Showing posts with label banks and bankers. Show all posts
Showing posts with label banks and bankers. Show all posts

Monday, November 08, 2021

041 The Erickson Report, Page 3: A Longer Look at Critical Race Theory

041 The Erickson Report, Page 3: A Longer Look at Critical Race Theory

We're going to take a slightly Longer Look at critical race theory. We're not going to plunge in as deeply as we usually do with A Longer Look but we can at least lay out some basics.

Critical race theory is that academic law-school discipline you've heard about so much after never having heard of it at all before the fanatical right tried to turn it into a social bludgeon. When you do hear about it, it's usually without - or with a very confusing, jargon-laded - explanation. So I'm going to try to give a little clarity.

To start, I'm going to take us back to September 22, to a Senate Judiciary Committee hearing on restoring the Voting Rights Act. At that hearing, Sen. Ted Ooze tried to dismiss the impact of voter ID laws by demanding of a panel of witnesses if such laws are racist and after having the one in Texas cited as an example of precisely that, came back with: “When I go to vote, they ask me for my ID, I pull up my ID, I show it to him [sic]. I vote. Is that racist?”

The witness to who he addressed the question gave a proper and effective answer, but I refer to this now because it occurred to me at the time that my answer would have been yes. Not that the person is necessarily racist, but that the act is racist because it operates within a racist system.

Later, it occurred to me that this is actually serves as a very basic illustration of what critical race theory is about.

That Texas voter suppression law was created, and was found by a federal court to have been created, with racist intent. Although facially racially neutral - it doesn't mention race anywhere in the text - its designers used demographic data and historical voting trends to target for restrictions those methods of voting that were more likely to be used by non-whites than by whites along with requiring those types of ID that non-whites were less likely to have. In other words, it was designed to make it harder for non-whites than whites to vote.

So even though it appeared on its face to be racially neutral, the racism was baked into the law. So if you are operating under that system, if you are voting under that law, you have two choices: don't vote or participate in a racist system. You could be the most non-racist voter who ever lived but still the system in which you operate means you are acting in a racist manner. You cannot avoid it.

That is a very simple, even over-simplified, example but it serves to illustrate what critical race theory is about: how racism is built into the law and social structures of our society.

Another simple, even simplistic but useful example is redlining, the practice of denying various services to residents of minority communities based solely on where they live. The most notorious, but not the only, examples involved what interest rates someone paid on a mortgage or a loan or even if they could get credit at all depended not on their individual circumstances but on their address. There actually were examples of whether or not you got credit depended on which side of a street you lived on, because the red line the bank drew to determine the credit-worthiness of a neighborhood went down the middle of that street.

What happened is that the previous decades, the history, of racial discrimination in housing and employment had resulted in black Americans being mostly confined to poor neighborhoods, lending itself to the superficially-reasonable but convenient notion that living in those communities meant you were less credit-worthy. So the segregated housing patterns generated by racial bigotry became locked in and persisted - and still persist - even after redlining was at least supposedly outlawed. (I say "supposedly" because as recently as 2015 banks were paying out settlements as a result of their redlining practices.)

The point is that racial and racist patterns, structures, that were created by white supremacy do not simply disappear on their own and they do not cease to exist, they do not cease to operate, to influence, because we are unaware of their roots. They are baked into the unspoken and quite often unaware assumptions about the law, about the economy, about our society which we carry in our heads and under which we operate.

Those assumptions are what critical race theory examines to get at the roots of the white supremacy which drove them. Because if they are to change, they must be examined, dissected, and actively overcome.

This doesn't mean that critical race theory is unassailable as a discipline and indeed there are critiques of it. And I have to admit that personally, I think that reducing everything to race, as some of its proponents do, as if there were no other factors such as economic class involved, is too simplistic. But at the same time that does not mean it is not a valuable tool.

And it also means that anyone who tells you that critical race theory is about how all white people are racist or about teaching white kids to feel guilty about being white either doesn't know what the hell they are talking about or is lying through their teeth. There is no third option - and the fuss about it is on the one hand being promoted by people who are invested in maintaining their own power and position and want to avoid any discussion of race, period, because they know an honest discussion will call into question their own privileged positions, and on the other hand is being embraced by those who are being distracted by the latest shiny penny to misdirect them from considering what is really impacting their lives or who are reluctant to examine their own assumptions because they are fearful of what they will find.
And that is evil on the one hand and tragic on the other.

Tuesday, November 07, 2017

37.5 - On the nature of capitalism

On the nature of capitalism

I have talked a pretty good number of times about the economy, most recently on how decades of economic stress without gain were for too many among us the crowbar that was used to pry open the restraints they had on their bigotry because blaming those weaker than you is always easier than blaming those more powerful.

But the real issue, of course, and one that I have not addressed often or deeply enough, is the nature of that economy. So without getting into a long dissertation, herewith are three good examples of the nature of our capitalist economy.

Verizon has a program called LTE in Rural America, which relies on a partnership between Verizon and small rural carriers who lease Verizon spectrum in order to build their own networks.

1. In October, Verizon dumped 8500 customers in that program on the grounds that, quoting the company, they "use a substantial amount of data while roaming on other providers' networks and the roaming costs generated by these lines exceed what these consumers pay us each month."

Those customers are spread across rural areas in 13 states.

In other words, it's "We make money on this program but not on every single individual person in it so screw them - you don't make us money, the hell with you."

2. As a reminder of who has to be taken care of first, Bank of America downgraded the stock of the chain restaurant Chipoltle from "neutral" to "underperform" on the grounds of, in the bank's analyst's words, an inability "to get labor below 27 percent of sales." In other words, they're downgrading Chipoltle's prospects on the grounds that the company pays its employees too much.

3. Executives from Papa John's, the official pizza company of the NFL, are blaming player protests for a decline in the league's TV ratings and thus, they claim, for a decline in the company's pizza sales. Company founder and CEO John Schnatter said "We are disappointed the NFL and its leadership did not resolve this," that is, did not "nip this in the bud," a year and a half ago.

In other words, the NFL should have clamped down on a peaceful, nonviolent, and legal use of 1st amendment rights to protest an obvious injustice because the corporation's pizza sales are more important.

Saturday, October 07, 2017

34.2 - News to make you smile: Sen. Elizabeth Warren rips CEO of Wells Fargo

News to make you smile: Sen. Elizabeth Warren rips CEO of Wells Fargo

Another bit of Good News - although, really, it's less Good News than something that felt good to see.

During a Senate hearing on October 2, Sen. Elizabeth Warren ripped into Tim Sloan, CEO of Wells Fargo. A year ago, it was revealed that between 2011 and 2015 the bank had opened more than 2 million customer accounts without their knowledge and ripped those customers off by charging them fees on those unapproved accounts. Apparently Warren doesn't think the bank has done enough to make up for the damage.

Warren pointed to quarterly earnings calls, which she said showed Sloan - who was at the time of the scandal Chief Financial Officer at the company - aggressively promoted Wells Fargo's ability to open new accounts for customers and she held that no one, not even then-CEO John Stumpf, "bragged more" about the bank's commitment to opening new accounts for existing customers.

"Wells Fargo cheated millions of people for years," Warren said. "The Federal Reserve should remove all of the current board members who've served during the fake accounts scandal scam. And Mr. Sloan you say you've been making changes at Wells Fargo for 30 years but you enabled this fake accounts scam, you got rich off it, and you tried to cover it up. At best you were incompetent, at worst you were complicit, either way you should be fired."

