Sunday, April 24, 2016


“Progressives have long complained of corporate influence over government policy. They’ve pilloried companies that threaten to move operations in order to extract favors from state legislatures; they’ve attacked the Koch-funded American Legislative Exchange Council for its role in drafting a slew of pro-business state laws; they’ve called for overturning Citizens United.

James Surowiecki, “Unlikely Alliances,” in the New Yorker, April 25, 2016, financial page.

“In a comprehensive 2014 study of two decades of public-opinion data, the political scientists Martin Gilens and Benjamin Page showed that the views of business leaders and the economic élite matter far more to politicians than what ordinary voters want.

James Surowiecki, “Unlikely Alliances,” in the New Yorker, April 25, 2016, financial page.

Wednesday, April 13, 2016

The Rich Live Longer Everywhere.
For the Poor, Geography Matters

“For poor Americans, the place they call home can be a matter of life or death.
“The poor in some cities — big ones like New York and Los Angeles, and also quite a few smaller ones like Birmingham, Ala. — live nearly as long as their middle-class neighbors or have seen rising life expectancy in the 21st century. But in some other parts of the country, adults with the lowest incomes die on average as young as people in much poorer nations like Rwanda, and their life spans are getting shorter.
“In those differences, documented in sweeping new research, lies an optimistic message: The right mix of steps to improve habits and public health could help people live longer, regardless of how much money they make.
“One conclusion from this work, published on Monday [April 11,2016] in The Journal of the American Medical Association, is that the gap in life spans between rich and poor widened from 2001 to 2014. The top 1 percent in income among American men live 15 years longer than the poorest 1 percent; for women, the gap is 10 years. These rich Americans have gained three years of longevity just in this century. They live longer almost without regard to where they live. Poor Americans had very little gain as a whole, with big differences among different places.

“The Richest American Men Live 15 Years Longer than the Poorest 1 Percent
“But the fact that some places have increased the life span of their poorest residents suggests that improving public health doesn’t require first fixing the broader, multidecade problem of income inequality. Small-scale, local policies to help the poor adopt and maintain healthier habits may succeed in extending their lives, regardless of what happens with trends in income inequality.
“ ‘You want to think about this problem at a more local level than you might have before,” said Raj Chetty, a Stanford economist who is the study’s lead author.
“ ‘You don’t want to just think about why things are going badly for the poor in America. You want to think specifically about why they’re going poorly in Tulsa and Detroit,’ he said, naming two cities with the lowest levels of life expectancy among low-income residents.
“The research, in the works for nearly three years and based on a vast trove of records on earnings and deaths, is the most detailed analysis to date of a pattern first identified at least a couple of centuries ago, that more money translates into a longer life.
“It could be as simple as this: Wealth buys higher-quality medical care, which allows people to live into old age. But a long line of evidence, including the new work, suggests it’s less obvious than it might seem. The affluent seem to live in healthier ways. They exercise more, smoke less, feel less stress and are less likely to be obese.
“It’s not even certain that the cause and effect flows from higher income to greater health; to some degree, it may go the other direction as well, because people who are healthy are better able to hold down a demanding job, and so have higher incomes.
“Geography Matters More for the Poor
“The new paper, in fact, finds little correlation between a region’s Medicare spending rate or the proportion of the population with health insurance and how long its poor citizens live.
“Public health experts who examined the results said the weak relationship did not mean that health insurance had no value. Research has long established that health care interventions have a much smaller effect on life span than behavioral factors like smoking and exercise. But health care does help people who are already sick lead healthier lives. And it can provide economic security and peace of mind that improve the lives of the poor in other ways.
“Economic measures like the unemployment rate and income inequality also showed little relationship to low-income people’s life spans. There was a much stronger relationship between longevity and obesity and smoking rates, which is unsurprising. Places where poor citizens had long life spans also tended to have a high concentration of college graduates and high local government spending.
“Life expectancy for the poor is lowest in a large swath that cuts through the middle of the country, and it appears in pockets in the rest of the country, in places like Nevada. David M. Cutler, a Harvard economist and an author of the paper, calls it the “drug overdose belt,” because the area matches in part a map of where the nation’s opioid epidemic is concentrated.
“The new findings dovetail with a much-discussed paper by Anne Case and Angus Deaton published last year. That research showed rising death rates among middle-age white Americans, especially those with low education. It also showed a sharp increase in drug and alcohol poisonings, suicides and accidents in the first years of this century. Research from the Brookings Institution published in February also found a growing gap in life span between the rich and the poor.
“ ‘There is some deeper distress going on among white middle-aged Americans that may continue to propel these mortality rates higher,” Mr. Deaton, a Princeton economist who wrote an editorial critiquing the new paper by Mr. Chetty and his colleagues, said in an interview. “If so, these people at the bottom will live even less long than they’re calculating.”
“The great question for public health officials is what strategies might help low-income people live as long as their richer neighbors.
“ ‘There is a very strong correlation between income and life span,’ Dr. Thomas R. Frieden, director of the Centers for Disease Control and Prevention, said in an interview. ‘But it is not inevitable. There are things we can do to change the life trajectory of people. What improves health in a community? It includes wide access to social, educational and economic opportunity.’
“A common thread among many of the places with a smaller longevity gap was population density, with wealthy cities leading the way. New York has a high rate of social spending for low-income residents andhas been aggressive in regulating trans fats and smoking.
“In the area in and around Birmingham, Ala., the life span for adults in the bottom quarter of income rose 3.8 years for men and 2.2 years for women from 2001 to 2014. (Because people of different races have different life expectancies regardless of income, the researchers statistically adjusted these local numbers to simulate a world in which all places matched the racial composition of the country as a whole. These numbers are after these race adjustments.)

