The Corporate Elite Are Redistributing Income To Themselves and Giving Americans The Shaft

Panorama View of Cumberland, Maryland 1906

Panorama View of Cumberland, Maryland 1906.  

Located on the Potomac River in the western part of the state, Cumberland was an important transportation hub early in the nation’s history.

In 1906 Teddy Roosevelt, the “trust buster” was president ( he would never get the tea bagger vote). It was the year of the Great San Francisco earthquake, the year Upton Sinclair’s The Jungle was published and Congress passed the Meat Inspection Act ( something else that conservatives would defeat if up for a vote today).

Fighting Back Against Wretched Wages

OFTEN relegated to the background, America’s low-wage workers have been making considerable noise lately by deploying an unusual weapon — one-day strikes — to make their message heard: they’re sick and tired of earning just $8, $9, $10 an hour.

Their anger has been stoked by what they see as a glaring disconnect: their wages have flatlined, while median pay for chief executives at the nation’s top corporations jumped 16 percent last year, averaging a princely $15.1 million, according to Equilar, an executive compensation analysis firm.

Conservatives, most libertarians and some centrist Democrats have been saying for years that the reason we have to keep wages low is to be competitive – competitive to whom, Asia. That is and has been a race to the bottom for half of the U.S. The truth is slight more complicated, but not so much so that even your kool-aid drinking conservative neighbors can understand. By shipping jobs overseas and using that leverage to put downward pressure on wages, all the while taking away much of organized labor’s power, corporate dreams have come true. Corporate America is making record profits – that means they could be paying people a living wage and keeping jobs in the U.S. rather than do that, these corporations are putting massive sums of money in executive pockets and shareholders. Sure some of the middle-class gets some of that via their mutual funds – but most Americans do not benefit from this capital redistribution from workers to the wealthy. This is a good recent example of how the very wealthy are redistributing capital to themselves, A Pension Deficit Disorder: The Massive CEO Retirement Funds and Underfunded Worker Pensions at Firms Pushing Social Security Cuts

A major player in the national debt debate, the “Fix the Debt” campaign, is arguing that cuts to Social Security and Medicare are necessary to avoid economic disaster. Meanwhile, the corporations leading this campaign are contributing to Americans’ retirement insecurity by funneling enormous sums into their CEO retirement accounts while underfunding their employee pension funds.

Key findings:

* The 71 Fix the Debt CEOs who lead publicly held companies have amassed an average of $9 million in their company retirement funds. A dozen have more than $20 million in their accounts. If each of them converted their assets to an annuity when they turned 65, they would receive a monthly check for at least $110,000 for life.
* The Fix the Debt CEO with the largest pension fund is Honeywell’s David Cote, a long-time advocate of Social Security cuts. His $78 million nest egg is enough to provide a $428,000 check every month after he turns 65.
* Forty-one of the 71 companies offer employee pension funds. Of these, only two have sufficient assets in their funds to meet expected obligations. The rest have combined deficits of $103 billion, or about $2.5 billion on average. General Electric has the largest deficit in its worker pension fund, with $22 billion.

Although they have not remedied their own internal pension fund debts, the Fix the Debt CEOs say they have the solution for our national debt problems, which would include cuts to Social Security and Medicare.

In some cases, the Fix the Debt member corporations could eliminate their pension fund deficits with cash they currently have on hand. GE, for example, has more than $85 billion in liquid assets, according to their most recent 10-K report — enough to easily wipe out their $22 billion pension deficit. But rather than fixing their own internal debts, these CEOs have embarked on an aggressive effort to persuade policymakers and the public that savings from Social Security, Medicare, and Medicaid are essential to addressing the country‘s financial challenges. While these CEOs have offered few details on how they would cut costs with these reforms, it would likely be by limiting access to these programs paid for by all working Americans and by yet again raising the retirement age.

