Tag Archives: economic inequality

The USA Is Now a 3rd World Nation

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By Charles Hugh Smith

Source: Of Two Minds

I know it hurts, but the reality is painfully obvious: the USA is now a 3rd World nation.

Dividing the Earth’s nations into 1st, 2nd and 3rd world has fallen out of favor; apparently it offended sensibilities. It has been replaced by the politically correctdeveloped and developing nations, a terminology which suggests all developing nations are on the pathway to developed-nation status.

What’s been lost in jettisoning the 1st, 2nd and 3rd world categories is the distinction between developing (2nd world) and dysfunctional states (3rd world), states we now label “failed states.”

But 3rd World implied something quite different from “failed state”: failed state refers to a failed government of a nation-state, i.e. a government which no longer fulfills the minimum duties of a functional state: basic security, rule of law, etc.

3rd World referred to a nation-state which was dysfunctional and parasitic for the vast majority of its residents but that worked extremely well for entrenched elites who controlled most of the wealth and political power. Unlike failed states, which by definition are unstable, 3rd World nations are stable, for the reason that they work just fine for the elites who dominate the wealth, power and machinery of governance.

Here are the core characteristics of dysfunctional but stable states that benefit the entrenched few at the expense of the many, i.e. 3rd Worldnations:

1. Ownership of stocks and other assets is highly concentrated in entrenched elites. The average household is disconnected from the stock market and other measures of wealth; only a thin sliver of households own enough financial/speculative wealth to make an actual difference in their lives.

2. The infrastructure of the nation used by the many is poorly maintained and costly to operate as entrenched elites plunder the funding to pad their payrolls, pensions and sweetheart/insider contracts.

3. The financial/political elites have exclusive access to parallel systems of transport, healthcare, education, etc. The elites avoid trains, subways, lenders, coach-class air transport, standard healthcare and the rest of the decaying, dysfunctional systems they own that extract wealth from the debt-serfs.

They fly on private aircraft, have their own healthcare and legal services, use their privileges to get their offspring into elite universities and institutions and have access to elite banking and lending services that are unavailable to their technocrat lackeys and enforcers.

4. The elites fund lavish monuments to their own glory disguised as “civic or national pride.” These monuments take the form of stadiums, palatial art museums, immense government buildings, etc. Meanwhile the rest of the day-to-day infrastructure decays in various states of dysfunction.

5. There are two classes that only interact in strictly controlled ways: the wealthy, who live in gated, guarded communities and who rule all the institutions, public and private, and the debt-serfs, who are divided into well-paid factotums, technocrat lackeys and enforcers who serve the interests of the entrenched elites and rest of the populace who own virtually nothing and have zero power.

The elites make a PR show of being a commoner only to burnish the absurd illusion that debt-serf votes actually matter. (They don’t.)

6. Cartels and quasi-monopolies are parasitically extracting the wealth of the nation for their elite owners and managers. Google: quasi-monopoly. Facebook: quasi-monopoly. Healthcare: cartel. Banking: cartel. National defense: cartel. National Security: cartel. Corporate mainstream media: cartel. Higher education: cartel. Student loans: cartel. I think you get the point: every key institution or function is controlled by cartels or quasi-monopolies that serve the interests of the few via parasitic exploitation of the powerless.

7. The elites use the extreme violence and repressive powers of the government to suppress, marginalize and/or destroy any dissent. There are two systems of “law”: one for the elites ($10 million penalties for ripping off the public for $10 billion, no personal liability for outright fraud) and one for the unprotected-unprivileged: “tenners” (10-year prison sentences) for minor drug infractions, renditions or assassinations (all “legal,” of course) and institutional forces of violence (bust down your door on the rumor you’ve got drugs, confiscate your car because we caught you with cash, so you must be a drug dealer, and so on, in sickening profusion).

8. Dysfunctional institutions with unlimited power to extract money via junk fees, licensing fees, parking tickets, penalties, late fees, etc., all without recourse. Mess with the extractive, parasitic bureaucracy and you’ll regret it: there’s no recourse other than another layer of well-paid self-serving functionaries that would make Kafka weep.

9. The well-paid factotums, bureaucrats, technocrat lackeys and enforcers who fatten their own skims and pensions at the expense of the public and slavishly serve the interests of the entrenched elites embrace the delusion that they’re “wealthy” and “the system is working great.” These deluded servants of the elites will defend the dysfunctional system because it serves their interests to do so.

The more dysfunctional the institution, the greater their power, so they actively increase the dysfunction at every opportunity.

The USA is definitively a 3rd World nation. Read the list above and then try to argue the USA is not a 3rd World nation. Try arguing against the facts displayed in this chart:

I know it hurts, but the reality is painfully obvious: the USA is now a 3rd World nation.

 

Taxpayers Are Footing the Bill for Sky-High CEO Salaries

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Billions in taxpayer funds go to CEOs who pay their workers peanuts. We can change that.

By Sam Pizzigati

Source: Other Words

Politicians often gab about the “private sector” and the “public sector,” as if these two categories of economic activity operated as two completely separate worlds.

In reality, these two sectors have always been deeply intertwined.

How deeply? Every year, the federal government spends about half a trillion dollars buying goods and services from the private sector. State and local government contracts with private-sector enterprises add hundreds of billions more.

And private-sector companies don’t just receive contracts from our governmental entities. They receive all sorts of subsidies — billions upon billions of dollars in “corporate welfare.”

Where do all these dollars come from? They come from us, America’s taxpayers. Without the tax dollars we provide, almost every major corporation in the United States would flounder. Some would simply cease to exist. The defense contractor Lockheed Martin, for instance, takes in almost all its revenue from government contracts.

This private sector reliance on public tax dollars gives us, as citizens, some leverage over the behavior of our largest and most powerful corporations. We could, if we so chose, deny those dollars to corporations that engage in behaviors that undermine the values we hold dear.

On other fronts, we already do this denying. For over a generation now, we’ve leveraged the power of the public purse against companies with employment practices that discriminate on the basis of race and gender. Companies that discriminate can’t get government contracts because we’ve come to a consensus, as a society, that we don’t want our tax dollars subsidizing racial and gender inequality.