Dr. Mark E. Wilson, chief executive of the health department in Jefferson County, Ala., which includes Birmingham, ticked off a number of things that might have helped.
“The county expanded availability of preventive health care like vaccinations and mammograms by opening clinics in poorer neighborhoods in the 1990s and early 2000s (though recently it has closed some of the clinics). Although a relatively high percentage of the population lacks health insurance, a portion of local taxes goes to hospital care for those who cannot pay. The county has been ahead of the rest of Alabama in banning smoking in restaurants and workplaces, with a law enacted in 2012. And philanthropic foundations backed by old industrial money have funded campaigns to make people healthier in the Birmingham area.
“ ‘These aren’t all huge-scale projects, but there is still an alignment of getting resources moving in the same direction around health,’ Dr. Wilson said. ‘We’re trying to establish a culture of health and get it more and more on the radar screen of our community.’
“Mr. Cutler, the Harvard economist, argues that the new research should serve as a jumping-off point. ‘Why is it that Birmingham has done well but Tulsa has done poorly?’ he said.
“It may be good to know that poor Americans are living a lot longer in some places than in others, but it would be better to know — in terms of specific policy prescriptions — how the places with better results are doing it.

Source: The Association Between Income and Life Expectancy in the United States, 2001-2014, The Journal of the American Medical Association; Contains charts, graphs, and sources.

Sunday, April 10, 2016

Gateway to Sources and Information About Income Inequality in the United States

Millions of Americans are working longer hours for lower wages, and yet almost all of the new income and wealth being created is going to the top one percent. While the top one percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall. 
  Scholars, from the Nobel-Prize-winning Paul Krugman to the widely respected economist James Surowiecki, have been working to analyze these disparities. Americans are not generally aware of the extent of this income inequality. In most developed countries, there is a direct relationship between income inequality and the public's views about the need to address the issue – but not in America, where income inequality is worse but the concern is lower. The most commonly accepted measurement of income inequality, the Gini Index, ranks the United States sixth-worst among 173 nations. 
   Private-equity companies are far more obviously connected to an undue concentration of wealth at the expense of workers and communities than are collateralized-debt obligations, which were at the core of our 2008 Great Recession. Within the one percent, there is a top one percent that consists disproportionately of private-equity and hedge-fund principals.

