Wherever there are large amounts of ordinary people’s money, you can be sure that greedy wealthy people are eying it and thinking up clever ways to siphon it away into their own pockets. Money for public schools, pension funds, and Social Security are the prime targets for their rapacity. The assault on the first has been going on for some time with charter schools being a prime vehicle for diverting funds.
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I bought the much talked-about book Capital in the 21st Century by economist Thomas Piketty but have not yet cracked open its 700-odd pages. His basic thesis apparently is that when r>g, where r is the rate of return on capital and g is the rate of growth of economies, that leads to greater wealth and income inequality. His book looks at the data over a long period and suggests ways to reduce the inequality. Of course, his prescriptions will not be popular among the elites in the US who see the inequality as reflecting the fact that they are so much more valuable to society than the 99%.
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A year ago I wrote about ProPublica’s reporting on the case of Carmen Segarra who was fired by the New York Federal Reserve Bank, the institution charged with regulating the big Wall Street banks. Jake Bernstein of ProPublica now has another big story based on secret recordings made by Segarra.
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Not that this will be a surprise but via Kevin Drum, I learned that the Federal Reserve has released a set of economic data that among other things shows that the gap between the rich and the poor has indeed been getting bigger at an astonishing rate within the last 25 years, with the top 3% making enormous gains at the expense of the bottom 90%, with the balance 7% remaining relatively stable.
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It is true that these companies extort money from the needy and get them trapped in a cycle of debt. The problem is that they also serve a need. Many people live paycheck-to-paycheck, just barely getting by, and any sudden emergency (car repair, medical bill, broken furnace) can throw their delicately balanced finances out of whack and they often feel they have nowhere else to turn to at short notice.
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The latest gambit by American corporations to lower their taxes even more is to take advantage of what is known as ‘corporate inversion’. The way it works is for a big US company to buy a small company in a country that has favorable tax laws, Ireland being the current favored nation. They then ‘invert’ the relationship, claiming that the foreign company is the parent one while the US one is the subsidiary, even though nothing else has changed. This enables them to pay the lower taxes of the other nation while enjoying all the benefits of being in the US.
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When I drive along the highway, I frequently pass campers and recreational vehicles driven by older people. I used to think of them as well-to-do retirees, enjoying a life of leisure wandering around the country and seeing the sights. But it turns out that in many cases, I would be wrong. The people in these vehicles could well be migrant workers.
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People may recall in the 2008 presidential election the huge fuss that occurred when in a casual conversation with a voter, candidate Barack Obama made a vague statement to the effect we need to share the wealth. That voter was the infamous ‘Joe the Plumber’ who then had his fifteen minutes of fame as he became a right wing hero, a so-called common man who opposed socialistic policies, although Obama is far from being a socialist as any rational person would concede.
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On Thursday, May 15, fast food workers in 150 US cities and in 33 countries are going on strike. In the US, they are calling for a minimum wage of $15 per hour and to be able to form unions without retaliation.
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