The Rich Get Richer is a Stark Reality of Modern-Day Capitalism…
Those who tout how great the economy is, they’re likely looking at the wrong statistics. And they might be among the upper crust of society mostly benefiting from our uneven economy. We continue to witness the working class falling further behind, with accelerating trends & current fiscal policies largely enriching the top earners. If tax cuts are really the magic elixir as GOP doctrine stipulates, it really needed to be primarily targeted for the middle class, rather than last year’s tax cut bill for the rich they falsely assumed would trickle down. So the bill managed to help the rich get richer while saddling America with escalating debt. And we have yet to touch the nagging issue of so many workers unable to land jobs paying a livable wage!
Below are articles on our structurally uneven economy along with great insights from Rubio & Kasich. In part 2 my basic warning to Americans often is don’t think fascism couldn’t come to America. But here in part 3 I often warn don’t think socialism couldn’t come to America if we don’t soon find some way to essentially fix capitalism. Hard work must be rewarded again, not exploited. This rich get richer system we find ourselves stuck in robs typical Americans of opportunity & upward mobility, as seen in this opening to the article inside to-save-america-we-must-rebalance-our-economic-system
America’s economic system is a mix of free-market capitalism with government actions and controls. It evolved along with our nation. Many of us came to believe this system rewarded hard work and was fair. Globalization and technological change challenged this belief. Increasing economic rewards to “knowledge workers” — people who work with their minds, not their hands — unintentionally weakened it further. Emphasis on efficiency and competition, untempered by our values and a long-term view, has undermined trust in the system’s fairness and rewards. The result is that a large number of Americans now see their economic system as unfair; they see opportunity declining, and income inequality significant and growing. Globalization and technology can unleash capitalism’s creative destruction. The disruptive impact it has on people’s lives must be mitigated. Our education system should respond to the need and offer paths to more competitive job skills. Areas hit hard by global competition or technology obsolescence need and deserve assistance in adapting. Concentration of wealth and political power in corporations and a new “aristocracy” has advantaged some, but has reduced opportunity and made our economic system less fair for many. Granting corporations the same rights as people facilitated this concentration. So did this “aristocracy” composed of financial, information and knowledge workers who rose to success by talent and merit. Working with and for corporations they engineered changes to the rules by which our economy runs. The result is a system that richly rewards financial transactions and values short-term competition and efficiency. It ignores long-term risks and costs such as worker dislocation. It allowed the influence of a few, concerned only with short-term financial gain, to become too big.
We Americans consume too much. We know we will be better off if we save more and invest those savings in the future. It is up to us to self-discipline and own the consequences of our over-consumptive behavior. Neither markets nor government can do that for us. The inability of our government to address the flaws within our economic system is, in part, because of the influence of Americans who believe that smaller government is always better for the country. They champion ideal free-market capitalism. While spotlighting the risks of overactive government, they discount the need for those functions that bring order to our huge, complex economy. Supply-side economics asserts that minimal regulation and taxation will create a rising tide that boosts prosperity. It has been an ally of those favoring minimalist government. Additionally, many of us have become “hyper-individualized” by information technology that gives everyone a voice and choices like never before. This undermines responsibility and accountability for shared needs. As a result of these influences, government action to reform our economic system gets labeled as “welfare state socialism” that threatens “free-market capitalism.” This false characterization further polarizes and incapacitates us.
Another Article on the Typical Struggling American
And it’s based on the common & largely accurate premise that only the rich get richer. The dilemma we face is further discussed in this last part to the article blind-sided-by-a-national-decline-like-that-snow-storm-we-did-not-expect, which includes the stat that household net worth is still 20% lower than in 2007. No wonder there’s such a high frustration level out there:
It is manifested in the disconnect between how the news media describes America to itself and what happened on the ground in the country after the 2008 meltdown. The Obama administration, faced with the prospect of the global economy sinking, applied a top down remedy that provided life boats for Wall Street and let Main Street America take on water. That had consequences and set up Donald Trump’s electoral victory because he gave voice to the Main Street discontent the bi-coastal elites could not hear because everybody they knew was doing well. And so, they failed to see the funnel cloud of blue collar discontent that would tear through 70 counties in the rust belt that had twice voted for Obama and flipped them over to Trump. It was every bit as unanticipated as the Nov. 15 snow storm. How did the people whose business it was to know not see the Trump twister? They were informed by aggregate data points on national unemployment that painted the sanguine picture of the Obama “recovery.” But this national data upon which markets and governments rely entirely remain largely irrelevant because no one lives in the aggregate.