Sloan's only response was mealy-mouthed cliche ad copy about how "Our job is to satisfy our customers financial needs."

Like I said, it's not really Good News as I define the term because it doesn't change anything - but still it was fun to see.

Saturday, May 06, 2017

20.1 - Good News: cities can sue banks for housing discrimination

Good News: cities can sue banks for housing discrimination

Let's start, as we always like to, with some Good News. This time we actually start with a sort of Good News-Bad News sort of thing.

In 2013, the city of Miami sued Bank of America and Wells Fargo, charging that their practice of targeting black and Latino homeowners for riskier, less favorable mortgages ultimately drove a wave of defaults and foreclosures producing a fall in property values in the city, cutting city revenue even as the city had to spend more money to deal with a rash of blighted or abandoned homes.

The Good News is that on May 1, the Supreme Court ruled 5-3 that yes, the city of Miami can be an "aggrieved person" under the Fair Housing Act and so can sue the banks.

The bad news is that the bar for the city to prove damages under the law will be high because of the difficulty of showing that the banks' lending practices were the "proximate cause" of the city's losses. Because so many economic and social issues can affect the value of the city's housing stock, it can be hard to tease out what effect the banks' policies had.

But even so, establishing the principle that cities can be victims of bank-driven housing discrimination, adding a weapon, even if a weak one, to the arsenal that can be wielded against the banks, has to be considered Good News.

Saturday, June 18, 2016

250.1 - Good News: LIBOR suit moves forward

Good News: LIBOR suit moves forward

It was hard week for Good News, but I did manage to find a few bits.

Nearly four years ago, I told you about an emerging bank scandal involving what's called LIBOR, the London Inter-Bank Offered Rate. (Or Offer or Offering or Overnight, depending on who you ask.) It's derived daily from the estimates of a consortium of 18 international banks as to what interest rate they think they will pay for the overnight loans they take out from other banks and so by combining these estimates into one figure is supposed to serve as a measure of the actual market cost of such loans.

It's an important figure because it provides the baseline for the interest rates on a variety of other loans and transactions. It directly affects around $10 trillion in loans and it indirectly affects $800 trillion in economic activity. The influential finance magazine The Economist called it "the most important figure in finance."

And nearly four years ago it emerged that the banks, or least least a sufficient number of them, had been manipulating the rate for years to their own profit.

The scandal started with Barclay's and spread out from there. In the years since, about a dozen financial houses have paid almost $9 billion in fines to resolve government investigations by various nations around the world.

What's relevant here is that were also suits by investors who charged that by cheating to depress the LIBOR rate, the banks had cheated them by depressing their returns on investments pegged to the rate. In 2013, a US District Court dismissed the suits, saying the investors had failed to show that they were harmed in a way that would permit them to sue under US antitrust law.

So what's the good news? A couple of weeks ago, the 2nd Circuit Court of Appeals overturned that decision and said the suits can proceed, meaning that 16 of the world's biggest banks - including Bank of America, JPMorgan, and Citigroup - are still on the hook for the losses they caused by their unrelenting drive for profit.

The ruling, as one analyst put it, was "far from a home run" because the District Court could still look to dismiss the case on other grounds, but for the moment, enjoy the Good News of the sight of bankers sweating.

Sources cited in links:
http://whoviating.blogspot.com/2012/07/left-side-of-aisle-66-part-1.html
http://whoviating.blogspot.com/2012/07/left-side-of-aisle-65-part-2.html
http://www.bloomberg.com/news/articles/2016-05-23/banks-are-ordered-by-court-to-defend-libor-antitrust-lawsuit

Friday, June 17, 2016

Left Side of the Aisle #250




Left Side of the Aisle
for the week of June 16-22, 2016

This week:

Good News: LIBOR suit moves forward
http://whoviating.blogspot.com/2012/07/left-side-of-aisle-66-part-1.html
http://whoviating.blogspot.com/2012/07/left-side-of-aisle-65-part-2.html
http://www.bloomberg.com/news/articles/2016-05-23/banks-are-ordered-by-court-to-defend-libor-antitrust-lawsuit

Good News:  Supreme Court upholds restrictions on mercury pollution
https://www.washingtonpost.com/news/energy-environment/wp/2016/06/13/supreme-court-rejects-case-challenging-key-white-house-air-pollution-regulation/

Good News: Court of Appeals says no right to concealed carry
http://www.nbcnews.com/news/us-news/9th-circuit-court-appeals-says-no-right-concealed-gun-carry-n589041
https://pacer-documents.s3.amazonaws.com/3/10-56971/009128111226.pdf
http://www.cnn.com/2016/06/09/politics/concealed-carry-second-amendment/
http://whoviating.blogspot.com/2012/12/left-side-of-aisle-87-part-1.html
https://en.wikipedia.org/wiki/Gun_laws_in_California#Open_carry

[Note: I have broken my discussion of the Orlando shooting into four parts for convenience.]

Orlando and guns
https://en.wikipedia.org/wiki/2016_Orlando_nightclub_shooting
http://www.tampabay.com/news/publicsafety/crime/washington-post-gun-used-by-omar-mateen-a-sig-sauer-mcx-not-an-ar-15/2281735
http://www.cbsnews.com/news/san-bernardino-shooting-assault-weapon-is-common-denominator-in-mass-shootings/
https://en.wikipedia.org/wiki/Virginia_Tech_shooting
http://wgntv.com/2016/06/14/us-home-to-nearly-a-third-of-worlds-mass-shootings/
http://www.nytimes.com/2016/05/23/us/americas-overlooked-gun-violence.html
https://www.washingtonpost.com/graphics/national/mass-shootings-in-america/
http://www.care2.com/causes/the-media-is-promoting-a-dangerous-mental-illness-and-violence-myth.html
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC4318286/

Orlando, Omar Mateen, and homophobia
https://www.washingtonpost.com/world/national-security/ex-wife-of-suspected-orlando-shooter-he-beat-me/2016/06/12/8a1963b4-30b8-11e6-8ff7-7b6c1998b7a0_story.html
http://thehill.com/blogs/blog-briefing-room/news/283216-former-co-worker-of-orlando-nightclub-shooter-he-was-unhinged
http://www.aol.com/article/2016/06/12/what-we-know-about-orlando-nightclub-shooter-omar-mateen/21393742/
http://www.theguardian.com/commentisfree/2016/jun/14/omar-mateen-gay-men-terrorism-pulse-jackd-sexuality
http://www.latimes.com/nation/la-na-orlando-nightclub-shooting-20160613-snap-story.html
http://www.alternet.org/news-amp-politics/ex-wife-pulse-patrons-omar-mateen-was-gay-regularly-attended-lgbt-nightclubs

Orlando and the media
http://fair.org/home/when-media-learned-killers-ethnicity-then-they-knew-to-call-it-terrorism/
http://www.reuters.com/article/us-florida-shooting-gunman-idUSKCN0YY11B
http://www.aol.com/article/2016/06/12/fbi-gay-nightclub-shooter-investigated-for-having-ties-to-suici/21393853/
http://www.aol.com/article/2016/06/13/report-orlando-shooter-scouted-disney-world-for-potential-attac/21394481/
http://learningenglish.voanews.com/a/was-the-orlando-shooting-at-gay-nightclub-terrorism-or-a-hate-crime/3375985.html
http://www.opednews.com/articles/If-Omar-Mateen-were-white-by-Trevor-Timm-Guns_Isis_Orlando-Shooting_Shootings-160613-448.html
http://www.businessinsider.com/james-comey-orlando-shooting-omar-mateen-fbi-2016-6
https://www.washingtonpost.com/news/post-nation/wp/2016/06/13/police-orlando-gunman-was-cool-and-calm-during-hostage-standoff/

