tax rate, which the Times‘ op-ed columnist David Leonhardt notes
is a combined tax payment of “less than one-quarter of their total income.”
This 23 percent tax rate for the
rich means their rate has been slashed by 47 percentage points since 1950 when
their tax rate was 70 percent.
(Screenshot via the New York Times)
The analysis finds that the 23
percent tax rate for the wealthiest Americans is less than every other income
group in the U.S. — including those earning working and middle-class incomes,
as a Times graphic
shows.
Leonhardt writes:
For middle-class and poor families,
the picture is different. Federal income taxes have also declined
modestly for these families, but they haven’t benefited much if at all from the
decline in the corporate tax or estate tax. And they now pay more
in payroll taxes (which finance Medicare and Social Security) than in
the past. Over all, their taxes have remained fairly flat. [Emphasis added]
The report comes as Americans
increasingly see a growing divide between the rich and working class, as the
Pew Research Center has found.
Sen. Josh Hawley (R-MO), the leading
economic nationalist in the Senate, has warned against the Left-Right
coalition’s consensus on open trade, open markets, and open borders, a plan
that he has called an economy that works solely for the elite.
“The same consensus says that we
need to pursue and embrace economic globalization and economic integration at
all costs — open markets, open borders, open trade, open everything no matter
whether it’s actually good for American national security or for American
workers or for American families or for American principles … this is the
elite consensus that has governed our politics for too long and what it has
produced is a politics of elite ambition,” Hawley said in an August speech in
the Senate.
That increasing worry of rapid
income inequality is only further justified by economic research showing a rise in
servant-class jobs, strong economic recovery for elite zip codes but not for
working-class regions, and skyrocketing wage growth for the billionaire class
at 15 times the rate of other Americans.
Census Says U.S. Income Inequality Grew ‘Significantly’ in 2018
(Bloomberg) -- Income inequality in America widened
“significantly” last year, according to a U.S. Census Bureau report published
Thursday.
A measure of inequality known as the Gini index rose to 0.485
from 0.482 in 2017, according to the bureau’s survey of household finances. The
measure compares incomes at the top and bottom of the distribution, and a score
of 0 is perfect equality.
The 2018 reading is the first to incorporate the impact of
President Donald Trump’s end-2017 tax bill, which was reckoned by many
economists to be skewed in favor of the wealthy.
But the distribution of income and wealth in the U.S. has been
worsening for decades, making America the most unequal country in the developed
world. The trend, which has persisted through recessions and recoveries, and
under administrations of both parties, has put inequality at the center of U.S.
politics.
Leading candidates for the 2020 Democratic presidential
nomination, including senators Elizabeth Warren and Bernie Sanders, are
promising to rectify the tilt toward the rich with measures such as taxes on
wealth or financial transactions.
Just five states -- California, Connecticut, Florida, Louisiana
and New York, plus the District of Columbia and Puerto Rico -- had Gini indexes
higher than the national level, while the reading was lower in 36 states.
The
Democrats’ opposition to Trump is not based on his imposition of austerity
measures, or his vicious assault on immigrants. While they will not mount a
serious challenge to a proposal that will literally take food out of the mouths
of school children, they were complicit in passing the Republicans’ $1.3
trillion tax cuts in 2017 and the record $738 billion defense budget agreed to
earlier this year.
Trump
proposal denies free school meals to half a million children
The Trump
administration has provided a new analysis of how proposed changes to
eligibility for the Supplemental Nutrition Assistance Program (SNAP), commonly
known as food stamps, will impact children who participate in the National
School Lunch and School Breakfast programs. By the White House’s own admission,
these changes mean that about a half-million children would become ineligible
for free school meals.
Secretary of
Agriculture Sonny Perdue has described the changes as a tightening up of
“loopholes” in the SNAP system. But those affected by the changes are not
corporate crooks or billionaires, but hundreds of thousands of children who
stand to lose access to free meals. For many American children, free school
breakfasts and lunches make up the bulk of their nutritional intake, and they
stand to suffer permanent physical and psychological damage as a result of the
cuts.
