Have you heard of the stock scam called pump and dump? That's what this Wall Street Journal reminds me of. It's titled Wealth Drives U.S. Consumers to Keep Spending. Here are a few quotes...
"More than halfway through 2013, they [consumers] are notching the highest confidence levels in years. Economists attribute the optimism to a gradually improving jobs picture, rising home values and the bull market in stocks."
"I think the big picture literally is that households are getting close to a position where they'll be able to spend a bit more vigorously," said Paul Dales of Capital Economics. "When you look back at what happened in the past four years, employment has improved, households have paid down debt, confidence has returned to a normal level."
"Midyear readings from the Conference Board as well as Thomson Reuters and the University of Michigan show consumer confidence at its highest point in more than five years. The stock market and climbing home prices have played a role."
Then, near the bottom of the article we read:
The wealth effect has been "the key to turning things around" for high-income households and some middle-income ones, Mr. Zandi said. By contrast, "low-income households are still struggling," although the recent easing in gas prices should provide some relief.
Karen McDonough a 41-year-old risk analyst, said she and her husband are spending sparingly, postponing renovation of their Boston home and halting investments in a retirement fund. They are trying to rebuild emergency savings depleted when Ms. McDonough's husband lost his job and "we hit rock bottom" four years ago. Browsing this week at a Bed Bath & Beyond in Washington, D.C., while visiting family, Ms. McDonough said, "The economy might be getting better for some people, but it's not improving at the same rate for everyone."
In other words, those at the top, as Mitt Romney would say, "are doing just fine" --- just like the title of the Wall Street Journal article says: Wealth Drives U.S. Consumers to Keep Spending.
Just like you talking up a bad stock (pump) to get people to buy it before selling your shares (dump) before the truth comes out and the stock crashes. That's what I get from many of the Wall Street Journal's articles...telling us how good everything is (for the top 1%), when really it sucks (for the bottom 99%).
And in case you haven't noticed, politicians in both parties do this too...pump and dump.
Here's my pump and dump:
The average Social Security disability benefit is $1,130 a month (or $13,560 a year). The average unemployment insurance benefit is $300 per week (which is $1,300 a month, or $15,600 a year). The federal minimum wage is $7.25 a hour. Based on 40 hours a week (which is rare), that would be $290 a week before taxes (or $15,080 a year).
These people (especially if they lived alone) would most likely spend 100% of their benefits on such things as shelter, food and utilities --- because they don't have enough left over to save. So 100% of their benefits or wages would go right back into the economy.
But if you tripled these amounts, people would either live in better places and eat better food, or save for retirements and college tuitions, or buy things (and/or all of the aforementioned). Either way, the money eventually goes right back into the economy (unlike those who rake in millions every year, low-income Americans don't hoard their money in offshore tax havens).
The Republicans always says that the government doesn't create jobs. That's a lie, and always has been. The government employees over twice as many people as Walmart. And because the government pays better wages and offers better benefits and job security, government is not only the biggest employer, but it is also one of the better overall employers. The defense industry alone has employees in all 50 states, and makes up the largest part of the annual budget (because you would also have to include the Department of Energy, which maintains our nuclear arsenal).
The private-sector (by contrast) over the past 5 years has hired temp and part-time workers in low-wage jobs --- or has continued to offshore the better-paying jobs to lower-wage nations. Our government workers pay more in taxes to our treasury because they earn more. About 5 million low-wage workers in Asia pay their taxes to THEIR government.
According to the Social Security Administration, half of all U.S. wage earners (who filed a W-4 with an employer and paid FICA taxes) earned $26,966 a year or LESS after taxes.
By comparison, U.S. CEOs of the largest companies made 354 times the average rank-and-file worker --- by far the widest pay gap in the world. Last year, CEOs received on average $12.3 million. This new data confirms CEO-to-worker pay disparities have increased dramatically over the past several decades. Thirty years ago, CEOs were paid 42 times that of rank-and-file workers in the U.S.
Most of us (if we have a job) actually "work" for a living, but once you get up to the very top of the income scale --- the top 0.1% got two-thirds of their income coming from non-labor sources.
A pair of Senate Democrats have introduced legislation to end unlimited tax write-offs on performance-based executive pay, allowing publicly traded corporations to deduct only up to $1 million in pay per employee.
Walmart is the most stingy corporation on the planet Earth (in the entire solar system) and is primarily owned by one family. (McDonald's ranks #2 for stingiest). Remember, this is the same most profitable company that also refuses to increase pay and benefits for its employees --- and fires those who try to change that. Christy Walton alone rakes in over $1.2 million EVERY SINGLE DAY from Walmart dividends. But the Republicans wants to regulate and tax Walmart and the Walton heirs LESS...and they also want to cut benefits to those who are disabled and unemployment (which can happen to ANYONE), while also eliminating the minimum wage.
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