Friday, January 31, 2014

37.4% of Working-Age Americans Aren't Working

45.5% of the population supports the other 54.5% of the population

In my most recent post, Trading Jobs for Ropes, I quoted David John Marotta (a Wall Street advisor) who calculated that the actual unemployment rate of those not working is a sky-high 37.2 percent, not the 6.7 percent as advertised by the Fed.

I wondered how he arrived at the number, because I got 37.4%.

317,454,372 Total U.S. population  (Google shows 313,900,000)

246,745,000 Civilian noninstitutional population, of those:
        154,408,000 Civilian labor force, of those:
                   144,423,000 Employed, of those:
                       6,934,000 work more than one job, of those:
                       3,550,000 works full time with part-time job

                      9,984,000 Counted unemployed, of those:
                      3,753,000 are long term unemployed and still counted

92,338,000 Not in labor force (not counted as unemployed), of those:
                         86,406,000 Do NOT want a job now
                           5,932,000 Want a job

92,338,000 not in the labor force is 37.4% of 246,745,000 on the civilian noninstitutional population.

144,423,000 employed (both part and full time) support 317,454,372 people (45.5% of the population supports 54.5% of the population)

In July of last year, Fox News reported that Only 47% of Adults Have Full-Time Job --- now 6 months later we have 44.4% of adults with full-time jobs. (more people are working part-time; maybe because employers are cutting hours to escape ObamaCare™)

246,745,000 Civilian noninstitutional population > minus 9,984,000 counted unemployed > minus 7,771,000 working part-time (but want a full-time jobs) = 109,563,000 working full-time (or 44.4% of the civilian noninstitutional population.

Congress is set to approve $9 billion in cuts to the food stamp program even as a record number of Americans live in poverty. Prior to the current bill, House Republicans had drafted legislation slashing $40 billion from the food stamp program. That bill passed the House with Republican votes only. After months of negotiations with the Democrat-controlled Senate, which wanted much lower cuts of around $4 billion, the House finally passed a farm bill 251-166 Wednesday that contains a "compromise" $9 billion in reductions to the food stamp program. (That's after last November's cuts). Here's why the compromise level of cuts is a Republican win:

In addition to the $9 billion in food stamp cuts in this five-year farm bill, another $11 billion will be slashed over three years as stimulus funding for the program expires

With no jobs and no food, what's left to do --- hang ourselves?

Should the Unemployed just Hang Themselves?

What is the bipartisan consensus in Congress—thin the heard? Is that their Kumbaya Grand Bargain? Sign more trade agreements and offshore more jobs? With a 5-year job shortage and more cuts in food stamps, what are millions of desperate Americans left to do, hang their heads in shame before finally hanging themselves with that cheap rope they bought at Walmart?

Obama only briefly mentioned fast-tracking the Trans-Pacific Partnership (TPP) in last Tuesday's State of the Union speech, depicting the trade agreement as part of his bipartisan outreach to the GOP, while claiming it would boost U.S. exports.

Rep. Keith Ellison of Minnesota, the chair of the House Progressive Caucus, asked, "How can you say on one hand you want to address income inequality, you want to make this economy work for everyone, and on the other hand, say you want trade promotion authority so you can pass these NAFTA-style trade deals? It doesn’t make any sense."

The Republicans, on the other hand, wanted Obama to spend more time pushing it during the State of the Union. But if Obama is so enthusiastic about this proposed trade deal, then why hasn't he been touring the nation and fervently trying to pitch this snake oil to the American public?

Senate Majority Leader Harry Reid reiterated his position about fast-tracking this trade deal, suggesting the bill (introduced by Senator Max Baucus, who is now the new ambassador to China) may be DOA in the Senate.

And it's no wonder—this trade agreement has been described as NAFTA on steroids. Wikileaks has more details and updates on the TPP trade agreement.

And here's a few numbers about the NAFTA trade agreement that Rep. Keith Ellison referenced:

  • In 1993, before NAFTA, the United States had a $2.5 billion trade surplus with Mexico and a $29 billion deficit with Canada. In 2012, the combined NAFTA trade deficit was $181 billion. The average annual growth of our trade deficit has been 45 percent higher with Mexico and Canada than with countries that are not party to a NAFTA-style pact.
  • The companies that took the most advantage of NAFTA — big manufacturers like G.E., Caterpillar and Chrysler [and many others, and many who are also tax dodgers] — promised they would create more jobs at their American factories if NAFTA passed. Instead, they fired American workers and shifted production to Mexico. The average American wage has grown less than 1 percent annually in real terms since NAFTA, even as productivity grew three times faster.
  • A 1997 Cornell University study ordered by the NAFTA Commission for Labor Cooperation found that as many as 62 percent of union drives faced employer threats to relocate abroad, and the factory shutdown rate following successful union certifications tripled after NAFTA.
  • Since NAFTA’s implementation, the share of national income collected by the top 1 percent has shot up by 58 percent.
  • Consumer prices had not been sufficient to offset losses in wage levels, even accounting for the benefits of cheaper goods. This means a loss of more than $3,300 per year for a worker earning the median annual wage of $27,500 (50% of all wage earners currently take home this or less.)

But yet, even without TPP, more jobs might still be offshored—this time to Panama in Central America. We've already had the CAFTA trade agreement with Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic (and we know how well they treat and pay their workers).