Orlando and terrorism
https://www.youtube.com/watch?v=mFi7_U1a9VA
http://www.aol.com/article/2016/06/14/baptist-pastor-applauds-orlando-shooting/21395110/

Update: what to expect from Hillary Clinton
http://www.salon.com/2016/05/09/hillary_clinton_is_wall_streets_preferred_candidate_financial_execs_pouring_millions_into_her_campaign_to_defeat_trum/
http://www.salon.com/2016/04/26/a_progressive_in_name_only_charles_koch_joins_a_long_list_of_right_wingers_who_have_lauded_hillary_clinton/
http://www.salon.com/2016/06/10/another_neocon_endorses_clinton_calling_her_2016s_real_conservative_and_the_candidate_of_the_status_quo/
http://www.nytimes.com/2016/04/24/magazine/how-hillary-clinton-became-a-hawk.html?_r=0

Saturday, June 11, 2016

249.2 - Part Two: Issues that won't be discussed in the fall election

Part Two: Issues that won't be discussed in the fall election

You want some examples of issues they don't want discussed? I'll give you some. But let me say at the top that the sort of political revolution I envision, which I dream about, goes beyond what Bernie Sanders has proposed. So what I will be talking about here is not my revolution, but issues, ideas, proposals, that have been brought up during the course of the primaries but which are now threatened with being disappeared because too many among our power elite don't want us to be thinking about them.

That said: What do you think are the changes that single-payer health coverage is going to be a topic in the election we now face? The Clintonites mocked the idea and mocked Sanders for advocating it; they called it impractical, impossible, pie in the sky, rainbows and unicorns, all that and more despite fact that US has been and remains almost the only industrialized nation without some sort of national health system.

And no, Obamacare is not that, not even close, not when by the estimates of even its most ardent defenders it will leave tens of millions without health insurance and an unknown number more with insurance they can't afford to use because of high deductibles and other costs. Obamacare doesn't even provide universal access to health insurance, much less what's really important, which is universal access to health care. But if we hear anything about health care this year, it will be about "preserving Obamacare" - because that is a debate the economic and political powers are willing to have.

Another example: As I've noted before, the Trans-Pacific Partnership, or TPP, this secretly-negotiated trade deal looking to turn the entire Pacific Rim into a playground for transnational corporations and banks, is going to be an issue after the election, during the lame duck session of Congress. What do you think are the chances that either of the campaigns or the media will bring it up in the coming election season? Do you really think that Hillary Clinton, who once called the TPP "the gold standard" for trade deals but turned against it - supposedly and only gradually and only in reaction to its obvious unpopularity and Sanders' opposition - is going to make that part of her campaign? If you do, remember that Tom Donohue, president of the US Chamber of Commerce, has said not to worry about what Clinton is saying about the TPP now because once she is office she will flip back to supporting it.

If we hear anything about trade, it will be about the supposed "millions of jobs" free trade has created and will create - with no consideration of the type of jobs, even as evidence shows that living-wage jobs, jobs that pay enough to provide for a family, are quickly being replaced by lower-wage and less secure forms of employment such that even the Wall Street Journal admits that "many middle-wage occupations have collapsed."

This is all part of the new "gig economy," the latest corporate buzz-phrase echoing across the country. We won't have jobs, they say, we'll do "gigs." We won't be stuck in traditional jobs with moldy, old-fashioned concerns such as regular hours, middle-class pay rates, benefits, some job security, and all those other silly "traditionals" of the workplace. In fact, in the gig economy, we won't even have a workplace. Instead, we'll be "liberated" to work in a series of low-paying, no-benefits, short-term jobs in many different places, always being on-call through a mobile app on your smart phone or through a temp agency.

What do you think are the chances that the phrase "gig economy" will pass the lips of either Hillary Clinton or Donald TheRump this fall?

Meanwhile, income inequality, one of the centerpieces of Sanders' campaign and which earlier drove the Occupy Movement - which was crushed by some of the same forces now arrayed against the resurgence of those issues which Sanders has helped spark - is now the highest it has been since 1928. And it continues to worsen, as it has across several decades, including during the administration of the sainted Bill Clinton, who Hillary now proposes to bring back to manage the economy in her planned administration.

Do you really think that economic, that income, inequality will be a centerpiece of the fall campaign? Do you think it even will be addressed in any way beyond vapid bromides?

Do you think a $15 minimum wage is going to come up in this race, particularly when Clinton opposes it? Consider that a new study of all 22 increases in the federal minimum wage between 1938 and 2009 not only showed no correlation between raising the minimum wage and loss of jobs, it actually showed that in a substantial majority of cases, employment in affected industries went up. Is that going to be part of the debate? What about the fact that despite the doomsday predictions, a year after Seattle raised its minimum wage, retail prices have not risen?

Will the moral scourge of poverty be on either candidate's regular agenda? Since as I noted last week, our major media are already prepared to ignore it, to make it a non-issue, why should the candidates bring it up?

Will either the GOPpers or the Dems talk about homelessness, again, in any way more than as rhetorical devices? It's generally agreed that to comfortably afford housing, it should take up no more than 30% of your income. (Years ago, it was 25%.) Will either party address the fact that, on that basis, as a national average it takes an income of $20.30 an hour to comfortably afford a two-bedroom apartment - at a time when the average hourly wage for Americans is $15.42? Will they address the fact that there is not a single state in the US where someone working full-time, year-round at federal minimum wage can comfortably afford even a one-bedroom apartment? Will they talk about how homelessness has long since spread from the cities to the suburbs, such that now school buses can been seen to drop off childen at tents and cars? They won't - because they and their backers don't want to.

Remember concerns about student debt, something else that drove the Occupy movement? What are the chances that will be a focus of the concerns of the major parties?

I have to make a quick detour here. A couple of minutes ago, I referred to the Occupy Movement as having been crushed by some of the same forces now arrayed against what strictly and solely for the convenience of the moment I'll call the Sanders movement. I want to make clear that while there actually was evidence of coordination among federal and local officials on the best ways to break the backs of Occupy encampments, I'm not talking here about grand conspiracies; I'm not talking about secret cabals Skyping each other in a weekly meeting to plan their latest outrages. It's rather agreement based on common interests, common values, common ways of viewing the world. It doesn't require conscious cooperation, in fact if doesn't require active cooperation at all. What it requires - and what it has - is a range of powerful interests all heading in much the same direction, with much the same attitudes.

But getting back to the issues, talking about student debt leads directly to something else that Bernie Sanders talked about but I'll guarantee won't come up after the convention: free college.

It is, in fact, not a particularly radical idea. Twelve nations currently offer college tuition free to their citizens: Argentina, Brazil, Denmark, Finland, France, Germany, Greece, Norway, Scotland, Slovenia, Sweden, and Turkey; Chile will make it 13 next year.

When last year Obama proposed a government program to make community college tuition-free for a number of students who met certain guidelines and academic standards, why the Dems were falling all over themselves with praise. Because that idea, offering some help to a limited number of people that wouldn't cost that much or change that much in the grand scheme of things but which can be made to sound like a great dramatic advance, that is the kind of debate our political establishment is willing to have.

