Friday, January 20, 2017

Dark Times Ahead


Passing The Torch

Political Cartoon is by Rob Rogers in the Pittsburgh Post-Gazette.

Public Believes Trump Will Destroy Most Of Obama's Legacy


President Obama has, in my opinion, been a good president -- and has accomplished a remarkable amount of good, in spite of a concerted effort by congressional Republicans to obstruct everything he tried to do. And it looks like a significant majority of Americans agree -- with his current job approval being very high.

But the public also believes Donald Trump, with the help of the GOP-controlled Congress, will destroy most of President Obama's accomplishments. A whopping 83% of the population believes that, while only 12% thinks most of Obama's accomplishments will survive the Trump presidency.

Personally, I have to agree with the 83%. I think this country is in for a dark and very troubling time in the coming few years. The best we can hope for at this point is that Senate Democrats can filibuster away the worst Republicans/Trump atrocities, and we can vote Trump out of office in 2020.

The chart above is from information in a new Rasmussen Poll -- done on January 15th and 16th of a random national sample of 1,000 likely voters, with a margin of error of 3 points.

Corruption In - Ethics Out

Political Cartoon is by Steve Sack in the Minneapolis Star-Tribune.

Replacing A Popular President With An Unpopular One


Today we get a new president, and as poll after poll has shown, the new president is replacing one that is much more popular with the public than he is. Only 40% of the general public has a favorable opinion of Donald Trump, while 55% have a favorable opinion of Barack Obama -- a rather large 15 point difference.

Only two groups view Trump more favorably than Obama -- Whites by a 3 point margin, and those 65 and older by a 7 point margin (probably reflecting the racist country they grew up in). All other groups view Obama more favorably than Trump.

This chart was made using information from a new Economist / YouGov Poll -- done between January 14th and 17th of a random national sample of 1,447 adults (including 1,234 registered voters), with a margin of error of 3 points.

Ask Not . . .

Political Cartoon is by Jim Morin in The Miami Herald.

The Sources Of Information For 2016 Voters


I thought you might be interested in this survey by the Pew Research Center (compiled from surveys they did between November 29th and December 12 of 4,183 adults, with a margin of error of 2.7 points). It shows where 2016 voters got their information on the presidential campaign.

Trepidation

Political Cartoon is by Pat Bagley in the Salt Lake Tribune.

Congressional GOP Begins Stealth Attack On Social Security



The pictures above show landmarks in American history. The top one shows President Roosevelt signing the bill to create Social Security, and the bottom one shows President Johnson signing the bill to create Medicare. Those two programs have been enormously successful in keeping seniors out of abject poverty and making sure they get the medical care they need. They are both examples of government programs that work exactly as intended.

But the Republicans have never liked either program, and they have tried to destroy both for many years now. That has not changed with the 115th Congress (which has GOP majorities in both houses). But the Republicans have learned from past experience. They know they cannot make a frontal assault on either program, because those programs are too popular with the voting public. Instead, they have developed a "stealth" approach, which will chip away at both programs until they no longer work -- claiming they are "saving" the programs with repeated cuts to funding.

And the latest GOP attacks have started already. Here is how this new stealth attack is described by Nancy Altman in The Huffington Post:

The Republicans are desperate to destroy Social Security and Medicare. These two programs demonstrate government at its best. The federal government runs these two extremely popular programs more efficiently, universally, securely, and effectively than the private sector does with its alternatives — or indeed could, no matter how well those private sector programs were designed. 
Because Social Security and Medicare are government programs that work so well, the Republican elite — with its seemingly religious belief that the private sector is always the best — hates them. So obsessed are the Republicans in their desire to eliminate these effective government programs that the very first action that House Republicans took in the new Congress was to adopt a rules package that included a new rule that amounts to a stealth attack on Social Security and Medicare.
The rules package, adopted at the start of every new Congress, sets out how the chamber will operate for the next two years. This year’s package is already infamous for provisions in the initial version that would have gutted the Office of Congressional Ethics — provisions that were ultimately dropped after a massive outcry from the American people. Unnoticed by most was an additional provision, which is one part of the Republican game plan to destroy Social Security and Medicare.
Social Security — the people’s pension — and Medicare — the first step toward universal health insurance for all — do not go through the appropriations process because, as monthly pension payments and medical insurance, they must pay what is owed, not what Congress chooses to spend. If Social Security and Medicare were subject to the whims of every Congress, they would be radically transformed. No one could count on the benefits they had earned. Presumably with that goal in mind, the new rules require the relevant committees to make “recommendations for changes to existing law for moving [unspecified} programs…from mandatory funding to discretionary appropriations, where appropriate.”
Note the vague language. Republican politicians understand how popular Social Security and Medicare are. Yet they desperately want to destroy the programs, which put the lie to their anti-government agenda by illustrating clearly that there are some tasks that government does much better then the private sector. 
The solution? Cut and radically transform Social Security and Medicare, but do it in a manner that avoids political accountability. Using changes in the arcane rules of the budget to force through subsequent cuts fits that bill perfectly. By the time the American people realize what’s happening, the rules that usher in the changes are in the past, and those voting for the cuts can claim that they have no choice, for budgetary reasons. . . .
(This is only part of the article. I urge you to read it all. We must protect Social Security and Medicare.)