Congress has already passed trade agreements with South Korea, Panama, and Colombia (made possible by both Bush and Obama). And there's also the little mentioned pending TAFTA trade agreement with our friends in Europe (full list here).

As if the unemployment rate wasn't high enough. In a memo to clients, David John Marotta (a Wall Street advisor) calculates that the actual unemployment rate of those not working is a sky-high 37.2 percent, not the 6.7 percent as advertised by the Fed—and the Misery Index is over 14, not 8 claimed by the government. 

The Bureau of Labor Statistics says the unemployment rates in 29 states are at post-recession lows --- BUT --- it was also noted that long-term unemployment is at record highs in 41 states—and that doesn't even count millions of "discouraged workers" who dropped out of the labor force and are no longer being counted in the official unemployment rate.

State economies have lost $1.76 billion after Congress let the benefits program for the long-term unemployed lapse at the end of last year. In North Carolina, after the state ended its participation in the long-term unemployment insurance program before the benefits lapsed, it has witnessed the largest labor force contraction ever.

David A. Rosenberg, formerly of Merrill Lynch in New York, says:

"The unemployment rate in the financial sector is down to 4.2%, in manufacturing down to 5.5%, in information technology down to 4.8%, in education/health down to 4%, and all the way down to 3.6% in the resource sector. This is over 40 million workers and represents a 40% chunk of private payrolls."

Officially, the Bureau of Labor Statistics reports that 92.3 million Americans are NOT in the labor force—another record high. As it's been noted before, the employment-population ratio in now at a 30 year low; and the labor force participation rate is now at a 35 year low.

The labor force includes those counted as either "employed" or "unemployed", but doesn't include all those previously counted as "discouraged workers". By some estimates, out of 92.3  million people NOT in the U.S. labor force, as many as 48 million Americans are currently involuntarily unemployed and would like a full time job paying a living wage—meaning more than Obama's proposed $10.10 an hour minimum wage, which is only $21,008 a year before taxes, but only if they are employed full time. (Fast food workers were asking for $15 an hour).

But Obama still wants to fast track TPP. Does this make any sense at all? What good will raising the minimum wage to a puny $10.10 an hour do when there aren't enough jobs?

So what will the unemployed do? The Democrats saw fit to "compromise" with the GOP again by cutting 4% of 1% (0.04%) of the federal budget in the farm bill to cut aid to 2 million poor Americans on food stamps. So is that the ultimate plan...making sure that Americans can't work AND can't eat? If it weren't for ObamaCare™, millions more would be without any health care either (obtained through the expansion of the Medicaid program).

It's too bad that The LEFT wants to hide these dismal unemployment numbers because it's an embarrassment to them (even though they didn't cause all these numbers); but The RIGHT only wants to use these numbers as a weapon again The Left —when it was The Right that primarily caused these numbers in the first place with Reaganomics, "trickle down" and "starve the best"—with a lot of help from The Left with NAFTA).

But The Left can't fix the problem because The Right has obstructed The Left, hoping to turn public sentiment against The Left so that The Right can regain control of the Senate and Presidency (so that they can give us more of these dismal numbers.)

It's all about politics, not about helping the unemployed obtain jobs, feeding the poor or fixing the country. And money in politics allows for this destruction of our nation. Taking big money out of politics will benefit the many at the expense of the few. But Congress is too corrupted to change the election and voting laws.

Vladimir Lenin said, "The Capitalists will sell us the rope with which we will hang them." But it could have been Chairman Mao who said that. The offshoring of jobs to China (and elsewhere) is responsible for China's spectacular growth over the past 30 years. American multinational corporations made the rope in China, sold it us, and we hung ourselves.

Thursday, January 30, 2014

Rich People don't care when Killing other People

From HuffPo: The Wall Street Journal's editorial page has come out swinging in defense of Tom Perkins, the 82-year-old venture capitalist who compared what he called the persecution of the rich in America to the persecution of the Jews in Nazi Germany.

Perkins, who co-founded the firm Kleiner Perkins Caufield & Byers in the 1970s, made his explosive comments in a letter to the WSJ over the weekend. The editors of the WSJ even found time to take shots at their rivals. You can read that Bloomberg piece here. Columnist Jonathan Bernstein observed that the rich seem quite paranoid these days.

This is how a WJS reporter described Perkins in a 2007 piece about the venture capitalist's $150 million yacht:

"He's rich, he's vulgar and he's proud."

Several studies have shown that the super-rich feel entitled and privileged, and lack empathy for "normal people". So it should come as no surprise that they would reject the notion that working and poor people should be "entitled" to healthcare, food stamps, disability, unemployment benefits, Social Security or employer-contributed retirement plans (or even jobs, or jobs that pay a living wage).

But they also lack empathy when they kill someone (yes, when they themselves, PERSONALLY, actually takes the life of someone else).

The mult-billionaire Tom Perkins was once convicted of involuntary manslaughter. In 1996, the yacht-crazed financier was racing off the French coast when he collided with a smaller boat, killing a French doctor on board. He got off with a $10,000 fine, then complained of the injustice.

Alice Walton of Walmart also got away with killing someone. She ran down a woman while speeding in her Porche. She was suspected of DUI, but just paid a fine—and didn't even offer to pay for the funeral. (Also read my post: Murder and Betrayal of the Rich and Famous)

Meet the new GOP, those that support people like Tom Perkins and Alice Walton: The national GOP front-runner is NOW Mike "Uncle Sugar" Huckabee (the Baptist minister from Arkansas and Fox News host). Among Republican voters, Huckabee enjoys a 64% approval rating (64% to 18%) while Sarah Palin holds a stunning 70% approval rating.

