Category Archives: inequality

It’s amazing what America could do with the money the rich hide overseas

Max Ehrenfreund writes: The documents known as the “Panama Papers” have created a global scandal around the ways the world’s rich conceal their wealth from the authorities. The prime minister of Iceland offered his resignation after the papers reportedly revealed that he and his wife had a fortune on paper hidden away in the British Virgin Islands. British Prime Minister David Cameron is taking criticism as well, and he acknowledged that he profited from a secret family trust.

The Washington Post has not reviewed the Panama Papers or verified their authenticity, but what seems certain is that wealthy people all over the world — and in the United States — pay much less in taxes by moving their income and assets to foreign countries.

In the United States, the Treasury would collect about $124 billion a year in additional taxes — $36 billion from individual taxpayers and $88 billion from multinational corporations — if it weren’t for such schemes, according to estimates by Gabriel Zucman, an economist at the University of California at Berkeley.

That’s a lot of money — and we’re all paying for it, Zucman said.

When the wealthy pay less in taxes, the rest of the population bears the burden. Either the government spends less money, providing fewer public services, or ordinary citizens pay more to make up the cost. [Continue reading…]

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How global tax evasion keeps poor countries poor

Max Bearak writes: Releases of secret documents, like the whopping 11.5 million Panama Papers, are designed to result in a cascade of scandals. Since Sunday’s revelations, Iceland’s prime minister has stepped down, and Britain’s prime minister, David Cameron, admitted on Thursday that he had profited from his father’s offshore account. Leaders in Russia, China and other parts of the world have come forward to either claim the leak is a conspiracy, censor online speculation, or simply deny any illicit dealings or tax impropriety.

As journalists take a fine comb through the 2.6 terabytes of data obtained from the servers of Mossack Fonseca, the world’s fourth biggest “offshore law” firm, they are sure to uncover more and more of the web of dealings that tie politicians, businesspeople, celebrities and their kin to that tax haven and others.

But what’s so scandalous about the Panama Papers isn’t just that there’s a nexus of rich people, some elected, who make profits by evading taxes. It’s that so much of the money moved through tax havens would otherwise be taxed by some of the world’s poorest, most revenue-hungry governments.

That tax evasion disproportionately affects the poor shouldn’t come as a surprise, and it certainly isn’t a secret. Angel Gurría, the secretary general of the Organization for Economic Cooperation and Development, or OECD, an economic organization consisting of the world’s richest nations, once estimated that developing countries lose three times as much to tax evasion as they receive in foreign aid. The Tax Justice Network, pointing out that data on tax evasion is murky at best, says the real figure may be closer to 10 times. [Continue reading…]

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The Panama Papers prove it: America can afford a universal basic income

Colin Holtz writes: We should all be able to agree: no one should be poor in a nation as wealthy as the US. Yet nearly 15% of Americans live below the poverty line. Perhaps one of the best solutions is also one of the oldest and simplest ideas: everyone should be guaranteed a small income, free from conditions.

Called a universal basic income by supporters, the idea has has attracted support throughout American history, from Thomas Paine to Martin Luther King Jr. But it has also faced unending criticism for one particular reason: the advocates of “austerity” say we simply can’t afford it – or any other dramatic spending on social security.

That argument dissolved this week with the release of the Panama Papers, which reveal the elaborate methods used by the wealthy to avoid paying back the societies that helped them to gain their wealth in the first place.

Roads and transportation infrastructure. Educated workforces. Courts and legal systems. Innovations sparked by government funding, such as the internet. No one – no matter how smart or hard working – joins the American or global elite without making use of these shared resources.

But while working and middle-class families pay their taxes or face consequences, the Panama Papers remind us that the worst of the 1% have, for years, essentially been stealing access to Americans’ common birthright, and to the benefits of our shared endeavors. [Continue reading…]

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The super rich live in a parallel world; here’s how we bring them back to reality

Suzanne McGee writes: “Only the little people pay taxes,” Leona Helmsley, New York’s “Queen of mean” once famously opined. The statement, delivered in court by one of her “little people” helped send the late billionaire real estate mogul to jail for 19 months for failing to pay her dues.