As New York Times columnist David Leonhardt recently pointed out, these existing data points don’t capture lingering wounds from the financial crisis including “millions of people — many of whom were already anxious about the economy— feeling much more anxious, if not downright angry.” “The trouble is that a handful of statistics dominate the public conversation about the economy despite the fact that they provide a misleading portrait of people’s lives,” he writes. “Even worse, the statistics have become more misleading over time.” Post Great Recession, wealth inequality and income disparity have only gotten worse as stock ownership is increasingly concentrated in fewer and fewer hands. “That’s why the net worth of the nation’s median household is still about 20 percent lower than it was in early 2007,” according to Leonhardt. As it turns out, when you lose $20 trillion dollars in American household wealth the impacts are lingering and generational and undermine the notion that each generation will out perform the last. Add in the $1.5 trillion dollars in student debt that hangs around the necks of our millennial like a millstone, and you have the makings for a growing underclass of Americans. Leonhardt suggests that the unemployment rate, which he reports originated as the brainchild of Civil War officer as a way to assess the economic impact of the Panic of 1873, is too dated to be useful.
I would nominate our national life expectancy as one of the data points we should include in our new national assessment of our socio-economic well being. Our life expectancy has declined for the last three years, thanks to continued spikes in suicide and opioid addiction. We have always treated that statistic when it came to assessing other nations as a basic make or break gauge of a country’s relative success or failure. But when it shows us coming up short our pre-programed “we are the greatest country on earth” propaganda mantra kicks in and we just ignore the big picture or rationalize that premature death from suicide or opioid addiction is often the consequences of bad choices made by individuals we are probably better off without as a society. To find an equivalent multi-year — back to back — decline in the annual American life expectancy you would have to go back to the years covering 1915 and 1918 which included World War I and the catastrophic flu epidemic that killed close to 700,000 in the United States. This decline has been decades in the making and has come in slow motion like a giant ocean liner with microscopic cracks below the waterline and we ignore it at our peril. Because our media narrative is dominated by the incessant hum of happy talk up-selling we’ve missed this slippage in our national circumstance.
Americans mired in Financial Stress affects their Mental & Physical Well-Being…
While the rich get richer. We need to orchestrate an economy providing shared prosperity that unleashes American initiative. We’re seeing inside americans-stuck-in-place-even-as-economy-booms there’s a lot less moving around these days. How’s this for a formula many are confronted with; financial stress = mental stress = health issues. That is pointed out in this beginning to one-big-reason-americans-are-so-stressed-and-unhealthy:
Americans are drowning in financial troubles. Credit card debt hit a record high this year at more than $1 trillion, according to the Federal Reserve. Student loan debt has jumped 150% over the span of just a decade. And not only are we drowning in debt, we’re not saving. About 1 in 4 Americans don’t even have a single dollar saved for an emergency. All of this takes a big toll on us: A survey by the American Institute of CPAs found that more than half of Americans with debt say that it’s negatively impacted their lives. What’s more, money is the No. 1 cause of stress for Americans, according to data from the American Psychological Association. “Regardless of the economic climate, money and finances have remained the top stressor since our survey began in 2007,” the results revealed. And now a new survey released Thursday by online lending marketplace LendingClub reveals that Americans who report poor financial health also tend to have poor physical health. Indeed, they are significantly less likely to practice healthy physical habits (59% do not get routine check-ups and 60% do not get regular exercise) and are more likely to skip preventative health measures due to cost (38%). “Bad wealth begets bad health,” the survey concluded.
Read this Entire Article!
Rubio wrote an excellent article here on what’s wrong & what needs to be done, accurately articulating the responsibilities we should place on political leaders from both parties. Posted here is the conclusion to help-working-class-voters-us-must-value-work, but click on the link for the whole thing:
Rebuilding the dignity of work means fighting for a work life that suits the needs of our workers. By recognizing the legitimate value of labor organizations and embracing creative ideas for restoring their importance in workers’ lives, we can better align the interests of our economy with the dignity of workers. For too long, government and business leaders alike have stood back and endorsed supposedly unstoppable global forces that have made life harder for working Americans. But inaction will not restore the dignity of work or usher in a new American century that values dignified work and wages like the last one. The 21st century offers a real opportunity to reconstruct the great American middle class. By making companies and workers more productive, helping students be better prepared, and improving the working lives of the working class, we can create fields and industries that never existed before, offering careers and jobs that pay decent wages and provide stability to working families. The “dignity of work” is not an ideology, nor is it a total theory of what is wrong with our country, however much we may crave one in a polarizing time. It is the lived reality of Americans: the day-in, day-out work to provide for their families and build a future for their children that is better than what they had to begin with. The “dignity of work” is both a recognition of how hard it is to achieve the American dream, and the reward for getting there. To begin rebuilding a flourishing nation, we need to remember that, and make dignified work possible for the many.
