Thursday, October 23, 2014

The Pits in the All-American Pie

President Obama bragged recently that by almost every economic measure, America has become better off under his watch. Obviously the weasel word here is "America." In Obama-speak, it is defined as the stock market, the plutocracy, and the media-industrial-war complex.

Actual living, breathing Americans are still in the pits, according to the most recent supplemental poverty report issued by the Census Bureau. Factoring in such expenses as medical debt, and such regional variables as transportation, housing, clothing, and child care costs, nearly half of us --150 million people -- can be considered  "near-poor" (incomes below twice the official poverty threshold). The official abject poverty rate is holding just about steady at 15.5%, or nearly 48 million Americans.

The poverty rate among older Americans is actually increasing, up by about four million people, largely as a result of medical expenses. And were it not for Social Security, more than half of all Americans over age 65 would be living in penury. In the population as a whole, according to the report, out-of-pocket medical expenses alone have sent an additional 10 million adults of all ages into a state of near-poverty.

In California, one in four residents is now deemed poverty-stricken under the supplemental measures listed by the Census Bureau. Ditto for New York City. Both locales also boast more than their share of billionaires, who have raked in an even greater share of global wealth in the past year. From The Guardian:
The richest 1% of the world’s population are getting wealthier, owning more than 48% of global wealth, according to a report published on Tuesday which warned growing inequality could be a trigger for recession.
According to the Credit Suisse global wealth report (pdf), a person needs just $3,650 – including the value of equity in their home – to be among the wealthiest half of world citizens. However, more than $77,000 is required to be a member of the top 10% of global wealth holders, and $798,000 to belong to the top 1%.
“Taken together, the bottom half of the global population own less than 1% of total wealth. In sharp contrast, the richest decile hold 87% of the world’s wealth, and the top percentile alone account for 48.2% of global assets,” said the annual report, now in its fifth year.
Meanwhile, though, most Americans (besides desperately believing that there is not only still a middle class, but that they still reside in it)  have no clue about how extreme the wealth inequality really is. According to a survey conducted by Harvard Business School, most people think that the average CEO makes a whopping 30 times the salary of the average worker, while believing that a fairer ratio would be more along the lines of 7:1.

The correct response is that, on average, the American CEO makes at least a staggering 300 times as much money as the employee. That would take the unacceptability factor into the outer limits of the stratosphere, to a level far above the comprehension of most of our brains.

And that, of course, is perfectly O.K. with the ruling elites.

Incidentally, the New York Times has today countered the Census Bureau's supplemental poverty report with a special supplemental section of its own. It is called, simply enough, Wealth. 

Far from being a self-celebration of extreme inequality, this supplement frames its articles around the theme of what a headache and hardship obscene wealth truly is for its sufferers.

If, for example, you are an executive stressed out from making 300 times as much as your serfs, you can relax. Get rid of any vestigial guilt you might be feeling at a euphemistically titled plutocratic "boot camp" where you can yoga away all your cares and woes. And if you're an older woman who is royally pissed off about all the attention your dog food-eating impoverished peers are getting, the Times has some special advice to help you cope with the angst of having all that money. There are other stories about heiresses on horseback, and how to supplement the stressful happiness that wealth brings by coddling your brain chemistry.

It doesn't take a rocket scientist or a Harvard study to prove that there is more than enough cluelessness to go around in this wildly tilting world of ours.

More Is Such a Chore


Kat said...

For more noblesse oblige read "From the Dumps of Rwanda to the Halls of Harvard"

As one reader commented (but definitely in the minority)
Stories like this one perpetuate a narrative that focuses on the indomitable human spirit and the social mobility that is in fact more the exception than the rule rather than critiquing the social, economic, and political structures at play.
Meanwhile, Eric Prince has renamed his band of mercenaries again and is peddling his services in Africa.
Harvard's endowment is 31 billion, so color me unimpressed. They are a charitable 501c organization. I would say that laws governing such organizations are not too strictly enforced if you can have a 31 billion dollar endowment and million dollar CEO's.
Charities and nonprofits are not going to solve the problems of the world. We don't need individual deciding what poor people need. (Here is a good one-- new nonprofit in my area dedicated to getting Legos to impovershed homes,
I would like a government that honors our freedom and returns power to the people. I would like government that is breaking up monopolies, protecting our freedom of association (unions), providing competition to the private sector (especially competition for labor), protecting our water, air, and land, and above, regulating our utilities and workplaces. If it did these things, why would we need all these damn nonprofits.

Kat said...

Is this Wealth section going to be a regular thing? Gag me. Isn't the Sunday Style section enough?
Okay, what I really should have said is isn't the rest of the paper enough?

Denis Neville said...

In the Kansas Laboratory of Democracy (aka Arthur Laffer's petri dish), extreme tax cutting has blown up the entire lab.

Income taxes for top earners and 200,000 small businesses (the “job creators”) were slashed.

