The Next Economy and America’s Future:
Via Gordon Winiemko and Ma Fa:
Via Gordon Winiemko:
On Democracy NOW!:
While President Obama is reporting looking into tapping a former corporate executive to become his next top economic adviser, many economists question the path the United States is on. We speak to the acclaimed Chilean economist Manfred Max-Neef. He won the Right Livelihood Award in 1983, two years after the publication of his book Outside Looking In: Experiences in Barefoot Economics.
by The Associated Press
WASHINGTON September 28, 2010, 10:00 am ET
The income gap between the richest and poorest Americans grew last year to its widest amount on record as young adults and children in particular struggled to stay afloat in the recession.
The top-earning 20 percent of Americans — those making more than $100,000 each year — received 49.4 percent of all income generated in the U.S., compared with the 3.4 percent earned by those below the poverty line, according to newly released census figures. That ratio of 14.5-to-1 was an increase from 13.6 in 2008 and nearly double a low of 7.69 in 1968.
A different measure, the international Gini index, found U.S. income inequality at its highest level since the Census Bureau began tracking household income in 1967. The U.S. also has the greatest disparity among Western industrialized nations.
At the top, the wealthiest 5 percent of Americans, who earn more than $180,000, added slightly to their annual incomes last year, census data show. Families at the $50,000 median level slipped lower.
“Income inequality is rising, and if we took into account tax data, it would be even more,” said Timothy Smeeding, a University of Wisconsin-Madison professor who specializes in poverty. “More than other countries, we have a very unequal income distribution where compensation goes to the top in a winner-takes-all economy.”
Lower-skilled adults ages 18 to 34 had the largest jumps in poverty last year as employers kept or hired older workers for the dwindling jobs available, Smeeding said. The declining economic fortunes have caused many unemployed young Americans to double-up in housing with parents, friends and loved ones, with potential problems for the labor market if they don’t get needed training for future jobs, he said.
Rea Hederman Jr., a senior policy analyst at The Heritage Foundation, a conservative think tank, agreed that census data show families of all income levels had tepid earnings in 2009, with poorer Americans taking a larger hit. “It’s certainly going to take a while for people to recover,” he said.
The findings are part of a broad array of U.S. census data being released this month that highlight the far-reaching impact of the recent economic meltdown. The effects have ranged from near-historic declines in U.S. mobility and birth rates to delayed marriage and the first drop in the number of illegal immigrants in two decades.
The census figures also come amid heated political debate in the run-up to the Nov. 2 elections over whether Congress should extend expiring Bush-era tax cuts. President Barack Obama wants to extend the tax cuts for individuals making less than $200,000 and joint filers making less than $250,000; Republicans are pushing for tax cuts for everyone, including wealthy Americans.
The 2009 census tabulations, which are based on pre-tax income and exclude capital gains, are adjusted for household size where data are available. Prior analyses of after-tax income made by the wealthiest 1 percent compared to middle- and low-income Americans have also pointed to a widening inequality gap, but only reflect U.S. data as of 2007.
Among the 2009 findings:
—The poorest poor are at record highs. The share of Americans below half the poverty line — $10,977 for a family of four — rose from 5.7 percent in 2008 to 6.3 percent. It was the highest level since the government began tracking that group in 1975.
—The poverty gap between young and old has doubled since 2000, due partly to the strength of Social Security in helping buoy Americans 65 and over. Child poverty is now 21 percent compared with 9 percent for older Americans. In 2000, when child poverty was at 16 percent, elderly poverty stood at 10 percent.
—Safety nets are helping fill health gaps. The percentage of children covered by government-sponsored health insurance such as Medicaid and the Children’s Health Insurance Program jumped to 37 percent, or 27.6 million, from 24 percent in 2000. That helped offset steady losses in employer-sponsored insurance.
The 2009 poverty level was set at $21,954 for a family of four, based on an official government calculation that includes only cash income. It excludes noncash aid such as food stamps.
