Friday, October 19, 2018

Changing the Poverty Numbers

Trump’s Council of Economic Advisers declared that poverty had, for all practical purposes, been eliminated. In a technical report, the economists wrote that the nation’s poverty rate was only 3 percent, rather than the Official Poverty Measure (OPM) of 12.3 percent for 2017, declared by the Census Bureau this September.
However, we are reminded of  Ronald Reagan’s famous declaration, in his 1988 State of the Union address, that “the federal government declared war on poverty, and poverty won.” 
The poverty rate is nowhere near as low as 3 percent. It is nonsense.  Almost all economic specialists found the methodology faulty.  If the claim that poverty is now 3 percent rather than the reported 12.3 percent had any validity, it would mean that more than 30 million fewer Americans are poor than previously reported.
Back in the real world, scholar Kathryn Edin, also with Luke Shaefer, published a book in 2016, $2.00 a Day: Living on Almost Nothing in America, which shows that 1.5 million families in America live on $2 of cash income a day per family member. They exclude the imputed income from SNAP because food stamps are not cash—you can’t use them to buy a warm coat for your child or to pay the electricity bill, they point out. Still, even if you include SNAP, 750,000 families live on $2 a day per family member, by their measure. That is roughly the same as the World Bank’s poverty line for poor nations.
The Kaiser Family Foundation finds that 62 percent of Medicaid recipients have full- or part-time jobs. Regarding SNAP, four out of five recipients worked either the year before or after they received food stamps (the typical SNAP recipient from 2008 to 2012 received benefits for just one year). As for TANF, it is in fact mostly failing. In 1996, benefits were provided to 68 percent of poor families, compared to 23 percent today, under TANF. More to the point, the jobs that recipients had been required to take under TANF mostly turned out to be short-term.

Banksters' Loot

[Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo] "These six banks have constantly chosen to use these tax breaks to enrich their shareholders and executives while laying off employees and exploiting consumers," Not One Penny spokesperson Ryan Thomas said noted, pointing to the explosion of stock buybacks since the GOP tax bill became law."

  • Bank of America: The bank has seen a $3.1 billion tax cut so far this year due to the 2017 tax law. It announced earnings of $7.2 billion this quarter for a total of $20.9 billion so far this fiscal year. Since the tax law was passed, Bank of America announced a $20.6 billion stock buyback program and this quarter the company spent $6.6 billion on buybacks and dividends, enriching corporate shareholders. In May, Bank of America announced the closure of an office in California, resulting in 575 layoffs. The bank also agreed to pay $15 million to settle claims that its bankers overcharged their clients on securities.
  • Citigroup: The bank has enjoyed a $1.3 billion tax cut so far this year due to the 2017 tax law and announced earnings of $4.6 billion this quarter for a total of $13.7 billion so far this fiscal year. Since the tax law was passed, Citigroup announced a $17.6 billion stock buyback program and this quarter, the company spent $6.4 billion on buybacks and dividends, both of which enrich corporate shareholders. Meanwhile, in June, Citibank laid over off over 100 workers, paid$100 million to settle charges that it manipulated interest rates, and was forced to spend $355 million in refunds to millions of customers it was overcharging interest.
  • Goldman Sachs: Due to the 2017 tax law, the bank has enjoyed a $353 million tax break so far this year. Goldman Sachs announced earnings of $2.5 billion this quarter for a total of $7.5 billion so far this fiscal year. Since the tax law was passed, Goldman Sachs announced a $5 billion stock buyback program and this quarter, the company spent $1.2 billion on buybacks and dividends, both of which enrich corporate shareholders. Meanwhile, it has closed up shop in Cedar Rapids, resulting in layoffs for 39 employees, while it constructs a new office for its outgoing CEO that could cost up to half a million dollars.
  • J.P. Morgan: The bank has seen a $2.1 billion tax cut so far this year due to the 2017 tax law, and announced earnings of $8.4 billion this quarter for a total of $25.4 billion so far this fiscal year. Since the tax law was passed, JP Morgan announced a $20.7 billion stock buyback program and this quarter the company spent $6.9 billion on buybacks and dividends, which enrich corporate shareholders. The company plans to spend 151 times what it spent on wage increases for workers on stock buybacks. At the same time, JP Morgan announced that it will lay off 400 employees in its consumer home-lending business. In August, the company laid off 100 employees in its asset management division.
  • Morgan Stanley: The bank, which has enjoyed a $738 million tax cut so far this year due to the 2017 tax law, announced earnings of $2.1 billion this quarter for a total of $7.2 billion so far this fiscal year. Since the tax law was passed, Morgan Stanley announced a $4.7 billion stock buyback program and this quarter, the company spent $1.2 billion on buybacks and dividends, both of which enrich corporate shareholders.
  • Wells Fargo: Wells Fargo has enjoyed a $1.5 billion tax cut from the tax law, and announced earnings of $6 billion this quarter for a total of $16.3 billion so far this fiscal year. Since the tax law was passed, Wells Fargo announced a $24.5 billion stock buyback program and this quarter the company spent $8.9 billion on buybacks and dividends, both of which enrich corporate shareholders. Last month, Wells Fargo announced a plan to cut up to 10 percent of its workforce in the next three years, a loss of between 13,250 and 26,500 jobs. Wells Fargo has been mired in scandals this year, and is involved in numerous settlements.  It is being forced to pay $1 billion, the largest fine ever imposed by the Consumer Financial Protection Bureau, in addition to millions more in refunds to customers for misleading and predatory practices.
Capitalism is founded on greed. It is irrational to expect the oligarchy to limit theirs.