Unfortunately, our tax dollars are still subsidizing — in a big way — economic inequality, as a new Institute for Policy Studies report on CEO pay details quite vividly. Billions of our tax dollars are annually going to corporations that pay their top executives more in a week, or even a day, than their typical employees can make over an entire year.

The late Peter Drucker, the founder of modern management science, believed that no corporate enterprise that pays its CEO over 25 times what its workers are earning could operate efficiently and effectively over the long haul. In 2017, every single one of the federal government’s 50 largest private contractors paid its chief executive over 25 times more than its most typical workers.

In fact, most paid their top execs well over 100 times more.

And at one, DXC Technology, the CEO pulled down over $32 million in 2017 pay — over 800 times the compensation of the firm’s typical employees.

Let’s add a little context here. The president of the United States earns $400,000 a year. The CEOs of the 50 private companies with the largest federal contracts last year averaged over $13.5 million. The CEOs of the 50 largest recipients of federal subsidies last year averaged over $12 million.

Our tax dollars, in other words, are helping a lucky few become fabulously rich.

We do live, as our politicians like to point out, in a “free country.” Corporations can pay their top execs whatever they want. But we taxpayers have freedom, too. We can freely deny our tax dollars to enterprises that are making our society ever more unequal.

Some lawmakers are starting to step in that direction. Five states have begun considering legislation that would make it harder for companies with wide CEO-worker pay gaps to get government contracts and tax breaks. And one city — Portland, Oregon — has already enacted legislation that taxes corporations with wide CEO-worker pay gaps at a higher rate than corporations with more modest gaps.

We need more Portlands.

Why do corporate boards so overpay US CEOs?

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By Sam Pizzigati

Source: Nation of Change

Back in 1999, near the dizzying height of the dot-com boom, no executive in Corporate America personified the soaring pay packages of America’s CEOs more than Jack Welch, the chief exec at General Electric. Welch took home $75 million that year.

What explained the enormity of that compensation? Welch didn’t claim any genius on his part. He credited his success, instead, to the genius of the free market.

“Is my salary too high?” mused Welch. “Somebody else will have to decide that, but this is a competitive marketplace.”

Translation: “I deserve every penny. The market says so.”

Top U.S. corporate execs today, on average, are doing even better than top execs in Welch’s heyday. In 1999, notes a just-released new report from the Economic Policy Institute, CEOs at the nation’s 350 biggest corporations pocketed 248 times the pay of average workers in their industries. Top execs last year averaged 312 times more.

What explains this growing generosity to America’s top corporate chiefs? Today’s apologists for over-the-top CEO compensation, like Jack Welch a generation ago, point to the market.

One leading critic of these apologists, the Dutch management scientist Manfred Kets de Vries, neatly summed up this market world view earlier this year: Big CEO pay packages “reflect market demands for a CEO’s unique skills and contribution to the bottom line.” Mega-million executive paychecks “merely represent the market forces of supply and demand.”

Or, as the University of Chicago’s Steven Kaplan puts it, “The market for talent puts pressure on boards to reward their top people at competitive pay levels in order to both attract and retain them.”

In the world that CEO cheerleaders like Kaplan inhabit, impartial, unbiased markets determine executive compensation. Corporate boards simply play by market rules. They pay their execs what the market says their execs deserve. If they don’t, they risk losing their executive talent.

American corporate leaders take scarcity – of CEO talent – as a given. How else, in a market economy, to explain rapidly rising CEO pay? If quality CEOs abounded, executive compensation would not be soaring. But that compensation is soaring, so qualified CEOs obviously must be few and far between – and totally deserving of whatever many millions they receive. Simple market logic.

And simply wrong. American corporations today confront no scarcity of executive talent. The numbers of people qualified to run multi-billion-dollar companies have never, in reality, been more plentiful. These numbers have been growing steadily over recent decades, in part because America’s graduate schools of business have been graduating, year after year, thousands of rigorously trained executives.

America’s first graduate school for executives, the Tuck School of Business at Dartmouth, currently boasts an alumni network over 10,000 strong. MBAs in the equally prestigious Harvard Business School alumni network total over 46,000. Add in the alumni from other widely acclaimed institutions and the available supply of executives trained at America’s top-notch business schools approaches several hundred thousand.

Just how many of these academically trained executives have the skills and experience really needed to run a Fortune 500 company? Let’s assume, conservatively, that only 1 percent of the alumni from the “best” business schools have enough skills and experience to run a big-time corporation.

That arithmetic would give Fortune 500 companies that go looking for a new CEO at least several thousand eminently qualified candidates. No supply shortage here.

Indeed, today’s business world is overflowing with eminently qualified CEO candidates, once you add in the grads from business schools abroad. INSEAD, perhaps the most prominent of these international schools, now has over 56,000 active alumni.

In the past, to be sure, American corporations seldom looked beyond the borders of the United States for executive talent. That tunnel vision made some sense. Executives inside the United States and executives outside worked in different business environments. Foreign executives could hardly be expected to succeed in an unfamiliar American marketplace, even if they did speak flawless English.

But today, in our celebrated “globalized” economy, that distinction between domestic and foreign executives no longer matters nearly as much. In dozens of foreign nations, in hundreds of foreign corporations, executives are competing in the same global marketplace as their American counterparts. They’re using the same technologies, studying the same market data, and strategizing toward the same business goals. Together, taken as a group, executives from elsewhere in the world constitute a huge new pool of talent for American corporations.

Pay consultants in the United States, for their part, do acknowledge the reality of this global marketplace for executive talent. In fact, they cite global competition as one important reason why executive pay in the United States is rising. American companies, the argument goes, now have to compete against foreign companies for executive talent, the argument goes. This competition is forcing up executive pay in the United States.

Really? What ever happened to market logic? If corporations all around the world paid their executives at comparable rates, market competition would certainly force up executive compensation worldwide. But corporations don’t all pay executives at comparable rates.

American executives take home far more compensation than their foreign counterparts, on average over triple the pay of execs in America’s peer nations. By classic market logic, any competition between highly paid American executives and equally qualified but more modestly paid international executives ought to end up lowering, not raising, the higher pay rates in the United States.