Every The VORACS Part 3 section in 2018 had Articles about the Tax Bill
Because we’ve exposed it for the boondoggle it really is! Trump’s poorly thought-out tax cuts from last year were all about helping the rich get richer. And that tax bill actually provides incentives for companies to move their operations to other countries, the exact opposite of the intended effect, which is explained inside the-tax-cuts-and-jobs-act-kneecaps-american-factory-workers. Trump supporters who bought into Trump’s promise of MAGA, & now they’re hearing the prez boast of the greatest economy ever as their personal situation hasn’t improved, should rightly be furious.
On the economic front, political leaders should by far make the #1 priority getting these struggling/discouraged workers back into productive jobs, whatever it takes. Automation & other factors are replacing many traditional blue-collar jobs, so we need to create brand new occupations that don’t require a college degree. It’s a big challenge, but we must stir up the determination to make it happen! These excerpts were pulled from robots-trump-country-jobs:
The growing use of work robots and the deployment of artificial intelligence have been most disruptive in just those areas of the country that provided President Trump with crucial margins of support in 2016. In a paper that was published earlier this year, “Robots and Jobs: Evidence from U.S. Labor Markets,” Daron Acemoglu and Pascual Restrepo, economists at M.I.T. and Boston University, demonstrate that the Midwest and sections of the South have far higher ratios of robots to population than other regions of the United States. They calculate the job losses resulting from the addition of one robot in a “commuting zone.” Their bottom line: “one more robot in a commuting zone reduces employment by about six workers.” These job losses are concentrated in blue collar occupations. Donald Trump’s $1.5 trillion tax cut has increased incentives to replace workers with robots, contradicting his campaign promise to restore well-paying manufacturing jobs in the nation’s heartland. The Trump tax bill permits “U.S. corporations to expense their capital investment, through 2022. So, if a U.S. corporation buys a robot for $100 thousand, it can deduct the $100 thousand immediately to calculate its U.S. taxable income, rather than recover the $100 thousand over the life of the robot, as under prior law,” Steven M. Rosenthal, a senior fellow at the Urban Institute and a specialist in tax policy, wrote me by email. One of the most striking developments in recent decades is the ongoing decline in work force participation among men, from 88.7 percent in July, 1947 to 68.7 percent in September, 2010, according to the Federal Reserve. This drop in participation has been sharpest for men without college degrees.
Taxes & Deficits
President Bush 41 in 1990 had the insight & courage to respond to economic circumstances on the ground, passing a fiscally-responsible tax bill that was the right remedy for its time: george-hw-bush-donald-trump-budget-deficit-taxes. It’s the exact opposite of what we’re currently getting from Trump: trump-tax-cuts-putting-america & also us-deficit-in-november-soars-to-205-billion. And by gutting the IRS budget, more of the wealthy can get away with cheating on their taxes (hopefully not to the same extent Trump himself committed tax fraud for his own business): rich-people-are-getting-away-not-paying-their-taxes. Yep, until we adjust the system, the rich get richer.
