Poverty is not inevitable

Poverty Is Not Inevitable: What We Can Do Now to Turn Things Around

Having poor people in the richest country in the world is a choice. We have the money to solve this. But do we have the will?

From Yes Magazine

 

Pearl Street photo by Eric Magnuson

Pearl Street, New York City. “This little girl and this man (I assume homeless) were talking, and they were laughing, smiling, and loving every minute of it,” writes photographer Eric Magnuson. “The little girl couldn’t care less what the man looked like or what situation he was in. She just saw him as another person.” Photo by Eric Magnuson.

 

Inequality and poverty are suddenly hot topics, not only in the United States but also across the globe. Since the early 1980s, there has been a growing underclass in America. At the same time a much smaller class, now called the superrich, built its wealth to levels of opulence not seen since France’s Louis XVI. Despite this, the resulting inequality went mostly unnoticed. When the Great Recession of 2008 hit, and the division between the very wealthy and the rest of us came starkly into focus, various people and groups, including the Occupy movement, began insisting more publicly that we tax wealth. But still, helping the poor has been mostly a discussion on the fringes. At last, the terms of public debate have changed, because inequality and poverty now are debated regularly in the mainstream media and across the political spectrum, not solely by labor, by the left, and by others imagining a new economy.

 

71 Cover LARGE.jpg

Inserting such a controversial topic into mainstream discourse is French economist Thomas Piketty. His 700-page tome, Capital in the Twenty-First Century, shocked everyone this year when it made The New York Times bestseller list and bookstores found themselves backordering an economics book for legions of eager readers. Piketty did exhaustive searches of tax records from Great Britain, France, and the United States, going as far back as the late 18th century in France. Using sophisticated computer modeling and analyses, the professor from the Paris School of Economics debunks a long-held assumption—that income from wages will tend to grow at roughly the same rate as wealth—and instead makes a compelling case that, over time, the apparatus of capitalism grows wealth faster than wages. Result: Inequality between the wealthy and everyone else will widen faster and faster; and, without progressive taxation, his data show we’ll return to levels of inequality not seen since America’s Gilded Age.

 

Piketty, no Marxist, says a solution lies in a “confiscatory” tax on wealth: Tax salaries over $500,000 at 80 percent worldwide, and tax wealth at 15 percent worldwide. Every year.

Unless we can reverse the inequality trends of the past 35 years, Piketty says, the ensuing social chaos will eventually destroy democracy. Unfortunately, not even Piketty sees much chance of all nations on Earth simultaneously enacting his tax plans.

But at least he sparked a widespread discussion. And fortunately, others have been digging deeply, thoughtfully into the same questions, and they have some practical as well as achievable ideas for reversing poverty and inequality trends.

Investigation

Pulitizer Prize-winner Hedrick Smith authored a pageturner called Who Stole the American Dream? Despite his whodunnit title, Smith reveals the perps long before you finish the book. The former New York Times reporter uses data and real-life stories to build a case against American CEOs and the politicians who do their bidding.

The Deliberate March Toward Poverty
America Keeps People Poor on Purpose: A Timeline of Choices We’ve Made to Increase Inequality

Between 1945 and 1973, Smith notes, U.S. workers’ productivity grew by 96 percent, and they were rewarded with a 94 percent increase in their wages. Between 1973 and 2011, years that parallel a collapse of the middle class, U.S. workers’ productivity grew by 80 percent, yet those evermore-productive employees saw only a 10 percent increase in their wages. Millions who created that wealth were thus pushed into poverty or to its precipice, while those who fancy a neomedieval economic system transferred billions in profits, generated by that labor, upward to themselves.

Gar Alperovitz is a professor of political economy at the University of Maryland. Like Smith, Alperovitz asks a question with his book’s title: What Then Must We Do? To be more accurate, he might have called it “Here’s What We’re Already Doing”—to create fresh models that can inspire a new economy.

What makes Alperovitz’s ideas valuable is that he not only lays out an array of alternatives already keeping people from poverty, but solutions we also can build upon to create strategies that, over time, might replace corporate capitalism.

And replacing capitalism no longer is farfetched. In 2013, Alperovitz was invited to address the Academy of Management, a group mostly of corporate advisers and business school professors with 20,000 members worldwide, “and the entire focus of the meeting was: Is capitalism over?—and, if so, where are we going?” Alperovitz pointed out during an extended conversation. “Even these people are now open to new ideas.”

Smith makes a similar point. The American system is now so obviously broken that even some corporate leaders are calling for a “domestic Marshall Plan” to repair our economy. From their thinking and others, he puts forward a proposal to reclaim the American Dream.

Start, he says, by creating a public-private partnership to generate 5 million new jobs rebuilding infrastructure—bridges, highways, and rail corridors. Increase government investment in science and high-technology research to bolster U.S. innovation and spur a manufacturing renaissance.

Make income tax fairer, which will decrease inequality, then fix the corporate tax structure so it promotes American jobs and curtails outsourcing. At the same time, force China to live up to ethical trading principles because that would generate up to 4 million U.S. jobs.

We can cut the Pentagon budget by $1 trillion—not much more than 10 percent of annual military spending—over the next decade, Smith says, and pump the money into this domestic Marshall Plan. We should also refinance millions of homes now “underwater” and strengthen safety-net programs such as Social Security and Medicare.

The bad news: Much of this new Marshall Plan depends on congressional action, where such ideas have little chance as long as the current gridlock prevails.

“Changing America’s direction will not be easy,” Smith says. “It will happen only if there is a populist, grassroots surge demanding it, like the mass movements of the 1960s and 1970s.”

Our political system is as broken as our economic system. But Americans could mobilize to reform electoral politics and reduce the influence of money in elections. And for those who are disenchanted with government, Smith recommends that they take a look at how well it’s working for the mobilized and active financial superclass.

In the meantime

While we’re working on mobilizing to take back our democracy, we can start from the bottom up to “democratize wealth,” as both Piketty and Alperovitz say we must. Alperovitz puts less faith in top-down institutions than does Smith (the subtitle of What Then Shall We Do? is Straight Talk About the Next American Revolution ). He lays out bottom-up solutions already in practice across America that offer superior alternatives to the status quo. Here’s a sampling:

Worker ownership.

