Tag Archives: corporate profits

America the Unfair?

America’s political and economic inequalities feed each other. The richest 1 percent in the U.S. now own substantially more wealth than the bottom 90 percent.

By 

Donald Trump and Bernie Sanders don’t agree on much. Nor do the Black Lives Matter movement, the Occupy Wall Street protests and the armed ranchers who seized public lands in Oregon. But in the insurgent presidential campaigns and in social activism across the spectrum, a common thread is people angry at the way this country is no longer working for many ordinary citizens.

And they’re right: The system is often fundamentally unfair, and ordinary voices are often unheard.

Read more » The New York Times
See more » http://www.nytimes.com/2016/01/21/opinion/america-the-unfair.html?smid=tw-nytopinion&smtyp=cur&_r=0

Oxfam says wealth of richest 1% equal to other 99%

The richest 1% now has as much wealth as the rest of the world combined, according to Oxfam.

It uses data from Credit Suisse from October for the report, which urges leaders meeting in Davos this week to take action on inequality.

Oxfam also calculated that the richest 62 people in the world had as much wealth as the poorest half of the global population.

It criticised the work of lobbyists and the amount of money kept in tax havens.

Oxfam predicted that the 1% would overtake the rest of the world this time last year.

Read more » BBC
See more » http://www.bbc.com/news/business-35339475

Pew Report: The American middle class is shrinking & standards of living are slipping. 

The American Middle Class Is Losing Ground
No longer the majority and falling behind financially

After more than four decades of serving as the nation’s economic majority, the American middle class is now matched in number by those in the economic tiers above and below it. In early 2015, 120.8 million adults were in middle-income households, compared with 121.3 million in lower- and upper-income households combined, a demographic shift that could signal a tipping point, according to a new Pew Research Center analysis of government data.1

Read more »  PewResearchCenter
See more » http://www.pewsocialtrends.org/2015/12/09/the-american-middle-class-is-losing-ground/

Elizabeth Warren on Fighting Back Against Wall St. Giants

In Oklahoma, Sen. Elizabeth Warren (D-MA) and her brothers grew up in “an America that invested in kids like us and helped build a future where we could flourish.” But, as she writes in her memoir, A Fighting Chance, “Today the game is rigged – rigged to work for those who have money and power… The optimism that defines us as a people has been beaten and bruised. It doesn’t have to be this way.”

Warren, a former Harvard Law School professor, is an expert on how Wall Street and the banking industry are destroying the middle class. She’s put that knowledge to powerful use on Capitol Hill, rapidly becoming the most authoritative and articulate voice of the Democratic Party’s progressive wing. Many are urging her to run for president.

Continue reading Elizabeth Warren on Fighting Back Against Wall St. Giants

Why ideas – not labor or capital – will decide countries’ economic success in the future

New World Order

Labor, Capital, and Ideas in the Power Law Economy

By Erik Brynjolfsson, Andrew McAfee, and Michael Spence

Recent advances in technology have created an increasingly unified global marketplace for labor and capital. The ability of both to flow to their highest-value uses, regardless of their location, is equalizing their prices across the globe. In recent years, this broad factor-price equalization has benefited nations with abundant low-cost labor and those with access to cheap capital. Some have argued that the current era of rapid technological progress serves labor, and some have argued that it serves capital. What both camps have slighted is the fact that technology is not only integrating existing sources of labor and capital but also creating new ones.

Machines are substituting for more types of human labor than ever before. As they replicate themselves, they are also creating more capital. This means that the real winners of the future will not be the providers of cheap labor or the owners of ordinary capital, both of whom will be increasingly squeezed by automation. Fortune will instead favor a third group: those who can innovate and create new products, services, and business models.

The distribution of income for this creative class typically takes the form of a power law, with a small number of winners capturing most of the rewards and a long tail consisting of the rest of the participants. So in the future, ideas will be the real scarce inputs in the world — scarcer than both labor and capital — and the few who provide good ideas will reap huge rewards. Assuring an acceptable standard of living for the rest and building inclusive economies and societies will become increasingly important challenges in the years to come.

LABOR PAINS

Turn over your iPhone and you can read an eight-word business plan that has served Apple well: “Designed by Apple in California. Assembled in China.” With a market capitalization of over $500 billion, Apple has become the most valuable company in the world. Variants of this strategy have worked not only for Apple and other large global enterprises but also for medium-sized firms and even “micro-multinationals.” More and more companies have been riding the two great forces of our era — technology and globalization — to profits.

Read more » Foreign Affairs
Learn more » http://www.foreignaffairs.com/articles/141531/erik-brynjolfsson-andrew-mcafee-and-michael-spence/new-world-order

 

The Corporate Assault on Direct Democracy

By Ron Fein, Truthout | Op-Ed

The direct democracy of ballot initiatives – where voters get to vote yes or no, without any politicians in the way – is a treasured part of the fabric of 24 states and many more cities. But around the country, there’s been a disturbing trend this year: When initiatives threaten corporate interests, lawyers run to court to prevent voters from even getting the chance to vote.

