Monthly Archives: September 2016

Gallup CEO: Economic Recovery Hasn’t Actually Happened

Jim Clifton | September 21, 2016 | EFT Daily News

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Jim Clifton, CEO of Gallup, one of the largest polling organizations in the world, just penned a piece that pans the supposed U.S. economic recovery — and he has the demographic data to support it.

“I don’t think it’s true,” writes Clifton, in response to recent reports in the New York Times andFinancial Times about a recovering economy. He notes that the amount of Americans who consider themselves above “lower class” has plunged in recent years:


The percentage of Americans who say they are in the middle or upper-middle class has fallen 10 percentage points, from a 61% average between 2000 and 2008 to 51% today.

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Ten percent of 250 million adults in the U.S. is 25 million people whose economic lives have crashed. 

Clifton identifies three main data points that he’d like to see serious improvement in for him to believe in an actual recovery, specifically, anemic full-time employment, a dearth of publicly-traded companies, and a lack of new business startups:

There are three serious metrics that need to be turned around or we’ll lose the whole middle class.

  1. According to the U.S. Bureau of Labor Statistics, the percentage of the total U.S. adult population that has a full-time job has been hovering around 48% since 2010 — this is the lowest full-time employment level since 1983.
  2. The number of publicly listed companies trading on U.S. exchanges has been cut almost in half in the past 20 years — from about 7,300 to 3,700. Because firms can’t grow organically — that is, build more business from new and existing customers — they give up and pay high prices to acquire their competitors, thus drastically shrinking the number of U.S. public companies. This seriously contributes to the massive loss of U.S. middle-class jobs.
  3. New business startups are at historical lows. Americans have stopped starting businesses. And the businesses that do start are growing at historically slow rates.

For thing to truly improve for the majority of all Americans, says Clifton, we’ll need to see a renewed boom in small business creation:

Gallup finds that small businesses — startups plus “shootups,” those that grow big — are the engine of new economic energy. According to the U.S. Small Business Administration, 65% of all new jobs are created by small businesses, not large ones.

In an era where the big just keep getting bigger, and the small seem to simply fade away, it’s easy to see why how the wider economy — and everyday Americans — will suffer. Despite relatively low unemployment and stocks trading near all-time highs, real economic growth has been very slow to respond, and that won’t change until we see a renaissance in smaller firms.

Bottom line: The two most trusted institutions in the U.S. are the military and small business. Most people know about our military’s importance, but not as many appreciate the role small business plays in creating the majority of new jobs and in national security itself.

Most people’s preferred measure of the economy, The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) was unchanged in premarket trading today ahead of the upcoming Federal Reserve decision. The DIA, which is the largest ETF that tracks the DJIA, has risen 4.06% year-to-date.

How to “Stop the Violence”: March Up the Steps of the Traders Who Pay No Sales Tax

Paul Buchheit | September 19 2016 | Common Dreams

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A demonstration in favor of a financial transaction tax, also known as a Robin Hood Tax. (Photo: RobinHoodTax/cc/flickr)

The rallies in Chicago and around the country evoke passion and sympathy from most of us, but just a shrug of the shoulders from those ultimately responsible for the carnage on our streets. These are the leaders of finance who use our infrastructure, technology, security, law, location, and especially our people to make billions in profits while paying almost nothing in return.

Especially the securities traders. An impoverished mother pays up to 10% in sales tax when she buys shoes for her kids, but the customers of companies with a quadrillion dollars in sales pay ZERO SALES TAX. Quadrillion sounds like gazillion, but it’s a real number — a thousand trillion, about four times the value of all the world’s wealth.

The protesting mothers are angry at the people who are killing their children. Much of that anger should be directed at the financial districts of New York and Chicago.

The Shame of Chicago

With a quadrillion dollars in sales and the collection of transfer fees, contract fees, brokerage fees, Globex fees, clearing fees, and surcharges, the Chicago Mercantile Exchange achieved a profit margin (54%) higher than any of the top 100 companies in the nation from 2008 to 2010, and in recent years it’s risen to nearly 60%.

