Couch potato plays “Debt Ceiling Doom,” new video game inspired by Congress and the White House. World capitalism on the brink.
Thanks to the Washington Post for running our letter:
“How can House Speaker Kevin McCarthy (R-Calif.), President Biden and Senate leaders claim to represent the working class and poor when Medicaid work requirements are a focal point in the debt ceiling standoff and the Trump-era tax cuts are not? According to the Congressional Budget Office, the work requirements in the Limit, Save, Grow Act would have a tiny impact (about $5.6 billion in fiscal 2025) on the nation’s $31.4 trillion national debt, but they would increase the number of uninsured and state costs and have no effect on hours worked by Medicaid recipients.
“In contrast, ending the Trump-era tax cuts, which disproportionately benefit the wealthy, could put a major dent in the national debt….”
Because most of this site’s readers won’t be able to get through the newspaper’s pay gate, here’s the draft of the letter sent to the Post:
Debt ceiling negotiators focus on a ‘speck’ in benefits for the poor, ignore the ‘logs’ in their own eyes.
The Post ran the letter next to this op-ed:
Op-Ed: Fairer Fares, Increased Ridership: Using Reduced Fare Programs as a Tool for Equitable Recovery – Eno Center for Transportation
Nearly a million US workers could go on strike this summer (Jay Clendenin – LA Times)
Director’s Guild Cuts Deal While Writers Guild Stay on Strike – Port Workers Walk Out Across the West Coast – Gannett Journalists Walkout Across the Country – Payday Report
House Health Proposals Would Undermine Consumer Protections and Expand High-Income Tax Benefits – CBPP
“Similar to a Trump-era rule a court struck down in 2019, the bill would segment insurance risk pools: some individuals who are younger and healthier, or small businesses whose employees have that profile, could get plans with lower premiums because they would be priced separately from ACA-compliant coverage and would not have to meet ACA standards, such as a requirement to cover a set of essential health benefits. As a result, other individuals and small businesses remaining in ACA-regulated markets would see higher premiums.”
Click here for our comments on the Department of Labor’s ill-fated proposed rule seeking to expand association health plan coverage during the Trump Administration.
Proposals to fragment insurance risk pools and markets through AHPs and other gimmicks can be likened to a rash that flares up periodically. A more threatening challenge facing Congress is the US medical system’s obesity — its gargantuan cost.
Here’s another blast from the past: “Let’s sell health insurance ‘across states lines’ – through Medicare” (Note: this is one of many ways to get to universal coverage and lower costs.)
“…a low birth rate has significant negative implications for national viability – not only does a low birth rate jeopardize pension systems such as Social Security, but it’s also a drag on the economy.”
Transgender-Industrial Complex: Profitable Child Sex Change ‘Industry’ is Mutating Children for Life – CA Globe
Academics say Edinburgh University’s cancellation of screening of gender-critical film is ‘shameful’ – Telegraph
Catholic Church in California grapples with more than 3,000 lawsuits, alleging child sex abuse – Religion News Service
Sunday, June 4, 2023
Is re-starting capital gains taxation of inherited assets on a “stepped-up basis” in the modern US political economy analogous to the English policy of entail in Adam Smith’s time?
Analyzing the May Jobs and Unemployment Report with Aaron Sojourner and Alicia Modestino – Power at Work blogcast
“…We’re seeing wage increases at the bottom of the distribution.”
A New Jersey restaurant had to pay $300,000 to staff after the Labor Department ruled they had been underpaid – Business Insider
“The study, published Thursday in the American Journal of Public Health, also shows more than 50 countries have surpassed the U.S. in life expectancy since the 1930s and a handful of states may be partly responsible.”
One possible reason: low wage workers make up a larger part of the population. Low-wage workers in the US live shorter lives than high-income workers. Researchers and analysts should dig deeper than population averages.
Low-wage work is more pervasive than you think, and there aren’t enough “good jobs” to go around – Brookings
CEOs got smaller raises. It would still take a typical worker two lifetimes to make their annual pay – AP
“Low-income families have a higher annual inflation rate…Middle-income households see slower wage growth.”
New CBO Estimates of the Impact of Unwinding on Medicaid Enrollment, Uninsured – Edwin Park/Georgetown HPI
“With unwinding, CBO expects 15.5 million low-income Medicaid beneficiaries, who have remained enrolled due to the continuous coverage protection, to lose their Medicaid coverage over an 18-month period starting in April 2023. About one-third, or about five million, are estimated to be children…
“there is wide variation in how well states are handling unwinding. For example, in three states — Arkansas, Florida and Indiana — roughly half of beneficiaries who have gone through the redetermination process have been terminated and more than 80 percent lost coverage for procedural reasons, not because they were determined to be ineligible. In comparison, in other states like Arizona, Pennsylvania, and Virginia, only 10-20 percent of beneficiaries undergoing redetermination have been terminated, and in Pennsylvania less than half lost coverage for procedural reasons. In other words, the Medicaid enrollment losses and increases in the uninsured resulting from unwinding that CBO estimates could be considerably lower if states take necessary steps to maximize retention (including among children) and to minimize procedural terminations.”
“The interests in play here are immensely powerful on both sides….the cardinal point: that right now agreeing to limit federal borrowing while going through the motions on raising taxes will pay off handsomely for Democrats if hardly for many of their voters.”
“Until Congress begins matching tighter federal mandates with additional financial support for states, expect them to continue evading WPR standards and make little headway on Republicans’ goal of moving more families from welfare to work.”
‘Treat humans like humans’: Amazon drivers file 16-page lawsuit alleging inhumane working conditions – Alternet
In China and the U.S., Gen Z doesn’t want low-paying jobs. Stagnant wages and stigma around blue-collar work keeps them jobless – Fortune
Fed gov contemplates the causes of inflation
Should Fed board members still blaming wages for inflation be required to work a low-paying job for a year to upgrade their skills? … Recall Prof. Bator (1989 KSG macro) saying the Phillips curve was something along the lines of “an observed regularity” – not a fundamental “law” of econ…How many economists does it take to screw in an interest rate?
“Unions are pushing for minimum and award wages to rise by about 7 per cent in line with inflation, while the Albanese government has said it doesn’t want the lowest paid workers going backwards in real terms.”
‘Treat humans like humans’: Amazon drivers file 16-page lawsuit alleging inhumane working conditions – Alternet
“To appreciate how bearish it would be for profit margins to return to this 6.4% average, assume that everything else stays constant—GDP, corporate sales, price/earnings multiples, and so forth. If profits’ share of GDP were to decline to 6.4%, the stock market would have to fall more than 40%.”
A theory of the rise and fall of economic leadership: Review of Bas van Bavel’s “The Invisible Hand?” – Global Inequality+
“Van Bavel distinguishes three stages: market economy (output markets and security of property), accumulation (wage labor, capital accumulation, and growth), capitalism (dominance of the financial sector, use of the state by capitalists, monopolization).”
The graph above shows how small wage pressure has been (red block) compared to energy (dark blue) and food prices (light blue), supply shortages (yellow) and initial macroeconomic conditions (grey).
As has been written here before, the current run of inflation has many fathers.
World capitalism can breathe a sigh of relief – at least for the weekend. The U.S. government will still be there to feed it. But couch potatoes on Medicaid might have more trouble getting free chips…On to Congress for more tough love.
“Videos from a March 16 raid in Jenin show increasingly deadly tactics by Israeli officers”
Racist chants and clashes as tens of thousands march in Old City for Jerusalem Day – Jerusalem Times
“Turnout for Flag March estimated at 70,000; some chant ‘death to Arabs’ and ‘may your villages burn’; over 60 arrests; Palestinians, Israelis fight with rocks, pepper spray.”
Wonder if the Biden/McCarthy budget deal includes a few billion for this racist government. Would the U.S. public tolerate a white mob marching through an African-American neighborhood on July 4 chanting the “n” word?
Sunday, May 28, 2023
“And why beholdest thou the mote that is in thy brother’s eye, but considerest not the beam that is in thine own eye?”
$7.25/Hour No Longer Enough: Survey Shows What Americans Want As Minimum Wage Amid Tough Times – Benziga
No surprises from the DC swamp: Federal hospital pricing transparency requirements are largely not being followed or enforced. As a result, patients remain at financial risk.
‘The taxpayer must render unto Caesar what is Caesar’s, but no more,’ said Chief Justice John Roberts in Tyler v. Hennepin County
Russia captured Bakhmut, but it cost thousands of troops and now its remaining soldiers are exhausted – Business Insider
Anything in here that could reduce the national debt?
“A possible lapse in Social Security payments means the oldest beneficiaries — those over 88 — and the disabled could be among the first to suffer.”
Event: 2023 State of Homelessness Report: Homelessness Trends in the United States – May 24 – 2-3 pm
“Continuums of Care conduct a Point-in-Time (PIT) count of people experiencing sheltered and unsheltered homelessness on a single night in January. They also take an inventory of beds and units that serve people experiencing homelessness in their Housing Inventory Counts (HIC). The Alliance’s annual State of Homelessness Report leverages both to analyze trends in homelessness across the United States. It provides systems, providers, advocates, policymakers, and others with information to help shape their work (for example, calculations of bed utilization and unmet need). Please join us for our webinar in which we will share our findings from our 2023 State of Homelessness Report.”
Pittsburgh’s mayor asked for expert advice on homelessness. Here’s what the mayor — and you — should know – PublicSource
“With homeless shelters full and warming weather, some street outreach workers are calling the situation in Pittsburgh a crisis and expect the number of people living outside to increase by up to 50%.”
U.S. Money Supply Is Doing Something Truly Historic, and It May Foreshadow a Big Move for the Stock Market – Motley Fool
“M2 has been trending higher since 1959, which is as far back as the data from the Board of Governors of the Federal Reserve goes. However, it really skyrocketed during the COVID-19 pandemic. The issuance of multiple rounds of stimulus checks, coupled with the nation’s central bank purchasing Treasury bonds and mortgage-backed securities (collectively known as quantitative easing (QE)), sent M2 screaming higher by 26% on a year-over-year basis. This was, by far, the fastest increase in U.S. money supply on record.
“Now we’re witnessing the opposite. As of March 2023, reported M2 data showed a 4.1% year-over-year decline…
“…if M2 is declining and inflation is still above historic norms, there may not be enough money for discretionary purchases or other goods and services. Declining M2 may signal deflationary pressures to come that could lead to lower corporate earnings and a recession.”
“The survey, which was fielded in October 2022, found that self-reported financial well-being fell sharply and was among the lowest observed since 2016.
“Similarly, the share of adults who said that they spent less than their income in
before the survey fell in 2022 from the prior year, while the share who said that their
card debt increased rose. Among adults who were not retired, the survey also showed a
decline in the
share who felt that their retirement savings plan was on track,
that individuals had concerns about their future financial security. The declines in financial well-being across these measures provide an indication of how families were affected by broader economic conditions in 2022, such as inflation and stock market declines.”
Question: What percent of the tithes that Churches ask from their members should the Church spend on helping people in need? How much on itself?
Sunday, May 21, 2023
“…the Federal Reserve is raising interest rates and pulling back on its epic monetary experiment that started with the Great Financial Crisis…
“The two-hour documentary Age of Easy Money investigates how the Fed’s experiment has changed the American economy and what it means that the era may be over.”
Has the US health insurance industry found a novel use of AI to increase cash flow and profits: replacing human claim reviewers with algorithms programmed to be blind, deaf, ignorant, lazy, stupid, obstinate, and randomly erroneous?
“FTC Chair Lina Khan just put the business model of big pharma on trial with a challenge to a merger of Amgen and Horizon Therapeutics. And Wall Street is freaking out.”
Number of manufacturing protests recorded in the CLB Strike Map (October 2022 – March 2023)
“Republicans stubbornly defend $7.25 an hour in a state where more than one in four children live in poverty.”
“The U.S. is the only wealthy country in the world without universal paid sick leave…
“Lawmakers also called for Congress to pass universal paid family leave, which is not included in the bill, at the press conference.”
Decoupling the demand for paid sick days, which mainly would benefit low-income workers, from paid family leave, which is more expensive and more likely to benefit higher-income workers, would be an important policy shift for progressives.
All Workers Should Have A Few Paid Sick Days. The President And Congress Can Make It Happen – HealthAffairs
“Despite the clear benefits and minimal costs of requiring a few days of paid sick leave, the opportunity to pass this legislation will likely slip by again once the 116th Congress gets to work. This is because neither major party puts enough priority on the needs of low-paid workers. Although Democrats are supportive of paid sick leave, they give far more emphasis to the Family and Medical Insurance Leave Act, which would mandate 12 weeks of paid family and medical leave funded by a payroll tax. Paid family leave will be a much heavier lift. While the payroll tax funding family leave would fall on all workers, it may be of greater benefit to higher-income families, especially if political bargaining results in exceptions for smaller businesses.”
“Nothing but the power of corporate leaders to rig rules in their favor can explain this double standard.”
Biden can’t ignore the Constitution and give himself unilateral power to raise the debt ceiling – WaExaminer
Question: If the Administration exceeded the debt limit, what enforcement mechanisms could Congress, or the Supreme Court, deploy to enforce compliance? How long would it take to litigate noncompliance and remedies?
House Republicans’ Agriculture Appropriations Bill Would Cut WIC Benefits for 5 Million Participants, Put SNAP Benefits at Risk for 1 Million Older Adults – CBPP
Have intel that contractors that would profit from administering federal/state work requirements are lobbying Congress to impose them on Medicaid and SNAP benefits.
Dear Speaker McCarthy, President Biden, and Senate leaders:
How can any of you claim to represent the working class and poor when Medicaid work requirements are a focal point in the debt ceiling standoff and the Trump tax cuts are not? According to CBO, work requirements in HR 2811 would have a tiny impact on the nation’s $25 trillion national debt (about $5.6 billion in FY 2025), while increasing the number of uninsured and state costs, and having no effect on hours worked by Medicaid recipients.
In contrast, ending the Trump cuts, which disproportionately boost the wealthy, could make a major difference in the nation’s finances. Lawmakers could either do this now or wait a couple years and be gridlocked when some of the tax cuts expire.
In 2018, CBO estimated “that the tax act would increase the primary deficit (that is, the deficit excluding the costs of servicing debt) by $1.843 trillion over the 2018-2028 period…When debt-service costs were added, the increase in the total deficit came to $2.314 trillion.” Adjusting those figures for inflation would equal a substantial chunk of today’s national debt.
CBO recently cited JCT estimates that extending individual income tax provisions of the 2017 tax act would increase deficits by $2.5 trillion over the 2024-2033 period — or by $2.66 trillion including debt service costs. Most of the effects would occur after 2026.
Low-Income Parents at Significant Risk Under the House-Passed Medicaid Work Reporting Requirements in Debt Ceiling Bill – Georgetown Health Policy Institute
Biden pushes back at tougher work requirements for welfare sought by Republicans in debt-ceiling talks – USA Today
So, which is it?
Is it rational for a woman and a man to produce and raise children? Costs and benefits?
The bipartisan immigration policy that helps rural Americans get access to local physicians – Niskanen Center
U.S. Sanctions on Venezuela & Cuba Fuel Migration Even as Biden Restricts Asylum Seekers at Border – Democracy Now!
Is the working-class black vote up for grabs?:
While there’s truth in this argument, the GOP can’t offer a viable alternative until it supports concrete policies that advance the economic interests of working-class Americans. That would include higher wages and better benefits.
We’ve suggested this approach on raising the minimum wage:
Analysis: Ways To Raise the U.S. Minimum Wage To Help Workers, Families, While Minimizing Negative Impacts
A group of Arab refugees walks along a road from Jerusalem to Lebanon, carrying their belongings with them on Nov. 9, 1948. The group was driven from their homes by attacks in Galilee. For the first time, the United Nations will officially commemorate the flight of hundreds of thousands of Palestinians from what is now Israel on the 75th anniversary of their exodus, an action stemming from the U.N.’s partition of British-ruled Palestine into separate Jewish and Arab states. (AP Photo/Jim Pringle, File)
Palestinian leader urges UN to ban Israel, says US, UK caused Nakba to ‘get rid of their Jews – Times of Israel
It’s impossible to know all of President Truman’s motives for supporting the creation of Israel. Here’s what he said in support of immigration of displaced Jews to Palestine in 1946:
Hypothetical question: If the Netanyahu government was forced to leave the country, where would it be welcome?
Though the hodge podge childcare industry is unlikely to become monopolized by capitalists, the story above provides interesting background and research.
Another idea: provide support for parents who forego paid work to care for their young kids. Canada, for example, does this by providing caregiver tax credits and counting childrearing in the national pension formula.
Something to avoid is the Biden Administration’s childcare blueprint in the failed Build Back Better legislative package, which was wasteful, targeted too high up the income scale, and inflationary. Here are risks we foresaw:
A California-based woman bought 3 abandoned houses in a Sicilian village for $3.30, cashing in on Italy’s desperation to repopulate its fast-emptying ghost towns – Business Insider
A couple videos:
“Meloni came to power last year on a pro-family campaign of ‘God, family, fatherland’ and her government has proposed a host of measures to try to encourage families to have more children, given Italy’s fertility rate of 1.24 children per woman is among the lowest in the world. Numerous studies have pointed to a combination of factors that discourage women from having children, including a lack of affordable childcare spots, low salaries and precarious work contracts, and a tradition of women often bearing the burden of caring for older parents.”
Funny. But, really, Papa and the Vatican brass should do more than talk and put their staff to work on this. Allowing Italy’s 40K+ clergy to marry and encouraging them to produce children could have many positive impacts. Instead of being the international poster child for sex abuse, the Church could provide living examples of Biblically sanctioned copulation and wholesome family life. Legal costs might ease.
Allowing priests to marry also could rescue Italy’s social security and welfare system and ease its financial stress. Premier Meloni could do her part by urging Italian women to ramp up their fertility. The current birth rate — one and a quarter kid per woman — is unacceptable. If today’s workforce isn’t up to the job, maybe it’s time to allow women to enter the priesthood.