It’s not just little startups and co-ops. Alperovitz points to the company ranked 48th on the Forbes list of the largest U.S. private companies: Hy-Vee, a Midwestern supermarket chain that currently has more than 69,000 employees and more than $8 billion in sales, is owned by employees through a profit-sharing program. W.L. Gore & Associates, makers of Gore-Tex, has been owned since 1974 by its workers—currently more than 10,000 in 30 countries generating annual revenues of about $3 billion.

Already, some 11,000 companies employing 10.3 million people operate under such employee stock-ownership plans, with more forming regularly.

Social enterprises.

Pioneer Human Services, in Seattle, is a textbook example of this model, a form of democratized ownership that uses the money it earns as well as the enterprises it creates to achieve broader social purposes. According to Alperovitz, a large portion of Pioneer’s $67 million annual budget comes from businesses it created. The organization produces thousands of machined parts for Boeing, caters more then 1,500 meals a day for hospitals and other facilities, and employs almost 1,000 people usually classified as impaired or unemployable. Pioneer is but one of many such social enterprises doing good and democratizing wealth.

Traditional co-ops.

Alperovitz says that more than 130 million Americans—more than 40 percent of the population—belong to one or more co-ops. Not just food co-ops but also agricultural co-ops, electric co-ops, insurance co-ops, retail co-ops (such as REI) and retailer-owned co-ops (such as ACE Hardware), health care co-ops, high-technology industry co-ops, artist co-ops, and credit unions. The Alliance to Develop Power, in Western Massachusetts, has developed what Alperovitz calls an $80 million “community economy” of housing co-ops and other cooperatively controlled businesses.

Community development corporations.

Almost 5,000 such organizations now operate in larger U.S. cities. These primarily incubate small businesses and develop low-income housing. In Newark, Alperovitz says, the New Community Corporation employs about 600 neighborhood residents, manages 2,000 housing units, and has built up $500 million in assets. Profits from its businesses, which include a shopping center, help support day-care and afterschool programs and a nursing home.

Land trusts.

Hundreds of these exist today, both urban and rural. By taking land out of the speculative market and democratizing ownership, such nonprofits prevent gentrification and support low- and moderate-income housing with development profits. By 2012, Alperovitz says, 255 land trusts were operating in 45 states and the District of Columbia.

Government-owned and operated businesses.

Today, more than 50 percent of cities larger than 100,000 are making municipal equity investments in local business. Now is the time, Alperovitz says, to expand these investments to co-ops, employee-owned businesses, social enterprises, and nonprofit land development. “If you’re going to get serious about systemic change—not just ‘projects’—you’re ultimately going to have to consider what government does,” he says, “and how it can be used to further the vision and the model you affirm.”

Already forms of this are happening from Cleveland to San Diego. One of the first was Boston, which in 1976 renovated historic Fanueil Hall, transforming it into Faneuil Hall Marketplace, a downtown retail center with 49 shops, 18 restaurants and pubs, and 44 pushcarts. Instead of turning things over to its joint-venture partner, Rouse Company, the city kept the property under municipal ownership and took profits in lieu of property taxes from Rouse. The strategy earned the city 40 percent more revenue that it would have collected in taxes.

Another example: More and more cities are building—and owning—hotels and using the profits to shore up their emaciated budgets. Dallas, Texas, not known for left-wing collectivism, opened the city-owned $500 million, 23-story, 1001-room Omni Dallas Hotel in 2011.

Transform too-big-to-fail-banks,

“Building from the bottom up, over time, is actually how you transform systems.”

and other private corporations that teeter on insolvency, into public utilities. The next time Bank of America’s risky scams threaten to implode the world’s economy, Alperovitz says we should bail out the bank—and assume public ownership of the corporation. If that idea seems radical, it arose from the militantly conservative economists of the Chicago School of Economics during the Great Depression.

“Every industry should be either effectively competitive or socialized,” wrote Harry C. Simon, one of the school’s revered thinkers. Simon and seven of his conservative colleagues proposed a “Chicago Plan” that called for public ownership of Federal Reserve Banks, nationalizing the creation of money, and turning private banks into highly restricted savings-and-loan associations.

Or, in Alperovitz’s 21st century version, “Take them over; turn them into public utilities.”

Need for strategy

Plenty of other ideas for democratizing wealth exist now, all of which can start small and scale up to large, even national enterprises that provide wellpaying jobs. But, Alperovitz cautions, “What hasn’t happened yet is that people haven’t seen this change strategically; they’re mainly developing ‘projects’—and I think the next level will be when people begin to realize that this could be a powerful strategy, not just for building a movement, but actually for building political power.”

At the moment corporations “certainly have the power. But I’m a historian; I think in decades,” he says, “not months. Power comes and goes. It could take 20, even 50 years,” adding that in the face of so much money and corporate power “it might not be possible to change the system.

“Or,” he adds, after a perfectly timed pause, “as in the case of ending apartheid; as in the case of the American Revolution; as in the case of the French Revolution; as in the case of the women’s revolution; as in the case of the fall of communism—building from the bottom up, over time, is actually how you transform systems.”

Share Button

Creativity becomes the defining feature of this Century.

From The RSA:

Posted: 27 Jul 2014 11:00 AM PDT

Economically, nothing much happened for 130 millennia of human history. Then 250 years ago all hell broke loose. So wrote the economist Eric Beinhocker and he was not wrong.

There were brief explosions of inventiveness, such as during the Roman Empire, but these would come to an end with the fall of the political system that sustained them. Average incomes improved at glacial rates: in the first century AD, most people could expect an income of around $1.20 a day; by the 18th, it had risen to $1.70.

This all changed in the late 1700s. Britain became the birthplace of an extraordinary revolution that would come to transform the world. Modern capitalism was being built on the back of an enormous flowering of commercial innovation: new machines, new products, new production systems, new business structures and new markets came to life.

Children learn in school that the Industrial Revolution lasted from about 1760 to 1820. But the revolution never stopped. There is a clear line of continuity from the opening of Arkwright’s Cromford textile factory in 1771 to Stephenson’s Rocket in 1829 to Carnegie’s Pittsburgh steelworks firing in 1875 to the production of the first Model T in 1908 to Toyota’s ground-breaking move to flexible production in the 1970s.

The impact was enormous. Average global incomes grew tenfold in just eight generations. Public healthcare took unimaginable strides and communications networks advanced rapidly. Millions now travel internationally every day and mass education is widespread.