Inauguration

Political Cartoon is by Marian Kamensky at cagle.com.

Dumbest President Ever


Thursday, January 19, 2017

Not Very Christian


Preparing

Political Cartoon is by Clay Bennett in the Chattanooga Times Free Press.

Public's Satisfaction With Race Relations Is At A New Low




The charts above are from a recent Gallup Poll -- done between January 4th and 8th of a random national sample of 1,032 adults, with a margin of error of 4 points.

They show that public satisfaction with race relations in the United States is at a 21st century low -- 26 points below any other point in the last 17 years. In just the last three years, it has fallen from 55% satisfied to a current level of only 22%. And that decrease in satisfaction is shared by both Whites and non-whites, and by both Democrats and Republicans.

One might think with satisfaction this low, the government might act to improve those race relations. But that is unlikely -- with a racist being sworn in as president in a few days and another racist who will soon assume the duties of Attorney General. Personally, I think it is more likely that race relations will continue to deteriorate in this country.

Attack On Education

Political Cartoon is by Pat Bagley in the Salt Lake Tribune.

With Repeal Pending, Obamacare More Popular Than Ever


The chart above is from a new NBC News / Wall Street Journal Poll -- done between January 12th and 15th of a random national sample of 1,000 adults, and has a margin of error of 3.1 points.

The poll shows that 45% of the public now thinks Obamacare is a good idea, while only 41% say it is a bad idea. That's the highest percentage supporting Obamacare (the Affordable Care Act) since it became law -- and the first time that significantly more view it favorably than unfavorably.

It was easy to bad-mouth the program when it looked like it could not be repealed, especially since the program does have some flaws and needs to be improved. But now the Republicans have the power to repeal (or defund) the program -- either of which would kill it. Now people are starting to realize that the program is in real danger of ceasing to exist, and they are worried that we could go back to a situation like existed before Obamacare (or even worse).

It now looks more and more like the GOP's killing of Obamacare could easily come back to bite them. And with Trump's promise that everyone would have insurance (and it would be cheaper), the GOP seems to have put themselves between a rock and a hard place. Are they really going to throw many millions of people off their health insurance coverage, and put the private insurance companies back in charge of the nation's health care? Could they even survive doing that? It'll be interesting to see what happens.

Couldn't Compete

Political Cartoon is by Dave Granlund at davegranlund.com.

CBO - Repeal Would Double Insurance Premiums By 2026

(Cartoon image is by Matt Boss at thenib.com.)

The Republicans are still trying to claim that the repeal of Obamacare will be good for Americans, and will reduce the cost of health insurance. But the non-partisan Congressional Budget Office (CBO) disagrees. Here is part of the summary of their latest estimates on what will happen if Obamacare is defunded (or repealed):

In brief, CBO and JCT estimate that enacting that legislation would affect insurance coverage and premiums primarily in these ways:
  • The number of people who are uninsured would increase by 18 million in the first new plan year following enactment of the bill. Later, after the elimination of the ACA’s expansion of Medicaid eligibility and of subsidies for insurance purchased through the ACA marketplaces, that number would increase to 27 million, and then to 32 million in 2026.
  • Premiums in the nongroup market (for individual policies purchased through the marketplaces or directly from insurers) would increase by 20 percent to 25 percent—relative to projections under current law—in the first new plan year following enactment. The increase would reach about 50 percent in the year following the elimination of the Medicaid expansion and the marketplace subsidies, and premiums would about double by 2026.
The ways in which individuals, employers, states, insurers, doctors, hospitals, and other affected parties would respond to the changes made by H.R. 3762 are all difficult to predict, so the estimates in this report are uncertain. But CBO and JCT have endeavored to develop estimates that are in the middle of the distribution of potential outcomes. . . .