Typhus in LA

Los Angeles officials have pledged to fight an outbreak of typhus, as a city of glittering wealth grapples with a disease linked to intense poverty.
“We’re deploying every available resource to help control and stop this outbreak,” said Alex Comisar, press secretary for Los Angeles’s mayor, Eric Garcetti.
Many of those resources have focused on the city’s large homeless population, considered most at risk for contracting the flea-borne illness. There have been 64 cases of typhus reported across Los Angeles county so far this year, more than the 53 cases recorded this time last year, and on track to surpass the 67 cases diagnosed last year total. A department of public health spokesperson said the outbreak began with 11 cases of typhus in downtown Los Angeles, six of which were diagnosed in people who were homeless. U
 This same time last year, California’s homeless population was threatened by an outbreak of hepatitis A, another disease associated with impoverishment and poor sanitation, which killed 21 people and infected hundreds.
According to the most recent count, 53,000 people are homeless across Los Angeles county.  Chronic sickness and hospitalization are common.  Many have been forced into the streets by the city’s soaring rents and lack of affordable housing. Homeless residents have no choice but to live in close proximity to rats and other rodents, putting the homeless and their pets especially at risk for flea exposure and typhus. The lack of access to toilets and places to wash up can also help the spread of disease.
Dr Timothy Brewer, a professor of medicine, epidemiology, and public health at UCLA, said: “It’s an uncommon disease.” He said in his six years of practicing medicine in Los Angeles, he had seen one confirmed case of typhus. Some people may not even know they have it. The common symptoms are headache, fever, and sometimes a rash, he said.  It is the city’s very poorest, living under bridges or in tents, who bear the most risk.

Yet again - US Inequality

The 1% has never had it so good.
The average wage for the 1% of income earners hit $719,000 per year in 2017, up 3.7% on the year, exceeding their peak of $716,000 per year just before the Great Recession, according to a report released Thursday by the Economic Policy Institute.
The average wage for the top 0.1% reached $2.7 million in 2017, the second-highest level ever, just 4% below their level in 2007. 
However, wages for the 0.1% rose 8% on the year in 2017.

Income inequality has soared in the U.S. over the last five decades, despite increases in worker productivity, the report said. “Incomes for most Americans have been stagnant for four decades,” according to a separate report released earlier this year by the staff of Keith Ellison, a Democratic congressman for Minnesota. “Instead, this increase in income inequality was almost entirely driven by soaring compensation levels for the top 1% of income earners.”
Average wage growth for most working Americans continues to flat line in 2018, the EPI said. “Some of this real wage stagnation can be explained by an uptick in energy prices, but even the underlying pace of nominal wage growth has yet to pick up in the way it historically has as labor markets tightened,” it said. 
The median household income was $61,372 in 2017, up 1.8% after accounting for inflation, according to the U.S. Census Bureau.
For most U.S. workers, real wages have barely budged in decades, the Pew Research Center said in August. “On the face of it, these should be heady times for American workers. U.S. unemployment is as low as it’s been in nearly two decades,” the Washington, D.C.-based think tank said. “In fact, despite some ups and downs over the past several decades, today’s real average wage — after accounting for inflation — has about the same purchasing power it did 40 years ago.”

