What makes things worse, is that "the rich go to enormous lengths to avoid paying taxes"!



Photo Credit: Dan Kinwood, Getty Images (copyright Getty Images)

"I tell you, it's not right! It's not right, I tell you!" (from Aldous Huxley, 1984, via bad memory)

From The Guardian UK (The Automatic Earth where I first found this, has its own blurb with other article snippets you wouldd want to look at):

"Despite their soaring share of the nation’s wealth, the rich go to enormous lengths to avoid paying taxes."

"Romney defended his sons by declaring that they served their country by 'helping me get elected'." (tip o' th' hat to Raul Ilargi Meijer)

How America's rich betrayed their fellow citizens
by Anthony J. Gaughan, The Guardian, Monday 25 April 2016

In the past, wealth came with responsibility. Today’s rich avoid taxes, military service, and charitable giving. No wonder we’re seeing a populist backlash.

The author F Scott Fitzgerald once wrote that the “rich are different than you and me”.
Fitzgerald’s observation rings especially true today. The growing divide between the wealthy and everyone else is one of the pre-eminent issues of the 2016 presidential election. A tidal wave of public anger over income inequality and the decline of the middle class has made the rich a popular target on the campaign trail. The best example is the remarkable success of Bernie Sanders, who has tapped into the populist spirit of the electorate by calling for a “political revolution” against the “billionaire class”.

Republicans routinely condemn such rhetoric as the reckless promotion of “class warfare” by irresponsible populists, but the reality is class conflict is a two-way street.

Sanders and other populists did not create the class tensions in American society. Instead, wealthy Americans themselves played a central role in creating the conditions that gave rise to the angry and populist mood of the 2016 election.

Although America has the largest economy in the world, real wages have not gone up since 1972 because most workers have experienced stagnating incomes for decades. Across the country middle-income Americans face a precarious economic future. Median income has fallen in over 80% of America’s counties since 2000, a trend that is accelerating. Even mortality rates reflect growing income inequality. Poor and rural Americans now die at rates well above that of wealthy and urban Americans.

Meanwhile the rich just keep getting richer....  Since the 1980s, rich Americans have maximized their share of the nation’s prosperity at the expense of the rest of the country. Adding insult to injury, a growing body of evidence suggests that many rich people today simply do not care about their fellow Americans. The old concept of noblesse oblige has declined among the wealthy to a disturbing degree.

To understand how the rich have changed, one needs to understand how the upper classes used to behave.

No single location encapsulates the worldview of “old money” families better than Harvard’s Memorial church, which stands in the center of Harvard Yard. The church’s walls list the Harvard students, alumni and faculty members who have perished in America’s wars since 1917.
The numbers are breathtaking. During the world wars, thousands of Harvard students and alumni served in the US military.

Harvard’s student body was drawn primarily from America’s richest and most well-connected families. Those families could have pulled strings to ensure their sons stayed out of combat. But they did not, as powerfully demonstrated by the list of names at Memorial church and similar memorials across the Ivy League. During the world wars, the upper classes did their part to defend the nation.

 

Things could not be more different today.

And it all started with Thatcher and Reagan, and the "Greed is good" mentality they spawned. And of course, nobody can be better at being greedy than narcissistic, self-centred rich people.

More here.

The USA's "Five Percent" Unemployment Rate Is a Bogus Lie.

Source: piximgif.com

The numbers can be cranked out to indicate a far higher unemployment rate by comparing the U-3 Official Unemployment Rate to the U-6 Unemployment rate, the Nonparticipation rate, and the size of the 1099 Army. And the higher numbers are indicative of the malaise that's resumed its grip on our country.

From Quartz online (http://qz.com/), exclamation point mine:

HOLLOW PROMISES!

Why America’s impressive 5% unemployment rate feels like a lie for so many

By Sarah Kendzior April 20, 2016 Link

On Apr. 14, Bloomberg News announced that jobless claims in the US have reached their lowest level since 1973. “All other labor market data are telling us that the economy is creating a lot of jobs,” economist Patrick Newport told the outlet. “This is further confirmation that the labor market is strong.”