Requiring priests to be celibate was the result of politics about 1,000 years ago. It was not widespread during the early years of church:
Sunday, May 14, 2023
Grant Cardone Asks How Politicians That Make $100k Suddenly Become Multimillionaires — Here’s the Harsh Reality – msn
It could be worse. Venality and serial lying to voters is bad enough. What if 1 in 3 members of Congress had committed murder or other serious crimes? …
“By 2019, the share of Lok Sabha members charged with serious crimes had more than doubled, to 29%. The bad was driving out the good throughout the country. Even in a progressive state such as Tamil Nadu, a quarter of the state legislators in 2021 had outstanding charges of serious crimes.”
The bottom line is land acquisition by force. Compare and contrast with Russia/Ukraine today, Germany/Europe in the 20th century, and the US/Mexico/Indian lands in the middle of the 19th under the doctrine of “manifest destiny.”
For a meticulously documented alternative to Israeli/US media accounts of history, read: “Under the Cover of War: The Zionist Expulsion of the Palestinians” by Rosemarie Esber.
BTW, here’s what U.S. Grant had to say about US seizure of Mexican territory:
“”For myself,’ Grant wrote later about the United States war against Mexico, ‘I was bitterly opposed to the measure, and to this day regard the war, which resulted, as one of the most unjust ever waged by a stronger against a weaker nation.’
“The political, cultural and social era of the 1830s birthed a mission transcribed as Manifest Destiny, America’s expansion westward into the lands occupied by native tribes and the Republic of Mexico. This national attitude was a major cause of the war with Mexico and had tragic results for many. Grant, though against the war personally, served to the best of his ability as a matter of duty.”
“We were sent to provoke a fight, but it was essential that Mexico should commence it.” – excerpt from Grant’s Personal Memoires, one of the greatest books written by an American.
“From Cocaine Bear to Panda Express, the fight for a living wage is the same.”
Compare incomes along with cost of training and malpractice liability. Also consider the social and economic culture of each country which is very different.
“In a new book, author Mark Rank looks at why one of the world’s wealthiest countries has such a high rate of poverty.”
Staffing firm CEO says more US companies are ‘nearshoring’ less-expensive workers from Latin America – Business Insider/msn
“HomeVestors of America, the self-proclaimed ‘largest homebuyer in the U.S.,’ trains its nearly 1,150 franchisees to zero in on homeowners’ desperation.”
“The company’s training manual teaches franchisees to build relationships with those who interact with people in difficult situations: nursing home administrators, probate officers, divorce lawyers. It also instructs them to comb neighborhoods for clues of distress — water shutoff notices, police tape, boarded-up windows, burn scars — and pounce on signs of desperation. If a family’s belongings are on the curb, for example, the directive is clear: ‘Quickly pursue the property where the trash pile indicates eviction.’ …
“‘That cat piss smell, you know what that smell is?’ he said with a chuckle. ‘That’s money.'”
“California in August formally launched CalKIDS, the nation’s largest children’s savings account program. CalKIDS will automatically set up college savings accounts with initial deposits of up to for every baby born in California on or after July 1, 2022. In addition, it will make a deposit up to $500 for each of the 3.4 million low-income public-school students in first through 12th grade.”
What California is doing may be well-intentioned, but it’s UNDERwhelming. While admirable to encourage low-income kids to go to college, the amount of money being invested is small and may not even cover ongoing inflation of university costs. If the state really wanted to help low-income kids, it could simply lower their tuition costs. The main beneficiary of the program is the state higher education establishment.
The small amount of money being invested by the state also is discriminatory against kids that don’t end up going to college – which would be most low-income kids. Under CalKIDS program rules, if the money isn’t used by age 26, it reverts to the state fund for use by kids that do go to college. A more equitable alternative would be to allow young people reaching a certain age (30?) to roll unspent CalKIDS funds into a Roth IRA so they can build wealth and prepare for retirement and old age.
Unspent funds from government baby bonds and education savings programs could be funneled into state (or federal) retirement savings programs or help provide money buying a home, upgrading job skills, or starting a business. Theycould dovetail with a universal retirement savings and investment system that CCSE proposes.
For example, Virginia’s Sec. 529 college savings agency is expanding its mission to encourage retirement savings for workers without access to employer 401(k) programs. The state legislature approved RetirePath Virginia, a state-facilitated retirement savings program through which workers can invest a portion of their pay to a Roth individual retirement account. Aside from payroll deduction by the employer, however, the new program replicates what is already available in the marketplace through companies like Fidelity or Vanguard. RetirePath Virginia actually forbids employers to match employee contributions and offers no contributions from the state. Without matching contributions, RetirePath Virginia is another UNDERwhelming program. The Virginia program could benefit low-wage workers more by providing matching funds. Unspent funds from education accounts could be a source. The main intent of the program is to nudge workers and employers into starting job-based retirement savings.
This simple way to fix the wealth gap between Blacks and Whites is far better than reparations – Juan Williams/Fox
The US Congress needs to organize a universal retirement savings system that includes all low-wage workers regardless of ethnic origin or color. The current system primarily covers and disproportionately subsidizes contributions for higher-income workers.
“The D.C. region joins a growing list of cities that are seeing similar spikes, which coincided with the end of pandemic relief programs and stubbornly high inflation. In recent weeks and months, Phoenix; Louisville; Tulsa; Spokane, Wash.; and Santa Monica, Calif., reported big increases in their homeless populations. Many jurisdictions such as New York City and Los Angeles have mounted aggressive plans for housing the homeless, but a shortage of affordable housing, mental health and substance abuse treatment options have frustrated many of those efforts, experts say.”
A California city is trying to block a Christian group from feeding homeless people. Now, the DOJ is weighing in. – USA Today
“Housing Trust Fund Allocations will increase and preserve the supply of decent, safe, and sanitary affordable housing for extremely low- and very low-income households.”
HUD Marks Important New Milestone in American Rescue Plan’s Emergency Housing Voucher Program – Fact Sheet
“An Energy rule for manufactured homes will hit low earners.”
“Almost four years after Epstein’s death, a series of articles last week in the Wall Street Journal have made it possible to peer further into this incestuous world of high finance and corporate-state power in which Epstein played a key intermediary role.”
Good news on fixing Social Security from Sens. Cassidy and King (and not-so-good)
We recently shared our concerns with Sens. Cassidy and King that raising the Social Security retirement age again would be a major benefit cut particularly for low-income workers and states. Both offices responded that, contrary to previous reports, neither is now singling out raising the age as a preferred means to fix Social Security’s long-term financing. That’s good news for families struggling to make ends meet.
From Cassidy’s staff last week: “Senators Cassidy and King think the single most important part of any Social Security guarantee plan should be an investment component that solves much of the solvency problem and minimizes painful choices. Other than that, they and the others in their working group believe that everything should be up for debate. Research like yours will help them make informed decisions should Social Security ever gain more deliberate attention in Congress.”
From King’s staff this week: “Raising the retirement age never has been a preferred choice of Sen. King’s. He’s focused on preserving benefits and enhancing them for low-income workers. While talks are highly unlikely to result in a legislative product this Congress, the Senator thinks that continuing to engage on a bipartisan basis is the only way to avoid a 24 percent benefit cut when we reach insolvency in a decade or less. The longer we delay, the tougher the choices become. I appreciate your input.”
Both senators should be applauded for their leadership in seeking a bipartisan solution as soon as possible. The not-so-good news is that most of their colleagues in this Congress aren’t interested in engaging in the issue. So why bother with it now? As Sen. McConnell (who also represents another low-income state) might observe, financing Social Security is a “long game.” It makes sense to provide information ASAP to members of the Senate and House likely to be involved in w0rk on a solution down the road.
Worker shortage was supposed to give people with no college degree opportunity. But has it? – USA Today
US tax dollars at work?
Dear Joe, Chuck, Mitch, Kevin and friends: As Israel bombs Gaza, should US taxpayers be asking why funding for its military is a safer bet to survive the debt ceiling standoff and threat of economic meltdown than funding to provide health care, housing, or food for American citizens? Time to move a couple billion $$ from guns to butter?
Jordan, Egypt pan Israeli strikes in Gaza; UN envoy: Civilian deaths ‘unacceptable’ – Times of Israel
A huge homeless camp will be cleared after neighbors sued. What happens to its vulnerable residents is an open question – CNN
“Legislators in the Peach State have joined a growing movement rejecting the failed approaches that have fostered urban anarchy elsewhere.”
An Indiana pizza shop owner says he’s facing thousands of dollars in fines for letting a homeless man keep his tent between two dumpsters behind the restaurant – msn
America’s rental nightmare, as map reveals 20 hardest markets to find a home – and it’s bad news if you live in the Northeast – Daily Mail
Republicans dismiss fears that their debt ceiling bill would make the housing crisis worse for 1 million families as ‘scaremongering’ – Business Insider
Young adults in the U.S. are less likely than those in most of Europe to live in their parents’ home – PEW
‘Scores settled’: IDF kills Palestinians who allegedly shot dead 3 Dee family members – Times of Israel
NYC – May 2023
Sunday, May 7, 2023
“When a stranger sojourns with you in your land, you shall not do him wrong. You shall treat the stranger who sojourns with you as the native among you, and you shall love him as yourself, for you were strangers in the land of Egypt: I am the Lord your God.”
“NYC Mayor Eric Adams announces upstate housing program following arrival of more than 60,000 migrants since last spring”
Inequality You Can Taste: Low Wages and Unstable Employment Make Fast Food Workers Susceptible to Homelessness – Capital & Main
Hollywood writers are on strike over an artificial intelligence threat some are warning is coming for you next – abc.net.aus
“When I was a child, I had immense freedom. We fished in the rivers and the lakes, we collected fruits and the seeds we use to make our handicrafts. But starting in 2014, I saw these areas turned into deserts by diggers and other big machines.” …
But she says that it was not easy to take on a leadership role in her community at first.
“In our culture, it’s traditionally the men who take decisions, it’s the men who go hunting and fishing. We women are supposed to stay in our realm, looking after the husband, the children, and the home.”
“After Williams ran her card, Brown walked out to look at her new tires. They’d traveled more than 10,000 miles from a factory in Vietnam to the shop in Picayune. They’d traversed a pandemic, a volatile raw materials market, a consumer spending boom, a trade war, a supply chain crisis and a labor shortage. Now they sat on the rear axle of her Rogue, ready to do the thing they were destined to do.”
‘Poor people are not stupid’: I grew up in poverty, earned $14 an hour, and inherited $150,000. Here’s what I have learned from my windfall. – msn
‘Workers now have their eye on the ball:’ Many employees are stressed, but also optimistic and focused on the future – msn
“It’s not surprising for workers to expect a pay increase forthcoming since the majority of workers worldwide (62%) received an increase in pay over the previous year. The rises in 2022 averaged 6.4% — under the International Monetary Fund’s global inflation forecast of 8.8%, which means, in real terms, workers received a slight pay cut.
“But Richardson says the wage increase staying below inflation is evidence that a wage-price spiral is not at hand. A wage-price spiral happens when wages and inflation feed each other to the point where inflation rises out of control.”
“God made the Idiot for practice, and then He made the School Board.”
“I never let my schooling interfere with my education.”
“Everything has its limit – iron ore cannot be educated into gold.”
“All schools, all colleges, have two great functions: to confer, and to conceal valuable knowledge.”
“American education lacks the rigor, focus, and self-discipline to march in lockstep on anything, let alone the commitment and perseverance required to whip schoolchildren into tiny Red Brigades, an American Komsomol. We can’t even agree on the rock-bottom basics: how to teach kids to read, or whether a student who assaults a teacher should be suspended or just needs a hug. Turn America’s 3.7 million teachers into ideologues committed to revolution? It would be easier to turn house cats into a synchronized-swimming team.”
“The question which is on everybody’s mind after having read Nayar’s book is, What next? Because if capitalism continues along the current trajectory that Nayar believes almost preordained, it must again produce instability and rejection.”
Black shirts or brown?
Largest Nurses Strike in UK History – Chat GPT Workers Unionize in Africa – Some Canadians Union Settle While Others Continue Strike – Payday Report
Arkansas Gets Medicaid Back to Normal: The Covid-19 public-health emergency expanded the rolls, reducing resources for low-income and disabled people. – Gov. Sarah Huckabee Sanders/WSJ
“Some also claim that Arkansas
see a spike in the number of uninsured people. That, too, is incorrect. Those who
Medicaid coverage can get health insurance through their jobs or
How much of the state’s motivation in speeding people off Medicaid is shifting costs from the state to the federal government (which subsidizes exchange coverage), employers, and individuals who will pay more for care through higher cost-sharing or by ending up uninsured? Provider lobbies may support the push for a variety of reasons. For some, it can result in higher payment rates. For others, like long-term care providers, it may free up state funds for Medicaid rate increases.
Gov. Huckabee says the state has added resources to help people losing Medicaid coverage:
Arkansas recently led a push for Medicaid work requirements. The demonstration program resulted in large-scale disenrollment and was halted by a federal court:
“Arkansas was the first state to implement a work requirement as a condition of eligibility for its Medicaid program. In order to maintain eligibility for coverage, Medicaid beneficiaries subject to the requirement had to report completion of 80 hours per month of work or another approved community engagement activity or a qualifying exemption. Qualifying community engagement activities included job training, job search, education, and community service activities, while exemptions included pregnancy, certain caregiving activities, and experiencing certain medical conditions.
“Implemented in June 2018, Arkansas’ work requirement policy was in effect until March 2019, when a federal court halted it. During this period, approximately 18,000 beneficiaries were disenrolled from Medicaid due to noncompliance. A research study found a significant increase in the uninsured rate in the target population (low-income 30 to 49 year-olds), with no increase in employment or other community engagement activities. Overall, work requirements led to a reduction in the share of this population who had Medicaid coverage by 12 percentage points. While most coverage losses were reversed in 2019 when the policy was halted, the temporary loss of Medicaid coverage had adverse consequences. One study found that adults with chronic conditions in Arkansas were more likely to lose coverage, and another found that many who lost Medicaid coverage in 2018 experienced negative effects. Specific findings include:
50 percent reported serious problems paying off medical bills;
56 percent delayed seeking health care because of cost; and
64 percent delayed taking medications because of cost.“
Taking a Closer Look at the CBO Estimates of Speaker McCarthy’s Damaging Medicaid Work Reporting Requirement – Georgetown Health Policy Institute
“Division C of the bill would establish new work requirements
Medicaid and expand work requirements for SNAP and TANF. CBO estimates that those
provisions would reduce federal spending by $120 billion over the
2023-2033 period, consisting of reductions of $109 billion for Medicaid, $11 billion for SNAP, and $6 million for TANF.”
“Exclusionary zoning and targeted growth controls on housing supply have long been the central policy tools furthering income and racial segregation.”
“India will need a strong rebound in investments to attain sustainable growth. Global uncertainties will weigh on growth this year, but India is poised to grow by 6.5% in the medium term.”
Tata Nano Into Solar-Powered Vehicle: Innovative West Bengal Businessman Travels 100km For Only Rs 30 – India Times
“The cheapest car in the world turned out to be something that not many people actually wanted to own, and that tag turned out to be the Tata Nano’s undoing. This despite the fact that the Nano car was actually the perfect city car, with a few shortcomings that weren’t even dealbreakers.”
“The American model of capitalism is under assault from the
which rails against the supposed horrors of neoliberalism and globalization, and from
Carlson-style populists, who often treat American capitalism as a great betrayal. But it
proved superior to all real world alternatives.”
This simplistic article places everything American under the label of capitalism. The reality is that the US political economy is a mixture. Capitalism is a driving force but cannot confine the nation’s spirit which flows beyond the confines of self-interest and money making. Yes, the US economy has been more dynamic than Europe’s. But its current brand of capitalism is tame compared with faster growing parts of the world and as well as its own past.
NICU Nurse Adopts 14-Year-Old Teen Patient with Triplets, to Keep Their Family Together – Good News Network
Sunday, April 30, 2023
“The Weekly Download is the place for ideas, features, research, and news coverage about workers, worker power, and unions — delivered to your inbox and the Power at Work Blog, every week. The Weekly Download hopes to promote the writing, research, and analysis that advances a discourse putting workers and their unions at the center of the national conversation.”
“The low-wage/high-welfare system that Democrats and Republicans have supported since the late 20th century is not sustainable in the long run. The alternative is to try to achieve the long-standing aspiration of American workers and reformers: a living wage for all.”
It turns out the Fed thinks it’s not very good at regulating banks. Maybe a better use for some of its 800 economists would be to put them in charge of US/Mexico border security policy — particularly those still influenced by Phillips curve theory. Supervisory incompetence at the border could lower wages, and thus inflation, by allowing a horde of unskilled workers into the US labor market. 🙂
CCSE comment: Rather than a single cause, it’s likely that the current run of inflation has many fathers. A big factor is years of monetary policy that drove equity prices up since the alternative was no interest on bonds. Investment capital was almost free due to low rates. People with capital had surplus savings. The working class didn’t benefit.
In the US, Covid stimulus spending reaching far too high up the income scale resulted in more extra cash. So, when supply constraints came, people with surplus savings could bid up prices of goods and services while those without mostly had to cut back on consumption. Corporations with monopoly leverage could squeeze more from those with money than they lost in volume at bottom….
Enter the Fed’s attack on surplus demand focused on labor costs. The Phillips curve might have worked for a while in the 1950s when big union bargaining set the pace for overall wage increases — not now. So raising interest rates to slow economic growth and cool wages by the higher unemployment rates is a remedy targeted at the wrong income segment — like injecting pain killer for a tooth ache into a knee.
Question: Would raising taxes on the upper-middle class and wealthy have a greater impact on curbing aggregate demand than interest rate hikes which most impact low-income people who don’t have the capacity to increase quantity demanded? At best, wage increases are barely keeping up with inflation. They are more likely to be reacting to inflation than causing it.
“Consider the case of the Carlyle Group and the nursing home chain HCR ManorCare. In 2007, Carlyle — a private equity firm now with $373 billion in assets under management — bought HCR ManorCare for a little over $6 billion, most of which was borrowed money that ManorCare, not Carlyle, would have to pay back. As the new owner, Carlyle sold nearly all of ManorCare’s real estate and quickly recovered its initial investment. This meant, however, that ManorCare was forced to pay nearly half a billion dollars a year in rent to occupy buildings it once owned. Carlyle also extracted over $80 million in transaction and advisory fees from the company it had just bought, draining ManorCare of money.”