And the GOP balcony bully Rep. Michael Grimm (not to be confused with the bridge bully) also has a long history of being a jerk. Besides recently threatening a reporter for asking him about his campaign finance fraud, when he was once in the FBI, he was also very dangerous—waving a gun around in a bar.

GOP: The party of greed, family values, bullies and murder....somehow that fits the GOP perfectly (except for the part about "family values".

Blaming Teachers (and other Government Employees)

In Paul Krugman's recent post: Hedgies Versus Teachers he notes that the top 40 hedge fund managers and traders took home a combined $16.7 billion—as much as 300,000 school teachers—almost a third of all high school teachers in America. Or, with total compensation (pensions, etc), maybe 200,000 teachers.

"Now look at those supposedly overpaid government employees. According to the BLS, the median high school teacher earns $55,050 per year."

One of Krugman's readers can't stand that government employees (such as teachers) earn a middle-class wage. In response to that commenter (lagunaray) I say this:

You just made Krugman's argument for him...because of unions. If workers in the public sector had belonged to a labor union over the past 30 years, they too would have seen annual cost-of-living adjustments (and pension plans, etc.) just like union workers in the public sector.

When you say, "their salaries are paid with taxpayers hard earned money", so aren't our soldiers, members of Congress, firefighters, and the people inspecting your food, directing your air traffic, policing your neighborhoods, curing horrible diseases—they ALSO work hard, so that people like you can have better lives.

Teachers DO create wealth (people in all real professions create wealth), not people gambling on the stock market or betting $10 billion against the British pound.

When you say "thousands in the financial services industry make less than teachers and live on much smaller amounts in retirement", you must be referring to bank tellers, because they don't belong to a union.

"WE" are the government (because just like corporations, governments are people too). When you say "government is too big", do you mean $650 billion a year spent on defense (to enrich the CEOs at companies like Boeing), or are you talking about the number of government workers (who are less now, than under Bush)? Our population grew from 200 million to over 300 million over the last 40 years (up 33%) — how much less government do you propose? How long do you want to stand in line to renew your drivers license?

You ask the question, "what percentage of a person's income should go to pay for government services?" Let's look at that: 50% of all wager earners take home less than $28,000 a year. Maybe if they were all earning a REAL "living wage", they could pay more in taxes and not need food stamps. If their employers (raking in record profits) offered them a group healthcare plan, maybe they wouldn't need Medicaid (and all your "hard earned taxes").

Yes, if all you low-paid workers without pensions and healthcare didn't belong to a union, you can't blame teachers for just earning a middle-class wage (with benefits) that most of us once enjoyed back in the 50s, 60s, and 70s ---- until union membership peaked in 1979, and when jobs started getting outsourced to places like China and India (why don't you blame the teachers for that too!)

If you think teachers are at fault, and you don't belong to a union, then you only have yourself to blame.

* Full disclosure: I belonged to a union (in the private sector) all my working life, and so I will not have to just rely on Social Security when I retire, because I will also have a pension when I retire (unless some private equity guy like Mitt Romney steals it).

And if you want to know who REALLY creates wealth, see my other post.

So if you want to hate teachers, then you can blame and hate people like me too. I really don't give a d@mn.

Wednesday, January 29, 2014

Dark Revelations of the Top One Percent

By Anthony W. Orlando, Looking for cheats? Don't look at the poor:

"In writing my new book Letter to the One Percent, I found a consistent pattern in the research literature. Psychologists have conducted many experiments on the rich and the poor, and they've found that the rich are less likely to have empathy for other human beings. They're more likely to break the rules and feel that they've earned the right to do so. They're less likely to think of the moral consequences of their actions, especially when money is involved, and they're more likely to put their own needs ahead of others'. The notion that the poor are uniquely morally deficient, it turns out, is completely backward. They're actually more virtuous, on average, than the rich."

Are You Rich, Poor or Middle Class?

From Paul Krugman, Money and Class:

"According to that Pew survey (pdf), in early 2008 only 6 percent of Americans considered themselves lower class — far below the official poverty rate! — only 2 percent upper class, and 1 percent didn’t know. So 91 percent of Americans — roughly speaking, people with incomes between $15,000 and $250,000 — considered themselves middle class. And a large portion of these people were wrong."

This reminded me of a post I did last year...

Tuesday, January 28, 2014

Who Really Creates Wealth?

And who just acquires it?

It takes money to make money. If a wealthy investor buys stock in a company, and the stock goes up in value, and the investor sells that stock the following year, and makes a long-term capital gain (and then uses an accountant to pay a low tax on that gain), the investor isn't actually creating wealth per se (or jobs), they're just seeing a return on their "gamble"—just like playing craps or roulette in Las Vegas.

Obama: If they won't pay us, then tax them!

You've already read the report from Oxfam, Working for the Few: "The world’s richest 85 people now hold as much wealth as the entire bottom half of the world’s population combined, 3.5 billion people in all."

And Oxfam researchers have put the total wealth now sitting in offshore tax havens at $18.5 trillion.

But these striking Oxfam statistics won't generate any groundswell from the top 1% for closing tax havens. In fact, the high-tech lobby group recently spent the week insisting that the G20 group of developed nations NOT shut the Double Irish loophole (the slick accounting maneuver that saves the tech giants billions of dollars a year in taxes).

