Wednesday, July 17, 2019

Fated to Homelessness

More than 600,000 members of so-called ‘Generation Rent’ are facing an “inevitable catastrophe” of homelessness when they retire, according to the first government inquiry into what will happen to millennials in the UK who have been unable to get on the housing ladder as they age.

People’s incomes typically halve after retirement. Those in the private rented sector who pay 40% of their earnings in rent could be forced to spend up to 80% of their income on rent in retirement.

If rents rise at the same rate as earnings, the inquiry found that 52% of pensioners in the private rental sector will be paying more than 40% of their income on rent by 2038. This will mean that at least 630,000 millennials are unable to afford their rent.
They will find themselves homeless or with no choice but to move into temporary accommodation, at the state’s expense, according to the report by the all-party parliamentary group on housing and care for older people.

“The number of households in the private rented sector headed by someone aged over 64 will more than treble over the next 25 to 30 years,” said Richard Best, the chair of the group. “But unless at least 21,000 suitable homes are built a year, there will be nowhere affordable for them to live. The consequence is bound to be homelessness for some.”

The report also forecasts that, in terms of quality of accommodation, the number of older households living in unfit and unsuitable private rented accommodation could leap from about 56,000 to 188,000 in 20 years’ time and to 236,500 in 30 years’ time. And it warns that the UK is headed towards an ‘inevitable catastrophe for the pensioners of tomorrow”.

Substandard housing is already known to be a direct cause of death for many older people: at least 53,000 winter deaths of old people over the last five years have been attributed to conditions related to living in a cold home.
Brendan Sarsfield, the chief executive of Peabody, who was a member of the inquiry, said: “The problem with the private rented sector is that people think it is the solution. It isn’t. Insecure tenancies and expensive rents mean that very often it is not a suitable tenure for older people. Many older people today were lucky enough to be able to buy their own home and watch the value of it grow. But for the pensioners of tomorrow there is little chance of being able to do that,” he added. “The broken housing market and failure of past governments to adequately fund social housing means that we are going to see many more older people struggling to pay the rent.”
George McNamara, the director of policy and influencing at Independent Age, said: “Our research has shown that the lives of too many older renters are blighted by insecure tenancies, woeful living conditions, dealing with unscrupulous landlords and constant financial stress.”
Polly Neate, the chief executive of Shelter, said: “This country is failing to build social homes at the rate we need them, leaving older generations who missed the homeownership boat with little choice but to rent privately. On top of being notoriously expensive and unstable, too many privately rented homes simply aren’t up to scratch either – condemning older people to live out their retirement in places which are cold, damp or infested with mice.”

Living standards stagnate

Adam Corlett, a senior economic analyst at the Resolution Foundation, said: “Over the past two years, UK households have experienced a near stagnation in living standards, even worse than the income hit experienced during the early 1990s recession.
Britain’s weak wage growth and rising prices have delivered a hit to living standards of a severity normally only seen during a deep recession, a leading thinktank has said.

While official data has shown a pick-up in real earnings growth in recent months, the Resolution Foundation said household incomes had declined by 0.5% in the period from 2016-17 to 2018-19.

In the past 40 years, the thinktank said, only the recession of the early 1980s and the slump during and after the financial crisis had brought a weaker performance. This, it added, had been caused by “a severe curtailing” of the traditional driver of income growth – rising productivity. UK productivity growth averaged 2% in the decades leading up to the 2008 banking crisis, but has barely risen at all in the 10 years since. The thinktank said rising output per hour – one measure of productivity – had accounted for two-thirds of overall economic growth before the great financial crash, but just 22% of growth since then
Household income growth had been worse than during the recession of the early 1990s – a period when real household incomes rose by 0.3% even though house prices were in the middle of a six-year decline and the pound crashed out of the European exchange rate mechanism on Black Wednesday in September 1992.