Children receive a free
lunch at the Phoenix Day Central Park Youth Program in downtown Phoenix. (AP
Photo Matt York)
The sheer
vindictiveness of the proposed rule change is shown by the minimal savings that
would result—about $90 million a year beginning in fiscal year 2021, or a mere
0.012 percent of the estimated $74 billion annual SNAP budget. Put another way,
the savings would amount to two-thousandths of a percent of the $4.4 trillion
federal budget. But while this $90 million might appear as small change to the
oligarchs running and supporting the government, it will be directly felt as
hunger in the bellies of America’s poorest children.
SNAP provided benefits
to roughly 40 million Americans in 2018 and is the largest nutrition program of
the 15 administered by the federal Food and Nutrition Service. Along with
programs such as the Nutrition Program for Women, Infants and Children and
school breakfast and lunch programs, SNAP has been a major factor in making a
dent in the hunger of working-class families. But despite these programs’
successes, the Trump administration is seeking to claw them back, with the
ultimate aim of doing away with them altogether.
The US Department of
Agriculture (USDA), which administers the food stamp and school meal programs,
says that the new analysis presented last week is a more precise estimate of
the impact of rule changes in SNAP the USDA first announced in July. The main
component of the rule change is an end to “broad-based categorical eligibility”
for the food stamp program. Food stamps are cut off for households whose
incomes exceed 130 percent of the federal poverty line, or $33,475 per year for
a family of four, calculated after exemptions for certain expenses.
Under “broad-based
categorical eligibility,” which is currently used by over 40 states, households
can be eligible for food stamps based on their receiving assistance from other
anti-poverty programs, such as Temporary Assistance for Needy Families. Under
this rule, which has been in effect for about 20 years, states are allowed to
raise income eligibility and asset limits to promote SNAP eligibility. This
prevents many households from falling over the “benefit cliff,” which happens
when a small increase in income results in a complete cutoff of benefits,
leaving a family worse off than before the rise in income.
According to the USDA,
the rule change on broad-based eligibility would throw more than 680,000
households with children off SNAP. About 80 percent of these households have
school-age children, amounting to about 982,000 children. Of those, 55 percent,
or about 540,000, would no longer be eligible for free school meals, although
most would be eligible for reduced-price meals. About 40,000 would be required
to pay the full meal rate.
However, this does not
paint the full picture. Households thrown off SNAP would be required to apply
separately for access to free or reduced-price school meals. The USDA admits
that its cost estimates “do not account for potential state and local
administrative costs incurred due to collecting and processing household
applications … and also do not account for any increased responsibility placed
on the households to complete and submit a school meals application.”
While the Trump
administration claims that the proposed changes to SNAP eligibility are aimed
at closing up “loopholes” and stopping people from claiming benefits they’re
not entitled to, the reality is that there is no evidence that broad-based
eligibility has allowed significant numbers of people to supposedly “game the
system.” A 2012 Government Accountability Office investigation found that only
473,000 recipients, or just 2.6 percent of beneficiaries, received benefits
they would not have received without the broad-based eligibility offered by
many states.
There is consistent
evidence that SNAP contributes to a decrease in food insecurity, a condition
defined by the USDA as limited or uncertain access to adequate food. By one
estimate, SNAP benefits reduce the likelihood of food insecurity by about 30
percent and the likelihood of being very food insecure by 20 percent. Census
data has shown that SNAP also plays a critical role in reducing poverty, with
about 3.6 million Americans, including 1.5 million children, being lifted out
of poverty in 2016 as a result of the program.
The EconoFact Network
reports that SNAP has improved birth outcomes and infant health. When an
expectant mother has access to SNAP during pregnancy, particularly in the third
trimester, it decreases the likelihood that her baby will be born with low
birth weight. There is also evidence that the benefits of nutrition support can
persist well into adulthood when access to SNAP is provided before birth and
during early childhood. This can have a long-term impact on an individual’s
earnings, health and life expectancy. Conversely, food insecurity in childhood
correlates with greater risk of developing high blood pressure, diabetes,
obesity and cardiovascular disease later in life.