The debates about why this happened have raged ever since, but what they miss is that something very human was released in the 1760s: the power to create. The human compulsion to turn ideas into reality suddenly intensified and has kept intensifying ever since. A switch was flicked and, thankfully, it has proven very hard to turn off. We are entering what could be the most impressive phase in this history, a period when creativity is driven not by an entrepreneurial elite backed by technical specialists, but by everyone. All hell looks likely to break loose once again.

Creative times

For many years, the way of creating and selling things, whether a manufactured product or a service, has been well established. During the past century, the modern corporation turned the creative process into a highly segmented system where each element had its own department.

Typically, the internal structures of the corporation were very hierarchical, but a powerful hierarchy also existed externally. The corporation actively created things and customers passively consumed them. Companies would use market research to find out what their customers wanted but, ultimately, the only way a consumer could be proactive was when deciding whether or not to buy a product or service.

In creative times, however, that hierarchy is disappearing. It began with the open innovation trend around the turn of the century as companies like Lego and Procter & Gamble discovered that letting customers in on some of the R&D and design work once carried out exclusively behind closed doors reaped commercial dividends. But the collapse of traditional creative hierarchies has accelerated rapidly since then.

This has happened most noticeably in industries that rely on information. Publishing, journalism and the entertainment sectors are going through a radical transformation, posing an existential challenge to the newspapers, networks and companies that once dominated.

However, this shift is now happening outside entertainment in new and unexpected ways. Airbnb, which lets people rent their homes or spare rooms for short periods, has hotel chains everywhere worried. Crowdfunding and peer-to-peer lending is transforming the way startups and, increasingly, growth businesses raise finance, taking it out of the hands of banks and venture capitalists. Even the highly controlled world of central banking is not safe, as alternative currencies such as Bitcoin and Litecoin seek to offer consumers an alternative to state-backed money. And soon the ‘internet of things’ – which allows everyday objects to send and receive data over the internet – will allow people to shape, in precise detail, the way their products are manufactured and their energy is generated.

The overall result of this is that concentrated forms of power are beginning to weaken. As the writer Moisés Naím has argued in his recent book The End of Power, hugely powerful institutions such as multinational corporations, nation states, newspapers and conventional armies find their authority being eroded year on year. Individuals and small groups, often benefiting from the networking power of the internet, are setting up their own initiatives and doing things their own way.

This is not to say that governments and corporations are devoid of all power – far from it – but the capacity of these bodies to enforce their will is spectacularly diminished when compared with 30 or even 20 years ago.

Reasons to be cheerful

This seizing by the masses of the power to create has huge benefits. The ability to create is a fundamental part of what it is to be human. Throughout history, philosophers and others have noted the inexhaustible capacity of humans to imagine an alternative way of doing something and then to turn that vision into reality. When we are being creative, we are more fully human and, as a result, more fulfilled.

Indeed, an important concept behind the rise of liberal democracy was the belief that greater freedom was a good thing, as it would allow humans to reach their full creative potential. This is a principle captured rather poetically by the liberal thinker Wilhelm von Humboldt (1767–1835) in a quote that hints at the promise today’s creative times may hold:

 …man never regards what he possesses as so much his own, as what he does; and the labourer who tends a garden is perhaps in a truer sense its owner, than the listless voluptuary who enjoys its fruits… In view of this consideration, it seems as if all peasants and craftsman might be elevated into artists; that is, men who love their labour for its own sake, improve it by their own plastic genius and inventive skill, and thereby cultivate their intellect, ennoble their character, and exalt and refine their pleasures.

But as well as being a good thing in itself, the power to create offers new routes to a better society. Establishing a world where millions can apply their ingenuity to solving problems is far more likely to bring about adequate solutions than one where this power is delegated to an exclusive elite. The enormous and continuing impact of the open-source movement is built on the principle that many minds can spot and solve problems far quicker and better than a few technicians.

But the power to create enables problems to be solved at an even deeper level. It has the capacity to develop completely new economic, political and social forms that better meet people’s needs. This is because they are designed by the people themselves, rather than handed down from on high.

The US writer Steven Johnson, for example, has noted how on-line peer groups have created a new world of information exchange and action that relies on neither the centralised control of the state nor the price mechanism of the market. Initiatives like NHS Citizen are showing how large organisations can now engage democratically with a huge population of users or customers.

Risks of revolution

This is, however, where the downside of the power to create has to be acknowledged. Mass creativity is a highly disruptive force. As we can see from the publishing and entertainment worlds, the radical shifts promoted by the power to create can lead to firms shrinking or going bust and people losing their jobs. It also, of course, leads to new firms and jobs being established, but that is little comfort to those suddenly shut out of labour markets because their skills are no longer needed. The risk is that this disruption, like the shifts in manufacturing in the 1980s and 1990s, will leave certain communities permanently excluded from economic and social well-being.

The other risk is that a counter-trend emerges simultaneously with the expansion of the power to create. Mass creativity relies on mass platforms like Google, YouTube and Facebook. This places enormous concentrated power in the hands of a new elite of internet companies just as other, older institutions’ power is dissolved. Clearly, as recent revelations in the media have shown, this situation can also offer new ways for the state to reassert its control of populations if surveillance is abused.

There is clearly an urgent need for business, government and civil society bodies to understand the rise of creative times and to respond adequately. Attempts to hold back the deluge will fail and only serve to damage those who try to do so.

Efforts by authoritarian governments, for example, to control social media may give them some short-term respite, but the longer-term implications for the competitiveness and development of those nations’ economies are negative. Equally, businesses that try to undermine disruptive competition by flexing their legal or political muscles – such as New York hoteliers’ attempts to ban Airbnb or the London taxi trade’s opposition to the car-hire app Uber – are short-sighted.

Searching for solutions

This is a revolution that needs to be embraced and encouraged. The benefits – in terms of human fulfilment, economic growth and quality of life – are too great to ignore. That must mean government, business and civil society asking hard questions about whether current education and training regimes are fit for purpose in creative times, whether intellectual property and other regulatory systems enable or stifle mass creativity and how sectors that have historically been less subject to major innovation, such as public services, energy and transport, can be opened up.