But go beyond that, talk about four-year public colleges being tuition free? Talk about something that actually is dramatic, that actually would make a fundamental change in our educational system? Impossible! Crazy! Just promising "free stuff!" And something to be forgotten as soon as the convention lights dim.

Oh, and here's something: See if there is any talk this fall about breaking up the big banks, about actually doing something about "too big to fail." It's something else that Sanders made one of the centerpieces of his campaign and something else I guarantee you will not sully the lips of Clinton or TheRump.

But all that has happened since 2008 is the the biggest banks have gotten bigger. Just four huge banks - Wells Fargo, Bank of America, Citigroup, and JPMorgan Chase - now hold $6.87 trillion in assets, 42.2% of the total assets held by banks in the US. They have continued to grow since 2008 and will continue to do so.

Conveniently for the Dems, the GOPpers proposing to revoke Dodd-Frank, legislation setting up regulations which have already been watered down almost to the point of irrelevancy. So see if there is any discussion about regulating the financial industry, about controlling Wall Street, beyond "preserve Dodd-Frank" - which is another debate the economic establishment is willing to have, while actually fracturing their hold on the economy is not and so will be off the table.

And then there's the elephant in the room: campaign finance reform. I noted just last week that 80% of the $76 million Clinton's Super-PAC has raised has come from just 20 donors and the so-called "Hillary Victory Fund" has acted essentially as a money-laundering scheme to get around limits on campaign contributions. The idea that she will make campaign finance reform a significant part of her campaign - in fact, that she will raise it at all - is laughable.

There is so much more, so much that has been raised over these past several months that now will be pushed to the shadows because those that have the power in our society don't want to talk about them, don't want to take them on in any actual way, because to do so would be too much of a challenge to their privileged positions, raise too many uncomfortable questions about our economy, about our society, about our culture.

See how much either campaign talks about fracking.

See how much they talk about immigration reform in any way other than vote-pandering.

See if they talk about our broken criminal justice system in any way other than that same vote-pandering.

See if they bring up Black Lives Matter; see if they talk about police brutality, particularly in minority communities; see if they talk about racism in any way other than platitudes.

And see, frankly, if foreign policy even comes up in any form other than "terrorists bad, US good."

Sources cited in links:
http://www.theatlantic.com/international/archive/2012/06/heres-a-map-of-the-countries-that-provide-universal-health-care-americas-still-not-on-it/259153/
http://crooksandliars.com/2015/02/insured-not-covered-problems-obamacare
http://www.nytimes.com/2015/02/08/sunday-review/insured-but-not-covered.html?_r=0
http://whoviating.blogspot.com/2016/05/2472-some-updates-on-secret-trade.html
http://www.truth-out.org/buzzflash/commentary/the-collapse-of-the-middle-class-job
http://www.truth-out.org/buzzflash/commentary/what-does-it-mean-to-gig-american-workers
http://whoviating.blogspot.com/2016/01/2357-income-inequality-is-growing.html
http://fightfor15.org/
http://www.nelp.org/publication/raise-wages-kill-jobs-no-correlation-minimum-wage-increases-employment-levels/
http://www.fastcoexist.com/3059118/after-a-year-seattles-new-minimum-wage-hasnt-raised-retail-prices
http://www.usnews.com/opinion/articles/2016-05-04/unicef-report-reveals-americas-childhood-poverty-is-a-global-embarrassment
http://whoviating.blogspot.com/2016/06/2486-footnote-media-ignore-poverty-in.html
http://www.citylab.com/housing/2016/05/the-hourly-wage-needed-to-rent-a-2-bedroom-apartment-in-2016-mapped/484091/
http://www.seattletimes.com/seattle-news/education/the-hidden-homeless-families-in-the-suburbs/
http://www.deseretnews.com/top/1642/0/Countries-that-offer-free-higher-education-.html
https://berniesanders.com/issues/its-time-to-make-college-tuition-free-and-debt-free/
http://www.salon.com/2014/11/02/7_countries_where_college_is_free_partner/
http://www.nytimes.com/2015/01/09/us/politics/obama-proposes-free-community-college-education-for-some-students.html?_r=0
http://www.huffingtonpost.com/2015/01/09/obama-free-community-college_n_6446866.html
https://www.thestreet.com/story/13598498/1/lsquo-too-big-to-fail-rsquo-bank-review-finds-wells-fargo-now-number-2.html

Tuesday, February 16, 2016

237.8 - Clown Award: Steve Schwarzman, CEO of Blackstone private equity firm

Clown Award: Steve Schwarzman, CEO of Blackstone private equity firm

Now it's time for our other regular feature, the Clown Award, given for meritorious stupidity. Oh, and we have a real one this week. A callous jerk and a brain-dead bozo in one fatuous package.

The winner of the Big Red Nose this week is Steve Schwarzman, the CEO of his own private equity firm, called Blackstone.

Schwarzman, a billionaire and one of the world's richest people, was attending the annual gathering of corporate and government honchos in Davos, Switzerland - a meeting I still want to call Davros - and told Bloomberg TV that he just can't understand why American voters seem discontented.

He expressed astonishment at "the amount of anger whether it's on the Republican side or the Democratic side" and said of Bernie Sanders in particular "How is that happening?"

Steve "The Clown" Schwarzman
Well, let's see. Pew Research has found that the wealth gap between upper-income and middle-income households in the US is the biggest it's ever been, that between 1983 and 2013, median household net worth for middle-income families went up a paltry 2%, for lower-income families is went down by a stunning 20%, which for upper-income families, it doubled.

That is an inequality that is growing as wages have stagnated and health care costs, despite the promises of Obamacare, continue to rise.

And yet Steve Schwarzman, who back in 2010 likened the prospect of a tax increase to Hitler invading Poland yes literally, he just can't understand, can't fathom, what those angry people are on about.

And you know what's really very sad and even more telling? He probably doesn't understand. He probably is that out of touch with the basic reality that exists beyond his well-insulated bubble.

Steve Schwarzman. If it wasn't for the enormous power buffoons like him wield, I could almost feel sorry for him. My gosh, what an utter clown.

Sources cited in links:

http://www.dailykos.com/story/2016/01/22/1473651/-Billionaire-bewildered-that-American-voters-are-angry
http://www.pewresearch.org/fact-tank/2014/12/17/wealth-gap-upper-middle-income/
http://www.psmag.com/business-economics/inequality-in-american-cities-is-on-the-rise
http://www.ibtimes.com/health-care-costs-us-rise-hospitals-now-charging-10-times-medicare-rates-common-1957271
http://www.businessinsider.com/steve-schwarzman-taxes-hitler-invaded-poland-2010-8?IR=T

Wednesday, January 27, 2016

235.8 - Outrage of the Week: forced arbitration

Outrage of the Week: forced arbitration

You want something to look for, to consider when hoping for innocence among politicos? See what they have to say, if anything, about one of the biggest unappreciated and little considered scandals of US economic life. It's called forced arbitration and it is our Outrage of the Week.

I've been meaning to bring this up for some time, so I'll take this opportunity.

As explained by the Alliance for Justice,
[a]rbitration is a process in which a private firm is hired to settle a dispute without going to court. It was designed as a voluntary alternative to litigation among corporate equals. It has been twisted today into a tool by powerful corporations to force consumers and employees to surrender their right to hold corporations accountable for wrongdoing before an impartial court.
Dozens and dozens of major companies in dozens of fields from telecommunications to credit cards, student loans, nursing homes, consumer goods, home builders, financial advisors, and of course software and more contain these noxious provisions, as do many employment "agreements."

