Money

How To Reclaim A Rigged Economy

CHUCK COLLINS’ new book does exactly what an introduction to wealth inequality and all its faults needs to do: summarize without oversimplifying, and provoke dialogue and action about the urgent problem of what Collins memorably dubs the U.S.’s “inequality death spiral.”

Newcomers to the topic will find a concise overview of how wealth inequality has skyrocketed since 1980, how a small elite has changed the rules to enable still higher inequality, the many seen and unseen ways that’s a problem for us all, and the beginnings of a solution. Those more familiar with the subject can benefit from Collins’ overview, well-selected statistics, and well-honed, direct turns of phrase. Those who want deeper reading will find excellent footnotes at the end of the slim volume. Everyone will find her experience livened by the stark words Collins quotes from people identifying as part of the 99 percent—and those who are part of the 1 percent.

Collins’ many years as an advocate against inequality show in the book’s graceful balance: It emphasizes the usefulness of the 99 percent-vs.-1 percent idea, while also making clear that neither side is monolithic. He acknowledges very real economic, class, and racial divisions among the 99, but makes a compelling case against letting those differences be the basis of divide-and-conquer political strategies: “It is important that the 99 percent see that they have some important common ground, rather than be peeled into a hundred subgroupings.” And Collins, who himself grew up in the 1 percent, refuses to demonize it or to accept the demoralizing falsehood that it is unified against those below. Rather, he quotes multiple allies within the economic elite, while decrying how “a small segment of the 1 percent—with an organized base in Wall Street’s financial institutions—has worked over many decades to rig the rules of the economy” in the areas of “taxation, global trade, regulation, and public spending.”

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Evil is as Evil Does

FOR MORE THAN a decade Google Inc. operated with a simple unofficial motto, “Don’t be evil.” And for a long time, the search-engine giant really seemed to be a company driven mainly by the desire to provide a truly excellent service in a manner that put the needs of the user first. Well, that slogan may have been good for a super-geek startup, but it doesn’t seem to work so well for the publicly held global empire Google has become.

Here are a few recent examples of Google behavior that is somewhat less than “not evil.” In March of this year, the company launched a new “privacy” policy that basically consists of warning you that you’re not going to have any. In April, the company was fined by the FCC for privacy violations committed by its infamous “Street View” cars. Apparently, in addition to collecting photographs of random sites on Google Earth, those cars have also been collecting data from unsecured home Wi-Fi networks. Google has also been charged with anti-trust violations for entering an agreement with Apple, Intel, Adobe, Intuit, Pixar, and Lucasfilm to never recruit each other’s employees.

The “don’t be evil” line worked well for Google back in the late 1990s when it could compare itself to Microsoft. That company, in its heyday, was an unabashed incarnation of evil in the best old robber-baron style. It routinely did things like programming your computer to sabotage its competitors’ software. Meanwhile, Google’s main competitor in the search business, Yahoo, was making headlines for turning over dissidents’ web activity to the Chinese government. In those days the ethical high ground wasn’t hard to reach, and Google seized it.

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Why Getting money Out of Politics is Good for Business

From Newsweek Magazine

It’s worrying to think that shareholder democracy is needed to rectify shortcomings in the real thing, yet this week two of the nation’s biggest corporations will give their investors precisely that opportunity. Motions on the ballots at the annual meetings of Bank of America and 3M will act as referenda on the U.S. Supreme Court’s decision in the Citizens United case, which handed companies the same freedoms of speech accorded people. Happily, restricting the use of corporate money in politics isn’t just good for democracy, it’s good business.
 
Read Rob Cox's article here

Will We Be Able to Afford Medicare?

Cost of Medicare photo, aceshot1 / Shutterstock.com
Cost of Medicare photo, aceshot1 / Shutterstock.com

We'll be hearing a lot about Medicare between now and November. President Barack Obama wants to tweak it. Mitt Romney wants to reinvent it. Everyone who wants to get elected, however, agrees on one thing: nothing will change for the current crop of seniors and soon-to-be seniors.

Whew. Six months and Mr. Neff will be home free! Less than a year and a half and we'll both have free health care! And then we can afford to retire, right?

Wrong.

Why Fixing the Economy is Easier Than We Think

In an interview with Rolling Stone, Paul Krugman talks about his new book, and why fixing the economy is easier than we think:

Four years after the start of the Great Recession, nobody would mistake U.S. economy for a thrumming engine of growth, prosperity, and human flourishing. Sure, we're officially out of "recession." But the recovery is painfully slow and uneven, and 24 million Americans are still unemployed or underemployed. There's a lot of pain out there, and a lot of potential going to waste.

Read the interview here

When a City Can't Afford an Election

If the GOP presidential primaries have been any indication, voter turnout for November's election could be fairly dismal. Between the uber-polarization of the parties and nationwide trend toward the middle at a voter level, many may opt to stay at home.