Wages are stagnating, Oxfam notes, as stocks and corporate profits soar to new heights. Corporate CEOs, a new Deloitte consultancy group report detailed last week, certainly have the cash on hand to end wage stagnation. The world's largest corporations are now sitting on trillions in cash. Apple alone has nearly $150 billion sloshing around in its corporate accounts.

The main reason why corporate profits are soaring is because wages are so low!

CEOs simply aren’t investing in their workforces, research, or anything that builds prosperity for the long haul—as one high tech exec admitted in one rare and revealing moment (something that very few rich investors and executives want to admit to in public.)

CEOs have also been speculating and pumping billions into mergers that typically inflate executive pay — and eliminate jobs. And on top of that, these same high tech corporations have colluded to deliberately reduce worker wages.

President Obama.....PLEASE!....if they won't pay us, then tax the bastards! (and hope they won't cancel my blog account for saying so.)

We must starve those damn beasts!

Bill Maher was right, the majority of Americans REALLY ARE dumb, ignorant and uneducated.

According to a Pew Research poll, overall, 63% of Americans say reducing the budget deficit should be a top priority for Congress and the president this year, down from 72% a year ago. Most of the decline has come among Democrats — 49% view deficit reduction as a top priority. (So the Democrats are slowly getting a little smarter).

Deficit reduction had surged as a policy priority during Obama’s first term. The right-wing think tanks and the anti-government "Starve the Beast" policy makers should pat themselves on the back for a propaganda job well done.

In the current Pew survey, majorities of Republicans (80%) and independents (66%) continue to say reducing the budget deficit should be a top priority for the president and Congress.

However, just 49% of Democrats view this as a top priority, the lowest percentage since Obama took office. A year ago 67% of Democrats rated cutting the deficit as a top policy goal. (So it appears that at least the Democrats are slowly getting a little smarter).

Meanwhile, a "compromise" was made in the new farm bill to cut of about $8 billion to $8.5 billion over 10 years — because the Republicans have convinced Democrats that the budget deficit is more important than feeding poor people. (We must starve those damn beasts!)

Medicaid Estate Recovery Program — Nevada

For individuals age 55 or older, states are required to seek recovery of payments from the individual's estate for nursing facility services, home and community-based services, and related hospital and prescription drug services. States have the option to recover payments for all other Medicaid services provided to these individuals. Skip to Nevada Supreme Court ruling and the actual Nevada law.

A Tip for Tipped Workers

In the New York Times there's an article about raising the minimum wage for tipped employees (waiters, busboys, bartenders, etc).

Some business owners had said that if they are forced to pay their employees more, they will have to either lay off people or raise prices—but not one owner had said they would have to learn to live on less (profits after expenses).

Is Obamacare really about the 3.8%?

In an article by Paul Krugman, Paranoia of the Plutocrats, he writes:

"Between the partial rollback of the Bush tax cuts and the tax hike that partly pays for health reform, tax rates on the 1 percent have gone more or less back to pre-Reagan levels."

But is this true? See the historical record for capital gains taxes, because that's how most of the top one percent make their money—with capital gains on stocks, real estate and SWAG investments (silver, wine, art and gold).

Sunday, January 26, 2014

Major Garrett, Propaganda on Unemployment Benefits

I've written a post to show how the media uses both misinformation (false or inaccurate information that is spread unintentionally) and disinformation (which is intended to mislead).

There is another way the media uses the art of propaganda, by using neither of these examples, but by convoluting their message in reporting on one topic, but then by inserting other non-related information—and having the reader (or viewer) believing that somehow one bit of information is either related, or is the cause of something else (by using subliminal inference to show cause and correlation.)

Adam Smith, Inequality and Politics

237 years ago, when our nation first declared it's independence, our understanding of economics was much different back then—different than it was in 1930 with Keynesian economics—and then again, when we had Reaganomics during the 1980s. The GOP's Starve the Beast strategy pushed for reduced government spending in a growing population, lowering taxes on the very wealthy and advocated for less government regulation (and less corporate taxes) on huge multi-national corporations.

Ever since "trickle-down economics" took effect, America can no longer afford to built a huge dam, a massive highway system, or put a man of the Moon.

Saturday, January 25, 2014

Bill Gates: "By 2035, there will be almost no poor"

You've all heard the news about how 85 people have the wealth of 50% of the world's poorest people -- and that inequality was growing (old news, I know, bla, bla, bla.)

But consider if at the current rate, this inequality exponentially escalates (as it has been doing, just like with computer intelligence). What might capitalism and the world be like in just 20 years --- if maybe only 185,000 people had the wealth of 75% of the world's poorest people?

And then 10 years after that...and the top 0.01% had the wealth of the 99.99% of the world's poorest people.

Friday, January 24, 2014

Where did all the 99ers go?

Since 2008, those who lived in high unemployed States and were laid off from their job could receive up to 99 weeks of federal unemployment benefits if they qualified; and so, were called the 99ers.

By the end of 2010 there were an estimated 7 million unemployed Americans receiving federal extended benefits. At one time on another (since July of 2008 until December 2013) there were 23.9 million Americans who received these benefits. As of the New Year, now nobody does.

