Category Archives: Bud Meyers

Using RICO to Stop Union-busting and Restore Wages

by Bud Meyers, published April 22, 2015

ricoIncreased productivity no longer has an affect on raising wages, because all the gains go to the top — and the decline of labor unions plays a big part; as well as a tax code that Congress has skewed to mostly favor the very wealthy and large corporations.

Jared Bernstein, former economic adviser to Vice President Joe Biden, recently writes:

“A number of economists and commentators have suggested that faster productivity growth would be a big way to boost the income of middle-class households … There is a large and persistent gap between productivity growth and middle-class incomes: we cannot realistically assume that faster productivity growth would reach the middle as opposed to doing an end-run around them on its way to the top.”

Via the professor of economics, Mark Thoma: As noted by the Economic Policy Institute, since 1979, the vast majority of American workers have seen their hourly wages stagnate or decline—even though decades of consistent gains in economy-wide productivity have provided ample room for wage growth:

“Until workers recover the bargaining power they lost with the decline of unions and the rise of globalization, it’s hard to imagine a reversal of the forces pushing us toward stagnating wages and ever higher inequality. It’s not market forces alone that are determining the split of income between those at the top of the income distribution and those below, it’s also the institutions that determine who holds the cards in negotiations over wages. Presently workers are not faring well … So long as we continue to believe that market forces and the attainment of full employment will solve the problem of stagnating wages and rising inequality, so long as we fail to recognize that workers need a level playing field when bargaining over wages, inequality will continue to be a problem.”

Continue reading Using RICO to Stop Union-busting and Restore Wages

New Study: Low Wages Cost Taxpayers Big

by Bud Meyers, published April 20, 2015

From another new study, this time from the UC Berkeley Center for Labor Research and Education (April 2015) “Poverty-Level Wages Cost U.S. Taxpayers $152.8 Billion Each Year  in Public Support for Working Families”

They report that wages of the bottom decile of earners were 5 percent lower in 2013 than in 1979. Trends since the early 2000s are even more pronounced. Inflation-adjusted wage growth from 2003 to 2013 was either flat or negative for the entire bottom 70 percent of the wage distribution … 73 percent of enrollees in America’s major public support programs* are members of working families; and the taxpayers bear a significant portion of the hidden costs of low-wage work in America.

* Medicaid, Children’s Health Insurance Program (CHIP), Temporary Aid to Needy Families (TANF aka “welfare”) and Supplemental Nutrition Assistance Program (SNAP aka “food stamps”).

Between 2009 and 2011 the federal government spent $127.8 billion per year on these four programs for working families; and the states collectively spent $25 billion per year for a total of $152.8 billion per year. In all, more than 56 percent of combined state and federal spending on public assistance goes to working families.

Continue reading New Study: Low Wages Cost Taxpayers Big

Would Hillary Clinton Expand Social Security?

by Bud Meyers, published April 18, 2015

So far, as Talking Points Memo points out, Hillary Clinton is noncommittal on expanding Social Security. On the other hand, two other potential Democratic primary contenders — former Maryland Governor Martin O’Malley and Senator Bernie Sanders (I-VT) — have championed Social Security expansion, which primarily involves providing more generous benefits and paying for them by lifting the income cap on payroll taxes. The cap is currently $118,500 — which is less than congressional salaries ($174,000).

A non-binding budget amendment to expand Social Security last month offered by Senators Elizabeth Warren (D-MA) and Joe Manchin (D-WV) won the votes of 42 out of 46 Democratic senators. The amendment lost on a vote of 56 to 42. Senators Dianne Feinstein (D-CA) and Barbara Mikulski (D-MD) didn’t vote (although their votes wouldn’t have mattered). Just two Democrats (pictured below) voted against it: Senators Tom Carper (D-DE) and Heidi Heitkamp (D-ND).

senators-against-social-security-expansion

Progressive advocates, with the blessing of Senate Minority Leader Harry Reid (D-NV), are pushing Democratic 2016 candidates to embrace the expansion of Social Security (as opposed to Republican cuts.) But if they can’t get Elizabeth Warren to run for the White House, the progressive Democrats want to shape Hillary Clinton’s candidacy in Senator Warren’s image — and expanding Social Security will be one metric to measure that endeavor. It won’t be enough for Clinton to attack Republicans and just run against cutting benefits (or privatizing Social Security).