Why, after all, would an American corporation pay $50 million for an American CEO when a skilled international CEO could easily be had for one-fifth or even one-fiftieth that price?

We have here, in short, a situation that a deep, abiding faith in the “market” does not explain. In the executive talent marketplace, American corporations face plenty, not scarcity, yet the going rate for American executives keeps rising.

Has someone repealed the laws of supply and demand? How else could executive pay in the United States have ascended to such lofty levels?

Some analysts do have an alternate explanation to offer. Markets, they point out, still operate by supply and demand. But markets don’t set executive pay.

“CEOs who cheerlead for market forces wouldn’t think of having them actually applied to their own pay packages,” as commentator Matthew Miller has noted in the Los Angeles Times. “The reality is that CEO pay is set through a clubby, rigged system in which CEOs, their buddies on board compensation committees and a small cadre of lawyers and ‘compensation consultants’ are in cahoots to keep the millions coming.”

“CEO compensation,” agree Lawrence Michel and Jessica Schieder, the authors of the new Economic Policy Institute executive pay report, “appears to reflect not greater productivity of executives but the power of CEOs to extract concessions.”

If CEOs earned less, the pair add, we would see “no adverse impact on output or employment.” Instead, they go on, lower executive paychecks would mean higher rewards for corporate workers, since the huge paydays that go to CEOs today reflect “income that otherwise would have accrued to others.”

How could those “others,” the rest of us, best go about lowering CEO compensation? Michel and Schieder offer a variety of promising proposals, ranging from higher marginal income tax rates to higher corporate tax rates on companies with excessively wide CEO-to-worker compensation ratios.

And what might a reasonable CEO-to-worker pay ratio be? The new Economic Policy Institute research suggests one plausible goal. Back in 1965, Michel and Schieder calculate, America’s top execs only pulled down 20 times more pay than the nation’s average workers.

National (In)Security In the United States of Inequality

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By Rajan Menon

Source: Unz Review

So effectively has the Beltway establishment captured the concept of national security that, for most of us, it automatically conjures up images of terrorist groups, cyber warriors, or “rogue states.” To ward off such foes, the United States maintains a historically unprecedented constellation of military bases abroad and, since 9/11, has waged wars in Afghanistan, Iraq, Syria, Libya, and elsewhere that have gobbled up nearly $4.8 trillion. The 2018 Pentagon budget already totals $647 billion — four times what China, second in global military spending, shells out and more than the next 12 countries combined, seven of them American allies. For good measure, Donald Trump has added an additional $200 billion to projected defense expenditures through 2019.

Yet to hear the hawks tell it, the United States has never been less secure. So much for bang for the buck.

For millions of Americans, however, the greatest threat to their day-to-day security isn’t terrorism or North Korea, Iran, Russia, or China. It’s internal — and economic. That’s particularly true for the 12.7% of Americans (43.1 million of them) classified as poor by the government’s criteria: an income below $12,140 for a one-person household, $16,460 for a family of two, and so on… until you get to the princely sum of $42,380 for a family of eight.

Savings aren’t much help either: a third of Americans have no savings at all and another third have less than $1,000 in the bank. Little wonder that families struggling to cover the cost of food alone increased from 11% (36 million) in 2007 to 14% (48 million) in 2014.

The Working Poor

Unemployment can certainly contribute to being poor, but millions of Americans endure poverty when they have full-time jobs or even hold down more than one job. The latest figures from the Bureau of Labor Statistics show that there are 8.6 million“working poor,” defined by the government as people who live below the poverty line despite being employed at least 27 weeks a year. Their economic insecurity doesn’t register in our society, partly because working and being poor don’t seem to go together in the minds of many Americans — and unemployment has fallen reasonably steadily. After approaching 10% in 2009, it’s now at only 4%.

Help from the government? Bill Clinton’s 1996 welfare “reform” program , concocted in partnership with congressional Republicans, imposed time limits on government assistance, while tightening eligibility criteria for it. So, as Kathryn Edin and Luke Shaefer show in their disturbing book, $2.00 a Day: Living on Almost Nothing in America, many who desperately need help don’t even bother to apply. And things will only get worse in the age of Trump. His 2019 budget includes deep cuts in a raftof anti-poverty programs.

Anyone seeking a visceral sense of the hardships such Americans endure should read Barbara Ehrenreich’s 2001 book Nickel and Dimed: On (Not) Getting By in America. It’s a gripping account of what she learned when, posing as a “homemaker” with no special skills, she worked for two years in various low-wage jobs, relying solely on her earnings to support herself. The book brims with stories about people who had jobs but, out of necessity, slept in rent-by-the-week fleabag motels, flophouses, or even in their cars, subsisting on vending machine snacks for lunch, hot dogs and instant noodles for dinner , and forgoing basic dental care or health checkups. Those who managed to get permanent housing would choose poor, low-rent neighborhoods close to work because they often couldn’t afford a car. To maintain even such a barebones lifestyle, many worked more than one job.

Though politicians prattle on about how times have changed for the better, Ehrenreich’s book still provides a remarkably accurate picture of America’s working poor. Over the past decade the proportion of people who exhausted their monthly paychecks just to pay for life’s essentials actually increased from 31% to 38%. In 2013, 71% of the families that had children and used food pantries run by Feeding America, the largest private organization helping the hungry, included at least one person who had worked during the previous year. And in America’s big cities, chiefly because of a widening gap between rent and wages, thousands of working poor remain homeless, sleeping in shelters, on the streets, or in their vehicles, sometimes along with their families. In New York City, no outlier when it comes to homelessness among the working poor, in a third of the families with children that use homeless shelters at least one adult held a job.

The Wages of Poverty

The working poor cluster in certain occupations. They are salespeople in retail stores, servers or preparers of fast food, custodial staff, hotel workers, and caregivers for children or the elderly. Many make less than $10 an hour and lack any leverage, union or otherwise, to press for raises. In fact, the percentage of unionized workers in such jobs remains in the single digits — and in retail and food preparation, it’s under 4.5%. That’s hardly surprising, given that private sector union membership has fallen by 50% since 1983 to only 6.7% of the workforce.