Despite being the most profitable big firm, CME complained that its taxes were too high, and they demanded and received an $85 million tax break from the State of Illinois.

Meanwhile, Illinois Governor Bruce Rauner has cut funding for funerals, AIDS programs, “Meals on Wheels” for seniors, and programs for at-risk youth.

The Farce in New York

The good news is that New York has a financial transaction tax. The bad news is that as soon as the tax is paid, it’s given back. That can only happen in the “strange world of taxes,” according to the New York Times, which also admits that the financial transaction tax “is an idea whose time has finally come.”

Continue reading How to “Stop the Violence”: March Up the Steps of the Traders Who Pay No Sales Tax

Don’t Celebrate Just Yet: Median Household Income In a 20-Year Decline

Naked Capitalism | September 18 2016

Lambert here: Campaign-driven happy talk about the US Census income figures has been debunked remarkably fast. Here Richard D. Wolff does a thorough demolition.

Richard D. Wolff is a Professor of Economics Emeritus at the University of Massachusetts, Amherst, and currently a Visiting Professor of the Graduate Program in International Affairs at the New School University in New York. He is the author of many books, including Democracy at Work: A Cure or Capitalism, and Imagine: Living in a Socialist USA. Originally published at The Real News Network.

DHARNA NOOR, TRNN: Welcome to the Real News Network. I’m Dharna Noor.

New statistics from the U.S. Census Bureau has raised hopes that the economy is finally recovering from the 2008 crash. The figures released on Tuesday show that the US median household income has gone up by 5.2% between 2014 and 2015, putting it at $56,516. They also showed a 1.2% decrease in the official poverty rate. These figures are being hailed as a victory for the American middle class but are average Americans really benefiting?

Joining us from New York City to discuss this is Richard D. Wolff. Richard is a Professor of Economics Emeritus at the University of Massachusetts Amherst and currently a visiting professor of the graduate program in international affairs at the New School University in New York. His latest book is Capitalism’s Crisis Deepens. Thanks for joining us today, Rick.

RICHARD WOLFF: Thank you for inviting me.

NOOR: Now Rick, some commentators like the New York Times’ Neil Irwin are saying that these new figures mark the first time in years that the U.S. economic expansion has helped the middle class rather than just the super-rich, and you, too, have pointed out in recent years that economic growth has really only been benefiting the 1%. Does this new Census Bureau report mark a shift away from that trend?

WOLFF: Absolutely not. Let’s remember, in order to understand what happens, say, to the middle class, or to any large group of people, your span of attention has to be more than one year. Things bounce around in a capitalistic economy because of its instabilities, because of the contradictions that are besetting it always. So a few months, a year or two, never explain anything. You have to have a longer vision.

Continue reading Don’t Celebrate Just Yet: Median Household Income In a 20-Year Decline

As many jobs created as those who left work force under Obama

Bud Meyers | September 12 2016 

14,770,000 net new jobs were created since January 2009 when Obama first took office — and according to the St. Louis Federal Reserve, most of those went to foreign-born workers: Foreign born workers / Native born workers — And the U.S. has 13,862,000 more working age Americans not in the labor force since January 2009 since Obama first took office.

For the sake of argument (to give the Obama administration the best benefit of the doubt), we’ll assume that all 8.7 million people who lost jobs during the Great Recession have either went on disability, retired on Social Security, were incarcerated (criminally or medically), passed away, left the country or found another job — and not a single one is officially counted as “unemployed” today (as of September 2016).

Since Obama first took office in 2009, according to the National Center for Education Statistics, the U.S. has averaged over 3 million high school graduates every year during his tenure (24 million total during Obama’s time in office) — and many, probably most, have went on to college for a certain amount of time and then either dropped out or graduated from college (and we can assume that most of them have attempted to enter the job market).