In its 2019 living standards audit, the Resolution Foundation said the slowdown in the years since the 2016 EU referendum was part of a wider stagnation in living standards since the financial crisis.
In the light of poor productivity, households had boosted incomes by working more. Employment is 3 percentage points higher than in 2007, while the average number of hours worked has remained unchanged at 32 hours a week since 2007, having fallen by an average of one hour every four years over the past century.

“The living standards history of the past 25 years tells us that there are two broad ways that families have traditionally got richer over time – higher pay off the back of rising productivity, and supporting more women into work. After an unprecedented income squeeze over the past decade, and a living standards outlook that includes child poverty rising to record levels, an economic approach that supports higher incomes for all households must be the top domestic priority for the incoming PM.”
The official data picked up some signs that the UK’s jobs boom is fading, with employment rising by just 28,000 in the latest quarter. There was a fall of 58,000 in full-time employment, offset by an 86,000 increase in part-time work. A rising working-age population meant the employment rate fell slightly.

Nuclear holocaust scenarios have not gone away

It seems to many that it is now climate change that confronts the world with an existential threat to civilization. No longer does nuclear war feature in the fore-front of people's minds but regardless of the media's neglect, the possibility of blowing up the world remains. There is currently an arms race among the super-powers to modernize their nuclear weapon stockpiles and a change to the strategy of their use.

Over the next 30 years, the U.S. will spend at least $1.2 trillion on maintaining and modernizing nuclear weapons. With inflation, cost overruns and common under-estimation of weapon systems, the final cost of the U.S. nuclear enterprise could be as high as $2 trillionTrump’s 2020 budget alone calls for $16.5 billion (an increase of 8.3 percent over 2019) for the Department of Energy (DOE)/National Nuclear Security Administration (NNSA) which maintains the U.S. nuclear stockpile.

The NNSA confirm  that it is currently executing five major nuclear weapons modernization programs. Those programs include a gravity bomb and an air-launched cruise missile whose nuclear yield can be “dialed up or down” (adjusted), allowing for greater flexibility.
Among the modified warheads is the W76-2, a lower yield (5-7 kilotons) version of the earlier more powerful (100 kiloton) W76-1. By comparison, the bombs that destroyed Hiroshima and Nagasaki were around 15 and 20 kilotons respectively.
The first W76-2 warhead was completed in February at the United States’s only nuclear weapons assembly and disassembly facility, the Pantex Plant near Amarillo, Texas. However, in June, House Democrats blocked funding for deployment of the W76-2 onto submarine-launched ballistic missiles.
Opponents of new low-yield “mini nukes” argue that bombs with an adjustable selective yield option can produce less radioactive fallout, and may thereby lower the threshold for using them, making a nuclear conflict more likely. Currently, the U.S. stockpile includes around 1,000 warheads with selective yield options, some believed to be as low as 0.3 kilotons (exact yields are classified).
“Even the lowest yield is a very large explosive force compared to even the biggest conventional weapons that humans have been able to build,” said Hans Kristensen, director of the Nuclear Information Project at the Federation of American Scientists (FAS). 
He points out that the U.S. is not alone in modernizing and upgrading its nuclear arsenal. All nine nuclear states have their own version of modernization reflecting the maturity of their program. The idea that Russia, for example, is modernizing, and the U.S. is “falling behind” is a mischaracterization of the real situation, says Kristensen. “All countries use that argument to their advantage,” Kristensen told Truthout.
Plans to use nuclear weapons are not just an abstraction for U.S. military planners. As the FAS’s Steven Aftergood reported, the Joint Chiefs of Staff posted an updated version of U.S. nuclear policy that included the passage: “Using nuclear weapons could create conditions for decisive results and the restoration of strategic stability … specifically, the use of a nuclear weapon will fundamentally change the scope of a battle and create conditions that affect how commanders will prevail in conflict.” 
Tom Collina, director of policy for the Ploughshares Fund, a global security foundation seeking to reduce nuclear risks.
“The more nuclear weapons that you build beyond what you need, not only is it very expensive — billions and billions of dollars — but it encourages Russia to build up as well so you create a new arms race,” Collina explained. According to Collina, the combination of rebuilding the U.S. nuclear stockpile and Trump’s efforts to pare down and withdraw from arms control agreements suggest a dangerous new arms race against Russia is in the making.
The International Campaign to Abolish Nuclear Weapons executive director, Beatrice Fihn, said “The total number keeps going down very slowly … but they are also making these upgrades and alterations of nuclear weapons, which means that the qualitative impact of using them is not going down; rather the opposite — they’re planning for new types of nuclear warfare scenarios,” Fihn said. “It shows that they are expanding on the type of scenarios where they think that nuclear weapons can be used.” Fihn worries that artificial intelligence, cyber warfare, autonomous weapons systems and other emerging technologies increase nuclear risks exponentially. “As long as governments believe nuclear weapons are the ‘ultimate security guarantee,’ they won’t be abandoned,” says Fihn, adding that the commonly accepted notion that it’s necessary to maintain and modernize nuclear stockpiles runs counter to the idea of ridding the world of nuclear weapons.  She believes nuclear weapons, like other weapons of mass destruction, need to be delegitimized.

