inequalityforall

The Four Biggest Right-Wing Lies About Inequality

Even though French economist Thomas Piketty has made an air-tight case that we’re heading toward levels of inequality not seen since the days of the nineteenth-century robber barons, right-wing conservatives haven’t stopped lying about what’s happening and what to do about it.

Herewith, the four biggest right-wing lies about inequality, followed by the truth.

Lie number one: The rich and CEOs are America’s job creators. So we dare not tax them.

The truth is the middle class and poor are the job-creators through their purchases of goods and services. If they don’t have enough purchasing power because they’re not paid enough, companies won’t create more jobs and economy won’t grow.

We’ve endured the most anemic recovery on record because most Americans don’t have enough money to get the economy out of first gear. The economy is barely growing and real wages continue to drop.

We keep having false dawns. An average of 200,000 jobs were created in the United States over the last three months, but huge numbers of Americans continue to drop out of the labor force.

Lie number two: People are paid what they’re worth in the market. So we shouldn’t tamper with pay.

The facts contradict this. CEOs who got 30 times the pay of typical workers forty years ago now get 300 times their pay not because they’ve done such a great job but because they control their compensation committees and their stock options have ballooned.

Meanwhile, most American workers earn less today than they did forty years ago, adjusted for inflation, not because they’re working less hard now but because they don’t have strong unions bargaining for them.

More than a third of all workers in the private sector were unionized forty years ago; now, fewer than 7 percent belong to a union. 

Lie number three: Anyone can make it in America with enough guts, gumption, and intelligence. So we don’t need to do anything for poor and lower-middle class kids.

The truth is we do less than nothing for poor and lower-middle class  kids. Their schools don’t have enough teachers or staff, their textbooks are outdated, they lack science labs, their school buildings are falling apart.

We’re the only rich nation to spend less educating poor kids than we do educating kids from wealthy families. 

All told, 42 percent of children born to poor families will still be in poverty as adults – a higher percent than in any other advanced nation. 

Lie number four: Increasing the minimum wage will result in fewer jobs. So we shouldn’t raise it.

In fact, studies show that increases in the minimum wage put more money in the pockets of people who will spend it – resulting in more jobs, and counteracting any negative employment effects of an increase in the minimum. 

Three of my colleagues here at the University of California at Berkeley — Arindrajit Dube, T. William Lester, and Michael Reich – have compared adjacent counties and communities across the United States, some with higher minimum wages than others but similar in every other way.

They found no loss of jobs in those with the higher minimums.

The truth is, America’s lurch toward widening inequality can be reversed. But doing so will require bold political steps.

At the least, the rich must pay higher taxes in order to pay for better-quality education for kids from poor and middle-class families. Labor unions must be strengthened, especially in lower-wage occupations, in order to give workers the bargaining power they need to get better pay. And the minimum wage must be raised. 

Don’t listen to the right-wing lies about inequality. Know the truth, and act on it. 

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ROBERT REICH’S “INEQUALITY FOR ALL” 

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The Great U-Turn

Do you recall a time in America when the income of a single school teacher or baker or salesman or mechanic was enough to buy a home, have two cars, and raise a family? 

I remember. My father (who just celebrated his 100th birthday) earned enough for the rest of us to live comfortably. We weren’t rich but never felt poor, and our standard of living rose steadily through the 1950s and 1960s. 

That used to be the norm. For three decades after World War II, America created the largest middle class the world had ever seen. During those years the earnings of the typical American worker doubled, just as the size of the American economy doubled. (Over the last thirty years, by contrast, the size of the economy doubled again but the earnings of the typical American went nowhere.)  

In that earlier period, more than a third of all workers belonged to a trade union — giving average workers the bargaining power necessary to get a large and growing share of the large and growing economic pie. (Now, fewer than 7 percent of private-sector workers are unionized.) 

Then, CEO pay then averaged about 20 times the pay of their typical worker (now it’s over 200 times). 

In those years, the richest 1 percent took home 9 to 10 percent of total income (today the top 1 percent gets more than 20 percent). 

Then, the tax rate on highest-income Americans never fell below 70 percent; under Dwight Eisenhower, a Republican, it was 91 percent. (Today the top tax rate is 39.6 percent.)

