— and in the United States, they own pretty much all the politicians
There were quite a few disconnects at the recently concluded Annual Meetings of the International Monetary Fund and World Bank. Among the most striking was the disparity between participants’ interest in discussions of inequality and the ongoing lack of a formal action plan for governments to address it. This represents a profound failure of policy imagination – one that must urgently be addressed.
There is good reason for the spike in interest. While inequality has decreased across countries, it has increased within them, in the advanced and developing worlds alike. The process has been driven by a combination of secular and structural issues – including the changing nature of technological advancement, the rise of “winner-take-all” investment characteristics, and political systems favoring the wealthy – and has been turbocharged by cyclical forces.
In the developed world, the problem is rooted in unprecedented political polarization, which has impeded comprehensive responses and placed an excessive policy burden on central banks. Though monetary authorities enjoy more political autonomy than other policymaking bodies, they lack the needed tools to address effectively the challenges that their countries face.
…These are not normal times. With political gridlock blocking an appropriate fiscal response – after 2008, the United States Congress did not pass an annual budget, a basic component of responsible economic governance, for five years – central banks have been forced to bolster economies artificially. To do so, they have relied on near-zero interest rates and unconventional measures like quantitative easing to stimulate growth and job creation…
As a result, most countries face a trio of inequalities – of income, wealth, and opportunity – which, left unchecked, reinforce one another, with far-reaching consequences. Indeed, beyond this trio’s moral, social, and political implications lies a serious economic concern: instead of creating incentives for hard work and innovation, inequality begins to undermine economic dynamism, investment, employment, and prosperity.
So far, Mohamed El-Erian has avoided political office. In the United States as well as Egypt. Understandable when common understanding of officeholders in either nation leaves voters with a choice between the corrupt elected by the ignorant or someone too dumb to comprehend the differences.
Though he easily fits the populist definition of a prince of economics, history and academia both recognize his commitment to common folk, those of us who toil and spin, creating the profits of industry and commerce. I know I needn’t be concerned about most of the wasters in Congress understanding the article. They will not have read it.
Still, around the civilized world, most elected leaders trying to affect the lives of citizens in a positive fashion will read it and at least take his analysis to heart as honest and forthright – whether or not they agree with any logical tough remedies.
I suggest you click the link and read the whole article.
During the first two years of the nation’s economic recovery, the mean net worth of households in the upper 7% of the wealth distribution rose by an estimated 28%, while the mean net worth of households in the lower 93% dropped by 4%, according to a Pew Research Center analysis of newly released Census Bureau data…
These wide variances were driven by the fact that the stock and bond market rallied during the 2009 to 2011 period while the housing market remained flat.
Affluent households typically have their assets concentrated in stocks and other financial holdings, while less affluent households typically have their wealth more heavily concentrated in the value of their home…
Overall, the wealth of America’s households rose by $5 trillion, or 14%, during this period, from $35.2 trillion in 2009 to $40.2 trillion in 2011. Household wealth is the sum of all assets, such as a home, car, real property, a 401(k), stocks and other financial holdings, minus the sum of all debts, such as a mortgage, car loan, credit card debt and student loans.
During the period under study, the S&P 500 rose by 34% (and has since risen by an additional 26%), while the S&P/Case-Shiller home price index fell by 5%, continuing a steep slide that began with the crash of the housing market in 2006…
The different performance of financial asset and housing markets from 2009 to 2011 explains virtually all of the variances in the trajectories of wealth holdings among affluent and less affluent households during this period. Among households with net worth of $500,000 or more, 65% of their wealth comes from financial holdings, such as stocks, bonds and 401(k) accounts, and 17% comes from their home. Among households with net worth of less than $500,000, just 33% of their wealth comes from financial assets and 50% comes from their home…
Looking at the period from 2005 to 2009, Census Bureau data show that mean net worth declined by 12% for households as a whole but remained unchanged for households with a net worth of $500,000 and over. Households in that top wealth category had a mean of $1,590,075 in wealth in 2005, $1,585,441 in 2009 and $1,920,956 in 2011.
Ain’t no one in that 7% living on my block – or in my neighborhood for that matter. And I don’t begrudge anyone the money they earned. Last job I had before retiring I worked for a subcontractor and my specialties often found me working on McMansions. Easily 98% of those folks earned their money. Almost no trust-funders.
What pisses me off is the power their money has over our elected officials. Politics in America is deliberately guided by the almighty dollar. Politicians prefer it that way. Corporate lobbyists prefer it that way. The greed breed that’s stolen the mantle of what is now conservatism in America absolutely loves it.