The corporate elite tell the public we have to pay sub-living standard wages or we’ll have to rise prices. What they could do is make reasonable salaries – say in the $85k to $125k range. I just suggested some heresy – hey this is America and corporate executives have to make millions or they won’t work. Fine, quite and lets usher is a new generation of hard working ethical executives they care about workers and America. Some conservatives bloggers have linked to this story – Exclusive: Signs of declining economic security, saying this is the result of Obama’s policies. They cannot put two and two together. Corporate profits at at all time highs and wages at all time lows. These companies could hire, they could pay more, but they are hoarding the money for themselves. Not exactly secret information, so conservatives continue to be the worse informed people on the planet. Read the comments on this post – if we made proof of general economic knowledge a requirement for voting, these people would not be allowed to vote. In one crazy-funny comment, one commenter goes off on how the communists are to blame. There is a very similar cognitive dissonance between what the Conservative base thinks about ” free enterprise” corporate America and what they thought about Bush and Iraq. They could not, and still cannot bring themselves to believe that the Bush administration betrayed America and they can’t believe these flag waving, “free enterprise” talking American businesses have betrayed America for more wealth than they will ever need and certainly never earned.

Conservative Media, Breitbart and Palin Throw Temper Tantrum on CBO Immigration Reform Facts

Concept High Speed Train wallpaper

Concept High Speed Train wallpaper

It was only a matter of time before Sarah Palin had a public meltdown,

Please take a look at the article linked below to understand how the amnesty bill the Senate passed yesterday is a sad betrayal of working class Americans of every ethnicity who will see their wages lowered and their upward mobility lowered too. And yet we still do not have a secured border. This Senate-approved amnesty bill rewards lawbreakers and won’t solve any problems – as the CBO report notes that millions of more illegal immigrants will continue to flood the U.S. in coming years.

That is the kind of incoherent rambling, mixed with an astounding lack of basic knowledge one would expect to hear from someone who never read a newspaper, a report from a respected economic policy center. Someone who has lived in a cave. But no, it is from someone that was a vice-presidential candidate just six years ago. Working class wages have been stagnant for years without an “amnesty” bills – Corporate profits hit all time high, wages hit all time low. And the middle-class has been losing ground since the 1980s.

I’m not going to do a fact by fact knock down of Palin or Breitbart’s Big Government or Breitbart’s Serial Lies and Distortions. MM has already done that, Conservative Media Misuse CBO Report To Attack Economic Benefits Of Immigration Reform. I just want to get to the effect on employment and wages, which Palin and Breitbart are so shrill about,

CBO: Wages Would Be “Slightly Lower” Over The First Decade But Higher By Next Decade. According to the CBO, the rapid increase in the numbers of workers would temporarily decrease wages but those wages would increase in the second decade of the legislation:

CBO’s central estimates also show that average wages for the entire labor force would be 0.1 percent lower in 2023 and 0.5 percent higher in 2033 under the legislation than under current law. Average wages would be slightly lower than under current law through 2024, primarily because the amount of capital available to workers would not increase as rapidly as the number of workers and because the new workers would be less skilled and have lower wages, on average, than the labor force under current law. However, the rate of return on capital would be higher under the legislation than under current law throughout the next two decades. [Congressional Budget Office, June 2013]

Real GNP Would Rise Overall By 2.4 Percent In 2023 And 4.5 Percent In 2033. According to the CBO report, real Gross National Product (GNP) could increase by as much as 4.8 percent in 2033 but would be greater by 2.4 percent in 2023 and 4.5 percent in 2033…

[  ]…Short-Term Increase In Unemployment Rate Due In Part To Immigration Reform Is Due To Expanding Workforce And Lack Of Occupations Available To Workers. According to the CBO report, the short-term increase in the unemployment rate would be in part due to the arrival of new immigrants who would not be able to fill the jobs demanded. Some workers would be forced to move into new fields in order to restore equilibrium which causes short-term unemployment. [Congressional Budget Office, June 2013]

CBO: Legislation Would Have “No Effect On Unemployment After 2020.” According to the CBO report, the immigration reform bill would have no effect on the unemployment rate after the year 2020. [Congressional Budget Office, June 2013]

One has to wonder why Breitbart links to other posts within it’s own site to back up the same fact free assertions instead of linking to the CBO report. yea but we’re going to be invaded by a wave of for’ners. Well, not really. They might represent a high of 4% of the population by 2033. So we’ll have plenty of time to adjust to the shock. Many of those people, because of immigration preferences will be high skilled workers – doctors, engineers, etc. MM also deals with the conservative lies about impact on Social Security. It is ironic that all of the consequences the Right brings up about this very modest immigration reform package passed by the Senate, that will never be passed into law anyway, are already occurring, but they can all be traced back to our crony corporate culture. Medicaid is strained because corporations like Walmart, McDonalds, Target, Applebees, and many other large companies pay such low wages and scarce health benefits. Yet, these very profitable companies are off-shoring as much as a trillion dollars in profits, Mindblowing Facts About America’s Tax-Dodging Corporations.

