nebris: (Away Team)
~I keep reading endless numbers of articles and essays about how Trump became president. And none of the them really seem to get it. Chris Hughes comes close, but he seems to have lost his mind. Can't blame him really, as everyone is dancing around the elephant in the room; we are in fact already IN Collapse, eg, The System is in Terminal Failure.

We are in Late Stage Capitalism. What that means is as the profit margins get narrower, The Owners need to squeeze harder to extract said profits. This has been going for a few decades now, but for the general public, the 'balloon went up' with the Crash of '09, which was the direct result of The Big Squeeze. Wall Street et al created a Housing Bubble of insane proportions via all manner of shady and even illegal marketing and accounting games.

When the shit hit the fan, they got their political lackeys to use Tax Payer Money to 'reimburse' them for their loses and left said Tax Payers out to dry. Roughly 40% of the American Middle Class Wealth was lost. FORTY PERCENT. That meant eroded tax bases, gutted pension funds, wrecked state and municipal bond portfolios.

That is what Obama inherited. And, being the Corporatist he is, he bunted economically. The perfect example is the ACA [which originated with The Heritage Foundation, a very right wing think tank]. He'd promised a Public Option over and over and over again on the campaign trail. Withing a month of his Inauguration, it had vanished, forcing thirty million Americans into the clutches of the Insurance Industry. [see The Big Squeeze]

Eight years later, after more and more of that kind of betrayal from the Democrats and the insane slavering obstructionism of the GOP, the American Electorate had come to hate the establishments of both parties. And two Insurgent candidates emerged from outside of each party; Bernie and The Donald.

We all know what happened. The 'undisciplined' Dems suddenly became Very Disciplined and sandbagged Bernie. And the infamously disciplined GOP fielded a slate of total buffoons and got its clock cleaned.

Even then, Hillary should have won. She did in fact 'win' The Vote. But her ground game sucked so badly [arrogance], and the Dems had alienated so much of their own base [more arrogance], she lost four states by roughly 120K votes in total.

And that boys and girls, is how Collapse works. The System becomes so rotten that a Black Swan like The Donald can end up in the White House. Now The Deep State has to game The System [delegitimatizing it even more] in order to fix the problem and do a reset, eg a Pence White House, which while ugly, will at least be relatively stable.

But we are still in Late Stage Capitalism and Collapse is still underway and no one has any real idea what to do about that ...except, of course, More Of The Same, which is a well known definition of insanity.

Toss the now inevitable Catastrophic Climate Change into the mix and one can be certain that the next century or so is going to be 'very interesting times' indeed.

You can kill yourself now if you wish....
nebris: (A Manga Thang)
Provisions that allow foreign investors to bypass the federal courts could undermine U.S. legal protections.

Alan Morrison Jun 23, 2015

It is January 2017. The mayor of San Francisco signs a bill that will raise the minimum wage of all workers from $8 to $16 an hour effective July 1st. His lawyers assure him that neither federal nor California minimum wage laws forbid that and that it is fine under the U.S. Constitution.

Then, a month later, a Vietnamese company that owns 15 restaurants in San Francisco files a lawsuit saying that the pay increase violates the “investor protection” provisions of the Trans-Pacific Partnership (TPP) agreement recently approved by Congress. The lawsuit is not in a federal or state court, but instead will be heard by three private arbitrators; the United States government is the sole defendant; and the city can participate only if the U.S. allows it.

It is not a far-fetched scenario. The TPP reportedly includes such provisions, as a means of solving a thorny problem. In the United States, the courts are, by and large, independent and willing to fairly decide challenges to arbitrary government laws and rulings, no matter who the plaintiff is. The same is not consistently true in less developed countries.

The solution proposed in the TPP is to allow foreign investors to bring claims for money damages over violations of the TPP’s investor protection provisions before a private arbitration tribunal that operates outside the challenged government’s court system. One arbitrator would be chosen by the investor, one by the country being challenged, and a third by agreement of the other two arbitrators.

The arbitrators are often lawyers who specialize in international trade and investment, for whom serving as arbitrators is only one source of their income. Unlike U.S. judges, they are not salaried but paid by the hour, and they can rotate between arbitrating cases and representing investors suing governments.

Despite the fairness of our court system, the U.S. government has consented in prior trade agreements, and in a leaked version of the still-secret TPP, to allow foreign investors to bypass our courts and instead move to “investor-state” arbitration. Thus, challenges based upon TPP to our duly enacted laws and other regulatory actions would be decided by three individuals who are not government officials and need not be American citizens. And they would have the final word as to whether the federal government will be compelled to pay damages, because there is no judicial review in any U.S. court of the merits of these arbitral rulings.

If such a case were brought, the foreign investor would sue the United States and ask that the arbitrators find that “investor-based expectations” under the TPP were violated. So, for example, it might claim that doubling the minimum wage from its prior level violated the TPP’s provisions requiring fair and equitable treatment of foreign investors. If the arbitrators agreed, they would assess money damages that would be paid from the federal treasury, but the San Francisco wage law would not be directly affected. However, because the ruling would open the door for other foreign investors in any number of businesses to bring similar claims, Congress would almost assuredly step in and override the wage increase to prevent opening the doors to the Treasury to every foreign investor in San Francisco. Indeed, in a similar situation Canada reversed a toxics ban and published a worldwide advertisement that the chemical was safe in order to avoid the possibility of having to pay substantial damages.

