Archive for category Economy
David J. Lynch on Bloomberg:
The widening gap between rich and poor is eroding faith in the American dream.
By almost two to one — 64 percent to 33 percent — Americans say the U.S. no longer offers everyone an equal chance to get ahead, according to a Bloomberg National Poll.
…The lack of faith is especially pronounced among those making less than $50,000 a year: By a 73 percent to 24 percent margin, they say the economy is unfair. Even 60 percent of those whose annual income is $100,000 or more bemoan the absence of a fair deal…
In the Bloomberg poll, 68 percent of Americans say the income gap is growing, while 18 percent say it is unchanged and 10 percent say it’s shrinking.
After 30 years of trickle-down economics, very few Americans can be fooled anymore. Democrats like President Obama have been forced to acknowledge the problem of extreme inequality, but what are they prepared to do about it?
The budget deal announced yesterday is the opposite of what we need. The Democratic Party sold out its own base to help Republicans maintain power.
UPDATE: Robert Reich: Raw Deal
Hopefully making “The Church of Jesus Christ of Later Day Saints” leaders sit up in their chair a little.
But let’s not kid ourselves, The Vatican has a lot more assets to sell in helping the poor.
Writing Friday in the New York Times, columnist Paul Krugman asks all of us to give President Obama’s big inequality speech a serious hearing. Speaking at the Center for American Progress Wednesday, our President pointed to a combination of growing income inequality and a lack of upward mobility as “the defining challenge of our time.”
Our political class has spent years obsessed with a fake problem — worrying about debt and deficits that never posed any threat to the nation’s future — while showing no interest in unemployment and stagnating wages. Mr. Obama, I’m sorry to say, bought into that diversion. Now, however, he’s moving on.
…The wrong turn we’ve taken in economic policy — our obsession with debt and “entitlements,” when we should have been focused on jobs and opportunity — was, of course, driven in part by the power of wealthy vested interests. But it wasn’t just raw power. The fiscal scolds also benefited from a sort of ideological monopoly: for several years you just weren’t considered serious in Washington unless you worshipped at the altar of Simpson and Bowles.
Now, however, we have the president of the United States breaking ranks, finally sounding like the progressive many of his supporters thought they were backing in 2008. This is going to change the discourse — and, eventually, I believe, actual policy.
So don’t believe the cynics. This was an important speech by a president who can still make a very big difference.
Many of us, including myself, tend to discount our President’s remarks about inequality because his administration has consistently favored Wall Street over Main Street. His support for raising the minimum wage comes too late– unless the Democrats re-take the House next year, he will likely be the first President since Franklin D. Roosevelt in 1938 not to sign a minimum wage law.
Economist Arindrajit Dube:
[T]he evidence suggests that around half of the increase in inequality in the bottom half of the wage distribution since 1979 was a result of falling real minimum wages. And unlike inequality that stems from factors like technological change, this growth in inequality was clearly avoidable. All we had to do to prevent it was index the minimum wage to the cost of living.
The question is, should we take President Obama’s inequality rhetoric seriously, as Krugman suggests?
Maxwell Strachan, HuffPo:
Congress effectively pulled money out of the hands of 47 million struggling Americans last month when it allowed massive cuts to the country’s food stamp program to go through without a hitch.
This was a callous decision. If you’re struggling to remember why, look no further than this chart from a new report by the Brookings Institution-affiliated Hamilton Project:
William Galston, Wall Street Journal:
The food-stamp program’s costs have soared since 2000, and especially since 2007. Here’s why.
First, there are many more poor people than there were at the end of the Clinton administration. Since 2000, the number of individuals in poverty has risen to 46.5 million from 31.6 million—to 15% of the total population from 11.3%. During the same period, the number of households with annual incomes under $25,000 rose to 30.2 million (24.7% of total households) from 21.9 million (21.2%).
Critics complain that beneficiaries and costs have continued to rise, even though the Great Recession officially ended in 2009. They’re right, but the number of poor people and low-income households has continued to rise as well.
According to the Census Bureau, there are 2.9 million more poor individuals today than in 2009, and three million more households with incomes under $25,000. The economic recovery, such as it is, has not yet reached low-income Americans.
A couple key passages:
The US elites, similarly, took the smooth functioning of the political-economic system for granted. The only problem, as they saw it, was that they weren’t being adequately compensated for their efforts. Feelings of dissatisfaction ran high during the Bear Market of 1973—82, when capital returns took a particular beating. The high inflation of that decade ate into inherited wealth. A fortune of $2 billion in 1982 was a third smaller, when expressed in inflation-adjusted dollars, than $1 billion in 1962, and only a sixth of $1 billion in 1912. All these factors contributed to the reversal of the late 1970s.
Three years ago I published a short article in the science journal Nature. I pointed out that several leading indicators of political instability look set to peak around 2020. In other words, we are rapidly approaching a historical cusp, at which the US will be particularly vulnerable to violent upheaval. This prediction is not a ‘prophecy’. I don’t believe that disaster is pre-ordained, no matter what we do. On the contrary, if we understand the causes, we have a chance to prevent it from happening. But the first thing we will have to do is reverse the trend of ever-growing inequality.