Global warming will heat up

We have grown accustomed to the news headlines of another forest fire. It has become the new normal. 

Widespread "increases in extreme heat” due to climate change could bring unprecedented risks to the US in coming decades, a new study has warned. By 2050, hundreds of American cities could experience an entire month each year with US "heat index" temperatures above 100F (38C) if nothing is done to tackle emissions and the resultant climate crisis, scientists said. 
Few places would be unaffected by extreme heat conditions by 2050 and only a few mountainous regions would remain extreme heat refuges by the century’s end, the team from the Union of Concerned Scientists said.
“Our analysis shows a hotter future that’s hard to imagine today,” the study's co-author Kristina Dahl, a climate scientist at the Union of Concerned Scientists, told the USA Today newspaper. “Nearly everywhere, people will experience more days of dangerous heat in the next few decades.” 
“We have little to no experience with ‘off-the-charts’ heat in the US,” said Erika Spanger-Siegfried, co-author of the report and lead climate analyst at the Union of Concerned Scientists. “These conditions occur at or above a heat index of 127 degrees, depending on temperature and humidity. Exposure to conditions in that range makes it difficult for human bodies to cool themselves and could be deadly,” she added.

Tuesday, July 16, 2019

Woody Guthrie Answers Trump

Defend the Unions

A three-judge panel unanimously upheld President Donald Trump's executive orders attacking workers' rights.

The U.S. Court of Appeals in the D.C. Circuit said that it lacked jurisdiction to block Trump's orders, which made it easier to fire federal employees, limited the amount of time workers can spend on union business, and compelled federal agencies to devise unfavorable contracts with unions.

The American Federation of Government Employees (AFGE), which represents 700,000 of the 2.1 million federal employees affected by the orders, said it would fight the court's decision "using every legal tool available to us."

"Today's terrible decision by the U.S. Court of Appeals for the District of Columbia is a tremendous blow to federal employees and their voice in the workplace," said AFGE President J. David Cox. "The union-busting framework laid out in the executive orders and the actions already taken at the bargaining table so far demonstrate clearly that there must be a check on the president's power to destroy federal employees' union rights."

The National Federation of Federal Employees (NFFE) and the AFGE union representing EPA workers echoed Cox's statement.
"In our view, these executive orders violate the law, and we are going to continue to fight them until we get a decision that sticks," NFFE President Randy Erwin told the Washington Post. "This appeals court decision does not change the fact that the Trump administration severely overstepped its authority." 

AFL-CIO President Richard Trumka also expressed solidarity with the federal workers' unions.

