Economy Section….
The related articles below start off with reports on how the working middle class continues to lose ground, which is at the heart of the anger that got Trump elected. He won because he identified & spoke to that frustration, but the problem is he has never had any sense how to fix it. As I’ve commented often the past few months, the temporary sugar-high from the tax cuts was very shortsighted & don’t really get at the core of our problems. Sure, corporations out there are expanding & some employees will enjoy the benefits, but the labor force in totality still lack a strong voice & any leverage to really make the significant gains they’ve been lacking for decades. Now that we’re seeing numbers those massive corporate tax cuts are trickling down to workers at around 3%, with the corporations themselves taking 97%, it indicates trickle-down is more of a trickle-dud. That might explain even in an overheated jobs market, we still aren’t seeing wage growth. Especially considering those Trump tax cuts look as though they could be instrumental in higher deficits, higher inflation & higher interest rates, which may actually wind up tanking the stock market & strangling growth (finance/economy/jpmorgan-corr
So when it’s all said & done, the path we’re on still won’t allow a large portion of the middle class to get ahead. The tax cuts touted to help middle class workers, it only makes our economic inequality worse as the benefits are being pocketed by the corporations, which I’ve been harping on & will continue to harp on. The perception of a strong economy does help fuel actions which help the economy, but such optimism fades if it’s not soon reflected in the paychecks. The anger that sparked the Trump rise will wind up looking in a different direction once they realize Trump policies aren’t really helping them. But whatever leader or movement they opt for might be even worse than what we currently have, as the agitation felt by workers who’ve fallen through the cracks could wind up supporting a socialist, authoritarian or who knows what type of regime might be voted into power. So if our modern-day free market capitalist system can’t provide a more shared economic growth, & prove to the people we’re trending in a positive direction rather soon, I fear something far worse may take its place.
Here’s an article white-collar-jobs-
ERIE, Pa. — With the abandoned smokestacks off the bay and ramshackle factories along 12th Street, it’s easy to pin the blame for this industrial city’s plight on the loss of manufacturing jobs to China and Mexico. Many, including President Donald Trump, hold the belief that shuttered factories are what primarily ails Erie and other aging blue-collar company towns. Yet since 2008, Erie has suffered a less-known and potentially more devastating exodus of well-paying white-collar jobs. Half its CEOs — 220 jobs — have disappeared. The city has shed 8 percent of its accountants, 10 percent of its computer workers, 40 percent of its engineers and 20 percent of its lawyers, according to government data analyzed by The Associated Press. They are the professional class jobs that buttressed Erie’s manufacturing might. And they are the type of work that has increasingly become the backbone of the U.S. economy.
After reviewing Labor Department figures dating to 2008, the AP found that a third of major metro areas — nearly 80 communities — are shedding a greater percentage of white-collar than blue-collar jobs. In Ohio, such cities as Toledo and Canton have had a harder time retaining jobs in offices than on factory floors. It’s a similar story in Sheboygan, Wisconsin. And in Wichita and Topeka, Kansas. And Birmingham, Alabama. And Decatur, Illinois. “That’s one of the most painful aspects of the economic decline of these manufacturing centers: They get hit twice,” said Enrico Moretti, an economist at the University of California, Berkeley. “First, they lose the factories. But second, and most importantly, they lose everyone who was supportive of those factories.”
It’s that second hit that increasingly matters nearly four decades since U.S. manufacturing employment peaked. Without a foundation of white-collar jobs, it becomes difficult for these areas to reinvent themselves in an era when the economy more and more requires specialized knowledge and technological skill. “It’s painful because it makes it even harder for the community to recover,” Moretti said. Trump had rallied voters on the promise that he would restore factory jobs to revive areas that had lost them. But the data show how higher-paying occupations are abandoning smaller cities, taking with them a generation of workers who could otherwise start new companies or serve existing businesses.
Rubin makes some excellent points in diagnosing-democracys-woes-
From 1935 to 1960, the living standard of the average American doubled. From 1960 to 1985, it doubled again. Since 1985, it’s essentially been stagnant. This makes a huge difference in how people think about politics. They didn’t love politicians in the past; but in the end, they gave them the benefit of the doubt. Now, they are saying: I’ve worked hard all of my life, and I don’t have much to show for it. So it must be the fault of those politicians. Let’s try something new.
