Tuesday, April 14, 2015

America's 1%:- Callous and Unfeeling

The callousness of U.S. political and business leaders is disturbing. It's hard to comprehend the thinking of people who cut funding for homeless and hungry children. Only two nations still refuse to ratify the UN Convention on the Rights of the Child. The United States is one of them. The stale counter-argument that “It could be worse, just look at those poor workers in country X and Y. It may not be great here, but what the hell, we’re not so bad off, are we?” is just another ideological ploy to get working classes to accept their deteriorating conditions. It’s just another ideological tool to get folk to accept their reality as their fate. To make them believe that, as their living conditions are getting worse, it’s not really that bad. But it is….The freedom to vote carries little weight without economic freedom – the freedom to work and to have food, shelter, education, medical care and a decent retirement.

The US’s true ‘war budget’ is about $1 trillion a year, not the reported $650 billion or so for the Pentagon, which is stuffed away in dozens of corners in its annual economic budget. It has more than 1000 military bases worldwide. It is engaged constantly in more wars worldwide than any other country by far. And it spies every day on more of its, and rest of the world’s, citizens than all the ‘spooks’ in the rest of the world do combined.

According to a study from Princeton University, American democracy no longer exists. Using data from over 1,800 policy initiatives from 1981 to 2002, researchers Martin Gilens and Benjamin Page concluded that rich, well-connected individuals on the political scene now steer the direction of the country, regardless of – or even against – the will of the majority of voters. America's political system has transformed from a democracy into an oligarchy, where power is wielded by wealthy elites. Whether it be health care, food services or telecommunications, private equity firms rake in those big bucks by cutting corners on services, slashing jobs and wages. Far too many Americans have bought into the notion that capitalism comes at little or no cost, and thus the expenses of the many continue to benefit the few. Today’s privileged fraction; i.e., the global 1%, has the great fortune of experiencing life without the encumbrances of dire poverty, hunger, lack of rights, alienation, persecution, repression, etc., which plague billions of others crushed by capitalism and the global capitalist system. Moreover, if the plutocracy fancies that it can enjoy capitalism at little personal cost, then why should its privileged ranks consider alternatives that give credence to a thinker, like Karl Marx, or to his conception of a “new type of human being who needs his fellow-men,” for example? Why should the ruling elites fashion any “real constructive effort to create the social texture of future human relations,” as Marx states? The fact is that if capitalism’s overseers ably exact a profit from capitalism at seemingly little expense to themselves (whilst growing ever richer in the process), then rationally they should have no plans for undoing the economic system that empowers them thusly. “Saving capitalism from itself” is not the solution to US global parasitism, criminal wealth appropriation, and an utterly bankrupt profit system.

Income inequality in the US is also the most extreme among the advanced economies, and growing worse every year. CEOs of US corporations make around 400 times the average pay of the average worker in their company—the biggest gap in the industrial world. (In 1980 they made only 35 times).The wealthiest 1% households (investor class nearly all), gained no less than 95% of all the net income growth in the US since 2010, which compares to 65% during the George W. Bush years, 2001-2007, and to 45% during the Clinton years in the 1990s. Meanwhile, the median family income has been declining in the US at 1%-2% every year for the past decade.

US workers work the longest hours among the industrial economies, have the shorted annual paid vacations (on average 7 days paid a year), and face the prospect of poverty when they retire or can no longer work. Social security pensions average only $1,100 a month, private pensions (called 401k plans) average less than $50,000 total savings for those age 60 and approaching retirement, and more than half of US workers live pay check to pay check with no personal savings whatsoever. As 70 million ‘baby boomers’ born after 1945 start to retire, tens of millions of them face the prospect of a penniless, poverty-ridden retirement. No wonder the fastest growing segment of the US workforce is those aged 65-74, as many return to work just to make ends meet.

US workers may get only 6 months unemployment benefits, at less than one-third their pay, when they lose their jobs, compared to German workers, for example, who get up to two years in jobless benefits and job retraining to boot.

College students have become, in effect, indentured servants to the education establishment of overpaid administrators and bankers, owing more than $1.1 trillion in debt just to get a college education—more per capita higher education debt than any other country in the world. The cost of attending a four year college today is, on average, $30,000 to $60,000 a year for a four year undergraduate education. For those who can’t afford college there’s no meaningful job training programs available any longer. Meanwhile, 70% of college professors and instructors in the US are part time/temp workers, many of whom earn poverty wages and have no benefits.