And finally this one:
How does growing economic inequality lead to political instability? Partly this correlation reflects a direct, causal connection. High inequality is corrosive of social cooperation and willingness to compromise, and waning cooperation means more discord and political infighting. Perhaps more important, economic inequality is also a symptom of deeper social changes, which have gone largely unnoticed.
Using Census data, the Washington Post calculates that the American middle class shrank by 676,199 households between 2009 and 2012, while the number of low- and upper-income households grew.
h/t Alan Pyke, Think Progress.
Via TPM (emphasis added):
The Medicaid expansion field is tentatively set for 2014, and the nation is split down the middle: 25 states (plus D.C.) are expanding, and 25 states are not, according to the Kaiser Family Foundation.
… according to the foundation, 4.8 million Americans won’t be covered as the law intended in those non-expanding states. They don’t qualify for Medicaid now, but would have under the expansion, and they don’t make enough money to qualify for financial help to buy private coverage.
States with either a Republican governor or a GOP-controlled chamber in the legislature (or both) are opting out. In Utah, 57,850 people will not get health coverage due to the lack of Medicaid expansion. In Texas, the number will be 1,046,430.
Let’s face it! We all agree with John McCain sometimes and he certainly gets a lot of face-time. When he comes out against ‘human cockfighting’, I’m for it.
An article I’m about to link to has this paragraph:
Prominent critics of [mixed martial arts] for adults including Senator John McCain, who called it ‘human cockfighting’ and in 2008 wrote a letter to the governors of every state asking them to ban it.
I’m interested in the word “adults” in the above paragraph, because I want to know if McCain was talking about human cage fighting for adults or something much, much worse.
I’ve never been a parent, but I imagine you have to walk a fine line between teaching your children to be kind to others or take a strong stance when threatened.
If you are weak of heart, don’t go here.
If this is the only future America can come up with, we need a LOT more bread and a LOT less circus!
Starting today SNAP, or food stamp benefits, will be reduced by 5 percent. SNAP used to max out at $668 a month for a family of four. Now, the maximum amount will drop to $632, or a cut of $432 a year.
Thanks to the Great Recession and a commitment to austerity by the government in the wake of the recession, an additional 21 million people were added to SNAP since 2008. Today, more than 1 in 4 U.S. children live in a home that gets food stamps.
Another group with lots of members in SNAP: Veterans. U.S. Census Bureau data show that, in 2011, some 900,000 former U.S. military personnel lived in households that used food stamps.
Economists have found that every dollar of SNAP spending generates roughly $1.70 in local economic activity. The USDA has calculated that food stamps generate an even bigger bang for the buck. So pinching food stamp recipients will ripple into the broader U.S. economy.
Food bank operators are bracing for more people lining up at local pantries while Congress debates additional cuts to the supplemental nutrition program that helps 1 in 7 Americans, including 22 million children. Utah alone is already losing $26 million in SNAP funding this fiscal year.
When we go shopping at Costco we always pick up some additional food to donate to the Utah Food Bank, which provides food to a statewide network of 134 emergency food pantries. Also we send them an annual cash contribution. Washington politicians are always ready with handouts for the rich and the corporations, but not for ordinary American people who work for a living. It’s going to be up to us to bail out the food banks!
Source: Mother Jones
The federal government’s latest annual deficit was $680 billion, the smallest it’s been since 2008, according to Treasury Department data released Wednesday. Federal spending in 2013 totaled 20.8% of GDP, down from 22% the year before. The FY 2013 deficit was less than half the record $1.413 trillion figure inherited by the Obama administration from President George W. Bush. It’s becoming clear to everyone, not just economists, that deficits are not that hard to control. If we can fix the economy and get the rich to pay their fair share of taxes, deficit spending will vanish completely.
The so-called “sequester” austerity budget has effectively sabotaged our economic recovery, but at least it accomplished one good thing. Washington politicians are no longer talking seriously about a proposed “Grand Bargain” to cut Social Security and Medicare. Progressive blogs have labeled this the Grand Betrayal, an attack on the social safety net that has kept millions of Americans out of poverty.
Paul Ryan killed any lingering hopes of a grand bargain within moments of the budget conference kickoff on Wednesday.
In his opening remarks, the Wisconsin congressman and chairman of the House budget committee laid down a firm marker against new taxes, which are essential to any major deficit reduction proposal that can pass Congress and be signed into law.
…His comments reflect the no-compromise mood of the GOP. That means the two chambers are unlikely to strike a major debt deal or reconcile the different budgets passed by the House and Senate earlier this year.
Party of NO, do your stuff!
OTOH it would be good if the 29-member budget conference committee can find some way to avoid another government shutdown on January 15 next year. Hopefully, that’s not too much to ask. They have until December 13 to reach a compromise agreement.