Blackstone’s Tony James Touting What Looks Like Hillary’s Scheme to Gut Social Security

Yves Smith | October 19 2016 | Naked Capitalism

Readers may recall that Bill Clinton planned to privatize Social Security in the second term of his Presidency. The Monica Lewinsky scandal derailed his plan.

As the Clintons knew, only a Democrat can dismantle Social Security. Hillary looks to be picking up where Bill left off. As David Sirota describes in a must-read story, Hillary is planning to introduce mandatory retirement accounts, a scheme that Hillary has mentioned in high concept form earlier. As details emerge, this “enrich Wall Street at the expense of everyone else” program is even more attractive to pet Democratic party constituencies than the 1.0 version of going after Social Security directly. No one in the Clinton or George W. Bush administration was so audacious as to cut in private equity and hedge funds in the way this variant would.

But Hillary, and her major advisor on the plan who is also on her short list of Treasury Secretary candidates, Blackstone CEO Tony James, are too adept to label these required savings accounts as a stealth replacement for Social Security.The plan, as described in Sirota’s article parallels the way the contributions are made now to Social Security, with both employers and employees required to put aside a percentage of payroll…but not in the form of Social Security taxes, but in individual retirement accounts that in turn are put in “pooled plans run by professional managers”.

If you look at James’ speech, what he is proposing sounds innocuous, a supposed additional 3% of worker savings. But that is a nearly 25% increase over what workers are paying into Social Security now. Moreover, most experts agree that to the extent that Social Security needs fixing (30 forecasts are fraught), some not very onerous tweaks would do the trick. First and foremost would be to eliminate the payroll tax ceiling.

Continue reading Blackstone’s Tony James Touting What Looks Like Hillary’s Scheme to Gut Social Security

Just say no to term limits! They’re fundamentally undemocratic and that’s why the right likes them

David J. Climenhaga | October 19 2016 | rabble.ca

rooseveltAs recent events clearly illuminate, our American cousins really ought to reconsider the 22nd Amendment to their Constitution. Surely by now the rest of the world heartily agrees.

“If only, if only the Obamas could be our President and First Lady for the next 4 or 8 years,” someone named Nan Socolow commented under Frank Bruni’s column last Saturday in the New York Times.

I’m sure Socolow speaks for millions of Americans, and perhaps tens or even hundreds of millions of citizens of the world, as they bleakly contemplate the two most likely winners among the politicians now running to replace the current U.S. president, the aforementioned Barack Obama.

Only Conrad Black, bloviating from his rapidly crumbling pedestal at the National Post, seems reassured by the character of both the principal candidates for the job, Donald Trump and Hillary Clinton. Black’s views on a variety of topics are well known, so that in itself should probably be taken a warning flag. However, je digresse …

Just to be perfectly clear, as Richard Nixon used to say, I’m talking about the Twenty-second Amendment to the U.S. Constitution. For Canadian gun nuts about to work yourselves into a full-blown swivet about that, it’s the Second Amendment you care about. Just sayin.’ The 22nd is the one that limits U.S. presidents to two four-year terms in office.

Notwithstanding the worries expressed by Thomas Jefferson — second president of the United States and admittedly a fellow whose advice is worthy of at least second glance — that allowing presidents to serve more than two terms would open the door to chief magistrates remaining in office for life (he had in mind the sort who would be monarchs) there is no evidence in American history through Civil War, Great Depression or World War his fears were justified.

Continue reading Just say no to term limits! They’re fundamentally undemocratic and that’s why the right likes them

How they manage to hide a weak jobs market with numbers

caucus99percent | October 18 2016

On June 6, Federal Reserve Chair Janet Yellen said in a speech at the World Affairs Council that the U.S. economy was “now fairly close to the … goal of maximum employment.”

At President Obama’s State of the Union address, he proudly claimed to have created a “more durable, growing economy” with “15 million new private-sector jobs since early 2010”.

Both Yellen and Obama have the numbers to back up their claims. So why is the public’s economic outlook still negative? Why has nearly half of the unemployed given up looking for work?

Some 59 percent of those who have been out of work for two years or more say they have stopped looking, the Harris Poll of unemployed Americans showed. Overall, 43 percent of the jobless said they have given up, according to the poll released in conjunction with Express Employment Professionals, a job placement service.