To use the service, to buy the product, even to get the job, you must agree to a "contract" in which you sign away your rights and your access to the courts, including - perhaps most especially - your ability to be part of a class action suit.

That is, arbitration has gone from being a voluntary process between equals to a requirement, a demand, put by the more powerful on the less powerful, effectively rendering them powerless. Clauses requiring arbitration of any dispute between the consumer or employee and the corporation and banning any resort to the courts, arbitration to take place at a site specified in the contract by the corporation and done by an arbiter hired by the corporation, are now routinely buried in the fine print of any "agreement" you thoughtlessly make when you click on "accept these terms."

The result is that if a dispute arises, you have to face the corporation alone and on its own turf and its own terms - first assuming that what you could achieve is even worth the time and expense, which is why, as the Alliance for Justice has said, forced arbitration gives corporations "a free pass to break the law" because they know there is little if any chance they would be held accountable even for gross violations of employment and civil rights laws.

And the practice is expanding: The New York Times recently reported on how debt collection agencies are using forced arbitration provisions in the debts they buy to claim that they, too, are covered by those provisions even though the consumer has no contract with the debt collector - and courts are going along with this perverted logic that you can be bound to the terms of a "contract" with some agency you never had any contact with or even knew existed.

There is a bill that has been introduced in Congress. It's called the Arbitration Fairness Act and it would ban forced arbitration of employment, consumer, anti-trust, and civil rights claims and restore at least some of the rights of workers and consumers to seek justice in the courts.

So the next time some politico tries to tell you how concerned they are about the economy and you, ask them if they agree with outlawing forced arbitration. Ask them if they will support outlawing forced arbitration. If they hesitate, if they start to dance, if they say anything other than a direct "yes," tell them to buzz off because they are not on your side but on the side of Big Business.

And it's an outrage.

Sources cited in links:
http://www.afj.org
http://www.afj.org/our-work/issues/eliminating-forced-arbitration
https://www.citizen.org/forced-arbitration-rogues-gallery
http://www.huffingtonpost.com/terisa-e-chaw/companies-that-violate-wo_b_8547412.html
http://www.nytimes.com/2015/12/23/business/dealbook/sued-over-old-debt-and-blocked-from-suing-back.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news&_r=1

235.7 - Income inequality is growing, hideous, and immoral

Income inequality is growing, hideous, and immoral

Another topic I haven't talked much about of late is the economy. And here just a few figures show everything that's wrong.

Fifty-six percent of Americans have less than $1,000 combined in their checking and savings accounts; a majority of us are living paycheck-to-paycheck.

Furthermore, almost two-thirds of Americans - 63 percent - do not have enough in their savings for an emergency, defined as an unexpected expense of $500-$1000. A substantial majority of Americans would need to borrow money from a family member, take out a bank loan, or put it on their credit card if faced with such an expense because they lack the resources to do otherwise.

This was all according to a survey cited in Forbes, which had the takeaway not that the economy sucks or that wealth continues to congeal at the top or that people are underpaid or that chronic long-term unemployment remains stubbornly high, but rather that "Americans are terrible savers." Which becomes bitterly funny when it's recalled that in June, Jon Hilsenrath, chief economics correspondent of the Wall Street Journal, was grousing that we are saving too much and not spending enough.

Meanwhile, the richest 0.1 percent of Americans have almost as much wealth as the bottom 90 percent combined and income inequality is the highest it has been since 1928. As Ben Norton, a politics staff writer at Salon magazine, wrote, "the term 'middle class' is useless" because, as he says, we don't have one anymore. I have for some time been saying that we are becoming a two-class nation of just a tiny number of rich and a great number of poor or at best working poor. And it seems that every day there is new information to confirm that.

Worldwide, the situation is even worse as income and wealth inequality continue to steadily worsen.

According to Oxfam, in 2010 the world's richest 388 people had the same amount of wealth as the bottom 50% of the world's population. By 2014, that number had shrunk to 80. In 2015, it was 62. Just 62 people, together, were as rich as half the population of the world combined. Indeed, since 2010, the wealth of that lower 50% has dropped by about $1 trillion, or 41 percent. The world is hideously and immorally unequal, and that inequality is not only increasing, it is accelerating. And for all their talk about how much they worry about that inequality, our economic and political leaders seem revealingly uninterested in actually doing anything about it except in cases - such as global climate change - where the inequality becomes so severe as to threaten what they value second only to their bottom lines, which is stability.

Those who are now gathering at the annual World Economic Forum in Davos, Switzerland - which I am forever tempted to call Davros - no matter what platitudes they may mouth, they are not on your side. They don't give a damn about you except insofar as you can fatten their bank accounts.

And don't think it's any better here. Don't.

Do you really think those politicos of both parties who blather on about the non-existent middle class really have your interests at heart? I know I don't have to convince you about people like Paul Rantin' or Ted Crazy or Donald TheRump, but do you really believe that, to cite a prominent example, Hillary Clinton, who has so many ties to Wall Street that it looks like some sort of kinky bondage party, is going to challenge the interests of the banks and bankers any more than did Barack Obama,

- who failed to prosecute Wall Street crooks, even going so far as to specifically refuse to follow up on criminal referrals from the Financial Crisis Inquiry Commission, which was set up to investigate criminality in the 2008 collapse;

- who thus let the bankers get away with, in the words of one source, "theft, wire fraud, bank fraud, loan fraud, securities fraud, and commodities fraud" while millions of Americans lost their life savings and their homes even as his Justice Department made mortgage fraud its lowest-ranked national criminal priority and closed hundreds of cases after little or no investigation;

- who depended for economic advice on the likes of Tim Geithner and has stood silent as the too-big-to-fail banks have gotten even bigger?

Do you really think people like that are on your side, on the side of the 56%, the 63%, the 90%?

Do not believe it.
Not for a second.

Now, I'm not going to claim to you that every leader, every officeholder, every politician, every rich person, is a solely self-interested selfish scumbag. I suppose I would say that, for again a prominent example, Bernie Sanders could be an exception, based largely on the fact that he's been saying pretty much the same things for 40 years or so, even though he's not the socialist he claims to be, even less the one he's painted as. But I do say for him and for all the rest that "guilty until proven innocent" is a good and reliable standard.

Sources cited in links:
http://www.salon.com/2016/01/14/myth_of_the_middle_class_most_americans_dont_even_have_1000_in_savings/
http://www.forbes.com/sites/maggiemcgrath/2016/01/06/63-of-americans-dont-have-enough-savings-to-cover-a-500-emergency/#408481996dde
http://whoviating.blogspot.com/2015/06/2077-clown-award-jon-hilsenrath-of-wall.html
http://www.salon.com/2016/01/21/this_global_wealth_study_will_make_you_weep_the_most_disturbing_findings_partner/
https://www.oxfam.org/
http://www.reuters.com/article/us-davos-meeting-divisions-idUSKCN0UW007?feedType=RSS&feedName=worldNews
http://tardis.wikia.com/wiki/Davros
http://whoviating.blogspot.com/2012/09/left-side-of-aisle-72-part-5.html
http://whoviating.blogspot.com/2014/03/1516-outrage-of-week-fraud-about.html
http://www.cnbc.com/id/101204216

Monday, December 14, 2015

230.6 - Corporations and the rich are usually scumbags

Corporations and the rich are usually scumbags

I'm going to spend a couple of minutes here, just so we don't forget, on a couple of reminders that most rich people and most big corporations - no, not all, but most - are self-serving scumbags.

