“The
middle class is getting killed; the middle class is getting crushed,"
former Vice President Joe Biden said in a Democratic presidential debate
last month. "Where I live, folks aren't measuring the economy by how the
Dow Jones is doing, they're measuring the economy by how they're doing,"
added Pete Buttigieg, a Democratic presidential candidate and former Mayor of
South Bend, Indiana.
Trump has criticized Democrats for tax and regulatory policies
that he says will make the U.S. less competitive in attracting business
investment.
“To every business looking for a place where they are free to
invest, build, thrive, innovate, and succeed, there is no better place on Earth
than the United States,” he said in Davos.
Stiglitz pointed to Trump’s threats last week of tariffs on European
cars to demonstrate that turmoil in U.S. trade relationships may continue,
despite the recent completion of U.S. trade deals in North America and China.
“He can’t help but bully somebody,” Stiglitz said.
Max Zahn is a reporter for Yahoo Finance. Find hi
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.
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.
W e’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.
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
This
article originally appeared on MarketWatch , a sister publication of
Barron’s.
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.
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.