However, we also need the right response to the dangers of the power to create. Government- and business-led programmes to support and retrain those who lose their jobs need to be put into place. Communities that might be particularly badly affected by the changes must not be allowed to drift for decades, as was the case with the parts of the UK and the wider world that were once reliant on heavy industry. Targeted support and investment to help these areas adapt to a new economy centred on mass creativity need to be put in place rapidly, rather than years after the worst effects of economic and social deprivation have set in.

Finally, we need a robust regulatory environment for the internet that ensures it remains a space for the flourishing of unexpected and creative human endeavour driven by commercial competition and social innovation. It is too precious to become a tool for the promotion of the interests of a few giant companies or, worse, the expansion of the more secretive and authoritarian aspects of government.

 

Joseph Schumpeter, the economist who placed the “creative destruction” of capitalism at the heart of his analysis, once said that pessimism always seems more profound than optimism. As the global economy still struggles back to health almost six years after the banking crash, pessimism is certainly de rigeur.

But the releasing of the power to create could be the next big step in humanity’s progress. There is good reason to be optimistic but it is up to governments, business and civil society to make sure the potential is met.

Share Button

Global decline of wildlife linked to child slavery

From The BBC:

kidfish

New research suggests the global decline in wildlife is connected to an increase in human trafficking and child slavery.

Ecologists say the shortage of wild animals means that in many countries more labour is now needed to find food.

Children are often used to fill this need for cheap workers, especially in the fishing industry.

The decline in species is also helping the proliferation of terrorism and the destabilisation of regions.

According to a study in the journal, Science, the harvesting of wild animals from the sea and the land is worth $400bn annually and supports the livelihoods of 15% of the world’s population.

There’s a direct link between the scarcity of wildlife, the labour demands of harvests and this dramatic increase in child slavery”

Prof Justin Brashares University of California, Berkeley

But the authors argue that the rapid depletion of species has increased the need for slave labour. Declining fisheries around the world mean boats often have to travel further in harsher conditions to find their catch.

In Asia, men from Burma, Cambodia and Thailand are increasingly sold to fishing boats where they remain at sea for many years, without pay and forced to work 18-20 hour days.

“There’s a direct link between the scarcity of wildlife, the labour demands of harvests and this dramatic increase in child slavery,” said Prof Justin Brashares from the University of California, Berkeley, who led the study.

“Many communities that rely on these wildlife resources don’t have the economic capacity to hire more labourers, so instead they look for cheap labour, and in many areas this has led to the outright purchasing of children as slaves.”

This exploitation also happens in Africa, where people who once found their food in the neighbouring forests now travel for days to find prey.
Fishers to pirates

Children are often used by hunters to extract wildlife from areas that would be too costly to harvest.

The researchers contrast the outcomes of the collapse of fisheries of the north east coast of the US and in the waters off Somalia.
child The decline of fish stocks is increasing the need for slave labour to work on the boats

While in the US the decline was cushioned by federal subsidies to retrain fishermen, in Somalia the increased competition for fish stocks led to the rise of piracy.

“That’s how the whole Somali conflict started,” said Prof Brashares.

“Fishermen started going out with guns, trying to fine boats that were fishing illegally in their waters.

“Unfortunately some segment of that community said we can do much better by ransoming these boats that we can do by fishing.”

The rise in value of items like tiger parts and elephant ivory have led to an explosion of trafficking, by powerful groups to further their aims.

The authors point to the Janjaweed, the Lord’s Resistance Army, Al-Shabab and Boko Haram, which they say have all been involved in poaching ivory and rhino horn to fund terrorist attacks.

Other researchers say there is not enough data to support this claim.

Regardless of the strength of the evidence, the western response to these events has been to declare a “war on poachers”.

The authors believe that this is misguided, and is missing the bigger picture.

“We can continue to try and cover it up with little bits of enforcement,” said Prof Brashares.

“But until we start to address the bigger issue which is poor governance and the global free for all, we are not going to address the tide of conflict.”

The study says there are some approaches that can work. They argue that when local governments give fishers and hunters exclusive rights to harvest some areas, social tensions can be reduced.

They point to Fiji’s fishery structured around territorial use rights and in Namibia pro-active policies have helped to reduce poaching.

“The most important bit from this article, I think, is that we need to better understand the factors that underlie fish and wildlife declines from a local perspective, and that interdisciplinary approaches are likely the best option for facilitating this understanding,” said Dr Meredith Gore, from Michigan State University who wasn’t part of the study.

The research has been published in the journal, Science.

bankrob

Share Button

Wealth Inequality in America

 

 

Transcript

There’s a chart I saw recently that I can’t get out of my head. A Harvard business professor and economist asked more than 5,000 Americans how they thought wealth was distributed in the United States. This is what they said they thought it was.

Dividing the country into five rough groups of the top, bottom, and middle three 20% groups, they asked people how they thought the wealth in this country was divided. Then he asked them what they thought was the ideal distribution, and 92%, that’s at least 9 out of 10 of them, said it should be more like this, in other words more equitable than they think it is.

Now that fact is telling, admittedly, the notion that most Americans know that the system is already skewed unfairly. But what’s most interesting to me is the reality compared to our perception. The ideal is as far removed from our perception of reality as the actual distribution is from what we think exists in this country.

So ignore the ideal for a moment. Here’s what we think it is, again, and here is the actual distribution. Shockingly skewed. Not only do the bottom 20% and the next 20%, the bottom 40% of Americans barely have any of the wealth. I mean, it’s hard to even see them on the chart. But the top 1% has more of the country’s wealth than 9 out of 10 Americans believe the entire top 20% should have. Mind blowing.

But let’s look at it another way, because I find this chart kind of difficult to wrap my head around. Instead, let’s reduce the 311 million Americans to just a representative 100 people. Make it simple.

Here they are, teachers, coaches, firefighters, construction workers, engineers, doctors, lawyers, some investment bankers, a CEO, maybe a celebrity or two. Now let’s line them up according to their wealth, poorest people on the left, wealthiest on the right. Just a steady row of folks, based on their net worth. We’ll color code them, like we did before, based on which 20% quintile they fall into.

Now, let’s reduce the total wealth of the United States, which was roughly
$54 trillion in 2009, to this symbolic pile of cash, and let’s distribute it among our 100 Americans. Well, pure socialism, all of the wealth of the country distributed equally, we all know that won’t work. We need to encourage people to work, and work hard, to achieve that good old American dream and keep our country moving forward.