A new rule to combat water pollution by extending Clean Water Act protections to millions of acres of wetlands and streams was finalized this year. And of course a lot of corporations want to see it overturned. Obama has pledged to veto any Congressional attempt to overturn the regulation, so trying to insert such a provision into the omnibus budget bill would have attracted a lot of attention.

Note I say "would have." The right-wing-dominated Congress is expected to include a provision to block Syrian refugees from entering the US. In a conference call held the week before Thanksgiving, lobbyists representing a number of polluting industries such as electric utilities, the American Forest and Paper Association, and others agreed among themselves that this, the fight about Syrian refugees, that this is great news for them.

Why? Because it takes the focus off them, giving them the cover they need to slip under the radar and attach a legislative rider to roll back the new rules.

Up to 10,000 refugees, hoping to escape the violence and insanity of the Syrian civil war and resettle in the US, their hopes being slammed against brick walls by xenophobic religious bigots attacking them as mere conduits for terrorists if not terrorists themselves, and the only thing these cretins can think about is how it will help them continue to pollute streams and wetlands.

Scumbags.

Martin Shkreli
Next up, you surely remember Martin Shkreli, the smirking little prig of a man who raised the price of a drug used by HIV patients among others to fight a parasitic infection by some 5000%, up to $750 per pill. After a massive outcry, he said he would reduce the price. Remember?

He hasn't. And he's not going to.

The day before Thanksgiving, his company announced it would drop prices for hospitals, create smaller bottles with 30 pills, and provide free starter packs in 2016. The problem? The discounts only apply to bulk orders. The list price of the drug remains the same: $750 a pill.

And Martin Shkreli remains a smirking little prig. And a scumbag.

Last but by no means least, and the thing that prompted me to do this, you unquestionably heard all the raucous fawning over Mark Zuckerberg, the megabillionaire co-founder of Facebook, when he and his wife announced they would donate 99 percent of their worth, the vast majority of which is tied up in Facebook stock valued at $45 billion today.

Mark Zuckerberg
But contrary to what you likely heard, they not donate $45 billion to charity. Nope. Not even close.

What Zuckerberg and his wife, Priscilla Chan, did was set up a limited liability company, an LLC, one which he controls, and then "donated" the stock to it. In effect, Zuckerberg moved his wealth from one bank account to another.

If instead they had set up a charitable foundation, it would have been subject to rules and oversight, it would have to allocate to charity a certain percentage of its assets every year, and it would have to meet transparency requirements. An LLC has none of those requirements. It can invest in for-profit companies. It can make political donations. It can lobby for changes in laws. In short, Zuckerberg can do exactly what he wants with his money, precisely like before.

What this does do is create wonderful tax benefits for him. Here's how it works without getting into the weeds of tax law: The LLC donates appreciated shares - remember, its assets are shares in Facebook - to charity. He gets a tax deduction equal to the fair market value of the shares but owes no tax on the transaction because the shares were donated, not sold, so there is no capital gain.

The bottom line is that Mark Zuckerberg has amassed a fortune valued at $45 billion and he may never pay a penny in tax on it. Yes, it is all legal, but that makes it no less scummy, especially when he allows himself to be described as a great philanthropist who "gave away" his fortune.

He would better be described as a scumbag.

Sources cited in links:
http://www.huffingtonpost.com/mike-lux/christmas-tree-oh-christm_b_8687648.html
https://theintercept.com/2015/11/24/lobbyists-refugee-crisis/
http://www.aol.com/article/2015/11/26/martin-shkreli-wont-cut-individual-daraprim-price-after-all/21273557/
http://www.theguardian.com/business/2015/nov/25/martin-shkreli-hiv-drug-daraprim-turing
http://mobile.nytimes.com/2015/12/04/business/dealbook/how-mark-zuckerbergs-altruism-helps-himself.html?_r=0

Monday, November 02, 2015

225.6 - The good news is who Obama tapped to fill a vacancy on the SEC; the bad and revealing news is who he wanted to pick

The good news is who Obama tapped to fill a vacancy on the SEC; the bad and revealing news is who he wanted to pick

Lisa Fairfax
Just a quick thing that is good news in its own terms but which I raise to make a bigger point.

The Securities and Exchange Commission, usually just called the SEC, exists for one reason: making sure potential investors have enough information to make informed choices when they buy stocks and bonds.

The SEC has five members: two Democrats, two GOPpers, and a supposedly nonpartisan chair. Democrat Luis Aguilar recently resigned, leaving a vacancy. The good news is that at the pressing of Sens. Sherrod Brown and Elizabeth Warren, President Obama has nominated Lisa Fairfax, a law professor from George Washington University and an expert on shareholder activism who is thought to be a strong voice for reform of - which in reality of necessity means controls on - the financial industry.

Keir Gumbs
Okay, that's the good news - and it is, considering that the other Democrat on the Commission, Kara Stein, is also regarded as a reformer.

But here's the thing: The person Obama wanted to fill that slot is one Keir Gumbs, a corporate lawyer with the high-powered Wall Street law firm Covington & Burling, which represents numerous financial institutions. Gumbs is a former SEC staffer who more recently has been giving CEOs guidance on how to hide their corporate political spending.

That's who Obama wanted. That's who our oh-so-liberal president wanted. And he wanted him as a corporate-friendly ally to Commission Chair Mary Jo White at a time when the SEC is looking to allow new rules that would undermine the SEC's own mission by making it much easier for corporations to hide their activities and so deceive potential investors in their stocks. That's what Obama wanted to support through his choice for the commission.

I can't say it enough times: These people are not on your side. Never forget it.

Sources cited in links:
http://www.nakedcapitalism.com/2015/10/sec-poised-to-gut-corporate-disclosure-in-financial-statements.html
https://theintercept.com/2015/10/20/obama-names-lisa-fairfax-to-sec-a-vote-for-wall-street-reform/
https://theintercept.com/2015/06/15/sec-pick-specializes-in-helping-corporations-hide-political-expenditures/

Monday, August 24, 2015

217.2 - More on the three secret trade deals

More on the three secret trade deals

I told you last week that this week I would tell you what we know about two still-mostly-secret trade deals, trade deal which if you hadn't heard about, don't feel bad, you weren't supposed to.

The Terrible Trio of trade deals now being negotiated in secret include the Trans-Pacific Partnership, or TPP, the Transatlantic Trade and Investment Partnership, or TTIP, and the Trade in Services Agreement, or TiSA. I've mentioned the TPP several times; it's the latter two I said I tell you more about this week.

Taking the TTIP first, this is a proposed deal that has been negotiated in secret between the US and the trade office of the European Union since June 2013. In essence, it seeks to do to the Atlantic side of the world what the TPP seeks to do to the Pacific side. Or, to be more exact, I should say the North Atlantic part of the world, as no African nation is part of this negotiation.

What we know about the TTIP has come through leaks and the occasional self-serving release by one or more of the parties involved and it is more than enough to get any sane person who is not a corporate executive, flak, lobbyist, or toady to be deeply worried.

One group called the agreement a "corporate lobbying paradise" because in 2012, during the run-up to the start of the negotiations, the European Commission’s trade department had 597 behind-closed-door meetings with lobbyists to discuss the plan. 528 of those meetings (88%) were with business lobbyists while only 53 (9%) were with public interest groups. The remainder were with other actors such as public institutions and academics. So, for every meeting with a trade union or consumer group, there were 10 with companies and industry federations.