In recent years, there has been a major increase in the use of arbitration in the United States to decide commercial disputes, but those cases involve contracts in which the parties agreed to arbitration, with the outcome generally depending on how factual issues are resolved. TPP arbitrators, by contrast, will decide what is essentially a legal question: whether governmental actions, which are designed to protect our health, safety, environment and economic well-being, are consistent with the TPP. Those protections extend from locally enacted laws like the San Francisco minimum-wage provision, to state statutes and regulatory actions, to laws passed by Congress and decisions of federal regulatory agencies. And under the TPP, as under other trade agreements, decisions of a majority of the arbitrators on compliance with the TPP will not be subject to review in any court, federal or state. Among the other important public policy measures currently being debated that might be the basis for a TPP claim by a foreign investor include water rationing in California, the legality of selling e-cigarettes to minors, and the state regulation of medical facilities performing abortions. If a foreign investor won a TPP arbitration in these situations or the wage increase discussed above, that would not only cost the Treasury, but it would disadvantage American competitors who cannot benefit from TPP arbitrations, unless the offending law were set aside. And if governments feel compelled to set aside such laws in response to adverse rulings, the three arbitrators will effectively have substituted their own judgments for that of the electorate.

Under the TPP, the arbitrators will act like judges, deciding legal questions just as federal judges decide constitutional claims. However, unlike judges appointed under Article III of the Constitution, TPP arbitrators are not appointed by the president or confirmed by the Senate, nor do they have the independence that comes from life tenure. And that presents a significant constitutional issue: Can the president and Congress, consistent with Article III, assign to three private arbitrators the judicial function of deciding the merits of a TPP investor challenge?

The Supreme Court has not ruled on this precise question. But the collective reasoning in four of its recent rulings bearing on the issue leans heavily toward a finding of unconstitutionality. The Court has placed significant limits on the ability of Congress to assign the power to decide cases traditionally handled by the courts to people other than Article III judges, even when the judicial substitutes are full-time federal officials, such as bankruptcy judges or the heads of federal agencies. Moreover, in each case in which the Court approved of a dispute being taken away from federal judges, there was judicial review at the end of the process, which is not the case with TPP. Moreover, although the Justice Department issued a lengthy opinion in 1995 on when arbitration can be used to replace court adjudication, it did not then, and has not since then, defended the constitutionality of arbitration provisions like those in the proposed TPP.

As it presses for the passage of TPP, the administration needs to explain how the Constitution allows the United States to agree to submit the validity of its federal, state, and local laws to three private arbitrators, with no possibility of review by any U.S. court. Otherwise, it risks securing a trade agreement that won’t survive judicial scrutiny, or, even worse, which will undermine the structural protections that an independent federal judiciary was created to ensure.
nebris: (Away Team)
"The final stages of capitalism, Marx wrote, would be marked by developments that are intimately familiar to most of us. Unable to expand and generate profits at past levels, the capitalist system would begin to consume the structures that sustained it. It would prey upon, in the name of austerity, the working class and the poor, driving them ever deeper into debt and poverty and diminishing the capacity of the state to serve the needs of ordinary citizens. It would, as it has, increasingly relocate jobs, including both manufacturing and professional positions, to countries with cheap pools of laborers. Industries would mechanize their workplaces. This would trigger an economic assault on not only the working class but the middle class—the bulwark of a capitalist system—that would be disguised by the imposition of massive personal debt as incomes declined or remained stagnant. Politics would in the late stages of capitalism become subordinate to economics, leading to political parties hollowed out of any real political content and abjectly subservient to the dictates and money of global capitalism."
Karl Marx Was Right
nebris: (Away Team)
"The dumbest thing Marx ever did was fall for that "withering away of the state" business. Whether the state is "bourgeois" or "proletarian" or "cooperative" or "corporatist" or what have you, there is not the slightest reason for thinking that the state, as such, will come to an end. There is no reason at all for thinking that complex human societies can forgo politics, governmental organization, planning, the rule of law, coercive enforcement of the rule of law, the paternalistic socialization of children and the ongoing, organized defense of the realm against violent threats from potential predators. There is no reason at all to think that the many interlocking institutions in such a society can make everything work through "self-organization" or "emergent" patterns of pure voluntariness and spontaneous cooperation.

There is no millennial salvation coming at the "end of history". There will be no end of history.

You know why the left goes absolutely nowhere and has been crushed by the forces of private capital power for over a half-century? Because it is largely composed of nitwit fantasists, dreamy melancholics drowning in barbarous and muddy ideological theorization, and thumb-sucking fools who are in deep, deep, deep denial about human history, human nature, and human social life.

People want a more just and equal world? Then they are going to have to fight for such a world, struggle to build it, think hard and in a concrete analytic fashion about how to organize it, put those organizational plans in place though the messy gringing work of politics and the coercive mechanisms of an organized legal system, and then struggle to keep it from falling apart.

And the struggle will be endless, because human beings are an erratic mess, with abundant proclivities toward aggression, violence, irrationality, selfishness, delusion, laziness, fanaticism and hysteria. Decent human society comes from keeping all of these things in check via a well-thought out system of governance, not from attempts to eradicate them.

Society is hard work because human beings are just a species of wild animal with the special ability to domesticate and tame themselves. There is no race of pure and sinless angels waiting to emerge once all of the fascism, statism, or meanyism is scraped away." ~Dan Kervick
nebris: (A Manga Thang)
[addressing some Bagger on Facebook] you demonstrate the classic 'conservative' cluelessness about how modern economics works. But in your defense, that is true of most Americans of any political persuasion. At least you know who Karl Marx is, even if you're probably quite unclear as to his actual philosophies. I'll wager half the people you'd ask on the street would have never heard of him.