Anyone wanting to know about income inequality may scroll down the various dates of the archive file, or use Windows Command f to find specific names or topics throughout the archive.


“35 soul-crushing facts about American income inequality,”

Posted on salon, JULy 15, 2015, at 01:15 P.M. (EDT)


Larry Schwartz, Alternet

“The money given out in Wall Street bonuses last year was twice the amount all minimum-wage workers earned combined.”

This article originally appeared on www.alternet.

“While Hillary Clinton occasionally gives some lip service to the problem of extreme inequality, [Senator] Bernie Sanders is the only candidate really hammering away at it. He has even blasted the orthodoxy of economic growth for its own sake, saying according to Monday’s [July 13, 2015] Washington Post that unless economic spoils can be redistributed to make more Americans’ lives better, all the growth will go to the top 1% anyway, so who needs it? Sanders might know his history, but the rest of the candidates could use a little primer.

“The United States was not always the most powerful nation on Earth. It was only with the end of World War II, with the rest of the developed world in smoldering ruins, that America emerged as the free world’s leader. This coincided with the expansion of the U.S. middle class. With the other war combatants trying to recover from the destruction of the war, America became the supermarket, hardware store and auto dealership to the world. Markets for American products abounded and opportunity was everywhere for American workers of all economic means to get ahead. America had a virtual monopoly on rebuilding the world. Combined with the G.I. Bill of 1944, which provided money for returning veterans to go to college, and government loans to buy houses and start businesses, the middle class in America boomed, as did American power, wealth and prestige. Between 1946 and 1973productivity in America grew by 104 percent. Unions led the way in assuring wages for workers grew by an equal amount.
“The 1970s, however, brought a screeching halt to the expansion of the American middle class. The Arab oil embargo in 1973 marked the end of cheap oil and the beginning of the middle-class decline. The Iranian Revolution in 1979, with more resultant oil instability, combined with the rise of Ronald Reagan’s conservative revolution at home, accelerated the long and painful contraction of the middle class. Cuts in corporate taxes, stagnant worker wage growth, the right-wing war on unions, and corporate outsourcing of work overseas greased the wheels of the middle-class decline and the upper-class elevation. Cuts in taxes on the wealthy, under the guise of trickle-down economics, have resulted in lower government revenue and cuts to all kinds of services. All of which has led to today, an era of national and international inequality unparalleled since the days of the Roaring ’20s.
Here are 35 astounding facts about inequality that will fry your brain.
1. In 81 percent of American counties, the median income, about $52,000, is less than it was 15 years ago. This is despite the fact that the economy has grown 83 percent in the past quarter-century and corporate profits have doubled. American workers produce twice the amount of goods and services as 25 years ago, but get less of the pie.
2. The amount of money that was given out in bonuses on Wall Street last year is twice the amount all minimum-wage workers earned in the country combined.
3. The wealthiest 85 people on the planet have more money that the poorest 3.5 billion people combined.
4. The average wealth of an American adult is in the range of $250,000-$300,000. But that average number includes incomprehensibly wealthy people like Bill Gates. Imagine 10 people in a bar. When Bill Gates walks in, the average wealth in the bar increases unbelievably, but that number doesn’t make the other 10 people in the bar richer. The median per adult number is only about $39,000, placing the U.S. about 27th among the world’s nations, behind Australia, most of Europe and even small countries like New Zealand, Ireland and Kuwait.
5. Italians, Belgians and Japanese citizens are wealthier than Americans.
6. The poorest half of the Earth’s population owns 1% of the Earth’s wealth. The richest 1% of the Earth’s population owns 46% of the Earth’s wealth.
7. More locally, the poorest half of the US owns 2.5% of the country’s wealth. The top 1% owns 35% of it.
8. Inequality is a worldwide problem. In the UK, doctors no longer occupy a place in the top 1% of income earners, London plays host to the largest congregation of Russian millionaires outside of Moscow, and also houses more ultra-rich people (defined as owning more than $30 million in assets outside of their home) than anywhere else on Earth.