What's more, there is clear evidence that during that time the trade department actively sought the involvement of corporate lobbyists, while holding trade unionists and other public interest groups at arm's length.

Not just before, but also during the negotiations, corporations are playing a shaping role. Some formulations in draft texts which have been leaked are identical to proposals of company lobbyists.

Then there is what is in the deal. Now, in fairness I have to say that the deal is not finalized so some of this may change, but considering the history of how such secret agreements go, any changes are at least as likely to make it worse than to make it better.

A big and important issue is the inclusion of what's called Investor-State Dispute Settlement. What that means is that foreign investors and corporations would have the right to sue for damages if they believe that they have suffered losses because of laws or measures of the targeted country. This would include environmental and consumer protection laws and other such measures; the fact that they were beneficial to the society as a whole would not matter.

So, for example, Barack Obama wants to reduce our carbon output to deter the threat of global climate change. Doing so would of necessity mean reducing the use of fossil fuels such as coal. Under this provision, if it was in effect, a foreign corporation with investments in US coal mines could claim that environmental program hurt the value of that investment and sue to "recover" its "loss."

Next, under something called "regulatory cooperation," corporate groups are to be included in the drafting of any new regulations or laws which might affect their trade interests. Public interest groups and workers are not invited.

Employee rights are coming under pressure, and jobs in numerous industries are endangered. The UN's International Labor Organization has established eight core standards for labor protection and rights. In the US, only two out of the either are recognized. The TTIP provides no protection for those other rights.

Privatization and so-called "liberalization" - and I hate that word, because "liberalization" should mean making something better, improving something, but here it means giving corporations a freer hand to do what they place - but they will become one-way streets. Once some asset or service has been handed over to private industry, turning it back into a public asset would be made almost impossible by TTIP. It is a blueprint for over time turning more and more of government services provided for the benefit of the public into profit centers for the benefit of corporations and their investors,as has already happened in part of Latin America, with the predictable result of skyrocketing prices for water.

Through a process called "regulatory convergence," standards of food safety and for consumer protection for cosmetics, medical products, pesticides, and other commodities are threatened with being set at whatever are the lowest standards now in force. In many cases, that would be the US standards, because US standards are often weaker than those in Europe. For example, in Europe a company has to prove a substance is safe before it can be used, while in the US, it's the other way around: a substance can be used until it is proven unsafe. So instead of us being able to improve or toughen our consumer protections, the nations of the European Union would have to weaken theirs.

Oh, but it doesn't all go one way: The financial rules, the controls on banks, are tougher in the US than in the EU. Under the rubric "regulatory convergence," European banks are pressing the TTIP to require the US to loosen its regulations. The already weak and already wounded Dodd-Frank bill could become worth less than the paper its printed on.

That's obviously not the whole agreement, but it should be more than enough to show you why so many environmental, public interest, consumer, and labor groups - particularly in Europe, when it has gotten more attention than here - are against it.

Which leads us to the last leg of this three-headed beast of corporate wet dreams.

It's called the Trade in Services Agreement, or TiSA, and in a nutshell it seeks to create the same kind of international corporate playground in services that the TTP and the TTIP aim to do for goods. Negotiations have been taking place - in secret, of course - since early 2013.

A year ago, WikiLeaks published the secret "core text" being used in the negotiations, which today involve over 50 nations making up two-thirds of global GDP, including the US, the EU, and nations such as Turkey, Mexico, Australia, Pakistan and Israel - nations which, by the way, do not include what are called the BRICS nations, Brazil, Russia, India, China, and South Africa, which have been excluded from the TiSA negotiations, even though those negotiations purport to benefit the global economy. Apparently, some nations are not supposed to be part of that economy.

According to analysts, that core text actually looks to undermine the governments involved in the treaty in favor of multinational corporations. One way is that it would require signatories to give up their right to choose local service providers in areas like broadcasting, education, electricity, and sanitation. "Buy local" would for governments become illegal.

The text looks to limit governments’ ability to regulate national services while giving unprecedented freedom to foreign corporations. This would apply to all services, including banking, financial services, e-commerce, health, transport, and consulting. The reforms would touch all levels of government from local to national.

The draft treaty also proposes restricting the ability of governments to set size and growth limits on various economic activities, as well as institutions such as banks. The expression "too big to fail," which not only suggest that is an unfortunate condition but carries the implication that smaller institutions can be controlled and even broken up, would become as passe as poodle skirts and rotary telephones.

The rules not only apply to internal matters: Another major element is a rule restricting governments from putting controls on cross-border movements of capital, including anything related to services or inflows of capital. Options to enforce capital controls are very limited, with the result that a small nation could be potentially bankrupted if a major international investor corporation or bank just decided to pull its capital out of the country.

That's not the end of it. In June of this year, two months ago, WikiLeaks released another set of secret documents leaked by some whistleblower, showing that the intention to, as described by the group, "deregulate global financial services markets" and "assist the expansion of financial multi-nationals" is as strong as ever.

I found two revelations in this new set of documents particularly disturbing. One is that "the leaked draft also shows that the US is particularly keen on boosting cross-border data flow, which would allow uninhibited exchange of personal and financial data" and privacy of personal information can go the way of the dodo. Who knew that when the Amazing Mr. O promised "the most transparent administration ever" he meant that we must be transparent to the corporations?

Oh, but wait, the draft does have a chapter on transparency. It mandates that regulators must tell transnational investors ahead of time what they are doing.

The other particularly disturbing revelation is that amendments proposed by the US would end publicly provided services like public pension funds, which are referred to as "monopolies" and limit public regulation of all financial services, freezing regulation at existing levels, so that when another 2008 happens, we won't be able to do anything about it. Except, of course, to bail out the banks again.

Heard enough? No, you haven't, not until you've heard one more thing.

- Negotiations on the Trans-Pacific Partnership began in 2008 and continued to the present.
- Those on the Trade in Services Agreement began in February 2103.
- Those on the Transatlantic Trade and Investment Partnership began in June 2013.

So the administration of what US president has been pushing for these deals?

The administration of what US president wants US consumer protection, environmental, and other such regulations reduced to the lowest common denominator?

The administration of what US president wants to slash away at our privacy rights and calls public pension plans "monopolies?"

I don't know how many times I will have to say it: These people are not on your side!

Sources cited in links:
http://eu-secretdeals.info/ttip/
http://corporateeurope.org/international-trade/2015/07/ttip-corporate-lobbying-paradise
https://stop-ttip.org/what-is-the-problem-ttip-ceta/
http://www.ilo.org/global/about-the-ilo/lang--en/index.htm
http://www.commondreams.org/views/2009/06/20/thirst-profit-corporate-control-water-latin-america
http://www.independent.co.uk/voices/comment/what-is-ttip-and-six-reasons-why-the-answer-should-scare-you-9779688.html
http://www.rt.com/news/264745-wikileaks-secret-tisa-documents/
http://www.rt.com/news/271138-wikileaks-tisa-leak-documents/
http://www.rt.com/usa/167088-wikileaks-tisa-secret-trade/

217.1 - Refuting the lies about Social Security

Refuting the lies about Social Security

Well, a couple of weeks ago I had some anniversaries to note: The 50th birthdays of Medicare, Medicaid, and the Voting Rights Act, and the 70th anniversary of the bombings of Hiroshima and Nagasaki.

And now I have another birthday to mark. On August 14, Social Security turned 80. And in what should have come as a surprise to no one, the date was met with a spate of widely-distributed articles claiming that the system either is or soon will be on its death bed.