The proposed threat to
school lunches for half a million children has elicited little response from
Democrats in Congress, who are obsessively focused on the Trump impeachment
inquiry. Critical issues such as the health and nutrition of school children
are of little consequence to the Democratic Party, which instead gives voice to
those sections of the military intelligence apparatus that sees Trump’s
actions, particularly his sudden pullout from Syria, as endangering the global
interests of American imperialism.
The Democrats’
opposition to Trump is not based on his imposition of austerity measures, or
his vicious assault on immigrants. While they will not mount a serious
challenge to a proposal that will literally take food out of the mouths of
school children, they were complicit in passing the Republicans’ $1.3 trillion
tax cuts in 2017 and the record $738 billion defense budget agreed to earlier
this year. At $94.6 million, the cost of one of the US Air Force’s newest
and most technologically advanced fighter jets, the F-35A, would cover the $90
annual savings from depriving half a million US schoolchildren of free meals.
The Democrats’ opposition to
Trump is not based on his imposition of austerity measures, or his vicious
assault on immigrants. While they will not mount a serious challenge to a
proposal that will literally take food out of the mouths of school children,
they were complicit in passing the Republicans’ $1.3 trillion tax cuts in 2017
and the record $738 billion defense budget agreed to earlier this year.
A new Gilded Age
has emerged in America — a 21st century version.
The
wealth of the top 1% of Americans has grown dramatically in the past four decades, squeezing both
the middle class and the poor. This is in sharp contrast to Europe and Asia,
where the wealth of the 1% has grown at a more constrained pace.
Josh
Hawley: GOP Must Defend Middle Class Americans Against ‘Concentrated Corporate
Power,’ Tech Billionaires
The Republican Party must defend America’s working and middle
class against “concentrated corporate power” and the monopolization of entire
sectors of the United States’ economy, Sen. Josh Hawley (R-MO) says.
In an interview on The Realignment podcast,
Hawley said that “long gone are the days where” American workers can depend on
big business to look out for their needs and the needs of their communities.
Instead, Hawley explained that increasing “concentrated
corporate power” of whole sectors of the American economy — specifically among
Silicon Valley’s giant tech conglomerates — is at the expense of working and middle
class Americans.
“One of the things Republicans need to recover today is a
defense of an open, free-market, of a fair healthy competing market and the
length between that and Democratic citizenship,” Hawley said, and continued:
At the end of the day, we are trying to support and sustain here
a great democracy. We’re not trying to make a select group of people rich.
They’ve already done that. The tech billionaires are already billionaires, they
don’t need any more help from government. I’m not interested in trying to help
them further. I’m interested in trying to help sustain the great middle of this
country that makes our democracy run and that’s the most important challenge of
this day.
“You have these businesses who for years now have said ‘Well,
we’re based in the United States, but we’re not actually an American company,
we’re a global company,'” Hawley said. “And you know, what has driven profits
for some of our biggest multinational corporations? It’s been … moving jobs
overseas where it’s cheaper … moving your profits out of this country so you
don’t have to pay any taxes.”
“I think that we have here at the same time that our economy has
become more concentrated, we have bigger and bigger corporations that control
more and more of our key sectors, those same corporations see themselves as
less and less American and frankly they are less committed to American workers
and American communities,” Hawley continued. “That’s turned out to be a problem
which is one of the reasons we need to restore good, healthy, robust
competition in this country that’s going to push up wages, that’s going to
bring jobs back to the middle parts of this country, and most importantly, to
the middle and working class of this country.”