In those decades, tax revenues from the wealthy and the growing middle class were used to build the largest infrastructure project in our history, the Interstate Highway system. And to build the world’s largest and best system of free public education, and dramatically expand public higher education. (Since then, our infrastructure has been collapsing from deferred maintenance, our public schools have deteriorated, and higher education has become unaffordable to many.)

We didn’t stop there. We enacted the Civil Rights Act and Voting Rights Act to extend prosperity and participation to African-Americans; Medicare and Medicaid to provide health care to the poor and reduce poverty among America’s seniors; and the Environmental Protection Act to help save our planet. 

And we made sure banking was boring. 

It was a virtuous cycle. As the economy grew, we prospered together. And that broad-based prosperity enabled us to invest in our future, creating more and better jobs and a higher standard of living.  

Then came the great U-turn, and for the last thirty years we’ve been heading in the opposite direction. 

Why?

Some blame globalization and the loss of America’s  manufacturing core. Others point to new technologies that replaced routine jobs with automated machinery, software, and robotics. 

But if these were the culprits, they only raise a deeper question: Why didn’t we share the gains from globalization and technological advances more broadly? Why didn’t we invest them in superb schools, higher skills, a world-class infrastructure?

Others blame Ronald Reagan’s worship of the so-called “free market,” supply-side economics, and deregulation. But if these were responsible, why did we cling to these ideas for so long? Why are so many people still clinging to them? 

Some others believe Americans became greedier and more selfish. But if that’s the explanation, why did our national character change so dramatically? 

Perhaps the real problem is we forgot what we once achieved together. 

The collective erasure of the memory of that prior system of broad-based prosperity is due partly to the failure of my generation to retain and pass on the values on which that system was based. It can also be understood as the greatest propaganda victory radical conservatism ever won.

We must restore our recollection. In seeking to repair what is broken, we don’t have to emulate another nation. We have only to emulate what we once had.

That we once achieved broad-based prosperity means we can achieve it again — not exactly the same way, of course, but in a new way fit for the twenty-first century and for future generations of Americans. 

America’s great U-turn can be reversed. It is worth the fight.

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let’s all watch this film! let’s all be reminded about people with no voice. let us be reminded that we all have social responsibility towards those voiceless groups and individuals. Robert Reich reminds us preciously that the social change and progress will happen only when the voice of suppressed and unheard is given back. Let’s invest in each other, let’s care for mutual responsibility!

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The "Paid-What-You're-Worth" Myth

It’s often assumed that people are paid what they’re worth. According to this logic, minimum wage workers aren’t worth more than the $7.25 an hour they now receive. If they were worth more, they’d earn more. Any attempt to force employers to pay them more will only kill jobs. 

According to this same logic, CEOs of big companies are worth their giant compensation packages, now averaging 300 times pay of the typical American worker. They must be worth it or they wouldn’t be paid this much. Any attempt to limit their pay is fruitless because their pay will only take some other form. 

"Paid-what-you’re-worth" is a dangerous myth.  

Fifty years ago, when General Motors was the largest employer in America, the typical GM worker got paid $35 an hour in today’s dollars. Today, America’s largest employer is Walmart, and the typical Walmart workers earns $8.80 an hour. 

Does this mean the typical GM employee a half-century ago was worth four times what today’s typical Walmart employee is worth? Not at all. Yes, that GM worker helped produce cars rather than retail sales. But he wasn’t much better educated or even that much more productive. He often hadn’t graduated from high school. And he worked on a slow-moving assembly line. Today’s Walmart worker is surrounded by digital gadgets — mobile inventory controls, instant checkout devices, retail search engines — making him or her quite productive. 

The real difference is the GM worker a half-century ago had a strong union behind him that summoned the collective bargaining power of all autoworkers to get a substantial share of company revenues for its members. And because more than a third of workers across America belonged to a labor union, the bargains those unions struck with employers raised the wages and benefits of non-unionized workers as well. Non-union firms knew they’d be unionized if they didn’t come close to matching the union contracts.