It’s hard not to think of the late Leona amid the revelations still pouring out from the Panama Papers. The massive treasure trove of 11.5m documents from the Panamanian law firm of Mossack Fonseca leaked to the media has disclosed a staggering amount of detail about how the rich and powerful have used shell companies to hide their wealth from the taxman and others around the world.

Done right – the way that the lawyers at Mossack Fonseca promised their super-wealthy clients they would be done – shell companies are almost untraceable. And that enabled those clients to use them to stash money made from illegal weapons, human trafficking or drugs, or shelter cash from the tax man or other kinds of regulatory scrutiny.

It’s just another way that the rich can take advantage of breaks that would elude us even if we wanted them. Sure, you or I could set up a shell company of sorts, by establishing a limited liability company. But our names, and our social security numbers, are attached to it. And it’s domiciled here in the US. While there are ways to use US shell companies fraudulently, most of us would have a hard time doing it without paying big bucks for the assistance of high-priced attorneys. [Continue reading…]

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Technology, the faux equalizer

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Adrienne LaFrance writes: Just over a century ago, an electric company in Minnesota took out a full-page newspaper advertisement and listed 1,000 uses for electricity.

Bakers could get ice-cream freezers and waffle irons! Hat makers could put up electric signs! Paper-box manufacturers could use glue pots and fans! Then there were the at-home uses: decorative lights, corn poppers, curling irons, foot warmers, massage machines, carpet sweepers, sewing machines, and milk warmers all made the list. “Make electricity cut your housework in two,” the advertisement said.

This has long been the promise of new technology: That it will make your work easier, which will make your life better. The idea is that the arc of technology bends toward social progress. This is practically the mantra of Silicon Valley, so it’s not surprising that Google’s CEO, Sundar Pichai, seems similarly teleological in his views. [Continue reading…]

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Thomas Frank: The inequality sweepstakes

Reading Thomas Frank’s new book, Listen, Liberal, or What Ever Happened to the Party of the People?, I was reminded of the snapshot that Oxfam offered us early this year: 62 billionaires now have more wealth than the bottom 50% of the global population, while the richest 1% own more than the other 99% combined. And in case you’re wondering in which direction inequality is trending on Planet Earth, note that in 2010, it took 388 of the super-rich to equal the holdings of that bottom 50%. At this rate in the inequality sweepstakes, by 2030, just the top 10 billionaires might do the trick. Let me just add that, as Frank makes clear in his brilliant new work, Donald Trump doesn’t have to win the presidency for billionaires to stand triumphant on the American part of our planet. Hillary Clinton will do just fine, thank you.

Listen, Liberal is, in a sense, a history of how, from the Clintonesque 1990s on, the Democratic Party managed to ditch the working class (hello, Donald Trump!) and its New Deal tradition, throw its support behind a rising “professional” and technocratic class, and go gaga over Wall Street and those billionaires to come. In the process, its leaders fell in love with Goldman Sachs and every miserable trade pact that hit town, led the way in deregulating the financial system, and helped launch what Frank terms “the greatest wave of insider looting ever seen”; the party, that is, went Silicon Valley and left Flint, Michigan, to the Republicans.  Only a few years after Bill Clinton vacated the Oval Office the financial system he and his team had played such a role in deregulating had to be rescued, lock, stock, and barrel from ultimate collapse. Quite a record all in all. Put another way, as Frank makes clear, in these years the Democrats (with obvious exceptions) became a more or less traditional Republican party. And if the Democrats are now the party of inequality, then what in the world are the Republicans? Don’t even get me started on the cliff that crew walked off of.

In the following post, adapted from his new book, Frank does a typically brainy thing. Since we’ve all heard for years about how the Democrats have been stopped from truly pursuing their political program by Republican experts in political paralysis, he turns to a rare set of places where, in fact, the Republicans were incapable of getting in the way and… well, let him tell the story. Tom Engelhardt

The blue state model
How the Democrats created a “liberalism of the rich”
By Thomas Frank

[This piece has been adapted from Thomas Frank’s new book, Listen, Liberal, or What Ever Happened to the Party of the People? (Metropolitan Books).]