Net new jobs created under Obama per the U.S. Bureau of Labor Statistics (in thousands)

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24 million graduates during Obama’s tenure
-15 million jobs created during Obama’s tenure
– 9 million jobs short (minus those who have either went on disability, left the country, was incarcerated (criminally or medically), passed away or left the country — and we have almost 14 million more working age Americans “not in the labor force” during Obama’s tenure.

Continue reading As many jobs created as those who left work force under Obama

Religion in US ‘worth more than Google and Apple combined’

Harriet Sherwood | September 15 2016 | The Guardian

Faith economy worth $1.2tn a year – more than combined revenues of 10 biggest tech firms in America, study shows

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St Patrick’s Cathedral, New York. More than 150 million Americans are members of faith congregations, according to the report. Photograph: Getty

Religion in the United States is worth $1.2tn a year, making it equivalent to the 15th largest national economy in the world, according to a study.

The faith economy has a higher value than the combined revenues of the top 10 technology companies in the US, including Apple, Amazon and Google, says the analysis from Georgetown University in Washington DC.

The Socioeconomic Contributions of Religion to American Society: An Empirical Analysis calculated the $1.2tn figure by estimating the value of religious institutions, including healthcare facilities, schools, daycare and charities; media; businesses with faith backgrounds; the kosher and halal food markets; social and philanthropic programmes; and staff and overheads for congregations.

Continue reading Religion in US ‘worth more than Google and Apple combined’

Five Deadly Sins of Big Pharma

Paul Buchheit | September 12 2016 | Common Dreams

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A pharmacist holds a package of EpiPens epinephrine auto-injector, a Mylan product, in Sacramento, Calif., last month. Mylan said it will make available a generic version of its EpiPen, as criticism mounts over the price of its injectable medicine. (Photo: Rich Pedroncelli/AP)

For Mylan, it was a perfect plan—diabolical, unstoppable. The company made changes in its anti-allergy EpiPen dispenser in 2009, enough to give it patent protection. Then, in 2012, it began to give away free pens to schools, gradually making school nurses at least partly dependent on them. Meanwhile the company was successfully lobbying for the “Emergency Epinephrine Act,” commonly referred to as the “EpiPen Law,” which encouraged the presence of epinephrine dispensers in schools. Most recently, after raising the price from $100 to $600, Mylan announced a half-price coupon, making itself appear generous even though the price had effectively jumped from $100 to $300.

This is capitalism at its worst, a greedy and disdainful profit-over-people system that leaves millions of Americans sick… or dead. These are the sins of the pharmaceutical industry.

1. Gouging Customers

The Mylan story is just one of many. An American with cancer will face bills up to $183,000 per year, even though it hasn’t been established that the expensive treatments actually extend lives. A 12-week course of Sovaldi, for hepatitis, costs Gilead Sciences about $84 and is priced at $84,000.

This is an industry that can suddenly impose a 60,000% increase on desperately ill people. Yet the pharmaceutical industry’s profit margin is matched only by the unscrupulous financial industry for the highest corporate profit margin.

2. Disposing of People Who Can’t Afford Medication

A Forbes writer summarizes: “Somewhere, right now, a cash-strapped parent or budget-limited patient with a severe allergy will skip acquiring an EpiPen. And someday, they will need it in a life-threatening situation…and they won’t have it. And they will die.”

A recent Health Affairs study concluded that since 2004 our medical dollars have been “increasingly concentrated on the wealthy.” As a result the richest 1% of American males live nearly 15 years longer than the poorest 1% (10 years for women). The high cost of medication is one of the factors leading to early death.

3. Gouging Us a Second Time

We’re paying twice for outrageously overpriced medications, both directly and with our tax dollars. The average medical insurance deductible has increased 67 percent since 2010, and most Medicare patients still face out-of-pocket costs of $7,000 or more a year.

Continue reading Five Deadly Sins of Big Pharma