Arloc Sherman, a senior researcher at the left-leaning Center on Budget and Policy Priorities, noted the effects of expanded government programs in cushioning the impact of skyrocketing unemployment. For example, the Census Bureau estimates that 3.6 million people would have been lifted above the poverty line if food stamps were counted — a number that would have reduced the 2009 poverty rate from the official 14.3 percent to 13.2 percent.
Sheldon Danziger, a University of Michigan public policy professor, said while the U.S. has developed policies to combat poverty, it has trouble addressing ever-widening income inequality — even with a growing federal deficit and previous warnings by former Federal Reserve Chairman Alan Greenspan about soaring executive pay.
An Associated Press-GfK Poll this month found that by 54 percent to 44 percent, most Americans support raising taxes on the highest U.S. earners. Still, many congressional Democrats have expressed wariness about provoking the 44 percent minority so close to Election Day.
“We’re pretty good about not talking about income inequality,” Danziger said.
By Gregory Rodriguez
The Los Angeles Times
An ABC News/Yahoo News poll revealed that today, only half of us think the American dream — which the pollsters defined as ‘if you work hard you’ll get ahead’ — still holds true, while 43% said that it had once been true.
For all the talk these days of porous borders and external threats to the United States, the core of our sense of security and identity as a nation has always come from within. What’s surprising, perhaps, is that it derives less from our vaunted democracy or our freedoms than it does from that rather nebulous notion we call the American dream.
The dream is the glue that keeps us all together. It’s the vague promise that our lot will get better over time that gives us the patience to endure whatever indignities we suffer at the moment. It’s the belief that our kids will have a better chance in life than we do that keeps the many elements of this diverse, highly competitive society from ultimately tearing each other apart. More than anything else, it’s the fabled dream that fuses hundreds of millions of separate, even competing individual dreams into one national collective enterprise.
But what happens when too many Americans stop believing in that dream? Last week’s ABC News/Yahoo News poll revealed that today, only half of us think the American dream — which the pollsters defined as “if you work hard you’ll get ahead” — still holds true, while 43% said that it had once been true. That only 4% of respondents thought that there was never such a dream testifies to the power of the phenomenon.
Not surprisingly, attitudes varied from group to group. Respondents with higher incomes tended to still believe in the dream more than those with lower incomes. Similarly, the college educated were bigger believers than the less educated. Independent voters believe less than either Democrats or Republicans, and Americans who live in the West are significantly more likely to believe than those in the Rust Belt. Reflective perhaps of varying levels of expectations — or sense of entitlement — nonwhites are more likely to believe in the dream than are whites.
This isn’t the first opinion survey whose findings suggest that our social glue has begun to lose its grip. And, significantly, the signs began to arise well before the Great Recession. In 2006, a CNN poll found that over half of respondents thought the American dream was no longer attainable for most Americans. Way back in booming 1995, a Business Week/Harris poll found that two-thirds of Americans believed that the American dream had become harder to achieve in the previous decade, and three-quarters believed that achieving the dream would be harder yet in the coming decade.
The fact that belief in the achievability of the dream was slipping in good times indicates that our attitudes toward it are shaped by more than objective economic reality.
Writers such as William Greider have suggested that the notion that a family’s material well-being will only get better over time is simply not sustainable. Gregg Easterbrook has written that, in recent years, the dream itself went into overdrive. At some point, it was no longer enough for people to keep up with the Joneses; they had to “call and raise” them.
Still, the latest dream data seem mostly driven by objective data. For nearly three decades, economic inequality has been widening, and some studies are suggesting that aside from the immigrant experience, the U.S. is not nearly as economically mobile — the ability of people to move up the ladder within a lifetime or from one generation to the next — as we would like to believe.
Though a certain level of income inequality is necessary for competition — without it, there’d be little incentive to strive — too much not only diminishes the size of the middle class, which is something like the nation’s social rudder, it challenges the very idea of ourselves as a nation.
In the face of all this, it’s gratifying to report that in most respects, the American experiment is alive and well. Yes, the strain shows — in incivility, in nativism, in howls of protest from those who have something to gain from disunity. But nothing has snapped, at least not beyond repair. (As one wag pointed out, nowadays “tarred and feathered” is just a phrase; it used to be real.)