So here’s that ideal we asked everyone about. It’s something like this curve. This isn’t too bad. We’ve got some incentive, as the wealthiest folks are now about 10 to 20 times better off than the poorest Americans. But, hey, even the poor folks aren’t actually poor, since the poverty line has stayed almost entirely off the chart. We have a super healthy middle class, with a smooth transition into wealth. And yes, Republicans and Democrats alike chose this curve. Nine out of ten people, 92%, said this was a nice, ideal distribution of America’s wealth.

But let’s move on. This is what people think America’s wealth distribution actually looks like. Not as equitable, clearly, but, for me, even this still looks pretty great. Yes, the poorest 20% to 30% are starting to suffer quite a lot, compared to the ideal, and the middle class is certainly struggling more than they were, while the rich and wealthy are making, roughly, 100 times that of the poorest Americans and about 10 times that of the still healthy middle class.

Sadly, this isn’t even close to the reality. Here is the actual distribution of wealth in America. The poorest Americans don’t even register. They’re down to pocket change. And the middle class is barely distinguishable from the poor. In fact, even the rich, between the top 10 and 20 percentile, are worse off.

Only the top 10% are better off. And how much better off? So much better off that the top 2% to 5% are actually off the chart, at this scale. And the top 1%, this guy, well his stack of money stretches 10 times higher than we can show. Here’s his stack of cash restacked, all by itself.

This is the top 1% we’ve been hearing so much about. So much green in his pockets that I have to give him a whole new column of his own because he won’t fit on my chart. 1% of America has 40% of all the nation’s wealth. The bottom 80%, 8 out of every 10 people, or 80 out of these 100 only has 7% between them, and this has only gotten worse in the last 20 to 30 years.

While the richest 1% take home almost a quarter of the national income today, in 1976, they took home only 9%, meaning their share of income has nearly tripled in the last 30 years. The top 1% own half the country’s stocks, bonds, and mutual funds. The bottom 50% of Americans own only half a percent of these investments, which means they aren’t investing. They’re just scraping by.

I’m sure many of these wealthy people have worked very hard for their money. But do you really believe that the CEO is working 380 times harder than his average employee? Not his lowest paid employee, not the janitor, but the average earner in his company. The average worker needs to work more than a month to earn what the CEO makes in one hour.

We certainly don’t have to go all the way to socialism to find something that is fair for hardworking Americans. We don’t even have to achieve what most of us consider might be ideal. All we need to do is wake up and realize that the reality in this country is not at all what we think it is.

There may be small errors in this transcript.
Share Button

Empathy

empathy-400x400All of a sudden, the word “empathy” is on the lips of scientists and business leaders, education experts and political activists. Empathy is not just a way to extend the boundaries of your moral universe. According to new research, it’s a habit we can cultivate to improve the quality of our own lives.
But what is empathy? It’s the ability to step into the shoes of another, aiming to understand their feelings and perspectives, and to use that understanding to guide our own actions. That makes it different from kindness or pity. And don’t confuse it with the Golden Rule, “Do unto others as you would have them do unto you.” As George Bernard Shaw pointed out, “Do not do unto others as you would that they should do unto you. Their tastes may not be the same.” Empathy is about discovering those tastes.
The good news is that empathy can be learned. In my new book, Empathy: A Handbook for Revolution (Random House), I’ve honed six key habits that highly empathic people (HEPs) bring into their daily lives. So what does it take to teach yourself empathy?

Habit 1:
Switch on your empathic brain
The recent big buzz about empathy stems from a revolutionary shift in how scientists understand human nature. The old view that we are essentially self-interested creatures is being nudged firmly to one side by evidence that we are also Homo empathicus, wired for empathy, social cooperation, and mutual aid.
Over the last decade, neuroscientists have discovered that 98% of us have the ability to empathise. They have also identified a ten-section “empathy circuit” in our brains which, if damaged, can curtail our ability to understand what other people are feeling. Evolutionary biologists like Frans de Waal have shown that we are social animals who have naturally evolved to care for each other, just like our primate cousins. And psychologists have revealed that we are primed for empathy by strong attachment relationships in the first two years of life.
A good way to start switching on your empathic brain is simply to make a mental note every time you notice an instance of empathic thinking or action in yourself or others. Maybe you will spot your boss managing to see someone else’s point of view, or observe empathic cooperation between your children. Think of it as becoming an “empathy detective”.

Habit 2:
Make the imaginative leap
Highly empathic people make a concerted effort to imagine themselves in other people’s situations, like an actor who occupies the personality of their stage character. Making this imaginative leap can be boosted by “empathic listening”. “What is essential,” says Marshall Rosenberg, psychologist and founder of Non-Violent Communication (NVC), “is our ability to be present to what’s really going on within – to the unique feelings and needs a person is experiencing in that very moment.” HEPs listen hard to others and do all they can to grasp their emotional state and needs, whether it is a friend who has just been diagnosed with cancer or a spouse who is upset at them for working late yet again.
We all know, instinctively, that empathy is a great tool for maintaining healthy relationships. Just think of all those times you’ve been arguing with your partner and thought, Why can’t she understand what I’m feeling? What are you asking for? Empathy of course. You want them to step into your shoes, if only for a moment.
That’s why it’s worth practising empathic listening in your relationships. Next time things are getting tense with your partner, focus intently on listening to their feelings and needs – without interrupting (and this might just induce them to return the favour). You might even ask them to tell you about their feelings and needs. It’s amazing how doing this can prevent a niggling annoyance from turning into resentment or a full-scale argument. Ultimately, most of us just want to be listened to and understood.