I'm not a commie btw. While Marx's critique of Capitalism is spot on, he really never gets around to explaining how the so-called Worker's Paradise was supposed to come into being, which is, in part, what led to abominations like the Soviet Union, etc.

But, I digress...

So, modern economics. I know this is tough because though it seems to be about The Maths, is in fact really about Existential Concepts. It is about what we humans decide is Valuable and what is not. Let's start with Gold. [bet yer a Goldbug, ain't ya lol] Gold, in and of itself, had no real intrinsic value until modern times when we discovered its great usefulness in the manufacture of electronics.

But before that it's 'value' was entirely subjective. Gold was valuable because it was pretty and, being mailable, it was easy to make pretty things with it. But as Midas found out, you can't eat it.

That is the nature of ALL forms of Money. We choose what it is worth by a more or less common Social Agreement. Take some of that colored paper out of your pocket. You bust you ass for that, but that's all it really is; colored paper that we all agree has a certain value. People will kill you for that paper....and you can't really eat that either. Well, actually you can, but its nutritional worth is near zero.

Our money here in the United States is what as known as a Fiat Currency, 'Fiat' being the Latin for 'make it so'. In essence, the US Govt simply prints what it needs and has done so ever since Richard Nixon shelved the Bretton Woods Agreement and took us off the Gold Standard. [bet that makes yer lil pink bunghole pucker]

Nixon many have been a seriously fucked up human being, but he was a brilliant political thinker. He was planing to institute a form of Basic Income called Negative Income Tax and also a National Health plan that was rather more 'socialist' than Obamacare, which is really just a watered down version of Nixon's plan.

Nixon was fully aware of Corporate American's plans to crush America's unions, outsource most of America's manufacturing – along with industry’s jobs – and generally roll back as much of the New Deal as was possible. [Goggle 'The Powell Memo'] He knew that would destroy the social fabric of The Republic, which it did – not to mention severely pollute the land – and he was a true patriot for all his terrible flaws.

So he tried to put those programs in place to keep his fellow citizens from being economically raped by The Corporations. But then Watergate came along...interesting that, eh?

But again, I digress....

So, Fiat Currency, printing what need. Such is the greatest Economic Truth that The Corporate State does not want you to know. If the American people ever really figure that out, the Govt would have to pony up to *everyone*. And The Corporate State wants a terrorized exhausted half starved work force to keep their Labor Costs down and their Profit Margins up. This is Stupidity driven by Greed of course. If we're all broke, who'll buy their shit? [there is however the possibility that they're trying to kill us off, but I'll save that paranoia for another time]

That is what all the screeching about the Nation Debt and Austerity and Social Security going broke and so on. But it is Debt that 'creates' money. Austerity strangles growth. [see the EU] And the Social Security Trust Fund would be just fine if all those who stole from it were forced to pay back the money. [The Corporate State, we're looking at you]

With a Basic Income Grant, the US Govt simply sets up bank accounts for every single American Citizen and electronically drops X number of dollars in said each month. [$800 to $1000 is the ballpark number right now] Those Citizens then go out and put that money back into the American economy. That is actually how all nearly all Govt payments work now anyway.

This would boost the economy, scrape just about every welfare program we have – which would be a cost saving right there and restore a lot of human dignity – and free up vast amounts of American creative energy because most people like to work. Sure, some will fuck off for the rest of their lives, but that gets boring after a while.

So, freed from the fear of homelessness and hunger, we could blossom as a people as we go off to Do What We Love instead of The Daily Grind of Survival.

The only caveat is Inflation and The Fed has all manner of tools to keep that in check. Of course, that would badly cut into the profits of The Investor Class...but fuck them. Those clowns brought us the Crash of 2008.

So, wasn't that fun? Bet you hated every minute of it and believe not a single word. And that's okay. I enjoyed myself and will post this elsewhere to more receptive audiences. You can sit home, fume about Obama et al [he's not a Socialist btw...he's at best a Moderate Republican] and become more and more irrelevant as the Hispanic population grows and grows and they'll love Basic Income. *smirk*
nebris: (Away Team)
La longue durée is an expression used by the Annales School of French historians to indicate an approach that gives priority to long-term historical structures over short-term events. The phrase was coined by Fernand Braudel in an article he published in 1958. Basically, the Annales historians held that the short-term time-scale is the domain of the chronicler and the journalist, whereas la longue durée concentrates on all-but-permanent or slowly evolving structures. Thus beneath the twists and turns of any economic system, wrote Braudel, which can seem like major changes to the people living through them, lie "old attitudes of thought and action, resistant frameworks dying hard, at times against all logic." An important derivative of the Annales research is the work of the World Systems Analysis school, including Immanuel Wallerstein and Christopher Chase-Dunn, which similarly focuses on long-term structures: capitalism, in particular.... )
nebris: (Away Team)
...first, some accurate propaganda.. some solutions..

Simple Solutions To The Budget Crisis:
End two wars of occupation­­­­­­­­­­­­­­. Leave the Middle East and Central Asia.
Stop fighting the Cold War. Leave Europe.
Start closing down America's world wide 'empire of bases'.
Stop funding the military power of other nations.
End all military contracts, and return all of those duties to the military itself.
Close Guantanamo and return Cuba's sovereign territory.
Abrogate NAFTA completely. [I'd also say withdraw from the IMF and WTO, but we own the damned things!]
Stop subsidizin­­­­­­­­­­­­­­g the already highly profitable oil industry.
Stop subsidizin­­­­­­­­­­­­­­g the highly unprofitab­­­­­­­­­­­­­­l­e corn industry.
Nationalize the private prison industry.
Release all minor, non-violen­­­­­­­­­­­­­­t drug offenders and stop paying a fortune to incarcerat­­­­­­­­­­­­­­e them.
End the War on Drugs, dismantle the DEA, legalize all drugs, then regulate and tax them.
Establish a State Bank for each of the fifty states and have each state treasury deposit ALL state revenues, pension funds, etc 'exclusively' in their own State Bank.
Forgive ALL outstanding student loans across the board and without condition.
Establish a national Single Payer 'buy in' program for Medicare with no age restrictions.
Extend a fully funded Medicaid to everyone below the poverty line.
Rebuild all of America's infrastruc­­­ture from the ground up.
Rebuild American industry here in America itself, by government fiat if necessary.
...and the biggest one, return to the sensible Eisenhower era taxation rate.