With the glue of the dream holding at 50%, it’s nothing to cheer about. And if that number falls further, it could pose as great a menace as any outside enemy. Which should lead us to believe that we must restore our inner core rather than fret about external threats.
grodriguez@latimescolumnists.com
By Bill Maher
The Huffington Post
New Rule: The next rich person who publicly complains about being vilified by the Obama administration must be publicly vilified by the Obama administration. It’s so hard for one person to tell another person what constitutes being “rich”, or what tax rate is “too much.” But I’ve done some math that indicates that, considering the hole this country is in, if you are earning more than a million dollars a year and are complaining about a 3.6% tax increase, then you are by definition a greedy asshole.
And let’s be clear: that’s 3.6% only on income above 250 grand — your first 250, that’s still on the house. Now, this week we got some horrible news: that one in seven Americans are now living below the poverty line. But I want to point you to an American who is truly suffering: Ben Stein. You know Ben Stein, the guy who got rich because when he talks it sounds so boring it’s actually funny. He had a game show on Comedy Central, does eye drop commercials, doesn’t believe in evolution? Yeah, that asshole. I kid Ben — so, the other day Ben wrote an article about his struggle. His struggle as a wealthy person facing the prospect of a slightly higher marginal tax rate. Specifically, Ben said that when he was finished paying taxes and his agents, he was left with only 35 cents for every dollar he earned. Which is shocking, Ben Stein has an agent? I didn’t know Broadway Danny Rose was still working.
Ben whines in his article about how he’s worked for every dollar he has — if by work you mean saying the word “Bueller” in a movie 25 years ago. Which doesn’t bother me in the slightest, it’s just that at a time when people in America are desperate and you’re raking in the bucks promoting some sleazy Free Credit Score dot-com… maybe you shouldn’t be asking us for sympathy. Instead, you should be down on your knees thanking God and/or Ronald Reagan that you were lucky enough to be born in a country where a useless schmuck who contributes absolutely nothing to society can somehow manage to find himself in the top marginal tax bracket.
And you’re welcome to come on the show anytime.
Now I can hear you out there saying, “Come on Bill, don’t be so hard on Ben Stein, he does a lot of voiceover work, and that’s hard work.” Ok, it’s true, Ben is hardly the only rich person these days crying like a baby who’s fallen off his bouncy seat. Last week Mayor Bloomberg of New York complained that all his wealthy friends are very upset with mean ol’ President Poopy-Pants: He said they all say the same thing: “I knew I was going to have to pay more taxes. But I didn’t expect to be vilified.” Poor billionaires — they just can’t catch a break.
First off, far from being vilified, we bailed you out — you mean we were supposed to give you all that money and kiss your ass, too? That’s Hollywood you’re thinking of. FDR, he knew how to vilify; this guy, not so much. And second, you should have been vilified — because you’re the vill-ains! I’m sure a lot of you are very nice people. And I’m sure a lot of you are jerks. In other words, you’re people. But you are the villains. Who do you think outsourced all the jobs, destroyed the unions, and replaced workers with desperate immigrants and teenagers in China. Joe the Plumber?
And right now, while we run trillion dollar deficits, Republicans are holding America hostage to the cause of preserving the Bush tax cuts that benefit the wealthiest 1% of people, many of them dead. They say that we need to keep taxes on the rich low because they’re the job creators. They’re not. They’re much more likely to save money through mergers and outsourcing and cheap immigrant labor, and pass the unemployment along to you.
Americans think rich people must be brilliant; no — just ruthless. Meg Whitman is running for Governor out here, and her claim to fame is, she started e-Bay. Yes, Meg tapped into the Zeitgeist, the zeitgeist being the desperate need of millions of Americans to scrape a few dollars together by selling the useless crap in their garage. What is e-Bay but a big cyber lawn sale that you can visit without putting your clothes on?