Estimated Changes Before the Elimination of the Medicaid Expansion and Subsidies

Following enactment but before the Medicaid expansion and subsidies for insurance purchased through the marketplaces were eliminated, the effects of H.R. 3762 on insurance coverage and premiums would stem primarily from repealing the penalties associated with the individual mandate.
Effects on Insurance Coverage. CBO and JCT expect that the number of people without health insurance coverage would increase upon enactment of H.R. 3762 but that the increase would be limited initially, because insurers would have already set their premiums for the current year, and many people would have already made their enrollment decisions for the year. Subsequently, in the first full plan year following enactment, by CBO and JCT’s estimates, about 18 million people would become uninsured. That increase in the uninsured population would consist of about 10 million fewer people with coverage obtained in the nongroup market, roughly 5 million fewer people with coverage under Medicaid, and about 3 million fewer people with employment-based coverage.
Most of those reductions in coverage would stem from repealing the penalties associated with the individual mandate. However, CBO and JCT also expect that insurers in some areas would leave the nongroup market in the first new plan year following enactment. They would be leaving in anticipation of further reductions in enrollment and higher average health care costs among enrollees who remained after the subsidies for insurance purchased through the marketplaces were eliminated. As a consequence, roughly 10 percent of the population would be living in an area that had no insurer participating in the nongroup market.
Effects on Premiums. According to CBO and JCT’s analysis, premiums in the nongroup market would be roughly 20 percent to 25 percent higher than under current law once insurers incorporated the effects of H.R. 3762’s changes into their premium pricing in the first new plan year after enactment. The majority of that increase would stem from repealing the penalties associated with the individual mandate. Doing so would both reduce the number of people purchasing health insurance and change the mix of people with insurance—tending to cause smaller reductions in coverage among older and less healthy people with high health care costs and larger reductions among younger and healthier people with low health care costs. Thus, average health care costs among the people retaining coverage would be higher, and insurers would have to raise premiums in the nongroup market to cover those higher costs. Lower participation by insurers in the nongroup market would place further upward pressure on premiums because the market would be less competitive.

Estimated Changes After the Elimination of the Medicaid Expansion and Subsidies

The bill’s effects on insurance coverage and premiums would be greater once the repeal of the Medicaid expansion and the subsidies for insurance purchased through the marketplaces took effect, roughly two years after enactment.
Effects on Insurance Coverage. By CBO and JCT’s estimates, enacting H.R. 3762 would increase the number of people without health insurance coverage by about 27 million in the year following the elimination of the Medicaid expansion and marketplace subsidies and by 32 million in 2026, relative to the number of uninsured people expected under current law. (The number of people without health insurance would be smaller if, in addition to the changes in H.R. 3762, the insurance market reforms mentioned above were also repealed. In that case, the increase in the number of uninsured people would be about 21 million in the year following the elimination of the Medicaid expansion and marketplace subsidies; that figure would rise to about 23 million in 2026.)
The estimated increase of 32 million people without coverage in 2026 is the net result of roughly 23 million fewer with coverage in the nongroup market and 19 million fewer with coverage under Medicaid, partially offset by an increase of about 11 million people covered by employment-based insurance. By CBO and JCT’s estimates, 59 million people under age 65 would be uninsured in 2026 (compared with 28 million under current law), representing 21 percent of people under age 65. By 2026, fewer than 2 million people would be enrolled in the nongroup market, CBO and JCT estimate.
According to the agencies’ analysis, eliminating the mandate penalties and the subsidies while retaining the market reforms would destabilize the nongroup market, and the effect would worsen over time. The ACA’s changes to the rules governing the nongroup health insurance market work in conjunction with the mandates and the subsidies to increase participation in the market and encourage enrollment among people of different ages and health statuses. But eliminating the penalty for not having health insurance would reduce enrollment and raise premiums in the nongroup market. Eliminating subsidies for insurance purchased through the marketplaces would have the same effects because it would result in a large price increase for many people. Not only would enrollment decline, but the people who would be most likely to remain enrolled would tend to be less healthy (and therefore more willing to pay higher premiums). Thus, average health care costs among the people retaining coverage would be higher, and insurers would have to raise premiums in the nongroup market to cover those higher costs. CBO and JCT expect that enrollment would continue to drop and premiums would continue to increase in each subsequent year.
Leaving the ACA’s market reforms in place would limit insurers’ ability to use strategies that were common before the ACA was enacted. For example, insurers would not be able to vary premiums to reflect an individual’s health care costs or offer health insurance plans that exclude coverage of preexisting conditions, plans that do not cover certain types of benefits (such as maternity care), or plans with very high deductibles or very low actuarial value (plans paying a very low share of costs for covered services).
Effects on Participation by Insurers. In CBO and JCT’s estimation, the factors exerting upward pressure on premiums and downward pressure on enrollment in the nongroup market would lead to substantially reduced participation by insurers and enrollees in many areas. Prior experience in states that implemented similar nongroup market reforms without a mandate penalty or subsidies has demonstrated the potential for market destabilization. Several states that enacted such market reforms later repealed or substantially modified those reforms in response to increased premiums and insurers’ departure from the market.
After weighing the evidence from prior state-level reforms and input from experts and market participants, CBO and JCT estimate that about half of the nation’s population lives in areas that would have no insurer participating in the nongroup market in the first year after the repeal of the marketplace subsidies took effect, and that share would continue to increase, extending to about three-quarters of the population by 2026. That contraction of the market would most directly affect people without access to employment-based coverage or public health insurance.
Effects on Premiums. In total, as a result of reduced enrollment, higher average health care costs among remaining enrollees, and lower participation by insurers, CBO and JCT project that premiums in the nongroup market would be about 50 percent higher in the first year after the marketplace subsidies were eliminated—relative to projections under current law—and would about double by 2026.

Covered

Political Cartoon is by Adam Zyglis in The Buffalo News.