Habit 3:
Seek experiential adventures
So you think ice climbing and hang-gliding are extreme sports? Then you need to try experiential empathy, the most challenging – and potentially rewarding – of them all. HEPs expand their empathy by gaining direct experience of other people’s lives, putting into practice the Native American proverb, “Walk a mile in another man’s moccasins before you criticise him.”
The writer George Orwell is an inspiring model. After several years as a colonial police officer in British Burma in the 1920s, Orwell returned to Britain determined to discover what life was like for those living on the social margins. So he dressed up as a tramp with shabby shoes and coat, and lived on the streets of East London with beggars and vagabonds. The result, recorded in his book Down and Out in Paris and London, was a radical change in his beliefs, priorities, and relationships. He not only realised that homeless people are not “drunken scoundrels” – Orwell developed new friendships, shifted his views on inequality, and gathered some superb literary material. It was the greatest travel experience of his life. He realised that empathy doesn’t just make you good – it’s good for you, too.
We can each conduct our own experiments. If you are religiously observant, try a “God Swap”, attending the services of faiths different from your own, including a meeting of Humanists. Or if you’re an atheist, try attending different churches! Spend your next holiday volunteering in a village in a developing country.
Next time you are planning a trip, don’t ask yourself, “Where can I go next?” but instead “Whose shoes can I stand in next?”

Habit 4:
Practise the craft of conversation
Highly empathic people have an insatiable curiosity about strangers. They will talk to the person sitting next to them on the bus, having retained that natural inquisitiveness we all had as children, but which society is so good at beating out of us. They find other people more interesting than themselves but are not out to interrogate them, respecting the advice of the oral historian Studs Terkel: “Don’t be the examiner, be the interested enquirer.”
Curiosity expands our empathy when we talk to people outside our usual social circle, encountering lives and world views very different from our own. Conversations with strangers can really help challenge our assumptions about people, so we get beyond our snap judgments about them based on their appearance or accent. It’s also a great cure for the chronic loneliness that affects one in four Westerners. No wonder happiness guru Martin Seligman identifies it as a key character strength that can enhance life satisfaction.
Cultivating curiosity requires more than having a brief chat about the weather. It involves talking about the stuff that really matters in life, like love, death or politics. Set yourself the challenge of having a conversation with one stranger every week. All it requires is courage.

Habit 5:
Travel in your armchair
If all of this is sounding a bit strenuous, you can always throw a little “armchair empathy” into the mix. This is about reading books and watching films that catapult our imaginations into other people’s lives that are vastly different from our own. Think of a movie like City of God, which reveals the violent world of two boys growing up in the shantytowns of Rio. Or the novel To Kill a Mockingbird, with its classic line, “You never really understand a person until you consider things from his point of view – until you climb inside of his skin and walk around in it.” In fact, there has been an avalanche of recent neuroscience and psychology research showing that entering other people’s lives through books and films is one of the best ways of learning to empathise.
It isn’t always easy to find the most inspiring and powerful empathy books and films, which is why – alongside my new book – I’ve just founded the world’s first online Empathy Library at www.empathylibrary.com. You’ll find the very best novels, non-fiction, kids’ books, feature films and video shorts all about empathy.

Habit 6:
Inspire a revolution
Empathy isn’t just something that happens between individuals. It can also flower on a mass scale and start shifting the contours of society itself. Many of those who took part in the Occupy Movement and Arab Spring were motivated by empathy – empathy for those whose lives had been ravaged by the financial crisis, or who had suffered police brutality. An important way to boost your empathy levels is to join with others to take action on empathy-related issues that matter to you – whether it’s child poverty or the fate of future generations whose lives will be affected by our addiction to high-carbon lifestyles. Even taking part in your local choir or playing five-a-side football are ways to engage in communal activities that break down the barriers between people and promote a more empathic world.
Empathy will most likely flower on a collective scale if its seeds are planted in our children. That’s why HEPs support efforts such as Canada’s pioneering Roots of Empathy, which has benefited over half a million school kids. Its unique curriculum centres on an infant, whose development children observe over time in order to learn emotional intelligence – and its results include significant declines in playground bullying and higher levels of academic achievement.
So now you’ve got some ideas for growing your empathy, let me leave you with a question. Who in your life do you need to develop more empathy with – and how might you go about doing it?

- empathy-600x412

Share Button

Ireland is a Tax Haven

Ireland. Ireland is a tax haven. The European definition of a tax haven is a country that cuts deals with foreign companies that don’t do any business there.

If Ireland were a legitimate low-tax country, all of Apple’s Irish affiliates would be paying the statutory 12.5% rate on their income. Instead, those Apple affiliates that do pay Irish tax appear to be paying a lower rate due to a special income calculation.

Moreover, the Irish holding company and the Irish principal company have not paid any tax to any government for the past few years. Ireland allows some Irish companies to claim non-residence if they are related to a company that is doing business there. That enables Apple’s Irish principal company—through which most of its sales income flows—to pay tax nowhere.

Nowhere income. Apple’s Irish holding company and its Irish principal company claim tax residence nowhere. These are the two entities through which Apple’s huge foreign revenues flow.

Irish law asks where a company is managed and controlled to determine its tax residence. U.S. law asks where the company was organized, that is, where papers creating it were filed (IRC section 7701(a)(5)). If neither country regards a particular corporation as a resident, no tax treaty mechanism assigns tax residence to the other. Apple’s nonresident Irish subsidiaries are not covered by the tax treaty between the United States and Ireland.

But because so much activity goes on in Cupertino, where the operations are managed, Apple’s foreign income may be considered effectively connected with a U.S. trade or business and taxable by the United States. The pertinent rules exempt income from sales of inventory for foreign consumption when a foreign affiliate with a foreign office materially participated in the sale. Apple may be relying on this exemption. (A fuller explanation is behind the paywall at www.taxanalysts.com .)

http://www.forbes.com/sites/leesheppard/2013/05/28/how-does-apple-avoid-taxes/

Apple has confirmed that two of its Irish subsidiaries pay around 2% in tax, however the company rejected claims that its Irish operation was used to avoid liabilities in the US.

Appearing before a US Senate hearing on tax, Apple’s head of tax policy Phillip Bullock confirmed that two Irish subsidiaries – Apple Operations Europe and Apple Sales International – paid approximately 2% in tax.

When asked about its reasons for operating in Ireland, CEO Tim Cook said that the company had received a “tax incentive arrangement” as part of its decision to establish here in 1980.

Apple pays $193m tax in Australia on $27b revenue as Federal Government vows to capture lost taxes……[06/03/2014]

WE MUST TAX THE RICH!!!

One share of Apple Computer stock, as of the close of trading on January 7, 2013 is worth $523.90 (AAPL on the Nasdaq). According to one investment site, 68% of the shares are held by institutional and mutual fund owners. The largest direct shareholder who owns the most stock is Arthur D. Levinson with 161,812 shares as reported on November 7, 2012.

