Some 95% of 2009-2012 Income Gains Went to Wealthiest 1%

By Brenda Cronin

Research released this month shows that the incomes of the well-off have largely climbed back from the toll of the most recent recession while those of the poor have yet to start recovering.

According to the latest version of “Striking it Richer: The Evolution of Top Incomes in the United States,” by Emmanuel Saez, of the University of California, Berkeley, the income inequality gap has been expanding, rather than narrowing, as the 2007-2009 recession recedes. That trend has been unfolding for more than 30 years

Read more » The Wall Street Journal
http://blogs.wsj.com/economics/2013/09/10/some-95-of-2009-2012-income-gains-went-to-wealthiest-1/

Income Inequality in Canada

Canada gets a “C” grade and ranks 12th out of 17 peer countries.
Income inequality in Canada has increased over the past 20 years.
Since 1990, the richest group of Canadians has increased its share of total national income, while the poorest and middle-income groups has lost share.

Read more » http://www.conferenceboard.ca/hcp/details/society/income-inequality.aspx

IMF Warns G-20 of Deflation Risk, Emerging-Market Turmoil

By Sandrine Rastello

Risks of prolonged market turmoil in emerging markets and of deflation in the euro area are threatening the world’s improved economic prospects, according to the International Monetary Fund.

The IMF, in a staff report prepared for central bankers and finance ministers from the Group of 20, said the recovery is still weak and “significant downside risks remain.” A January global growth forecast of 3.7 percent for this year, from 3 percent in 2013, hinges on recent market volatility from Turkey to Brazil being short-lived, according to the report.

“Capital outflows, higher interest rates, and sharp currency depreciation in emerging economies remain a key concern,” according to the report prepared ahead of the G-20 Feb. 22-23 meeting in Sydney. “A new risk stems from very low inflation in the euro area, where long-term inflation expectations might drift down, raising deflation risks in the event of a serious adverse shock to activity.”

Read more » Bloomberg
http://www.bloomberg.com/news/2014-02-19/imf-warns-g-20-of-risks-of-deflation-emerging-market-turmoil.html

Bill Gates: People Don’t Realize How Many Jobs Will Soon Be Replaced By Software Bots

Big changes are coming to the labor market that people and governments aren’t prepared for, Bill Gates believes.

Speaking at Washington, D.C., economic think tank The American Enterprise Institute on Thursday, Gates said that within 20 years, a lot of jobs will go away, replaced by software automation (“bots” in tech slang, though Gates used the term “software substitution”).

This is what he said:

“Software substitution, whether it’s for drivers or waiters or nurses … it’s progressing. …  Technology over time will reduce demand for jobs, particularly at the lower end of skill set. …  20 years from now, labor demand for lots of skill sets will be substantially lower. I don’t think people have that in their mental model.”

He’s not the only one predicting this gloomy scenario for workers. In January, the Economist ran a big profile naming over a dozen jobs sure to be taken over by robots in the next 20 years, including telemarketers, accountants and retail workers.

Gates believes that the tax codes are going to need to change to encourage companies to hire employees, including, perhaps, eliminating income and payroll taxes altogether. He’s also not a fan of raising the minimum wage, fearing that it will discourage employers from hiring workers in the very categories of jobs that are most threatened by automation.

BBC – Brazil police strike ends in Bahia amid troop deployment

Police in the state of Bahia in north-eastern Brazil say they have voted to end a two-day strike over pay after accepting an improved government offer.

They said they accepted salary increases ranging from 25% to 60%, according to Brazil’s G1 news portal.

On Wednesday, elite police units and armed soldiers were deployed to the state to restore order amid a hike in the number of murders and other crimes.

Shops were also looted in the capital, Salvador, following the walkout.

Brazil’s third-largest city is due to host six matches during the football World Cup, which begins in June.

Following their vote to end the walkout, the protesting officers were seen on local TV celebrating what they said was a “victory”.

Their decision came a day after a federal judge ruled the dispute illegal and ordered the striking officers to return to work or their union would face fines.

‘Unacceptable’

State officials said 39 people have been killed in and around Salvador since the strike was announced, a much higher figure than normal.

The labour dispute also prompted car robberies and looters to pillage supermarkets, electronics stores and other shops, as police stayed away in defiance of the court order.

Many shops, schools and universities remained closed, and fewer buses circulated in Salvador after drivers refused to go to work for fear of being attacked.

Read more » BBC
http://www.bbc.com/news/world-latin-america-27074277

The New York Times – A Return to a World Marx Would Have Known

Doug Henwood is editor of Left Business Observer, host of a weekly radio show originating on KPFA, Berkeley, and is author of several books, including “Wall Street: How It Works and For Whom” and “After the New Economy.”