That same day, thousands of fast food workers, airport workers, home care workers, and adjunct professors took to the streets across the country to protest brutal labor conditions and demand a $15 minimum wage. Most of these workers make far below $15 per hour. Some make as low as $7.25 per hour, the current federal minimum wage. Most lack benefits. Some, like adjunct professors, have contingent, temporary jobs, sometimes consisting of only one poorly paid course per year. Many low-wage employees work two or even three jobs in an attempt to cobble together enough income to cover basic needs.

According to the US Bureau of Labor, all of these workers are considered “employed.” They are viewed as part of the American economy’s success story, a big part of which is our 5% unemployment rate. As president Barack Obama boasted in February: “The United States of America right now has the strongest, most durable economy in the world.”

But Obama’s claims of a strong economy ring hollow for the many thousands of workers—in professions ranging from those which require a GED to those which require a PhD—who say they cannot make enough money to survive. And these people, at least, are working. Those who cannot find work at all tell an even grimmer story.

From the US Bureau Labor of Statistics we have the Official U-3 Unofficial Rate of 5.1% but also two higher rates U-5 and U-6 of 6.1% and 9.9%, respectively.* Now this doesn't reflect the labor non-participation rate, or the size of the 1099 Army, which we don't have to look for at the BLS because Quartz online put them in their article:

There are three main reasons the vaunted economic recovery still feels false to so many. The first is the labor participation rate, which plunged at the start of the Great Recession and discounts the millions of Americans who have been out of work for six months or more. The second is “the 1099 economy,” a term The New Republic’s David Dayen coined to refer to the soaring number of temps, contractors, freelancers, and other often involuntarily self-employed workers. The third is a surge in low-wage service jobs, coupled with a corresponding decrease in middle-class jobs.

Since 2008, the labor participation rate has fallen from a high of 67.3% in 2000 to 62.6% today. That 62.2% represents a 38-year low, which puts Bloomberg’s claim of a 42-year-low in joblessness in perspective. The jobless number is “low” only because more people are no longer considered to be participating in the workforce.

This non-participation rate includes the long-term unemployed, some 2.1 million people. If we divide the 62.6% of today into the 67.3% of 2008, we get a 7.5% of today's workforce who are now outside of it.

100% X (67.3 / 62.6 - 1) = 7.5%

But also there's this huge, and I mean immense, Army of 1099 Workers:

Many of the long-term unemployed are older workers who once had stable middle-class jobs with benefits. Some, like their younger peers, have resorted to participating in the “1099 economy,” willingly or unwillingly. Freelance and contract workers move from low-paying gig to gig in professions like journalism, arts and entertainment, private transportation, and higher education, trying to scrape together enough cash to survive.

The number of Americans working in this capacity grew from 10.1% in 2005 to 15.8% in 2015, according to new research from labor economists Lawrence Katz and Alan Krueger. David Dayen describes their life as stressful and uncertain: “You’re cut off from any safety net that relies on employers. You have an unpaid, part-time job consisting of getting your next job and making sure you get paid for your last job … You have no advocates for you in the workplace, and little bargaining power to improve your lot.”

And how big is the size of the 1099 Army??? 15.8%. Now what would we expect it to be based on the U-5 and U-6 Rates?

9.9% - 6.1% = 3.8 %.

So what's our real unemployment rate? We take the U-6 rate, plus the decrease in participation rate since 2008, plus the 1099 Army, and we obtain the following true unemployment rate of 33.2%

9.9% + 7.5% + 15.8% = 33.2%

 

To be charitable, we should subtract the difference between the U-5 and U-6 rates of 3.8%.

 

33.2% - 3.8% = 29.4%



This is an unemployment rate worthy of the Grea-a-a-t Depression where nobody worked, and everyone was on the street, begging! 'Til Franklin Roosevelt came and saved us all.

Check the rest of the Quartz online article out.

Now you know why people want to vote for Trump? And rejected the whole GOP establishment? And loathe Hillary?