Continue reading Would Hillary Clinton Expand Social Security?

The Real Keynesians are the Chinese

by  Bud Meyers, published April 18, 2015

(* Editor’s note: Most of the comments and links below are excerpts from readers at Mark Thoma’s blog.)

The Real Keynesians were the Chinese. Not only did they invest massively in infrastructure, they have strongly emphasized increasing domestic consumption as well. As a result, they have experienced strong economic growth … China’s official policy now is to increase domestic consumption in order not to be as dependent on exports as it has been hitherto. Obviously China is far behind the U.S., but our policy, unlike China’s, has not been to increase consumption as the late great economist, John Maynard Keynes, had advocated:

“Moreover, I should readily concede that the wisest course is to advance on both fronts at once. Whilst aiming at a socially controlled rate of investment with a view to a progressive decline in the marginal efficiency of capital, I should support at the same time all sorts of policies for increasing the propensity to consume. For it is unlikely that full employment can be maintained, whatever we may do about investment, with the existing propensity to consume. There is room, therefore, for both policies to operate together; — to promote investment and, at the same time, to promote consumption, not merely to the level which with the existing propensity to consume would correspond to the increased investment, but to a higher level still.” — Keynes, The General Theory, p. 325

keynes

No other country (developed or developing) has come close to the per capita GDP growth that China has experienced since 2007 — though the experience was a continuation of per capita growth that averaged 8.7% annually in the 37 years since 1977.

The Wall Street Journal: “Richard C. Levin, president of Yale — and also a professor of economics — said an early mistake during the recession was not targeting more stimulus funds to job creation. He contrasted America’s meager pace of growth in gross domestic product in the past few years with China’s often double-digit pace, noting that after the crisis hit, Washington allocated roughly 2% of GDP to job creation while Beijing directed 15% of GDP to that goal.” Continue reading The Real Keynesians are the Chinese

Studies show, Congress Favors the Rich

by Bud Meyers, published April 17, 2015

When Hillary Clinton recently borrowed Elizabeth Warren’s talking points and claimed “the deck is still stacked in favor of those at the top” (in our economic and political system) against regular working people, did she mention reforming the tax code — and then offer any solutions? The simple answer is “no”; and unless she is ever pressed by the mainstream “liberal” media, she will probably dodge this question the same way GE dodges taxes.

A new Pew Research study reports some 61 percent of Americans feel bothered “a lot” that “wealthy people don’t pay their fair tax share”. Besides just campaign finance reform, poll, after poll, after poll, after poll, after poll, after poll, shows most Americans also favor raising taxes on the very wealthy. So if Congress is supposed to represent the majority of the people in a democracy, why haven’t they raised taxes on the wealthy — or reformed campaign finance laws? It’s because members of Congress usually do the bidding of their biggest campaign contributors (the wealthy), those who would see their taxes increased. Not to mention, wealthy members of Congress (meaning most) would also see their own taxes increased.

As Jack Lessenberry at the Metro Times writes: “Most lawmakers don’t give a damn about what the voters need or want, and are only fixated on pleasing the superrich in order that they can get jobs from them when their terms are up.”

So is Congress primarily representing themselves? And is it because most Americans realize this, that’s why Congress’s approvals ratings have been at all-time lows? Probably. But even though Congress knows we know, most of our elected leaders still refuse to do what’s in the best interest of the American people and this nation — such as raising taxes on the rich to help pay for infrastructure. It’s so sad to witness this moral decay in our government leaders. But thankfully, there are some exceptions.

Senator Bernie Sanders (I-Vermont) sounds more like Elizabeth Warren than Hillary Clinton: “At a time when we have massive wealth and income inequality, and when corporate profits are soaring, it is an outrage that many large, profitable corporations not only paid nothing in federal income taxes last year, but actually received a rebate from the IRS. Instead of balancing the budget on the backs of the elderly, the children, the sick and the poor, as the Republicans in Congress have proposed, we need a tax system that demands that large, profitable corporations and the wealthy start paying their fair share in taxes.”