Political influence? What political influence?
Student loan pause has benefitted affluent borrowers the most, others may struggle when payments resume – Brookings
New Evidence: Availability of Federal Student Loans for Grad Students Caused Costs to Rise Dramatically – AEI
“Based on their analysis, they conclude that the increases in available credit did in fact cause prices to rise—and hugely so. They estimate that every dollar-increase in federal student loan eligibility translated into a $0.64 increase in net price. This implies, that in the case of graduate programs, they are in fact “greedy” in the way that William Bennett accused them of being. And more importantly, that the colleges themselves—rather than the students—were capturing most of the tax-payer funded expansion of student aid.”
“…A subsequent analysis of the Arkansas program, published in Health Affairs, found that it did not increase employment levels. But it did have long-term, adverse consequences for those who lost coverage. Of those purged, 50 percent reported serious problems paying off medical debt, 56 percent delayed care due to cost, and 64 percent delayed taking medications because of cost.”
Budget BS coming from both sides:
DOA in the Senate.
As lawmakers gear up for federal debt limit fight, here’s what it could mean for Social Security – CNBC
After Macron Raised Retirement Age, French Unions Promise Largest Strike Yet on May Day – Payday Report
Center on Capital & Social Equity completes 8th year
Billing from our web site vendor indicates CCSE has been operating for a bit more than eight years. If memory does not fail, this was the first article posted:
This is one of the longest and most comprehensive:
“Mixing Capitalism and Socialism: Policies To Moderate Systemic Wealth Concentration in the United States“
Click here for links to essays, op-eds, letters and other information concerning economic inequality. Or click on Quick Links at the top of this page.
“The suffering caused by exorbitant drug prices is all too clear for doctors to see.”
“Extensive evidence shows that, relative to being uninsured, coverage through Medicaid and the Children’s Health Insurance Program (CHIP) improves children’s access to and receipt of health care, with benefits that extend throughout a child’s life. But some children with Medicaid/CHIP coverage may face systematic barriers that constrain their access to care.”
“New technologies, artificial intelligence, and automation may have positive impacts on growth and productivity, which could eventually increase demand for higher-skilled workers. Our results suggest that in the short run the labor market may not adjust to such rapid and dramatic change. As income inequality increases in many emerging economies, this may pose further challenges to governments facing increased dissatisfaction among the population, particularly among those most exposed to the competition with new technologies. However, we also document how workers responded to the shock by increasing early retirement and technical training, highlighting the role of these channels of adjustment in the labor market. Households responded to the negative shock by increasing borrowing to keep savings and consumption constant. At the same time, more exposed households increased investment in the human capital of their children.”
Writers Guild Warns of Impact on Streamers, Legacy Networks as Potential Strike Looms – Hollywood Reporter
Why Hollywood Writers Are Going on Strike – More Perfect Union
“There is a nearly $100,000 disparity between household incomes required to be considered middle class in cities across the United States, new data showed…”
“You are the light of the world. A town built on a hill cannot be hidden. Neither do people light a lamp and put it under a bowl. Instead they put it on its stand, and it gives light to everyone in the house.”
Sunday, April 23, 2023
“Some implications of this one-state reality are clear. The world will not stop caring about Palestinian rights, no matter how fervently many supporters of Israel (and Arab rulers) wish they would. Violence, dispossession, and human rights abuses have escalated over the last year, and the risk of large-scale violent confrontation grows with every day that Palestinians are locked in this ever-expanding system of legalized oppression and Israeli encroachment. But far less clear is how important actors will adjust—if they adjust at all—as the reality of a single state shifts from open secret to undeniable truth.”
“…their plan would make it significantly harder for people to access Medicaid, food stamps, and Temporary Aid for Needy Families (TANF — the main cash welfare program for poor families with children).”
Thought the new GOP was going to fight for low-income people and frontline workers…More paperwork to qualify for Medicaid and cuts in benefits workers need in hard times? That’s not new.
Assessing the Damaging Impact of Medicaid Work Reporting Requirements in McCarthy Bill – Georgetown University
Taking Medicaid Away for Not Meeting a Work-Reporting Requirement Would Keep People From Health Care – CBPP
All Workers Should Have A Few Paid Sick Days. The President And Congress Can Make It Happen – HealthAffairs
“When you combine the narrative from P&G (“we have price power and we know it now”) with the FOMC’s greatest fear (services inflation), it is not difficult to parse out what happens next. There is little in the way of relief coming in the pipeline for the consumer.”
Bernie Sanders: We Need To Talk About Oligarchy, Income Inequality, Lobbying, Corporate Ownership Of Media – RealClear Politics
Sen. Bernie Sanders talks about his new book, “It’s OK to Be Angry About Capitalism,” with MSNBC’s Jen Psaki.
Q: If an AL company drops out of a state Medicaid program after promising private-pay residents to keep them should they exhaust their assets, has it encumbered a contractual obligation to pay for their care at another AL facility (assuming, of course, residents do not require nursing home level of care) if they run out of money and are asked to leave?
Also, another reason it makes sense for Congress to increase SSI:
SSI Needs Fixing: Chronic
is choking off access to Social Security’s critical backstop – and pushing more
blind, disabled and old people into poverty. – CCSE
“SSI helps many states offer assisted living and group home options to low-income seniors and people with disabilities who otherwise would have to live in a nursing home or psychiatric facility. Under federal law, Medicaid pays for room and board in nursing homes but not assisted living or group homes. States use SSI to fill in the gap, but the amount is often insufficient to cover provider costs. As a result, supply and consumer choice of non-institutional housing-with-care options are usually limited.”
“Levine, a college dropout, was one of several retail founders who ushered in a boom of stores selling low-cost goods. Discount stores have thrived in recent decades as the income gap in the United States has widened. Three dollar store chains — Dollar General, Dollar Tree and Family Dollar — are now the fastest-growing US retailers.”
Jayapal criticized for saying immigrants ‘needed’ in America to ‘pick the food we eat’ and ‘clean our homes’ – Fox
Another way immigrants can help the US: providing competition for incumbents whose mouths run ahead of their brains.
CBPP has released two tweet threads: one on how the expiration of the expanded Child Tax Credit has affected child poverty, and another on the number of adults without children previously eligible for the expanded 2021 Earned Income Tax Credit who will receive a meager credit or no credit at all this year.
WaPost op-ed – Beyond noncompetes, firms use these tactics to stop workers from leaving – Open Markets
Median earnings ran above consumer prices in first quarter.
Strong wage gains may tilt Fed toward another rate hike in May._____
Check out the Fed funds rate in 1980 and 1982.
PNC Ballpark Workers to Strike on 4/20 – 155,000 Canadian Workers to Strike on Thursday – Payday Publishes 1,000th Article
Employee dies, nearly 100 workers infected in fungal outbreak at Michigan paper mill – USA Today/msn
‘We’re going to live in reality over here’: Republicans nix Kevin McCarthy’s plan to slash food aid – Raw Story
“Politico reported Sunday that McCarthy’s latest idea is to slash food aid to poor families, including children. Still, it’s not sitting well with Republican colleagues who are likely aware of the inflated costs around food.”
“Nine of the top 10 wealthiest congressional districts are represented by Democrats, while Republicans now represent most of the poorer half of the country, according to median income data provided by Rep. Marcy Kaptur’s (D-Ohio) office.”
More independents, but…
“More than half the nation’s renters—including two thirds of low-income renters—report that they have been very stressed by sharp increases in both rents and the price of other goods and services, according to our analysis of data from the Census Bureau’s Household Pulse Survey.”
Great video…So, what can policymakers/Congress do to ensure these brokers and consultants are guard dogs, not lap dogs — ie, minimize conflicts of interest?
As medical cost inflation cuts into health coverage and care, particularly for people with low incomes, employers and the government need to increase their bargaining leverage.
The chronicle of the revolutions foretold?: Review of Peter Turchin’s “End Times” – Branko Milanovic
“Turchin’s model of decay has one variable: inequality in income or wealth…
“The model fits well—almost too well—the current American reality. The median person is the “deplorable” (to quote Hillary Clinton), a populist (to quote the mainstream media), a Hillbilly (to quote J. D. Vance) or one of the candidates for the deaths of despair (to quote Anne Case and Angus Deaton). The disaffected, disenchanted American lower middle class has been studied extensively after Trump came to power. The current elite, whom Turchin dissects in an almost forensic manner, is composed of CEOs and board directors, large investors, corporate lawyers, ‘policy-planning network’, and top elected officials (p. 203), that is, of all those who have money and who use it to gain voice and power.”
“Instead, postsecondary education has become a status marker and a source of the snobbery that fuels the resentments of America’s non-college majority. The education divide threatens to become a calcified class distinction akin to race as predictive of political behavior…
“Education levels broadly correlate with incomes. Today, Democrats represent 14 of the 16 congressional districts with the highest percentages of bachelor’s degrees.”
A Christian group has amassed more than 12,000 signatures to oust the Tennessee Republican leader who expelled two Black lawmakers – Business Insider
Sunday, April 16, 2023
“The long depression of the 2010s is continuing into the 2020s.”
A particularly bad time to put all your eggs in one basket.
“To withdraw is not to run away, and to stay is no wise action when there’s more reason to fear than to hope; ’tis the part of a wise man to keep himself today for tomorrow, and not venture all his eggs in one basket.” – from “Don Quixote”
Pink Flamingos (1972) – Eggman Scene
‘I’ve seen people do stupid things all my life’: Warren Buffett doubles down on his long-held bitcoin and crypto views – msn
Man gets prison time after feds discover $3.4 billion in stolen Bitcoin hidden inside a Cheetos popcorn tin and underground safe – Business Insider
A paper mill in Alabama told authorities a worker died from a heart attack. He actually died after being electrocuted by machinery, the labor department says. – Business Insider
The onus is on people in power to demonstrate they are not thieves.
‘A democratic China must be realized in our time’: Beijing jails two prominent legal activists for subversion – CNN
True enough, but the working class is stuck between a political rock and hard place. Just what are Republicans doing for them on economic issues? Higher wages and benefits? Right to organization and bargain?
CCSE letter to Washington Post:
“The Jan. 25 news article “At Davos, enthusiasm for trees but not a carbon tax” did not mention an important reason political leaders might balk at levying higher carbon taxes. Carbon taxes, including those on gasoline, are highly regressive, affecting lower-income people much more than higher-income. For example, if gas taxes were doubled in the Washington area, most well-paid professionals would have enough capital (or access to credit) to easily switch to a hybrid vehicle. Over the life of the vehicle, their savings in fuel and taxes would probably cancel out any initial expense. In contrast, for lack of capital, a person driving a used gas guzzler to two low-paying jobs would be stuck driving the gas guzzler along with higher fuel costs.
“Hiking fuel taxes would make it even harder for the growing share of the U.S. population working low-paying jobs to make ends meet and raise families. Carbon taxes would be more equitable and politically feasible if governments also made sure that workers struggling to pay their bills could afford the switch to clean-energy technology.”
The Swiss Bank-Bailout Rebellion – Bank rescues are poking a political bear last awakened in 2008 – WSJ
“…Take these episodes as a warning. The turmoil in last month’s banking mini-panic started in financial markets, but it’s unlikely to stay there if more financial failures come to light. What begins as an economic fiasco could become a political uproar as it did after the 2008 bailouts—with similarly unpredictable results.”
“In a 2021 paper ‘The People’s Ledger: How to Democratize Money and Finance the Economy’, she proposed ‘a comprehensive reform of the structure and systemic function of the Fed’s balance sheet as the basis for redesigning the core architecture of modern finance. In essence, it offers a blueprint for democratizing both access to money and control over financial flows in the nation’s economy.’ She called for the Federal Reserve to offer consumer bank accounts and become ‘the ultimate public platform for generating, modulating, and allocating financial resources in a modern economy’ in a move she has called a radical reform.”
Related CCSE paper:
“Could new tools allowing the Fed to pump money through ‘the people’ make U.S. monetary policy more equitable and effective?”
Income and rent trends during the pandemic reversed modest affordability gains in recent years.
“The latest trends highlight the widening inequality among renters. Indeed, residual incomes for the lowest-income renter households have decreased 35 percent since 2001 as their incomes dropped and rents rose. Higher-income households have benefited from rising incomes that outpaced rent growth, resulting in a 2 percent increase in residual incomes over the same period.”
“The claim that Americans don’t want to work is not true. Americans from their mid-20s to mid-50s are now working at levels not seen in more than 20 years.”
“Most prime-age Americans work, and most of those who don’t work say they’re not looking for a job due to caregiving, health.”
“…But I also know that the day will come when the darkness over our country will dissipate. When black will be called black and white will be called white; when at the official level it will be recognized that two times two is still four; when a war will be called a war, and a usurper a usurper; and when those who kindled and unleashed this war, rather than those who tried to stop it, will be recognized as criminals.
“This day will come as inevitably as spring follows even the coldest winter.”
Upstairs, downstairs in the U.S. medical industrial complex:
“Most uninsured people are in low-income families and have at least one worker in the family. Reflecting the more limited availability of public coverage in some states, adults are more likely to be uninsured than children…
“Despite policy efforts to improve the affordability of coverage, many uninsured people cite the high cost of insurance as the main reason they lack coverage. In 2021, 64% of uninsured adults said that they were uninsured because the cost of coverage was too high. Many people do not have access to coverage through a job, and some people, particularly poor adults in states that did not expand Medicaid, remain ineligible for financial assistance for coverage.”
Market concentration is a major factor.
Cross with Red Sky – Georgia O’Keeffe
Sunday, April 9, 2023
“What the Voortrekkers failed to realize in their moment of victory was that they had offered the covenant to God, not He to them.” ― James Michener, The Covenant
What’s happening in the most racist country on the planet?:
Skipping the opinions, compare the information presented in the following articles to accounts in the Washington Post or NY Times:
“Sex, insurance status, and income all factors in access to advanced critical care therapy”
Blast from the past:
“Obama Signs Bipartisan Bill To Speed Miracle Cures to Market. But Who Will Have Access to Expensive New Technology? Who Won’t?”
US still has foot on medical tech gas pedal leaving millions without access.
“There’s a basic conflict of interest at the heart of American health care. Obamacare caused health care payers to combine with health care providers. We need a health care Glass-Steagall. f interest at the heart of American health care. Obamacare caused health care payers to combine with health care providers. We need a health care Glass-Steagall.”
Interesting article. But it’s not fair to blame the ACA/O’Care, Provider consolidation was already happening and would have continued. The ACA extended coverage at the edges of the health care economic juggernaut. It was intended to make premiums affordable for consumers, but didn’t cut the growth of overall medical costs (a major omission). That needs to be done and anti-trust measures are an important component.
“The fifteen articles in this double issue explore the evolution of the suburbs, growing suburban inequality, and how inequality develops within and between suburban communities.”
‘We may be looking at the end of capitalism’: One of the world’s oldest and largest investment banks warns ‘Greedflation’ has gone too far – Fortune
IRS reveals how it’s spending $80 billion in extra funding — wealthy taxpayers and large corporations can expect more scrutiny – msn
Letter to Washington Post (2019):
If crimes against children can’t be stopped from within, the Vatican and its subsidiaries need purging from the outside
Land of the penny wise. Home of the brain dead.
Writers’ Guild to Vote on Hollywood Strike – Labor Protests Pa’s Largest Coal Plant Closing – BBC Journalists Move Closer to Strike – Payday Report
“The paper highlighted striking differences between the wealthiest households and those at the other end of the spectrum.
“The wealthiest invested ‘a substantially higher share of their portfolio’ in private businesses starting from very young ages, the paper noted. Their share of risky assets (the sum of private and public equity) in their investment portfolio stayed above 80% across all ages and increased up to 89% by age 50.
“Equity income was the main source – 83% – of lifetime income for the top 0.1% in the 50-54 age group. In contrast, households in the bottom 90% of the distribution earned 80% to 90% of their lifetime income from labor services. ‘A very small fraction of people became rich purely through labor earnings,’ Salgado said. Added Hubmer: ‘Labor earnings are not going to make you significantly rich; it’s just now how it works.'”
Two factors are intertwined: Those who start out with inherited money can take more investment risk.
“Lessons learned and next steps for public-private vaccines.”
Or, more simply, taxpayers and citizens getting the shaft…
“Most lower-income Americans, 61%, say their financial situation has deteriorated over the past year, while less than half that number, 26%, indicate it has improved. Middle- and upper-income Americans are also more likely to say they are worse off than better off, but by much narrower margins than seen among the lower-income group.”
Prices are rising faster than wages for most.
Sunday, April 2, 2023
“The model shows that, in 2019, under a payroll-tax financed system, employment of full-time workers without a college degree (ages 25 to 64) would have been nearly 500,000 greater, average annual earnings for those workers would have been about $1,700 higher, and the gap between the average earnings of college-educated workers (with a bachelor’s degree or higher) and workers without a college degree would have been 11% smaller…
“The paper stops short of recommending switching to payroll tax financing. However, it notes that one step in that direction would be to modify the current tax system, which excludes employer contributions to health insurance from taxable income, thus effectively subsidizing private insurance by about $300 billion a year. Replacing this tax exclusion with a tax credit that phases out as income rises would move the system partway toward the benefits of payroll tax financing.“
Should Congress End the Tax Exclusion for Employer‐​Sponsored Health Insurance? – Cato
Robin Hood Tax Reform: Modest Changes in Health,
Retirement Tax Breaks Could Produce Major Gains in US Health Access, Financial
– at Little or No Added Government Cost – CCSE
See proposal for progressive taxation of employee health benefits at end of the above article.
Also see comments below on where Congress might find $$ to plug Social Security’s financing gap.
“The Trustees project that Social Security’s annual cost will increase from 5.2 percent of GDP in 2023 to 6.3 percent in 2076. It then declines to 6.0 percent by 2097. The 75-year actuarial deficit equals 1.3 percent of GDP through 2097, increased from 1.2 percent last year.”