* Nota bene:

(U-5 is the total of unemployed, plus discouraged workers, plus all other persons marginally attached to the labor force, as a percent of the civilian labor force plus all persons marginally attached to the labor force.)

(U-6 is the total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force.)

Globalisation costs the developed world's middle classes big time

Forget the positive video up at the top of the CNN article, courtesy of Getty Media. The fact of the matter is, globilisation and mechanization/automation/computerization have been the sources of that giant sucking sound of jobs going south.

Yet in the developing world, which we used to call the third or even turd world, middle classes are enlarging and their median income have been growing by leaps and bounds. That's why you have days-long traffic jams on Chinese expressways these days.

Take a look at this:

Source: Economist Branko Milanovic via CNN.

Of course, the Chinese middle class grew from hardly anything to 500 million in 2013 and more although the article does not mention that.

From the CNN article:

America's middle class is deeply concerned about jobs, pay and their future, and many of them are blaming China.

In the U.S., 43% of voters believe trade with other countries is a bad thing, according to the Pew Research Center. It's not that hard to understand why.

China's middle class is booming while America's middle class is stagnating. A typical family in China has experienced the "Asian miracle," an astonishing 70% bump in their income from 1988 to 2008.

But the middle class in the U.S. and across the developed world has stagnated: incomes rose a mere 4% over that 20-year same period, according to economist Branko Milanovic. He studies pay and wealth around the world and just published a new book, "Global Inequality."

To be clear, a Chinese middle class family still earns around $8,000 a year, a lot less than the typical U.S. household income of about $54,000, according to the World Bank. But the Chinese are getting richer at a much faster rate.

Consulting firm McKinsey predicts that by 2022, the majority of China's urban middle class will earn $9,000 to $34,000 a year. They are embracing all the trappings of a better life: eating out more, vacationing around the world and buying new cars.

Compare that to the U.S. where even people who have jobs worry they are one step away from financial ruin. Expenses are going up, but a typical family earns about the same amount of money now as they did in the mid-1990s.

Assuming, of course, the global economy doesn't completely sputter and break down. China is actually having problems right now, which can be followed at The Automatic Earth.

More at the CNN Article, here.

Holbert Nails It!

From The Boston Herald via Page 5B of the New Orleans Advocate:

The Herald has original, as the cartoon for April 18, 2016, here.

Coal in Dire Straits as Renewables, Natural Gas from Fracking Give it a One-Two Punch!

Reblogging another post from Robertscribbler, supplemented (a demain) by a blurb from yesterday's The Automatic Earth Debt Rattle.

Coal Production, Exports Plummet as Peabody Energy Declares Bankruptcy.

by Robert Scribbler, 13 April 2016 (condensing mine)

Jenny Marienau of the climate disaster prevention group 350.org is certainly right about one thing. A healthy world. A world full of life and of prospects for all people, all living things. A world that avoids the worst impacts of a terrible climate disruption on the road to a hothouse mass extinction. In this, far more hopeful, world there is no place for companies like Peabody Energy. Companies whose profit-making and related accumulation of a corrupting political power and influence is entirely dependent on locking in an ever-worsening global crisis.

Today that company, representing the largest coal interest in the Western World, declared bankruptcy. An optimistic announcement that comes amidst a swift sea change and a precipitous contraction in the global coal industry. One that, if world-wide public, private, protest action, and individual efforts to reduce carbon emissions on the back of 200 nations reaching a landmark global climate agreement in Paris continue in force, may well be a beginning of an end to the fossil fuel energy era.

The broadening contraction in coal has forced bankruptcies not just for Peabody, but for other major American coal players like Arch Coal and Alpha Natural Resources. A devastating wave for a climatologically destructive industry that appears less and less likely to survive in any form resembling its former might.

It’s all a part of an emerging supertrend that is being reinforced along many fronts. The first of which involves a broad global protest action against new coal plant construction and wider fossil fuel based energy itself. Led by key groups like 350.org, Greenpeace, and the Sierra Club, these critical actions have targeted construction sites, pipelines, railways and mines. In addition, a comprehensive divestment campaign spear-headed by 350.org has targeted capital flows to the fossil fuel special interests.