The Omnibus Bill, Crony Capitalism and Drug Tests

In the newly proposed farm bill, the GOP House voted to allow states to conduct drug tests for people on food stamps. (In Texas, the GOP wanted to drug test for unemployment benefits too, with supporters saying taxpayers should not be subsidizing drug use or helping to supply money to drug dealers.)

There are no provisions in the newly proposed farm bill to make farmers (or those who receive farm subsidies) take drug tests. Several members of Congress are themselves recipients of farm subsidies, including Rep. Doug LaMalfa (R-Calif.), a co-sponsor of the drug testing amendment.

Among other things, the GOP said they were concerned with the national debt—so, speaking of the national debt...

Thursday, January 23, 2014

Our Economy has been Deconstructed

The employment-population ratio in now at a 30 year low; and the labor force participation rate is now at a 35 year low—and both have been in a steady decline since peaking in April of 2000. The first Baby Boomer (who born in 1946) didn't retire until 2008 when she turned 62 (she would have been eligible in 2011 to retire at the age of 65).

So it's not middle-aged people (who are retiring early) that has been driving a shrinking work force for the past 14 years. Over the past 40 years offshoring and automation has contributed to a glut of discouraged prime-aged workers. And the Bureau of Labor Statistics predicts a continuing decline going forward into 2022.

But by 2025 robots with artificial intelligence will be capable of doing almost everything humans can do—and employers will need even fewer workers in a growing population.

Wednesday, January 22, 2014

Democrats Moving Left, Not Center

"The people don't want a phony Democrat." —Harry Truman, 1952

In 2008, after the Bush debacle, America had wanted a new FDR. When they voted for Obama, they thought they had one. But because most of his progressive ambitions were thwarted by fierce Republican obstructionism in Congress (especially since the rise of the Tea Party in 2010), Obama was rendered into being more of a speech-giver rather than a real activist President.

Many Democrats in Congress, encountering relentless GOP criticism and growing frustration from their constituents, had wanted to appear more "center" and "moderate" after consistent attacks by the right wing and Fox News, accusing Obama of being a Socialist.

Since the 2008 economic collapse, massive job losses and high unemployment, Americans have become much more aware of the corporate takeover of our Democracy, the top one percent and income inequality—thanks in part to the Occupy Wall Street movement.

Tuesday, January 21, 2014

CEO of Starbucks: Not Such a Kind Gesture


A year ago the Starbucks board of directors moved to make Howard Schultz the highest-paid CEO in the Pacific Northwest for the fourth straight year. Starbucks had paid CEO Howard Schultz $28.9 million, including a special $12 million stock award for his leadership and to retain him for at least three more years.

Schultz still remains deeply despised in Seattle for selling their NBA team, the Supersonics, after taxpayers refused to build him a new arena. Then when the Seahawks were in the NFC Championship Game, a game held in Seattle, Schultz wanted to make nice with a kind gesture by selling coffee for 12-cents—but not all Seattle fans were buying it.

And in San Jose activists are now blasting Starbucks for seeking an exemption from having to pay the city’s $15.78 hourly living wage. NerdWallet calculated last month that Starbuck's CEO makes $9,637 an hour, 1,096 times the Starbucks average hourly rate.

Starbucks has just filed a request with the San Jose City Council to pay its employees less than the current law permits -- all so the multi-billion dollar company can pump up its profits even more. (Sign the petition)

Looking for a Howard Schultz take on all this? You'll find one in his 2011 memoir: “I love Starbucks because everything we've tried to do is steeped in humanity.”

Bits and Pieces: Bill Gates and Unemployment

This morning on MSNBC's "Morning Joe", host Joe Scarboroug blasted the tax code and how the ultra-rich paid so little in taxes—calling it "obscene". And he also railed against their offshore banks accounts to dodge taxes, saying, "If they want to keep their money offshore, then they should move offshore with their money... We don't want you here anymore."

A little later on in the program the MSNBC hosts had Bill Gates on as a guest, to discuss his 2014 annual letter. They asked Gates about the new wealth report, showing the world's top one percent had 50% of the world's wealth. But rather than waiting for a definitive answer, they asked him about raising the minimum wage, and Gates was lukewarm on the subject, saying raising the minimum wage would cause wage substitutions, and that the issue was "complicated", and that a lot more thinking was needed on the idea.

Monday, January 20, 2014

The World's Top 1% now has $110 Trillion


According to a study by Oxfam titled Working for the Few:
  • In a world of 7 billion people, 85 of richest people now have the combined wealth of 3.5 billion of the world's poorest people.

Sunday, January 19, 2014

Why does Cynthia M. Allen hate the Unemployed?

To: Cynthia M. Allen, columnist for the Fort Worth Star-Telegram (mallen@star-telegram.com)
Re: Response to her article "Extending unemployment benefits exacerbates jobs problem"

Senator Mike Lee's Tax Plan: Same Ole B.S.

This author at the New York Times seems to think Mike Lee (R-Utah) has a fair tax plan, and links to the National Review, who then links to Mike Lee's speech about his spiffy new tax plan called The Family Fairness and Opportunity Tax Reform Act. (Have you ever noticed how they always have these patriotic-sounding, but very misleading names for their deceitful bills.)

Sutton's Law: Not Enough Jobs

Sutton's Law states that when diagnosing, one should first consider the obvious. The law is named after the bank robber Willie Sutton, who reputedly replied to a reporter's inquiry as to why he robbed banks by saying, "Because that's where the money is."