Not so long ago, it seemed as though democracy gave you all the good things at the same time: Democracies were the most powerful countries in the world. They were the most affluent. And they were also the most free. Under those circumstances, it was easy to tell ourselves that most people believed in democracy for the most noble of reasons. Even if it cost us dearly, we told ourselves, we would obviously choose democracy over the alternatives.
Well, the evidence of the past years seems to suggest that popular support for democracy has always depended on what political scientists call “performance legitimacy”–the ability of a political system to deliver the goods–to a much greater extent than we realized. So as people have grown frustrated with the ability of the democratic system to give them what they want, they have rapidly changed their attitudes about the system. That helps to explain why, as I show in the book, a lot of people around the world are giving less importance to living in a democracy, and becoming more receptive to authoritarian alternatives to democracy.
In part 2 diagnosing-democracys-woes-s
To win people back, we need to give them a realistic hope for a better future. In my mind, the 2016 elections were a competition between an extremist politics of change and a moderate politics of the status quo. Under those circumstances, the extremists can win. And that’s not because most Americans are extremists; it’s because they really want change. Now, I do think that moderate politicians can deliver on that desire for tangible improvements. Despite automation and globalization, they can help people take real control over their own lives. They can force big companies and rich individuals to pay their fair share of tax. They can make much bigger investments in education to raise productivity. And they can ensure that the bulk of Americans get to share in the fruits of free trade.
At the same time, it is also absolutely essential to make the case for democracy. If young people give much less importance to living in a democracy, and are even more open to extreme alternatives like army rule, part of the reason is that they don’t really know what’s at stake. Like the fish described by David Foster Wallace, they take the water in which they swim for granted. So it’s the task of all of us to remind our fellow citizens of the great benefits our political system gives us, from the freedom to live our own lives as we choose to the ability to determine our political fate collectively. And it’s also the task of the educational system to point out that, for all of our flaws, it is much better to be a citizen of the United States than one of, say, Iran or China or Russia or Venezuela.
It’s hard to square the late-Obama-era insistence that “America is already great” with the palpable sense that something — in the climate, in the economy, in society, in politics, in the wellspring of American ideas — is going badly wrong. What to do? The problem is much deeper than they allow. I don’t think business-as-usual but better is enough to fix what’s broken here. I think the problem lies at the root of the thing, with capitalism itself.
Americans appear to be isolated, viciously competitive, suspicious of one another and spiritually shallow; and that we are anxiously looking for some kind of attachment to something real and profound in an age of decreasing trust and regard — seem to be emblematic of capitalism, which encourages and requires fierce individualism, self-interested disregard for the other, and resentment of arrangements into which one deposits more than he or she withdraws. (As a business-savvy friend once remarked: Nobody gets rich off of bilateral transactions where everybody knows what they’re doing.) Capitalism is an ideology that is far more encompassing than it admits, and one that turns every relationship into a calculable exchange. Bodies, time, energy, creativity, love — all become commodities to be priced and sold. Alienation reigns. There is no room for sustained contemplation and little interest in public morality; everything collapses down to the level of the atomized individual.
I would support a kind of socialism that would be democratic and aimed primarily at decommodifying labor, reducing the vast inequality brought about by capitalism, and breaking capital’s stranglehold over politics and culture. I don’t think that every problem can be traced back to capitalism: There were calamities and injustices long before capital, and I’ll venture to say there will be after. But it seems to me that it’s time for those who expected to enjoy the end of history to accept that, though they’re linked in certain respects, capitalism seems to be at odds with the harmonious, peaceful, stable liberalism of midcentury dreams. I don’t think we’ve reached the end of history yet, which means we still have the chance to shape the future we want. I suggest we take it.