Another of my favorites, Congresswoman Michele Bachmann said, “I don’t know where they’re going to get all this money, because we’re running out of rich people in this country.” Actually, we have more billionaires here in the U.S. than all the other countries in the top ten combined, and their wealth grew 27% in the last year. Did yours? Truth is, there are only two things that the United States is not running out of: Rich people and bullshit. Here’s the truth: When you raise taxes slightly on the wealthy, it obviously doesn’t destroy the economy — we know this, because we just did it — remember the ’90’s? It wasn’t that long ago. You were probably listening to grunge music, or dabbling in witchcraft. Clinton moved the top marginal rate from 36 to 39% — and far from tanking, the economy did so well he had time to get his dick washed.
Even 39% isn’t high by historical standards. Under Eisenhower, the top tax rate was 91%. Under Nixon, it was 70%. Obama just wants to kick it back to 39 — just three more points for the very rich. Not back to 91, or 70. Three points. And they go insane. Steve Forbes said that Obama, quote “believes from his inner core that people… above a certain income have more than they should have and that many probably have gotten it from ill-gotten ways.” Which they have. Steve Forbes, of course, came by his fortune honestly: he inherited it from his gay egg-collecting, Elizabeth Taylor fag-hagging father, who inherited it from his father. Of course then they moan about the inheritance tax, how the government took 55% percent when Daddy died — which means you still got 45% for doing nothing more than starting out life as your father’s pecker-snot.
We don’t hate rich people, but have a little humility about how you got it and stop complaining. Maybe the worst whiner of all: Stephen Schwarzman, #69 on Forbes’ list of richest Americans, compared Obama’s tax hike to “when Hitler invaded Poland in 1939.” Wow. If Obama were Hitler, Mr. Schwarzman, I think your tax rate would be the least of your worries.
Bill Maher is host of HBO’s “Real Time with Bill Maher”, Friday’s at 10:00PM
Once upon a time, a Latin American political party promised to help motorists save money on gasoline. How? By building highways that ran only downhill.
I’ve always liked that story, but the truth is that the party received hardly any votes. And that means that the joke is really on us. For these days one of America’s two great political parties routinely makes equally nonsensical promises. Never mind the war on terror, the party’s main concern seems to be the war on arithmetic. And this party has a better than even chance of retaking at least one house of Congress this November.
Banana republic, here we come.
On Thursday, House Republicans released their “Pledge to America,” supposedly outlining their policy agenda. In essence, what they say is, “Deficits are a terrible thing. Let’s make them much bigger.” The document repeatedly condemns federal debt — 16 times, by my count. But the main substantive policy proposal is to make the Bush tax cuts permanent, which independent estimates say would add about $3.7 trillion to the debt over the next decade — about $700 billion more than the Obama administration’s tax proposals.
True, the document talks about the need to cut spending. But as far as I can see, there’s only one specific cut proposed — canceling the rest of the Troubled Asset Relief Program, which Republicans claim (implausibly) would save $16 billion. That’s less than half of 1 percent of the budget cost of those tax cuts. As for the rest, everything must be cut, in ways not specified — “except for common-sense exceptions for seniors, veterans, and our troops.” In other words, Social Security, Medicare and the defense budget are off-limits.
So what’s left? Howard Gleckman of the nonpartisan Tax Policy Center has done the math. As he points out, the only way to balance the budget by 2020, while simultaneously (a) making the Bush tax cuts permanent and (b) protecting all the programs Republicans say they won’t cut, is to completely abolish the rest of the federal government: “No more national parks, no more Small Business Administration loans, no more export subsidies, no more N.I.H. No more Medicaid (one-third of its budget pays for long-term care for our parents and others with disabilities). No more child health or child nutrition programs. No more highway construction. No more homeland security. Oh, and no more Congress.”
The “pledge,” then, is nonsense. But isn’t that true of all political platforms? The answer is, not to anything like the same extent. Many independent analysts believe that the Obama administration’s long-run budget projections are somewhat too optimistic — but, if so, it’s a matter of technical details. Neither President Obama nor any other leading Democrat, as far as I can recall, has ever claimed that up is down, that you can sharply reduce revenue, protect all the programs voters like, and still balance the budget.
