“So what can we learn from this study? On the data side, we see that everything is proceeding as planned. Nobody’s paying $50 for a burger at McDonald’s, or $16 for a can of tuna at Safeway. Employers wish their profits were higher, and workers are glad they got a raise, but they wish they made more money. Three years after Seattle started down the road to $15, everything is as it should be. Those apocalyptic claims of destruction and business closures haven’t been proven true. One thing the study didn’t explain was why the sky didn’t fall as promised. Why weren’t workers laid off in droves, or replaced with robots? Why didn’t prices skyrocket? Why does Seattle have more restaurants now than at any point in its history? It’s because those workers who saw a raise now have more money to spend in the city around them. Those restaurant workers are eating in more restaurants. They’re buying more groceries. They’re buying more clothes and cars. That increased consumer demand is creating jobs, and more than paying for the increased minimum wage. The $15 minimum wage established a positive feedback loop that created growth in Seattle by including more people in the economy. In other words, it worked exactly as intended.”
— Seattle’s $15 Minimum Wage Experiment Is a Success
(via allthecanadianpolitics)I’m gonna leave this right here.
When you give consumers money, they spend it. When you give old, rich, white men money, they hoard it.
Tag: economics
THE NEXT CRASH
Sorry to deliver the news, but it’s time to worry about the next crash.
The combination of stagnant wages with most economic gains going to the top is once again endangering the economy.
Most Americans are still living in the shadow of the Great Recession that started in December 2007 and officially ended in June 2009. More have jobs, to be sure. But they haven’t seen any rise in their wages, adjusted for inflation.
Many are worse off due to the escalating costs of housing, healthcare, and education. And the value of whatever assets they own is less than in 2007.Which suggests we’re careening toward the same sort of crash we had then, and possibly as bad as 1929.
Clear away the financial rubble from those two former crashes and you’d see they both followed upon widening imbalances between the capacity of most people to buy, and what they as workers could produce. Each of these imbalances finally tipped the economy over.
The same imbalance has been growing again. The richest 1 percent of Americans now takes home about 20 percent of total income, and owns over 40 percent of the nation’s wealth.
These are close to the peaks of 1928 and 2007.
The underlying problem isn’t that Americans have been living beyond their means. It’s that their means haven’t been keeping up with the growing economy. Most gains have gone to the top.
But the rich only spend a small fraction of what they earn. The economy depends on the spending of middle and working class families.
By the first quarter of this year, household debt was at an all-time high of $13.2 trillion. Almost 80 percent of Americans are now living paycheck to paycheck.
It was similar in the years leading up to the crash of 2007. Between 1983 and 2007, household debt soared while most economic gains went to the top. If the majority of households had taken home a larger share, they wouldn’t have needed to go so deeply into debt.
Similarly, between 1913 and 1928, the ratio of personal debt to the total national economy nearly doubled. After the 1929 crash, the government invented new ways to boost wages – Social Security, unemployment insurance, overtime pay, a minimum wage, the requirement that employers bargain with labor unions, and, finally, a full-employment program called World War II.
After the 2007 crash, the government bailed out the banks and pumped enough money into the economy to contain the slide. But apart from the Affordable Care Act, nothing was done to address the underlying problem of stagnant wages.
Trump and his Republican enablers are now reversing regulations put in place to stop Wall Street’s excessively risky lending.
But Trump’s real contributions to the next crash are his sabotage of the Affordable Care Act, rollback of overtime pay, burdens on labor organizing, tax reductions for corporations and the wealthy but not for most workers, cuts in programs for the poor, and proposed cuts in Medicare and Medicaid – all of which put more stress on the paychecks of most Americans.
Ten years after the start of the Great Recession, it’s important to understand that the real root of the collapse wasn’t a banking crisis. It was the growing imbalance between consumer spending and total output – brought on by stagnant wages and widening inequality.
That imbalance is back. Watch your wallets.
(Source: https://www.youtube.com/)
If things really go south with Britain’s economy; Meghan Antoinette better go into hiding. Seriously though, when they release her final spending bill by the end of the year and if Britain happens to be in the middle of a recession by then can you imagine? especially when most Brits are not happy about the $57,000 dollars dress and the 40 million dollar wedding. If her and Harry keep it up they’ll end up getting a movement started. A movement the rest of the BRF won’t be thanking them for.
Yep.
The Next Crash
September 15 will mark the tenth anniversary
of the collapse of Lehman Brothers and near
meltdown of Wall Street, followed by the Great Recession.Since hitting bottom in 2009, the economy has grown steadily, the stock market has soared, and corporate profits have ballooned.