Number One


Wednesday, January 18, 2017

Richest Cabinet In History


President Obama Finishes Term With High Approval Ratings



While Donald Trump is struggling with the lowest approval ratings for any president-elect since the question has been polled, President Obama is finishing his tern on a high note. He is currently enjoying a job approval ratings that is approved of by a majority of the American people (an average approval rating of 55.3% to a disapproval rating of only 40.8% -- a positive difference of 14.5 points).

The numbers above are from RealClearPolitics.

The Wrong Way

Political Cartoon is by Tom Janssen at cagle.com.

Trump Just Knifed GOP In The Back On Obamacare Repeal

(Cartoon image is by Pat Bagley in the Salt Lake Tribune.)

Donald Trump is incapable of keeping his mouth shut. And his latest bout of bragging has placed a knife squarely in the back of congressional Republicans. It concerns the GOP's plan to repeal Obamacare and replace it with a "plan" of their own.

In an interview last weekend, Trump made the American people some promises. He said that the plan to replace Obamacare (which he claims is nearly ready) will "have insurance for everybody", will be "much less expensive", and will have "much lower deductibles". He also promised to allow Medicare and Medicaid to negotiate drug prices with the drug companies.

That has to be blowing the minds of congressional Republicans, because they weren't planning to deliver on any of those promises. All of the GOP plans floated, none of which has garnered majority support among Republicans, do not deliver on any of Trump's promises.

The GOP wants to offer "universal access", which is far different from universal coverage. Universal access simply means any American can buy health insurance (if they have the money to pay for it). But Trump promised insurance for everyone, which is universal coverage.

If everyone is covered, costs are lowered, and deductibles lowered, then the Trump plan would cost more than Obamacare. And that would mean the Republicans couldn't follow through on their promise to cut taxes massively for corporations and the rich without ballooning the national deficit and debt.

But a promise is a promise, and Trump has put the GOP on record now as promising universal coverage that will be cheaper and have lower deductibles. If they don't deliver that, the public is going to want to know why not -- and they are going to hold it against them in the next election (and you can be sure the Democrats won't let anyone forget).

It'll be interesting to see how the Republicans try to weasel their way out of Trump's promises.

Trump's Jokes

Political Cartoon is by Randall Enos at cagle.com.

Trump Set To Violate The Constitution On Day One

(Cartoon image is by Joel Pett in the Lexington Herald-Leader.)

From John Dean (Nixon administration White House counsel):

“I don’t think Richard Nixon even comes to close to the level of corruption we already know about Trump.”
The following article is by Richard W. Painter in the New York Times. Painter was the chief White House ethics lawyer from 2005 to 2007 (during the administration of Bush II).

On Wednesday, President-elect Donald J. Trump finally announced his plans to “separate” himself from his global business empire when he assumes the presidency next Friday. His plans were announced in the midst of worrisome news around the world, including renewed terrorist attacks in the Middle East, rising tensions in the South China Sea and Mr. Trump’s belated admission that the Russian government had conducted espionage activities inside the United States.
This was his moment to announce a plan to separate himself from ownership interest in his global business empire. It was his final chance to disclose the identity of, and unwind his relationships with, his business partners and creditors around the globe.
The plan Mr. Trump announced on Wednesday does none of these things. As expected, he continues to refuse to release his tax returns, even though many of his cabinet nominees will have to disclose theirs in order to get confirmed by senators skeptical of, among other things, foreign business entanglements. He also did not announce a divestment of ownership interest in his businesses, even though this is a step that his own cabinet appointees will have to take in order to comply with a federal conflict of interest law.
Instead, Mr. Trump will simply turn management of the businesses over to a trustee chosen by him, and to two of his sons, Donald Jr. and Eric. This is not a separation at all, and from a conflict of interest vantage point, it won’t work.
First, if Mr. Trump continues to own the businesses, he will continue to receive payments they earn from dealings with foreign governments. Most if not all of these payments will violate the Emoluments Clause of the Constitution, which expressly forbids anyone in public office from receiving any gifts, salary or profits of any kind from transactions with foreign governments without the consent of Congress. Apart from exceptions already set forth in the Foreign Gifts and Decorations Act, Congress, even though now controlled by Republicans, has shown no appetite for making further exceptions.
Absent such consent from Congress, President Trump will be in violation of the Constitution as of next Friday with respect to, among other things, loans from foreign-government-controlled banks, leases of Trump office space to foreign-government-controlled companies, foreign governments and diplomats renting rooms in Trump hotels and any investments that are made alongside foreign sovereign wealth funds. The plan announced on Wednesday does nothing to fix this problem because if President Trump still owns the businesses, or he is the beneficiary of a trust that owns the businesses, he receives the economic benefit — the “emolument” — from all of these transactions.
The only concession that Mr. Trump made on this issue in his news conference was a proposal to donate “profits” made by his hotels from foreign governments to the United States government. He failed to address the fact that foreign government money likely permeates his entire business empire, not just the hotels, and that he has no plan to stop receiving these payments that will become unconstitutional at noon next Friday.
Second, apart from a promise not to enter into any “new” deals outside the United States, Mr. Trump’s plan does nothing to fix the serious conflicts of interest and global security threats posed by his existing business relationships with politicians and politically connected businessmen around the world. He also does not address his ownership and licensing rights in properties — including the use of the Trump name. Shockingly, the president-elect did not even mention the grave risk posed to the people who live and work in these buildings, which are likely to be prime terrorist targets because they carry the name of the president of the United States. Taking his name off these buildings would greatly reduce this security risk, but that would cost Mr. Trump his licensing profits, so he won’t do it. Who will pay for increased security for these buildings — foreign governments, the United States government or the Trump organization — is an unanswered question.
Third, and perhaps most dangerous to our national security, our president could be beholden, and indebted, to undisclosed lenders and other investors around the world. These relationships are not revealed on Mr. Trump’s financial disclosure form, which lists only his personal liabilities, and he won’t release his tax returns, which would tell us a lot more. If Mr. Trump’s businesses were to be sold, these entanglements would go away, but Mr. Trump won’t sell.
Imagine where we would have been in December 1941 if President Franklin D. Roosevelt had owned office towers in Berlin and Frankfurt, licensing agreements in Munich and Tokyo and a hotel in the Philippines. The world today is still a dangerous place, and we are entitled to a president who can protect the interests of our country free of personal financial conflicts of interest. What we heard on Wednesday did nothing to reassure Americans in the face of clear evidence that Mr. Trump will take office on Jan. 20 with more conflicts of interest than any president in history.