“This is a tale of two economies,” Express CEO Bob Funk said in a statement. “It’s frightening to see this many people who could work say they have given up.”

Something doesn’t add up.

The political shills may not want to admit it, but the workers are always right about the labor market. Their opinions are the only ones that really matter.

There is more than one way this disconnect of official stats from reality is done.

For starters, there are the people filing new and continuing unemployment claims.

Initial filings have remained below 300,000 for 84 straight weeks — the longest streak since 1970 — and continuing unemployment claims, at 2.05 million, are at the lowest level since 2000….

New laws implemented across several states after the recession have cut the duration of benefits. Until 2011, all states paid at least as many as 26 weeks of aid to eligible, unemployed individuals, according to an August report from the Congressional Research Service. Now, about eight states have less generous plans in effect, ranging from as few as 12 weeks of aid in Florida and North Carolina, conditional on the state’s unemployment rate. That makes it less attractive for people to file a claim to begin with.

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Continue reading How they manage to hide a weak jobs market with numbers

What the Narcissists Have Done to Our Jobs and Health

Paul Buchheit | October 17 2016 | Common Dreams 

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‘Like other great narcissists, [Donald Trump] is a very important man in his own head.’ (Photo: Gage Skidmore/flickr/cc)
When Donald Trump blurted out “that makes me smart” as a reason for non-payment of taxes, he was revealing a truth about the American narcissist. Senator Lindsey Graham was equally arrogant when he stated, “It’s really American to avoid paying taxes, legally… It’s a game we play.” The game has become very popular, with an incomprehensible three-quarters of Fortune 500 companies stashing profits in offshore tax havens, avoiding over $700 billion in U.S. taxes.

Who Are the Narcissists?

They’re people who don’t feel any responsibility to the society that made them rich, largely because they believe in the “self-made” myth. Their numbers are growing. For every 100 households with $100 million in assets in 2010, there are now 160.

Some of the super-rich care about average Americans, and some are well-intentioned philanthropists, but in general, as numerous studies have shown, wealthier individuals tend to be imbued with a distinct sense of entitlement. They believe their talents and attributesgenius, even – have earned them a rightful position of status over everyone else.

The narcissists care less about the feelings and needs of others, they become anti-social, they are less generous with their money, they move further to the right, and they become less willing to support the economic needs of all members of society. People in rich countries have been found to express less concern about their environmental impact.

And as the wealth gap widens, people at the two extremes become more and more distrustful of each other.

Most disturbing is that ‘upper-class’ individuals tend to behave more unethically than average citizens. Especially at the highest levels, where career success has been associated with Machiavellianism — doing anything necessary to get ahead. A recent study of 261 U.S. senior professionals found that 21 per cent had clinically significant levels of psychopathic traits, compared to about one percent in the general population. That’s roughly the same rate as for prisoners.

Jobs: Narcissists Blame “the U.S.” for the Collapse of the Job Market

Stunning hypocrisy: Apple claims to be responsible for “creating and supporting 1.9 million jobs” while actually employing 115,000; but the company complains that “the U.S. has stopped producing people with the skills we need”; yet Apple undermines job creation in its role as the biggest overseas profit hoarder and a leading tax avoider; but its CEO Tim Cook said, “We pay all the taxes we owe – every single dollar.”

Continue reading What the Narcissists Have Done to Our Jobs and Health

Three Reasons a New President Won’t Help America. One Way She or He Could.

Paul Buchheit | October 03 2016 | Common Dreams

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‘Inequality has ripped us apart, not only economically, but also emotionally, as people further removed from the lives of others tend to distrust each other.’ (Photo: Elvert Barnes / Flickr)

There are at least three major American failures that are too entrenched in our society to undergo change with anything less than an FDR-type effort.

Corporations Continue to Ignore Their Responsibility to Education

The Wall Street Journal says, “Many workers who were laid off in recent decades…don’t have the skills to do today’s jobs. An Apple executive recently lamented, “The U.S. has stopped producing people with the skills we need.”

But opportunities for young people have diminished as corporations have rejected their obligation to society. Public colleges and universities have suffered major cuts in funding over the last ten years, while the largest American corporations have avoided hundreds of billions of dollars in taxes by stashing their profits overseas.