But most Americans are still living in the shadow
of the Great Recession. More have jobs, to be sure. But they haven’t seen any rise
in their wages, adjusted for inflation.Many are worse off due to the escalating costs of
housing, healthcare, and education. And the value of whatever assets
they own is less than in 2007.Last year, about 40 percent of American families
struggled to meet at least one basic need – food, health care, housing or
utilities, according to an Urban Institute survey.All of which suggests we’re
careening toward the same sort of crash we had in 2008, and possibly as bad as 1929.Clear away the financial rubble from
those two former crashes and you’d see they both followed upon widening imbalances between the capacity of most people to buy, and what they as workers could
produce. Each of these imbalances finally tipped the economy over.The same imbalance has
been growing again. The richest 1 percent of Americans now takes home about
20 percent of total income, and owns over 40 percent of the nation’s wealth.These are close to the peaks of 1928 and 2007.
The U.S. economy crashes
when it becomes too top heavy because the economy depends on consumer spending
to keep it going, yet the rich don’t spend nearly as much of their income as
the middle class and the poor.For a time, the middle
class and poor can keep the economy going nonetheless by borrowing. But, as in 1929 and 2008, debt bubbles eventually burst.We’re getting dangerously
close. By the first
quarter of this year, household debt was at an all-time high of $13.2 trillion.Almost 80
percent of Americans are now living paycheck to paycheck. In a recent Federal
Reserve survey, 40 percent of Americans said they wouldn’t be able to pay their
bills if faced with a $400 emergency.They’ve
managed their debts because interest rates have remained low. But the days of low rates are coming to an end.The underlying problem isn’t that Americans have been living beyond their means. It’s that their
means haven’t been keeping up with the growing economy. Most gains have gone to
the top.It was similar
in the years leading up to the crash of 2008. Between 1983 and 2007, household
debt soared while most economic gains went to the top. Had the majority of households
taken home a larger share, they wouldn’t have needed to go so deeply into debt.Similarly,
between 1913 and 1928, the ratio of personal debt to the total national
economy nearly doubled. As Mariner
Eccles, chairman of the Federal Reserve Board from 1934 to 1948, explained: “As
in a poker game where the chips were concentrated in fewer and fewer hands, the
other fellows could stay in the game only by borrowing.”Eventually
there were “no more poker chips to be loaned on credit,” Eccles said, and “when
… credit ran out, the game stopped.”After the
1929 crash, the government invented new ways to boost wages – Social Security,
unemployment insurance, overtime pay, a minimum wage, the requirement that employers
bargain with labor unions, and, finally, a full-employment program called World
War II.After the
2008 crash, the government bailed out the banks and pumped enough money into
the economy to contain the slide. But apart from the Affordable Care Act, nothing
was done to address the underlying problem of stagnant wages.Trump and
his Republican enablers are now reversing regulations put in place to stop
Wall Street’s excessively risky lending.But Trump’s real contributions to
the next crash are his sabotage of the Affordable Care Act, rollback of overtime
pay, burdens on labor organizing, tax reductions for corporations and the
wealthy but not for most workers, cuts in programs for the poor, and proposed cuts in Medicare and
Medicaid – all of which put more stress on the paychecks of most
Americans.Ten years after Lehman Brothers collapsed,
it’s important to understand that the real root of the Great Recession wasn’t a
banking crisis. It was the growing imbalance between consumer spending and
total output – brought on by stagnant wages and widening inequality.That imbalance is back. Watch your
wallets.
THE MONOPOLIZATION OF AMERICA: The Biggest Economic Problem You’re Hearing Almost Nothing About
Not long ago I visited some farmers in Missouri whose profits
are disappearing. Why? Monsanto alone owns the key genetic traits to more than
90 percent of the soybeans planted by farmers in the United States, and 80
percent of the corn. Which means Monsanto can charge farmers much higher
prices.Farmers are getting squeezed from the other side, too,
because the food processors they sell their produce to are also consolidating
into mega companies that have so much market power they can cut the prices they
pay to farmers.This doesn’t mean lower food prices to you. It means more
profits to the monopolists.Monopolies All Around
America used to have antitrust laws that stopped corporations
from monopolizing markets, and often broke up the biggest culprits. No longer.
It’s a hidden upward redistribution of money and power from the majority of
Americans to corporate executives and wealthy shareholders.You may think you have lots of choices, but take a closer look:
1. The four largest food companies control 82
percent of beef packing, 85 percent of soybean processing, 63 percent of pork
packing, and 53 percent of chicken processing.2. There are many brands of toothpaste, but 70 percent of all of it comes from just two companies.
3. You may think you have your choice of sunglasses, but they’re almost all from one company: Luxottica – which also
owns nearly all the eyeglass retail outlets.4. Practically every plastic hanger in America is now made by one
company, Mainetti.5. What brand of cat food should you buy? Looks like lots of brands but behind them are basically just two companies.