So, we get screwed.
Switzerland is the best country for a baby to be born in 2013, according to a new study by the Economist Intelligence Unit, which is based on both subjective and objective quality of life factors.
The variables include life expectancy, gender equality, political freedoms, and even climate, but because the study looks at where “to be born” not “where to live,” some of the factors look at what life will be like in those countries in 2030, when children born in 2013 reach adulthood.
Rounding out the top 10 are:
7. New Zealand
10. Hong Kong
The report authors write:
Being rich helps more than anything else, but it is not all that counts; things like crime, trust in public institutions and the health of family life matter too. In all, the index takes 11 statistically significant indicators into account.
The United States didn’t crack the top 10 this year, because American “babies will inherit the large debts of the boomer generation,” the researchers write. Could have included mediocre education, crumbling infrastructure in that same sentence.
In the 1988 survey, the United States came in first, followed closely by mostly European countries and several high-performing Asian ones, such as South Korea and Japan…
Now, Japan and South Korea rank 25 and 19, respectively, perhaps because their economies have become more troubled in recent years.
Europe has also slipped in the rankings because the ongoing euro-zone crisis there has caused severe unemployment and “eroded both family and community life,” the authors write…Germany has dropped to 16 – a tie with the United States.
Disagree with the list? The full methodology can be found here.
The Economist is a magazine grounded in conservative economics. That’s conservative in the traditional sense, rather like the term used to be in the United States before today’s Republican Party started their outreach policy for governance by homophobes, religious nutballs, various and sundry bigots.
So, the list will be accused of being part of a mythic liberal conspiracy – regardless of credentials.
Paul Ryan, the Republican candidate for vice president, says he wants to scuttle the tax breaks of America’s rich, but he also proposes expanding one of the biggest breaks enjoyed by the wealthiest – the low tax rate on investment income.
Ryan, Mitt Romney’s running mate, last week hinted at how their ticket would revamp the tax code starting in 2013. He vowed to unveil details only after the November 6 elections…
Wealthier Americans generally trim their taxes in two big ways. One is through tax deductions such as those for charitable donations. The other, a lower tax rate on investment income than on wages, favors the rich because they have more investment income than taxpayers further down the income ladder whose salaries make up the bulk of their income.
The wealthier also reap a bigger benefit because their steeper marginal income tax rates mean that a lower rate on investment income translates into a bigger discount…
“When I look for tax advantages enjoyed by very high-income people, everything else pales in comparison to the favorable treatment of their capital gains and dividends,” said Clint Stretch, former counsel at the congressional Joint Committee on Taxation.
The top 1 percent of taxpayers derive 35 percent of their income from investments, while the poorest 20 percent derive about 2 percent of their total income from capital investments, according to the nonpartisan Tax Policy Center.
If you expect someone like Paul Ryan or Mitt Romney to move into your neighborhood, you might be one of those folks who doesn’t care for tax reform. The rest of us are still in favor of progressive income tax structures and want to see an end to offshore escape roads.
We may not be Greece, yet — Wall Street’s not entirely in charge of our country’s economy. But, we’re damned close to being Italy with all the ways and means available for the rich to slip their money out of the country.
Middle aged men who live in London or the West Midlands are the unhappiest people in the UK, while pensioners enjoy life the most, official research from the Office for National Statistics (ONS) shows.
In a survey of 80,000 people’s happiness, the first of its kind, the ONS found that men aged between 45 and 49 are the least satisfied with life in the UK. Conversely, men and women aged between 65 and 80 are the most satisfied. This is followed closely by teenagers aged between 16 and 19.
London or the West Midlands are the gloomiest regions. People who live here are the least happy with their lives and also value the worth of what they do with their lives less than people in other regions. The findings come despite London being the wealthiest part of the country by some distance.
The happiest place in the UK, and also the one with the highest levels of life satisfaction and feelings of worth, is Northern Ireland, the ONS found…
In terms of the general outlook on life, the ONS found that women routinely put higher worth on the things they do in their lives than men do. Women were also found to be happier than men in most age groups. However this changes when men reach retirement age. Once they hit 65, men are found to become slightly happier than women…
The findings are based on four questions that people were asked about their happiness, anxiety levels, satisfaction and feelings of worth. They were asked to rate how they felt on a scale of one to 10. People were not asked about their incomes…
The survey also found that married people have higher levels of “life satisfaction” than couples who co-habit. However cohabiting couples are happier than single people…
Juliet Michaelson, a senior researcher at thinktank Nef, said: “This data tells a story overlooked by traditional economic measures about what really matters to us. London is the richest region in the UK, but it is not the happiest – respondents scored poorly on all of the well-being indicators.