When you press Democrats on their uninspiring deeds — their lousy free trade deals, for example, or their flaccid response to Wall Street misbehavior — when you press them on any of these things, they automatically reply that this is the best anyone could have done. After all, they had to deal with those awful Republicans, and those awful Republicans wouldn’t let the really good stuff get through. They filibustered in the Senate. They gerrymandered the congressional districts. And besides, change takes a long time. Surely you don’t think the tepid-to-lukewarm things Bill Clinton and Barack Obama have done in Washington really represent the fiery Democratic soul.

So let’s go to a place that does. Let’s choose a locale where Democratic rule is virtually unopposed, a place where Republican obstruction and sabotage can’t taint the experiment.

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What Americans don’t get about Nordic countries

Anu Partanen writes: Bernie Sanders is hanging on, still pushing his vision of a Nordic-like socialist utopia for America, and his supporters love him for it. Hillary Clinton, meanwhile, is chalking up victories by sounding more sensible. “We are not Denmark,” she said in the first Democratic debate, pointing instead to America’s strengths as a land of freedom for entrepreneurs and businesses. Commentators repeat endlessly the mantra that Sanders’s Nordic-style policies might sound nice, but they’d never work in the U.S. The upshot is that Sanders, and his supporters, are being treated a bit like children — good-hearted, but hopelessly naive. That’s probably how Nordic people seem to many Americans, too.

A Nordic person myself, I left my native Finland seven years ago and moved to the U.S. Although I’m now a U.S. citizen, I hear these kinds of comments from Americans all the time — at cocktail parties and at panel discussions, in town hall meetings and on the opinion pages. Nordic countries are the way they are, I’m told, because they are small, homogeneous “nanny states” where everyone looks alike, thinks alike, and belongs to a big extended family. This, in turn, makes Nordic citizens willing to sacrifice their own interests to help their neighbors. Americans don’t feel a similar kinship with other Americans, I’m told, and thus will never sacrifice their own interests for the common good. What this is mostly taken to mean is that Americans will never, ever agree to pay higher taxes to provide universal social services, as the Nordics do. Thus Bernie Sanders, and anyone else in the U.S. who brings up Nordic countries as an example for America, is living in la-la land.

But this vision of homogenous, altruistic Nordic lands is mostly a fantasy. The choices Nordic countries have made have little to do with altruism or kinship. Rather, Nordic people have made their decisions out of self-interest. Nordic nations offer their citizens — all of their citizens, but especially the middle class—high-quality services that save people a lot of money, time, and trouble. This is what Americans fail to understand: My taxes in Finland were used to pay for top-notch services for me. [Continue reading…]

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Lost in the world: The young people shunted around a global asylum system

By Elaine Chase, UCL and Nando Sigona, University of Birmingham

Immigration control is a global phenomenon. Young people seeking safety and security are subjected to the vagaries of all kinds of “solutions” at various national borders. Sometimes they are taken in and sometimes they are turned away. Sometimes, as we have found in our research, they are offered help but then deported as soon as they become legal adults. These people end up drifting between states and detained in immigration centres without understanding the system that put them there.

Each year many young people arrive in a Western country as unaccompanied children. They may be granted time-limited leave to remain and spend their teenage years there. Then they are told to leave. This can happen when a young person becomes a legal “adult” (institutionally and politically at the age of 18) and is no longer eligible for the same protections and rights that they enjoyed as children.

Once appeal rights have been exhausted, they can be forcibly returned to their countries of origin. From here, finding life unsustainable and unsafe, many re-migrate. Rejected in one region of the globe, they seek security in another, searching for the ever elusive better life.

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The curious case of San Francisco’s Tech bro v. Homelessness

Holly Wood writes: I am writing today to voice my concern and outrage over the increasing tech bro problem, conspicuously concentrated in the city of San Francisco. The curious case of Tech bro v. Homelessness has been presented before me for comment.