Sanders was commenting on a new report by Citizens for Tax Justice, which detailed how many of the biggest and best-known corporations in America pay little or no federal income taxes, and said the report underscores the need to close corporate tax loopholes. (Will we ever hear how Hillary Clinton stands on this issue, and what her proposals might be?)

As examples, Citizens for Tax Justice has found that:

  • Media giant Time Warner paid nothing in federal income taxes last year when it received a rebate of $26 million from the IRS, even though it made $4.3 billion in U.S. profits.
  • CBS made $1.8 billion in U.S. profits last year, but instead of paying federal income taxes, it received a rebate from the IRS of $235 million.
  • Xerox made $629 million in U.S. profits in 2014, but received a tax rebate of $16 million from the IRS.
  • Prudential Financial made $3.5 billion in U.S. profits last year, but instead of paying federal income taxes, it received a tax rebate of $106 million from the IRS.
  • The toy maker Mattel made $268 million in profits last year, but received a tax rebate of $46 million from the IRS.
  • Priceline.com not only paid nothing in federal income taxes last year, it received a tax rebate of $9 million, even though it made $73 million in profits last year.
  • Pacific Gas and Electric not only paid nothing in federal income taxes last year, it received a tax rebate of $84 million from the IRS, even though it made $1.8 billion last year.
  • Wireless technology maker Qualcomm made $3.2 billion in U.S. profits last year, but instead of paying federal income taxes, it received a refund from the IRS of $98 million.
  • General Electric made over $5.8 billion in profits in the U.S. last year, but paid just 0.9 percent of that amount (less than 1 percent) in federal income taxes.
  • Jetblue Airways made $615 million in U.S. profits last year, but paid just 0.4 percent of that amount (less than half of 1 percent) in federal income taxes.

So when we hear people like Stephen Moore at the conservative think tank Heritage Foundation claiming the U.S. has the highest corporate tax rate in the world, the actual “statutory” tax rate has little bearing on the actual “effective” tax rate corporations are actually obligated to pay, because of all the loopholes that members of Congress have allowed them on behalf of their campaign donors and corporate lobbyists. People such as Senator Bernie Sanders would like to change this “pay for play” in Washington (More on this further below in this post).

Continue reading Studies show, Congress Favors the Rich

Money can’t buy Class

by Bud Meyers, published April 14, 2015

But a lot of extra cash would sure help, especially if someone wants to be considered a part of the “upper class” of our society; but that is only when measured by one’s personal wealth and/or income (and not by their moral fortitude). A lot of us still wonder — besides just plain luck, how did so many rich people get to be soooo rich in the first place?

As in other countries around the world, most of us in the U.S. (as defined economically) probably wonder where we really exist in the class structure of our society. How well are we doing when compared to most other people? If someone doesn’t spend an adequate amount of time doing research on the internet (or going to a library), and/or reading the newspapers and news magazines — and they only catch short sound bites from the radio or from the headline news on TV — they would probably get more accurate reporting from Stephen Colbert or Jon Stewart. Otherwise, they may have a limited capacity for truly understanding where they actually exist on the wage scale ladder.

And if they only watched reality TV shows, they wouldn’t have any clue at all — and so, they should take 6 minutes out their very busy lives to watch this YouTube video (currently with over 16 million views so far).

If most people in the suburbs just look around at their neighbors, and at other people in the town they lived in, and if they perceived most people lived in three bedroom homes with attached garages, are married and have spouses that earn similar wages, they may think that, if they do too, then they also are part of the so-called “middle-class” — because most people that they know or associate with might live in similar circumstances.

But people living in urban public housing projects, as compared to those living in trailer parks in rural areas, might also have vastly different perceptions of what the “middle-class” might really be. Just as if someone were earning $28,000 a year (the national “median wage”) in a small town in the South, they most likely will be doing a lot better economically than someone else earning $28,000 in New York City — just because of the local cost-of-living.

Continue reading Money can’t buy Class

Progressivism may be “The New Center”

by Bud Meyers, published April 13, 2015

The Hill has a short article titled: “Reid, left push for liberal 2016 candidate” — reporting that Senate Minority Leader Harry Reid (D-Nev.) has joined a progressive group’s call for Hillary Clinton (or any other Democratic White House candidate) to run from the “left” in 2016. (We need a Democratic debate! — because not all Democrats want Hillary, and not because they’re misogynist.)