Corporate leaders blame government, they blame society, they blame the poor for their own misfortunes. But they don’t acknowledge their responsibility to pay for the people and research provided by higher education, especially during the technological boom of the 1990s. Instead they seem to agree with Donald Trump about skipping out on taxes: “That makes me smart.” Higher education is one of the main victims of this narcissistic way of thinking.

The Rich Lack Incentive to Help Others: They Believe an “Invisible Hand” Will Do It

For every 100 American millionaires six years ago, there are now 140. As this richest 5% of America gets richer, many of them lose the sense of empathy that creates a strong society, and they become more convinced that the magic of the market will solve all the country’s problems.

Continue reading Three Reasons a New President Won’t Help America. One Way She or He Could.

The Vanity of the Billionaires: Circuses and no Bread

Juan Cole | October 16 2016 | Informed Comment

Rome was a republic until between 40 and 27 BCE, when the generals overthrew it. Military dictator Gaius Octavius put the nail in the coffin when he made himself Augustus Caesar on the latter date. The later satirist Juvenal, to whom we owe the phrase ‘bread and circuses,’ is clear that it was the transition away from the republic that required the bribing of the plebeian class in this way. He says it used to be they were bribed for their votes, but with the coming of dictatorship they had to be provided bread to keep them from rioting and cruel public spectacles to divert their attention from the reigning tyranny.

The US government offers a little bread in the form of welfare, but not much and much less than it used to. Most working people haven’t recovered from 2008. Mostly nowadays we are being offered circuses by the billionaires who now rule us.

Whereas in the old days it was the gladiators who were torn limb from limb to satisfy the bloodlust of the masses, in today’s America other sorts of diversions are on offer.

The pressing issues facing what’s left of the republic (I guess we are in year 41 — you have to count backward in this analogy) are these:

1. Our tax code is allowing 3 million mega-rich to take home 20% of the country’s yearly income (since the 3 million include children, it is probably actually 1 million adults that get the one-fifth of everything Americans earn annually). Tax policy could be used to redistribute that wealth over time, but it has been so blunted that it is useless. So if we have a hundred people in a circle, and we distribute a thousand bananas in this unequal way, Person Number One, let us say, the Billionaire, will get 200 bananas out of the 1,000. That should leave 8 apiece for the other 99, but Person Number Two, the multimillionaire, gets another 100. Some of the other 98 will only get 1 banana. A lot of the rest of the people will only get that black part at the bottom of the skin. And if you do it that way every year the Billionaire, will end up with piles of bananas and the people with the black pieces at the bottom never will get even one banana.

Continue reading The Vanity of the Billionaires: Circuses and no Bread

The Democratic Plot to Privatize Social Security

Andrew Stewart | September 30 2016 | Counterpunch

Looks like I picked the wrong week to quit drinking.
-Steve McCroskey, AIRPLANE (1980)

I have shared this sentiment on a daily basis during this absolutely absurd electoral circus year, particularly when engaging with lesser-evil Clinton boosters who seem to have come upon the finest batch of hallucinogenic mushrooms this side of the Rio Grande. These people, many of whom are pleading for a Clinton vote on the basis of the idea that a President Trump would ravage what remains of the social safety net, are simply refusing to accept or alternatively do no believe that the Democrats are aiming to privatize Social Security right now and have been for years.

Those who doubt this should do themselves a favor and examine the record. First, read through the excellent Counterpunch essay by historian Robin Blackburn, How Monica Lewinsky Saved Social Security, which explains how the neoliberal Democratic Party agenda regarding Social Security started to be rolled out by Bill Clinton when his intern forced him to pivot to the left in order to shore up his base as a defensive posture against the inquiries of Ken Starr.

This has been an agenda item for decades that can be traced back to the minds of the fiscal brain trust of Larry Summers and Robert Rubin. Both men have played major roles in Obama’s political career dating back to his early days as a “community organizer”, which was in fact a gentrification project done on behalf of the Chicago FIRE (finance, insurance, and real estate) sector. When Clinton was administering Rubin/Summers policies to benefit the FIRE sector, Obama was working on the ground in the Windy City as a foot soldier for this agenda.

Continue reading The Democratic Plot to Privatize Social Security

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