Many of you have petitioned the Council for Human Decency your concerns regarding the callousness of one startup entrepreneur, Justin Keller. As penance for sins I must no doubt have committed in a past life, I found this case dumped on my desk alongside the even more absurd case of Marc Andreessen v. Indian Emancipation and the morally bankrupt case of Yelp v. Talia Jane. Yes indeed, this week has been a low watermark for Human Decency in San Francisco. But I digress.

In publishing his open letter to Mayor Ed Lee and Police Chief Greg Suhr on Feb. 15, Keller is guilty of betraying an incredible sense of bourgeois entitlement, reckless irony, and sloppy philosophy. “I shouldn’t have to see the pain, struggle, and despair of homeless people to and from my way to work every day,” he writes. But I urge, nevertheless, that we stay the blade.

You are not wrong to imagine Keller’s morality long rusted, encrusted in the residue of so long having volunteered himself a willing cog in a fetishized industry. But here at the Council, we husband our resources strategically. It bears recognition that Keller is merely a foot soldier on the tech front of the class war, a prole with aspirations so banal, history has already forgotten him. As a startup founder, statistics and conventional wisdom would suggest Keller will burn out — if not this year, then the next. Your anger is my anger is our anger, but from our vantage, Keller is but Silicon Valley cannon fodder.

Still, the irony of the incident warrants reflection. Perhaps the greatest tragedy of Tech bro v. Homelessness is that Keller sincerely believes himself entitled to comfort and security from the city—not because he believes these protections should be guaranteed to everyone as rights, but because of all the money he hopes to earn as a tech startup founder. “The wealthy working people have earned their right to live in the city,” he declares, despite the fact that he is unlikely to have yet earned anything at all. [Continue reading…]

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Peter Van Buren: Minimum wage, minimum chance

To say that we live on a 1% planet isn’t just a turn of phrase. In fact, it would undoubtedly be more accurate to speak of a .1% or a .01% planet.  In recent years, wealth and income inequalities have grown in a notorious fashion in the United States — and, as it turns out, globally as well. In January, Oxfam released a report on the widening gap between global wealth and poverty. It found that, between 2010 and today, the wealth of the poorest half of the planet’s population fell by a trillion dollars, a drop of 41%, while that of the richest 62 people (53 men and nine women) increased by half a trillion dollars.  Put another way, those 62 billionaires were wealthier than the bottom 50% of the world’s people, while the richest 1% owned more than the other 99% combined.  The direction in which we’re heading is obvious.  Just consider that, in 2010, it took 388 of the super-rich to equal the holdings of the bottom 50%; now, that number is 326 people smaller.

Keep that trend line in mind as you read about TomDispatch regular Peter Van Buren’s latest adventures in the minimum-wage economy. Back in 2014, he described for this site how, having lost his State Department job for being a whistleblower on the Iraq War, he fell for a time into the low-wage world. As he wrote, “And soon enough, I did indeed find myself working in exactly that economy and, worse yet, trying to live on the money I made. But it wasn’t just the money. There’s this American thing in which jobs define us, and those definitions tell us what our individual futures and the future of our society is likely to be. And believe me, rock bottom is a miserable base for any future.” His experiences in a big-box retail store inspired him to write his novel, Ghosts of Tom Joad: A Story of the #99Percent. As last year ended, he returned to the minimum-wage world, now — thanks in particular to Bernie Sanders — part of the national conversation. And here’s what he found. Tom Engelhardt

Nickel and dimed in 2016
You can’t earn a living on the minimum wage
By Peter Van Buren

When presidential candidate Bernie Sanders talks about income inequality, and when other candidates speak about the minimum wage and food stamps, what are they really talking about?

Whether they know it or not, it’s something like this.

My Working Life Then

A few years ago, I wrote about my experience enmeshed in the minimum-wage economy, chronicling the collapse of good people who could not earn enough money, often working 60-plus hours a week at multiple jobs, to feed their families. I saw that, in this country, people trying to make ends meet in such a fashion still had to resort to food benefit programs and charity. I saw an employee fired for stealing lunches from the break room refrigerator to feed himself. I watched as a co-worker secretly brought her two kids into the store and left them to wander alone for hours because she couldn’t afford childcare. (As it happens, 29% of low-wage employees are single parents.)