..and finally some cynicism..

"Back then [the Sixties] everything seemed to be coming apart. Viet Nam. Urban riots every summer. The Manson Family. So many were certain the Revolution was almost here. But what we got instead was Richard Nixon and Disco. And I have to say that in retrospect, they both look pretty damned good at this point." ~Michael Varian Daly
nebris: (A Proper General)
From War and Game

Early Dutch trading ventures in Europe and the Atlantic were often very profitable, but merchants could be financially ruined if violent storms sank their ships or if pirates stole their cargo. To spread the risk they developed joint-stock companies, a new form of business enterprise based on the sale of shares to multiple owners. In addition to helping investors avoid bankruptcy if a single venture failed, the joint-stock system allowed men and women of small means to buy a few shares and reap a modest profit with little risk.

The development of joint-stock companies put the Dutch at the forefront of early modern commercial capitalism. The development of financial institutions such as banks, stock exchanges, and insurance companies increased the efficiency with which capital could be accumulated and invested. Rather than simply look for a single big windfall that would allow them to retire in comfort, investors now looked for more modest but regular gain through shrewd reinvestment of their profits. This dynamic of using profit for reinvestment and further profit was at the core of the new capitalist ethos associated with the bourgeoisie, the rising social group in Amsterdam and other urban areas of western Europe in the seventeenth century. The bourgeoisie based their social and economic power, and their political ambitions, on ownership of property rather than inherited titles.

Dutch culture reflected the rise of this commercially dynamic bourgeoisie. In many cultures trade was a low-status activity, it being assumed that a merchant could only be rich if he had made someone else poor. Seeking higher social status for their families, successful merchants in cultures as diverse as Spain and China would often use their assets to educate their sons to be “gentlemen” (in Spain) or members of the “literati” (in China). In Holland, by contrast, the leading citizens were all involved in trade, and commerce was seen as a noble calling.

The greatest of the joint-stock companies, and the largest commercial enterprise of the seventeenth century, was the Dutch East India Company, founded by a group of Amsterdam merchants in 1602. The government of the Netherlands granted a charter to the company giving it a monopoly on Dutch trade with Asia. As a “chartered company,” the Dutch East India Company was also granted administrative and military responsibilities overseen from their headquarters in Batavia in what became the Dutch East Indies (today’s Indonesia). In the coming centuries other European powers would copy the Dutch model and use chartered companies of their own to extend their national interests.

Dutch capitalism was not based on free-market principles. The Dutch East India Company was a heavily armed corporate entity that maintained its monopoly through force. “Trade cannot be maintained without war,” said one governor of the East India Company, “nor war without trade.” The Dutch thus repeated the Portuguese pattern of using military force in the Indian Ocean to secure commercial profit, while at the same time introducing modern business and administrative techniques that made them more efficient and effective.

The Portuguese were no match for Dutch competition. In addition to their commercial innovations, the Dutch had made major advances in ship design and construction. In 1641 they took Malacca, the strategic choke point for Southeast Asian trade, from the Portuguese. They became a power in South Asia after they took the island of Sri Lanka (south of India) in 1658. The Dutch presence in Africa was focused on the settlement of Cape Town, established at the far southern tip of the continent in 1652. The fort at Cape Town was built to supply passing Dutch ships with water, meat, brandy, and fruit. At the other end of this vast oceanic expanse, ships of the Dutch East India Company made annual calls at the Japanese port of Nagasaki.

The Dutch East India Company made huge profits, especially from the spice trade. Sometimes they violently intervened in local affairs to increase production, as on the Bandas Islands, where they removed most of the local population and replaced them with slaves drawn from East Africa, Japan, and India to grow nutmeg. The estimated rate of profit ranged from several hundred to several thousand percent. Investors back in Holland were delighted.

The Dutch were lucky that at this time the entire Indian Ocean economy was being stimulated by the introduction of large quantities of American silver being mined by the Spanish in South America and shipped across the Pacific. In fact, the increased supply of silver into China and the Indian Ocean trade networks in the late sixteenth and early seventeenth centuries probably had a greater effect on those economies than the activities of European merchants. Still, the Dutch, with their efficient business organization and shipping infrastructure, were in an ideal position to profit from this development.
nebris: (Away Team)
"October 2. People are asking my thoughts on Occupy Wall Street. Here's an article about five ways OccupyWallStreet has succeeded. But notice the level on which it has succeeded: public opinion. In the middle ages, there was universal agreement that the church was corrupt for hundreds of years before the church began to reform. Even then it did not reform because of public opinion, but because it was losing to competing churches. Wall Street has no incentive to change, because it has a monopoly on our lives. We can't buy houses or go to college without bank loans; we can't drive without oil companies; we can't eat without agribusiness. Predictable assholes are saying we have no right to protest if we use products made by the systems we're protesting against. They're so wrong, they're almost right: the whole reason we're protesting is that we can't get what we need without going through corrupt systems; but until we have other ways of getting what we need, we have no leverage to do anything but shout into the wind.