The lack of enthusiasm is especially evident in the youngest voting bloc, age 18-24. According to the latest from Public Religion Research and Georgetown University's Berkley Center, young adults are not exactly excited about their prospects of either political persuasion. Further, while one in six of them are registered to vote, only 46 percent plan to cast theirs in November.

But apart from the state of public discourse and apathy concerns of the weary voter, another issue is creeping up that could pose a problem for potential turnout—money. 

According to The Atlantic Cities, some cities simply don't have the money—and have to cut elsewhere—to host an election. 

"… municipalities are scrambling to pay the costs associated with manning polling places. Some have said they'll put off road repairs while transit crews work on Election Day. Others may borrow workers from other departments to help count votes. In practice, this will likely mean fewer voting precincts, shorter hours and longer lines."

In a culture that is not known for its patience or attention span, how will this trend affect the public's motivation, or lack thereof, to hit the polls in November?

Vicar Sentenced for Conducting Sham Marriages

Bride and groom, MNStudio/Shutterstock.com
Bride and groom, MNStudio/Shutterstock.com

 

A Church of England vicar has been sentenced to 4 1/2 years in prison for conducting hundreds of bogus weddings and illegally pocketing more than 30,000 pounds ($48,000) in fees.

The Rev. Brian Shipsides was convicted and sentenced Tuesday (April 3) for carrying out a "meticulously planned and orchestrated" immigration fraud over a 2 1/2 period at All Saints Church in east London.

Authorities said the vicar conducted the fake marriages of non-Europeans, mostly Nigerians, to European partners to try to obtain immigration rights to stay in Britain.

Banking For the Rest of Us

One meaning of the word “occupy” involves asserting sovereignty over a place. For the demonstrators who set up camp in lower Manhattan last fall, “occupying” was a reassertion of popular sovereignty at the very epicenter of our economic system. It was a challenge to the power that giant corporations—and Wall Street banks in particular—have amassed. It was a challenge to the way these firms have captured the levers of government and rigged policy to protect their own positions and profits at the expense of everyone else.

More than three years after their reckless greed triggered the Great Recession, the nation’s biggest banks have paid almost no penalty and are bigger than ever. In 2007, the top four banks—Bank of America, JPMorgan Chase, Citigroup, and Wells Fargo—held assets of $4.5 trillion, which amounted to 37 percent of U.S. bank assets. Today, they control $6.2 trillion, or 45 percent of bank assets, according to the Federal Deposit Insurance Corporation. For them, the recession was a brief hiccup, promptly ameliorated by a public bailout and a return to robust profitability. Last year, these four firms, together with the next two largest banks, Goldman Sachs and Morgan Stanley, paid out $144 billion in compensation, making 2011 their second highest payday ever. According to the Bureau of Labor Statistics, the average bank teller made $24,980 in 2010. Such rank-and-file employees didn’t benefit from the big bonuses and compensation packages which were heavily concentrated at the top of the corporate ladder.

Meanwhile, joblessness, staggering debt, and foreclosure have devastated countless families. Many have shared their stories on the We Are the 99 Percent Tumblr website, which should be required reading for the 1 percent. It provides a heart-breaking account of living in a society “made for them, not for us,” of drowning in debt and struggling merely to secure a means of keeping food on the table.

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Isaiah and the Foreclosure Crisis

Today’s Washington Post sits open on my desk with the headline: “Settlement launches foreclosure reckoning—U.S., states pledge relief for homeowners under deal with five big banks.” Next to it, my Bible is open to Isaiah 55. Could two descriptions of “relief” be more opposite?

In the first, Wells Fargo, Bank of America, JPMorgan Chase, Ally Financial, and Citigroup steal the homes and life savings of hundreds of thousands of people. (If you or I “robo-signed” documents, we’d be charged with forgery. It’s illegal.) But with no cop big enough to wrassle the Big Five into a noisy, urine-stained jail cell, and no judge with a gavel hard enough to thwack down a decent judgment, applying pressure for some restitution fell to grassroots groups, the states’ attorneys generals, and partisan powerbrokers—a tenuous coalition at best.

After 16 months of posturing, the “principalities and powers” behind the Big Banks agreed to let some artisan bread crumbs fall from their private-dining, Madison Avenue tables. Now, the 750,000 people whose houses were stolen at pen-point can sign up to get approximately $2,000 each in restitution. As blogger David Dayen put it, it’s the equivalent of the banks telling their victims, “Sorry we stole your home. Here’s two month’s rent.”

The banking settlement “forces” the lenders to give some money back. Forty-nine states will get a much-needed trickle of cash and cash-like substances. And they’ve agreed to reduce the principal on mortgages with “negative equity” to the tune of $17 billion over three years. However, that amounts to about 2.4 percent of the $700 billion needed to bring borrowers’ noses to the surface, according to Capital Economics’ Paul Diggle. The fine doesn’t nearly match the crime. And the banks have been tucking this money away in slush funds in preparation for the settlement. They are paying out of their excess—not until it hurts.

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