One last note. Conservatives especially, but some Democrats as well, have spread the myth of Reagan Democrats. This was supposedly some decisive moment in hsitory where a lot of blue-collar Democrats jumped to Right of center. Palin uses that myth in her FaceBook meltdown. It is myth Sarah, just like Game of Thrones is not real.

Evening Light and Snow wallpaper – What’s Wrong With Republicans? A Fatal Case of Zombism

Evening Light and Snow wallpaper

Evening Light and Snow wallpaper

 

There’s A Way To Close The Deficit Without Raising Taxes Or Cutting Spending

Earlier today, John Boehner showed a chart projecting a gigantic budget deficit if current spending plans are in place.

It’s well established that the primary future driver of spending is going to be Medicare, ergo everyone wants to figure out how to reduce the cost of Medicare (either by privatization, reduced benefits, or some other fix to healthcare inflation).

But there’s a simple way to get deficit reduction that doesn’t involve Medicare: Lower the unemployment rate.

[  ]….This chart has been floating around for awhile, and at least I, personally, didn’t think much of it the first time I across it. There is an element of tautology to it. When the economy improves, unemployment goes down, and deficit/GDP shrinks, as tax revenue goes up. When the reverse happens, deficits rise. Duh, right?

But not so fast…

The post-2009 period is associated with a virtually unprecedented pursuit of government spending and deficits (as far as the eye can see!). Not only did the deficit go up because tax revenue collapsed, but Obama announced a historic stimulus the likes of which weren’t seen since the New Deal.

And yet! The relationship holds. Even when the government purposely spends like crazy to increase the debt and fight the weak economy, deficits/GDP have shrunk alongside unemployment. There is a big gap between the red and blue lines, perhaps in part because the downturn was so severe, but the clear lesson is that spending to reduce unemployment does have the effect of reducing deficits as a share of total GDP.

No tax increase at all is probably not a good idea in the long run, even if they are only modest income tax increase on the top 10% and an increase in taxes on capital gains. It is not all about Medicare, we need some infrastructure improvements and to make a larger investment in scientific research. Though just as important is the need to end the race to the bottom. The race corporate America, with the help of the radical Right, to have a permanent under-class of American workers. Wal-Mart, Apple and Darden Inc ( Applebees) are among corporations that are making record profits, yet many of their employees are not making a living wage – Corporate profits hit record as wages get squeezed. Not only would these workers thus contribute more to the safety net that they will need sooner or later, they will also rely less on programs like food assistance. Yet we’re dealing with John Boehner (R-OH) and his charts and the Koch brothers and their freakish zeal to make every worker in America wage slave.

Graphic via boingboing.net

The Walton family, with a net equal to the bottom 40% of American workers – about $89.5 billion – are the real welfare cheats. Every working American is subsidizing their business. McDonald’s pays workers an average of $8.25 hr and their CEO makes $8.7 million a year. So an average employee makes about $17.1 thousand a year. Their CEO makes as much as 509 workers. CEO pay has become completely disconnected from any rational values. An elite class of people with money and political power equal to those massive paychecks have decided to break the social contract with their employees. And as the Wal-Mart chart shows they are also passing off the cost to everyone else. The conservative movement keeps claiming that it is the social safety net or union wages that are holding back growth. A lie so ridiculous that no one with basic reading and math skills should believe. Yet the Republican Speaker of the House is very serious about selling the plantation dream to the public. If we can just race to the bottom, through some convoluted logic, America will then and only then, truly prosper. Conservatives even use magic to sell this dark dystopian dream to the public. Look at the one or two union guys being mean. Look at the woman using her food stamps to buy candy. This constant highlight of the petty is to distract people while conservatives steal billions from working Americans and their children. These corporate Robin Hohhs who steal from workers to give to each other are deeply afraid of their workers organizing and having any kind of power – Why Most Walmart and Fast Food Workers Didn’t Strike.