World Bank V. Oxfam

The World Bank published their 2019 World Development Report entitled ‘The Changing Nature of Work’. The report touches on the impact of advancing technology on labour needs and job security. The report acknowledges that many feel threatened by the shift toward automation, especially workers in advanced economies, but iterates that technology is also creating more jobs, increasing productivity, and delivering effective public services. It claims that the fear of innovation is unfounded. Among the suggestions put forth by The World Bank on how the world economy can begin to truly embrace technology include loosening labour regulations and encouraging governments to provide more inclusive social protection in conjunction with the rise of the ‘gig economy’ or short-term work.

Oxfam disagrees.

Head of Oxfam International’s Washington office Nadia Daar said in a statement, “It is irresponsible for the World Bank to promote the deregulation of labour and the dismantling of the rights that workers have long fought for. The report downplays the severity of inequality and contradicts internationally agreed labour standards. Just last week, the IMF said higher minimum wages are needed to counteract extreme inequality”.

Oxfam called on The World Bank to do ‘everything possible to encourage policies that help workers and reduce inequality’.

Targeting the poor

10.4m UK households – more than one in three, 26 million me, women and children – will be left on average £150 poorer than they are today. Worse still, this loss will be concentrated on families already struggling, or even failing, to get by: those at or below the UK’s poverty line.

What’s more, this year won’t be the first time those families have had money snatched from them: it is the fifth in a row. The reason isn’t a new tax, or unemployment, or universal credit. It’s the benefits freeze.

Usually, each year, anyone receiving a working-age benefit – which includes working and child tax credits, which prop up low wages for households that need it – gets an increase in line with whatever the level of inflation is each September.

This week, September’s inflation was announced at 2.4%, meaning that, on average, everything is 2.4% more expensive than it was a year ago. If the rate continues about that level, in the coming year you’ll need 2.4% more money just to afford to buy the same things. An increase to benefits in line with that amount would be what you would need just to stand still.

Ever since 2015-16, the Conservative government has instead “frozen” these benefits – a false term, given that in reality each year these families are seeing their incomes cut. For next year, the well-respected Institute of Fiscal Studies (IFS) estimates the average hit to income at £150.

But the cumulative effect of five years ends up much higher, at something in the region of £700 to £800, taken from families who were hardly finding it easy to get by in 2015. Even for those in work, the relatively fortunate ones, wages are yet to return to their pre-financial crash levels, meaning the government has imposed a devastating double whammy on the people least able to cope with it. The government did not need to take this money from low- and middle-income families. It made a choice, and has all but escaped condemnation for doing so. What amounts to a large-scale robbery has received hardly a fraction of the scrutiny universal credit has rightly garnered.

This does save the government a fairly significant amount of money. The IFS estimates the freeze next year will save about £1.6bn, instead of allowing benefits to rise in line with inflation. Keeping that freeze year after year – as the Conservatives have done – compounds these savings, meaning the measure has now probably reduced government spending by about £8bn a year. 

Ever since entering government, the Conservatives have made a series of cuts to corporation tax, reducing government revenues by between £12bn and £16bn a year – far more than the money saved by the benefits freeze.

It’s also the result of deliberate and sustained demonisation of benefits and the people who live off them – leading to the bizarre situation where it’s easy to cut benefits.

At no point did the Labour Party offer to reverse the benefit freeze and offset its effects. It didn’t even contain the bare minimum: a promise to at least end the freeze and increase benefits to – or, better, above – the level of inflation. Somehow the party of the workers forgot perhaps the most serious financial blight on millions of working families (and those looking for work) – and it has yet to make helping those families its stated policy.

In the UK’s ridiculous current politics, trying to enact a measure that would help 10 million families would be a tough political sell. But right now, no one is even trying to make it. As a result, 10 million families are being made poorer every year, and virtually no one in politics or the media has their corner. 