Today’s Walmart workers don’t have a union to negotiate a better deal. They’re on their own. And because fewer than 7 percent of today’s private-sector workers are unionized, non-union employers across America don’t have to match union contracts. This puts unionized firms at a competitive disadvantage. The result has been a race to the bottom. 

By the same token, today’s CEOs don’t rake in 300 times the pay of average workers because they’re “worth” it. They get these humongous pay packages because they appoint the compensation committees on their boards that decide executive pay. Or their boards don’t want to be seen by investors as having hired a “second-string” CEO who’s paid less than the CEOs of their major competitors. Either way, the result has been a race to the top. 

If you still believe people are paid what they’re worth, take a look at Wall Street bonuses. Last year’s average bonus was up 15 percent over the year before, to more than $164,000. It was the largest average Wall Street bonus since the 2008 financial crisis and the third highest on record, according to New York’s state comptroller. Remember, we’re talking bonuses, above and beyond salaries.

All told, the Street paid out a whopping $26.7 billion in bonuses last year. 

Are Wall Street bankers really worth it? Not if you figure in the hidden subsidy flowing to the big Wall Street banks that ever since the bailout of 2008 have been considered too big to fail. 

People who park their savings in these banks accept a lower interest rate on deposits or loans than they require from America’s smaller banks. That’s because smaller banks are riskier places to park money. Unlike the big banks, the smaller ones won’t be bailed out if they get into trouble.

This hidden subsidy gives Wall Street banks a competitive advantage over the smaller banks, which means Wall Street makes more money. And as their profits grow, the big banks keep getting bigger. 

How large is this hidden subsidy? Two researchers, Kenichi Ueda of the International Monetary Fund and Beatrice Weder di Mauro of the University of Mainz, have calculated it’s about eight tenths of a percentage point. 

This may not sound like much but multiply it by the total amount of money parked in the ten biggest Wall Street banks and you get a huge amount — roughly $83 billion a year.  

Recall that the Street paid out $26.7 billion in bonuses last year. You don’t have to be a rocket scientist or even a Wall Street banker to see that the hidden subsidy the Wall Street banks enjoy because they’re  too big to fail is about three times what Wall Street paid out in bonuses.

Without the subsidy, no bonus pool. 

By the way, the lion’s share of that subsidy ($64 billion a year) goes to the top five banks — JPMorgan, Bank of America, Citigroup, Wells Fargo. and Goldman Sachs. This amount just about equals these banks’ typical annual profits. In other words, take away the subsidy and not only does the bonus pool disappear, but so do all the profits.  

The reason Wall Street bankers got fat paychecks plus a total of $26.7 billion in bonuses last year wasn’t because they worked so much harder or were so much more clever or insightful than most other Americans. They cleaned up because they happen to work in institutions — big Wall Street banks — that hold a privileged place in the American political economy. 

And why, exactly, do these institutions continue to have such privileges? Why hasn’t Congress used the antitrust laws to cut them down to size so they’re not too big to fail, or at least taxed away their hidden subsidy (which, after all, results from their taxpayer-financed bailout)? 

Perhaps it’s because Wall Street also accounts for a large proportion of campaign donations to major candidates for Congress and the presidency of both parties. 

America’s low-wage workers don’t have privileged positions. They work very hard — many holding down two or more jobs. But they can’t afford to make major campaign contributions and they have no political clout. 

According to the Institute for Policy Studies, the $26.7 billion of bonuses Wall Street banks paid out last year would be enough to more than double the pay of every one of America’s 1,085,000 full-time minimum wage workers. 

The remainder of the $83 billion of hidden subsidy going to those same banks would almost be enough to double what the government now provides low-wage workers in the form of wage subsidies under the Earned Income Tax Credit.

But I don’t expect Congress to make these sorts of adjustments any time soon. 

The “paid-what-your-worth” argument is fundamentally misleading because it ignores power, overlooks institutions, and disregards politics. As such, it lures the unsuspecting into thinking nothing whatever should be done to change what people are paid, because nothing can be done. 

Don’t buy it. 