Providing an order of magnitude of the annual cost of filling the funding gap, 1.3% of this year’s GDP of about $26 trillion equals $388 billion.
(Also see: Analysis of the 2023 Social Security Trustees’ Report – CRFB.)
So where to find $388 billion (or so) in the budget? Here’s one place: reducing tax breaks for employer retirement savings and pension plans and health plans. Most of these tax breaks, which exceed SS’s annual shortfall, go to higher income people:
Here’s another way to balance the SS’s books: raising taxes on higher-income people. See:
Growing inequality has shrunk Social Security’s tax base. Revitalizing it could restore solvency without cutting benefits. – CCSE
“Taxpayers at the top of the heap would bear most of the burden, but none would end up driving a smaller car or living in a smaller house as a result:
“Taxing invested capital: Beginning in 2019, Congress could apply an additional 6.2 percent tax on investment income (which mostly accrues to the wealthiest), gradually extending it from top earners to the middle class. Responding to a request from Rep. Peter DeFazio, D-Ore., and Sen. Bernie Sanders, I-Vt., SSA actuaries estimate this policy would close about one third of Social Security’s long-run shortfall.
“Taxing high-earner income: Beginning in 2019, Congress could apply the payroll tax to earnings above $400,000, leaving a “donut hole” that would gradually disappear as the current indexed tax cap rises, and provide some benefit credit for newly taxed earnings. This change could close up to two thirds of the program’s long-range shortfall.”
World average life expectancy (years at birth)
“…what is ignored is the huge disparity in life expectancy between lower income people retiring and very dependent on state pensions and better-off people with additional company pensions.”
“There’s a range of criteria for Americans to get social security and disability benefits, but some are denied because of an outdated index of jobs.”
SSI Needs Fixing: Chronic neglect is choking off
to Social Security’s critical backstop – and pushing more
blind, disabled and old people into poverty. –
During yesterday’s Senate Health, Education, Labor, and Pensions Committee hearing on the unionization drive at Starbucks, Senator Chris Murphy of Connecticut advanced the argument we’ve been making since our founding about the importance of conservative support for a healthy labor movement. In his opening remarks, Sen. Murphy said:
“Collective bargaining is a fundamentally conservative idea. We’ve lost track of that. It’s rooted in free-market principles, the idea that workers should be able to freely join together to negotiate in a free, open negotiation with their employer.”
He went on to highlight the history of conservative support for labor, noting that “previous Republican candidates … worked hard to win the union vote, to speak at union conventions,” while the partisan divide on the issue “is, in fact, new.”
“In a well-functioning capitalist system, participants meet as equals able to advance their interests through mutually beneficial relationships. Organized labor has traditionally been the mechanism that gives workers an institution of solidarity, power in the market, and representation in the workplace. Strong worker representation can make America stronger.”
Price caps, spending floors, and penalties, oh my! The latest in state hospital policy – Lown Institute
Each brief explores expenditure and revenue data; political control of the state government; the most recent state budget; trends in personal income, poverty, unemployment, and industry composition; and data on population, race, age, and education.
Witness the elevated risk police, teachers and students face every day due to lack of action by US federal and state policymakers.
“According to NSSF’s 2022 Firearm and Ammunition Industry Economic Impact Report, the industry’s total economic influence ballooned from $19.1 billion in 2008 to $70.52 billion in 2021, a 269% jump. Year-over-year, the industry’s economic impact rose 11.1% (from $63.5 billion in 2020).”
To put this amount in perspective, $4 trillion is about 15% of US GDP or roughly 20% of funds needed to plug Social Security’s 75-year funding deficit ($267 billion per year in current dollars) if benefits are not cut.
Here’s an area where Congress can save money and head off billions in future debt:
“Every other drug maker in America is going to do this exact same thing.”
A “wealth extraction machine” private-sector purchasers cannot control…A natural place for Congress cut costs, but Big Pharma’s influence over Congress is likely to blunt action. For example, see:
This Pharma- sponsored panel discussion on drug affordability (today) is typical fare for Congressional staff (often served up with free coffee and food). Industry aligned experts are not likely to be talking about policies that interfere with wealth extraction, whether from individuals, health plans, or the government programs.
OK, now that the blame is spread around, what are we going to do to stabilize national finances?
This NY Post editorial is, of course, business-friendly “woke” diarrhea from the right. Neither political party prioritizes interests of workers struggling at the bottom. At least the Ds pay lip service. Rs might win over voters fed up with the cultural swill dished out by the left if their party would support higher wages, paid sick days, and workers’ right to organize and bargain.
Sunday – Edward Hopper (1926)
“White, working-class, middle-aged Americans are one of the only demographics in the world that has seen its life expectancy fall. But Mike wasn’t just a statistic.”
“Policymakers would be wise to try to lock in the recent gains by lifting the federal minimum wage.”
9 million workers (6%) are paid less than $12 per hour.
21 million (15%) < $15 per hour.
41 million (29%) < $18 per hour.
51 million (36%) < $20 per hour.
72 million (51%) < $25 per hour.
Among the issues facing national policymakers setting a minimum wage is that the buying power of a particular wage level varies a great deal between states and regions. Here’s an approach to dealing with that:
“Heine Brothers union is the second largest coffee shop workers’ union operating under a master agreement covering multiple locations.”
Nonprofit hospitals’ investment losses shouldn’t be subsidized by taxpayers: health economists – Becker’s Hospital Review
“Faced with the stark choice between curbing inflation and saving the banks, venerable commentators appeal to central banks to do both: to continue hiking interest rates while continuing with the post-2008 socialism-for-bankers policy, which, other things being equal, is the only way to stop the banks from falling like dominoes. Only this strategy – tightening the monetary noose around society’s neck while lavishing bailouts on the banking system – can simultaneously serve the interests of creditors and banks. It is also a surefire way to condemn most people to unnecessary suffering (from avoidably high prices and preventable unemployment) while sowing the seeds of the next banking conflagration.”
The column answers its own question: The Fed and Treasury are being ambiguous about the risk they might cover, probably out of necessity. They need to project enough risk to control moral hazard and enough assurance to prevent bank runs. And, hell no, your $$ are not fully insured in a bank, even a very large one. For one thing, if the gov guarantees total “safety,” inflation might chew up your preserved savings.
Given the historical record, shouldn’t elected officials be assumed to be thieves unless proven otherwise? Standard of proof: propensity of evidence.
“Offenders to clean up damage within 48 hours, wearing jumpsuits or hi-viz jackets, in government bid to claim crime as priority”
Time to invest in brightly colored jump suits? They could become a fad.
Massé Mansour, Maternal Longing, 2018
Not Just Nuclear: Families Are Elders Long Buried and Generations Yet Unborn – Edwidge Danticat/Plough
Sunday, March 26, 2023
Irvo Otieno, who died while restrained in a hospital, was ‘brilliant and creative and bright,’ his mother says – CNN
“At what point, do we consider mental illness a crime?” Ochieng said, adding later, that for families dealing with mental illness in America, “you should not wake up and feel sick and consider whether you should call for help.”
Families taking care of people with serious mental illnesses should ask for officers with CIT – crisis intervention training – if they need help restraining someone during a breakdown (if it’s available where they live). Otherwise, in many places, there’s a risk their family member may end up dead.
“55 Million Children Would Benefit; Millions Would Be Lifted Out of Poverty…
“The expansion would benefit 55 million children, and, unlike current law, no children would face a reduced credit because their families earn too little.”
“Overall, Biden’s tax provisions would reduce after-tax
nearly two-thirds of households. But for those making less than $410,000, nearly
that decline would be due to their share of the corporate tax
“By contrast, individual income, payroll, and estate taxes alone would raise taxes on only about 2 percent of households. And nearly all of them will make $410,000 or more. Nearly 40 percent of the lowest-income households and almost one-quarter of middle-income households would get a tax cut.”
Consistent with past Biden proposals. DOA in this
Depending on the Supreme Court’s interpretation of an amendment designed to protect the interests of slaveholders, a national tax on property or wealth may, or may not, be ruled unconstitutional, or end up being impossible to implement.
Many states have wealth taxes:
And don’t forget state and local property taxes, which are also types of wealth taxes.
At first blush, these amounts seem sufficient to pay their bills without getting free student loans. (See House hearing testimony below.)
No, the VA isn’t going to reduce your disability payments if you make too much money – Task & Purpose
How falling life expectancy, Generation X and the backlash in France have pushed the UK government to rethink pension policy – Sky News
“If life expectancy was rising, Mr Cridland reasoned, it made sense for the state pension age to rise with it.
“However, since the pandemic, life expectancy in the UK has actually gone backwards…For women, the pandemic clipped a year off life expectancy on average and for men, 1.3 years….
“This, then, removes one of the major justifications for bringing forward the rise in the state pension age.”
Determinants of inequalities in life expectancy: an international comparative study of eight risk factors – Lancet
As in the US, Europeans with low levels of education and income live shorter lives.
Here’s What To Know About France’s Controversial Pension Reforms As Macron Survives No-Confidence Vote – Forbes
What just happened at BP? Depends on what you read:
The value American capitalism places on workers’ lives: BP fined $156,250 for the deaths of two refinery operators in Ohio explosion – WSWS
Testimony: House Ed. & Workforce subcommittee hearing: “Breaking the System: Examining the Implications of Biden’s Student Loan Policies for Students and Taxpayers” – Marc Goldwein/CRFB
“…the Administration’s approach – especially the ongoing student debt pause,
retroactive debt cancellation, and Income-Driven Repayment (IDR) reforms – is of
concern. At best, these changes serve as a band-aid and ignore very real structural
challenges. Likely, they will make the underlying situation worse. They are
inflation surging and federal debt approaching record levels.
In my testimony, I will touch on five main points:
“1. Recent student debt actions and proposals are costly, adding nearly $1
the deficit over a decade.
2. These student debt actions are, for the most part, economically unjustified.
3. The student debt pause and cancellation worsen inflation and recession risk.
4. The policies are poorly targeted, paying windfalls to high earners.
5. The policies would lead to more borrowing, higher tuition, more low-quality programs, and a more arbitrary higher education financing system.”
Americans without health insurance or $1 million to spare can stop reading here:
“Federal health official announces plans to break up monopoly power of group that has run system for decades.”
Unos, dos, tres…? How will the gov replace the monopoly? Competitive bidding? A full bore ‘wet’ market?
Wyden Statement at Finance Committee Hearing on the Urgent Need to Address Failures in the Organ Transplant System
“An optimal allocation system for scarce resources should simultaneously ensure maximal utility, but also equity.
“While the model for end-stage liver disease is currently the standard for this model, many adjustments were implemented in most countries. A future globally applicable strategy should combine donor and recipient factors predicting probability of death on the waiting list, post-transplant survival and morbidity, and perhaps costs.”
Blast from the past:
“Obama Signs Bipartisan Bill To Speed Miracle Cures to Market. But Who Will Have Access to Expensive New Technology? Who Won’t?” – CCSE
No insurance = no liver:
“The number of lifesaving liver transplants has plummeted in some Southern and Midwestern states that struggle with higher death rates from liver disease.”
“Landing a spot on the transplant waiting list has been difficult for some time. The proportion of people who make it can vary wildly by state. In 2021, Massachusetts had 11 people per 100,000 residents on its waitlist — the second-highest in the country; North Carolina had 1 per 100,000, among the lowest nationwide. Kansas had about 3 per 100,000.
“To get on the list, patients need insurance or other means to pay for their treatment. They must show up for regular appointments, which often require access to a car and sometimes a friend or family member to drive. And they have to be able to pay for regular appointments before transplant surgery, weeks of recovery at the hospital afterward and thousands of dollars a month in anti-rejection medication for the rest of their lives.
“Residents of the states harmed by the new rules are at a disadvantage for each of these.
“Not only do they generally have lower incomes, they also have lower rates of insured people than those that benefited. Three of these seven states chose not to expand Medicaid, the federal health program for the poor, under the 2010 Affordable Care Act. A fourth, South Dakota, only expanded it in late 2022, and it doesn’t go into effect until this summer. The state has the second highest rate of death from liver disease in the nation.
“Lack of insurance leaves many people with no way to pay for a liver transplant, which can cost just shy of a million dollars.
“‘Everyone has to have insurance,” said J. Steve Bynon Jr., chief of abdominal transplantation at Memorial Hermann in Houston, when asked about its policy. “There are no freebies.’…
“‘Being poor,’ said Donna Cryer, CEO of the patient advocacy group Global Liver Institute, ‘penalizes people.'”
Someone should ask presidential candidates from the 11states that haven’t expanded Medicaid why they left billions of federal matching funds on the table that would provide life-saving coverage to low-income residents.
House Republicans’ Proposals Could Take Food Away From Millions of Low-Income Individuals and Families – CBPP
Well, most everybody…
“As Congress possibly revisits an expansion of the Child Tax Credit, it’s likely that any new version won’t look like its pandemic predecessor in order to garner bipartisan support. Some Republicans have expressed concerns that the CTC would be inflationary and that one version without work requirements would disincentivize work.
“One potential compromise would be to adopt provisions from the Republican-led Family Security Act 2.0, introduced by Sens. Mitt Romney (R-UT), Steve Daines (R-MT), and Richard Burr (R-NC). The proposal calls to increase the maximum value of the CTC to $4,200 per child under the age of 6 and $3,000 for those between 6 and 17.
“Unlike the enhanced CTC from the American Rescue Act, Romney’s proposal requires families to earn a minimum of $10,000 to receive the full credit. Part of the funding would also come from financial cuts to the Earned Income Tax Credit and the elimination of the Child and Dependent Care Tax Credit, which would impact low- to moderate-income households the most, according to the Center of Budget and Policy Priorities.”
The Effects of Work
the Employment and Income of TANF Participants – Justin
“Experiments conducted in the mid-1990s show that a combination of work requirements
and work supports substantially increased the employment of cash assistance recipients
to Families with Dependent Children, the predecessor program to Temporary Assistance
Families (TANF) while having little effect on recipients’ average income. There is little evidence on the effects of TANF’s work requirements, though, and recent research on other means-tested programs demonstrates that their work requirements have had little effect on employment and have substantially reduced the number of people receiving the benefits they provide.”
De-transitioned teen sues Kaiser Permanente for performing double mastectomy on her at 13: ‘Intentional fraud’ – Fox
Can’t deny she has big brass ones.
“You might expect two or three years of life differential … but 10 or 15 years … it’s an immense difference”
“While researchers have long known that life expectancy increases with income, Cutler and others were surprised to find that trend never plateaued…
“Cutler and Chetty then examined how life expectancy changed over time, and found that while life expectancy has increased for the wealthiest, it has edged up only slightly for low-income Americans…
“‘The increase has been approximately three years at the high end, versus zero for the lowest incomes,’ Cutler said. ‘This is important, because it has major implications for Social Security policy. People say, “Americans are living longer, so we ought to delay the age of retirement,” but … it’s a little bit unfair to say to low-income people that they’re going to get Social Security and Medicare for fewer years because investment bankers are living longer.’
“When they laid the data over maps of the United States, Cutler and Chetty again found unexpected results, with low life expectancy concentrated not in the Deep South, but across the Midwest Rust Belt.
“‘What emerges strongly is that there is a belt from West Virginia, Kentucky, and down through parts of southern Ohio, through Oklahoma and into Texas — it’s not a story of the Deep South,’ Cutler said. ‘The variability in where high-income people live longest is not as large and is much less geographically concentrated. You don’t see this same type of belt — it’s scattered all over.'”
Implication: Manchin (WVA) & McConnell (KY) alert): The pain resulting from raising the standard Social Security retirement age would fall most heavily on particular low-income states and regions.
“Life expectancy in Britain, as in almost all other rich countries, had been rising for nearly two centuries…
“Two features make this figure even more worrying. Death comes mostly when people are old. But the slowdown in life expectancy has occurred across all age groups. Mortality rates have stalled for infants, and risen among young adults and the middle-aged. Death rates for 30- to 49-year-olds have steadily increased in Britain since around 2012, in sharp contrast with neighbouring countries.
“Although the deaths have been spread across generations, they have not been spread across the income spectrum. Life expectancy has fallen among the poorest in society but risen for the richest. A poor English girl could on average expect to live 6.8 years less than a rich girl in 2011, but 7.7 less in 2017. For boys, the gap increased from 9.1 to 9.5 years over the same period.”
A Black family fights to get their kids back from Tennessee Department of Children’s Services – TN Lookout
“One month after the Tennessee Highway Patrol pulled the couple over, their five young children remain in state custody.”
Need a break taking care of the kids? Try driving a car with “a dark tint” slowly from Chattanooga to Knoxville with the kids in the back seat and a joint on the dashboard. The Volunteer State can help.
“Advocates say the Baker Act, designed as a measure of last resort, is not used that way. The result: Kindergarteners can be forcibly committed to psych centers for exams.”
Sunday, March 19, 2023
“Income and wealth inequality has grown in Arizona, while the state’s legislature and courts have recently taken several actions that shift even more of the state’s income to these wealthy interests. Policymakers and the courts ignored public will after Arizona voters approved increasing taxes on millionaires to fund public schools. Instead, the legislature cut income taxes, particularly for high-income people, and restricted voters’ ability to ever again tax wealthy people via the ballot box.”
Historic highs in employment for people with disabilities: An unexpected pandemic outcome – Journal of Spinal Cord Medicine
“While much attention focused on the risks of COVID-19 infection and the social, emotional, and psychological consequences of lockdowns and mandatory isolation, in the U.S. many people with disabilities realized newfound opportunities as employers faced widespread labor shortages.”
“Key bad guys in the Silicon Valley Bank saga are at the Federal Reserve. It’s time to end the era of central bank supremacy and fire the Fed as our most important bank regulator.”
But a thousand economists with PhDs can’t be wrong!…Where’s Wright Patman when you need him?
Treasury Secretary Yellen says not all uninsured deposits will be protected in future bank failures – CNBC
“Treasury Secretary Janet Yellen told senators that government refunds of uninsured deposits will not be extended to every bank that fails, only those that pose systemic risk to the financial system.”
In the wake of a statement like this, one might expect capital to move from smaller to larger banks.