While multinational corporations monopolize industries, Hawley
said the GOP must defend working and middle class Americans and that big
business interests should not come before the needs of American communities:
A free market is one where you
can enter it, where there are new ideas, and also by the way, where people can
start a small family business, you shouldn’t have to be gigantic in order to
succeed in this country. Most people don’t
want to start a tech company. [Americans]
maybe want to work in their family’s business, which may be some corner shop in
a small town … they want to be able to make a living and
then give that to their kids or give their kids an option to do that. [Emphasis
added]
The problem with corporate
concentration is that it tends to kill all of that. The worst thing about corporate concentration is that it
inevitably believes to a partnership with big government. Big business and big government always get
together, always. And that is exactly what has happened now with the tech sector,
for instance, and arguably many other sectors where you have this alliance
between big government and big business … whatever you call it, it’s a problem
and it’s something we need to address. [Emphasis added]
Hawley blasted the free trade-at-all-costs doctrine that has
dominated the Republican and Democrat Party establishments for decades,
crediting the globalist economic model with hollowing “out entire industries,
entire supply chains” and sending them to China, among other countries.
“The thing is in this country is that not only do we not make
very much stuff anymore, we don’t even make the machines that make the stuff,”
Hawley said. “The entire supply chain up and down has gone overseas, and a lot
of it to China, and this is a result of policies over some decades now.”
As Breitbart News reported,
Hawley detailed in the
interview how Republicans like former President George H.W. Bush’s ‘New World
Order’ agenda and Democrats have helped to create a corporatist economy that
disproportionately benefits the nation’s richest executives and donor class.
The billionaire class, the top 0.01
percent of earners, has enjoyed more than 15 times as much
wage growth as the bottom 90 percent since 1979. That economy has been
reinforced with federal rules that largely benefits the wealthiest of
wealthiest earners. A study released last month
revealed that the richest Americans are, in fact, paying a lower tax rate than
all other Americans.
Economists: America’s Elite Pay Lower Tax Rate Than All Other
Americans
The wealthiest
Americans are paying a lower tax rate than all other Americans, groundbreaking
analysis from a pair of economists reveals.
For the
first time on record, the wealthiest 400 Americans in 2018 paid a lower tax
rate than all of the income groups in the United States, research highlighted by the New York Times from
University of California, Berkeley, economists Emmanuel Saez and Gabriel
Zucman finds.
The
analysis concludes that the country’s top economic elite are paying lower
federal, state, and local tax rates than the nation’s working and middle class.
Overall, these top 400 wealthy Americans paid just a 23 percent tax rate, which
the Times‘ op-ed columnist David Leonhardt notes is a
combined tax payment of “less than one-quarter of their total income.”
This 23
percent tax rate for the rich means their rate has been slashed by 47
percentage points since 1950 when their tax rate was 70 percent.
(Screenshot
via the New York Times)
The
analysis finds that the 23 percent tax rate for the wealthiest Americans is
less than every other income group in the U.S. — including those earning
working and middle-class incomes, as a Times graphic shows.
Leonhardt
writes:
For
middle-class and poor families, the picture is different. Federal
income taxes have also declined modestly for these families, but they haven’t
benefited much if at all from the decline in the corporate tax or estate tax. And
they now pay more in payroll taxes (which finance Medicare and Social
Security) than in the past. Over all, their taxes have remained fairly flat.
[Emphasis added]
The
report comes as Americans increasingly see a growing divide between the rich
and working class, as the Pew Research Center has found.
Sen. Josh
Hawley (R-MO), the leading economic nationalist in the Senate, has warned
against the Left-Right coalition’s consensus on open trade, open markets, and
open borders, a plan that he has called an economy that works solely for the
elite.
“The same
consensus says that we need to pursue and embrace economic globalization and
economic integration at all costs — open markets, open borders, open trade,
open everything no matter whether it’s actually good for American national
security or for American workers or for American families or for American
principles … this is the elite consensus that has governed our politics
for too long and what it has produced is a politics of elite ambition,”
Hawley said in an August speech in the
Senate.
That increasing
worry of rapid income inequality is only further justified by economic
research showing a rise in servant-class jobs,
strong economic recovery for elite zip codes but not for working-class
regions, and skyrocketing wage growth for the billionaire class at 15 times
the rate of other Americans.
Census Says U.S.
Income Inequality Grew ‘Significantly’ in 2018
(Bloomberg) -- Income
inequality in America widened “significantly” last year, according to a U.S.