One of the top measurable statistics of Kansas Republican Governor Sam Brownback’s "Roadmap for Kansas" campaign platform was to be a decreasing the number of children living in poverty. Brownback said, "Pouring tax dollars into good-hearted but weak anti-poverty Great Society programs inspired by former President Lyndon Johnson won't break intergenerational poverty." But extreme tax cuts would!

Today, more kids are living in poverty in Kansas. Childhood poverty has been on slow, steady rise since Brownback took office. Nearly one in five lives in poverty. About 19 percent — or 134,000 kids — live below the federal poverty level. Too many are not getting the help they need. Many of the programs available to assist poor families have been directly impacted (i.e., cut to make up for the loss of tax revenue) by Brownback’s policies as governor.

Attitudes toward the poor, especially those on welfare or otherwise receiving government assistance, are particularly punitive. Ever since Ronald Reagan invented the mythical welfare queen, getting rich on welfare and food stamps and endlessly sucking on the government teat, Americans have publicly embraced punitive, cruel attitudes toward the poor. Poverty is hard enough without being judged as lazy and a leech.

“There are millions of Americans who’ve been unemployed so long they no longer even count as unemployed. There are millions more working jobs that don’t pay the bills. This can and will not simply be undone by a growing economy. Many are scarred for life, and that certainly goes for the huge numbers of children growing up in poverty and now seeing their food stamps cut to boot. Leaving aside whether we see rising inequality as a good or a bad thing, we need to realize that it is a choice we make for ourselves and others: there is no need for 25% of our children to be too poor to function well, there is enough wealth in our societies to provide for them. We would just need to redistribute that wealth, and to limit inequality to the levels we had when our economies were doing better than they ever have, before or since. Would that really be such a bad thing? Are we truly better off creating this fake Darwinian jungle we have today? Just asking. And then of course there’s that last remaining question: “How long do you think such a society can last?” - Raúl Ilargi Meijer, “Winter In America Gets Colder: Why We Choose Poverty,”

Denis Neville said...

Anyone who gets wages and collects tips must report these payments as income. Tips are taxed just like any other salary or income.

This January, the Internal Revenue Service began classifying automatic gratuities as service charges that are taxable as regular wages and subject to payroll tax withholding. Previously, they were considered tips, and it was up to the workers to report them as income.

Tips are taxable income and must be reported to the IRS. Each month, if employees earned tips of more than $20 for the previous month, they must tell their bosses just how much extra cash they pocketed. This includes cash tips, as well as amounts added to credit cards. The employer takes the reported tip amount, adds it to the worker's base pay amount and then figures the appropriate amount of income tax to withhold from the employee's paycheck. All tips, even those amounts that fall under the $20 reporting limit, still are taxable.

Restaurants with a large serving staff report a total called "allocated tips" to the IRS. This is what the boss thinks the worker should have made in tips. This is designed to ensure that the IRS is informed of what it considers reasonable tip income for all eligible employees, regardless of whether they actually got any tips.

Criminal prosecutions remain rare, but the IRS says it has become more aggressive in pursuing civil cases involving unreported tip income. Casino workers in Nevada were sentenced to prison for underreporting their tip income.

Many waiters, especially in these tense economic times, need every tip they can get. Most struggle to stay above the poverty line. Not all of them make it.

Waitress, fired for posting a picture of this note a customer left on a bill: “I give God 10%. Why do you get 18?" - says “I would like to make a statement on behalf of wait staff everywhere: We make $3.50 an hour. Most of my paychecks are less than pocket change because I have to pay taxes on the tips I make. After sharing my tips with hosts, bussers, and bartenders, I make less than $9 an hour on average, before taxes … In this economy, $3.50 an hour doesn't cut it. I can't pay half my bills.”

Why go after billionaires when you can squeeze more out of all the waiters and waitresses?

Why target the weakest members of society? Why take away the little they have?

All the social Darwinist Ayn Rand dead-enders are out there saying, “Don’t like a less than minimum wage job? Then get another job that pays more money.”

Darwinism is an atheistic lie, except in politics, then it is policy. Social Darwinism, survival of the fittest, is a symptom of a larger and pervasive cancer running through our society

Bert Gold said...

Here is my comment on Brooks' column this morning, wherein he extolls the virtues of building infrastructure:

'When a tiny cadre is the ruling class that possesses all the wealth, you don't need roads, bridges or rails; you need Faberge eggs. America is over; David is among those who destroyed her; and he doesn't know that yet.'

Bert Gold
Frederick, Maryland

PS - Lately, I've been thinking about publishing a revised, updated version, of Michael Harrington's 'The Other America'. But, it's a big project, and I would need help.

Kat said...

In America to be a young person deserving of our consideration you must do this:
You must only being looking for opportunity (especially the educational variety), not actual stuff.
You must exhibit grit-n-determination.
You must never get angry or bitter
You must never make a misstep-- no run ins with the law (even if the law has a way of finding you).
Respect your elders.
Don't make any of the comfortable uncomfortable by letting on that you are dirt poor.
Stop texting! better yet, you should not have any sort of smart phone.
Absolute poverty only, please.
Be the very exemplar of America, the land of opportunity.
That's all. For now. I'm sure there is more.
In addition to this primer you may find more information in the article I referenced earlier.