"This is more than union busting—it's democracy busting," Cox has previously said

Biden's Death Toll

2020 Democratic presidential candidate Joe Biden on Monday unveiled a healthcare plan that one analyst said could cause the deaths of around 125,000 people over the first ten years by leaving millions of Americans uninsured.

People's Policy Project, pointed to Biden's claim that his plan will provide health insurance to 97 percent of Americans and calculated the death toll of leaving three percent of the U.S. population without coverage.

"Even if you suppose that Biden's estimate is right and the uninsurance rate does go to three percent, that still implies an enormous amount of unnecessary death caused by a lack of insurance," Matt Bruenig said. "One commonly-used (e.g. by CAP) estimate states that one unnecessary death occurs annually for every 830 uninsured people. This means that during the first 10 years of Bidencare, over 125,000 unnecessary deaths will occur from uninsurance."

Radical Farming

The true cost of cheap, unhealthy food is a spiralling public health crisis and environmental destruction, according to a high-level commission. It said the UK’s food and farming system must be radically transformed and become sustainable within 10 years. The commission’s report concluded that farmers must be enabled to shift from intensive farming to more organic and wildlife friendly production, raising livestock on grass and growing more nuts and pulses.

“Our own health and the health of the land are inextricably intertwined but in the last 70 years, this relationship has been broken,” said the report, which was produced by leaders from farming, supermarket and food supply businesses, as well as health and environment group. Time is now running out. The actions that we take in the next 10 years are critical: to recover and regenerate nature and to restore health and wellbeing to both people and planet,” said the commission.

The commission also said agriculture produced more than 10% of the UK’s climate-heating gases and was the biggest destroyer of wildlife; the abundance of key species has fallen 67% since 1970 and 13% of species are now close to extinction.
To solve these crises, the commission said “agroecology” practices must be supported – such as organic farming and agroforestry, where trees are combined with crops and livestock such as pigs or egg-laying hens. While it and other studies recommend large reductions in meat-eating, Sue Pritchard, director of the RSA commission and an organic farmer in Wales said: “There is a strong case to be made in the UK to support sustainable beef and lamb in the places where grass is the best thing to grow.”
Pritchard said the UK had the third cheapest basket of food in the developed world, but also had the highest food poverty in Europe in terms of people being able to afford a healthy diet. Type 2 diabetes, a diet-related illness, costs the UK £27bn a year. The so-called planetary health diet calls for more nuts and pulses in diets and Pritchard said these and more vegetables could be grown in the UK. Hazelnuts and walnuts are native to the UK, she pointed out, and some farmers are now starting to grow crops like lentils and quinoa, as well as beans and peas.

London's High Rent

London and the southern regions of England are facing a dearth of teachers, nurses and police officers as rising rents make housing in large parts of the UK unaffordable for key public sector workers. Public sector workers have been forced to accept below-inflation pay increases during the government’s austerity drive of the past decade while rents have risen by more than the cost of living.

London has witnessed the biggest squeeze on public sector workers but PwC said rising rents in the south-east, the east of England and the south-west meant it was too expensive to live outside the capital and commute in.

The report by the consultancy firm PricewaterhouseCoopers said there was an urgent need to increase the supply of homes after it found that the failure of public sector pay to keep pace with soaring housing costs had made it increasingly hard for workers on modest incomes to make ends meet.

In London, workers in their 20s were spending more than half their incomes on rent, making it impossible for them to save up the deposit to buy a home.

PwC said the benchmark for an affordable rent was that it accounted for no more than 30% of an individual’s gross annual income, but that this threshold had been crossed in the high-rent hot spots in the more prosperous parts of Britain.

“The last five years has seen rental affordability ratios deteriorate and, in the UK as a whole, the amount spent on rent over this period has grown by 8%, while at the same time earnings growth remains relatively weak and below levels seen before the financial crisis,” he said. “This is not only having an impact on social mobility, it will also hinder national productivity growth in the longer term by preventing people from moving to places in the UK where they can be most productive.”