Fox News revealed selective editing of punched Fox News Thug Steven Crowder  contributor
Video of Steven Crowder getting punched is being used as evidence of union thuggery, but who got hit first? VIDEO. Of course violence is wrong. So with that I have done the required disclaimer for stories like this. Everyone has probably seen the Michigan video that Crowder has posted on the net. One major problem with that is that video is it does not show the union protester on the ground, before he gets up and punches Crowder. How did that protester start a fight from the prone position. Someone mentioned this on Tweeter ( sorry I do not remember who caught it first to give proper credit). How about what happened is that Crowder made threatening gestures and words towards the protester and the protester “stood his ground”. If conservatives want to love stand your ground laws and mentality, than they can suffer the consequences when it backfires. Let’s say that this was as Crowder described. One guy committed assault and battery; in reality aggravated assault. One guy out of thousands of protesters. So if one Republican picks his nose in an elevator that means all Republicans pick their noses in elevators. If those are the rules, if that is the logic we’re using, conservatives are in much deeper mud than America’s unions. Virginia GOP Official Calls Union Members ‘Terrorists’

Union workers who were protesting the passage of so-called “right-to-work” laws outside the state capitol in Lansing, Michigan are “terrorists,” according to a former high-ranking official in the Republican Party of Virginia who now serves in a county-level elected office.

Shawn Kenney, who formerly served as the communications director for the state GOP and is now the chairman of the Fluvanna Co. Board of Supervisors, posted an entry on his blog titled, “We Don’t Negotiate With (Union) Terrorists.” The post features a video of a brief fight that occurred outside the Michigan state capitol. Before the video, Kenney writes: “…and these people are terrorists.”

[  ]….Another former Republican Party of Virginia official wrote on the same blog this week that by passing “right-to-work,” Michigan had “finally unshackle[d] itself from slavery.”

Maybe we should thank these two clowns, they have given anyone license to call them any names they like. “Slavery”? Sure. Everyone’s dictionary defines slavery as the right to make workers into powerless wage slaves who better not get too uppity and ask for a living wage and health insurance. How dare unions ask for fair compensation, benefits or decent working conditions. That infringes on the right of conservatives to treat people like dirt. As usual these freaks are projecting their agenda on decent Americans seeking simple economic justice. Krugman seems to understand Mr. Kenney’s pain, The G.O.P.’s Existential Crisis

No, what we’re having is a political crisis, born of the fact that one of our two great political parties has reached the end of a 30-year road. The modern Republican Party’s grand, radical agenda lies in ruins — but the party doesn’t know how to deal with that failure, and it retains enough power to do immense damage as it strikes out in frustration.

Krugman, myself and other Democratic bloggers have described Republicans as zombies. That is what we’re seeing. If they can eat your brains they will. They lost the election, so that leaves them trying to eat fingers. It is all they know and all they will ever know. They’re not any more or less venal now than they were in 2010 or 2000.

Since the 1970s, the Republican Party has fallen increasingly under the influence of radical ideologues, whose goal is nothing less than the elimination of the welfare state — that is, the whole legacy of the New Deal and the Great Society. From the beginning, however, these ideologues have had a big problem: The programs they want to kill are very popular. Americans may nod their heads when you attack big government in the abstract, but they strongly support Social Security, Medicare, and even Medicaid. So what’s a radical to do?

The answer, for a long time, has involved two strategies. One is “starve the beast,” the idea of using tax cuts to reduce government revenue, then using the resulting lack of funds to force cuts in popular social programs. Whenever you see some Republican politician piously denouncing federal red ink, always remember that, for decades, the G.O.P. has seen budget deficits as a feature, not a bug.

Arguably more important in conservative thinking, however, was the notion that the G.O.P. could exploit other sources of strength — white resentment, working-class dislike of social change, tough talk on national security — to build overwhelming political dominance, at which point the dismantling of the welfare state could proceed freely.

From just after 2000, after Bush has spent the surplus left by Bill Clinton, conservatives spent like crazy, They whined, but there was no holding up spending bills for grand bargains, no lines drawn in exchange for new revenue to offset their new spending. Dick Cheney famously said that deficits did not matter. He and every conservative were suddenly out of the closet Keynesians, when we didn’t need Keynes. Now that we need Keynes, conservatives are back in the closet. They have no convictions. They just hate the democratic republic model of government. They hate fairness. They hate workers. They hate science. They hate justice. They hate education. That is the only real Republican conviction, hate.

