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.
Jails are accelerants of human misery, and what they often do… is take very difficult, complicated life circumstances and exacerbate challenges that individuals and families and communities are facing. The idea that the default system should be money bail or jail for a broad range of offenses is not normatively defensible, or does it necessarily promote public safety.
Julian Adler, co-author of Start Here: A Road Map to Reducing Mass Incarceration (via nprfreshair)
Of course, it’s not too weird given the conversation about Rose and Kit. Britain is a class driven society. Imagine you leave school and you decide you want to be an actor. You’d probably have to move to London where rent is astronomically high. For the average person, they couldn’t afford rent in London on an acting salary so they have to get another job. They would probably end up on a zero hours contract or a low skilled job because they need time to do their acting. That means their focus is divided, they have less time to invest in acting, and eventually they’re likely to come to a point where they have to make a choice as the lifestyle isn’t sustainable. But for someone from the upper classes, they’re much more likely to have someone who will pay for their rent or provide a living allowance. That means they don’t have to get that second job, they can focus entirely on acting. They can stay in London for years until they make it big because there’s less worry. Does that make sense? A lot of career paths will require you to do unpaid internships or have a very low wage for various reasons and unless you have a family who can financially support you for as long as it takes to do it then it’s going to be much much harder for you.
There’s also a really interesting difference in terms of aspirations. So for example I was watching Frankie Boyle’s New World Order yesterday (it’s a satirical panel show, not important). A comedian who I love called Romesh Ranganathan was talking about how he used to be a teacher at an Outstanding school (that’s the best rating a school can be given by government inspectors) and gave it up to teach at a school that had just come out of special measures (that’s basically the worst rating a school can have). Anyway, he said that at his Outstanding school he ran a parents evening where they talked about applying for university, bursaries and loans etc etc. Then he tried to do the same thing at the special measures school and all the parents were incredibly hostile as they thought university was pointless and for snobs and that their child should get a job straight away. I’m not saying that those parents are wrong- I think that their concerns come out of a genuine place and are driven by our class based society- but it just shows you how different things can be. I went to private school and the one girl who wanted to go straight in to a job instead of uni was “persuaded” not to by the school staff. But in other schools there’s no expectation that most pupils will go to university. It’s all part of the same issue.
Fewer GPs are choosing to work in poorer areas but more are joining surgeries that look after wealthier populations, new official figures reveal.
The exodus, uncovered by Labour MP Frank Field, is exacerbating the existing “under-doctoring” of deprived populations – the lack of family doctors in places where poorer people live.
Experts said the widening divide between rich and poor areas in GP numbers – which is one of England’s starkest health inequalities – would force the least well-off to wait longer for an appointment, even though they are generally sicker and die earlier than the rest of the population.
“A decade ago the country was beginning to make some serious inroads into the under-doctoring of the poorest areas. What these grim figures show is that in recent years that progress has not only stalled, but actually gone into reverse,” Field told the Observer.
“The most worrying trend here is the number of GPs ceasing to serve people towards the bottom of the pile, while at the same time people in the wealthiest areas have benefited from an even better service. Vulnerable people are having to suffer in silence without being able to see a GP.
“Here’s another example of everything going in the wrong direction if our goal is to equalise health opportunities and outcomes. It is a new appalling face of inequality in modern Britain.”
There were 8,207 GPs working in areas containing the most deprived quintile of the population in England in 2008. But by last year that number had fallen to 7,696 – a drop of 511 – according to the response to a written parliamentary question Field asked recently.
But over the same decade the number of family doctors working in the most prosperous fifth of the population increased from 4,058 to 4,192 – a rise of 134, public health minister Steve Brine told Field.
Fuck keeping affluent people alive, help us instead
Everybody wants to think that if they were alive during slavery, they’d be an abolitionist. Everybody wants to think that if they were active during the time of lynching, they’d be rallying against and trying to prevent lynchings. Most of us believe that if we were alive and in a position to march in the 1950s, we’d be on the side of Dr. King. But today, we are in the face of all of these problems. One in three black male babies is expected to go to jail or prison. There are these constant shootings of unarmed black people. And the question is: If we’re not prepared to respond to these issues, if we’re not prepared to act today, then I don’t think we can claim that we would have acted any differently during slavery and lynching and segregation.
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.
Librarians, policymakers and other experts gathered Thursday in Washington, D.C., for a panel discussion on the legislation and the needs of tribal communities.
Federal Communications Commissioner Mignon Clyburn told the group that investing in broadband infrastructure is critical because those investments increasingly determine which cities, towns and tribal nations thrive.
“Just like water, roads, railways and electricity, broadband is now fundamental when it comes to our community development,” Clyburn said.
For many poor families in America, eviction is a real and ongoing threat. Sociologist Matthew Desmond estimates that approximately 2.3 million evictions were filed in the U.S. in 2016 — a rate of four every minute.
“Eviction isn’t just a condition of poverty; it’s a cause of poverty,” Desmond says. “Eviction is a direct cause of homelessness, but it also is a cause of residential instability, school instability [and] community instability.”
Desmond won a Pulitzer Prize in 2017 for his book, Evicted: Poverty and Profit in the American City. His latest project is The Eviction Lab, a team of researchers and students at Princeton University dedicated to amassing the nation’s first-ever database of eviction. To date, the Lab had collected 83 million records from 48 states and the District of Columbia.
“We’re in the middle of a housing crisis and that means more and more people are giving more and more of their income to rent and utilities,” Desmond says. “Our hope is that we can take this problem that’s been in the dark and bring it into the light.”
In a recent podcast interview with David Axelrod, former NBA star Charles Barkley talks about how NBA legend Bill Russell persuaded Barkley to stop publicly complaining about how much income tax he paid (transcription by Steven Greenhouse).
Bill Russell called me one time… He says, “Charles Barkley.” I said, “Yes, sir, Mr. Russell.”
“You grew up in Alabama. Right?” I said, “Yes, sir.”
He says, “Did you go to public school?” I said, “Yes, sir.”
He says, “Did the cops ever come to your neighborhood?” I said, “Yes sir.”
He said, “Any of the houses ever on fire and the firemen come?” I said, “Yes, sir.”
He said, “I don’t want to see your black ass on TV complaining about your taxes anymore.” I says, “What do you mean?”
He says, “So now that you got money you don’t want to help other people out, but when you were poor, other people took care of you.” And I says, “You know what, Mr. Russell, you will never hear me complain about my taxes again.”
And it was a very interesting lesson for me, because I do think rich people should pay more taxes. I’m blessed to be one of them, and we should pay more in taxes. I learned my lesson. I never complain about taxes.
I think Bill Russell needs to make a few phone calls to Congress…
House of Brat 