9. The slice of the national income pie going to the wealthiest 1% of Americans has doubled since 1979.
10. The 1% also takes home 20% of the income. This figure is the most since the 1920s era of laissez faire government (under Republicans Warren Harding, Calvin Coolidge and Herbert Hoover).
11. The super rich .01% of America, such as Jamie Dimon, CEO of JP Morgan, take home a whopping 6% of the national incomeearning around $23 million a year. Compare that to the average $30,000 a year earned by the bottom 90 percent of America.
12. The top 1% of America owns 50% of investment assets (stocks, bonds, mutual funds). The poorest half of America owns just .5% of the investments.
13. The poorest Americans do come out ahead in one statistic: the bottom 90% of America owns 73% of the debt.
14. Tax rates for the middle class have remained essentially unchanged since 1960. Tax rates on the highest earning Americans have plunged from an almost 70% tax rate in 1945 down to around 35% today. Corporate tax rates have dropped from 30 percent in the 1950s to under 10 percent today.
15. Since 1990, CEO compensation has increased by 300%. Corporate profits have doubled. The average worker’s salary has increased 4%. Adjusted for inflation, the minimum wage has actually decreased.
16. CEOs in 1965 earned about 24 times the amount of the average worker. In 1980 they earned 42 times as much. Today, CEOs earn 325 times the average worker.
17. Wages, as a percent of the overall economy, have dropped to an historic low.
18. In a study of 34 developed countries, the United States had the second highest level of income inequality, ahead of only Chile.
19. Young people in the U.S. are getting poorer. The median wealth of people under 35 has dropped 68% since 1984. The median wealth of older Americans has increased 42%.
20. The average white American’s median wealth is 20 times higher ($113,000) than the average African American ($5,600) and 18 times the Hispanic American ($6,300).
21. America’s highest incomeinequality is located in the states surrounding Wall Street (New York City) and the oil-rich states.
22. Since 1979, high school dropouts have seen median weekly income drop by 22 percent. Ethnically, the highest dropout rates are among Hispanic and African American children.
23. In 1970, a woman earned about 60% of the amount a man earned. In 2005 a woman earned about 80% of what a man earned. Since 2005, there has been no change in that figure. African-American women earn just 64% of what a white male earns, and Hispanic women just 56%.
24. Over 20 percent of all American children live below the poverty line. This rate is higher than almost all other developed countries.
25. Union membership in the US is at an all-time low, about 11% of the workforce. In 1978, 40 percent of blue-collar workers were unionized. With that declining influence has come a concurrent decline in the real value of the minimum wage.
26. Four hundred Americans have more wealth, $2 trillion, than half of all Americans combined. That is approximately the GDP of Russia.
27. In 1946, a child born into poverty had about a 50 percent chance of scaling the income ladder into the middle class. In 1980, the chances were 40 percent. A child born today has about a 33 percent chance.
28. Despite massive tax cuts, corporations have not created new jobs in America. The job creators have been small new businesses that have not enjoyed the same huge tax breaks.
29. More than half of the members of the United States Congress, where laws are passed deciding how millionaires are taxed, are millionaires.
30. Twenty five of the largest corporations in America in 2010 paid their CEOs more money than they paid in taxes that year.
31. In the first decade of the 21st century, the U.S. borrowed $1 trillion in order to give tax cuts to households earning over $250,000.
32. In 1970, there were five registered lobbyists working on behalf of wealthy corporations for every one of the 535 members of Congress. Today there are 22 lobbyists per congressperson.
33. In 1962, the 1% household median wealth was 125 times the average median wealth. In 2010 the divide was 288 times.
34. During the Great Recession, the average wealth of the 1% dropped about 16 percent. Meanwhile the wealth of the 99% dropped 47 percent.
35. Between 1979 and 2007, the wages of the top 1% rose 10 times more than the bottom 90 percent.

Wednesday, April 6, 2016

Date created: April 3, 2016

Panama papers: Major leak exposes elite’s tax havens


“A massive leak of 11.5 million tax documents has revealed how the worlds rich and powerful use the offshore industry to hide money and skirt national regulations.