Census Bureau report published Thursday.
A measure of inequality
known as the Gini index rose to 0.485 from 0.482 in 2017, according to the
bureau’s survey of household finances. The measure compares incomes at the top
and bottom of the distribution, and a score of 0 is perfect equality.
The 2018 reading is the
first to incorporate
the impact of President Donald Trump’s end-
2017 tax bill, which was reckoned by many
economists to be skewed in favor of the
wealthy.
the impact of President Donald Trump’s end-
2017 tax bill, which was reckoned by many
economists to be skewed in favor of the
wealthy.
But the distribution of
income and wealth in the U.S. has been worsening for decades, making America
the most unequal country in the developed world. The trend, which has persisted
through recessions and recoveries, and under administrations of both parties,
has put inequality at the center of U.S. politics.
Leading candidates for
the 2020 Democratic presidential nomination, including senators Elizabeth
Warren and Bernie Sanders, are promising to rectify the tilt toward the rich
with measures such as taxes on wealth or financial transactions.
Just five states --
California, Connecticut, Florida, Louisiana and New York, plus the District of
Columbia and Puerto Rico -- had Gini indexes higher than the national level,
while the reading was lower in 36 states.
TRUMPERNOMICS:
Billionaires’ wealth surged in 2019
28
December 2019
As the second decade of the 21st century comes to a close, its
most salient feature—the plundering of humanity by a global financial
oligarchy—continues unabated.
Amidst trade war and the growth of militarism and authoritarianism
on the one side, and an eruption of international strikes and protests by the
working class against social inequality on the other, the stock market is
hitting record highs and the fortunes of the world’s billionaires are
continuing to surge.
On Friday, one day after all three major US stock indexes set
new records, Bloomberg issued its end-of-year survey of the world’s 500 richest
people. The Bloomberg Billionaires Index reported that the oligarchs’ fortunes
increased by a combined total of $1.2 trillion, a 25 percent rise over 2018.
Their collective net worth now comes to $5.9 trillion.
To place this figure in some perspective, these 500 individuals
control more wealth than the gross domestic product of the United States at the
end of the third quarter of 2019, which was $5.4 trillion.
The year’s biggest gains went to France’s Bernard Arnault, who
added $36.5 billion to his fortune, bringing it above the rarified $100 billion
level to $105 billion. He knocked speculator Warren Buffett, at $89.3 billion,
down to fourth place. Amazon boss Jeff Bezos lost nearly $9 billion due to a
divorce settlement, but maintained the top position, with a net worth of $116
billion. Microsoft founder Bill Gates gained $22.7 billion for the year and
held on to second place at $113 billion.
The 172 American billionaires on the Bloomberg list added $500
billion, with Facebook’s Mark Zuckerberg recording the year’s biggest US gain
at $27.3 billion, placing him in fifth place worldwide with a net worth of
$79.3 billion.
It is difficult to comprehend the true significance of such
stratospheric sums. In his 2016 book Global Inequality, economist
Branko Milanovic wrote:
"A billion dollars is so far outside the usual experience
of practically everyone on earth that the very quantity it implies is not
easily understood… Suppose now that you inherited either $1 million or $1
billion, and that you spent $1,000 every day. It would take you less than three
years to run through your inheritance in the first case, and more than 2,700
years (that is, the time that separates us from Homer’s Iliad) to
blow your inheritance in the second case."
The vast redistribution of wealth from the bottom to the top of
society is the outcome of a decades-long process, which was accelerated following
the 2008 Wall Street crash. It is not the result of impersonal and simply
self-activating processes. Rather, the policies of capitalist governments and
parties around the world, nominally “left” as well as right, have been
dedicated to the ever greater impoverishment of the working class and
enrichment of the ruling elite.
In the US, the top one percent has captured all of the increase
in national income over the past two decades, and all of the increase in
national wealth since the 2008 crash.