Rationalizations

Political Cartoon is by Mike Stanfill at ragingpencils.com.

Compassionate ?


Tuesday, January 17, 2017

Cheater


Swamp Creatures

Political Cartoon is by Monte Wolverton at cagle.com.

Trump Is Still The Most Unpopular Pre-Inauguration Prez



Just more evidence that Donald Trump has no mandate. A new Gallup Poll shows that he is, by far, the most unpopular president elected just before the inauguration. Barack Obama, George W. Bush, and Bill Clinton were all viewed favorably by a significant majority of Americans preceding their inaugurations. Donald Trump is viewed unfavorably by a significant majority of the population. This gives him less authority to advance his policies than any of the last three presidents.

These charts are from the Gallup Poll -- done between January 4th and 8th of a random national sample of 1,032 adults, and has a margin of error of 4 points.

Killing Children

Political Cartoon is by Ranier Hachfeld at cagle.com.

Public Disagrees With Trump On Russia (And Putin)


Donald Trump seems to have a favorable opinion of Russia, and it strongman -- Vladimir Putin. But a majority of the American public disagrees with his assessment. About 54% of Americans view Russia as a major threat to the United States.

Surprisingly though, only 41% of Republicans see Russia as a major threat -- about 17% less than held that view just three years ago. Have they been seduced by Russia's help to elect their presidential nominee? Or are they just blindly accepting Trump's views?

Maybe they have just foolishly accepted the myth that the cold war is over. If so, they are wrong. While the Soviet Union no longer exists, its major member (Russia) does -- and it continues to oppose U.S. and Western interests around the world. Russia's leader is former KGB, and regardless of what he says publicly, still views the United States as an enemy.

Frankly, Trump's view of Russia and Putin worries me. The U.S. has opposed Russian aggression since World War II, and acted as a check on the expansion of Russia and its influence. Is that policy going to change now to one of appeasement? That's a distinct possibility, since Trump views the world more in economic terms (possibility of business profits) than political terms (protection of emerging and established democracies). A policy of appeasement may or may not be good for business interests, but it will definitely increase Russia's aggression throughout the world.

Trump's assessment of Putin is also not aired by the public (see chart below), and that even includes members of Trump's own party. While a larger share of Republicans view Putin favorably than either Democrats (11%) or the general public (19%), it is a small percentage (27%). Trump may trust Putin, but American's don't.

These charts are from a recent Pew Research Center survey -- done between January 4th and 9th of a random national sample of 1,502 adults, and has a 2.9 point margin of error.


Unwanted

Political Cartoon is by John Graham at cagle.com.

Wealth Inequality Grows Larger In The World (And U.S.)

(The cartoon image is from polyp.org.uk.)

The charity Oxfam has released its very disturbing 2017 report of poverty and inequality in the world.  A summary of the report is below, along with the causes for it and the myths that contribute to those causes. It's well worth reading.


It is four years since the World Economic Forum identified rising economic inequality as a major threat to social stability,1 and three years since the World Bank twinned its goal for ending poverty with the need for shared prosperity.2 Since then, and despite world leaders signing up to a global goal to reduce inequality, the gap between the rich and the rest has widened. This cannot continue. As President Obama told the UN General Assembly in his departing speech in September 2016: ‘A world where 1% of humanity controls as much wealth as the bottom 99% will never be stable.’