I'm not hopeful about sudden positive change. At the global scale, fast changes tend to be destructive and traumatic, while good changes take decades. Maybe this is like one wave of the tide coming in. The next twenty waves will be smaller, but then one will go a little higher than this one, and eventually the giant blocks of money will be washed away, except for a few islands."

nebris: (Away Team)
By Gaius Publius on 10/04/2011 01:15:00 PM

Thanks to the always informative econ writer masaccio, we find this, from James Clifton, the chairman and CEO of Gallup (the polling people).

Yes, there's a huge jobs shortfall. No, it's not a U.S. problem, it's a global problem. And no, it's not going away soon (my emphasis):

"Of the 7 billion people on Earth, there are 5 billion adults aged 15 and older. Of these 5 billion, 3 billion tell Gallup they work or want to work. Most of these people need a full-time formal job. The problem is that there are currently only 1.2 billion full-time, formal jobs in the world. This is a potentially devastating global shortfall of about 1.8 billion good jobs. It means that global unemployment for those seeking a formal good job with a paycheck and 30+ hours of steady work approaches a staggering 50 percent, with another 10 percent wanting part-time work.

This also means that potential societal stress and instability lies within 1.8 billion people, nearly a quarter of the world’s population."

Those are huge aggregate numbers, which means a lot of societal stress. Earlier the author gloomily notes:

"If countries fail at creating jobs, their societies will fall apart. Countries, and more specifically cities, will experience suffering, instability, chaos, and eventually revolution. This is the new world that leaders will confront."

Clifton calls this "America’s next war for everything" and likens it to WWII in scale and importance. (For masaccio's take, click here. It's worth a read.)

I'm not sure I agree with jobs as a primary focus for civil unrest in the rest of this century, though there's nothing minor about this problem. The lack of jobs has a cause, which makes it a symptom as well. That cause is global corporate control of economic lives and resources. This includes banks and all industries.

So while lack of jobs is one ugly tentacle of this global beast, there are others. For example, "water is the next oil" is something I'm hearing again and again, and the anti-corporate fight over water has already been joined. (Imagine a third-world farmer not being able to drill a well on his own land, because the water rights under the entire province have been sold to Global Water, Inc (a subsidiary of Koch Industries perhaps) by a corrupt and bribe-able local government. That's the coming water world.)

The "last oil" of course — which is actual oil — is still with us. If the Oil & Gas Barons can keep a lid on the social unrest (no easy task), they're perfectly placed to sell the last drop of petroleum on the planet to the increasingly desperate at an astounding price (not including the price in pollution).

What do you call it when an addict will pay you anything for what only you have? Mission Accomplished, of course. Welcome to CorpWorld, new-century edition.

So you see, it's not just jobs, though that's a huge piece of the problem. There are lots of these tentacles. And at some point in this century that problem will have to be sorted, to the bitter end. If we're lucky, it won't happen in our personal lifetimes.

But kudos to Clifton for noticing the job numbers. A 1.8 billion shortfall certainly gets your attention.

nebris: (Away Team)
Coming Apart: Inertia, Not Progress Defines the Decade After 9/11

Organized Climate Change Denial “Played a Crucial Role in Blocking Domestic Legislation,” Top Scholars Conclude
nebris: (Away Team)
By Steve M, No More Mister Nice Blog
Posted on September 20, 2011
Via AlterNet

From an AP "fact check" of the arguments underlying the president's call for the so-called Buffett tax:

There may be individual millionaires who pay taxes at rates lower than middle-income workers. In 2009, 1,470 households filed tax returns with incomes above $1 million yet paid no federal income tax, according to the Internal Revenue Service.

Excuse me -- if any millionaires paid zero federal income tax, then it's inaccurate to say that there "may be" millionaires with a lower tax rate than typical middle-income workers. There are millionaires with a lower tax rate -- period, full stop. By definition, there are more than a thousand of them -- at least. So avoid the conditional, please. (The AP "fact check" doesn't tell us about millionaires who pay some federal income tax but not very much, though surely there are a number of those as well.)


There's also this, in the "fact check":

Obama's claim hinges on the fact that, for high-income families and individuals, investment income is often taxed at a lower rate than wages. The top tax rate for dividends and capital gains is 15 percent. The top marginal tax rate for wages is 35 percent, though that is reserved for taxable income above $379,150.

If you read this looking for "the facts," you might conclude that that 15% rate is unfair, but only to somewhat less rich people, those who make more than $379,150. What the "fact check" leaves out is that it's unfair to middle-income people. Here are the current marginal tax rates. Notice how much -- or, rather, how little -- money you can make and still be paying federal income tax (on at least some of it) at a higher rate than hedge-fund fat cats paying 15%:

Single Filing Status
[Tax Rate Schedule X, Internal Revenue Code section 1(c)]

10% on taxable income from $0 to $8,500, plus
15% on taxable income over $8,500 to $34,500, plus
25% on taxable income over $34,500 to $83,600, plus
28% on taxable income over $83,600 to $174,400, plus
33% on taxable income over $174,400 to $379,150, plus
35% on taxable income over $379,150.

Married Filing Jointly or Qualifying Widow(er) Filing Status
[Tax Rate Schedule Y-1, Internal Revenue Code section 1(a)]

10% on taxable income from $0 to $17,000, plus
15% on taxable income over $17,000 to $69,000, plus
25% on taxable income over $69,000 to $139,350, plus
28% on taxable income over $139,350 to $212,300, plus
33% on taxable income over $212,300 to $379,150, plus
35% on taxable income over $379,150.