Banksters - Divvying up the Dividend

So-called "cum-ex" and "cum-cum" deals -- complex stock transactions around the days when companies pay out dividends -- have cost taxpayers as much as 55 billion euros ($63 billion) in lost revenue or outright fraud since 2001. The schemes were first uncovered in Germany in 2012 and further investigation found evidence of the practice in France, Spain, Italy, the Netherlands, Denmark, Belgium, Austria, Finland, Norway, and Switzerland.
In the cum-cum scam, foreign investors holding shares in a company temporarily sell the stock to a bank based in the same country as the firm ahead of the day dividend gets paid out. This allows them to escape higher taxes on the dividend charged to shareholders from abroad, before buying back their holdings quickly afterward.
Such deals deprived Germany of 24.6 billion euros in tax revenue, France 17 billion and Italy 4.5 billion - all technically legal. 
The illegal  "cum-ex" deals draw in more parties in a complex dance around the taxman.
Reportedly conceived by well-known German lawyer Hanno Berger, the cum-ex method relies on several investors buying and selling shares in a company amongst themselves around the day when the firm pays out its dividend. The stock changes hands so quickly that the tax authorities are unable to identify who is the true owner. Working together, the investors can claim multiple rebates for tax paid on the dividend and share out the profits amongst themselves -- with the treasury footing the bill.
This practice cost Germany 7.2 billion euros, Denmark 1.7 billion and Belgium 201 million, the investigation found.

Tory Immigration Policies Not Working

Theresa May’s hostile environment policy is failing, according to a new report. The study by researchers at the University of Oxford found little evidence that immigration enforcement activity deters irregular migrants or encourages them to leave the country – and instead gives rise to criminal practices and pushes undocumented people further underground.

Almost all irregular immigrants interviewed for the report were not deterred by tightened immigration controls or the hostile environment approach, with one saying “being illegal in the UK is still better than being legal in my own country”.

 Immigration enforcement had unintended and often “perverse” side effects, as undocumented migrants became increasingly vulnerable to exploitation by employers and fearful of accessing healthcare. Rules requiring employers to conduct passport checks are “pushing undocumented migrant workers into the hands of criminals trading false documents”, while data-sharing between the NHS and the Home Office has led to many being afraid of going to see a doctor. Tighter controls provoke more criminal responses such as false documents.

Chai Patel, legal policy director at the Joint Council for the Welfare of Immigrants, told The Independent: “The hostile environment doesn’t work to reduce irregular migration, but causes huge amounts of human suffering."


Globally, there are just under 150,000 people with assets of more than $50m. Of these, 50,000 have personal wealth of more than $100m, and 4,390 have assets of more than $500m. The richest 1% own just under half of the world’s global assets, which is roughly the same proportion as last year. The dominance of the super-rich had been driven by rising inequality

The UK’s ranks of the ultra-rich have swelled by 400 over the last year, taking the number of people with fortunes of more than £38m ($50m) to nearly 5,000.

The fortunes of the already very wealthy are growing at a far faster rate than the general population, according to a report by the Swiss bank Credit Suisse.

The number of ultra-high net worth individuals (UHNWIs) in Britain over the 12 months to summer 2018 increased by 8.5% to 4,670, while the average Briton saw their wealth, including property, increase by just 1% to £213,000.

Anthony Shorrocks, an economist and author of the report, said the fortunes of the rich were growing much faster than the general population because those with investments had benefited from booming stock markets. “There are a lot of people with wealth just below $50m, and they are tipping over into the UHNWI bracket,” he added.

The richest person in the UK is Sir Jim Ratcliffe, the founder and chief executive of the petrochemicals company Ineos and a high-profile Brexiter, who has an estimated fortune of £21bn. Ratcliffe is preparing to leave Britain for tax-free Monaco – just months after he was knighted by the Queen. 

While the number of the UK’s ultra-rich is growing quickly, the pace in the US is even faster. More than 6,000 in the US joined the UHNWI bracket, taking the total to 70,540, which means the country accounts for 47% of the global UHNWI population.

China is in second place with 16,510, followed by Germany (which an 11% decline) with 6,320. The UK has the fourth-largest population of UHNWIs, ahead of Japan, India, and Italy.

The number of UHNWIs has increased fourfold since the turn of the millennium, according to the report which said, “Rising inequality can also boost the speed at which new millionaires are created...Since the global financial crisis, wealth inequality has trended upward, propelled in part by the rising share of financial assets, and a strengthening US dollar,” the report said.

India's Richest

91% of India's adult population has wealth below Rs 730,000 (less than $10,000)

"However, the country's high wealth inequality and immense population mean that India also has a significant number of members in the top wealth echelons,” says Report 2018.

The mean is estimated at $7,020 per adult, while the median wealth is even lower at $1,289 per adult. 