Interesting history and analysis. Maybe the gov could design a way to randomly bail out enough failed banks to stabilize markets while letting enough flounder to reduce moral hazard? 🙂
To repeat, seems like what we have is socialism for the capitalists. And creative destruction for everyone else.
Rate of women dying in childbirth surged by 40%. What’s to blame for these preventable deaths? – USA Today
Pregnancy-Related Deaths: Data from Maternal Mortality Review Committees in 36 US States, 2017-2019 – CDC
“Over 80% of pregnancy-related deaths were determined to be preventable.”
Scroll down for report on how states are expanding Medicaid postpartum coverage.
Total National Work = Paid Work + Unpaid Work (especially raising the next generation).
Source: underpaid economist, 2023
Congress’ failure to reup expanded child tax credit displays longtime favoritism toward higher income – CCSE
“If lawmakers decide to add a work mandate, it could be softened to require only part-time paid employment for low-income single parents who have the hardest time earning a living wage since they have no partner. Alternatively, low-income parents facing work requirements could be provided with adequate subsidies for childcare, which incidentally would be far more costly for taxpayers than the expanded 2021 credit amounts.
“Sen. Romney and other leaders realize that work does not have to be paid to have great value to a society. Raising children is hard work – and perhaps the most important contribution that parents make to the country’s health and wellbeing. Having enough time to raise their children should not disqualify a mother or father from getting government assistance that better-off parents receive.”
“This interactive map and chart summarizes proposed and approved legislation since 2018, Medicaid waivers and state plan amendments, financial estimates, and other initiatives designed to extend coverage during the postpartum period.
“Under the Consolidated Appropriations Act of 2023, the 12-month extended Medicaid postpartum coverage option has been made permanent. This option was created by the American Rescue Plan Act of 2021, and previously expired in 2027. Now once states take up the option to extend the postpartum period from 60 days to 12 months, they will continue to receive federal matching funds.”
“Ninety-four percent of workers are paid less than $160,200 per year, so they pay the 6.2 percent social security payroll tax on all of the paychecks they receive in 2023. But workers who earn over $160,200 pay no tax on their earnings above this level. For a millionaire, only about 1 percent or less of their total earnings go to supporting Social Security. Despite earning much more than the average worker, a millionaire’s effective tax rate is far lower than the average worker’s. As a result, the burden of supporting Social Security falls most heavily on working-class and middle-class people.”
‘That’s how capitalism works,’ Biden says of SVB, Signature Bank investors who lost money in failed banks – CNBC
Really? Another soft landing for ‘risk takers’ operating the US financial casino. Meanwhile, the Fed amps up risk people at the bottom will lose jobs, homes, means to pay bills and raise families…
Socialism for capitalists. Capitalism for everyone else.
With demands for a bank bailout, Silicon Valley shows its ‘small government’ mantra was just a pose – msn/LA Times
Billionaires, Buybacks & Medicare: How Biden’s 2024 Budget Outlines Trillions Of Dollars In Proposed New Taxes – Forbes
“The budget is not expected to make its way through Congress, according to Senate Republican leader Mitch McConnell. McConnell noted that because Republicans hold a House majority, the budget ‘will not see the light of day,’ according to Reuters.”
For the record, “equity” on this web site denotes fair treatment, ownership of property, freedom from bias or discrimination, and inclusion of everyone in the yield of the economy.
“Class-action suit, one of four nationwide, filed in Richmond in January.”
“New legislation would require the New Mexico Corrections Department to help schedule parole hearings for prisoners given life sentences as children. But the agency wasn’t aware of at least 21 ‘juvenile lifers’ in its custody.”
“…New Mexico, despite having banned the death penalty for children three decades before the Supreme Court did, had not yet addressed extreme juvenile sentencing. (Twenty-six other states and Washington, D.C., have done so.)”
New Study Finds 1% Recidivism Rate Among Released Philly Juvenile Lifers – Montclair State University
Va. prison reform advocates fear approved solitary confinement bill won’t lead to meaningful change – Daily Press
Sunday, March 12, 2023
Congress, this isn’t Ayn Rand’s railroad.
Black Americans view capitalism more negatively than positively but express hope in Black businesses – PEW
“Isms” can imply a sense of worship.
Wolf’s analysis still holds up. If clicking this link leads to a paywall, try goggling the title of the article.
“Based on past research, here are four recommendations that could help families build wealth.
“Help families build a rainy-day fund…
“Promote early-in-life investments…
“Examine college costs…
“Support all forms of housing.
“Increase the supply of affordable rental housing while promoting paths to sustainable homeownership. Homeownership should be treated as a “capstone” financial event, not a first step; building a diversified balance sheet—with low levels of consumer debts and high levels of liquid savings—should precede and help sustain homeownership.”
Most low-income households have zero net worth or owe more than they own.
As high-income Northern Virginia leaders begin contemplating making room for what’s left of the middle class, don’t forget low-wage people including those who work at restaurants, supermarkets, nursing homes, warehouses and childcare centers, and as construction workers, drivers, maids, and grass cutters. Judged by their lack of action on providing affordable housing for workers like these, county and city officials across the Potomac from the US capital demonstrate this attitude: “We want you work here, but don’t think about living here.” (Contact Fairfax County or Falls Church and ask what kind of housing assistance or advice they have for full-time workers making $35,000 or less a year.)
Idaho Childcare Workers Strike Statewide – As Democrats Dither, Virginia Bus Drivers Strike Remains Deadlocked – Payday Report
Will Growing Inequality Make Social Security & Long Term Care Financing Fixes Harder?
2020 Society of Actuaries Living to 100 Symposium
Karl Polzer/Center on Capital & Social Equity
This essay explores two basic questions. The first is the extent to which capitalism, which emphasizes the rights of individuals to pursue their interests, and socialism, which focuses on group needs, tend to function in tandem as much as they do in conflict. As many agree that the political pendulum in recent decades has swung in favor of capitalism, the paper also discusses a range of public policies that can be used to reduce its imbalances and risks, with particular emphasis on moderating capitalism’s tendency toward systemic inequality. Policy options range from programs to help the poorest, social insurance, higher taxation of income and wealth, and re-channeling to all citizens a portion of profits from private exploitation of public assets and business activities enabled by public laws and infrastructure.
Including all workers in our retirement savings system requires 2 things: a universal tax credit and a secure place to invest it.
Congress should be working on both.
Almost half of Americans have no net assets and little or no retirement savings. Many have no money to save, and if they did, and no retirement account to put it in. Meanwhile, Americans at the top of the economic heap get generous tax breaks for retirement savings – and capital gains from these assets widen the wealth gap.
Establishing a national retirement savings system and reshaping tax policy to provide every American worker a modest tax credit to put in a retirement account could improve economic security, help people prepare for old age, and facilitate saving for emergency expenses. This type of inclusive capitalism would make every American worker an owner of assets generating income. Such a system could be funded via a relatively small sacrifice to high earners without increased federal spending.
Include Everyone in the Retirement Savings System
Related initiatives and proposals:
- 40% of Older Americans Rely Solely on Social Security for Retirement Income – ADVISOR Magazine
- Plan Sponsor Groups Oppose Financial Literacy Proposal
- DOL Exemption Paves Way for Auto Portability
- State-run Auto-IRAs Will Help Close the Coverage Gap
- Half of Americans have no retirement savings — here’s how Congress can look out for them
- Why Not a Minimum Pension?
- Capitalize Workers!
- New York Envisions a State-run Retirement Plan for Private Workers
- If you want more equality, you have to embrace the risk premium
- A preview of the U.S. without pensions – older people work longer
- Why it’s so hard for Americans to save
- OregonSaves web site
- Facing employer jitters, ERISA lawsuits, Oregon & other states push toward universal retirement savings systems.
- Treasury ending Obama Administration’s myRA savings program.
- Bipartisan Policy Center commission suggests developing a near-universal retirement savings system along with raising Social Security benefits for lower-income and raising Social Security taxes to ensure program solvency.
- Universal system would significantly raise Americans’ retirement readiness: EBRI
- Great Britain is ramping up a new universal pension system called National Employment Savings Trust or NEST. Features include automatic enrollment, mandated contributions, and a choice of diversified investment funds, including those based on a person’s age.
- Harvard study finds tax subsidies less effective policy option in boosting retirement savings than automatic enrollment or putting money in low-income savers’ accounts.
- Appalachian Savings Project helped child-care workers with low and variable earnings save 5.5% of income on average. Program evaluation.
- Urban Institute’s “Super Simple” savings proposal. Sharing many features of a system now being implemented in Great Britain, this proposal would establish a universal retirement savings system with contributions from employers, workers, and the government.
- Oklahoma experiment shows power of universal children’s savings. Early formal evaluation of the Oklahoma program.
- Great Britain’s experience with “Child Trust Funds.”
- “Automatic IRAs” available to workers and the self-employed. There is growing support for this type of approach.
- State Retirement Savings Resource Center – AARP
- Illinois to set to build an auto-IRA system for companies with at least 25 employees by 2017. Other states considering similar approaches.
- Click here for a summary of state activity as of July 2016.
- Three ways states are organizing retirement savings programs for private-sector workers.
- Aspen Institute issue brief explores how state retirement savings programs can utilize the federal saver’s tax credit.
- Reps. Crowley and Ellison propose legislation to start savings accounts for all U.S. children.
- Research shows value of “hands on” financial education.
If you know of other proposals along these lines or would like to comment, please go the “Contact Us” page on this site and send us an email.
CCSE Proposes Universal Starter IRAs
Australia as a Model?
Australia’s “superannuation” system requires employers to contribute a percentage of employees’ income into diversified retirement funds managed by trustees. By 1999, 97 percent of Australia’s full-time employees and 76 percent of part-time employees were covered by the superannuation system. Over the years, Australia has increased required contributions and continued to refine the system, which has been credited with raising levels of capital accumulation and improving retirement security.
According to a July 2016 report, the Australian superannuation system continues to broaden coverage, but may be contributing to growing wealth inequality in its current form.
Research shows dramatic growth of upper middle class, major shift in economic resources
An Urban Institute report published in June 2016 found that since 1979 the percentage of wealthy and upper-middle-class Americans have grown dramatically while the middle- and lower-middle class has become smaller. The study found that “the proportion of the population in the upper middle class went from under 13 percent in 1979 to over 29 percent in 2014.”
The report documents a major shift in the distribution of economic resources. “In 1979, the bottom three income groups controlled 70 percent of all incomes, and the upper middle class and rich controlled 30 percent. By 2014, this distribution shifted to 37 percent for the bottom three groups and 63 percent for the upper middle class and rich groups. The middle class alone saw its share of income decline from 46 percent in 1979 to 26 percent in 2014.”
The study divides the population into five classes. The poor and the near-poor had annual incomes from $0 to $29,999; the lower middle class, from $30,000 to $49,999; the middle class, from $50,000 to $99,999; the upper middle class, from $100,000 to $349,999; and the rich, $350,000 and up.
Pew study shows long-term decline in size of middle class, rise in number of poor
After more than four decades of serving as the nation’s economic majority, the American middle class is now matched in number by those in the economic tiers above and below it, according to a study released in December. In early 2015, 120.8 million adults were in middle-income households, compared with 121.3 million in lower- and upper-income households combined, according to the Pew Research Center analysis of government data. Highlights include the following:
“While the share of U.S. adults living in both upper- and lower-income households rose alongside the declining share in the middle from 1971 to 2015, the share in the upper-income tier grew more.
“Over the same period, however, the nation’s aggregate household income has substantially shifted from middle-income to upper-income households, driven by the growing size of the upper-income tier and more rapid gains in income at the top. Fully 49% of U.S. aggregate income went to upper-income households in 2014, up from 29% in 1970. The share accruing to middle-income households was 43% in 2014, down substantially from 62% in 1970.
“And middle-income Americans have fallen further behind financially in the new century. In 2014, the median income of these households was 4% less than in 2000. Moreover, because of the housing market crisis and the Great Recession of 2007-09, their median wealth (assets minus debts) fell by 28% from 2001 to 2013.
“Meanwhile, the far edges of the income spectrum have shown the most growth. In 2015, 20% of American adults were in the lowest-income tier, up from 16% in 1971. On the opposite side, 9% are in the highest-income tier, more than double the 4% share in 1971. At the same time, the shares of adults in the lower-middle or upper-middle income tiers were nearly unchanged.
“These findings emerge from a new Pew Research Center analysis of data from the U.S. Census Bureau and the Federal Reserve Board of Governors. In this study, which examines the changing size, demographic composition and economic fortunes of the American middle class, ‘middle-income’ Americans are defined as adults whose annual household income is two-thirds to double the national median, about $42,000 to $126,000 annually in 2014 dollars for a household of three. Under this definition, the middle class made up 50% of the U.S. adult population in 2015, down from 61% in 1971.”
Impact of Raising the Minimum Wage
Increasing the minimum wage would have two principal effects on low-wage workers, according to an analysis by the Congressional Budget Office. Most of them would receive higher pay that would increase their family’s income, and some of those families would see their income rise above the federal poverty threshold. But some jobs for low-wage workers would probably be eliminated, the income of most workers who became jobless would fall substantially, and the share of low-wage workers who were employed would probably fall slightly.
- Five Facts about the Minimum Wage.
- Living Wage Calculator: The cost of meeting basic needs varies widely depending on where you live. MIT offers an on-line tool to help determine such costs and the living wage in each county and metropolitan area in the U.S. The site also has articles on related issues.
- State Minimum Wage Levels: Federal minimum wage law supersedes a state’s minimum wage law if the state level is lower. In those states where the state minimum wage is greater than the federal level, the state minimum wage prevails. Two states have a minimum wage set lower than the federal minimum wage. In 29 states and DC, the state minimum wage is higher than the federal minimum. Fourteen states have a minimum wage that is the same as the federal requirement. The remaining five states have not established a minimum wage.
The Economics of Inequality
Deaton Wins Nobel Prize
“The award comes at a time when there is rising academic and popular interest in the study of inequality. Several economists, including Anthony Atkinson of the London School of Economics (who was among the leading contenders for a Nobel prize this year) and Thomas Piketty of the Paris School of Economics (who is still a bit too young for one), have published widely-read volumes on the subject over the last two years. Mr Deaton published his, The Great Escape: Health, Wealth, and the Origins of Inequality, in 2013. In it, he argued that while most people in the world have gained in terms of health and well-being from GDP growth over the last few decades, there are many groups that have missed out, particularly if on measures beyond those most commonly examined.”
— The Economist
Milanovic Explores Dynamics of Income Inequality in Age of Globalization
In “Global Inequality: A New Approach for the Age of Globalization,” Branko Milanovic identifies five forces pushing up inequality in the United States:
1. The increasing share of national income that accrues to owners of capital.
2. Very high and rising concentration of incomes from capital.
3. People holding high-paying jobs also often have high capital income.
4. The tendency of high-income individuals to marry each other.
5. The rising political power of the rich.
Revisiting the work of American economist Simon Kuznets, Milanovic describes how global income economy waxes and wanes in “waves” driven by economic and political forces.
CBO report analyzes impact of government transfers, taxes on rising U.S. income inequality
“Between 1979 and 2013, all three measures of income examined in this report—market income, before-tax income, and after-tax income—became less equally distributed, based on a standard measure of inequality known as the Gini index. The increase in inequality in both before-tax and after-tax income over the 35-year period stemmed largely from a significant increase in inequality in market income, mostly because of substantial income growth at the top of the market income distribution.
“Because government transfers go predominantly to lower-income households, before-tax income (which is equal to market income plus government transfers) was more evenly distributed in each year than market income. And because higher-income households pay a larger share of federal taxes than lower-income households do, after-tax income was more evenly distributed than before-tax income.
“In each year between 1979 and 2013, government transfers reduced income inequality significantly more than the federal tax system did.“
View from the Paris School of Economics
- The return of a patrimonial (or wealth-based) society in the Old World (Europe, Japan).
- Inequality in America: Is the New World developing a new inequality model that is based upon extreme labor income inequality more than upon wealth inequality? Is it more merit-based, or can it become the worst of all worlds?
- In all nations with capitalist economies examined, the poorest half of the population owns virtually no assets or is in debt.
- In general, when the rate of growth of capital exceeds the rate of growth of the overall economy, wealth tends to concentrate. There is no natural market mechanism to counter this tendency; a nation’s degree of wealth concentration in large part is a function of public policy.
“The Spirit Level: Why Greater Equality Makes Societies Stronger”
In this book, Richard Wilkinson and Kate Pickett present data making the case that countries with greater income inequality tend to have more health and social problems. Furthermore, there is evidence that the negative effects of inequality impact not just the poor, but people at all social levels. The Equality Trust provides slides of some of the supporting data.
This short Wall Street Journal video describes competing views of the wealth inequality issue and how to address it.
Robert Solow, the Russell Sage Foundation’s Robert K. Merton Scholar and Institute Professor Emeritus at MIT, joined New York Times columnist Paul Krugman and moderator Janet Gornick (Director of the Luxembourg Income Study Center and a former RSF Visiting Scholar) at the Foundation for a conversation on Inequality: What Can Be Done?, a new book by British inequality scholar Anthony B. Atkinson. In the book, Atkinson argues that economic inequality has reached unacceptable levels in many countries and lays out an agenda for reducing inequality. His policy proposals span five areas: technology, employment, the sharing of capital, taxation, and social security.
Columbia’s Joseph Stiglitz takes on “The Great Divide”
Click on highlighted words to hear interview.
Hayek Revisited: Is Compromise Possible?
Is Friedrich Hayek’s classic defense of individual liberty and economic freedom, rooted in moral tradition, just as relevant today as during World War II? Click here to read a summary of Hayek’s “The Road to Serfdom,” published by Reader’s Digest as that war came to an end and a new international economic order was developed.
Today, how can monopoly power, whether wielded by corporations or government agencies, be checked while expanding economic opportunity and inclusion for all including the young, old, and those with few assets? If Hayek could have foreseen the ability of modern corporations to concentrate wealth and power, what policies would he recommend?