Low-wage employers like it that way and — Walmart being the poster child for this — work diligently to make it ever harder for employees to join unions. As a result, they rarely find themselves under any real pressure to increase wages, which, adjusted for inflation, have stood still or even decreased since the late 1970s. When employment is “at-will,” workers may be fired or the terms of their work amended on the whim of a company and without the slightest explanation. Walmart announced this year that it would hike its hourly wage to $11 and that’s welcome news. But this had nothing to do with collective bargaining; it was a response to the drop in the unemployment rate, cash flows from the Trump tax cut for corporations (which saved Walmart as much as $2 billion), an increase in minimum wages in a number of states, and pay increases by an arch competitor, Target. It was also accompanied by the shutdown of 63 of Walmart’s Sam’s Club stores, which meant layoffs for 10,000 workers. In short, the balance of power almost always favors the employer, seldom the employee.

As a result, though the United States has a per-capita income of $59,500 and is among the wealthiest countries in the world, 12.7% of Americans (that’s 43.1 million people), officially are impoverished. And that’s generally considered a significant undercount. The Census Bureau establishes the poverty rate by figuring out an annual no-frills family food budget, multiplying it by three, adjusting it for household size, and pegging it to the Consumer Price Index. That, many economists believe, is a woefully inadequate way of estimating poverty. Food prices haven’t risen dramatically over the past 20 years, but the cost of other necessities like medical care (especially if you lack insurance) and housing have: 10.5% and 11.8% respectively between 2013 and 2017 compared to an only 5.5% increase for food.

Include housing and medical expenses in the equation and you get the Supplementary Poverty Measure (SPM), published by the Census Bureau since 2011. It reveals that a larger number of Americans are poor: 14% or 45 million in 2016.

Dismal Data

For a fuller picture of American (in)security, however, it’s necessary to delve deeper into the relevant data, starting with hourly wages, which are the way more than 58%of adult workers are paid. The good news: only 1.8 million, or 2.3% of them, subsist at or below minimum wage. The not-so-good news: one-third of all workers earn less than $12 an hour and 42% earn less than $15. That’s $24,960 and $31,200 a year. Imagine raising a family on such incomes, figuring in the cost of food, rent, childcare, car payments (since a car is often a necessity simply to get to a job in a country with inadequate public transportation), and medical costs.

The problem facing the working poor isn’t just low wages, but the widening gap between wages and rising prices. The government has increased the hourly federal minimum wage more than 20 times since it was set at 25 cents under the 1938 Fair Labor Standards Act. Between 2007 and 2009 it rose to $7.25, but over the past decade that sum lost nearly 10% of its purchasing power to inflation, which means that, in 2018, someone would have to work 41 additional days to make the equivalent of the 2009 minimum wage.

Workers in the lowest 20% have lost the most ground, their inflation-adjusted wages falling by nearly 1% between 1979 and 2016, compared to a 24.7% increase for the top 20%. This can’t be explained by lackluster productivity since, between 1985 and 2015, it outstripped pay raises, often substantially, in every economic sector except mining.

Yes, states can mandate higher minimum wages and 29 have, but 21 have not, leaving many low-wage workers struggling to cover the costs of two essentials in particular: health care and housing.

Even when it comes to jobs that offer health insurance, employers have been shifting ever more of its cost onto their workers through higher deductibles and out-of-pocket expenses, as well as by requiring them to cover more of the premiums. The percentage of workers who paid at least 10% of their earnings to cover such costs — not counting premiums — doubled between 2003 and 2014.

This helps explain why, according to the Bureau of Labor Statistics, only 11% of workers in the bottom 10% of wage earners even enrolled in workplace healthcare plans in 2016 (compared to 72% in the top 10%). As a restaurant server who makes $2.13 an hour before tips — and whose husband earns $9 an hour at Walmart — put it, after paying the rent, “it’s either put food in the house or buy insurance.”

The Affordable Care Act, or ACA (aka Obamacare), provided subsidies to help people with low incomes cover the cost of insurance premiums, but workers with employer-supplied healthcare, no matter how low their wages, weren’t covered by it. Now, of course, President Trump, congressional Republicans, and a Supreme Court in which right-wing justices are going to be even more influential will be intent on poleaxing the ACA.

It’s housing, though, that takes the biggest bite out of the paychecks of low-wage workers. The majority of them are renters. Ownership remains for many a pipe dream. According to a Harvard study, between 2001 and 2016, renters who made $30,000-$50,000 a year and paid more than a third of their earnings to landlords (the threshold for qualifying as “rent burdened”) increased from 37% to 50%. For those making only $15,000, that figure rose to 83%.

In other words, in an ever more unequal America, the number of low-income workers struggling to pay their rent has surged. As the Harvard analysis shows, this is, in part, because the number of affluent renters (with incomes of $100,000 or more) has leapt and, in city after city, they’re driving the demand for, and building of, new rental units. As a result, the high-end share of new rental construction soared from a third to nearly two-thirds of all units between 2001 and 2016. Not surprisingly, new low-income rental units dropped from two-fifths to one-fifth of the total and, as the pressure on renters rose, so did rents for even those modest dwellings. On top of that, in places like New York City, where demand from the wealthy shapes the housing market, landlords have found ways — some within the law, others not — to get rid of low-income tenants.

Public housing and housing vouchers are supposed to make housing affordable to low-income households, but the supply of public housing hasn’t remotely matched demand. Consequently, waiting lists are long and people in need languish for years before getting a shot — if they ever do. Only a quarter of those who qualify for such assistance receive it. As for those vouchers, getting them is hard to begin with because of the massive mismatch between available funding for the program and the demand for the help it provides. And then come the other challenges: finding landlords willing to accept vouchers or rentals that are reasonably close to work and not in neighborhoods euphemistically labelled “distressed.”

The bottom line: more than 75% of “at-risk” renters (those for whom the cost of rent exceeds 30% or more of their earnings) do not receive assistance from the government. The real “risk” for them is becoming homeless, which means relying on shelters or family and friends willing to take them in.