Read more » Truth Out
Learn more » http://truth-out.org/opinion/item/26982-the-corporate-assault-on-direct-democracy

The New 1% isn’t just the Rich, it is the Spoiled Oligarch Heirs (Krugman)

Economist Paul Krugman explains how the United States is becoming an oligarchy – the very system our founders revolted against.

Bill Moyers interviews Paul Krugman

” Capital in the Twenty-First Century by Thomas Piketty, a 42-year-old who teaches at the Paris School of Economics, shows that two-thirds of America’s increase in income inequality over the past four decades is the result of steep raises given to the country’s highest earners.

This week, Bill talks with Nobel Prize-winning economist and New York Times columnist Paul Krugman, about Piketty’s “magnificent” new book.

“What Piketty’s really done now is he said, ‘Even those of you who talk about the 1 percent, you don’t really get what’s going on.’ He’s telling us that we are on the road not just to a highly unequal society, but to a society of an oligarchy. A society of inherited wealth.”

Krugman adds: “We’re seeing inequalities that will be transferred across generations. We are becoming very much the kind of society we imagined we’re nothing like.” ”

Courtesy: http://www.juancole.com/2014/04/spoiled-oligarch-krugman.html

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

The 1% Should Be Afraid: The New Norm in the Workplace Is Unstable

By Laura Flanders, Truthout | Interview and Video

A new study from Oxfam published just ahead of this year’s World Economic Forum meeting in Davos, reported that just one percent of the world’s population controls nearly half of the planet’s wealth and 70 percent of the world’s people live in countries where income inequality has been growing in the last 30 years. In the US, the gap between rich and poor has grown faster than in any other developed country. The top one percent has captured 95 percent of all growth since the putative “recovery” of 2009. This is the “new normal.” Is it sustainable?

Barbara Garson is the author of a series of books describing American working lives at historically important turning points. If this is one of those turning points, it’s one in which the one percent have won:

“That the so-called recovery that everyone is bragging about is this,” Garson told GRITtv in a recent interview. “We’ve recovered, we’ve taken your full-time job away and given you a part-time job, and we’ve given the difference to our stockholders.”

The trouble is, this cockeyed situation is not stable, and even the capitalists, maybe especially the capitalists, should be worried.

“There are capitalist solutions, like redistribution, but they’re not doing it. That may be why we have a socialist solution this time,” she concludes. “If seventeen percent of the houses are vacant, we’ll just move into them.”

Garson’s new book is Down the Up Escalator: How the 99% Live. You can watch our conversation at GRITtv.org.

Read more » truth-out.org
http://truth-out.org/news/item/21785-the-one-percent-should-be-afraid-the-new-norm-in-the-workplace-is-unstable

France passes 75% ‘millionaire’s tax’

By Thomson Reuters

France’s Constitutional Council gave the green light on Sunday to a ‘millionaire’s tax’, to be levied on companies that pay salaries of more than one million euros, or about $1.4 million, a year.

The measure, introduced in line with a pledge by President Francois Hollande to make the rich do more to pull France out of crisis, has infuriated business leaders and soccer clubs, which at one point threatened to go on strike.

It was originally designed as a 75 per cent tax to be paid by high earners on the part of their incomes exceeding one million euros, but the council rejected this, saying 66 per cent was the legal maximum for individuals.

The Socialist government has since reworked the tax to levy it on companies instead, raising the ire of entrepreneurs.

Under its new design, which the Council found constitutional, the tax will be an exceptional 50 per cent levy on the portion of wages exceeding 1 million euros paid in 2013 and 2014.

Including social contributions, its rate will effectively remain roughly 75 per cent. The tax will, however, be capped at 5 percent of the company’s turnover.

The Council, a court made up of judges and former French presidents, has the power to annul laws if they are deemed to violate the constitution.

Courtesy: CBC
http://www.cbc.ca/news/world/france-passes-75-millionaire-s-tax-1.2478390

A Rare Elected Voice for Socialism Pledges to Be Heard in Seattle

SEATTLE — People are used to liberals running things around here. But nobody reckoned with Kshama Sawant. Ms. Sawant, a 41-year-old economics teacher and immigrant from India, took a left at liberal and then kept on going — all the way to socialism.

When she takes a seat on Seattle’s nine-member City Council on Jan. 1, representing the Socialist Alternative Party, she will become one of the few elected socialists in the nation, a political brand most politicians run from.

But Kshama Sawant (pronounced SHAH-mah sah-WANT) heartily embraces the label. Ask her about almost any problem facing America today, and her answer will probably include the “S” word as the best and most reasonable response. Socialism is the path to real democracy, she says. Socialism protects the environment. Socialism is the best hope for young people who have seen their options crushed by the tide of low-wage, futureless jobs in the post-recession economy.

“The take-home message for the left in general is that people are looking for alternatives,” she said in an interview, discussing her victory over a veteran Democrat by a margin of 3,100 votes of about 184,000 cast in a citywide contest. “If you ask me as a socialist what workers deserve, they deserve the value of what they produce.”