Maybe it's the "brain drain" --- all the best and brightest students are going to work in the financial industry --- and that is part of the problem that we are currently having with our economy; we don't have enough "smart" people running our government, while the bankers are doing great. Even different people at different branches of the Federal Reserve can't seem to agree on why the labor force participation rate has been so low and declining.

I would suggest they use Sutton's Law: "Because we lack jobs."

Friday, January 17, 2014

TPP Trade Agreement: Obama's Real Waterloo

Not only will the TPP trade agreement turn Obama's supporters against him, it could ruin his Presidential legacy.

Obama - TPP trade agreement

For the past three days MSNBC's Ed Schultz blasted Obama for fast-tracking the TPP trade agreement after Obama had just given one of his "populist" speeches in North Carolina about manufacturing and bringing jobs home.

This is one of the few issues that both the right and the left seem to agree on, but there are bought-and-paid-for members of Congress (including Obama) that are trying to pass TPP on behalf of their corporate sponsors.

And according to Politico, another release by Wikileaks about the secret TPP trade agreement seems to be feeding a Democratic insurgency.

Thursday, January 16, 2014

TPP, Dark Money and Anti-Worker Politicians

Corporations have been influencing U.S. politics for decades, allowing them to decimate the American work force --- busting labor unions, passing bad trade agreements, offshoring jobs, stagnating wages, displacing workers with H-1B visas, and weakening the labor laws.

These corporations also bribe politicians to skew the tax code in their favor.

Both political parties have been beholden to these corporations. The TPP trade agreement is on the verge of being fast-tacked by Obama. Ed Schultz has been on MSNBC blasting Obama for the last two days.

Wednesday, January 15, 2014

When Money becomes an Addiction


Hoarding is when a person accumulates a massive amount of valued objects for which that person has no practical use. The most damaging form of hoarding is the hoarding of money. Yet this is routinely done by those who can, and desire to do so; and it's celebrated in publications such as Forbes Magazine and the Wall Street Journal. The richest among us have far more money that they could possibly ever need, or even use, but to them it is a game in which the richest one is the "winner"—and as Paul Krugman recently noted, the rest of us are "losers".

Several studies have been done since the Great Recession, and we've learned that many of the CEOs who devastated our economy weren't only greedy, but nearly 40% of them bombed at their jobs—and that 10% were psychopaths. Some studies have also revealed that the wealthier they were, the more likely they were to be more narcissistic and more unethical. So unless they were lucky enough to be born into wealth, many of these "job creators" were using nefarious means to accumulate their vast wealth—contrary to the popular myths that they accomplished this with just hard work and/or a great idea.

Tuesday, January 14, 2014

National and Household Debt - Apples and Oranges

Apples and Oranges

The Federal Debt as a percent of GDP (1941 to 2013)

(Chart below) The federal debt as a percent of GDP was historically the lowest under Jimmy Carter in 1979 (when manufacturing and unionization had peaked). Then it rose under Ronald Reagan and continued to rise higher under George H.W. Bush. Then under Bill Clinton it dropped, but rose again under George W Bush with tax cuts and two unfunded wars. It continued to rise under Obama with bank and corporate bailouts, and also with extended government programs for those who lost jobs during the Great Recession and its aftermath.

Monday, January 13, 2014

2000 to 2014: America's Downward Spiral & Race to the Bottom

(*NOTE: This post is a continuation from an earlier post How Keynesian Economics Won World War II)

After the Powell Memo, by 1979 the middle-class had peaked — then came Reaganomics and the Republican strategy of Starve the Beast (starving government spending) and the long decline in both manufacturing and the middle-class, when "trickle up economics" had created the largest income gap between rich and poor not seen since before the Great Depression.

How Keynesian Economics Won World War II

...and created the greatest middle-class in world history.

John Maynard Keynes began his theoretical work (Treatise on Money, published in 1930) to examine the relationship between unemployment, money and prices back in the 1920s. A central idea of his work was that if the amount of money being saved exceeds the amount being invested — which can happen if interest rates are too high — then unemployment will rise.

Saturday, January 11, 2014

Desperate Job Seekers in South Florida

First, a brief recap:

Now consider this: On April 1, 2000 the U.S. population was 281.4 million when the labor force participation rate peaked at 67.3% in April of 2000 (now it's 62.8%) and the employment-population ratio peaked at 64.7% in April 2000 (now it's 58.6%). In 2014 the U.S. population is now 317.3 million

From the Economic Populist:

"The United States is now down -1.165 million jobs from December 2007, a full six years ago. The EPI just performed an analysis showing America is really down 7.9 million jobs to return to pre-recession employment levels due to increased population growth over the last six years....The terrible employment situation has been going on for six years with no end in sight."

Jobs lost and gained

Friday, January 10, 2014

The Labor Force is Shrinking for Lack of Jobs

And not because baby boomers are shuffling into retirement.

Bud Meyers

Unemployment will be 0% in 2 Years

With a 0.3% monthly drop in the unemployment rate, at this rate, we should have a 0% unemployment rate by this time in 2015.

The labor department reported 74,000 net new jobs were created last month, and 32,000 of those were in retail trade --- and we're not yet sure how many of those were temporary jobs for the Holiday sales, although analysts had expected 200,000 new jobs created last month.

But the stock market is doing just fine.