Red Lighthouse Storm Clouds wallpaper – The Real Nanny State is Run By The Greedy For The Benefit of Unpatriotic Plutocrats

Red Lighthouse Storm Clouds wallpaper

I read some time ago that NYT columnist make at least six figure salaries. Seeing that whether people agree with them or not Paul Krugman and Maureen Dowd drive a lot of traffic to their site, they probably are above the columnist minimum. Even at the rock bottom of six figures that still leaves us with what is clearly pity or charity pay for Ross Douthat. By way of here – Don’t Eliminate the Link between Social Security Contributions and Benefits – Douthat writes,

But now Washington is in danger of practicing payroll-tax bipartisanship of a more destructive sort. While the White House and Congressional Republicans wrestle over where to set income tax rates and how and whether to cut spending, the payroll tax holiday has been orphaned. Lacking noisy champions and press attention, it’s in danger of expiring at the end of the year out of political indifference.

That outcome would be unfortunate. Payroll taxes are a relic of New Deal Machiavellianism: by taking a bite of every worker’s paycheck and promising postretirement returns, Franklin Roosevelt effectively disguised Social Security as a pay-as-you-go system, even though the program actually redistributes from rich to poor and young to old. That disguise has helped keep Social Security sacrosanct — hailed by Democrats because it protects the poor and backed by Republicans as a reward for steady work.

Payroll taxes for Social Security are there to assure the people that they have paid into an insurance or entitlement program – thus are entitled to benefits. FDR was very clever to do so. By disconnecting entitlement programs from general revenues Americans would see those benefits as insurance, which indeed they are – Social Security keeps millions of people out of poverty and allows millions more a life of dignity and relative comfort in their retirement years. Social Security was motivated by the Great Depression and the mature grown-ups admitting that our economic system has innate structural issues and by no fault of their own, many Americans can work hard all their lives and end up with nothing because of some knuckleheads on Wall Street and on the broads of America’s largest corporations – our shadow government. As the Economist View notes detaching Social Security or Medicare from their own unique funding will mean the end of those programs, which is just what social-Darwinist plutocrats like Douthat want – not for any practical reason, only for reason of blind zealotry.

Ross Douthat Argues that Social Security Would be Easier to Cut If It Were Changed from a Social Insurance Program to a Welfare Program, by Dean Baker: Ross Douthat argues convincingly that if we eliminated the link between contributions and benefits it would be much easier politically to cut Social Security. Of course he thinks ending the link would be a good idea for that reason, but his logic is certainly on the mark, people will more strongly protect benefits that they feel they have earned. …

The payroll tax certainly can cover the program’s expenses. In fact, had it not been for the upward redistribution of income over the last three decades, which nearly doubled the share of wage income going over the cap on taxable income, the projected 75-year shortfall would be about half of its current level.

Even with the current projected shortfall, if ordinary workers shared in projected productivity growth over the next three decades, a tax increase equal to 6 percent of their wage growth over this period would be sufficient to make the program fully solvent. The problem is clearly the policies that led to the upward redistribution of income…, not Social Security.

It is worth pointing out that when Douthat proposes “means-testing for wealthier beneficiaries,” his notion of wealthy means school teachers and firefighters, not Bill Gates and Mitt Romney. …

Douthat is so typical of the wild-eyed ideology of the far Right. They have no answers. They simply believe. They believe in dog-eat-dog social-Darwinist ideology of laissez -faire economics. If you don’t claw your way to a sizable savings for your retirement just go begging to the back door of your local church or die. If the part about wishing people dead sounds like hyperbole – a reminder of the conservative mind-set. The kind of pure and nightmarish capitalism that Douthat and other conservatives believe in does not provide for the elderly, the disabled or children. We all know the talking points since they have been beamed into every America’s head since birth – all of this helping people stuff should be voluntary and private. The first charity hospital for children was founded by Ben Franklin and used partly public funding from the Pennsylvania legislature. So we have never been a country that had a pure than pure laissez -faire attitude towards those American who do not get paid six figures in charity from the NYT to write pure hackery.