And the G.O.P. itself used to make more sense than it does now. Ronald Reagan’s claim that cutting taxes would actually increase revenue was wishful thinking, but at least he had some kind of theory behind his proposals. When former President George W. Bush campaigned for big tax cuts in 2000, he claimed that these cuts were affordable given (unrealistic) projections of future budget surpluses. Now, however, Republicans aren’t even pretending that their numbers add up.
So how did we get to the point where one of our two major political parties isn’t even trying to make sense?
The answer isn’t a secret. The late Irving Kristol, one of the intellectual godfathers of modern conservatism, once wrote frankly about why he threw his support behind tax cuts that would worsen the budget deficit: his task, as he saw it, was to create a Republican majority, “so political effectiveness was the priority, not the accounting deficiencies of government.” In short, say whatever it takes to gain power. That’s a philosophy that now, more than ever, holds sway in the movement Kristol helped shape.
And what happens once the movement achieves the power it seeks? The answer, presumably, is that it turns to its real, not-so-secret agenda, which mainly involves privatizing and dismantling Medicare and Social Security.
Realistically, though, Republicans aren’t going to have the power to enact their true agenda any time soon — if ever. Remember, the Bush administration’s attack on Social Security was a fiasco, despite its large majority in Congress — and it actually increased Medicare spending.
So the clear and present danger isn’t that the G.O.P. will be able to achieve its long-run goals. It is, rather, that Republicans will gain just enough power to make the country ungovernable, unable to address its fiscal problems or anything else in a serious way. As I said, banana republic, here we come.
via Ella Delaney:
Marketplace’s Kai Ryssdal talks to author Eric J. Weiner about his new book on the “shadow markets,” which countries utilize to gain influence around the globe.
Bob Moon: Picture a world where banks, big banks suddenly lose their influence over the global marketplace. No need to imagine, really. A new book lays out the case that wealthy governments around the world are now pulling the strings. And guess which country is no longer such a major player? The book says financial experts met in Washington last year to play out some financial war games, of sorts. And they were dismayed to find that the U.S. came out on the losing end every time.
How could this happen? Perhaps you haven’t been paying attention to the rise of something called “sovereign wealth funds.” But Eric Weiner has. He says those funds are basically created to do the bidding of rich countries. And his new book is packed with alarming revelations. It’s called, “The Shadow Market: How a Group of Wealthy Nations and Powerful Investors Dominate the World.”
Welcome to the program.
Eric Weiner: Thanks for having me.
Moon: So, what do you mean when you say “shadow markets”?
Weiner: The shadow market isn’t really a physical place like Wall Street or the New York Stock Exchange. It’s more an invisible nexus where now you have large countries that have accumulated tremendous assets that are working with private equity firms and hedge funds in order to really control the flow of capital around the world in ways we’ve never seen before.
Moon: Well, it’s always been about money, but how does this differ from buying influence with a country and actually buying parts of the country, if you will?
Weiner: What you have is countries that have digested the lesson of the market, and that, is that you gain control over things and you have a much greater opportunity to create the returns. So, what you’re seeing is massive land grabs going on in Africa and other developing nations, because many of these rich countries have concerns about their natural resources, about their food supply, so they’re basically going in and cutting deals by offering them very low-interest loans or outright giving them grant money, whatever it is, and they are in effect, creating a new colonial system.
Moon: China owns the food-say in a particular part of the world, we don’t?
Weiner: Yeah. Well, it’s that China builds allies with other countries that we would like have influence in. And it’s not just China. For example, Saudi Arabia owns a farm the size of the state of Connecticut in Indonesia and they’re going to grow crops that are in demand in Saudi Arabia. This creates a natural ally between Saudi Arabia and Indonesia in ways that we can’t even comprehend, because we’re not participating in this.
Moon: When there’s this shift of economic power going from private hands to governments, what are the geopolitical consequences?