Share Button

The Minority of the Opulent

Winnie Byanyima, the Oxfam executive director who will attend the Davos meetings, said: “It is staggering that in the 21st Century, half of the world’s population – that’s three and a half billion people – own no more than a tiny elite whose numbers could all fit comfortably on a double-decker bus.”

Oxfam also argues that this is no accident either, saying growing inequality has been driven by a “power grab” by wealthy elites, who have co-opted the political process to rig the rules of the economic system in their favour.

In the report, entitled Working For The Few (summary here), Oxfam warned that the fight against poverty cannot be won until wealth inequality has been tackled.

The following is a “Must Watch” video from Noam Chomsky given at Marthas Vineyard in the summer of 2013. It is a scathing attack on inequality backed by historical facts. Excellant!

Distribution of income in the United States has been the subject of study by scholars and institutions. Data from a number of sources indicate that income inequality has grown significantly since the early 1970s, after several decades of stability. While inequality has risen among most developed countries, and especially English-speaking ones, it is highest in the United States.

Studies indicate the source of the widening gap (sometimes called the Great Divergence) has not been gender inequality, which has declined in the US over the last several decades, nor inequality between black and white Americans, which has stagnated during that time, nor has the gap between the poor and middle class been the major cause—though it has grown. Most of the growth has been between the middle class and top earners, with the disparity becoming more extreme the further one goes up in the income distribution. Upward redistribution of income is responsible for about 43% of the projected Social Security shortfall over the next 75 years. The Brookings Institution said in 2013 that income inequality was increasing and becoming permanent, reducing social mobility in the US.

A 2011 study by the CBO found that the top earning 1 percent of households gained about 275% after federal taxes and income transfers over a period between 1979 and 2007, compared to a gain of just under 40% for the 60 percent in the middle of America’s income distribution. Other sources find that the trend has continued since then. In spite of this data, only 42% of Americans think inequality has increased in the past ten years. Income inequality is not uniform among the states; as measured by the Gini coefficient: after tax income inequality in 2009 was greatest in Texas and lowest in Maine.

Scholars and others differ as to the causes, solutions, and the significance of the trend, which in 2011 helped ignite the “Occupy” protest movement. Education and increased demand for skilled labor are often cited as causes, some have emphasized the importance of public policy; others believe the cause(s) of inequality’s rise are not well understood. Inequality has been described both as irrelevant in the face of economic opportunity (or social mobility) in America, and as a cause of the decline in that opportunity.

http://en.wikipedia.org/wiki/Income_i…

Wealth inequality in the United States, also known as the “wealth gap”, refers to the unequal distribution of assets among residents of the United States. Wealth includes the values of homes, automobiles, personal valuables, businesses, savings, and investments.[2] The top 10% wealthiest possess 80% of all financial assets.[3] Although different from income inequality, the two are related.

A 2011 study found that US citizens across the political spectrum dramatically underestimate the current US wealth inequality and would prefer a far more egalitarian distribution of wealth.[4] Wealth inequality in the U.S. is worse than in most developed countries other than Switzerland and Denmark.[5]

Wealth is usually not used for daily expenditures or factored into household budgets, but combined with income it comprises the family’s total opportunity “to secure a desired stature and standard of living, or pass their class status along to one’s children”.[6] Moreover, “wealth provides for both short- and long-term financial security, bestows social prestige, and contributes to political power, and can be used to produce more wealth.”[7] Hence, wealth possesses a psychological element that awards people the feeling of agency, or the ability to act. The accumulation of wealth grants more options and eliminates restrictions about how one can live life. Dennis Gilbert asserts that the standard of living of the working and middle classes is dependent upon income and wages, while the rich tend to rely on wealth, distinguishing them from the vast majority of Americans.[8]

Share Button

The Evil Rich

The world’s 100 richest people earned a stunning total of $240 billion in 2012 – enough money to end extreme poverty worldwide four times over, Oxfam has revealed, adding that the global economic crisis is further enriching the super-rich.
“The richest 1 percent has increased its income by 60 percent in the last 20 years with the financial crisis accelerating rather than slowing the process,” while the income of the top 0.01 percent has seen even greater growth, a new Oxfam report said.

For example, the luxury goods market has seen double-digit growth every year since the crisis hit, the report stated. And while the world’s 100 richest people earned $240 billion last year, people in “extreme poverty” lived on less than $1.25 a day.

Oxfam is a leading international philanthropy organization. Its new report, ‘The Cost of Inequality: How Wealth and Income Extremes Hurt us All,’ argues that the extreme concentration of wealth actually hinders the world’s ability to reduce poverty.

The report was published before the World Economic Forum in Davos next week, and calls on world leaders to “end extreme wealth by 2025, and reverse the rapid increase in inequality seen in the majority of countries in the last 20 years.”

Oxfam’s report argues that extreme wealth is unethical, economically inefficient, politically corrosive, socially divisive and environmentally destructive.

The report proposes a new global deal to world leaders to curb extreme poverty to 1990s levels by:

- closing tax havens, yielding $189bn in additional tax revenues

- reversing regressive forms of taxation

- introducing a global minimum corporation tax rate

- boosting wages proportional to capital returns

- increasing investment in free public services

The problem is a global one, Oxfam said:In the UK inequality is rapidly returning to levels not seen since the time of Charles Dickens. In China the top 10 percent now take home nearly 60 percent of the income. Chinese inequality levels are now similar to those in South Africa, which is now the most unequal country on Earth and significantly more [inequality] than at the end of apartheid.”

In the US, the richest 1 percent’s share of income has doubled since 1980 from 10 to 20 percent, according to the report. For the top 0.01 percent, their share of national income quadrupled, reaching levels never seen before.

“We can no longer pretend that the creation of wealth for a few will inevitably benefit the many – too often the reverse is true,” Executive Director of Oxfam International Jeremy Hobbs said.

Hobbs explained that concentration of wealth in the hands of the top few minimizes economic activity, making it harder for others to participate: “From tax havens to weak employment laws, the richest benefit from a global economic system which is rigged in their favor.”

The report highlights that even politics has become controlled by the super-wealthy, which leads to policies “benefitting the richest few and not the poor majority, even in democracies.”