The usual saw will be trotted out about money not buying happiness – the wealthiest will prattle on about how happy poor people must be. In truth, the decisions you make about how you live your life may have little or no correlation with income; but, rather expectations and how well they are realized – goals, how realistic they may be and how thoroughly you realize them.
It pays to live in Sherman County: $590 a year.
“Now you wake up and the wind is blowing and it’s like, yes!” said one Sherman County resident who is making money from wind turbines on her farm.
In this sparsely populated landscape south of the Columbia River Gorge, annual checks for that amount are local residents’ share of a windfall brought by the growing wind energy industry. In an area otherwise dominated by wheat farms, hundreds of 300-foot wind turbines now generate electricity and cash.
“Wind is the only thing that is going to save rural Oregon,” said Judge Gary Thompson of Sherman County Court, “especially since all the timber is gone and the sawmills and all that are closing down. I think what it is is a breath of fresh air.”
The Columbia Gorge has been like an expressway for hard-blowing wind since long before the turbines arrived. Trees here lean to the east from the gusts that rip across the plateau.
Sherman County, which earned $315,000 in property taxes from the first wind farm in 2002, raked in $3 million from wind farms in 2010. The bounty, while mostly flowing to the farmers who lease their land for the turbines, also benefits the public. Taxes, fees and assessments on more than 1,000 megawatts of wind turbine capacity have brought $17.5 million in nine years to a county with just 1,735 residents.
The county’s four towns — Wasco, Moro, Rufus and Grass Valley — are prospering. At Sherman Junior/Senior High School in Moro, wind money paid for new computers, musical instruments, robotics equipment, portions of a greenhouse and a new teacher to instruct the most gifted of its 124 students last year…
Judge Thompson said the payments were intended to reward residents who have made no financial gains from wind energy development, but whose views of Mount Adams and the county’s stunning landscape now include a panorama of turbines. The checks are also intended to soothe any unease about the influx of corporations, occasional turbine noise and the risks posed to bats and birds by turbines.
“It’s modeled after a lot of Alaska compensation,” Judge Thompson said. “There are a lot of people who live in the county who are not necessarily going to benefit from the renewable energy, and we felt we needed to share it with all the county residents.”
The judge is the kind of politician liable to be indicted – or lynched – by the Kool Aid Party and the Oil Addicts they cohabit with in the Republican Party.
Meanwhile, it’s just a heckuva nice story about folks who band together and distribute a little bit of their new-found environmental wealth among those who surely can use it. Especially schoolchildren.
President Hosni Mubarak’s power may have visibly crumbled before the world on Jan. 25 when protesters took to the streets of Cairo, but his personal wealth will likely be intact when he leaves office as pledged at the end of the year, or sooner if the crowds have their way.
Experts say the wealth of the Mubarak family was built largely from military contracts during his days as an air force officer. He eventually diversified his investments through his family when he became president in 1981. The family’s net worth ranges from $40 billion to $70 billion, by some estimates.
“The business ventures from his military and government service accumulated to his personal wealth,” said Professor Amaney Jamal. “There was a lot of corruption in this regime and stifling of public resources for personal gain.”
Jamal said that Mubarak’s assets are most likely in banks outside of Egypt, possibly in the United Kingdom and Switzerland.
“This is the pattern of other Middle Eastern dictators so their wealth will not be taken during a transition, she said. “These leaders plan on this…”
Gross national income is $2,070 per family in Egypt, according to the World Bank. About 20 percent of the population lives below the poverty line, according to a 2010 report by the CIA.
“Gamal and Alaa are partners in the biggest trade and industrial companies in Egypt, practically paying nothing,” Aladdin Elaasar wrote in his book of Mubarak’s two sons. Elaasar said the sons have shares in Chili’s restaurants, Hyundai and Scoda auto dealerships, Vodafone, and several luxury hotel and residential properties.
The Mubarak family owns properties in London, Paris, Madrid, Dubai, Washington, D.C., New York and Frankfurt, according to a report from IHS Global Insight…
Whatever Mubarak’s wealth is, Jamal said it is certain that whenever the president actually leaves office, there will be an investigation into his assets.
“There’s not much of a cover-up,” she said. “The people have already outed him as a corrupt leader.”
There will be the question of how much cooperation is received from foreign governments, bankers, financiers in reporting how much Mubarak stole during the years of his regime.