Read more » The New York Times
http://mobile.nytimes.com/2013/12/29/us/a-rare-elected-voice-for-socialism-pledges-to-be-heard-in-seattle.html?pagewanted=2&_r=1&rref=us&hpw=

Noam Chomsky: We’re no longer a functioning democracy, we’re really a plutocracy

By Travis Gettys

The world faces two potentially existential threats, according to the linguist and political philosopher Noam Chomsky.

“There are two major dark shadows that hover over everything, and they’re getting more and more serious,” Chomsky said. “The one is the continuing threat of nuclear war that has not ended. It’s very serious, and another is the crisis of ecological, environmental catastrophe, which is getting more and more serious.”

Chomsky appeared Friday on the last episode of NPR’s “Smiley and West” program to discuss his education, his views on current affairs and how he manages to spread his message without much help from the mainstream media.

He told the hosts that the world was racing toward an environmental disaster with potentially lethal consequence, which the world’s most developed nations were doing nothing to prevent – and in fact were speeding up the process.

“If there ever is future historians, they’re going to look back at this period of history with some astonishment,” Chomsky said. “The danger, the threat, is evident to anyone who has eyes open and pays attention at all to the scientific literature, and there are attempts to retard it, there are also at the other end attempts to accelerate the disaster, and if you look who’s involved it’s pretty shocking.”

Chomsky noted efforts to halt environmental damage by indigenous people in countries all over the world – from Canada’s First Nations to tribal people in Latin America and India to aboriginal people in Australia—but the nation’s richest, most advanced and most powerful countries, such as the United States, were doing nothing to forestall disaster.

“When people here talk enthusiastically about a hundred years of energy independence, what they’re saying is, ‘Let’s try to get every drop of fossil fuel out of the ground so as to accelerate the disaster that we’re racing towards,’” Chomsky said. “These are problems that overlie all of the domestic problems of oppression, of poverty, of attacks on the education system (and) massive inequality, huge unemployment.”

He blamed the “financialization” of the U.S. economy for income inequality and unemployment, saying that banks that were “too big to fail” skimmed enormous wealth from the market.

“In fact, there was a recent (International Monetary Fund) study that estimated that virtually all the profits of the big banks can be traced back to this government insurance policy, and in general they’re quite harmful, I think, quite harmful to the economy,” Chomsky said.

Those harmful effects can be easily observed by looking at unemployment numbers and stock market gains, he said.

“There are tens of millions of people unemployed, looking for work, wanting to work (and) there are huge resources available,” Chomsky said. “Corporate profits are going through the roof, there’s endless amounts of work to be done – just drive through a city and see all sorts of things that have to be done – infrastructure is collapsing, the schools have to be revived. We have a situation in which huge numbers of people want to work, there are plenty, huge resources available, an enormous amount to be done, and the system is so rotten they can’t put them together.”

The reason for this is simple, Chomsky said.

“There is plenty of profit being made by those who pretty much dominate and control the system,” he said. “We’ve moved from the days where there was some kind of functioning democracy. It’s by now really a plutocracy.”

Chomsky strongly disagreed with Smiley and West that he had been marginalized for his views, saying that he regretfully turned down dozens of invitations to speak on a daily basis because he was otherwise engaged.

He also disagreed that a platform in the mainstream media was necessary to influence the debate.

“If you take a look at the progressive changes that have taken place in the country, say, just in the last 50 years – the civil rights movement, the antiwar movement, opposition to aggression, the women’s movement, the environmental movement and so on – they’re not led by any debate in the media,” Chomsky said. “No, they were led by popular organizations, by activists on the ground.”

He recalled the earliest days of the antiwar movement, in the early 1960s, when he spoke in living rooms and church basements to just a handful of other activists and they were harassed – even in liberal Boston – by the authorities and media.

But that movement eventually grew and helped hasten the end of the Vietnam War, and Chomsky said it’s grown and become so mainstream that antiwar activists can limit wars before they even begin.

He said President Ronald Reagan was unable to launch a full-scale war in Central America during the 1980s because of the antiwar movement, and he bitterly disputed the idea that antiwar activists had no impact on the Iraq War.

“I don’t agree; it had a big effect,” Chomsky said. “It sharply limited the means that were available to the government to try to carry out the invasion and subdue the population. In fact, it’s one reason why the U.S. ended up really defeated in Iraq, seriously had to give up all of its war aims. The major victor in Iraq turns out to be Iran.”

Despite these limitations, he said the Iraq War had been one of the new millennium’s worst atrocities and had provoked a violent schism between Sunni and Shiite Muslims that had sparked regional conflicts throughout the Middle East.

“The United States is now involved in a global terror campaign largely against the tribal people of the world, mostly Muslim tribes, and it’s all over. The intention is to go on and on,” Chomsky said. “These are all terrible consequences, but nevertheless they’re not as bad as they would be if there weren’t public opposition.”

Courtesy: The Raw Story
http://www.rawstory.com/rs/2013/12/27/noam-chomsky-were-no-longer-a-functioning-democracy-were-really-a-plutocracy/