The truth about ‘class war’ in America
Republicans claim, in Orwellian fashion, that Obama’s millionaire tax is ‘class war’. The reality is that the super-rich won the war
The truth about ‘class war’ in America
The top 1 percent of American earners controls as much of the nation’s total income as it did on the eve of the Great Depression. Now, however, their money comes from skyrocketing paychecks more than from unearned income, as it did in 1928.
Enter your household income and see how you rank in 344 zones across the country
[The Congressional Budget Office ] found that, between 1979 and 2007, income of the top 1 percent of households grew 275 percent. The next 19 percent of households grew about a quarter of that and, of course, the bottom half of Americans saw very little income growth.
Super-rich costing the treasury £1bn a year by dodging stamp duty on their properties
Homes are transferred to offshore companies and sold as corporate transactions
Tax dodge: All the homes on London’s exclusive Cornwall Terrace overlooking Regent’s Park have been transferred into offshore companies
If you STILL do not know what OWS is about, you are living under a rock.
The FACTS are there to back them up, which leaves you detractors left with personal attacks. How quaint.
1965: production worker (average) $19.61 per hour
2007: production worker (average) $19.71 per hour
1965: CEO pay (hourly basis for comparative purposes) $490.31
2007: CEO pay (hourly basis for comparative purposes) $5,419.97
With the highest youth unemployment rate in the eurozone amongst the under 25s hitting 43.5%, young people in Spain have little hope a new government can be a force of change and job opportunities.
The court heard how Mr Abramovich employed a company called Valmet to set up a “complex and opaque” web of offshore companies and trusts, which he used to remove hundreds of millions of dollars from Sibneft, the oil firm he bought and set up for $100m (£62m) in 1995 with the assistance of Boris Berezovsky, and sold in 2005 for
Hedge fund managers, CEOs, athletes with multi-year contracts, Corzine speculators, do not earn their money, like individuals who drive daily a hundred miles to work. Through connections that manipulate the system and illegal or immoral activity, the favored few assign themselves porker accumulations of wealth. Instead of millions in the pockets or accounts of the few, thousands in the pockets or accounts of the many would serve the higher social good because that would mean consumption instead of asset acquisition: paper. The one or two percent who actually create wealth through investment and job creation, these people serve the social good.
“IBM chief Sam Palmisano could walk away with as much as $170 million when he steps down from his role as CEO at the end of 2011. He will remain on as chairman of the multinational.
It was revealed last month that Eugene Isenberg, oil boss of Texas’ Nabors Industries, can count on $126 million when he relinquishes his title as CEO – even though the 81-year-old tycoon will remain as chairman.
At the beginning of the year, Google announced that outgoing CEO Eric Schmidt was to be given $100 million.”
The 1% are the very best destroyers of wealth the world has ever seen
Our common treasury in the last 30 years has been captured by industrial psychopaths. That’s why we’re nearly bankrupt
guardian.co.uk, Monday 7 November 2011 15.30 EST
If wealth was the inevitable result of hard work and enterprise, every woman in Africa would be a millionaire. The claims that the ultra-rich 1% make for themselves – that they are possessed of unique intelligence or creativity or drive – are examples of the self-attribution fallacy. This means crediting yourself with outcomes for which you weren’t responsible. Many of those who are rich today got there because they were able to capture certain jobs. This capture owes less to talent and intelligence than to a combination of the ruthless exploitation of others and accidents of birth, as such jobs are taken disproportionately by people born in certain places and into certain classes.
The findings of the psychologist Daniel Kahneman, winner of a Nobel economics prize, are devastating to the beliefs that financial high-fliers entertain about themselves. He discovered that their apparent success is a cognitive illusion. For example, he studied the results achieved by 25 wealth advisers across eight years. He found that the consistency of their performance was zero. “The results resembled what you would expect from a dice-rolling contest, not a game of skill.” Those who received the biggest bonuses had simply got lucky.
Such results have been widely replicated. They show that traders and fund managers throughout Wall Street receive their massive remuneration for doing no better than would a chimpanzee flipping a coin. When Kahneman tried to point this out, they blanked him. “The illusion of skill … is deeply ingrained in their culture.”