I’d expect little cooperation from the Swiss and not much more from Brits and Americans.
Meanwhile, the range of his reported wealth exceeds Carlos Slim, Bill Gates or Warren Buffett.
Like a couple of cop cars in a parking lot sharing doughnuts
Canada and the United States are beginning a five-week joint Arctic survey, part of which will take place in a section of the energy-rich Beaufort Sea that is claimed by both countries.
The survey is intended to help the neighbours determine the extent of their continental shelves.
The bi-national study is part of an ongoing race by the Arctic nations – the US, Canada, Russia, Norway and Denmark – to gather evidence to submit claims under the United Nations Convention on the Law of the Sea (UNCLOS).
It could grant them exploitation rights to potential energy and mineral wealth above and below the sea floor.
Currently, coastal nations can claim exploitation rights in an Exclusive Economic Zone (EEZ) – a 200-mile (322km) nautical area beyond their land territory.
If the Arctic nations can prove that their submerged territory extends beyond 200 miles, they could gain access to vast untapped resources which lie beneath the pristine waters of the polar region…
The most absurd crap rationale for exploitation and profit since the 19th Century.
Daylife/Reuters Pictures used by permission
Police have unearthed at least 51 bodies in a mass grave outside Mexico’s business capital Monterrey since Thursday, a grisly sign of the escalating drug violence in the northern city.
Acting on a tip from an informant, investigators have been digging up a rural area 12 miles east of Monterrey, uncovering dozens of corpses, some burned beyond recognition, others with bullet wounds, said the governor of Nuevo Leon state, where Monterrey is located.
“(Investigators) believe these could be people related to organized crime, a product of war between these cartels,” Governor Rodrigo Medina told reporters. “This is the level of violence we expect when these groups clash.”
Many of the victims found in the mass grave were believed to have died as recently as two weeks ago, police said.
Timely action by the police, I see.
Wealthy Monterrey, whose residents earn on average twice as much as other Mexicans, was until recently an oasis of relative tranquility amid the drug violence that has gripped northern Mexico since President Felipe Calderon launched an army-led crackdown on drug cartels after taking office in late 2006.
But the modern, high-rise city is no longer immune. Cartels have dumped their victims in streets, staged brazen kidnappings and even blocked off major roads to thwart the police.
Decade upon decade of corruption and cronyism among politicians who bought and sold their offices produce exactly what anyone would reasonably expect. A thoroughly corrupt nation with no security services which can be trusted by the state to bring down gangsters.
There is little or no reason for ordinary citizens to risk their lives – or so they feel. Turn in a drug dealer to the police and you are the one liable to be killed for tomorrow’s headline. Perhaps, now that the wealthy are threatened, something more than street warfare will begin.
You better believe I’m happy – or I’ll exterminate you!
The United States may be the richest nation on Earth, a new study indicates, but it’s not the happiest…
There are two major categories of happiness: overall life satisfaction; and more moment-to-moment enjoyment of life. And while overall satisfaction of life is strongly tied to income, meaning richer nations and individuals have more of this overall bliss, how much one enjoys life (by measures such as laughing and smiling) depends more on social and psychological needs being met. These include having social support and using one’s abilities, as opposed to sitting at a mind-numbing job.
The United States, which had the highest gross domestic product per capita, came in at No. 16 for overall well-being and No. 26 for enjoyment, referred to as positive feelings. The No. 1 spot for overall well-being went to Denmark, and New Zealand landed the No. 1 slot for positive feelings.
“Everybody has been looking at just life satisfaction and income,” said study researcher Ed Diener of the University of Illinois and the Gallup Organization. “And while it is true that getting richer will make you more satisfied with your life, it may not have the big impact we thought on enjoying life…”
Overall satisfaction with life went up with both personal and national income, suggesting societal circumstances play an important role in happiness. But positive feelings, which were slightly higher in relation to higher income, were much more strongly tied to feeling respected, having autonomy and social support and working at a fulfilling job…
Some economists think money increases happiness at the low end of the pay scale as it helps people meet their basic needs, but doesn’t do much once a person is lifted out of poverty. This new study suggests the link between money and happiness goes beyond basic needs. While the steepest rise in overall well-being with money occurred in the poorer individuals and nations, there was still a bump in overall happiness at the higher socioeconomic status regions.
Of course, our politicians are happy enough just buying elections.
OK. More seriously, I have to come down on the side of lifestyle decisions which reflect satisfaction, choice, accomplishments measured by personal standards – not just the business scorecard of earnings.
I’ve lived my whole life that way and I’m a happier man for it.