“…Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance — where, in short, we deal with genuinely insurable risks — the case for the state’s helping to organize a comprehensive system of social insurance is very strong. …
“(T)here is no incompatibility in principle between the state’s providing greater security in this way and the preservation of individual freedom.”
— F. Hayek, The Road to Serfdom, Chapter 9/Security and Freedom
Thanks to the Washington Examiner for publishing this op-ed, which provides a perspective typically ignored by Washington’s elite and both political parties. The article is based on this study:
Widening Gap in
Makes Raising Social
Security’s Retirement Age a
Particularly Bad Deal
for Low-Wage Earners –
Sens.Manchin (WVA), Cassidy (LA), & McConnell (KY) alert! You have a dog in this hunt. The pain resulting from raising the Social Security retirement age would fall most heavily on particular low-income states and regions.
March 3, 2023
“As the White House considers possible economic aid for East Palestine residents, the PPP model should be scrapped along with the wrecked Norfolk Southern railway cars. While it might be a boon for bankers administering the so-called loans, a PPP-style approach has proven prone to fraud and poor targeting and would miss altogether many people needing assistance.”
What can trillions in Covid stimulus spending teach us in preparing to head off a future financial disaster?
Thanks to the Richmond Times-Dispatch for running this column. It’s based on the longer piece below, which contains references:
Thanks to the Washington Post for running most of our letter responding to Sen. Hawley’s op-ed:
The unedited version below has something to say about both political parties:
Time to get their ducks in a row?
Dec. 15, 2022
Who’s More Likely To Find Gifts from Congress under the X-Mas Tree? Low-income Families – or Well-off Retirees and Corporate Shareholders?
“As time ticks down for 117th U.S. Congress to pass a year-end spending package, it will be interesting to see which strata of society our lame-duck lawmakers might gift the most if a deal can be reached. Will they deliver corporate tax breaks for those at the top? Good chance. Corporate tax breaks may be the prerequisite for anyone else getting anything.
“What about tax-code adjustments mostly benefiting well-off owners of retirement funds? Possible. As described as a case study below, long-prepared, bipartisan legislation – aka the Secure Act 2 or Earn ACT— is ready for final touches and attachment to a spending bill.
“What about something that could help people at the bottom…”
“In U.S. college sports — as in the nation’s broader blend of capitalism and socialism — political leverage can be advantageous. Winning football coaches now sit at the top of the public university food chain. They are emblems of both American economic opportunity and inequality…”
Thanks to the Washington Examiner for publishing this op-ed.
P.S. The draft, titled “Capitalizing on the public-private college football plantation,” includes links to the classic Marx Brothers film “Horsefeathers.”
Thanks to the Washington Post for publishing our letter.
P.S. (March 3, 2022) As the invasion escalates, it appears that Putin’s operational objectives may include: 1) ongoing military and political control of Belarus; 2) depopulation of non-Russian speaking Ukraine to facilitate larger annexation (a la Israel/Palestine); and 3) constricting the mobility and internal political threat of Russian oligarchs (a la Xi and Chinese capitalists).
Western State Hospital home page – December 2020
March 5 – This week, the Senate approved HB 388 with amended text. The House then passed the Senate version. Both votes were unanimous. The bill now goes to Virginia’s Governor. Unlike other states, if the Governor does not act on a bill, it becomes law without his signature in 30 days (the majority of bills are not signed).
Virginia becomes first state to ensure mental hospital patients, families have access to video visitation
April 11 – It’s a law! Gov. Youngkin signed HB 388, which was passed unanimously by both Virginia’s House and Senate. Effective July 1, 2022, the bill requires the director of each of the state’s 10 mental health hospitals to have a process in place to facilitate virtual visitation. It will help thousands of patients and their families and friends stay connected and could positively impact patient care and hospital transparency.
The Center on Capital & Social Equity worked with staff at Western State Hospital in Staunton to develop a pilot program when in-person visitation was suspended due to Covid 19. We then advocated to expand access to video visits to patients at all state hospitals. Special thanks to the staff at Western State, the Virginia chapter of the National Alliance on Mental Illness, and Del. Rod Willett and his staff who were instrumental in making this happen.
To our knowledge, Virginia is the first state to make sure that mental hospital patients and families have access to video visitation. Today, the world is slightly less unequal!
COVID Ended In-Person State Hospital Visits So Father Pushed For Virginia Law Allowing Zoom-Like Calls For Patients – Pete Earley
Thanks to Peter Earley for posting on our work to increase connectivity between people living in institutional settings and their families and the larger community.
Extending the Expanded Child Tax Credit:
total national work
= paid work + unpaid work, which
Also see last section of the paper below on raising the minimum wage: “Combining a minimum wage hike with the EITC, more aid to raise children” on p.11:
“Considerations on Raising the U.S. Minimum Wage To Help Workers and Families While Minimizing Negative Impacts”
Click on the article above for the answer to the puzzle below:
Nov. 4, 2021
“The $1.75-trillion Build Back Better (BBB) proposal’s promise to cap childcare expenses at 7% of income for families earning up to $300,000 faces a series of policy hurdles regarding cost, equity, long-term impacts, and how such a program might be administered. While subsidized childcare would meet a pressing need for many low- and modest-income working parents, providing benefits to upper-income professionals and inflationary impacts could push the program’s cost as high as $1 trillion over 10 years.
“Some analysts warn that massive
subsidies combined with costly
regulatory requirements could end up
reducing care choices for many
low-income families, particularly those
preferring to look after their children
Nov. 20, 2021
Karl Polzer – Center on Capital & Social Equity
As the fog lifts from what was achieved during last week’s international negotiations over controlling climate change, some outlines of future reality come into focus. Layers of carbon pollution girding the Earth will continue to drive up temperatures and sea levels. The world’s 195 countries will not be able to change human behavior enough to stop major climate change. By later this century, billions of people will face pressure to move away from eroding seashores to higher ground and north to cooler places to live.
There are several reasons to expect this…
Oct. 26, 2021
Last week, the Center on Capital & Social Equity, which operates from Northern Virginia, sent a short list of questions to policy and press people working on the two Virginia campaigns for governor. We are pleased that both campaigns sent responses but would have liked to see more specific answers to many of the questions.
Our motivation in asking these questions is to help focus the next governor on the needs of low-income people who make up a large portion of Virginia’s population. Their everyday challenges are often ignored by their political representatives. Attention to detail and commitment will be keys to developing and implementing policies that will help improve their lives on issues including adequate wages, paid sick days, access to mental health care, the cost of living,and affordable health care. We look forward to working with the next administration on these and other matters.
November 20th, 2021 Grocery Store Labor Action – All Workers Deserve Paid Sick Days – Virginia Interfaith Center for Public Policy
“Grocery store workers are one of the best examples of why Virginia needs a paid sick day standard. Two-thirds of grocery store workers have no paid sick days. Virginians for Paid Sick Days is partnering with UFCW Local 400 to hold actions outside grocery stores on the Saturday of November 20, 2021 (the Saturday before Thanksgiving) highlighting the need for all grocery store workers to have paid sick days.”
July 12, 2021
“Congress could do many relatively inexpensive things to improve working people’s lives. At spending levels near the bottom of what’s being now debated, all workers – including the lowest-paid — could have additional funds to raise their kids, paid sick days, more job training, and some savings for retirement and emergencies. Millions more could have higher wages and health care coverage. And millions more disabled and elderly people could move above the poverty line. Much of this could be done by modifying existing programs and policies.”
Social ‘infrastructure’ improvements for the working class
- Target subsidies for families (child tax credits, daycare, college) to people most in need.
- Raise the minimum wage and index it for inflation. Give states reasonable flexibility to adjust the minimum. All workers get paid sick days.
- Repair and improve SSI.
- Establish a universal retirement savings system.
- Incentivize states to expand Medicaid. Hold Medicare spending increases to general inflation or less.
- Improve Social Security benefits for the bottom 50%. Achieve long-term solvency through higher taxes mostly on the top 20%.
- Improve the unemployment insurance system and job training.
Thanks to the Washington Post for publishing most of our letter:
Really don’t think that a particular billionaire (hint: cojones enough to be shot into space) would have objected to being mentioned as in the letter submitted:
“President Joe Biden‘s plan to inject $4 trillion of social and capital infrastructure spending into a $21 trillion economy could help many people take care of their families. But there are also major economic and political downsides. These risks could be reduced, and the proposal’s value increased, by putting Social Security on the table and targeting new social spending to people most in need…”
Where’s Social Security?
Karl Polzer, Center on Capital & Social Equity
A government, already paying interest on more than its people produce each year (hint: $22 trillion), now proposes to tax its wealthiest citizens in the vicinity of $3 trillion more to finance a growing list of social and physical infrastructure needs. Like families paying off mortgages, indebted governments should know that each major purchase narrows its ability to raise capital for future needs…
So, what do we need and how can the wealthy be tapped to pay for it? What’s missing?…
Thanks to the Washington Examiner for timely publication of this op-ed.
March 1, 2021
“…States could be given flexibility. Congress could set the national minimum at the high end of current proposals, say at $15 or $16, and allow states to adjust it downward by a certain margin, say 20% or 25%, but no lower. A national minimum wage corridor, rather than a line, could help California and New York build up and adjust down from a higher platform. Poorer states could choose lower levels in the corridor, say $12 to $13 an hour.
“Policymakers also should consider how changes to the earned income tax credit and child tax credit can complement wages for working-class families. Members of both parties support higher subsidies to raise children. Such payments should be targeted to help the poorest the most. Yet the current child tax credit provides the most money to higher-income families.”
Feb. 17, 2021
Analysis: Ways To Raise the U.S. Minimum Wage To Help Workers, Families, While Minimizing Negative Impacts
A recent Congressional Budget Office (CBO) analysis reinforces the case that raising the national minimum wage is long overdue. But it also provides reasons for caution. Dialing up wages at the bottom up too fast and too much could increase the magnitude of negative side effects including job loss and price increases.
This paper examines potential impacts of raising the federal minimum wage nationally and in selected states and local areas. It ends with suggestions to temper negative side effects resulting from a higher minimum wage and discusses the need to fill income gaps that are too large for a higher minimum wage to address adequately, especially for some types of families. Options include setting a national corridor in which states can choose a minimum wage best fitted to them and supplementing low wages with more support for raising children.
Thanks to the Washington Examiner for running this op-ed and its openness to air a variety of views including our work exploring inequality and advocating for the bottom 50%. The Examiner’s audience includes conservative members of Congress whose votes are needed to pass and sustain legislation advancing working class interests.
Biden’s stimulus risks sending aid to those who don’t need it – Karl Polzer/Washington Examiner op-ed
January 29, 2021
Who exactly will get the enhanced cash aid, and who won’t, in the stimulus package the Biden administration will soon negotiate with Congress? This is the first of many distributional challenges awaiting lawmakers on both sides of the aisle. Choices on targeting increasingly scarce public funds will reveal which income groups both parties are committed to represent.
Details of the relief proposal had not been released as of this writing. But it is likely that the administration has been working from the distribution template in legislation Democrats introduced at the end of December. That bill, the Cash Act of 2020, would increase the $600 COVID-19 cash relief authorized last month to a total of $2,000 ($4,000 for couples). It also would send billions of dollars to well-off people that don’t need the money. As with previous COVID-19 cash aid legislation, an argument can be made that the distribution scheme shortchanges millions of people who need money to pay for food and rent.
The Center on Capital & Social Equity explores and promotes ways to include all workers and families in the output of capitalist economies. (See chart above.) All should have the opportunity to own shares of working capital. One way to mitigate the negative effects of monopolies, which antitrust regulation cannot entirely control, is through widespread profit sharing. This can be done by setting up a universal retirement savings system.
Missionary being eaten by a jaguar (Noé León, 1907)
Feb. 23, 2020
Dear Sen. Sanders,
Among all candidates for president, we think you are the most committed to making sure that ALL Americans have health insurance and access to comprehensive health care. We commend you for your leadership on this issue.
Unfortunately, it is hard to see how the Medicare-for-all legislation you propose could gain Congressional approval in the foreseeable political future. As a longtime member of the U.S. Senate, you must be able to understand the grounds for this concern.
Please answer this question: If, during your presidency, Congress could agree to pass a universal coverage bill using a different, perhaps more traditional, approach, would you sign it?
Getting ALL Americans affordable coverage as soon as possible is an important part of our policy agenda. We cannot wait until a political moment in the unforeseeable future in which a Medicare-for-all system can gain approval. We also recognize that any universal system put in place will need to enjoy long-lasting acceptance spanning the ebbs and flows of partisan politics.
Our question is of deepest sincerity. Your answer could be key to broadening your base of support and winning the presidency.
Thank you again for your leadership.
Karl Polzer, Center on Capital & Social Equity
Interesting evidence on how CARE Act stimulus helped low-income people get through the summer, despite large job losses, and why we need more stimulus now.
Thanks to the Washington Post for publishing this as leaders in Congress negotiated changes to Covid-19 relief legislation:
Dec. 11, 2020 at 4:31 p.m. EST
Sens. Mark R. Warner (D-Va.) and Susan Collins (R-Maine) said in their Dec. 8 op-ed, “We can’t afford inaction on the covid-19 compromise package,” that their compromise “would help Americans at least get through the next four months.” With due respect to their bipartisan efforts, that was dead wrong.
Very little in the coronavirus relief package would help low-income Americans make it through even one month. What’s needed most is rent relief and money to cover food and utility bills. Yet no direct payments to low-income individuals similar to the checks issued under the Cares Act in the spring are to be found. The bipartisan proposal mainly would benefit interests with access to Congress: businesses (via cheap or free money, plus a liability shield), nonprofits/associations/churches, state governments, and professional classes including doctors, lawyers and accountants.
The D.C. government’s decision to send $1,200 checks to people among the hardest hit sets a good example for states and the federal government. Congressional leaders, many perched in the nation’s wealthiest strata, need to understand that about half of the U.S. workforce earns low wages or is out of a job. Viewed from the bottom up, the United States is becoming a much more impoverished nation.
Karl Polzer, Falls Church
The writer is founder of the Center on Capital & Social Equity.
Thanks to the Washington Examiner for publishing this op-ed.
- Raise minimum wage with annual COLA (option: give states some leeway to adjust ↓ to reflect cost of living/labor).
- Five PAID sick days annually for ALL workers.
- 100% of Americans with health coverage by 2025 – with strong cost controls (any number of payers will work).
- Universal retirement savings system with minimum $500 annual government contribution (so, all Americans own working capital, have stake in market economy).
- No surprise medical bill >$500.
- Cut cost of college/expand apprenticeship programs.
- Improve Social Security benefits for bottom 50%. Achieve long-term solvency through higher taxes mostly on top 20%.
- Increase refundable child tax credit.
Life expectancy has not increased for the lowest-paid workers – National Academy of Sciences
A Widening Gap in Life Expectancy Makes Raising Social Security’s Retirement Age a Particularly Bad Deal for Low-Wage Earners – Karl Polzer/Society of Actuaries
Thanks to the Society for publishing this article.
2020 Society of Actuaries Living to 100 Symposium
“Although much of it may turn out to be pre-election packaging, legislation unveiled last week by Democrats to help racial minorities is a poorly conceived policy approach that fails to treat the nation’s low-wage workers fairly or equally. Senate leadership is billing the Economic Justice Act as a “major new legislative proposal to make $350 billion in immediate and long-term investments in Black communities and other communities of color.” However, policies that reward or punish citizens based on skin color not only rest of shaky legal and ethical ground. If enacted, they may ignite a political backlash that will set minority communities back rather than helping them move forward.”
Click here to read
A Sea Change for Wages v. Capital?
Addicted to Identity Politics, Progressives May Miss a Historic Chance To Connect with America’s Working Class
Karl Polzer – Center on Capital & Social Equity
New research affirms what has been known for centuries. In the wake of a pandemic, a smaller, more risk-averse work force is often in position to demand higher wages. After the Black Death ripped through Europe, for example, peasants, shop workers and craftsmen realized they had gained bargaining power. Wages rose and the return on capital fell.
Though the impact of the current pandemic probably will be much milder, millions in the American working class suddenly deemed to be “essential” may come to a similar realization. People working with their hands in nursing homes, grocery stores, meat packing plants, or as home health aides, might ask whether they are getting a fair deal. Why, they might ask, are we expected show up to work and risk contagion for wages that barely cover the rent, while millions in the professional, management, and bureaucratic classes can shelter at home and still pull down a good salary? Why don’t we get paid sick days, health insurance, and other basic benefits like they do? Why can’t we spend more time raising our kids to help them get ahead?
In just two months, the Covid virus has upended the American workforce. Incomes have crashed. Unemployment has rocketed. Whatever new normal emerges will be different and probably more unequal. A larger portion of the workface – and the electorate — may well be unemployed or working for low wages. Jobs that can support a middle-class lifestyle may be harder to find.
This is the perfect time for elected officials to talk to all American workers about how to improve their lives. Unfortunately, many Democrat leaders are deeply rutted in rituals of race and gender politics. The Democratic party may be blowing its chance to regain working class support — once its bread and butter — in two important ways. First, its policy agenda largely reflects upper-middle class priorities. Second, the party’s world view and messaging for many years has presumed that low-wage work is exclusive to blacks and Hispanics. To many Democratic leaders, pale-skinned poor people seem to have no standing. It’s almost as if they don’t exist…
July 1, 2020
Letter to U.S. Political Leaders and Media
What wasn’t said at last week’s Congressional hearings on Covid-19 should raise alarm. Federal officials testified the CDC plans to issue “more targeted” testing “guidelines” for states and nursing homes. More advice is not enough. After five months and more than 120,000 virus deaths, lack of federal and state action — and adequate funding — for testing in nursing homes is homicide by negligent policy…
July 14, 2020
Yes! Credit to CMS Administrator Verma and the Administration. We’ve been calling on the feds to deploy rapid, comprehensive testing for nursing home residents and staff for 4 months. This is a major step toward reducing deaths from the pandemic. Now, make sure to include long term care providers not directly regulated by CMS, such as assisted living facilities, in the testing program. About 1.5 million live in nursing homes and one million in assisted living.
June 15, 2020
Thanks to the Washington Examiner for running this article.