Make $65 grand as a single person and you're paying 25% on nearly half your income, while the hedge-fund guy pays 15% on his $65 million. AP could have told us that, but it's an inconvenient fact.
nebris: (Away Team)
By Sarah Jaffe, AlterNet
Posted on September 16, 2011

The underground economy isn't just drugs and sex work--and it touches all of our lives.

The United States continues to suffer from mass unemployment, and people have had to adjust their lifestyles to the new reality—fewer jobs, lower wages, mortgages to pay that are now more than their homes are worth. Millions have dropped out of the job hunt and are trying to find other ways to sustain their families.

That's where the underground economy comes in. Also called the shadow or informal economy, it's not just illegal activity like selling drugs or doing sex work. It's all sorts of work that doesn't get regulated by the government or reported to the IRS, and it's a far bigger part of the economy than most of us are aware—in 2009, economics professor Friedrich Schneider estimated that it was nearly 8 percent of the US's GDP, somewhere around $1 trillion. (That makes the shadow GDP bigger than the entire GDP of Turkey or Austria.) Schneider doesn’t include illegal activities in his count-- he studies legal production of goods and services that are outside of tax and labor laws. And that shadow economy is growing as regular jobs continue to be hard to come by—Schneider estimated 5 percent in '09 alone.

The Young Women's Empowerment Project [PDF] describes what they call the “street economy” as “... any way that girls make cash money without paying taxes or having to show identification. Sometimes this means the sex trade. But other times it means braiding hair, babysitting, selling CDs/DVDs, drugs or other skills like sewing and laundry.”

D.A. Barber explained:

“This underground economy goes beyond the homeless collecting aluminum cans or clogging day labor halls. It includes the working poor getting cash for all forms of recycling: giving plasma, selling homemade tamales outside shopping plazas, holding yard sales, doing under-the-table work for friends and family, selling stuff at pawnshops, CD, book and used clothing stores, and even getting tips from restaurants and bars--to name a few.”

That means nearly all of us have participated in some way in the underground economy.

Yet little is known or discussed about this section of our lives, even though it touches each of us as we try to make ends meet.

Economist Edgar Feige estimated in 2009 that unreported economic activity was costing the US government $600 billion in tax revenues, and the growth in that number—from the Internal Revenue Service's 2001 estimate of $345 billion—indicates the growth of the informal economy. Reporting on Feige's work, Dennis Chaptman noted, “As the recession deepens and regular employment opportunities decline, unreported activities tend to grow, thereby swelling the tax gap and worsening the government's budget deficit.”

Workers in the underground economy can also be vulnerable to exploitation; the Monthly Review pointed out that workers, especially undocumented immigrants, are pushed into off-the-books work out of desperation and have no officials to appeal to when their conditions are horrific or their pay substandard; wages are pushed downward and expectations lowered.

Labor economist Mark Price agreed. He told me, “People enter such arrangements because of their difficulty finding formal employment. Think of undocumented immigrants that work as housecleaners or in the construction industry.”

He continued, “Employers or consumers who use workers in this way are doing so to boost profits or lower prices. Of course documented workers also can end up choosing to work in the underground economy but that choice, like the choice for the undocumented, has the same basic driver--the inability to find formal paid employment that meets a worker's needs.”

Alfonso Morales, a professor at the University of Wisconsin at Madison, told the Christian Science Monitor that off-the-books work “is probably neutral to good.” He pointed out that it is impossible to separate the informal economy from the formal. “People who make their money in unregulated businesses probably spend it in regulated ones.”

Price compared the growth of the underground economy to payday lending; “a typically undesirable practice that develops and thrives because it fills a need created by the failure of public policy to address societal needs.”

The informal economy, though, does not only consist of low-wage workers. Saskia Sassen, Robert S. Lynd Professor of Sociology at Columbia University, pointed out in her book Cities in a World Economy that there is also an informal economy of creative professionals. In an article titled “Cities Today: A New Frontier for Major Development” she wrote:

“In brief, the new informal economy in global cities is part of advanced capitalism. One way of putting it is that the new types of informalization of work are the low-cost equivalent of formal deregulation in finance, telecommunications, and most other economic sectors in the name of flexibility and innovation. The difference is that while formal deregulation was costly, and tax revenue as well as private capital went into paying for it, informalization is low-cost and largely on the backs of the workers and firms themselves.”

She points out that by keeping creative professional work informal, these workers avoid the corporatization of creative work, and maintain the freedom to be innovative and self-sufficient.

While these creative workers prize independence, Lisa Dodson stressed the way communities came together to help one another through tough times, often through off-the-books economic activity, in her book The Moral Underground: How Ordinary Americans Subvert an Unfair Economy.

In one passage, she tells the story of arriving in a small-town farmer's market in Maine, only to overhear a discussion between locals on “neighbors and the market erosion of common fairness.” She wrote:

“Just then a middle-aged woman, who had been talking to friends, suddenly turned around to face other shoppers and asked, 'What’s happening to us? Why doesn’t the government do something?' A local farmer, sorting vegetables nearby, responded immediately, 'The government is the same as the oil companies. There’s no difference. We can’t wait for them to do anything.' A young mom holding a baby as she stood in line said, 'So what do we do?' There was no single response, but they were looking at each other to find it.”

Without solutions coming from Washington or local governments, it continues to be up to working people to find a way to negotiate the rough economy. Price argued, “People shouldn't have to give up fundamental human rights like access to income in retirement or safety on the job because they need work. But in a society like ours, which tolerates high levels of unemployment, the underground economy is often the next best alternative to starving.”