At that point, having worked at the State Department for 24 years, I had been booted out for being a whistleblower. I wasn’t sure what would happen to me next and so took a series of minimum wage jobs. Finding myself plunged into the low-wage economy was a sobering, even frightening, experience that made me realize just how ignorant I had been about the lives of the people who rang me up at stores or served me food in restaurants. Though millions of adults work for minimum wage, until I did it myself I knew nothing about what that involved, which meant I knew next to nothing about twenty-first-century America.

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Over half the world’s population suffers from ‘severe’ water scarcity, scientists say

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The Washington Post reports: Alarming new research has found that 4 billion people around the globe — including close to 2 billion in India and China — live in conditions of extreme water scarcity at least one month during the year. Half a billion, meanwhile, experience it throughout the entire year.

The new study, by Mesfin Mekonnen and Arjen Hoekstra of the University of Twente in the Netherlands, uses a high resolution global model to examine the availability of “blue water” — both surface and underground freshwater — in comparison with the demand for it from agriculture, industry and human household needs. The model — which zoomed in on areas as small as 60 kilometers by 60 kilometers in size at the equator — also took into account climatic factors, ecological ones (how much water is needed to sustain a river ecosystem or lake) and other causes of depletion such simple evaporation.

“We find that 4 billion people live in areas that experience severe water scarcity at least part of the year, which is more than previously thought, based on those earlier studies done on an annual basis,” says Hoekstra, who published the work in Science Advances Friday. “You have to look really month by month, in order to get the scarcity.” [Continue reading…]

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Why the time is again ripe for American socialism

By Michael Espinoza, UCL

Vermont Senator Bernie Sanders has handily beaten Hillary Clinton to win the New Hampshire primary – and after being dismissed as more or less an ideological sideshow when it first began, his campaign has become an unlikely but remarkable movement.

With the Republican Party in a seemingly unstoppable rightward spiral, as the likes of Ted Cruz and Donald Trump dominate its race, the seemingly unexpected rise of as such a proud left-wing candidate as Sanders might seem inconsistent with every trend in recent American politics. At the beginning of the race, he was unknown to many voters outside his home state of Vermont. He is also the Senate’s only self-proclaimed socialist, a label that many once thought would make him utterly unelectable.

But Sanders’s support for “democratic socialism” hasn’t just been surprisingly popular: it’s rapidly changing the way America perceives socialism and all it stands for.

A major strength of Sanders’s campaign is an economic argument against income inequality. This message is at the heart of Sanders’s self-described democratic socialism, but the “revolution” he’s advocating isn’t a Marxist seizure of the means of production; it’s a democratic political uprising.

But this in itself is hardly anything new by the standards of American politics, even at the presidential level.

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Under Sanders, income and jobs would soar, economist says

CNN reports: Median income would soar by more than $22,000. Nearly 26 million jobs would be created. The unemployment rate would fall to 3.8%.

Those are just a few of the things that would happen if Bernie Sanders became president and his ambitious economic program were put into effect, according to an analysis given exclusively to CNNMoney. The first comprehensive look at the impact of all of Sanders’ spending and tax proposals on the economy was done by Gerald Friedman, a University of Massachusetts Amherst economics professor.

Friedman found that if Sanders became president — and was able to push his plan through Congress — median household income would be $82,200 by 2026, far higher than the $59,300 projected by the Congressional Budget Office.

In addition, poverty would plummet to a record low 6%, as opposed to the CBO’s forecast of 13.9%. The U.S. economy would grow by 5.3% per year, instead of 2.1%, and the nation’s $1.3 trillion deficit would turn into a large surplus by Sanders’ second term [Continue reading…]

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Aviva Chomsky: A newspaper’s crisis reveals unreported worlds