For decades the American worker has been neglected & cheated. With the GOP largely catering to their wealthy donor/corporate class & the Dems primarily focused on the needy, the issues of the working class were ignored as they kept losing ground. Even with the spiked enthusiasm from the tax cuts helping provide a very strong jobs report today, we’re still not seeing wage growth (nonfarm-payrolls-february). In excerpts below from another article revealing how the tax bill failed to specify stipulations for companies to qualify for the tax cuts, where it could be required a certain percentage is invested in workers &/or new plants & equipment. The legislation also failed to incentivize job training/apprenticeships. I’ve posted here most of the article from blame-congress-not-companies-f
Outrage over a slew of companies increasing share buybacks after the recently passed tax bill is misplaced. While it is insulting to be promised a deluge of job creation and wage increases only to see a tsunami of announced company share buybacks, consider who made it all possible: Congress. If you are in the camp of blaming companies for increased share buybacks following significant reductions in corporate tax rates, consider this: Congress had it within its power to tie corporate tax cuts to actual job creation and wage growth, but it didn’t. It could have based each company’s tax rate on its rate of job creation and on each company’s rate of wage growth. Instead, it passed tax reform giving universal and unconditional corporate tax cuts with no connections to job or wage growth.
While some may find it emotionally satisfying to rail against companies, unless voter anger is directed at Congress and leads to ousting those who voted for this seriously flawed bill, nothing will change. What makes it worse is that Congress should have seen this coming from a mile away. We’ve seen what happens to share buybacks when corporate tax rates decline — they increase. From 1999 to 2016, the effective corporate tax rate decreased from nearly 28 percent to 18.6 percent. Before the tax bill was passed, 46 percent of companies surveyed by Bank of America Merrill Lynch said they would increase share buybacks. This compares to only 35 percent saying they would use the extra cash on capital expenditures. Worse still, in an ominous sign that should have not been ignored, when the audience was asked during a Wall Street Journal CEO Council how many CEOs would use increased after-tax earnings to bolster investment, only a few hands were raised.
Adding insult to injury, not only are companies increasing share buybacks, some are firing Americans while pocketing significant tax-cut savings. As I previously wrote in an op-ed for The Hill, Walmart and Carrier Corp. announced almost 10,000 job cuts while Walmart and Carrier’s parent corporation, United Technologies, may potentially pocket nearly $3 billion in tax savings — in one year. But again, don’t blame these companies; blame Congress. They made it all possible. Why did Congress make such an egregious error? Because it wasn’t an error, it was intentional. Senator Lindsey Graham (R-S.C.) summed it up best when asked about not passing tax reform: “The financial contributions will stop.” So, in the end, it was as always about money. It wasn’t about getting a better return on taxpayer dollars. It was about future campaign donations.
There was, and still is, an alternative: An earned corporate tax cut (ECTC). Under an ECTC, only companies that increase hiring and wages would receive rate reductions. Companies would be “scored” based on the number of jobs they create in America, the percentage increase in jobs, percentage of their jobs based in America, wages paid, wage growth and whether they offer company provided health-care insurance. This merit-based approach to corporate tax cuts could reduce the ballooning tax-bill-related deficits we are likely to see as April and May corporate tax revenues are reported. Under the ECTC system, only companies that increase hiring and wages would receive tax cuts. It would allow greater tax cuts for the actual job creators by redistributing tax cuts currently being siphoned off by companies firing Americans or just not hiring. It would direct those funds to companies actually creating jobs in America.
I’m starting to sound like a broken record here, but another link corporate-america-
The tax bill was sold as a way to create jobs and boost stagnant wages. So far, at least, corporations have been showing more concern about shareholders than about employees or the economy as a whole. In fact, it is hard to imagine a better strategy for fomenting a backlash and ensuring that the new low rates don’t last. Just since passage of the law, companies have announced an astounding $200 billion in stock buyback plans, with some of the bigger ones coming from Cisco Systems ($25 billion) and Wells Fargo ($22.5 billion). For one thing, buybacks don’t have much direct impact on the economy. This is especially troubling in that Congress estimated that the tax bill would increase deficits by only $1.5 trillion over 10 years, because economic growth would generate $458 billion in new tax revenues. That growth won’t happen if much of the windfall goes into a form of financial engineering that does not do much to increase wages, hire workers or build facilities. Buybacks are also somewhat controversial, as they often come just as a stock is set to fall. Indeed, buying into nine-year rally would seem like a bit of questionable timing.