While some have been able to flourish working underground, it's important to remember that most workers are not off the books to dodge paying taxes or because they prefer it that way. As we see more and more people dropping out of the formal labor market altogether in despair, the informal economy will remain a destination of last resort—and will keep growing.

Sarah Jaffe is an associate editor at AlterNet, a rabblerouser and frequent Twitterer. You can follow her at @seasonothebitch.
nebris: (Away Team)
September 19, 2011 5:50 AM

At a food pantry in a Chicago suburb, a 38-year-old mother of two breaks into tears.

She and her husband have been out of work for nearly two years. Their house and car are gone. So is their foothold in the middle class and, at times, their self-esteem.

"It's like there is no way out," says Kris Fallon.

She is trapped like so many others, destitute in the midst of America's abundance. Last week, the Census Bureau released new figures showing that nearly one in six Americans lives in poverty — a record 46.2 million people. The poverty rate, pegged at 15.1 percent, is the highest of any major industrialized nation, and many experts believe it could get worse before it abates.

The numbers are daunting — but they also can seem abstract and numbing without names and faces... )
nebris: (A Dark Boy)
~I was going to write a post about the possible SoCal grocery workers strike and how I had to cross the picket lines last time because I was homeless and that the whole fucking thing seems to turning on healthcare costs but I'm sick of fighting with Libertarian sociopaths over this shit and will spend the energy working on The Explanation instead.
nebris: (Away Team)
From The Infamous Brad [the comments there are quite informative as well]

Denial: Yes, I know that they're breaking the unions, and laying people off left and right. But we're the strongest, smartest, most productive people on earth! Our way of life will survive, it has to! Anger: They can't get away with this! Take to the streets! Bargaining: Maybe if we adopt some of their proposals, create something called New Labor, or become Third Way Democrats, they'll let us keep our middle class way of life? Despair: Oh, god, no, they won't, not after the bankers successfully blackmailed us into covering 100% of their losses, and certainly not after Citizens United. And Obama keeps selling us out. I'm so depressed, I can't even watch the news any more.

Those were all natural stages of the grieving process for the way of life that the G.I. Generation, the Greatest Generation, intended to leave to us as their legacy. The time period from roughly 1946 to 1972, in America and in the UK and in Japan and in parts of western Europe, was one of the rare times in human history where people -- in this case, the people who lived through the Roaring 20s, the horrors of Prohibition gangsterism, the further horrors of the Great Depression and the Dust Bowl, the even further horrors of World War II -- set out to build for us a world where nobody was so poor that they had nothing left to lose, and where nobody was so rich that they were above the law.

It was a beautiful world. It was a dream worth fighting for, and they fought for it. It was better than what we have to day. But it's been hit by one hammer blow after another since the OPEC oil crisis of 1973. And now, that dream is dead. You've had your time of denial in the 1980s and 90s, and your time of anger during the second Bush administration, and you spent the whole 2008 election cycle and the almost three years since then bargaining. Which is why most of you have already reached despair. And that's good. It was necessary to your healing process. But now, maybe, it is time to move on to the final stage of grief for that lost egalitarian dream: Acceptance.

The winners, the right wing Democrats and the Republicans, New Labor and the Tories, have said it out loud, and repeatedly: they consider the "middle class" to be people between the 85th and 95th percentile of income, and everybody below that to be poor. And as several of them have said lately, they deeply resent the generosity with which they allow poor people, in America and elsewhere, to cling to unnecessary luxuries ... like air conditioning. And a telephone. And a refrigerator. They resent that they let you keep those luxuries, which means if you're not in the 85th percentile of income for your country, you better take it for granted: those luxuries are going away. Period. In the post-Citizens United world, a world where the people who fund the only candidates who can win in either party's primaries are universally convinced that any resources that are going into lifting the bottom 85% of society out of poverty are wasted resources, where that's taken for granted by vast voting majorities of the elected representatives of both parties no matter what else they quibble about? In that world, no amount of denial, or anger, or bargaining, nor despair; neither angry violence nor peaceful protest; neither inspirational speeches nor cynical compromise, is going to change that.

It's a done deal. Maybe it's been a done deal, as some people warned us at the time, since Reagan dissolved the Professional Air Traffic Controllers' Organization, but whether or not it was then, it certainly is after Citizens United. And the sooner you accept that, the sooner you can get on with what's really important. Maybe, for you, that's still a life in politics, if what you care about are other issues, like women's rights, or the environment, or whatever. If not ... and for me, if we can't get that right, it's mostly not ... if not, for the rest of you who are like me? It is time for us to get on with planning for what our new lives are going to be like once the changes are done.

Welcome to the rest of your life. Specifically, welcome to this: Sudhir Alladi Venkatesh's 2006 book, Off the Books: The Underground Economy of the Urban Poor. If you haven't done so yet, you need to read this book. I don't know how many of you read the last book I begged you all to read, Nick Taylor's American Made. I get the sense it was maybe a quarter of you. But if you want to know what your life is going to be like if you aren't already in the 85th percentile of American life or up, you cannot do better than to read this book, and I'll tell you why.