6. What about your pharmaceuticals? Yes, you can get low-cost generic versions. But drug companies are in effect paying the makers of generic drugs to
delay cheaper versions. Such “pay for delay” agreements are illegal in other
advanced economies, but antitrust enforcement hasn’t laid a finger on them in
America. They cost you and me an estimated $3.5 billion a year.7. You think your health insurance will cover the costs? Health
insurers are consolidating, too. Which is one reason your health insurance
premiums, copayments, and deductibles are soaring.8. You think you have a lot of options for booking discount airline
tickets and hotels online? Think again. You have only two. Expedia merged with
Orbitz, so that’s one company. And then there’s Priceline.9. How about your cable and Internet service? Basically just four
companies (and two of them just announced they’re going to merge).Why the Monopolization of America is a Huge Problem
The problem with all this consolidation into a handful of giant firms is they don’t have to compete. Which means they can – and do – jack up your prices.
Such consolidation keeps down wages. Workers with less choice
of whom to work for have a harder time getting a raise. When local labor markets
are dominated by one major big box retailer, or one grocery chain, for example,
those firms essentially set wage rates for the area.These massive corporations also have a lot of political clout.
That’s one reason they’re consolidating: Power.Antitrust laws were supposed to
stop what’s been going on. But today, they’re almost a dead letter. This hurts
you.We’ve Forgotten History
The first antitrust law came in 1890 when Senator John Sherman
responded to public anger about the economic and political power of the huge
railroad, steel, telegraph, and oil cartels – then called “trusts” – that were
essentially running America.A handful of corporate chieftains known as “robber barons” presided
over all this – collecting great riches at the expense of workers who toiled
long hours often in dangerous conditions for little pay. Corporations gouged
consumers and corrupted politics.Then in 1901, progressive reformer Teddy Roosevelt became
president. By this time, the American public was demanding action.In his first
message to Congress in December 1901, only two months after assuming the
presidency, Roosevelt warned, “There is a widespread conviction in the minds of
the American people that the great corporations known as the trusts are in
certain of their features and tendencies hurtful to the general welfare.”Roosevelt used the Sherman Antitrust Act to go after the
Northern Securities Company, a giant railroad trust run by J. P. Morgan, the
nation’s most powerful businessman. The U.S. Supreme Court backed Roosevelt and
ordered the company dismantled.In 1911, John D. Rockefeller’s Standard Oil Trust was broken up,
too. But in its decision, the Supreme Court effectively altered the Sherman
Act, saying that monopolistic restraints of trade were objectionable if they were “unreasonable” – and that determination was to be made by the courts. What
was an unreasonable restraint of trade?In the presidential election of 1912, Roosevelt, running again
for president but this time as a third party candidate, said he would allow
some concentration of industries where there were economic efficiencies due to large
scale. He’d then he’d have experts regulate these large corporations for the
public benefit.Woodrow Wilson, who ended up winning the election, and his
adviser Louis Brandeis, took a different view. They didn’t think regulation
would work, and thought all monopolies should be broken up.For the next 65 years, both views dominated. We had strong
antitrust enforcement along with regulations that held big corporations in
check.Most big mergers were prohibited. Even large size was thought to be a
problem. In 1945, in the case of United States v. Alcoa (1945), the Supreme
Court ruled that even though Alcoa hadn’t pursued a monopoly, it had become one
by becoming so large that it was guilty of violating the Sherman Act.What Happened to Antitrust?
All this changed in the 1980s, after Robert Bork – who,
incidentally, I studied antitrust law with at Yale Law School, and then worked
for when he became Solicitor General under President Ford – wrote an
influential book called The Antitrust Paradox, which argued that the sole
purpose of the Sherman Act is consumer welfare.Bork argued that mergers and large size almost always create
efficiencies that bring down prices, and therefore should be legal. Bork’s
ideas were consistent with the conservative Chicago School of Economics, and
found a ready audience in the Reagan White House.Bork was wrong. But since then, even under Democratic administrations, antitrust has
all but disappeared.The Monopolization of High Tech
We’re seeing declining competition even in cutting-edge,
high-tech industries.In the new economy, information and ideas are the most
valuable forms of property. This is where the money is.We haven’t seen
concentration on this scale ever before.Google and Facebook are now the first stops for many Americans
seeking news. Meanwhile, Amazon is now the first stop for more than a half of
American consumers seeking to buy anything. Talk about power.Contrary to the conventional view of an American economy bubbling
with innovative small companies, the reality is quite different. The rate at
which new businesses have formed in the United States has slowed markedly since
the late 1970s.Big Tech’s sweeping patents, standard platforms, fleets of
lawyers to litigate against potential rivals, and armies of lobbyists have
created formidable barriers to new entrants. Google’s search engine is so
dominant, “Google” has become a verb.The European Union filed formal antitrust charges against
Google, accusing it of forcing search engine users into its own shopping
platforms. And last June, it fined Google a record $2.7 billion.But not in
America.It’s Time to Revive Antitrust
Economic and political power cannot be separated
because dominant corporations gain political influence over how markets are
organized, maintained, and enforced – which enlarges their economic power
further.One of the original goals of the antitrust laws was to prevent this.
Big Tech — along with the drug, insurance, agriculture, and
financial giants — is coming to dominate both our economy and our politics.There’s only one answer: It
is time to revive antitrust.
(Source: https://www.youtube.com/)
House of Brat 