President Trump’s proposed budget cuts will make life even harder for low-income workers seeking affordable housing. His 2019 budget proposal slashes $6.8 billion(14.2%) from the resources of the Department of Housing and Urban Development’s (HUD) by, among other things, scrapping housing vouchers and assistance to low-income families struggling to pay heating bills. The president also seeks to slash funds for the upkeep of public housing by nearly 50%. In addition, the deficits that his rich-come-first tax “reform” bill is virtually guaranteed to produce will undoubtedly set the stage for yet more cuts in the future. In other words, in what’s becoming the United States of Inequality, the very phrases “low-income workers” and “affordable housing” have ceased to go together.

None of this seems to have troubled HUD Secretary Ben Carson who happily ordered a $31,000 dining room set for his office suite at the taxpayers’ expense, even as he visited new public housing units to make sure that they weren’t too comfortable (lest the poor settle in for long stays). Carson has declared that it’s time to stop believing the problems of this society can be fixed merely by having the government throw extra money at them — unless, apparently, the dining room accoutrements of superbureaucrats aren’t up to snuff.

Money Talks

The levels of poverty and economic inequality that prevail in America are not intrinsic to either capitalism or globalization. Most other wealthy market economies in the 36-nation Organization for Economic Cooperation and Development (OECD) have done far better than the United States in reducing them without sacrificing innovation or creating government-run economies.

Take the poverty gap, which the OECD defines as the difference between a country’s official poverty line and the average income of those who fall below it. The United States has the second largest poverty gap among wealthy countries; only Italy does worse.

Child poverty? In the World Economic Forum’s ranking of 41 countries — from best to worst — the U.S. placed 35th. Child poverty has declined in the United States since 2010, but a Columbia University report estimates that 19% of American kids (13.7 million) nevertheless lived in families with incomes below the official poverty line in 2016. If you add in the number of kids in low-income households, that number increases to 41%.

As for infant mortality, according to the government’s own Centers for Disease Control, the U.S., with 6.1 deaths per 1,000 live births, has the absolute worst record among wealthy countries. (Finland and Japan do best with 2.3.)

And when it comes to the distribution of wealth, among the OECD countries only Turkey, Chile, and Mexico do worse than the U.S.

It’s time to rethink the American national security state with its annual trillion-dollar budget. For tens of millions of Americans, the source of deep workaday insecurity isn’t the standard roster of foreign enemies, but an ever-more entrenched system of inequality, still growing, that stacks the political deck against the least well-off Americans. They lack the bucks to hire big-time lobbyists. They can’t write lavish checks to candidates running for public office or fund PACs. They have no way of manipulating the myriad influence-generating networks that the elite uses to shape taxation and spending policies. They are up against a system in which money truly does talk — and that’s the voice they don’t have. Welcome to the United States of Inequality.

 

Rajan Menon, a TomDispatch regular, is the Anne and Bernard Spitzer Professor of International Relations at the Powell School, City College of New York, and Senior Research Fellow at Columbia University’s Saltzman Institute of War and Peace Studies. He is the author, most recently, of The Conceit of Humanitarian Intervention 

American Society Would Collapse If It Weren’t for These 8 Myths

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By Lee Camp

Source: TruthDig

Our society should’ve collapsed by now. You know that, right?

No society should function with this level of inequality (with the possible exception of one of those prison planets in a “Star Wars” movie). Sixty-three percent of Americans can’t afford a $500 emergency. Yet Amazon head Jeff Bezos is now worth a record $141 billion. He could literally end world hunger for multiple years and still have more money left over than he could ever spend on himself.

Worldwide, one in 10 people only make $2 a day. Do you know how long it would take one of those people to make the same amount as Jeff Bezos has? 193 million years. (If they only buy single-ply toilet paper.) Put simply, you cannot comprehend the level of inequality in our current world or even just our nation.

So … shouldn’t there be riots in the streets every day? Shouldn’t it all be collapsing? Look outside. The streets aren’t on fire. No one is running naked and screaming (usually). Does it look like everyone’s going to work at gunpoint? No. We’re all choosing to continue on like this.

Why?

Well, it comes down to the myths we’ve been sold. Myths that are ingrained in our social programming from birth, deeply entrenched, like an impacted wisdom tooth. These myths are accepted and basically never questioned.

I’m going to cover eight of them. There are more than eight. There are probably hundreds. But I’m going to cover eight because (A) no one reads a column titled “Hundreds of Myths of American Society,” (B) these are the most important ones and (C) we all have other shit to do.

Myth No. 8—We have a democracy.

If you think we still have a democracy or a democratic republic, ask yourself this: When was the last time Congress did something that the people of America supported that did not align with corporate interests? … You probably can’t do it. It’s like trying to think of something that rhymes with “orange.” You feel like an answer exists but then slowly realize it doesn’t. Even the Carter Center and former President Jimmy Carter believe that America has been transformed into an oligarchy: A small, corrupt elite control the country with almost no input from the people. The rulers need the myth that we’re a democracy to give us the illusion of control.

Myth No. 7—We have an accountable and legitimate voting system.

Gerrymandering, voter purging, data mining, broken exit polling, push polling, superdelegates, electoral votes, black-box machines, voter ID suppression, provisional ballots, super PACs, dark money, third parties banished from the debates and two corporate parties that stand for the same goddamn pile of fetid crap!

What part of this sounds like a legitimate election system?

No, we have what a large Harvard study called the worst election system in the Western world. Have you ever seen where a parent has a toddler in a car seat, and the toddler has a tiny, brightly colored toy steering wheel so he can feel like he’s driving the car? That’s what our election system is—a toy steering wheel. Not connected to anything. We all sit here like infants, excitedly shouting, “I’m steeeeering!”

And I know it’s counterintuitive, but that’s why you have to vote. We have to vote in such numbers that we beat out what’s stolen through our ridiculous rigged system.

Myth No. 6—We have an independent media that keeps the rulers accountable.

Our media outlets are funded by weapons contractors, big pharma, big banks, big oil and big, fat hard-on pills. (Sorry to go hard on hard-on pills, but we can’t get anything resembling hard news because it’s funded by dicks.) The corporate media’s jobs are to rally for war, cheer for Wall Street and froth at the mouth for consumerism. It’s their mission to actually fortify belief in the myths I’m telling you about right now. Anybody who steps outside that paradigm is treated like they’re standing on a playground wearing nothing but a trench coat.

Myth No. 5—We have an independent judiciary.