The Black Swan said...

As a young American, it is truly depressing to live in this country. The game is rigged, and I know I am on the wrong side of that rigging. Unless I decide to shed my morals and join the society of greed and sociopathy I must resign myself to a life of poverty. Every day more news comes to light of the absolute corruption of the United States government and it's subservience to the corporate world and it's wealthy owners.

I think constantly about expatriation, and only my ties to my family keep me slaving away in this wetiko society.

Denis Neville said...

@ The Black Swan

Who’s your daddy?

“The persistence in the advantages and disadvantages of income passed from parents to the children will rise by about a quarter for the next generation as a result of the rise in inequality that the U.S. has seen in the last 25 years." - Alan Krueger, Chairman White House Council of Economic Advisers, “The Great Gatsby curve,” January 2012

This is how the American Dream ends. Inequality starts in the crib. Economic opportunity for poor kids is strangled in the crib.

“Poor kids in America are more and more isolated from everybody.” - Robert Putnam, public policy professor at the Harvard John F. Kennedy School of Government and author of “Bowling Alone

"There is little moral justification for a society with a large gap between rich and poor, and little movement between the two." - Richard Reeves and Isabel Sawhill, "Equality of Opportunity: Definitions, Trends, and Interventions," Federal Reserve Bank of Boston's annual conference, October 2014

The transmission of wealth inequality across generations is the antithesis and death of democracy.

What happens when you have income inequality that crosses generations by families? Aristocracy and aristocrats!

“Liberals in the United States have been losing political debates to conservatives for a quarter century. In order to start winning again, liberals must answer two simple questions: what is conservatism, and what is wrong with it? As it happens, the answers to these questions are also simple:

Q: What is conservatism?

A: Conservatism is the domination of society by an aristocracy.

Q: What is wrong with conservatism?

A: Conservatism is incompatible with democracy, prosperity, and civilization in general. It is a destructive system of inequality and prejudice that is founded on deception and has no place in the modern world.

“Economic inequality and regressive taxation, while certainly welcomed by the aristocracy, are best understood as a means to their actual goal, which is simply to be aristocrats…

For conservatives, rather, democracy is a psychological condition. People who believe that the aristocracy rightfully dominates society because of its intrinsic superiority are conservatives; democrats, by contrast, believe that they are of equal social worth. Conservatism is the antithesis of democracy. This has been true for thousands of years…

United States right now is toward the latter end of the spectrum. A main goal in life of all aristocrats, however, is to pass on their positions of privilege to their children, and many of the aspiring aristocrats of the United States are appointing their children to positions in government and in the archipelago of think tanks that promote conservative theories.” - Philip E. Agre

Jay - Ottawa said...

Poverty, Substandard Healthcare and Ebola: Connectible Dots

Dr. Paul Farmer, an infectious disease specialist at Harvard (and lately West Africa) has a must-read article about Ebola in the “London Review of Books.” If you have time to read only one article about the pandemic, read this. (The article is open to non-subscribers.) A few passages:

“But the fact is that weak health systems, not unprecedented virulence or a previously unknown mode of transmission, are to blame for Ebola’s rapid spread.”
“The desire for simple solutions and for proof of a high ‘return on investment’ will be encountered by anyone aiming to deliver comprehensive services (which will necessarily include both prevention and care, all too often pitted against each other) to the poor. Anyone whose metrics or proof are judged wanting is likely to receive a cool reception, even though the Ebola crisis should serve as an object lesson and rebuke to those who tolerate anaemic state funding of, or even cutbacks in, public health and healthcare delivery. Without staff, stuff, space and systems, nothing can be done.”
“Outbreaks are inevitable. Pandemics are optional.’’

The lords of disparity and their helpers are keeping pandemics optional. Even with Ebola in their face, they cannot find it within themselves to fund the “staff, stuff, space and systems” needed to contain the outbreaks.

If you damn the poor for getting sick and spreading disease, don’t forget to damn the rich. And their helpers.

annenigma said...

Jesus H. Christ! You've got to read this - front page NYT. Karen might already be writing her own piece on this - I certainly hope so.

'Law Lets IRS Seize Accounts on Suspicion, No Crime Required'

I'm so OUTRAGED I'm actually beyond words.

Jay - Ottawa said...

The asset seizure exercise in the sticks of Maryland and Iowa against little savers and small business owners was probably just a tune up drill for the IRS before they move on Wall Street accounts. Look forward.

annenigma said...

Wall Street got away with bank robbery so why wouldn't the police engage in highway robbery under the asset forfeiture law. Now we see the IRS is getting in on the act.

If this isn't a Kleptocracy, I don't know what is.