As chairman of the House Budget Committee in the late 1990’s, Kasich was instrumental in orchestrating the last time our nation balanced its budget. We’re a long long ways from doing that now, so John has some valuable advice for us as seen in this first part to the article john-kasich-when-will-we-stop-ignoring-that-21-trillion-pound-gorilla-sitting-in-plain-sight:
Do deficits matter? Clearly, the White House and a substantial number of congressional Republicans can’t decide. On one hand, they sound like cost-cutting deficit hawks when out on the stump or issuing tweets. But once the TV lights go off, they turn tables to support record spending and deficit-driven borrowing that have left us with an unprecedented burden of national debt — more than $21 trillion today and counting. So which is it? Do deficits matter or not? Because if they do — and I count myself in that corner — then the U.S. economy and all of us who depend on its well-being are in deep trouble unless we turn things around fast. It’s a mystery to me why political leaders and commentators who fashion themselves as conservatives could think or act otherwise. For as long as I can remember, increasing deficit spending and national debt topped the list of conservative taboos. An even bigger mystery is why deficits and debt were not hotly debated in the recent midterm elections. Every other issue, ridiculous or sublime, got a full airing, but the 21 trillion-pound gorilla sitting there in plain sight was ignored by both parties and the media as well. These issues deserve full discussion. Deficits, debt and their root cause — spending — truly matter. Over the long term, deficit spending is detrimental to economic growth and national prosperity. And as deficit spending continues, its adverse effects add up over time. When workers, businesses and entrepreneurs use savings to pay for increased government spending and borrowing, that leaves them with less to invest in small businesses or initiatives; less for capital improvements and innovations that enhance productivity; and less to put aside for inevitable downturns or unforeseen events. The bottom-line result is less growth and innovation — and pressure to take on even more debt.
Our ability to restrain spending and thus control the nation’s debt sends an important signal to financial markets that the United States is a stable, welcoming place for job creation and investment. Deficits and debt made inevitable by overspending send a far different message. So for those of us who believe that deficits matter, what’s our solution? I look back to my days in Congress on the House Budget Committee. As committee chair, I worked with the Clinton White House and leaders in both chambers to hammer out the Balanced Budget Act of 1997, which led to slower spending growth, lower capital gains taxes, lower debt held by the public and some first steps toward controlling entitlement costs. That happened because of good-faith, bipartisan collaboration and some honest political give and take. Sadly, that bipartisan spirit didn’t last. After a few more balanced budgets, the old problems of deficit spending returned, driven in large part by the costs of nation-building, unpaid-for tax cuts and a continuing failure to address entitlement reform. Controlling spending was no longer a bipartisan goal, and it hasn’t been for all the years since. The only way to solve our present dilemma and return some fiscal sanity to Washington is for leaders on both sides of the congressional aisle and both ends of Pennsylvania Avenue to rediscover a way to work together on the problems they were sent to Washington to solve. I know it can be done because I once helped make it happen in Congress, and now we’ve made it work for eight straight years of structurally balanced, cost-cutting budgets in Ohio.
The Possibly Good President
Whatever value that may come out of the Trump presidency, as risky as this tariffs gambit is, the hope is to strike equitable trade deals with China. I’ve been complaining for decades how China is picking our pockets by manipulating various factors giving them an unfair advantage. I actually applauded Trump years ago for blowing the whistle on those unfair trade deals, but I never thought at that time America would someday elect him president. Maybe he has time to strike a breakthrough Chinese deal before his many crimes implode his presidency. But such negotiations aren’t so cut & dried, being more complicated with many nuances: china-rise-decline-usa-xi-trump.
The Decidedly Bad President
Nothing our despicable racist/bigoted/xenophobic president does should surprise us anymore, but then we discover more new sins against humanity which continue to shock us: trump-administration-deport-vietnam-war-refugees. To go after refugees who’ve practically lived their whole lives here is inexcusably heartless, but he does it to be in simpatico with the extremists in his base. And the prez is still lying about a main rallying cry (build the wall) for his base: trump-schumer-pelosi-shutdown-meeting-mexico-pay-for-wall-usmca-nafta-trade-deal. New sections of the wall are not currently being built & Mexico is not going to pay for it! And he’d actually be proud of a shutdown over this?: trump-border-wall-government-shutdown. And how are we treating those migrant kids?: guatemalan-girl-death-ice.
If not for Echo Lies & a Gullible Base, Trump’s Numbers would Tank
This polling does offer hints at a popularity nosedive, seen inside trump-its-all-downhill-here & also map-how-trumps-approval-ratings-fare-in-each-state. As more crimes & lies are exposed, look for the president’s polling numbers to hopefully start a permanent decline. With my former party going off the deep end, I now side with the Blue Dogs: blue-dog-democrats-are-poised-to-play-a-crucial-role-in-the-next-congress.
Peace on Earth
Sometimes we need to leave the circus mayhem of politics & the world behind & get into the Christmas spirit. As we celebrate the day we recognize as the Lord’s birthday, it’s going to require trust in the Lord to ever achieve such a lofty goal:
https://www.youtube.com/watch?v=0_DxNpW1kHQ
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