The criminal justice system has become a weapon wielded by the corporate state. This is how bankers can foreclose on millions of homes illegally and see no jail time, but activists often serve jail time for nonviolent civil disobedience. Chris Hedges recently noted, “The most basic constitutional rights … have been erased for many. … Our judicial system, as Ralph Nader has pointed out, has legalized secret law, secret courts, secret evidence, secret budgets and secret prisons in the name of national security.”

If you’re not part of the monied class, you’re pressured into releasing what few rights you have left. According to The New York Times, “97 percent of federal cases and 94 percent of state cases end in plea bargains, with defendants pleading guilty in exchange for a lesser sentence.”

That’s the name of the game. Pressure people of color and poor people to just take the plea deal because they don’t have a million dollars to spend on a lawyer. (At least not one who doesn’t advertise on beer coasters.)

Myth No. 4—The police are here to protect you. They’re your friends.

That’s funny. I don’t recall my friend pressuring me into sex to get out of a speeding ticket. (Which is essentially still legal in 32 states.)

The police in our country are primarily designed to do two things: protect the property of the rich and perpetrate the completely immoral war on drugs—which by definition is a war on our own people.

We lock up more people than any other country on earth. Meaning the land of the free is the largest prison state in the world. So all these droopy-faced politicians and rabid-talking heads telling you how awful China is on human rights or Iran or North Korea—none of them match the numbers of people locked up right here under Lady Liberty’s skirt.

Myth No. 3—Buying will make you happy.

This myth is put forward mainly by the floods of advertising we take in but also by our social engineering. Most of us feel a tenacious emptiness, an alienation deep down behind our surface emotions (for a while I thought it was gas). That uneasiness is because most of us are flushing away our lives at jobs we hate before going home to seclusion boxes called houses or apartments. We then flip on the TV to watch reality shows about people who have it worse than we do (which we all find hilarious).

If we’re lucky, we’ll make enough money during the week to afford enough beer on the weekend to help it all make sense. (I find it takes at least four beers for everything to add up.) But that doesn’t truly bring us fulfillment. So what now? Well, the ads say buying will do it. Try to smother the depression and desperation under a blanket of flat-screen TVs, purses and Jet Skis. Nowdoes your life have meaning? No? Well, maybe you have to drive that Jet Ski a little faster! Crank it up until your bathing suit flies off and you’ll feel alive!

The dark truth is that we have to believe the myth that consuming is the answer or else we won’t keep running around the wheel. And if we aren’t running around the wheel, then we start thinking, start asking questions. Those questions are not good for the ruling elite, who enjoy a society based on the daily exploitation of 99 percent of us.

Myth No. 2—If you work hard, things will get better.

According to Deloitte’s Shift Index survey: “80% of people are dissatisfied with their jobs” and “[t]he average person spends 90,000 hours at work over their lifetime.” That’s about one-seventh of your life—and most of it is during your most productive years.

Ask yourself what we’re working for. To make money? For what? Almost none of us are doing jobs for survival anymore. Once upon a time, jobs boiled down to:

I plant the food—>I eat the food—>If I don’t plant food = I die.

But nowadays, if you work at a café—will someone die if they don’t get their super-caf-mocha-frap-almond-piss-latte? I kinda doubt they’ll keel over from a blueberry scone deficiency.

If you work at Macy’s, will customers perish if they don’t get those boxer briefs with the sweat-absorbent-ass fabric? I doubt it. And if they do die from that, then their problems were far greater than you could’ve known. So that means we’re all working to make other people rich because we have a society in which we have to work. Technological advancements can do most everything that truly must get done.

So if we wanted to, we could get rid of most work and have tens of thousands of more hours to enjoy our lives. But we’re not doing that at all. And no one’s allowed to ask these questions—not on your mainstream airwaves at least. Even a half-step like universal basic income is barely discussed because it doesn’t compute with our cultural programming.

Scientists say it’s quite possible artificial intelligence will take away all human jobs in 120 years. I think they know that will happen because bots will take the jobs and then realize that 80 percent of them don’t need to be done! The bots will take over and then say, “Stop it. … Stop spending a seventh of your life folding shirts at Banana Republic.”

One day, we will build monuments to the bot that told us to enjoy our lives and … leave the shirts wrinkly.

And this leads me to the largest myth of our American society.

Myth No. 1—You are free.

And I’m not talking about the millions locked up in our prisons. I’m talking about you and me. If you think you’re free, try running around with your nipples out, ladies. Guys, take a dump on the street and see how free you are.

I understand there are certain restrictions on freedom we actually desire to have in our society—maybe you’re not crazy about everyone leaving a Stanley Steamer in the middle of your walk to work. But a lot of our lack of freedom is not something you would vote for if given the chance.

Try building a fire in a parking lot to keep warm in the winter.

Try sleeping in your car for more than a few hours without being harassed by police.

Try maintaining your privacy for a week without a single email, web search or location data set collected by the NSA and the telecoms.

Try signing up for the military because you need college money and then one day just walking off the base, going, “Yeah, I was bored. Thought I would just not do this anymore.”

Try explaining to Kentucky Fried Chicken that while you don’t have the green pieces of paper they want in exchange for the mashed potatoes, you do have some pictures you’ve drawn on a napkin to give them instead.

Try running for president as a third-party candidate. (Jill Stein was shackled and chained to a chair by police during one of the debates.)

Try using the restroom at Starbucks without buying something … while black.

We are less free than a dog on a leash. We live in one of the hardest-working, most unequal societies on the planet with more billionaires than ever.

Meanwhile, Americans supply 94 percent of the paid blood used worldwide. And it’s almost exclusively coming from very poor people. This abusive vampire system is literally sucking the blood from the poor. Does that sound like a free decision they made? Or does that sound like something people do after immense economic force crushes down around them? (One could argue that sperm donation takes a little less convincing.)

Point is, in order to enforce this illogical, immoral system, the corrupt rulers—most of the time—don’t need guns and tear gas to keep the exploitation mechanisms humming along. All they need are some good, solid bullshit myths for us all to buy into, hook, line and sinker. Some fairy tales for adults.

It’s time to wake up.