Personally, I think of myself more as a “progressive” person rather than a “liberal” or a “leftie” or a “socialist”. I don’t think the descriptions should all be lumped together as one and the same. People on the Right might confuse progressivism with staunch socialism, communism, eco-terrorism or Code Pink — because some extreme groups tend to side with progressive causes — with progressive like-mined people such as myself. Meaning, those that hold political office who caucuses with the Democrats, who also (more-or-less) better favor the working-class, minorities, the elderly and the poor — as opposed the GOP, who mostly favor the very wealthy and the biggest businesses, but who also have their own radical (and sometimes, violent) political supporters.

I oppose the liberal use of the word “liberal” by the media (even by the “liberal media”) when reporting on political issues, because “liberal” might sound soft on crime (like allowing pedophiles in the suburbs to freely roam elementary schoolyards at will) — or “liberal” might imply an “anything goes” attitude (such as the hippie culture of “love-ins” and communes in the 1960s), as if we were all from the great “liberal” State of California (where I was raised for several years). Is Charles Manson a “liberal”, or just a psychopath?

Bernie Sanders calls himself a “socialist”, but many people (who remember or study history) equates socialism to Joseph Stalin and genocide. While at Fox News Glenn Beck called the 99ers “socialists” and said “I bet you’d be ashamed to call them Americans”, just because they protested for extending UI benefits until there were enough jobs available. How can one compare the long-term unemployed in America to a mass killer’s ideology? People weren’t even allowed to protest in Stalin’s Russia. On Fox News, according to Bill O’Reilly, all progressives, liberals, socialists, environmentalists, tree-huggers, climate change advocates, civil rights leader, minorities, union members (and anybody else who votes for Democrats — including Veterans, musicians, movie stars, professional athletes, etc.) are “left-wing loons” if they don’t agree with him and other multi-millionaires like Sean Hannity or Rush Limbaugh.

FDR and Theodore Roosevelt — and even Dwight D. Eisenhower — weren’t “left-wing loons”; just as Elizabeth Warren and Bernie Sanders aren’t socialist despots. But the GOP and the media have depicted them as “left of center” (“center” being in the middle of being what most people believe and agree with), when the “progressive” platform seems to be more “center” than whatever a “moderate” (Third Way) Democrat like Hillary Clinton advocates — which is really more to the right of center, and closer to what a “moderate Republican” might be today.

The political “Left” advocates for average working people (and those who can’t survive without help), while the political “Right” advocates for very wealthy oligarchs and plutocrats, and that everyone else (the working-class and poor) should all be left alone to fend for ourselves — even while the GOP consistently promotes policies that makes it ever more difficult for everyone else to fend for ourselves (like raising the minimum wage). Aside from the “wedge issues” — such as birth control and abortion (which are religious and moral differences), that’s really the biggest difference between right-wing radicals and left-wing loons. It’s really that simple.

For example: Sane gun laws (aka “gun control”) isn’t about disarming American citizens so that the “government” (our elected officials and our military) can take control of our daily lives, or lock us up in FEMA camps. It’s really about the NRA (gun lobbyists) who are advocating for big businesses and selling more guns to us (besides just to the rest of the world for war profits). It has nothing at all to do with constitutional rights, the 2nd amendment, and our right to bear arms. It’s all about corporate profits. Period.

Dwight “I like Ike” Eisenhower articulated his position as a moderate progressive Republican: “I have just one purpose … and that is to build up a strong progressive Republican Party in this country. If the right wing wants a fight, they are going to get it … before I end up, either this Republican Party will reflect progressivism or I won’t be with them anymore.”

Continue reading Progressivism may be “The New Center”

The Long-term Unemployed: Lost, but not Forgotten

by Bud Meyers, published April 11, 2015

According to a new report from the Department of Labor (Trends in Long-term Unemployment), people unemployed in 2014 couldn’t count on a college degree to save them from long-term joblessness. The data also show it doesn’t matter what industry you work in — and confirmed previous studies, that the longer you’re out of work, the less likely you are to get another job. One Princeton University study last year showed that after 15 months, the long-term unemployed were more than twice as likely to have withdrawn from the labor force than the short-term unemployed.