Is there a category of human beings who, in election 2016, have been the focus of more negative attention, fear-mongering, or worse press than immigrants, especially undocumented ones coming from or through Mexico (those infamous “rapists”)?  I doubt it.  Thought of in another way, such immigrants seem to be the only “lobbying group” capable of convincing Republican politicians that our crumbling infrastructure needs to be shored up — hence those monster walls to come along the Mexican border.  Immigrants, it’s now well known, are a shiftless bunch of criminals, or as Donald Trump put it, “If you look at the statistics of people coming, you look at the statistics on rape, on crime, on everything coming in illegally into this country it’s mind-boggling!” And don’t forget the terrorist types supposedly worming their way in among refugees — another category of immigrants — fleeing the chaos the U.S. had such a hand in creating in Syria and Iraq.  Those lost souls looking for asylum here have been a particular target of Republican candidates and office holders eager to ban them from coming anywhere near this country or at least their states.  Put it all together and you have a witch’s brew when it comes to the land of the free and home of the… well, whatever.

So imagine the national shock (had anyone been paying attention) that “The Criminalization of Immigration in the United States,” a study by researchers Walter A. Ewing, Daniel E. Martínez, and Rubén G. Rumbaut released last July through the American Immigration Council, should have caused here.  The three scholars offered truly shocking news.  They crunched the latest numbers and confirmed decades of other studies showing that immigration does anything but increase U.S. crime rates.  Immigrants, legal and otherwise, are charged with far fewer “serious crimes” and are jailed far less often than the native born.  To be specific, their study found that “1.6% of immigrant males age 18-39 are incarcerated, compared to 3.3% of the native-born. This disparity in incarceration rates has existed for decades, as evidenced by data from the 1980, 1990, and 2000 decennial censuses. In each of those years, the incarceration rates of the native-born were anywhere from two to five times higher than that of immigrants.”  The same, by the way, holds true for incarceration rates “among the young, less-educated Mexican, Salvadoran, and Guatemalan men who make up the bulk of the unauthorized population.”

How in the world do such definitive hard numbers fit with the overwrought sense of fear and alarm, the myth-making about immigrants alive in the country today?  In her second TomDispatch post, Aviva Chomsky offers an interesting answer: it’s not that hard to create a nightmare vision of immigrants when they are almost never seen by the Americans you are scaring the hell out of.  Their invisibility in our world ensures that just about any picture can be painted of them without fear of contradiction because there’s nothing in most of our lives to which to compare it.  So consider today just one recent case in which, however briefly, that cloak of invisibility began to be lifted from the remarkably lawful, remarkably hardworking immigrants who are the target of so much calumny this election season. Tom Engelhardt

All the news that’s fit to print
How the media hide undocumented workers
By Aviva Chomsky

In our post-modern (or post-post-modern?) age, we are supposedly transcending the material certainties of the past. The virtual world of the Internet is replacing the “real,” material world, as theory asks us to question the very notion of reality.  Yet that virtual world turns out to rely heavily on some distinctly old systems and realities, including the physical labor of those who produce, care for, and provide the goods and services for the post-industrial information economy. 

As it happens, this increasingly invisible, underground economy of muscles and sweat, blood and effort intersects in the most intimate ways with those who enjoy the benefits of the virtual world. Of course, our connection to that virtual world comes through physical devices, and each of them follows a commodity chain that begins with the mining of rare earth elements and ends at a toxic disposal or recycling site, usually somewhere in the Third World.

Closer to home, too, the incontrovertible realities of our physical lives depend on labor — often that of undocumented immigrants — invisible but far from virtual, that makes apparently endless mundane daily routines possible.

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How China’s downturn threatens one of the world’s greatest success stories

poverty

The Washington Post reports: Over the last 25 years, a period of remarkable economic growth spanning from China to South America spurred one of the world’s greatest — and oft-overlooked — modern achievements: a dramatic reduction in the number of extreme poor. More than one billion were pulled out of the most destitute conditions, and the pace of improvement inspired such optimism that two years ago the United Nations vowed to eliminate extreme poverty entirely by 2030.

But now, China’s downturn — and the related prospect of weaker growth across the world — is threatening to stall that progress, signaling a new era of dimmer prospects for the poorest of the poor. That is just one of the emerging challenges from a slowdown that has crippled some nations’ currencies and wiped hundreds of billions from stock markets globally.