In addition to stock buybacks, companies have been doing other things to reward stockholders, including increasing dividends and reducing debt. In a poll by Morgan Stanley, companies said they intended to spend 51% of their windfall on these three things. Nearly 20% would go to mergers and acquisitions, which are, in essence, another form of stock buyback, one in which a company buys shares of a targeted company rather than its own. In fact, mergers tend to bring job reductions as companies seek efficiencies. Add this up, and you get a whopping 70% of the tax windfall going to shareholders in ways that have little impact on the economy, jobs and wages. The other 30% would be divided between 17% for capital expenses and just 13% for wage increases. Some companies have touted bonuses they have given out. Any bonus is welcome, but the numbers don’t lie. This is a tiny portion of the windfall. And the fact that they gave out one-time bonuses, rather than permanent raises, was telling. Even Goldman Sachs CEO Lloyd Blankfein called the bonuses “symbolic” and “not a significant thing.”
We have a clueless president who is increasingly operating without a competent White House staff. It’s unfortunately come down to the ones he trusts the most & basing his critical governing decisions on are seen on Fox & Friends. So please feast on the links below & share The Voracs with others, as we’re facing some long-term structural problems which the gang in charge are incapable of coming up with viable answers. The first group of Related Articles show how so many struggle with little hope in the current economic system. From there we have a group of links on the tax cuts, followed by articles the stock market is being propped up by a blind faith in Trump.
In a group with lots of links, it’s the trade/tariffs deal Trump just announced where the GOP have nearly unanimously broke from the prez. Knowing how stubbornly committed Trump is, GOP leadership have resorted to getting him to agree on exemptions like he did for Canada & Mexico. One core value Trump does believe in are protectionist policies. Another motivation for the prez on these tariffs is the optics going into a special election coming up in western Pa. Despite the risk to the macroeconomy, I’m not as much against tariffs as most are, since we can help protect our domestic industries if the tariffs approximate the equivalency of the trade barriers individual countries have always erected against us, plus it can be used as a bargaining chip with those countries in striking more fair trade deals. My views are undoubtedly shaped by the devastation I’ve witnessed through the years here in northeast Ohio, from communities & families put through total upheaval as their steel plants shut down, while driving through some of these areas resemble war zones. But naturally the concern is higher costs on steel & aluminum could cost jobs in other manufacturing sectors, like cars. We also must recognize bygone eras can never be recreated as they once were, so we need a national commitment & even crusade to best use modern tools & high technology, creating new careers & training workers for these jobs of the future which can support a family as those old factory jobs once did.
In the bottom links, there’s a whole section from the Washington Post on some of the dumb things our DC leaders are doing. If you exceed your monthly limit on the Post, they may request you subscribe. Then below that we see articles on a variety of topics. As much as California gets offended over the intrusion of their sanctuary laws (https://www.msn.com/en-us/
In other words, we have to understand who Ayn Rand is so we can reject her philosophy and dedicate ourselves to rebuilding the common good. The idea of the common good was once widely understood and accepted in America. After all, the U.S. Constitution was designed for “We the people” seeking to “promote the general welfare”—not for “me the selfish jerk seeking as much wealth and power as possible.”
Yet today you find growing evidence of its loss—CEOs who gouge their customers, loot their corporations and defraud investors. Lawyers and accountants who look the other way when corporate clients play fast and loose, who even collude with them to skirt the law. Wall Street bankers who defraud customers and investors. Film producers and publicists who choose not to see that a powerful movie mogul they depend on is sexually harassing and abusing young women.
Politicians who take donations (really, bribes) from wealthy donors and corporations to enact laws their patrons want, or shutter the government when they don’t get the partisan results they seek. And a president of the United States who lies repeatedly about important issues, refuses to put his financial holdings into a blind trust and then personally profits off his office, and foments racial and ethnic conflict.
The common good consists of our shared values about what we owe one another as citizens who are bound together in the same society. A concern for the common good—keeping the common good in mind—is a moral attitude. It recognizes that we’re all in it together. If there is no common good, there is no society.
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