Source: Clean Technica with US EIA data.

Within the fossil fuel ranks there is also division. Even among the fossil fuel players there appears to be an acceptance that coal is on its way out. Messaging coming from the fossil fuel industry appears to have shifted to support of the still very harmful natural gas and for a new global fracking campaign. In essence, what we observe is that the oil and gas interests, including the new fracking interests, have basically maneuvered in a way that effectively throws coal under the climate change response bus. Coal is tougher to greenwash than natural gas and the spearhead campaign against coal as the worst of the worst among carbon polluters has proven undeflectable. This has been especially true in the UK where even conservatives are aiming to shut down coal plants (while continuing their harmful efforts in support of fracking and aimed at suppressing rates of renewable energy adoption).

More here. 

Now from Raúl Ilargi Meijer of The Automatic Earth:

Demand destruction and debt deflation.

• Peabody, World’s Top Private Coal Miner, Files For Bankruptcy (Reuters) 

 

[Link]

Peabody Energy, the world’s largest privately owned coal producer, filed for U.S. bankruptcy protection on Wednesday in the wake of a sharp fall in coal prices that left it unable to service a recent debt-fueled expansion into Australia. The company listed both assets and liabilities in the range of $10 billion to $50 billion. Falling global coal demand, stricter environmental controls and a glut of natural gas have pushed big miners, including the second largest U.S. coal producer, Arch Coal, into bankruptcy protection over the past year.

What Robertscribbler and Raúl Meijer didn't tell you, but Reuters does, is that Peabody Coal bought out MacArthur Coal, a big Australian coal mining concern supplying metallurgical  coal to China's steel mills, right when the price for that kind of coal was at an all-time high. As you might have known recently, demand for minerals and fossil fuels of all kinds have been plummeting, perhaps chiefly due to the recent economic stumbles in China. Of course, Mr. Meijer does keep people abreast about the trends in the general economy and whatnot, and they are not good.

And it is these trends which, if they continue, may put the kibosch on Business-As-Usual, and perhaps save us from the worst cases of the upcoming climate changes.

We Missed the Paris COP21 Climate Change Goal!

That is, the goal of 1.5 degrees Centigrade during the first three months of this year, according to Japan Met Office.

From the Robertscribbler...

Japan Meteorological Agency Shows First Three Months of 2016 Were About 1.5 C Above the IPCC Preindustrial Baseline

by Robert Scribbler, 14 April 2016 (link-format and image caption mine)

We should take a moment to appreciate how hot it’s actually been so far in 2016. To think about what it means to be in a world that’s already so damn hot. To think about how far behind the 8 ball we are on responses to human forced climate change. And to consider how urgent it is to swiftly stop burning coal, oil and gas. To stop adding more fuel to an already raging global fire.

Global policy makers, scientists, and many environmentalists have identified an annual average of 1.5 degrees Celsius above preindustrial marks as a level of heat we should try to avoid. [Link] The Paris Climate Summit made a verbal pledge to at least attempt to steer clear of such extreme high temperature ranges. But even the strongest emissions reduction commitments from the nations of the world now do not line up with that pledge. And it’s questionable that they ever could given the massive amount of greenhouse gas overburden that has already accumulated and is already rapidly heating the world’s airs, waters, ice, and carbon stores.

Current emission reduction pledges, though significant when taking into context the size and potential for growth of all of carbon-spewing industry, don’t even come close to the stated 1.5 C goal. Under our presently accepted understanding of climate sensitivity, and barring any response from the global carbon stores unforeseen by mainstream science, pledged reductions in fossil fuel use by the nations of the world under Paris would limit warming to around 3 C by the end of this Century. Rates of carbon emission reduction would necessarily have to significantly speed up beyond the pledged Paris NDC goals in order to hit below 3 C by 2100 — much less avoid 2 C.

As for 1.5 C above preindustrial averages — it already appears that this year, 2016, will see temperatures uncomfortably close to a level that mainstream scientists have identified as dangerous.

Source: Japan Met.

More here.