#TheBookOfTheWeek: “Profit Over People” (Neo-Liberalism & Global Order) By Noam Chomsky


This book basically is a condemnation of out of control, laissez-faire capitalism or neo liberalism which is destroying our planet. Capitalism left unchecked will become abuse that is why our world is on the brink of Fascism.. Great read

#BookOfTheWeek #InequalityForAll #NeoFeudalism #NeoFascism #Captalisim #ClimateJustice

David Brooks' Utter Ignorance About Inequality

Occasionally David Brooks, who personifies the oxymoron “conservative thinker” better than anyone I know, displays such profound ignorance that a rejoinder is necessary lest his illogic permanently pollute public debate. Such is the case with his New York Times column last Friday, arguing that we should be focusing on the “interrelated social problems of the poor” rather than on inequality, and that the two are fundamentally distinct.

Baloney.

 

First, when almost all the gains from growth go to the top, as they have for the last thirty years, the middle class doesn’t have the purchasing power necessary for buoyant growth.

Once the middle class has exhausted all its coping mechanisms – wives and mothers surging into paid work (as they did in the 1970s and 1980s), longer working hours (which characterized the 1990s), and deep indebtedness (2002 to 2008) – the inevitable result is fewer jobs and slow growth, as we continue to experience.

Few jobs and slow growth hit the poor especially hard because they’re the first to be fired, last to be hired, and most likely to bear the brunt of declining wages and benefits.

 

Second, when the middle class is stressed, it has a harder time being generous to those in need. The “interrelated social problems” of the poor presumably will require some money, but the fiscal cupboard is bare. And because the middle class is so financially insecure, it doesn’t want to, nor does it feel it can afford to, pay more in taxes.

 

Third, America’s shrinking middle class also hobbles upward mobility. Not only is there less money for good schools, job training, and social services, but the poor face a more difficult challenge moving upward because the income ladder is far longer than it used to be, and its middle rungs have disappeared.

 

Brooks also argues that we should not be talking about unequal political power, because such utterances cause divisiveness and make it harder to reach political consensus over what to do for the poor.

 

Hogwash. The concentration of power at the top — which flows largely from the concentration of income and wealth there — has prevented  Washington from dealing with the problems of the poor and the middle class.

To the contrary, as wealth has accumulated at the top, Washington has reduced taxes on the wealthy, expanded tax loopholes that disproportionately benefit the rich, deregulated Wall Street, and provided ever larger subsidies, bailouts, and tax breaks for large corporations. The only things that have trickled down to the middle and poor besides fewer jobs and smaller paychecks are public services that are increasingly inadequate because they’re starved for money.

 

Unequal political power is the endgame of widening inequality — its most noxious and nefarious consequence, and the most fundamental threat to our democracy. Big money has now all but engulfed Washington and many state capitals — drowning out the voices of average Americans, filling the campaign chests of candidates who will do their bidding, financing attacks on organized labor, and bankrolling a vast empire of right-wing think-tanks and publicists that fill the airwaves with half-truths and distortions.

 

That David Brooks, among the most thoughtful of all conservative pundits, doesn’t see or acknowledge any of this is a sign of how far the right has moved away from the reality most Americans live in every day. 

I wanna know what you all think!!!The 400 richest Americans now own more wealth than the bottom 150 million combined! The US’ widening income inequality-currently at historic highs- is increasing, and is harmful not only to the U.S. economy but American democracy itself. We pay more income taxes than multi million earning CEO’s and corporations. This is why we’re laying off policeman and teachers, why music and PE have been cut from our schools, and college tuition is sky high! 2.13 an hour wage vs 3,000,000 an hour wage (the lowest vs the highest wage in the US) making the US among the most wealth-unequal countries in the WORLD. Cost of living goes up but wages aren’t going up accordingly, yet for the richest it has gone up exponentially. Tax cuts for corporations= not enough money to run the country= the poor become poorer. Sale taxes are down because people can’t pay, income taxes are down because middle class people aren’t making much money, and TAX CUTS are given to the wealthy and corporations- this is WHY we have budget deficits!!! #GEdoesntpaytaxes #bankofamericadoesntpaytaxes #exxondoesntpaytaxes #verizondoesntpaytaxes #walmarttaxbreak #inequalityforall #USuncut YOU PROBABLY PAY MORE INCOME TAXES THAN WARREN BUFFET (2nd richest person in the US) why? Because corporations invest millions into politicians for these tax breaks.