“It is time our leaders reformed the system so that it works in the interests of the whole of humanity rather than a global elite,” the report said.
Of relevance too is Thomas Pogge on Poverty


The four-day World Economic Forum will be held in Davos starting next Wednesday. World financial leaders will gather for an annual meeting that will focus on reviving the global economy, the eurozone crisis and the conflicts in Syria and Mali.

NB The idea that the rich are job creators is a myth. Heres what the billionaire Nick Hanauer says:

May Chan and James, all residents of a squat in north London, were arrested on 25 October, just before midnight, after a member of the public called the police to report three men scaling a wall at the back of Iceland in Kentish Town. Police arrested the men as they left the area with a holdall and trolley containing food. The total value of the items taken from the bins allegedly amounted to £33. (my comment : the food had been thrown away therefore was worthless)

May, 35, a freelance web designer, said he was relieved the case had been dropped. He said it was a ridiculous charge, and “crazy” to think that prosecution was in the public interest.

Bold mine

 

Share Button

Positive Thinking

Heres some things to be positive about admidst all the doom and gloom at how rich fat cats arte shafting us. Here are some tips for living a longer more fruitful life:

 


 

Starting at a very young age I became a voracious ready. I would devour books especially science fiction. Later I would read most of the classics , later most of philosophy. I’ve forgotten much love it and its scary when Homer Simpson says ” When I learn something new it pushes something old out”. Not true fortunately but things do have a priority and old things do appear to get “lost” Here is a reminder for you……..

childrensbookssm

It has been said that we are only limited by our imaginations. In our formative years fostering and nurturing our imaginations is vital.  If we are to find solutions to our problems we need to be imaginative and not just apply outmoded techniques to new problems. Thinking outside the box ……

 

Share Button

The 6 Filthiest Facts About The Rich

Donald Trump and his 1% cohorts captured all the income gains in the first two years of the post-recession recovery. (Photo by John W. Adkisson/Getty Images)

Features » August 30, 2013

The 6 Filthiest Facts About the Rich

Unrestrained capitalism has led to an untenable situation.

BY Paul Buchheit, AlterNet

The 400 richest Americans made $200 billion in just one year. That’s equivalent to the combined total of the federal food stamp, education, and housing budgets.

First of all, who are they? Mostly the 1%. But the top 2-5% have also done quite well, increasing their inflation-adjusted  wealth by 75 percent from 1983 to 2009 while average wealth went down for 80 percent of American households. The rest of the top 20% have been prosperous, realizing a 32 percent gain in inflation-adjusted wealth since 1983. The facts to follow are primarily about the richest 1%, with occasional dips into the groups scrambling to make it to the top.

1. Accumulating almost all the wealth

As evidence of the extremes between the very rich and the rest of us, the average household net worth for the top 1% in 2009 was almost $14 million, while the average household net worth for the bottom 47% was almost ZERO. For nearly half of America, average debt is about the same as average asset ownership.

The extremes are just as filthy at the global level. The richest 300 persons on earth (about a third of them in the U.S.) have more money than the poorest 3 billion people. Out of all developed and undeveloped countries with at least a quarter-million adults, the U.S. has the 4th-highest degree of wealth inequality in the world, trailing only Russia, Ukraine, and Lebanon.

2. Creating their own wealth

In another alarming testament to wealth at the top, the richest 10% own almost 90 percent of stocks excluding pensions. Consider what that means. The stock market has historically risen three times faster than the GDP itself. Since the recession, as the U.S. economy has “recovered,” 62 percent of the gain was due to growth in the stock market, which surged as much in four years as it did during the “greatest bull market in history” from 1996 to 2000.

Many stock owners see a couple thousand dollars added to their fortunes every time they go online.

But that’s not enough for the very rich. Thanks in good part to the derivatives market, the world’s wealth has doubled in ten years, from $113 trillion to $223 trillion, and is expected to reach $330 trillion by 2017. The financial industry has figured out how to double or triple its buying power while most of the world has proportionately less.

3. Taking ALL the income gains

If the richest 1% had taken the same percentage of total U.S. income in 2006 as they did in 1980, they would have taken a trillion dollars less out of the economy. Instead they tripled their share of post-tax income. And then they captured ALL the income gains in the first two years of the post-recession recovery.

4. Donating a smaller share than the poorest Americans

Two dependable sources provide pretty much the same information. Barclays reported that those with earnings in the top 20% donated on average 1.3 percent of their income, whereas those in the bottom 20% donated 3.2 percent. And according to the New York Times, the nonprofit Independent Sector found that households earning less than $25,000 a year gave away an average of 4.2 percent of their incomes, while those with earnings of more than $75,000 gave away 2.7 percent.

5. Making enough to feed 800 million people

India just approved a program to spend $4 billion a year to feed 800 million people. Half of Indian children under 5 are malnourished.

In 2012, three members of the Walton family each made over $4 billion just from stocks and other investments. So did Charles Koch, and David Koch, and Bill Gates, and Warren Buffett, and Larry Ellison, and Michael Bloomberg, and Jeff Bezos.

It’s not the obligation of any one of these individuals to feed the world. The disgrace is in the fact that our unregulated capitalist system allows such outrageous extremes to exist.

Here’s more to provoke outrage. The 400 richest Americans made $200 billion in just one year. That’s equivalent to the combined total of the federal food stampeducation, and housing budgets.

6. Taking two-thirds of a trillion dollars in subsidies

Even all that is not enough for the very rich. About two-thirds of nearly $1 trillion in individual “tax expenditures” (tax subsidies from special deductions, exemptions, exclusions, credits, capital gains, and loopholes) goes to the top quintile of taxpayers. An astounding 75 percent of dividend and capital gain subsidies go to the richest 1%.

And that doesn’t include business subsidies, like the $16.8 billion per year in agricultural benefits paid out to big companies and to wealthy individuals who happen to have farms in their portfolios. The filthiest fact, in terms of detestable extremes, is that much of Congress wants to  cut the $4.35 a day food benefit to hungry Americans, almost half of them children, so that money can keep flowing to the top.

ABOUT THIS AUTHOR

Paul Buchheit is a professor with City Colleges of Chicago and co-founder of Global Initiative Chicago. He is the editor and main contributor to the forthcoming book, American Wars: Illusions and Realities (Clarity Press).

More information about Paul Buchheit, AlterNet

Share Button