Other highlights from the jobs report include:

  • The unemployment rate declined from 7.0 percent to 6.7 percent.
  • The number of unemployed persons declined by 490,000 to 10.4 million.
  • The number of part-time worker (for economic reasons) was unchanged at 7.8 million.
  • The employment-population ratio was unchanged at 58.6 percent.
  • The labor force participation rate fell to 62.8 percent.

Some "expert" on MSNBC falsely claimed that the labor force participation rate went down 3 percentage points over the last 5 years --- and that 2 percent of that was due to retiring baby boomers in their late 50's and 60s, and that only one percent was due to "discouraged workers" dropping out of the labor force.

From a study by Shigeru Fujita at the Philly Fed (dated November 19, 2013):

"As of the first half of 2013, roughly 5 percent to 6 percent of individuals in the working-age population are out of the labor force because of disability, 16 percent to 17 percent are out of the labor force because of retirement, and the rest have left the labor force for other reasons....There is no question that more workers dropped out of the labor force due to discouragement during and after the Great Recession and that there are more discouraged workers now than before the recession. These facts clearly reflect the continued weakness of the U.S. labor market."

The study noted that the nonparticipation in the labor force (due to disability) raised the overall nonparticipation rate by 1.4 percent (between the beginning of 2000 and the end of 2011); but he also adds, "In the last two years or so, however, it has been flat, thus making no contribution to the overall decline in the participation rate." In other words, not since the first Baby Boomer retired at age 65 in 2011. The first Boomer turned 62 in 2008 and took an early Social Security.

However, the study also noted that, "Nonparticipation due to retirement did not rise until the end of the Great Recession, but started to increase significantly in 2010. Since the start of 2012, it has been the only component that has contributed to the increase in the nonparticipation rate." --- which almost seems contradictory what he said earlier.

Zero Hedge -|- People Not In Labor Force Soar To Record 91.8 Million; Participation Rate Plunges To 1978 Levels

There have been millions of Americans who "dropped out of the labor force" since the recession because they never found work again after being laid off; but there have been many more "non-starters" graduating from high school --- far less than those who retired or went on disability (check the numbers here).

Continuing unemployment claims have not been updated as of this post, and still shows 1.3 million receiving federal benefits, even though the program ended last year.

Thursday, January 9, 2014

Revisiting CEO Pay in the U.S.

The growth of CEO and executive compensation (including the value of stock options granted to an executive) overall was a major factor driving the doubling of the income shares of the top 1.0 percent and top 0.1 percent of households from 1979 to 2007. Average CEO compensation was $14.1 million in 2012, up 37.4 percent since 2009.

The Big Lie: Politicians and the Media

UPDATED here on 8/15/17 -- I posted the image directly below because it reminded me of the Democrat's political strategy of using psychological projection to blame others for their own failures or misdeeds. Example: Notice how the buck never stopped with Hillary Clinton ... who was one of the biggest liars of all time.

Editor's Note: No one is attempting to compare the American news media or any particular political party to German Nazis and genocide, but only comparing their propaganda techniques to misinformation and disinformation.

Note that misinformation is false or inaccurate information that is spread unintentionally. It is distinguished from disinformation, which is intended to mislead. Disinformation is intentionally false or inaccurate information that is spread deliberately. It is an act of deception and false statements to convince someone of untruth. Disinformation should not be confused with misinformation, information that is unintentionally false.

Secular Stagnation, $5 Trillion in Hoarded Profits, Tax Havens

Editor's Note: I stitched together a few quoted paragraphs from various articles to show a correlation between several different topics (unemployment, secular stagnation, corporate taxes, hoarded profits and tax havens), so don't be confused (read through all the links.)

Wednesday, January 8, 2014

What's the Difference between an Economist and a Politician?

No, it's not a joke, and there's no punch line. It's a serious question.

If economists, government statisticians, media celebrities and politicians tell us that the unemployment rate is 7%, naturally most average people will assume that 7% of the working-age population is out of work — and that this is a "fact", and not just someone's opinion.

They can argue among themselves all they want, until they are blue in the face, as to why so many people are out of work, such as: there aren't enough jobs, the unemployed are lazy, the jobs were offshored, the unemployed want a government hand-out, there's nothing for the unemployed to do, the jobless are drug addicts or alcoholics, automation and robots are better, the unemployed lack education and skills, it's more profitable to fire rather than hire workers, etc. — the reasons are endless, but nothing has been done about it. Why?

Study: The Top 1% in International and Historical Perspective

* From the American Economic Association by Alvaredo, Facundo, Anthony B. Atkinson, Thomas Piketty, and Emmanuel Saez --- 2013 Journal of Economic Perspectives, 27(3): 3-20

The top 1 percent income share has more than doubled in the United States over the last 30 years, drawing much public attention in recent years.

While other English-speaking countries have also experienced sharp increases in the top 1 percent income share, many high-income countries such as Japan, France, or Germany have seen much less increase in top income shares. Hence, the explanation cannot rely solely on forces common to advanced countries, such as the impact of new technologies and globalization on the supply and demand for skills.

Moreover, the explanations have to accommodate the falls in top income shares earlier in the twentieth century experienced in virtually all high-income countries. We highlight four main factors:

  • The first is the impact of tax policy, which has varied over time and differs across countries. Top tax rates have moved in the opposite direction from top income shares. The effects of top rate cuts can operate in conjunction with other mechanisms.