Economists caution that the rise or fall of poverty in the coming years depends on a number of hard-to-predict factors, including technology, disease, corruption, war, and climate change. But they also say with growing confidence that the job of fighting poverty is getting harder, particularly in Africa, a continent that is home to half the world’s extreme poor and depends disproportionately on Chinese demand for raw materials. [Continue reading…]

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The inequality problem

Ed Miliband writes: ‘What do I see in our future today you ask? I see pitchforks, as in angry mobs with pitchforks, because while … plutocrats are living beyond the dreams of avarice, the other 99 per cent of our fellow citizens are falling farther and farther behind.’ Who said this? Jeremy Corbyn? Thomas Piketty? In fact it was Nick Hanauer, an American entrepreneur and multibillionaire, who in a TED talk in 2014 confessed to living a life that the rest of us ‘can’t even imagine’. Hanauer doesn’t believe he’s particularly talented or unusually hardworking; he doesn’t believe he has a great technical mind. His success, he says, is a ‘consequence of spectacular luck, of birth, of circumstance and of timing’. Just as his own extraordinary wealth can’t be explained by his unique talents, neither, he says, can rising inequality in the United States be justified on the grounds that it is a side effect of a broader economic success from which everyone benefits. As Henry Ford recognised, if you don’t pay ordinary workers decent wages, the economy will lack the demand to sustain economic growth.

Hanauer is in the vanguard of the ‘Fight for 15’, the campaign for a $15 minimum wage. Like Bill Gates and Warren Buffett, who have also issued loud warnings about inequality, he is heir to a long tradition of social concern among the wealthy in the US. They have reason to be worried. The last time inequality reached comparable levels was shortly before the Wall Street Crash. As Anthony Atkinson shows in Inequality: What Can Be Done?, inequality in the US fell for decades after the crash, before beginning to rise again in the 1970s.​ Since then the gap between the wealthy and the rest has grown steadily wider. The top 1 per cent now has nearly 20 per cent of total US personal income. In the 1980s, inequality in the UK went up even more sharply than in the US. Since then, overall UK inequality has been relatively stable but the income share of the top 1 per cent has increased significantly and now accounts for about 12 per cent of UK personal income. The important factors are rising inequality in wages, a decline in the share of the national income that wages represent as more money goes to corporate profits and dividends, and a reversal of redistribution from the rich to the poor.

The rise in inequality should not, Atkinson insists, be brushed aside as an inevitable effect of irresistible forces such as globalisation or developments in technology. It is driven by political choices. [Continue reading…]

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Wall Street declares war on Bernie Sanders

Bill Black writes: Wall Street billionaires are freaking out about the chance that Bernie Sanders could be elected President. Stephen Schwarzman, one of the wealthiest and most odious people in the world, told the Wall Street Journal that one of the three principal causes of the recent global financial trauma was “the market’s” fear that Sanders may be elected President. Schwarzman is infamous for ranting that President Obama’s proposals to end the “carried interest” tax scam that allows private equity billionaires like Schwarzman to pay lower income tax rates than their secretaries was “like when Hitler invaded Poland.”

Schwarzman and Pete Peterson co-founded the private equity firm Blackstone. Peterson leads the effort to destroy the safety net in America. His greatest dream is to privatize Social Security so that Wall Street could increase its revenues by tens of billions of dollars. Blackstone is a major owner of Sea World, and it was in this sphere that Schwarzman went beyond his delusional rants about Hitler and became vile. When an Orca killed its trainer, Schwarzman lied and blamed the death on the trainer, claiming that Sea World “had one safety lapse — interestingly, with a situation where the person involved violated all the safety rules that we had.”

Schwarzman’s claim that the global financial markets are tanking because of Bernie’s increasing support is delusional, but it is revealing that he used the most recent market nightmare as an excuse to attack Bernie. The Wall Street plutocrats, with good reason, fear Bernie – not Hillary. Indeed, it is remarkable how vigorous and open Wall Street has been in signaling through the financial media that it has no problem with Hillary’s Wall Street plan. CNN, CNBC, and the Fiscal Times, under titles such as: “Here’s Why Wall Street Has Little to Fear from Hillary Clinton,” pushed this meme. [Continue reading…]

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