“The so-called Panama Papers expose the offshore holdings of 12 current and former world leaders and provide details of secret financial dealings of more than 120 politicians and celebrities, according to the [International Consortium of Investigative Journalists] ICIJ. The documents also reveal how businessmen used offshore networks to help criminal organisations thrive and allow repressive regimes to stifle opponents.

“The files allegedly expose offshore companies controlled by the prime ministers of Iceland and Pakistan, and the king of Saudi Arabia.
“They have also linked associates of Russian President Vladimir Putin and the family of Chinese President Xi Jinping to offshore accounts.
“Celebrities already under scrutiny for questionable financial dealings, including football star Lionel Messi and disgraced UEFA chief Michel Platini, are also named in the report.
“The vast stash of records was obtained from an anonymous source by German daily  Sueddeutsche Zeitung and shared with dozens of media outlets worldwide, including the Guardian, the BBC and French daily Le Monde.

Panama Papers is described by the ICIJ as ‘one of the biggest leaks and largest collaborative investigations in journalism history,’ bigger even than the Wikileaks' exploits of 2010 which included the release of 500,000 secret military files on the wars in Afghanistan and Iraq and 250,000 US diplomatic cables.
" ‘I think the leak will prove to be probably the biggest blow the offshore world has ever taken because of the extent of the documents,’ said ICIJ director Gerard Ryle.
“The documents, from around 214,000 offshore entities covering almost 40 years, came from Mossack Fonseca, a Panama-based law firm with offices in more than 35 countries.
“The head of the law firm, Ramon Fonseca, denied any wrongdoing, claiming his firm has fallen victim to an international campaign against privacy.
“The group, which specialises in setting up offshore companies, had suffered a successful but limited hack, Fonseca told Reuters by telephone.
“Fonseca, who was also until March a senior government official in Panama, said his firm has formed more than 240,000 companies, adding that the ‘vast majority’ have been used for ‘legitimate purposes.’
“He emphasised that the firm is not responsible for the activities of the companies it incorporates. ‘Were dedicated to making legal structures which we sell to intermediaries such as banks, lawyers, accountants and trusts, and they have their end-customers that we dont know,’ he said.
“The British Virgin Islands and Panama itself were the two most popular tax havens for the 210,000 companies that appear in the Panama Papers.
“Though most of the alleged dealings are said by the ICIJ to be legal, they are likely to have a serious political impact on many of those named.
“Iceland's Prime Minister Sigmundur David Gunnlaugsson is expected to face a no-confidence vote this week over allegations he used a secret offshore firm called Wintris Inc. to hide millions of dollars in the British Virgin Islands.
“The files show he secretly owned millions of dollars of investment in his country's banks during the financial crisis through an offshore company.
" ‘I have never hidden assets,’ Gunnlaugsson told a journalist from the Swedish SVT channel.
“Gunnlaugsson later told privately held Icelandic television Channel 2 that he did not plan to resign, despite opposition calls to do so. [Gunnlaugsson resigned
‘The government has had good results. Progress has been strong and it is important that the government can finish their work,’ he said. ‘I will listen to the peoples stand in the next elections.’
The Kremlin, meanwhile, has reacted with anger to the allegations against Putin contained in the documents, saying they are an attempt to destabilise the country.
" ‘Putin, Russia, our country, our stability and the upcoming elections are the main target, specifically to destabilise the situation,’ Kremlin spokesman Dmitry Peskov, who himself figures in the leaked documents, told journalists in Moscow.
“The leaked documents show that banks, companies and close associates to Putin ‘secretly shuffled as much as $2 billion (1.75 billion euros) through banks and shadow companies,’ according to the ICIJ.
“The allegations were not aired by Russian state TV.
“At least 33 people and companies listed in the documents were blacklisted by the US government for wrongdoing, including dealings with North Korea and Iran, as well as Lebanon's Islamist group Hezbollah, the ICIJ said.
“Names also figuring in the leak included Ukrainian President Petro Poroshenko, martial arts film star Jackie Chan, recently-elected Argentinian President Mauricio Macri, President of the United Arab Emirates Khalifa bin Zayed bin Sultan Al Nahyan and the late father of British Prime Minister David Cameron, Ian Cameron.