Medicaid regime is a mixture of bad
and good. It often renders low
quality nursing home care. But
Medicaid does provide universal
long-term care coverage, a rarity in
American social policy. That’s a
good thing. Medicaid needs to be
upgraded – not gutted. Long-term
care insurance and personal savings
simply can’t fill the gap cutting
Medicaid would leave.”
“Witness the Trump administration’s delegation of most of the responsibility for the COVID-19 nursing home policy to the states. It recommended, for example, that states make sure COVID-19 testing gets done in nursing homes rather than having CMS require it nationally. Washington’s failure to take the lead on testing can’t bode well for nursing home quality and mortality rates.”
Detroit Industry – Diego Rivera
Three policy recommendations include: “Capital gains tax rates need to be aligned more closely with marginal income tax rates, since large gaps lead to repackaging of income, reducing the redistributive effects of tax, creating horizontal inequity, and biasing measures of vertical inequality.”
Awakening Slaves – Michelangelo
“In this talk, I present some of the figures & tables gathered in my book Capital and Ideology (2020) – an economic, social & political history of inequality regimes, from trifunctional and colonial societies to post-communist, post-colonial hyper-capitalist societies. As compared to Capital in the 21st Century (2014): Capital and Ideology is less western-centered, more political and focuses on the fragilities and the transformation of inequality ideologies. A much better book (I believe!)”
New Book by Anne Case and Angus Deaton
Comment: Excellent new paper. Remember Macro 101: national savings = national investment? This takes Keynes one step further. Instead of being invested, savings glut at top generates rents, increases systemic inequality, through increased lending to bottom 90%. Who pays high credit card interest and transaction fees, and who profits, e.g.?
Great Flower Moon – Richard Coleman
Letter to the Washington Post, Other Media – April 3, 2020
The Washington Post and
other newspapers have done yeoman work in covering
the coronavirus outbreak. Getting reliable and
thoughtful information to the public quickly plays a
critical role in helping to coordinate responses and
saves lives. Unfortunately, the normal practice of
restricting access to paid subscribers slows down
dissemination of critical information, particularly
to lower-income people.
Until this national emergency is over, the Post and other media should “ungate” all coverage related to the pandemic. That way people and organizations that subscribe can quickly get the word out about latest developments. This would be a great service to the public.
Karl Polzer/Center on Capital & Social Equity
March 3, 2020 – Letter to the Washington Post
The Post’s March 3 article “Bernie Sanders and Elizabeth Warren want a wealth tax. Wealthy Swiss say their model could work for America” raises key issues of tax fairness and enforcement.
Why would it be unfair to tax the super wealthy on total net assets when middle-class homeowners already are taxed on the value of homes largely financed through debt on which they pay interest to banks (whose profits flow disproportionately to the wealthiest)? Existing American wealth taxes — state and local property taxes — now finance most K-12 education. A national wealth tax could be used to make school funding more equitable and lessen the tax burden on the middle class. We already tax the middle class on property it partially owns. So why not tax the wealthiest on the value assets they own lock, stock and barrel?
Incentives are key to enforcement. A progressive wealth tax — rising in increments from point A to point B — could be enforced by applying the maximum rate to all households with wealth over a given threshold, and leaving it up to filers to document to the IRS that the lowest allowable rate is appropriate. Finally, a reasonable tax rate could provide an incentive for investment that spurs economic growth. A high rate could stifle it.
Karl Polzer/Center on Capital & Social Equity
A full time worker paid the federal minimum wage earns 13% of the average national income per worker in the US — the lowest level since the creation of the minimum wage in 1938.
Source: Gabriel Zucman.
“Fastest way to cut carbon emissions is a ‘fee’ and dividend, top leaders say,” Washington Post, 2/14/20
The article above is an example of how the virtue of economic analysis can’t be measured by the pound or aggregate number of titles. The insight of a single analyst can contain more wisdom than collective opinion of 100.
Jan. 28, 2020 at 5:40 p.m. EST
The Jan. 25 news article “At Davos, enthusiasm for trees but not a carbon tax” did not mention an important reason political leaders might balk at levying higher carbon taxes. Carbon taxes, including those on gasoline, are highly regressive, affecting lower-income people much more than higher-income. For example, if gas taxes were doubled in the Washington area, most well-paid professionals would have enough capital (or access to credit) to easily switch to a hybrid vehicle. Over the life of the vehicle, their savings in fuel and taxes would probably cancel out any initial expense. In contrast, for lack of capital, a person driving a used gas guzzler to two low-paying jobs would be stuck driving the gas guzzler along with higher fuel costs.
Hiking fuel taxes would make it even harder for the growing share of the U.S. population working low-paying jobs to make ends meet and raise families. Carbon taxes would be more equitable and politically feasible if governments also made sure that workers struggling to pay their bills could afford the switch to clean-energy technology.
Karl Polzer, Falls Church
The writer is founder of the Center on Capital & Social Equity.
Response to WaPo dialogue stemming from our letter on carbon taxes
Dear Washington Post Editors:
Sabrina S. Fu made excellent points in her Feb. 4 letter “Quit saying ‘carbon tax.’ It’s a fee and dividend” addressing concerns I raised in a letter last week. Her proposal, however, would work best an ideal political world where one can control opponents’ and skeptics’ language used to frame an issue. My concern over tax fairness would remain because in the legislative bargaining process — including a last-minute deal in conference committee — the redistribution part of the proposal could easily be watered down, or eliminated, while the regressive “tax” or “fee” would become law.
Why don’t we start by applying her proposal to the current gasoline tax? If it survives the legislative process and works for current energy taxes, then move on to carbon writ large. Bottom line: advocates for low- and middle-income people trying to survive today need to keep a sharp eye on idealistic proposals coming from the better-situated trying to save the planet in the next century.
CCSE work on this issue:
Half of Americans Have No Retirement Savings. Here’s How Congress Can Look Out for Them – Washington Examiner Op-ed (2018)
Aug. 7, 2019
By letting banks charge excessive credit card fees, US raises prices for all, shifts billions of $$$ to the wealthier
There are many mechanisms through which the financial establishment systematically drains money from workers struggling to pay their bills. Some hum along in plain sight while regulators and members of Congress barely take notice. Such is the case with the $80 billion in fees that banks will extract from credit and debit card transactions this year.
While other countries have lowered credit card transaction costs, either through non-bank market innovation (in China) or regulation (in the European Union, Australia, and other nations), U.S. policymakers empower banks and credit card networks to levy what amounts to a doubly regressive national sales tax…
(Also see the note on excessive credit card interest rates beginning on p. 6.)
A winner for the poor? Soda machine offers lower price for cash in Poulsbo, WA
Photo by Tom Hahler
Letter to Washington Post – Nov. 17, 2019
The Post’s call for vigorous debate on capitalism raises issue of its role as honest broker
Today’s lead editorial (“Capitalism itself is on the 2020 ballot: Every billionaire is not a policy failure, but each can afford to pay more”) begins by defending core values of capitalism. It then endorses higher taxes on the super wealthy to temper growing inequality. On the critical issue of how much more wealthy people should pay toward government operation and programs, the editorial is silent. It ends with a call for vigorous and informed debate over these critical issues during the 2020 election.
Along the way, by carefully acknowledging that its current owner, Jeff Bezos, bought the Post from the “civic minded” Graham family six years ago, the editors raise another important issue. That is whether one of the world’s most influential sources of news and public opinion can maintain both neutrality and vigor in the debate over capitalism if owned by one of the world’s richest people. As the debate deepens, this potential conflict of interest may become more awkward and harder to explain.
Karl Polzer, Founder, Center on Capital & Social Equity
Saez/Zucman’s “The Triumph of Injustice: How the Rich Dodge Taxes and How To Make Them Pay”
Branko Milanovic’s “Capitalism, Alone”
Map of golf clubs in and around San Francisco
Warning: Read the article above at your own risk. Author declaims any responsibility for variation in sense of humor. Note that some links in this article are intended to provide useful information, others irony.
NRA HQ in the Northern Virginia suburbs.
States strike back in federal court on AHPs
CCSE asked to co-sign amicus brief opposing U.S. Labor Dept.’s AHP rule, which increases risk of stripped-down benefits (e.g. no mental health coverage), healthplan insolvency, and consumers being defrauded.
Congressional Budget Office – July 2019
Findings: “In an average week in 2025, the $15 option would boost the wages of 17 million workers who would otherwise earn less than $15 per hour. Another 10 million workers otherwise earning slightly more than $15 per hour might see their wages rise as well. But 1.3 million other workers would become jobless, according to CBO’s median estimate. There is a two-thirds chance that the change in employment would be between about zero and a decrease of 3.7 million workers. The number of people with annual income below the poverty threshold in 2025 would fall by 1.3 million.” … Similar, but smaller effects for minimum wage of $12 … Ditto for $10 minimum wage.
MIT Living Wage Calculator Provides Powerful Tool for State and Local Policymakers
Many U.S. households earning less than a living wage: MIT analysis
“Across all family sizes, the living wage exceeds the poverty threshold, often used to identify need. State minimum wages provide for only a portion of the living wage. For two adult, two children families, the minimum wage covers 73.0% of the living wage at best in the District of Columbia and 41.8% at worst in Virginia. This means that families earning between the poverty threshold ($25,298 for two working adults, two children on average in 2018) and the living wage $67,146) on average for two working adults, two children per year before taxes), may fall short of the income and assistance they require to meet their basic needs.”
Example: Maryland is one of the wealthiest states in the U.S., but income varies widely by region. This has made it difficult for the legislature to set a uniform minimum wage.
Possible option: Set a statewide minimum wage at $15/hour (or other level) and let local governments reduce it up to a fixed percentage (say 30%) to account for regional differences. It’s important to index any minimum to inflation.
If crimes against children can’t be stopped from within, the Vatican & its subsidiaries need purging from the outside: Letter to Washington Post
Every Catholic and every U.S. citizen should carefully read The Post’s Feb. 20 front-page article “ ‘The tragedy that keeps playing out.’ ” It is the latest in an endless stream of detailed evidence that the church power structure is incapable of changing from within to protect children in its care from sexual abuse. Senior church officials should be charged with criminal negligence for failing to remove predators they employ from positions from which they could injure children. Billions of dollars should be removed from the Vatican and its subsidiaries through the courts and distributed to victims. Still, would they change their ways?
Until this systemic problem is forcibly corrected, every church, school and other Catholic facility whose employees come into contact with children should undergo thorough inspection every year on the presumption that abuse may be occurring. If this cannot be corrected from within, then the Catholic Church should be broken up and reorganized. The same should happen with any church operating this way. Jesus commands that those in power do not harm those in their care, particularly children.
This Wall! 🙂
The stand off over building a border wall sadly embodies the narrow-mindedness of America’s leaders and disrespects the creative potential of American capitalism. It’s an undeniable fact that Donald, Chuck and Nancy are thinking way too small to discern the proper dimensions of a win-win agreement that could profit the United States for centuries…
Distribution of Household Income before/after Transfers and Taxes: CBO
Summary of slides released November 2018
In 2015, household income was unevenly distributed: Households at the top of the income distribution received significantly more income than households at the bottom of the distribution.
Before accounting for the effects of means-tested transfers and federal taxes:
- Average income among households in the lowest quintile (or fifth) of the income distribution was about $20,000.
- Average income among households in the highest quintile was about $292,000.
- Within the highest quintile, income was highly skewed toward the very top of the distribution: Among households in the bottom half of the highest quintile (the 81st to 90th percentiles), average income was $157,000; among the 1.2 million households in the top 1 percent of the distribution, it was $1.9 million.
The combined effect of means-tested transfers and federal taxes in 2015 was, on average, to increase income at the bottom of the income distribution and decrease income at the top of the distribution.
After accounting for the effects of means-tested transfers and federal taxes:
- Average income among households in the lowest quintile of the income distribution was about $33,000.
- Average income among households in the highest quintile was about $215,000.
- Among households in the bottom half of the highest quintile, average income was $125,000; among households in the top 1 percent, it was $1.2 million.
Below: Taxes, transfers resulted in significantly more income growth from 1979-2015 for the bottom income group than the middle three, while the top income group was held harmless.
Would Adam Smith favor policies creating a more inclusive economy?
Karl Polzer – Center on Capital & Social Equity
In a recent op-ed, I suggested that Congress establish a universal retirement savings system, possibly funded by a tiny tax on financial market transactions. In another, that growing income and wealth inequality has shrunk Social Security’s revenue and that taxing capital gains and high earnings could help the program stay solvent without cutting benefits. What would Adam Smith, the father of modern economic analysis, think of taxing financial transactions and capital gains? The notion of including all workers in saving and ownership of working capital? Helping correct the tendency of modern capitalism to concentrate wealth? Although conservative economists often cite Smith as a siren of an unfettered market, he might give these proposals serious consideration. Times have changed. Yet his manner of reasoning remains vital in addressing issues we face today.
Growing inequality has shrunk Social Security’s tax base. Revitalizing it could restore solvency without cutting benefits.
As the graying and outsized baby boom generation claims Social Security benefits, Americans increasingly doubt whether the program can pay all that it has promised – or even continue to cut checks at all. In their annual report released June 5, Social Security’s Trustees warn that, unless Congress acts to restore the program’s long-term solvency, by 2034 it will only have sufficient funds to pay 77 cents of each dollar currently promised. By then, the Social Security trust fund will be empty and the program will lack legal authority to pay out more than it can bring in through earmarked taxes. An adjustment this size in 2018 would drop the average annual Social Security payment of $16,848 to $12,973. Most older Americans depend on Social Security for all or most of their income.
The longer Congress plays chicken on this issue, the greater the risk that changes such as tax increases or benefit cuts, or a combination, will have major economic impacts on retirees and workers. The trustees’ report emphasizes the growing ratio of retirees receiving benefits to workers contributing payroll taxes as a major force impinging on the program’s solvency. Underlying factors include the size of the baby boom generation and a lower birth rate. But other forces are at work. Growing wealth and income inequality have significantly eroded Social Security’s tax base.
First, wealth inequality: As Americans at the top of the economic spectrum continue to amass equities, bonds, and other assets, the portion of national income from capital investment has increased significantly, pushing down the portion earned through labor. In the United States, labor’s share of earnings fell about eight percentage points between 1995 and 2013 (compared to a bit over three percentage points in other Organization for Economic Co-operation and Development countries). Since Social Security relies primarily on a tax on labor for its sustenance, the relative growth of capital income gradually is choking off a source of revenue.
Second, income inequality: As part of its structure to promote fairness between economic classes, Social Security replaces relatively more lifetime income for lower-wage workers than those with higher wages – but also caps wages subject to its payroll tax, in part to increase the net value of Social Security in the eyes of higher earners. The wage cap for 2018 is $128,400. Over the past several decades, wages of lower-income Americans have stagnated, while those at the top have grown significantly. As a result, the trustees note that portion of wage income taxed by Social Security has dropped by about six percentage points (see p. 144). In agency jargon, the “taxable ratio” of payroll fell from 88.6 percent in 1984 to 82.6 percent in 2000, and has fluctuated near the latter level since then. Social Security Administration (SSA) actuaries assume the ratio will remain about 82.5 percent over the next decade. In summary, unless the tax cap on earnings keeps up with the growing prosperity of those at the top, Social Security’s tax base shrinks as a portion of national income.
America’s Inequality and What To Do about It
The Poor Will Always Be with Us. Will the Middle Class?
“The top 1 percent saw their wealth increase by 156 percent (from 1989 to 2013), while parents in the bottom half saw their wealth shrink by 260 percent. About a third of all families with children in 2013 had no wealth, only debt.”
“Rising Inequality and the Changing Structure of Political Conflict” – Piketty lecture at the Kennedy School
Extreme Income Inequality: Brazil, India, the Middle-East and South Africa
In all of these four regions, top 10% earners receive more than 50% of national income. These societies are characterized by a dual social structure, with an extremely rich group at the top whose income levels are broadly comparable to their counterparts in high-income countries, and a much poorer mass of the population. The authors highlight the importance of the historical legacy of social segregation and of modern institutions in shaping income disparities.
Which Way Is Your Country Headed?
These two figures show that the only exceptions to “r>>g” happen in very special periods: the years in or right around wartime. In the pre-WW2 period, r minus g was on average 5% per annum (excluding WW1). As of today, this gap is still quite large – in the range of 3%-4% – and it narrowed to 2% during the 1970s oil crises, before widening in the years leading up to the Global Crisis.
“We show that income inequality has increased in nearly all world regions in recent decades, but at different speeds. The fact that inequality levels are so different among countries, even when countries share similar levels of development, highlights the important roles that national policies and institutions play in shaping inequality.”
Extract Rent from Nature’s
“As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce. The wood of the forest, the grass of the field, and all the natural fruits of the earth, which, when land was in common, cost the labourer only the trouble of gathering them, come, even to him, to have an additional price fixed upon them. He must then pay for the licence to gather them, and must give up to the landlord a portion of what his labour either collects or produces. This portion, or, what comes to the same thing, the price of this portion, constitutes the rent of land, and in the price of the greater part of commodities, makes a third.”
Lucas Chancel & Thomas Piketty,
This chart shows that collective income accruing to India’s “middle 40” rose to just over 45 percent by the early 1980s, while that of the top 10 percent declined from about 37 percent in 1951 to 30 percent. After 1990 the two trends reverse. The top 10 percent garnered more than 55 percent of all income in 2014, almost double its share in the early 1980s, while the middle 40 percent’s share fell to just over 30 percent.
U.S. Tax Policy Should Boost Retirement Savings for All Workers, Not Just the Wealthiest
Center on Capital & Social Equity – October 2017
Current tax breaks for retirement savings
mainly subsidize the top half of the income
distribution, leaving almost half the
workforce out of the system. Part of the
federal tax subsidy for 401(k)s should be
rechanneled into a retirement savers tax
credit that all workers get ($500 to $1,000
In 2017 employees can put up to $18,000 in tax-deferred defined contribution plans (e.g., 401(k)s) and those 50 or older can put aside an additional $6,000. Total employee and employer contributions are limited to $54,000. The Tax Policy Center estimates that in 2016 the tax savings from all tax-qualified pension and defined contribution accounts averaged about $1,040 per taxpayer. (No kidding: 1040.) These tax savings, however, were extremely tilted toward the well-off. Only 4.4 percent of workers in the lowest fifth of the income distribution received any tax benefit and their average tax savings in 2016 was $20. In contrast, 82 percent of the highest-paid quintile received a tax benefits with an average benefit of $4,750. About 48 percent of the middle fifth received a tax benefit with an average savings of $580.