Weiner: Corporate interest are actually relatively predictable. You look at where the profits lie and then you can sort of follow the money. Then when you look at what countries are doing, they can make investments that don’t make sense on a financial level, but that make tremendous sense on a geopolitical level. They could be willing to lose money on an investment in order to gain power over another country, and that’s a very very different game from the way that our capital markets were structured. What is the interests of China, what is the interests of the Persian Gulf. We don’t necessarily know, and because there’s no disclosure, we aren’t necessarily going to know.
Moon: We’ve been worried about regulating our old problems, is there any way of regulating this new issue?
Weiner: It’s very difficult, because it’s really hard to get your arms around something this size. We’re talking about by 2012 or 2013, the shadow markets are going to control roughly $19 trillion. And the U.S. GDP that year is expected to be about $16 trillion. So, we’re talking about something the size of the U.S. government being unleashed in the capital markets. That’s not something that the U.S. alone can do. We need a western or global agreement and solution on how to do this. And that’s how you tackle China’s manipulation of its currency, that’s how you tackle the trade issues that are arising from this. It can’t just be us, because we are going to lose that fight.
Moon: It’s pretty mindboggling. Eric Weiner’s new book is BUY: “The Shadow Market: How a Group of Wealthy Nations and Powerful Investors Secretly Dominate the World.” Thanks for being with us.
Weiner: Thanks for having me.
Moon: By the way, if you’re still having trouble understanding the concept of a “shadow market,” our Whiteboard guru Paddy Hirsch can draw you a picture.
Shadow banking: still big, still dangerous from Marketplace on Vimeo.
by William Alden
Huffington Post
Americans vastly underestimate the degree of wealth inequality in America, and we believe that the distribution should be far more equitable than it actually is, according to a new study.
Or, as the study’s authors put it: “All demographic groups — even those not usually associated with wealth redistribution such as Republicans and the wealthy — desired a more equal distribution of wealth than the status quo.”
The report (pdf) “Building a Better America — One Wealth Quintile At A Time” by Dan Ariely of Duke University and Michael I. Norton of Harvard Business School (hat tip to Paul Kedrosky), shows that across ideological, economic and gender groups, Americans thought the richest 20 percent of our society controlled about 59 percent of the wealth, while the real number is closer to 84 percent.
More interesting than that, the report says, is that the respondents (a randomly selected 5,522-person sample, reflecting the country’s ideological, economic and gender demographics, surveyed in December 2005) believed the top 20 percent should own only 32 percent of the wealth. Respondents with incomes over $100,000 per year had similar answers to those making less than $50,000. (The report has helpful, multi-colored charts.)
The respondents were presented with unlabeled pie charts representing the wealth distributions of the U.S., where the richest 20 percent controlled about 84 percent of wealth, and Sweden, where the top 20 percent only controlled 36 percent of wealth. Without knowing which country they were picking, 92 percent of respondents said they’d rather live in a country with Sweden’s wealth distribution.
As the new Forbes billionaires list, released Wednesday, testifies, the richest Americans are getting richer, even as the country as a whole gets poorer. After 2005 income inequality continued to balloon.
A message sent from Sarah Lewison to Andy Cox of CIO…………
the poster is by Dan Wang
additional resources:
dialogue between Immanual Wallerstein and Grace Lee Boggs (capitalism is over, he says.. but what will replace it?) I might transcribe this, and if so will post as pdf print on demand zine to you, for redistribution..
http://www.archive.org/details/GraceLeeBoggsImmanuelWallersteinDialogue
David Harvey, A Brief History of Neoliberalism
http://davidharvey.org/
http://davidharvey.org/reading-capital/
David Harvey podcasts “Reading capital”
Karl Polanyi’s “The Great Transformation” charts out the source of the absurdity that humans are fundamentally motivated by the profit motive and in the middle of the last century made a case for the necessity of strong regulations of an economy– in order to ensure the existence of society (and natural world too). Polanyi is best known for the idea that formerly economy was something that existed within society, now society is forced to find a way to exist in the middle of a market. that would not be a bad quick project…