Yet the global inequality crisis continues unabated:
  • Since 2015, the richest 1% has owned more wealth than the rest of the planet.3
  • Eight men now own the same amount of wealth as the poorest half of the world.4
  • Over the next 20 years, 500 people will hand over $2.1 trillion to their heirs a sum larger than the GDP of India, a country of 1.3 billion people.5
  • The incomes of the poorest 10% of people increased by less than $3 a year between 1988 and 2011, while the incomes of the richest 1% increased 182 times as much.6
  • A FTSE-100 CEO earns as much in a year as 10,000 people in working in garment factories in Bangladesh.7
  • In the US, new research by economist Thomas Piketty shows that over the last 30 years the growth in the incomes of the bottom 50% has been zero, whereas incomes of the top 1% have grown 300%.8
  • In Vietnam, the country’s richest man earns more in a day than the poorest person earns in 10 years.9

    Left unchecked, growing inequality threatens to pull our societies apart. It increases crime and insecurity, and undermines the fight to end poverty.10 It leaves more people living in fear and fewer in hope.

    From Brexit to the success of Donald Trump’s presidential campaign, a worrying rise in racism and the widespread disillusionment with mainstream politics, there are increasing signs that more and more people in rich countries are no longer willing to tolerate the status quo. Why would they, when experience suggests that what it delivers is wage stagnation, insecure jobs and a widening gap between the haves and the have-nots? The challenge is to build a positive alternative not one that increases divisions.

    The picture in poor countries is equally complex and no less concerning. Hundreds of millions of people have been lifted out of poverty in recent decades, an achievement of which the world should be proud. Yet one in nine people still go to bed hungry.11 Had growth been pro-poor between 1990 and 2010, 700 million more people, most of them women, would not be living in poverty today.12 Research finds that three-quarters of extreme poverty could in fact be eliminated now using existing resources, by increasing taxation and cutting down on military and other regressive spending.13 The World Bank is clear that without redoubling their efforts to tackle inequality, world leaders will miss their goal of ending extreme poverty by 2030.14 
CAUSES 

There is no getting away from the fact that the biggest winners in our global economy are those at the top. Oxfam’s research has revealed that over the last 25 years, the top 1% have gained more income than the bottom 50% put together.15 Far from trickling down, income and wealth are being sucked upwards at an alarming rate. What is causing this? Corporations and super-rich individuals both play a key role.

Corporations, working for those at the top

Big businesses did well in 2015/16: profits are high and the world’s 10 biggest corporations together have revenue greater than the government revenue of 180 countries combined.16

Businesses are the lifeblood of a market economy, and when they work to the benefit of everyone they are vital to building fair and prosperous societies. But when corporations increasingly work for the rich, the benefits of economic growth are denied to those who need them most. In pursuit of delivering high returns to those at the top, corporations are driven to squeeze their workers and producers ever harder and to avoid paying taxes which would benefit everyone, and the poorest people in particular.

Squeezing workers and producers

While many chief executives, who are often paid in shares, have seen their incomes skyrocket, wages for ordinary workers and producers have barely increased, and in some cases have got worse. The CEO of India’s top information firm earns 416 times the salary of a typical employee in his company.17 In the 1980s, cocoa farmers received 18% of the value of a chocolate bar today they get just 6%.18 In extreme cases, forced labour or slavery can be used to keep corporate costs down. The International Labour Organization estimates that 21 million people are forced labourers, generating an estimated $150bn in profits each year.19 The world’s largest garment companies have all been linked to cotton- spinning mills in India, which routinely use the forced labour of girls.20 The lowest-paid workers in the most precarious conditions are predominantly women and girls.21 Across the world, corporations are relentlessly squeezing down the costs of labour and ensuring that workers and producers in their supply chains get less and less of the economic pie. This increases inequality and suppresses demand.

Dodging tax

Corporations maximize profit in part by paying as little tax as possible. They do this by using tax havens or by making countries compete to provide tax breaks, exemptions and lower rates. Corporate tax rates are falling all over the world, and this together with widespread tax dodging ensures that many corporations are paying minimal tax. Apple allegedly paid 0.005% of tax on its European profits in 2014.22 Developing countries lose $100bn every year to tax dodging.23 Countries lose billions more through providing tax holidays and exemptions. It is the poorest people who lose out the most, as they are most reliant on the public services that these forgone billions could have provided. Kenya is losing $1.1bn every year in tax exemptions for corporations, nearly twice its budget for health this in a country where women have a 1 in 40 chance of dying in childbirth.24 What is driving this behaviour by corporates? Two things: the focus on short-term returns to shareholders and the increase in ‘crony capitalism’.

Super-charged shareholder capitalism

In many parts of the world, corporations are increasingly driven by a single goal: to maximize returns to their shareholders. This means not only maximizing short-term profits, but paying out an ever-greater share of these profits to the people who own them. In the UK, 10% of profits were returned to shareholders in 1970; this figure is now 70%.26 In India, the figure is lower but is growing rapidly, and for many corporations it is now higher than 50%.27 This has been criticized by many, including Larry Fink, CEO of Blackrock (the world’s largest asset manager)28 and Andrew Haldane, Chief Economist at the Bank of England.29 The increased return to shareholders works for the rich, because the majority of shareholders are among the richest in society, increasing inequality. Institutional investors, like pension funds, own ever-smaller shares in corporations. Thirty years ago, pension funds owned 30% of shares in the UK; now they own only 3%.30 Every dollar of profit given to the shareholders of corporations is a dollar that could have been spent paying producers or workers more, paying more tax, or investing in infrastructure or innovation. 