Sudhir Venkatesh is a sociologist with some training in economics who dedicated eight years of research (1995-2003), most of it embedded with his subjects living and working alongside them, to trying to understand better than has ever been understood before how it is, exactly, that people survive in an urban ghetto: what do they do all day, where does the food that feeds them come from, how do they survive the brutal winters and the summers, how do they deal with crime in a neighborhood where, at most, the cops come every 20th or so time you call them, and never stay longer than an hour or two before going back to some neighborhood that actually has property values left to protect? What he found surprised him; if you haven't lived that life, it'll probably surprise you several times, too. But more about that later; here's why it's important to you:

The older people in this south Chicago neighborhood, a couple of blocks from where Cabrini Green used to be, reminded him that they remembered a time when, due to harsh segregation both of housing and economics, south Chicago had black poor people, a thriving black middle class, and a modest group of wealthy blacks. When housing desegregation came, those middle class and rich people left that neighborhood, commuting back in to their old family churches but otherwise never seen again ... and that was in the 1960s. The neighborhood he studied is one that is almost entirely literally post-economic, in exactly the way that your life is going to be: a place with few honest imports, and few honest exports, a world down to its last couple of people living anything that you or I would recognize as a middle class way of life. A world where only 4% of the population has the luxury of never doing business with people who are, at least technically, criminals ... not coincidentally, the 4% of the population who have jobs nowhere near the neighborhood and who don't socialize with anybody near where they live. A world where technically 20% of the population was unemployed even before the 2007 financial collapse, and where 40% were unemployed by the broader (U-6) measure of unemployment. But on the other hand, it's also a world where almost literally everybody works, actually works, at least an 8 hour day, frequently a 10 to 16 hour day ... just, mostly, off the books, getting paid 25¢ to $2.00 a day plus barter.

And yet, they live. They, and their parents, and in some cases their grandparents, have lived without anything you would recognize as a middle class standard of living for longer than most of you have been alive. One that goes almost entirely without reliable health care, and certainly goes without anything resembling honest law enforcement. A life that includes bouts of sleeping in abandoned buildings or basements or alleys for nearly everybody, at least a couple of times in their lives, lives that are shorter than you were lead to expect and you're not going to get now. They come to the bus stop after the last bus has left, or hang out on stoops of abandoned buildings during the day, or make out with each other on thown-away alley couches because, crammed 20 or 30 people per house, that time outdoors is the only privacy they get. (If you think Facebook is eroding your privacy, wait until you find out what poverty will do to it.) And the ghetto is a horrifically awful place for children, and they know that; even the prostitutes and the drug dealers struggle with how can they better provide for their children with no more resources than they have and no more help than they're going to get, without sacrificing what little income the community has that feeds those children?

It is not a life that you would want, although if you're a majority voter in the 85th percentile of income and up, it is a life you think is entirely fair for people who deserve less than the truly deserving do, the 15% of us you consider to be the only productive members of society. And it is, as that majority of the upper-middle-class and the wealthy will certainly argue, a life that is humanly possible, and one that has love in it, and even occasional moments of happiness, for almost everybody. And if you're not in the 85th percentile by income or above already, and you don't know how you, personally, will live, when the people you think of as "middle class" and that your rulers think of as "the poor" or "the working class" are reduced to ghetto levels of poverty and scarcity and danger? This is the best book that I've found, yet, to get you started about asking yourself this question: when it comes to that, which of these people do I want to be like? How will I live?

Will you be like one of the three truly powerful women he got to know, in the neighborhood -- women who owned big but run-down houses free and clear, who operated off-the-books boarding houses to the hustlers and prostitutes? Or will you be one of the prostitutes, or will one of your family members be one of the prostitutes who bring home the money so that once in a rare while the family can afford some fenced black-market penicillin or the occasional tooth extraction? Will you be one of the three or four shade tree mechanics per neighborhood, undercutting the above-board garages while paying a couple of bucks a day in protection money to the local street gang so you can work unmolested in an alley, giving the corrupt cops deep discounts on their oil changes so they don't run you in? Will you be the woman who runs an illegal unlicensed catering business, selling $2 lunches to the construction workers around town who work on the rich peoples' houses and office buildings, or one of the army of street hustlers getting paid $2 a day plus lunch to hand-deliver those meals for her? Will you be one of the hustlers who interviews and vets homeless people, getting paid a small commission by the property owners of the empty properties, to find reliable homeless people willing to get paid $1 to $2 per week plus free rent to sleep in the basements of those properties to ward off the copper thieves? Or will you be one of those homeless people? Or will you be one of the less reliable homeless people, who get paid $1 a week or less and the bartered right to use a store's bathroom, store your stuff in its storeroom, sleep under cardboard in the alley behind it, and sleep indoors on the stockroom floor during (and only during!) the worst couple of nights of the year, in exchange for a promise to be there, in that alley, from sundown to sunup to call the police or the fire department or the street gang if needed? Will you join the gang, and provide contract negotiation services between hustlers and their clients, and security that sometimes does extend beyond the protection racket to the trying-to-be-above-board stores? Will you own one of those stores? Or will you be the guy selling (probably shoplifted) socks and underwear for $2 as you walk down the street or in the park? (Or, to pick an example I see every time I take the train, the guy selling pirated DVDs of newly released movies for the same price?) Will you be one of the storefront pastors who try to keep peace in the neighborhood, and try to provide for the children, even though most of your salary and all of your church's rent are covered by the $2000 per gangland funeral you collect?

Unless you are already in the 85th percentile or above, you need to read about these people's lives, and ask yourself which of their niches you will fit into when the ghetto comes to you. Because only when you find one or two that you could be comfortable in can you start to plan, and only once you start to plan can you begin to be prepared, and only when you're prepared can you put your mind at rest. Only then will you be ready to get on with the rest of your life in what reduced standard of life, like the reduced standard of life after any loss, will pass for happiness. Only then will you be ready for acceptance.


nebris: (Default)
The Divine Mr. M

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