I don’t see how you can understand our current unhappy economic state without some sort of Marx-inspired analysis.

Here we are, almost five years into an officially designated recovery from the worst downturn in 80 years, and average household incomes are more than 8 percent below where they were when the Great Recession began, and employment still 650,000 short of its pre-recession high.

Though elites are prospering, for millions of Americans, it’s as if the recession never ended.

How can this all be explained? The best way to start is by going back to the 1970s. Corporate profitability — which, as every Marxist schoolchild knows, is the motor of the system — had fallen sharply off its mid-1960s highs. Stock and bond markets were performing miserably. Inflation seemed to be rising without limit. After three decades of seemingly endless prosperity, workers had developed a terrible attitude problem, slacking off and, quaintly, even going out on strike. It’s no accident that Johnny Paycheck scored a No. 1 country hit with “Take This Job and Shove It” in 1977 — utterly impossible to imagine today.

This is where Marx begins to come in. At the root of these problems was a breakdown in class relations: workers no longer feared the boss. A crackdown was in order.

And it came, hard. In October 1979, the Federal Reserve began driving interest rates toward 20 percent, to kill inflation and restrict borrowing, creating the deepest recession since the 1930s. (It was a record we only broke in 2008/2009). A little over a year later, Ronald Reagan came into office, fired the striking air-traffic controllers, setting the stage for decades of union busting to follow. Five years after Johnny Paycheck’s hit, workers were desperate to hold and/or get jobs. No more attitude problem.

The “cure” worked for about 30 years. Corporate profits skyrocketed and financial markets thrived. The underlying mechanism, as Marx would explain it, is simple: workers produce more in value than they are paid, and the difference is the root of profit. If worker productivity rises while pay remains stagnant or declines, profits increase. This is precisely what has happened over the last 30 years. According to the Bureau of Labor Statistics, productivity rose 93 percent between 1980 and 2013, while pay rose 38 percent (all inflation-adjusted).

The 1 percent got ever-richer and more powerful. But there was a problem: a system dependent on high levels of mass consumption has a hard time coping with the stagnation or decline in mass incomes.The development of a mass consumer market after Marx died, with the eager participation of a growing middle class, caused a lot of people to say his analysis was obsolete. But now, with the hollowing out of the middle class and the erosion of mass purchasing power, the whole 20th century model of mass consumption is starting to look obsolete.

Borrowing sustained the mass consumption model for a few decades. Non-rich households borrowed to buy cars, buy food, pay medical bills, buy ever-more-expensive houses, and so on. Conveniently, rich households had plenty of spare cash to lend them.

That model broke apart in 2008 and has not — and cannot — be revived. Without the juice provided by spirited borrowing, demand remains constricted and growth rates, low. (See also: Europe.)

Raising the incomes of the bottom 90 percent of the population through higher wages and public spending initiatives — stifled since Reagan starting putting the squeeze on them — could change that. But the stockholding class has resisted that, and they have a lot of political power.

And an extraordinarily lopsided economy is the result. We didn’t expect that the 21st century would bring about a return of the 19th century’s vast disparities, but it’s looking like that’s just what’s happened.

Courtesy: The New York Times
http://www.nytimes.com/roomfordebate/2014/03/30/was-marx-right/a-return-to-a-world-marx-would-have-known?smid=fb-share

DG ISI had to face tough questions from Nawaz Sharif

DG ISI had to face tough questions from all

Inside the conference room of PM House … COAS assures PM things to be done as desired by govt

Excerpt;

The DG ISI gave a briefing on internal security and Pak-Iran relations. At one point, Zaheerul Islam claimed that some elements of Jundullah, a defunct organisation, were active in Balochistan upon which the prime minister gently asked the DG ISI whose job was this to inform the government about it. The prime minister at times asked questions directly from the DG ISI who, according to the law, came directly under his command.

During the briefing, the DG ISI mentioned Iran’s close relations with India on which Nawaz Sharif calmly reminded him of the government’s policy that they had nothing to do with the internal matter of any of the neighbours. Lt Gen Zaheerul Islam also discussed the internal security situation with regard to the Afghanistan situation.

Prime Minister Nawaz Sharif, while addressing the participants, said that they needed peace and they didn’t want any kind of interference in any of the neighbouring countries. During the course of the meeting, the army chief, on a number of occasions, assured the prime minister that things would be done according to the directions of the prime minister. At no point there was any hint of any tiff between the civilian and the military leadership. Some participants, however, observed some unease between the army chief and DG ISI.

Read more » The News
http://www.thenews.com.pk/Todays-News-13-29792-DG-ISI-had-to-face-tough-questions-from-all