Make no mistake: The claims you no doubt have seen that Social Security is "running out of money" or needs an "overhaul" which invariably involves cutting benefits or "will go belly up" in less than 20 years or, this one addressed to younger workers, "won't be there" when you get to retirement age, are all lies. Flat out lies.

I refuse even to call them misunderstandings or inaccuracies. They are lies, lies intended to undermine support for a program that the right wing has tried to bring down from the get-go, a program which they hated at first because it was government support for those in need and have come to hate even more because it has worked so damn well.

Oh, and I do mean from the get-go.

When Social Security originally was being considered in Congress, opponents claimed it would bring an end to American freedom. Seriously. For example, one member of Congress warned that the people would feel "the lash of the dictator" while another said Social Security "opens the door to a power so vast, so powerful as to threaten to pull the pillars of the temple down upon the heads of our descendants" and a third insisted it would "end the progress of a great country."

They haven't stopped trying to undermine it, they've just changed tactics to regular waves of fear-mongering about how "unaffordable" and "unsustainable" the system is.

And, again, it's all lies.

One widely-circulated article was from Stephen Ohlemacher of Associated Press, headlined with some version or another of "Social Security at 80: Is it time for an overhaul?" Because it was from Associated Press, it appeared in newspapers major and minor all across the country.

It is hard to imagine that this article would have been more biased against Social Security if it had been written by some far right-wing think tank. But for that same reason, plus its wide publication, it provides a template to rebut the lies.

It starts with the boiler-plate fear mongering:
Social Security’s disability fund is projected to run dry next year. The retirement fund has enough money to pay full benefits until 2035. But once the fund is depleted, the shortfalls are projected to be enormous.
Okay, let's deal with the disability issue first because it's a bit subtle. Social Security actually has two funds: the Old-Age and Survivors Insurance Trust Fund, which is what we usually think of when we think of Social Security, and Social Security Disability Insurance. The money that comes in from payroll taxes is distributed between those two funds, with most going to the former.

Eleven times over the years, the trustees of the funds have adjusted what percentage of the monies coming in goes to each fund, depending on which one needed an extra little boost at the moment. Such shifts have been routine and uncontroversial. The last time one of these re-allocations of tax income was done was in 1994 and it was predicted at that time that the Disability Insurance fund would need to be replenished - guess when - in 2016. The need for replenishment is exactly what has been expected for the past 20-plus years.

The reason, the only reason, this presents the possibility of a crisis is that on the first day of the new Congress in January, the GOPper leaders of the House of Representatives adopted a rule which said that it would be out of order for Congress to reduce the actuarial balance of the Social Security retirement account. But obviously there is no way to reallocate any money to the Disability Insurance fund without affecting the balance of the retirement account. The effect would be small, but it would not be zero. Put bluntly, the "crisis" in the Disability Insurance fund was deliberately created by the right-wing in the House.

But the article mentions this rule only in passing, never explains its effect, but does describe it falsely as related to "improv[ing] the overall financial health" of the system, and allows the disability program to be called "plagued by waste and abuse" without challenge or evidence.

Next up, saying "the fund will be depleted" in 2035 is total and complete garbage. Starting back in 1977, payroll taxes were increased to build up a surplus to deal with the baby-boomer demographic bulge in retirees everyone knew would be hitting around 2010. The trustees' latest report says that the Social Security Trust fund now has $2.8 trillion in assets and that amount is expected to grow until 2019.

At that point, payments will exceed income and the system will have to dip into that surplus to pay full benefits. That is what will be "depleted" in, its now predicted, 20 years from now: the surplus. The surplus that was deliberately created to deal with the increasing demands on the system. The surplus that was deliberately created so it could be drawn upon. At that point, the system would be back on the pay-as-you-go basis on which it has existed for almost it's entire life.

More scare tactics:
In 1960, there were more than five workers for every person receiving Social Security. Today there are fewer than three. In 20 years, there will be about two workers for every person getting benefits.
Omigosh, how will we ever afford it?

Except that "workers versus retirees" is a useless and deceptive statistic. Workers don't just support retired people, they support all non-workers, including their children and their spouse or partner if they don't work. Even as the number of retirees is growing, family size is shrinking. So over those next few decades, even as the ratio of workers to retirees is expected to go down, the ratio of workers to non-workers is expected to go up: more workers per non-worker. The burden on workers will be much that same, it's just that in effect, some portion of that burden will have shifted from supporting their children to supporting their parents.

But wait! Come 2035, when we're back to pay-as-you-go, Social Security would collect enough in taxes to pay only 79 percent of scheduled benefits. A 21% benefit cut! Horrors! We have to cut benefits now to avoid that big hit later!

Well, yes, the 79% figure is true - if you also assume that nothing is done in those 20 years. The system has been tweaked and adjusted numerous times over its life and it will probably have to be tweaked again, but presenting it as a choice between "cut benefits now" and "cut benefits more later" is a false choice.

And here's an interesting thing I bet no one has told you: Note the reference to "scheduled" benefits. The trustees make calculations of future costs and benefits based on various scenarios of how the economy might play out over the years. Initial benefits for a new retiree are calculated on a wage base. The thing is, over time, wages tend to rise a bit faster than inflation. Which means projected - that is, "scheduled" - initial benefits also rise a bit faster than inflation. The bottom line is that 79% of scheduled benefits in 2035 will provide about the same standard of living as current benefits do today.

Oh, and one other little tidbit to add in here: Three years ago, instead of predicting being able to pay 79% of scheduled benefits in 2035, the prediction was being able to pay 75% of scheduled benefits in 2033. Which means, of course, that projections are somewhat better than three years ago.

Finally, there is of course the "scare with big numbers" gambit.
Over the next 75 years, Social Security is projected to pay out $159 trillion more in benefits than it will collect in taxes. That is not a typo.
Wow. Scary. Except: The US GDP is now $17.5 trillion a year, so even if you assume no expansion of the economy at all, over the same 75 years the economy will generate over $1.3 quadrillion in goods and services.

You want really big numbers? We'll give you big numbers. Between 1933 and early 2015, the mean annual real (i.e., non-inflated) growth in the US GDP has been 4.4%.

If that average was maintained, in that 75th year, when the accumulated payments beyond income of Social Security would be $159 trillion, the US GDP, in that single year, would be over $440 trillion. The magic of compound interest.

And if it seems silly to try to calculate out how big the US economy will be in 75 years, it should seem even sillier to talk about cutting benefits to present and future retirees based on projections every bit as tenuous.

Finally, what would I do about Social Security? I would remove the cap on wages subject to Social Security taxes, which is now $118,500 a year. Don't give me any bull about that's going after "the middle class." $120,000 a year is more than about 92-93% of US income-earners. That is not middle class.

Sources cited in links:
http://www.dailykos.com/story/2015/08/14/1412097/-Social-Security-at-80-It-s-Time-to-Expand-Benefits
http://www.pbs.org/newshour/rundown/things-know-social-security-80-overhaul-time/
http://whoviating.blogspot.com/2015/02/1916-outrage-of-week-changing-rules-to.html
http://www.ncpssm.org/PressRoom/NewsReleases/Release/ArticleID/1432/Analysis-of-the-2015-Social-Security-Trustees-Report
http://whoviating.blogspot.com/2012/04/left-side-of-aisle-54-part-1.html
https://en.wikipedia.org/wiki/History_of_Social_Security_in_the_United_States
http://www.multpl.com/us-real-gdp-growth-rate
 
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