 

If you think this column is important, please share it. Also, check out Lee Camp’s weekly TV show “Redacted Tonight” and weekly podcast “Common Censored.”

Eternity, nature, society and the absurd fantasies of the rich

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Fragment of “Butcher to the World” by Sue Coe.

By Kurt Cobb

Source: Resilience

Professor and author Douglas Rushkoff recently wrote about a group of wealthy individuals who paid him to answer questions about how to manage their lives after what they believe will be the collapse of society. He only knew at the time he was engaged that the group wanted to talk about the future of technology.

Rushkoff afterwards explained that the group assumed they would need armed guards after this collapse to defend themselves. But they rightly wondered in a collapsed society how they could even control such guards. What would they pay those guards with when the normal forms of payment ceased to mean anything? Would the guards organize against them?

Rushkoff provides a compelling analysis of a group of frightened wealthy men trying to escape the troubles of this world while alive and wishing to leave a decaying body behind when the time comes and transfer their consciousness digitally into a computer. (I’ve written about consciousness and computers previously.)

Here I want to focus on what I see as the failure of these people to understand the single most salient fact about their situations: Their wealth and their identities are social constructs that depend on thousands if not millions of people who are employees; customers; employees of vendors; government workers who maintain and run the law courts, the police force, the public physical infrastructure, legislative bodies, the administrative agencies and the educational institutions—and who thereby maintain public order, public health and public support for our current systems.

Those wealthy men aren’t taking all this with them when they die. And, while they are alive, their identities will shift radically if the intellectual, social, economic and governmental infrastructure degrades to the point where their safety is no longer guaranteed by at least minimal well-being among others in society. If the hunt for diminishing food and other resources comes to their doors, no army of guards will ultimately protect them against the masses who want to survive just as badly but lack the means.

One would think that pondering this, the rich who are capable of pondering it would have an epiphany: Since their security and well-being ultimately hinges on the security and well-being of all, they ought to get started helping to create a society that provides that in the face of the immense challenges we face such as climate change, resource depletion, possible epidemics, growing inequality and other devils waiting in the wings of the modern world. (In fairness, some do understand this.)

At least one reason for the failure of this epiphany to occur is described by author and student of risk Nassim Nicholas Taleb. Taleb describes how the lives the rich become increasingly detached from the rest of society as arbiters of taste for the wealthy convince them that this detachment is the reward of wealth. The rich visit restaurants that include only people like themselves. They purchase larger and larger homes with fewer and fewer people in them until they can spend whole days without seeing another person. For the wealthiest, neighbors are a nuisance. Better to surround oneself with a depopulated forest than people next door.

The rich are convinced by this experience that they are lone heroes and at the same time lone victims, pilloried by the media as out of touch and heartless. These self-proclaimed victims may give to the Cato Institute to reinforce the idea that the individual can go it alone and should. They themselves have done it (or at least think they have). Why can’t everyone else?

The wealthier they are, the more their fear and paranoia mounts that others not so wealthy will try to take their wealth; or that impersonal forces in the marketplace will destroy it or at least diminish it significantly; or that government will be taken over by the mob and expropriate their wealth through high taxes or outright seizure. And, of course, there are the natural disasters of uncontrolled climate change and plague, just to name two.

It’s no wonder some of the super rich are buying luxury bunkers to ride out the apocalypse. These bunkers come with an array of amenities  that include a cinema, indoor pool and spa, medical first aid center, bar, rock climbing wall, gym, and library. High-speed internet is included though one wonders how it will work after the apocalypse.

But strangely, even in these luxury bunkers built in former missile silos, dependence on and trust in others cannot be avoided. The units are actually condominiums. And while they contain supplies and ammunition said to be enough for five years, it will be incumbent on the owners, whether they like it not, to become intimately acquainted with their neighbors in order to coordinate a defense of the compound should that need arise.

The irony, of course, is that this is precisely the kind of communal entanglement which their wealth is supposed to allow them to avoid. Society, it seems, is everywhere you go. You cannot avoid it even when eternity is advancing on your door. And, you cannot escape with your consciousness into a computer (assuming that will one day be possible) if there’s no stable technical society to tend to computer maintenance and no power to keep the computer on.

It turns out that we are here for a limited time and that trusting and reciprocal relationships with others are ultimately the most important possessions we have—unless we are too rich or too frightened to realize it.

Jeff Bezos’ Paper Tells You Not to Worry About Those Billionaires

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By Dean Baker

Source: FAIR

Just when you thought economic commentary in the Washington Post couldn’t get any more insipid, Roger Lowenstein proves otherwise. In a business section “perspective” (7/20/18), he tells readers:

But what if inequality is the wrong metric. Herewith a modest proposition: economic inequality is not the best yardstick. What we should be paying attention to is social mobility.

Wow, what a novel idea, as though right-wingers have not been pushing this line since the dawn of time: “Don’t worry that your standard of living is awful, the important thing is that your kids will be able to get rich.” (It doesn’t help his story that his poster child for the rich being good is Lloyd Blankfein, who made his fortune shuffling financial assets at Goldman Sachs, and benefited from a massive government bailout.)

But let’s be generous, and try to take Lowenstein’s story seriously. He goes on: “Rising inequality, although a fact, is also very hard to find a culprit for. Not that economists haven’t tried.”

Really? There are plenty of really good explanations for rising inequality, many of which are in my (free) book Rigged. I suppose in the Age of Trump, it is appropriate that the Post has a business columnist determined to flaunt his ignorance.

But then we get the real payday:

It’s also far from proved—to me, it’s not even intuitive—that high incomes on Wall Street and elsewhere are the reason for, say, flatter wages in manufacturing. The fact that Mark Zuckerberg is so rich is annoying, and his separateness from Main Street may not be a great thing socially, but in an economic sense, his fortune did not “come from” the paychecks of ordinary workers.

OK, let’s explain this one so that even someone profoundly ignorant of economics can understand. Suppose that someone, we’ll call them Jeff Bezos or Mark Zuckerberg, were really good at printing counterfeit bills. Imagine that they printed up trillions of these counterfeit bills. This would make them incredibly rich, if they could get away with it. But, as Lowenstein says, how does this make anyone else worse off?