The share of the unemployed who were out of work for 52 weeks or longer reached a record high of 31.9 percent in 2011. The share unemployed for 99 weeks or longer reached a record peak at 15.1 percent in 2011 (99 weeks = 1 year, 10 months and 3 weeks). There were 6.8 million unemployed over 27 weeks in April 2010.

But because so many left the labor force, all of these measures of long-term unemployment have trended down since their respective peaks, but still remain high by historical standards. Five years after the Great Recession officially ended in June 2009, the number of long-term unemployed still made up a larger share of unemployment than during any previous recession.

Below are the numbers of all who were counted as “unemployed” since the onset of the Great Recession to the present.

ltu-3

From July 2008 to December 2013, we had a whopping 24 million long-term unemployed workers who once qualified for federal extended jobless benefits. These people were once known as the 99ers, because in some States, the maximum one could receive for federal extended unemployment benefits was 99 weeks. One can see from the Bureau of Labor Statistics (chart below) how many jobs were lost and gained during that same time period. So the question becomes: “Where are they now?”

ltu-2

Continue reading The Long-term Unemployed: Lost, but not Forgotten

A look at Berkshire Hathaway’s response to ‘mobile home trap’ investigation

by Daniel Wagner and Mike Baker, published April 6, 2015

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Mobile home purchased by Kirk and Denise Pitts of Knoxville, Tennessee in 1997. They still owe more than $39,000 on the home and land, which were valued at $33,100 in 2013. Daniel Wagner/Center for Public Integrity

After The Seattle Times and The Center for Public Integrity published their investigation of Berkshire Hathaway’s mobile-home business, Berkshire sent a statement to a newspaper it owns, calling the story “misleading.” It did not point to any factual inaccuracies.

For months, Berkshire Hathaway and Clayton Homes, its mobile-home subsidiary, had ignored or declined reporters’ requests to discuss the company’s treatment of consumers.

Here’s a look at the company’s statement, published by the Omaha World-Herald, and the credibility of its claims:

CLAIM: “Clayton Homes’ policies, procedures and training are designed to ensure that customers have a choice of lenders. A list of all available lenders is posted and provided in company-owned retail locations.”

FACTS: Customers historically have not been given a choice of lenders, according to customers interviewed for this report. In early 2015, a reporter visited Clayton-owned and -affiliated dealerships in eastern Tennessee, and saw large, house-sized banners promoting Clayton loan products. There were no comparable signs related to other lenders. Promotional materials related to other lenders at one dealership consisted of small, trifold brochures located on a side table in one room of the dealership.

CLAIM: “Customers are encouraged to select more than one lender so they can compare options – and select the loan program that best serves their needs.”

FACTS: Numerous customers interviewed for this story said they were told that Clayton lenders were the only option or the best option. Some did not realize, nor were they told, they said, that the home dealers and lenders were part of the same company. They said they were never encouraged to explore alternatives.

CLAIM: “The retailer selling the home receives no financial incentives from the lender the customer chooses.” Continue reading A look at Berkshire Hathaway’s response to ‘mobile home trap’ investigation

The Richest Slumlord in America

by Bud Meyers, published April 7, 2015

(* Editor’s note: This is from a joint investigation of The Center for Public Integrity and The Seattle Times)

Clayton-owned mobile home dealerships with different names and similar banners offer to “BEAT OR MATCH ANY DEAL.” Customers say theythought they were comparison shopping, when they were really visiting multiple Clayton-owned dealerships — all owned by one company, which is owned by another company, which is owned by one of America’s richest men.

The U.S. second richest man, Warren Buffett, owns Berkshire Hathaway, which owns Clayton, the mobile home industry’s biggest manufacturer and lender. Clayton is a many-headed hydra with companies operating under at least 18 names. It also sells property insurance on their mobile homes — and repossesses them when borrowers fail to pay.

Berkshire Hathaway extracts value at every stage of the process. Clayton even builds the homes with materials supplied by other Berkshire subsidiaries. And Clayton borrows from Berkshire to make mobile home loans, paying up to an extra percentage point on top of Berkshire’s own borrowing costs.

Continue reading The Richest Slumlord in America