Crony capitalism

As documented by Oxfam in An Economy for the 1%,31 corporations from many sectors finance, extractives, garment manufacturers, pharmaceuticals and others use their huge power and influence to ensure that regulations and national and international policies are shaped in ways that enable continued profitability. For example, oil corporations in Nigeria have managed to secure generous tax breaks.32

Even the technology sector, once seen as a sector that is relatively above board, is increasingly linked to charges of cronyism. Alphabet, the parent company of Google, has become one of the biggest lobbyists in Washington and is in constant negotiations in Europe over anti-trust rules and tax.33 Crony capitalism benefits the rich, the people who own and run these corporations, at the expense of the common good and of poverty reduction. It means that smaller businesses struggle to compete and ordinary people end up paying more for goods and services as they face cartels and monopoly power of corporations and those with close connections with government. The world’s third richest man, Carlos Slim, controls approximately 70% of all mobile phone services and 65% of fixed lines in Mexico, costing 2% of GDP.34 


The role of the super-rich in the inequality crisis

By any measure, we are living in the age of the super-rich, a second ‘gilded age’ in which a glittering surface masks social problems and corruption. Oxfam’s analysis of the super- rich includes all those individuals with a net worth of at least $1bn. The 1,810 dollar billionaires on the 2016 Forbes list, 89% of whom are men, own $6.5 trillion as much wealth as the bottom 70% of humanity.35 While some billionaires owe their fortunes predominantly to hard work and talent, Oxfam’s analysis of this group finds that one-third of the world’s billionaire wealth is derived from inherited wealth, while 43% can be linked to cronyism.36 


Once a fortune is accumulated or acquired it develops a momentum of its own. The super-rich have the money to spend on the best investment advice, and the wealth held by the super-rich since 2009 has increased by an average of 11% per year. This is a rate of accumulation far higher than ordinary savers are able to obtain. Whether via hedge funds or warehouses full of fine art and vintage cars,38 the highly secretive industry of wealth management has been hugely successful in increasing the prosperity of the super- rich. The fortune of Bill Gates has risen 50% or $25bn since he left Microsoft in 2006, despite his commendable efforts to give much of it away.39 If billionaires continue to secure these returns, we could see the world’s first trillionaire in 25 years. In such an environment, if you are already rich you have to try hard not to keep getting a lot richer.

The huge fortunes we see at the very top of the wealth and income spectrum are clear evidence of the inequality crisis and are hindering the fight to end extreme poverty. But the super-rich are not just benign recipients of the increasing concentration of wealth. They are actively perpetuating it.
One way this happens is through their investments. As some of the biggest shareholders (particularly in private equity and hedge funds), the wealthiest members of society are huge beneficiaries of the shareholder worship that is warping the behaviour of corporations.


Avoiding tax, buying politics

Paying as little tax as possible is a key strategy for many of the super-rich.41 To do this they make active use of the secretive global network of tax havens, as revealed by the Panama Papers and other exposés. Countries compete to attract the super-rich, selling their sovereignty. Super-rich tax exiles have a wide choice of destinations worldwide. For an investment of at least £2m, you can buy the right to live, work and buy property in the UK and benefit from generous tax breaks. In Malta, a major tax haven, you can buy full citizenship for $650,000. Gabriel Zucman has estimated that $7.6 trillion of wealth is hidden offshore.42 Africa alone loses $14bn in tax revenues due to the super-rich using tax havens Oxfam has calculated this would be enough to pay for the healthcare that could save the lives of four million children and to employ enough teachers to get every African child into school. Tax rates on wealth and on top incomes have continued to fall across the rich world. In the US, the top rate of income tax was 70% as recently as 1980; it is now 40%.43 In the developing world, taxation on the rich is lower still: Oxfam’s research shows that the average top rate is 30% on incomes, and the majority is never collected.44

Many of the super-rich also use their power, influence and connections to capture politics and ensure that the rules are written for them. Billionaires in Brazil lobby to reduce taxes,45 and in São Paulo would prefer to use helicopters to get to work, flying over the traffic jams and broken infrastructure below.46 Some of the super-rich also use their fortunes to help buy the political outcomes they want, seeking to influence elections and public policy. The Koch brothers, two of the richest men in the world, have had a huge influence over conservative politics in the US, supporting many influential think tanks and the Tea Party movement47 and contributing heavily to discrediting the case for action on climate change. This active political influencing by the super-rich and their representatives directly drives greater inequality by constructing ‘reinforcing feedback loops’ in which the winners of the game get yet more resources to win even bigger next time.48 

THE FALSE ASSUMPTIONS SUPPORTING THOSE CAUSES


The current economy of the 1% is built on a set of false assumptions which lie behind many of the policies, investments and activities of governments, business and wealthy individuals, and which fail people living in poverty and society more broadly. Some of these assumptions are about economics itself. Some are more about the dominant view of economics described by its creators as ‘neoliberalism’, which wrongly assumes that wealth created at the top will ‘trickle down’ to everyone else. The IMF has identified neoliberalism as a key cause of growing inequality.50 Unless we tackle these false assumptions, we will be unable to turn the situation around.