While Lowenstein doesn’t see any problem with our incredibly rich counterfeiters, in the real world, we have the problem that they are creating demand for goods and services with their consumption. If the economy is below full employment, this would be good news, since any source of demand will generate more output and jobs. However, if we are near full employment, or the Federal Reserve Board thinks we are near full employment, then this demand comes at the expense of the paychecks of ordinary workers.

Prices like house prices and rents are driven up by our counterfeiters and the demand created by their servants. The Fed raises interest rates to slow growth and employment, and lessen the ability of ordinary workers to get pay increases, since the labor market will be weaker.

Now, folks may object that Bezos and Zuckerberg are not like counterfeiters; they actually generate value for the economy. While this undoubtedly partly true, it is also the case that much of Bezos’ wealth came from avoiding the requirement that retailers collect state and local sales taxes. Zuckerberg’s wealth came from control of a monopoly platform, and Blankfein’s wealth came from running a too-big-to-fail institution with friends in high places.

Insofar as people get incredibly wealthy from being successful in earning rents at the expense of others in the economy, rather than generating wealth, they are very much like counterfeiters. Furthermore, since productivity has been growing at an incredibly slow rate for the last dozen years (just over 1.0 percent annually), it seems in aggregate that these incredibly rich folks are much better at generating wealth for themselves than for the economy as a whole. This makes the rent-seeker story look very plausible.

While Lowenstein’s plea for greater mobility is about as old as capitalism and has been incredibly unsuccessful, let me propose something considerably more original that you probably won’t see in the Washington Post. Since we have so completely bombed at providing anything like equal opportunity, and no serious person can think this is about to change in the decades ahead, how about we structure our economy so that it makes less difference whether someone ends up at the top end, like Jeff Bezos, or at the bottom, earning the minimum wage?

That one is almost certainly far too simple for the great minds to ever consider.

This Viral ‘Feel-Good’ Story Is Actually an Indictment of American Labor Hell

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By Luke O’Neil

Source: Observer

In what’s quickly become the feel-good story of the week, a young Alabama man named Walter Carr is being lauded across the country for his perseverance and indomitable spirit. It’s the type of story that can instill hope in a divided nation when it’s sorely needed and serve as inspiration for the rest of us that if you work hard enough and keep a positive attitude, good things will come to you. It also happens to be disgusting horse shit and an utter indictment of the brutal, indifferent hell of the nightmare capitalist wasteland we all suffer in. So, a bit of a mixed bag here. 

Carr, a 20-year-old college student, as nearly every news outlet has pointed out in sepia-tinted coverage—from CBS News and USA Today to the BBC—was set to start a new job on Saturday morning with the moving company Bellhops. At the last minute, his car broke down, and he was unable to find a ride from friends to get there. Instead, he decided to walk. He began the trek, which was roughly 20 miles from his home, at midnight, hoping to get there by 8 a.m. the next day to meet the rest of the movers. 

“I didn’t want to defeat myself,” Carr later told ABC News.

Along the way, around 4 a.m. in the morning, Carr, a young person of color, was stopped by local police officers, who, out of the kindness of their hearts, no doubt, asked him where he was headed. When he explained the situation—and after his story checked out—they decided to give him a ride the rest of the way, even going so far as to take him to breakfast.

“He was very polite. It was ‘yes sir’ and ‘no sir,”’ one of the officers later said. I bet he was!

When he arrived at the moving job a few hours later, complete with police escort, they explained the situation to Jenny Lamey, the woman who had hired the movers. Inspired by Carr’s work ethic and apparent decency, she shared the story on Facebook, where it soon went viral. 

The story eventually came to the attention of Bellhops CEO Luke Marklin, who arranged to meet Carr a few days later for a big surprise. 

“This is how you pay it forward… treat your employees with respect and incentivize them and bet you’ll get a much better worker for it,” wrote one commenter on Twitter. “It is awesome to see a young man not make an excuse like it’s too far to go to work, and then see him rewarded for it. Wish the young man and the company all the best in the future,” added another. 

It’s enough to drive you to tears. What kind of tears those are will probably depend on how susceptible you are to the lie at the heart of American capitalism and Horatio Alger nonsense.

Carr who set out the night before with a kitchen knife to protect against stray dogs on the walk, as he explained to The Washington Post, nonetheless floored everyone he encountered along the way. 

“He’s such a humble, kindhearted person,” Lamey said. “He’s really incredible. He said it was the way he was raised.”

“We set a really high bar for heart and grit and… you just blew it away,” Marklin told him, after gifting Carr his 2014 Ford Escape (barely-driven! as alabama.com reported). 

A GoFundMe set up by Lamey to help Carr with his car troubles has since raised almost $40,000. 

“Nothing is impossible unless you say it’s impossible,” she told the Post. 

Nothing except for paying workers an actual salary with benefits, which, you may not be surprised to hear, Bellhops does not do. Essentially Uber for movers, (Marklin came to the company from Uber), Bellhops relies on the labor of young college students, like Carr, who take jobs on a gig-by-gig basis. The company, which operates in dozens of cities around the country, and has raised tens of millions of dollars in rounds of funding since it was founded in 2011, pays movers between $13-16 an hour. 

“It’s a transitional job,” CEO Cameron Doody told BuzzFeed News in a story from 2015. “It’s not a career.”

Alabama, incidentally, is also only one of five states that has traditionally never spent any state money on public transportation. 

Naturally, Bellhops are very proud of themselves, and have been reveling in the attention. You probably didn’t know the company existed before yesterday, and may be thinking about contracting their services in the future now. Win win. 

“I want people to know this—no matter what the challenge is, you can break through the challenge,” Carr, who also wants to become a Marine some day, said of his story. 

“Nothing is impossible unless you make it impossible,” he added. “You can do anything you set your mind to. I’ve got God by my side. I’m really emotional right now trying to hold back the tears.”

It’s a heartwarming reminder that, much like with getting sick or injured in America, which needs to be done in a tragic but endearing enough way to go viral so people will pay your medical bills, all you have to do to make it in this beautiful country is have your life fall apart in such a way that the news wants to write about it, then hope the benign feudal lords will see fit to offer you as an aspirational example to the rest of us so we remain compliant.