Dean baker makes an excellent point about how busy we have been redistributing the capital produced by labor to the top 10%. Since unions have been demonized as Marxist thugs and fair wages, a living wage, is devil talk, the average American workers is earning less than their fair share. That means they contribute less to entitlement insurance like Medicare and Social Security. Why Raises For Walmart Workers Are Good For Everyone

Chances are you missed this particular bargain on Black Friday: Agree to spend 15 cents more on every shopping trip, and Walmart, Target, and other large retailers will agree to pay their workers at least $25,000 a year.

Big box retailers aren’t actually offering that deal, but a new study by the liberal think tank Demos argues that it would be a great bargain for us all if they did. Increasing the average wage at large retailers from $21,000 to $25,000 would probably cost you less than $20 a year at the register yet lift some 1.5 million people out of poverty (including your cashier), create 100,000 new jobs, and boost GDP by some $13.5 billion.

Demos argues that retailers would benefit, despite higher labor costs, because their low-wage employees could suddenly afford to buy more of the basic necessities that they scan and load into plastic bags every day.

If you are still wondering what’s in it for you, however, then consider this tidbit from Sasha Abramsky:

In 2004, a year in which Walmart reported $9.1 billion in profits, the retailer’s California employees collected $86 million in public assistance, according to researchers at the University of California-Berkeley. Other studies have revealed widespread use of publicly funded health care by Walmart employees in numerous states. In 2004, Democratic staffers of the House education and workforce committee calculated that each 200-employee Walmart store costs taxpayers an average of more than $400,000 a year, based on entitlements ranging from energy-assistance grants to Medicaid to food stamps to WIC—the federal program that provides food to low-income women with children.

The economic challenges facing America and labor are framed as everyone being either lucky stiff because the Walton family was good enough to bestow a job on you, even if you cannot live on what they pay. The truth is just the opposite. The Waltons, the Romneys. the Kochs, the Sheldon Adelsons, The Papa Johns are all leaching off the labor of the American workers. The six heirs to the Walmart fortune ( the Walton’s own Walmart, Walgreens and Sam’s Clubs among other business interests) are worth $115 billion dollars. They owe part of their fortune to the ridiculously low tax rates on capital gains. The other part comes from taking the pie and leaving workers – the people who did the actual work of creating their fortune – the crumbs. Every single person on Fortune’s most wealthy people in America list are thieves. They’re entitled to a healthy share of their profits, but not to the kind of massive unearned wealth they have accumulated on the backs of people making $8 to $20 an hour. It would be great f this was just a simple argument about rights and wrongs, fair and unfair. It is those things, but it is also about average folks versus people who have a deranged sense of entitlement to unearned wealth, Fiorina: ‘It is not fair’ that public workers are ‘so rich’

Carly Fiorina, who reportedly stood to receive more than $42 million after being ousted at HP in 2005, says that public workers should receive less benefits because “it is not fair” that unions are “so rich.”

During a Sunday panel segment on NBC, MSNBC host Al Sharpton asserted that Congress must agree to raise taxes on the wealthy before cutting spending.

“This is about fairness,” he explained. “Why do we need to need to deal with the tax on the rich first? Because we must ensure Americans we are dealing with fairness. We keep talking about shared sacrifice, there was not shared wealth and shared prosperity. So, you’re asking people that didn’t enjoy the good times to share in paying for the tab that they never enjoyed.”

“Let us accept Rev. Al’s point and the president’s point about fairness,” Fiorina replied. “But equally, it is not fair that public employee union pensions and benefits are so rich now that cities and states are going bankrupt and college tuition is going up 25 and 30 percent or police and firefighters are being cut. There’s a lot that isn’t fair right now.”

During Fiorina tenure as the CEO of HP, at least 18,000 workers were laid off after the company’s disastrous merger with Compaq.

Fiorina failed. She lost millions. By the rules of her own conservatism she should have been out on the street looking for a job. She left HP with a golden parachute of $20 million. She could live to be 300 years old and never earn that kind of money. There are people smarter than her teaching calculus or programming at your local community college. Part of our economy is attached at the hip to a work hard just to survive capitalist system and the other part is connected to a welfare nanny state for the ruling plutocrats like Fiorina whose hobbies include whining about how much teachers and firefighters make. Like Romney, Fiorina was born into the upper middle-class. Privileged, and like Old World royalty they think they the elite who deserve everything they siphoned off the hard work of others.