Date created : 2016-04-03

Tuesday, April 5, 2016

Pfizer is a giant pharmaceutical company based in New York City that has a history of overcharging Americans for prescription drugs. It's in the process of trying to merge with another company located in Ireland.
“If the merger is successful, Pfizer would technically become a foreign company, meaning it could dodge around $35 BILLION in corporate taxes here in America.
“Enough is enough. Pfizer and other pharmaceutical companies cannot be allowed to ‘evade taxes and rip off American patients who already pay the highest prices in the world for prescription drugs.

Pfizer is trying to do is known as a ‘corporate inversion.’ In this case, Pfizer, an American company, is merging with a company based abroad. The result of the merger is a company with an address in another country – even though the majority of shareholders are still based in America.
Pfizer apparently doesn't want to pay the $35 billion in taxes it would owe in America. I don't think that's right.

”No matter what, you can bet that Pfizer would continue to overcharge Americans for prescription drugs, too. The
pharmaceutical company has hiked the prices of seven of its top selling drugs by an average of 39 percent.

Pfizer also charges 12 times as much in the U.S. under Medicare for these drugs as it charges in Ireland, where it’s claiming a new address for tax purposes.

“All of this is the result of years of
weakened tax laws, an abdication of responsibility by American companies to their country, and a corrupt political system that allows it to happen.”
 “Pfizer and Allergan [maker of Botox] will mutually terminate their merger early Wednesday morning ET, sources told CNBC, after changes in U.S. tax regulations dealt a death blow to the $160 billion deal.

“Pfizer will pay Allergan a $400 million break fee as per the merger agreement, the sources said.”

NEW YORK, April 5 (Reuters) - U.S. drug maker Pfizer Inc's $160 billion agreement to acquire Botox maker Allergan Plc was on the brink of being abandoned on Tuesday, after the U.S. Treasury issued new rules on how tax ‘inversion’ deals can be structured.
“Allergan's shares were hit considerably hard on Tuesday, showing how the rules that were issued on Monday targeted the biggest inversion attempted to date. The federal government has grappled with a wave of recent inversions by U.S. companies seeking to slash their tax bills by redomiciling overseas in merger deals.
“Pfizer is now leaning towards abandoning the deal with Allergan, though no final decision has yet been made, a source familiar with the situation said. Were the deal to be tweaked, Pfizer is concerned U.S. President Barack Obama's administration could change the rules again to thwart a deal, according to the source.
“Pfizer shares ended up 2 percent on hopes the company would walk away or renegotiate the deal in its favor. Allergan shares closed down 14.8 percent to their lowest level since October 2014.
“Obama on Tuesday called global tax avoidance a ‘huge problem’ and urged Congress to take action to stop U.S. companies from tax-avoiding corporate ‘inversions’, which lower companies tax bills by redomiciling overseas.
" ‘While the Treasury Department's actions will make it more difficult... to exploit this particular corporate inversions loophole, only Congress can close it for good,’ Obama said.
“Several U.S. presidential candidates, including Republican Donald Trump and Democrats Hillary Clinton and Bernie Sanders, have seized on the issue in their campaigns.
" ‘We have so many companies leaving, it is disgraceful,’ Trump told reporters as he greeted voters in Waukesha, Wisconsin on Tuesday. Clinton and Sanders both expressed support for Treasury's plan.

“Besides Pfizer-Allergan, other pending inversion deals that have not yet closed include the proposed $16.5 billion merger of Johnson Controls Inc with Ireland-based Tyco International Plc, Waste Connections Inc's $2.67 billion deal with Canada's Progressive Waste Solutions Ltd , and IHS Inc's $13 billion acquisition of London-based Markit Ltd.