  1. False assumption #1: The market is always right, and the role of governments should be minimized. In reality, the market has failed to prove itself the best way of organizing and valuing much of our common life or designing our common future. We have seen how corruption and cronyism distort markets at the expense of ordinary people and how the excessive growth of the financial sector exacerbates inequality. Privatization of public services such as health, education or water has been shown to exclude the poor, and especially women.
  2. False assumption #2: Corporations need to maximize profits and returns to shareholders at all costs. Maximizing profits disproportionately boosts the incomes of the already rich while putting unnecessary pressure on workers, farmers, consumers, suppliers, communities and the environment. Instead, there are many more constructive ways to organize businesses that contribute to greater prosperity for all, and plenty of existing examples of how to do this.
  3. False assumption #3: Extreme individual wealth is benign and a sign of success, and inequality is not relevant. Instead, the emergence of a new gilded age, with vast amounts of wealth concentrated in too few hands – the majority male – is economically inefficient, politically corrosive, and undermines our collective progress. A more equal distribution of wealth is necessary.
  4. False assumption #4: GDP growth should be the primary goal of policy making. Yet as Robert Kennedy said in 1968: ‘GDP measures everything except that which makes life worthwhile.’ GDP fails to count the huge amount of unpaid work done by women across the world. It fails to take into account inequality, meaning that a country like Zambia can have high GDP growth at a time when the number of poor people actually increased.
  5. False assumption #5: Our economic model is gender-neutral. In fact, cuts in public services, job security and labour rights hurt women most. Women are disproportionately in the least secure and lowest-paid jobs and they also do most of the unpaid care work – which is not counted in GDP, but without which our economies would not function.
  6. False assumption #6: Our planet’s resources are limitless. This is not only a false assumption, but one which could lead to catastrophic consequences for our planet. Our economic model is based on exploiting our environment and ignoring the limits of what our planet can bear. It is an economic system that is a major driver of runaway climate change.
These six assumptions need to be overturned, and fast. They are outdated, backward- looking, and have failed to deliver both shared prosperity and stability. They are driving us off a cliff. An alternative way of running our economy a human economy is needed urgently. 

Special Treatment ?

Political Cartoon is by Barry Deutsch at patreon.com/barry.

Ashamed


Monday, January 16, 2017

Victim ?


It's 3 a.m.

Political Cartoon is by Steve Sack in the Minneapolis Star-Tribune.

Republicans Spend $1.4 Million To Lie To Americans

(Cartoon image is by Adam Zyglis in The Buffalo News.)

Congressional Republicans are getting nervous about their plan to dismantle Obamacare. Many of them are now afraid that their repeated lies about Obamacare will be exposed once the plan is repealed. They could just abandon their nefarious plan and fix Obamacare (which is what the public really wants), but that would make too much sense. Instead, they have chosen another option.

They have decided that the answer is more propaganda. A group affiliated with the GOP (American Action Network) is spending $1.4 million dollars on advertisements on television and digital media. They are advertising the Republican plan that will replace Obamacare. The ads claim that plan has "more choices", "better care", and "lower costs".

There is only one thing wrong with this approach -- it's advertising a plan that DOES NOT EXIST! The congressional Republicans have been trying to come up with a plan to replace Obamacare for years now, and have been unable to do that. And they are no closer to developing a plan now than in the past.

There is only one way to describe the new GOP advertising campaign -- it is a LIE!

Trophy Catch

Political Cartoon is by John Cole in the Scranton Times-Tribune.

Public Supports Insurance Subsidies (& A Public Option)


The Republicans in Congress are quickly acting to repeal the Affordable Care Act (Obamacare), or at least defund it (which would effectively kill it). They have been lying about the program since it was passed, but what they still fail to realize is that most Americans don't want the program repealed. People understand that the program is not perfect, and most just want it fixed -- not repealed.

One aspect of Obamacare that Republican officials dislike the most is the providing of subsidies to help Americans buy health insurance. Once Obamacare is defunded, or repealed, this aspect would disappear -- and over 20 million Americans would lose the health insurance they have been able to get under Obamacare.

But the public does not want the subsidies to disappear. As the chart above shows, most Americans are in favor of providing government subsidies to help low income (and middle class) people buy the health insurance they need. Only a tiny minority opposes these subsidies.

And a majority of the public also supports something else that congressional Republicans oppose -- a public option for insurance to compete with private insurance (see chart below).

The Republicans are playing with fire in their efforts to repeal Obamacare, and they may find they will get burned.

These charts were made from information contained in a new Economist / YouGov Poll -- done between January 7th and 10th of a random national sample of 1,424 adults (including 1,237 registered voters), and has a margin of error of 3.1 points.


Germaphobe ?

Political Cartoon is by Nate Beeler in The Columbus Dispatch.