Legalised Thievery

There’s a wide range of of tax avoidance schemes played by multinationals: Transfer mispricing, abusive transfer pricing, trade misinvoicing, base erosion and profit shifting (BEPS), and re-invoicing—they all fall under the umbrella of trade mispricing, or the intentional falsification of transactions on an international level. The short-term goals for mis- or re-invoicing vary. In some cases the desired outcome is to dodge capital controls (a strategy commonly used in emerging markets to reduce rapid cash outflows). In other cases, the incentive for misinvoicing is to claim tax incentives or avoid paying duty. Generally, the scheme is this: shift profits out of high tax countries and into low tax countries, or tax havens, while ensuring that the majority of the expenses are assigned to high tax countries. Transfer pricing—the pricing of commodities traded between or within multinational enterprises—is a legal practice and a key feature of cross-border and intra-firm transactions. 

 A key concern are tax havens. 214,000 offshore entities are cited in the Panama Papers. After the release of the Panama Papers—just two years later -  a U.S. PIRG study found that 73 percent of the Fortune 500 companies operated 9,755 tax haven subsidiaries. 

In 2015, Global Financial Integrity (GFI) published a study revealing that in 2013 an astounding US$1.1 trillion was stolen annually—or nearly $3 billion a day—from developing countries due to trade mispricing

Raymond C. Offenheiser, the former president of Oxfam America, in his 2006 description of tax havens as being “the core of a global system that allows large corporations and wealthy individuals to avoid paying their fair share, depriving governments, rich and poor, of the resources they need to provide vital public services and tackle rising inequality.” Inc. was brought to court by the Internal Revenue Service (IRS) in 2017 for transfer pricing discrepancies. In 2005 and 2006, the multinational tech company transferred $255 million in royalty payments to its tax haven in Luxembourg, but according to the IRS these royalty payments should have amounted to $3.5 billion. This transfer pricing adjustment would have increased Amazon’s federal tax payments by more than $1 billion The loss of this much cash in federal tax revenue is substantial. Take for instance the water crisis in Flint, Michigan—if the city’s estimated costs of $55 million to replace the pipes are accurate, then Amazon’s tax payments could have saved the 100,000 residents from lead poisoning 18 times over.

Tax haven subsidiaries function as cash canals to transport taxable profits with the goal of lowering or, if you are Amazon Inc., entirely avoiding tax payments. But a company’s subsidiary in a tax haven requires financial sleights of hand to get the cash safe. Take for instance the Goldcrest method Amazon used in Luxembourg. It shifted its intellectual property rights (or intangibles) that were held by its U.S. parent company to its subsidiary, Amazon Lux. The subsidiary then collected royalties tax-free on international sales. Google and Ikea, similarly, decided to play the “Going Dutch” move, using their subsidiaries in the Netherlands.
The “Swiss Sidestep” is another tax play, and rather than royalty payments, “management service fees” are the key element. By paying a value-added service fee to a sister company in a European tax haven, a company can “side-step” tax payments by converting profits into fees. And, then, of course, there is the privacy and protection that a company gets on the island of Mauritius—with the “Mauritius Maneuver” a person can send their cash to Mauritius to avoid income tax and then bring it back—without a trace—as “foreign investment.”
Suppose a company extracts 2 megatons (MT) of cobalt from Papua New Guinea (PNG) and then exports the 2 MT (or 1 million kilograms) at the price of US$5 per kilogram, but imports into Canada—by way of Mauritius or the Netherlands—the same 2 MT of cobalt at the price of US$10. The result for PNG is the loss of tax revenue on $5 million. Even at a mere 5 percent tax rate with these modest and imaginative figures, a loss of US$250,000 for PNG is significant. Also in the hypothetical PNG scenario, for instance, one glaring concern that arises from this manipulative business practice is the implication that the people of PNG are somehow unaware of the value of their own resources.