  • The second factor is a richer view of the labor market, where we contrast the standard supply-side model with one where pay is determined by bargaining and the reactions to top rate cuts may lead simply to a redistribution of surplus. Indeed, top rate cuts may lead managerial energies to be diverted to increasing their remuneration at the expense of enterprise growth and employment.

  • The third factor is capital income. Overall, private wealth (relative to income) has followed a U-shaped path over time, particularly in Europe, where inherited wealth is, in Europe if not in the United States, making a return.

  • The fourth, little investigated, element is the correlation between earned income and capital income, which has substantially increased in recent decades in the United States.

Full text here (18 pages in PDF format)

Author Disclosure Statement(s)

Tuesday, January 7, 2014

STUDY: The Wealthier One is, the more Entitled They Feel

Paul Piff, a social psychologist of human behavior at University of California-Berkeley, studies how social hierarchy, inequality and emotion shape relations between individuals and groups.

What can a game of Monopoly tell us about how wealth's concentration poisons our interpersonal relations?

Paul Piff describes what happened when researchers at his lab rigged games of Monopoly to privilege some players over others (like our tax code). This and similar experiments, Piff notes, demonstrate that “the wealthier you are, the more entitled you feel.”

It's amazing what a rigged game of Monopoly can reveal. In this entertaining but sobering talk, Paul Piff shares his research into how people behave when they feel wealthy. (Hint: badly.)

A TED Talk Video --- link here

How Boeing Sold Out America for Stock Options

On Oct. 26, 1958 history was made when Pan Am flew a new commercial Boeing 707 jetliner from New York to Paris. That was when manufacturing had been the backbone of the U.S. economy --- when only 8 percent of all cars sold in the United States were imports.

Also in that same year, a small Japanese company called Toyota sold its first vehicle in California; it sold 288 Toyopet sedans to American consumers. By comparison, General Motors produced 2.1 million cars in the U.S. that year.

That was a time when Americans once took great pride in the Made in the USA label --- and when usually only teenagers worked at one of the 34 McDonalds restaurants --- and when Walmart was only a local Five-and-Dime store in the small town of Bentonville, Arkansas.

But since the 1970s, a new trend began when America's job creators learned to offshore jobs for greater profits and much higher executive pay.

Sunday, January 5, 2014

Will Legalized Pot Increase Unemployment in Colorado?

Denver is going up in smoke.

With their recent victory over the Oakland Raiders, the Denver Broncos clinched the top seed in the AFC playoffs. In Denver, you can smell excitement in the air.

But that's not the only thing you can smell in Denver's mile-high air, because Colorado just recently unveiled the modern world's very first fully-legal marijuana industry. Now cities like Denver are going up in smoke.

Saturday, January 4, 2014

STUDY: 1/3 of Americans are Moochers

President Lyndon Johnson declared the war on poverty 50 years ago this month. The critics (usually Republicans and Libertarians) claim we lost that war. After all, our poverty rate back then was about 19 percent, and today it's over 15 percent --- not much of a change.

These know-it-all critics say that government money spent on programs like food stamps, subsidized school lunches, Medicaid, TANF, unemployment benefits and tax subsidies for the working poor has all been wasted.

Friday, January 3, 2014

Job Creators don't Need to Create Jobs

Our "job creators" don't need to create jobs these days, because permanent long-term unemployment has been actually helping to drive stocks higher --- because an over-saturated labor market depresses wages, helping to increase corporate earnings.

Thursday, January 2, 2014

22% of all U.S. Households had no Earners

According to the Bureau of Labor Statistics, in 2012 there were 124.4 million total households in the U.S. --- and 27.6 million of those (22.1%) had no "earners" at all.

An "earner" as defined by the BLS: "A consumer unit member, 14 years of age or older, who reported having worked at least 1 week during the 12 months prior to the interview date."

A "household" could be anything from a beach-front mansion to a weekly motel room or a mobile trailer.

The World's First Trillionaire

What’s fueling this astonishing concentration of wealth to the top 0.1 percent? It's tax policy...or in Bill Clinton’s words, it’s arithmetic.

Wednesday, January 1, 2014

The Rich are only Rich because of Luck

In 1999 the executive chairman of Google (then the CEO of Novell) said in an interview for Forbes:

"Lots of people who are smart and work hard and play by the rules don’t have a fraction of what I have." Schmidt acknowledged that the scale of inequality generated by the new wealth “makes me uncomfortable.” The reason: "I realize I don’t have my wealth because I’m so brilliant. Luck has a lot to do with it."

USA Today: "If we assume that wealth comes from working hard, taking great personal risk and coming up with great ideas, then the wealthy don't necessarily "owe" society for their success. But if the rich are simply lucky, or if they get wealthy on the back of America's publicly funded infrastructure, they owe more of a debt in the form of taxes or philanthropy."

Since the Great Recession, we've heard the phrase "upward mobility" tossed around a lot. After I read that USA Today article, I immediately thought of 13 ways of how the rich got to be sooooo rich in the first place --- just plain dumb luck.

Paul Krugman, Zombies, Cockroaches and Weasels

Historians write, “The Rome of 100 A. D. had better paved streets, sewage disposal, water supply, and fire protection than the capitals of civilized Europe in 1800.”

More Part-Time Jobs in 2014?

The red line in the chart below is the monthly index of the employment-to-population ratio (which is currently at a 30-year low). In the chart, the employment-to-population ratio is normalized to a value of 100 in December 2007 when the Great Recession first began (in the gray area).

Employment-to-population ratio 2007 to 2013