The government pay roughly $153 billion each year to supplement (subsidize) employers who refuse to pay a livable wage, according to report published by the University of California, Berkeley, Center for Labor. 73 percent of those enrolled in the country's major public support programs are members of working families. The Berkeley study examined state spending for Medicaid/Children’s Health Insurance Program and Temporary Aid to Needy Families (TANF), and federal spending for those programs as well as food stamps (SNAP) and the Earned Income Tax Credit (EITC). Adjusted for inflation, wage growth from 2003 to 2013 was either flat or negative for the entire bottom 70 percent of the wage distribution. Further, the number of non-elderly Americans who receive insurance benefits from an employer has fallen from 67 percent in 2003 to 58.4 percent in 2013. When companies pay too little for workers to provide for their families, workers rely on public assistance programs to meet their basic needs. The reliance on public assistance spans a diverse range of occupations, including fast-food workers (52%), childcare workers (46%), home care workers (48%), and even part-time college faculty (25%).

The United States has a large, parasitical for-profit health care system, dominated by multi-billion dollar profit making private health insurance companies that suck $1 trillion a year from the wallets of US consumers for pushing paper around, a vast network of ‘for profit’ hospital chains that suck another $900 billion a year, pharmaceutical drug companies that charge $94,000 for drugs to treat someone with hepatitis C (that’s $1,125 per pill) and charge patients $14,000 to $64,000 a month for cancer drugs, and it has the highest paid professional medical personnel in the world. The US spends more than $3 trillion a year, and rising, on health care. That’s about 18% of its $17.4 trillion annual GDP, or almost one dollar out of every five spent on everything is for healthcare. That’s the highest spending on healthcare in the industrial world. In return for that massive spending, it ranks 39th in infant mortality rates, 42nd in adult mortality, and 36th in life expectancy.

America's wealth grew by 60 percent in the past six years, by over $30 trillion. In approximately the same time, the number of homeless children has also grown by 60 percent.  Financier and CEO Peter Schiff said, "People don’t go hungry in a capitalist economy." Tell that to the 16 million kids on food stamps who know what it's like to go hungry. Perhaps, some in Congress would say, those children should be working. "There is no such thing as a free lunch," insisted Georgia Representative Jack Kingston, even for schoolkids, who should be required to "sweep the floor of the cafeteria" The U.S. has one of the highest relative child poverty rates in the developed world. As UNICEF reports, "[Children's] material well-being is highest in the Netherlands and in the four Nordic countries and lowest in Latvia, Lithuania, Romania and the United States."  Over half of public school students are poor enough to qualify for lunch subsidies, and almost half of black children under the age of six are living in poverty. Nearly half of all food stamp recipients are children, and they averaged about $5 a day for their meals before the 2014 farm bill cut $8.6 billion (over the next ten years) from the food stamp program. In 2007 about 12 of every 100 kids were on food stamps. Today it's 20 of every 100. For Every 2 Homeless Children in 2006, There Are Now.  On a typical frigid night in January, 138,000 children, according to the U.S. Department of Housing, were without a place to call home.  That's about the same number of households that have each increased their wealth by $10 million per year since the recession.

The reason most of us have seen little gain from economic growth over the last three decades is that the rich have rigged the rules to ensure that money flows upward such as the carried interest tax deduction. In the case of a fund manager looking at $100 million in carried interest income the tax break will mean an additional $20 million in their pockets. To put this in perspective, this is equal to 150,000 months of food stamps for the typical beneficiary. Fund managers don't differ from millions of other workers in the economy. Salespeople typically get much of their pay on commission. The difference between these workers and the super-rich who run hedge funds and private equity funds is that ordinary workers have to pay the same tax rate on their earnings (39.6%) regardless of whether they are paid a straight salary or whether they earned it as a commission. It is only the fund managers who get to have their earnings taxed at a lower rate (20%) because they earned them on a commission.

The United States, Noam Chomsky explained is “a business-run society,” tainted by a “very violent and repressive labor history.” That legacy reverberates today, as governors of onetime bulwarks of labor power like Wisconsin and Michigan sign “right-to-work” laws allowing workers to opt out of paying fees to support unions that bargain on their behalf. While such measures are framed in terms of workers’ rights, Chomsky argued that they effectively sanction freeloading. “ ‘Right to work’ means right to scrounge, ” he said. “It has nothing to do with ‘right to work.’ It means the right to be represented by a union to defend you and not to pay for it.” Workers do pay a price for right-to-work laws, however. Not only do such measures reduce union coverage by nearly 10 percentage points, but the Economic Policy Institute finds that right-to-work laws are associated with an average $1,500 drop in annual wages.
As workers lose clout, Chomsky said, a well-heeled elite continues to prosper. Bemoaning a status quo in which political elites cater to the interests of the powerful while stripping rights from ordinary citizens, Chomsky said, “This is a plutocracy. It’s not a democracy.” Chomsky maintains that meaningful change requires a democratic awakening. “Democracy is a threat to any power system,” he said.