An Oxfam report earlier this year had said 73 per cent of the wealth generated last year went to the richest 1 per cent, while 670 million Indians who comprise the poorest half of the population saw 1 per cent increase in their wealth.

According to Credit Suisse, around 90 per cent of India’s household assets comprise property and other non-financial items. Therefore, the house price movement is considered to be the proxy for India’s wealth growth.

By 2023, India’s wealth is projected to grow at 8 per cent a year to $8.8 trillion. The number of millionaires in India is estimated to grow at a slightly faster pace of 9 per cent per annum to 526,000 in the next five years.
In the past 12 months, the number of millionaires in India grew by 7,300 to 343,000 who are collectively worth around $6 trillion.

Halting the Caravan

Trump has threatened to cut all aid payments to El Salvador, Honduras, and Guatemala over illegal immigration.

Trump also tweeted  "In addition to stopping all payments to these countries, which seem to have almost no control over their population, I must, in the strongest of terms, ask Mexico to stop this onslaught - and if unable to do so I will call up the U.S. Military and CLOSE OUR SOUTHERN BORDER!."

 Trump has sent national guard troops to the border before, it is unclear what he means by shutting it down entirely, and whether that would affect businesses or people with legitimate visas. And according to international law, the US cannot deport asylum seekers without first determining the validity of their claim.

The caravan of more than 3,000 migrants has made its intentions clear: they are heading  on a nearly 2,800 mile (4,500km) trek from Honduras to the US borderThe migrant caravan is currently making its way through Guatemala, mostly on foot, with several of the quickest already arriving at Mexico's southern border by Thursday.  Mexico has sent federal police to the border, though they are not officially there to stop the caravan.  Many migrants do not have passports and have been using national ID cards, which allow them to travel within Central America. Mexico, however, requires a passport at entry.

Erika Guevara-Rosas of Amnesty International said in a statement: "Mexican authorities should not take a Trump approach treating people like a security threat."
"These families deserve dignity and respect to ensure that no one is illegally returned to situations where they could risk serious harm due to violence."
"The surreal side of this perceived crisis at the border is that the border is more under control now than it was 15 or 20 years ago," Andrew Selee, president of the Migration Policy Institute, told the BBC. Mr Selee said closing the border "would wreak havoc on Mexican and American economies". "It could be a symbolic effort," he adds. "A way of pressuring Mexico - but that would have a limited effect on illegal crossings and a huge effect on legal crossings." Mr Selee explained he thinks Mexico will "try to defuse the crisis" the same way they did with the last migrant caravan: by giving some people legal status or the chance to apply for asylum and deporting others.
An estimated 10% of the population of Guatemala, El Salvador and Honduras have fled danger, forced gang recruitment and dismal economic opportunities. The region has one of the highest murder rates in the world. The UN reported murder rates in 2015 in Honduras standing at 63.75 deaths per 100,000 and El Salvador at 108.64 deaths.
Jari Dixon, a politician in Honduras, tweeted that the caravan was not "seeking the American dream" but "fleeing the Honduras nightmare".

Thursday, October 18, 2018

California's Poisoned Water

In the center of California lies one of the most important agricultural areas in the US — an 18,000-square-mile stretch of heartland known as the Central Valley. Each year, the region's mega-farms produce about a quarter of the nation's food supply. Without them, a significant swathe of the US could lose easy access to staple foods like fruits, vegetables, and nuts. That's begun to look increasingly likely as the effects of drought poison the water supply and cause the land to sink.

The problems date back to 2011 when California was hit by one of the worst droughts in its history. From then until 2014, the state was the driest it's ever been on record. The effects of the drought are long-lasting.

The land is now painfully starved for groundwater, prompting farmers to drill wells into the ground and pump the water through aquifers (bodies of porous rock that act as a natural filtration system). When farmers over-pump the water — which they often do, given the arid nature of the soil — it can cause the land to sink at a rate of two inches per month in some areas. Sinking poses a danger to nearby infrastructure, causing roads to crack or holes to form in the ground. It can also damage aqueducts, or underground pipes, making it even more difficult to move water between locations.

 But the area is struggling with yet another environmental concern: poisoned water. 

new study shows that over-pumping aquifers can release arsenic, a toxic chemical that increases the risk of cancer, heart disease, and diabetes when present in significant amounts. According to the study, around 10% of wells tested in the San Joaquin Valley — the Central Valley's main agricultural hotspot — have shown dangerous levels of arsenic over the last ten years.