The result of this tax policy? About half the
American population has put aside virtually
nothing for retirement, while many wealthy
people are being paid to save money they
would have saved anyway. It’s clear that
retirement savings tax breaks could be
better targeted. For more information
- Distribution of Tax Benefits by Family Income
- Retirement Tax Incentives Are Ripe for Reform Current Incentives Are Expensive, Inefficient, and Inequitable
- Who Benefits from Asset Building Tax Subsidies?
- Estimates of a Proposal to Establish Guaranteed Retirement Accounts, Financed by Reduced Limits on Current Law Contributions to Defined Contribution Retirement Saving Plans
- There’s a Better Way To Target Retirement Savings Tax Breaks
“Worry not at all about inequality if it is achieved by smart betterment….But do worry about inequality if it is achieved by using the government to get protection for favored groups. It is what a large government, worth capturing to get the protection, is mainly used for, to the detriment of most of the people off-stage.”
Are Workers Receiving the EITC Being Shortchanged on Social Security?
updated October 2017
…”Under the current system, a person whose highest earnings averaged $15,000 a year over 35 years would end up with about $10,542 in annual Social Security benefits – the same as a worker averaging $15,000 wages plus various amounts of EITC. A worker averaging $20,000 in wages would end up with $1,600 (15%) more in annual Social Security benefits compared with another with the same total income but instead averaging $15,000 wages and taking home $5,000 in EITC. Similarly, someone averaging $25,000 in wages would end up with $3,200 (30%) more in Social Security benefits than a counterpart averaging $15,000 and receiving $10,000 in EITC.”
Green lines: current law Purple: proposed increases
D’s Push for Major EITC
Two members of Congress are teaming up to bring much-needed relief to low-wage workers and their families through an expanded Earned Income Tax Credit (EITC).
Senator Sherrod Brown (D-OH) and Representative Ro Khanna (D-CA) introduced the Grow American Incomes Now (GAIN) Act in both the House and Senate. Currently, a family of three can receive a maximum EITC of $6,318, while workers without dependent children can receive at most a $510 credit. The legislation would roughly double the EITC for eligible workers raising children and increase the credit for workers without dependent children nearly six fold. The bill also lowers the qualifying age for the EITC from 25 to 21.
Expanding the EITC is a good idea. However, as the share of workers’ income provided by government subsidies rises, the case becomes stronger for the federal government to begin making corresponding payments to Social Security. Also, a way to simplify tax policy might be to coordinate the EITC and Child Tax Credit (CTC) in the following way: the EITC could be based solely on income, not family structure. The refundable component of the Child Tax Credit could be expanded to provide additional income for low- and middle-income families.
September 2017 – Karl Polzer
Expanding Use, Scope of the EITC & Child Tax Credit: a Win-Win for Workers and Employers
This paper makes the case that helping employees access the Earned Income Tax Credit and Child Tax Credit – along with supporting bipartisan legislation to expand these programs – can help industries with large numbers of low-to-middle wage workers. In the long-term care field, such a strategy can improve worker income through government wage supplements, thus encouraging more to enter the workforce. Increased labor supply would dampen employer wage costs – all while expanding the range of affordable services providers can offer. This could result in hundreds of millions of dollars of added value in worker earnings as well as provider and customer savings.
From Soviets to Oligarchs: Inequality and Property in Russia 1905-2016
“…(T)op income shares are now similar to (or higher than) the levels observed in the U.S. … inequality has increased substantially more in Russia than in China and other ex-communist countries in Eastern Europe. …the wealth held offshore by rich Russians is about three times larger than official net foreign reserves, and is comparable in magnitude to total household financial assets held in Russia.”
High earnings of labour are an advantage to the society – Adam Smith
“Is this improvement in the circumstances of the lower ranks of the people to be regarded as an advantage or as an inconveniency to the society? The answer seems at first sight abundantly plain. Servants, labourers and workmen of different kinds make up the far greater part of every great political society. But what improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, cloath and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed and lodged.”
— The Wealth of Nations (originally published in 1776)
For the last eight years of Liu Xiaobo’s life, the Chinese authorities robbed him of his liberty and his dignity. But in the state-enforced silence surrounding Liu’s stage-managed death, the words of his Nobel Prize lecture ring out even louder: “Freedom of expression is the foundation of human rights, the source of humanity, and the mother of truth.”
“Natural forces of a market economy and capitalism will drive that disparity unless government does things to help.” Buffett says EITC should be expanded so workers can have decent lives. (See CCSE article on this site about relationship of EITC and Social Security.)
Thomas Piketty, Li Yang, Gabriel Zucman
Researchers find that the share of public property in China’snational wealth has declined from about 70% in 1978 to 30% in 2015…
“The top 10% income share rose from 27% to 41% of national income between 1978 and 2015, while the bottom 50% share dropped from 27% to 15%. China’s inequality levels used to be close to Nordic countries’ and are now approaching U.S. levels.”
Robin Hood Tax Reform – May 2017
How Modest Changes in Health, Retirement Tax Breaks Could Produce Major Gains in US Health Access, Financial Security – at Little or No Added Government Cost
…”The positive impacts of two such changes discussed below could include 1) lowering the rate of health care cost inflation; 2) providing revenue to help subsidize health insurance for the unemployed; 3) creating seed money and a low-cost infrastructure for a universal retirement savings system; and 4) increasing retirement security for low- and middle-income people; and 5) helping people save for long-term care costs. Looking at benefit tax exclusion is already on the table as Congress faces the unsavory chore of developing a fix for the Affordable Care Act’s clumsily designed “Cadillac” health plan excise tax. Most importantly, these changes could result in greater economic fairness and inclusion.”
Eyes on the Prize: Universal Health Insurance Is the Goal
Charles Krauthammer’s March 31 op-ed, “The road to single-payer health care,” was largely on point. However, it is important to separate the concepts of “single-payer,” which is a means toward a goal, and “universal coverage,” which should be the primary goal. Universal coverage can be achieved without having the government cover every citizen. Even if government programs cover most citizens, there will always be multiple payers, including individuals and taxpayers; a universal system also could allow employer plans to operate. Ironically, creating a larger government role in sponsoring and subsidizing health insurance could result in a more competitive market for providing services. Karl Polzer – April 2, 2017
Obama Signs Bipartisan Bill To Speed Miracle Cures to Market. Who Will Have Access to the New Technology? Who Won’t?
In a city that’s witnessed trench warfare between Congress and the White House during the last six years of the Obama Administration, this was a rare moment: a bipartisan love fest. On Dec. 13, 2016, President Obama signed the “21st Century Cures Act,” which includes expanded funding to push medical technology through the development pipeline. “We are bringing to reality the possibility of new breakthroughs to some of the greatest health-care challenges of our time,” Obama said. “It is wonderful to see how well Democrats and Republicans in the closing day of this Congress came together around a common cause.”
The legislation was backed by a coalition of interests, including the powerful pharmaceutical industry, academia, and consumer groups supporting speedier medical research. Its few critics have mainly argued that the popular funding provisions “mask a worrisome loosening of regulations at the Food and Drug Administration that could put patients at risk.”
Hardly anyone, however, is asking the million-dollar question: Which Americans will end up having access to new miracle cures, many of which promise to be extremely expensive? And, who will not? The country’s patchwork of health insurance already is rationing expensive new technology to some populations, particularly low-income people. Congress, meanwhile, has begun a fractious debate over repealing, and possibly replacing, the Affordable Care Act (ACA). So, while lawmakers have just put their collective foot on the technology gas pedal, they may soon slam the brakes on funding for expanded coverage, potentially throwing millions of Americans into the ranks of the uninsured…
Traditions of Democracy
“The tradition of Jefferson and Jackson might recede, but it could never disappear. It was bound to endure in America so long as liberal capitalistic society endured, for it was the creation of the internal necessities of such a society. American democracy has come to accept the struggle among competing groups for the control of the state as a positive virtue — indeed, as the only foundation for liberty. The business community has been ordinarily the most powerful of these groups, and liberalism in America has been ordinarily the movement on the part of other sections of society to restrain the power of the business community. This was the tradition of Jefferson and Jackson, and it has been the basic meaning of American liberalism.”
Excerpt from Chapter 37, “The Age of Jackson,” Arthur M. Schlesinger, Jr.
June 30, 2016
Reflections on American Wealth Concentration – and What To Do About It
Just over one year ago, the Center on Capital & Social Equity (CCSE) began exploring the phenomenon of growing wealth concentration and inequality, while advocating for a more inclusive form of capitalism. Following are some general observations.
Over the past year, the issue of economic inequality in the United States has moved from the backburner to center stage. Much credit for this goes to Sen. Bernie Sanders’ attack on the “top one percent” in his run for the Democratic nomination. While there is ample reason to question many details of his proposals, Sanders’ call for an increased role for government in providing opportunity and essential services resonated with many Americans who feel they have been left out of the economic mainstream. Yet the problems posed by rising economic inequality are deeply rooted and go well beyond the disproportional gains of the top one percent. They will be harder to address than portrayed in election rhetoric and require judicious use of public resources.
Three observations can be made about economic inequality in the United States. First, income and wealth inequality have grown steadily since the 1980s, suggesting that some of the causes are structural in nature. Second, high levels of inequality increase the risk of political and economic instability. Finally, moving toward an economy that is less unequal and offers opportunity to more Americans will require major changes in public policy and shifts in spending.
Life Expectancy Gap is Large – and Expanding
The gap in life expectancy between the richest 1% and poorest 1% was 14.6 years for men and 10.1 years for women. A study published in the Journal of the American Medical Association also found that inequality in Americans’ life expectancy is growing over time.
How the U.S. Retirement Savings System Magnifies Wealth Inequality
Karl Polzer, Center on Capital & Social Equity
Economic inequality and wealth concentration have have emerged as central issues in the U.S. presidential race. While these concerns appear to have risen to the forefront quite suddenly, forces driving wealth concentration have been building for decades. As analysts probe the dynamics beneath these trends, they may find that America’s shift to a defined contribution retirement system is playing an increasing role in the concentration of wealth…
So, What Does Jesus Say about Wealth Concentration and Inequality?
In recent years, the tendency for wealth to concentrate in the hands of a powerful few has come under scrutiny, prompting concern about growing inequality from political and religious leaders, most notably Pope Francis. While excessive wealth concentration is likely lead to greater social ills and unrest, how to rein in growing inequality is a more difficult question. Should we move away from capitalism and the market system? Develop a more socialist model? Reform capitalism from inside to benefit people more equitably? …
Investigators Detail Growth of Extreme Poverty in U.S.
Virginia’s push to end veteran homelessness faces steep challenges
On Nov. 11, 2015, Virginia Gov. Terry McAuliffe announced that the state was the first to “functionally” end homelessness among veterans of the U.S. armed forces. To assist two veterans living on the street not aware of the program, the Center on Capital & Social Equity contacted the governor’s office, asking how veterans can gain access to housing and other services under the collaboration involving state, federal, and local government agencies.
The Virginia Department of Veterans Services provided information (click on the button below), including contact points at the local and state levels where veterans and their advocates can begin the process of finding temporary or permanent housing.
To follow up, we contacted three Northern Virginia jurisdictions and found an array of barriers to functionally ending veteran homelessness. These problems include lack of knowledge on the part of local officials of the state’s initiative; lack of affordable and subsidized housing resources; high housing prices; lack of shelter space (for example, Fairfax County has 1 million residents but only three homeless shelters that can’t meet wintertime demand); unwillingness by many street people to seek help (for a variety of reasons); coordination issues between state and local, local and local, and federal and state and local agencies; bottlenecks like having to go through shelters to gain access to housing, when shelter space is limited; and many other factors.
While helping one of the veterans gain access to temporary shelter and services, we reported these issues back to the state officials who said they will take steps to increase awareness of the governor’s initiative, including posting information about the program on a state website. For more detail, see our correspondence with state and local officials, which can be accessed by clicking the second button below.
Let’s sell health insurance “across states lines” – through Medicare
Republicans, stop with being the party of “no.” It’s time to step up to the plate and seize the initiative on health policy…
Playing Immigration Piñata
Deception and hypocrisy are no strangers to politics. This seems particularly true in recent incantations about illegal immigration. Republican presidential candidates – other than Jeb Bush – mostly want to round up illegals and dump them into Mexico. Donald Trump wants to spend billions to build a massive wall in the wrong place…
How Can U.S. Policy Reduce Financial Risk for the Very Old?
CCSE explores ways to reduce retirement risk and pay for long term care in Society of Actuaries monograph.
Finding: 401(k)rule changes including new “sub-accounts” could help seniors better save for needs in very old age.
Retirement Strategy: When Should I Start Receiving Social Security Checks?
Americans can begin taking Social Security between ages 62 and 70. Waiting to take Social Security can increase the amount on your check significantly. Collecting Social Security benefits early has the opposite effect.
When to start depends on many factors including your life situation, needs and plans. Most Americans begin taking Social Security early.
The U.S. Consumer Financial Protection Bureau offers this planning tool and other information to help people work through this decision.
A Dream Deferred
What happens to a dream deferred?
Does it dry up
like a raisin in the sun?
Or fester like a sore–
And then run?
Does it stink like rotten meat?
Or crust and sugar over–
like a syrupy sweet?
Maybe it just sags
like a heavy load.
Or does it explode?
Still I Rise
You may write me down in
With your bitter, twisted lies,
You may tread me in the very dirt
But still, like dust, I’ll rise.
Does my sassiness upset you?
Why are you beset with gloom?
‘Cause I walk like I’ve got oil wells
Pumping in my living room.
Just like moons and like suns,
With the certainty of tides,
Just like hopes springing high,
Still I’ll rise.
Did you want to see me broken?
Bowed head and lowered eyes?
Shoulders falling down like teardrops.
Weakened by my soulful cries.
Does my haughtiness offend you?
Don’t you take it awful hard
‘Cause I laugh like I’ve got gold mines
Diggin’ in my own back yard.
You may shoot me with your words,
You may cut me with your eyes,
You may kill me with your hatefulness,
But still, like air, I’ll rise.
Does my sexiness upset you?
Does it come as a surprise
That I dance like I’ve got diamonds
At the meeting of my thighs?
Out of the huts of history’s shame
Up from a past that’s rooted in pain
I’m a black ocean, leaping and wide,
Welling and swelling I bear in the tide.
Leaving behind nights of terror and fear
Into a daybreak that’s wondrously clear
Bringing the gifts that my ancestors gave,
I am the dream and the hope of the slave.
Easter Essay: Is the Golden Rule Enough? Mathematics of the Two Great Commandments
Whether people see themselves as Christians, followers of other faiths, or atheists, all are pulled by the power of many gods: the god of money, the god of technology, the nymph of new electronic gadgets, satyrs of TV and the worldwide net, and so on. In adoration of possessions, money, and power, atheists and believers are equal — even deeply religious in the way that Paul sarcastically described the polytheistic statuary of Athens as evidence of its faith. Some of today’s humanists and atheists are more Christian in spirit and behavior than nominal Christians. And, unlike some Christians, many have thought through their views on religion and feel they need to have moral justification they can explain. The conventional morality of good people often is a humanism expressed by the Golden Rule.
Jesus taught the Golden Rule two thousand years ago, as one of two great principles. But to Jesus the Golden Rule, while essential, is incomplete without a first principle. Jesus preached the Golden Rule in the Sermon on the Mount. “Therefore, whatever you want men to do to you, do also to them, for this is the Law and the Prophets.” (Mat 7:12 NKJV).) Here he is speaking to a large crowd that can’t hear him that well and needs a simple guideline.
Later, speaking to religious leaders, he aligns the Golden Rule with the first commandment. In Matthew 22:34-40, “hearing that Jesus had silenced the Sadducees, the Pharisees got together. One of them, an expert in the law, tested him with this question: ‘Teacher, which is the greatest commandment in the Law?’ ” To this audience, Jesus provides more context: “‘Love the Lord your God with all your heart and with all your soul and with all your mind.’ This is the first and greatest commandment. And the second is like it: ‘Love your neighbor as yourself.’ All the Law and the Prophets hang on these two commandments.”
The interaction of the two great commandments shows why the second commandment is not sufficient and why God — an overarching Spirit that connects individual people — is necessary, even for a functional morality. For example, if we only love our neighbor as ourselves — and we happen to be filled with hate and rage for ourselves — then we won’t treat our neighbors very well. The Golden Rule can remedy part of this problem by changing the focus from “loving” to “treating” neighbors as we would have them treat us — thereby imposing our view of ideal behavior and not raw emotion as the standard. But that won’t work for some people either, especially those who lack a model of ideal behavior. So, these folks still might act destructively to people around them.
The idea of a single God, or life force, connecting all people creates a vertical pull toward a connecting spirit (the first commandment) to accompany the horizontal equity of the second commandment. Mathematically, the second commandment is nothing more than a simple equation: Love for me = Love for you. The first commandment is a command to maximize Love to the limit of capacity. Without the first commandment, the potential of a person’s love would be limited by inherited and culturally absorbed defects and injuries. The two commandments can be seen as consistent with scientific theories of evolution. The first commandment reflects the biological imperative that no individual can carry on life on his or her own. Individuals must interact and communicate with others to continue the stream of life. The Golden Rule suggests that individuals have the freedom to choose the way they interact and communicate with others. Perhaps those with greater faith and sense of fairness are more likely to pass along their genes. —
Karl Polzer, Easter 2017
“In God We Trust” was adopted as the official motto of the United States in 1956 as an alternative or replacement to the unofficial motto of E pluribus unum, which was adopted when the Great Seal of the United States was created and adopted in 1782. Secularists have expressed objections to its use and have sought to have the religious reference removed from the currency. Wikipedia, 2015