The main mechanism for this transfer of wealth has been the
stock market, and the policies of the US Federal Reserve and central banks
internationally have been geared to providing cheap money to drive up stock
prices. The cost of this massive subsidy to the financial markets and the
oligarchs has been paid by the working class, in the form of social cuts, mass
layoffs, the destruction of pensions and health benefits, and the replacement
of relatively secure and decent-paying jobs with part-time, temporary and contingent
“gig” positions.
Since Trump was inaugurated in January of 2017, pledging to
slash corporate taxes, lift regulations on big business and dramatically
increase the military budget, the Dow has surged by 9,000 points. This year,
Trump and the financial markets applied massive pressure on the Fed to reverse
its efforts to “normalize” interest rates. The Fed complied, carrying out three
rate cuts and repeatedly assuring the markets it had no plans to raise rates in
2020.
This windfall for the banks and hedge funds was supported by the
Democrats no less than the Republicans. In fact, Trump’s economic policy has
been given de facto support by the Democratic Party all down the line—from his
tax cuts for corporations and the rich to his attack on virtually all
regulations on business. Even in the midst of impeachment—carried out entirely
on the grounds of “national security” and Trump’s supposed “softness” toward
Russia—the Democrats have voted by wide margins for Trump’s budget, his
anti-Chinese US-Mexico-Canada trade pact and his record $738 billion Pentagon
war budget.
This has included giving Trump all the money he wants to build
his border wall and carry out the mass incarceration and persecution of
immigrants.
Trump’s pro-corporate policies are an extension and expansion of
those pursued by the Obama administration. It allocated trillions in taxpayer
money to bail out the banks and flooded the financial markets with cheap
credit, driving up stock prices, while imposing a 50 percent across-the-board
cut in pay for newly hired autoworkers in its bailout of General Motors and
Chrysler. Obama oversaw the closure of thousands of schools and the layoff of
hundreds of thousands of teachers, and enacted austerity budgets that slashed
social programs.
Two of those running for the 2020 Democratic presidential
nomination are billionaires—Tom Steyer and Michael Bloomberg. The latter, with
a net worth of $56 billion, is the ninth richest person in the US. He entered
the race as the spokesman for oligarchs outraged over talk from Bernie Sanders
and Elizabeth Warren of token tax increases on the super-rich.
The oligarchs are not frightened by Sanders and Warren—two
longstanding defenders of the American ruling class, who seek to mask their
subservience to capital with talk of making the oligarchs pay “their fair
share,” a euphemism for defending their right to pillage the population. The
billionaires are frightened by the growth of mass opposition to capitalism that
finds a distorted expression in support for the phony “progressives” in the
Democratic fold.
Between them, Bloomberg and Steyer have already spent $200
million of their own money in an effort to buy the election outright.
The impact of the policy of social plunder is seen in the
deepening of a malignant social crisis in country after country. In the US,
society is marching backwards, as the crying need for schools, hospitals,
affordable housing, pensions, the rebuilding of decrepit roads, bridges,
transportation, flood control, water and sewage, fire control and electricity
grids is met with the official response: “There is no money.”
The result? Three straight years of declining life expectancy,
record addiction and suicide rates, devastating wildfires and floods,
electricity cut-offs by profiteering utility companies. And a climate crisis
that cannot be addressed within the framework of a system dominated by a
money-mad plutocracy.
Not a single serious social problem can be addressed under
conditions where the ruling elite—through its bribed parties and politicians,
aided by its pro-capitalist trade unions and backed up by its courts, police
and troops—diverts resources from society to the accumulation of ever more
luxurious yachts, mansions, private islands and personal jets.
Where social reform is impossible, social revolution is
inevitable. The solution to the impasse is to be found in the growth of the
class struggle. The movement of workers and youth all over the world—from mass
strikes in France to strikes by autoworkers and teachers in the US, protests in
Chile, Bolivia, Ecuador and Brazil, strikes and mass demonstrations in Lebanon,
Iran, Iraq and India—reveals the social force that can and will put an end to
capitalism.
The watchword must be—in opposition to the Corbyns, the Sanders,
the Tsiprases and their pseudo-left promoters—“Expropriate the super-rich!”
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