So much for the financial sector and its super-educated analysts. As for other kinds of business, you tell me. Is your boss possessed of judgment, vision and management skills superior to those of anyone else in the firm, or did he or she get there through bluff, bullshit and bullying?
In a study published by the journal Psychology, Crime and Law, Belinda Board and Katarina Fritzon tested 39 senior managers and chief executives from leading British businesses. They compared the results to the same tests on patients at Broadmoor special hospital, where people who have been convicted of serious crimes are incarcerated. On certain indicators of psychopathy, the bosses’s scores either matched or exceeded those of thepatients. In fact, on these criteria, they beat even the subset of patients who had been diagnosed with psychopathic personality disorders.
The psychopathic traits on which the bosses scored so highly, Board and Fritzon point out, closely resemble the characteristics that companies look for. Those who have these traits often possess great skill in flattering and manipulating powerful people. Egocentricity, a strong sense of entitlement, a readiness to exploit others and a lack of empathy and conscience are also unlikely to damage their prospects in many corporations.
In their book Snakes in Suits, Paul Babiak and Robert Hare point out that as the old corporate bureaucracies have been replaced by flexible, ever-changing structures, and as team players are deemed less valuable than competitive risk-takers, psychopathic traits are more likely to be selected and rewarded. Reading their work, it seems to me that if you have psychopathic tendencies and are born to a poor family, you’re likely to go to prison. If you have psychopathic tendencies and are born to a rich family, you’re likely to go to business school.
This is not to suggest that all executives are psychopaths. It is to suggest that the economy has been rewarding the wrong skills. As the bosses have shaken off the trade unions and captured both regulators and tax authorities, the distinction between the productive and rentier upper classes has broken down. Chief executives now behave like dukes, extracting from their financial estates sums out of all proportion to the work they do or the value they generate, sums that sometimes exhaust the businesses they parasitise. They are no more deserving of the share of wealth they’ve captured than oil sheikhs.
The rest of us are invited, by governments and by fawning interviews in the press, to subscribe to their myth of election: the belief that they are possessed of superhuman talents. The very rich are often described as wealth creators. But they have preyed on the earth’s natural wealth and their workers’ labour and creativity, impoverishing both people and planet. Now they have almost bankrupted us. The wealth creators of neoliberal mythology are some of the most effective wealth destroyers the world has ever seen.
What has happened over the past 30 years is the capture of the world’s common treasury by a handful of people, assisted by neoliberal policies which were first imposed on rich nations by Margaret Thatcher and Ronald Reagan. I am now going to bombard you with figures. I’m sorry about that, but these numbers need to be tattooed on our minds. Between 1947 and 1979, productivity in the US rose by 119%, while the income of the bottom fifth of the population rose by 122%. But from 1979 to 2009, productivity rose by 80%, while the income of the bottom fifth fell by 4%. In roughly the same period, the income of the top 1% rose by 270%.
In the UK, the money earned by the poorest tenth fell by 12% between 1999 and 2009, while the money made by the richest 10th rose by 37%. The Gini coefficient, which measures income inequality, climbed in this country from 26 in 1979 to 40 in 2009.
In his book The Haves and the Have Nots, Branko Milanovic tries to discover who was the richest person who has ever lived. Beginning with the loaded Roman triumvir Marcus Crassus, he measures wealth according to the quantity of his compatriots’ labour a rich man could buy. It appears that the richest man to have lived in the past 2,000 years is alive today. Carlos Slim could buy the labour of 440,000 average Mexicans. This makes him 14 times as rich as Crassus, nine times as rich as Carnegie and four times as rich as Rockefeller.
Until recently, we were mesmerised by the bosses’ self-attribution. Their acolytes, in academia, the media, thinktanks and government, created an extensive infrastructure of junk economics and flattery to justify their seizure of other people’s wealth. So immersed in this nonsense did we become that we seldom challenged its veracity.
This is now changing. On Sunday evening I witnessed a remarkable thing: a debate on the steps of St Paul’s Cathedral between Stuart Fraser, chairman of the Corporation of the City of London, another official from the corporation, the turbulent priest Father William Taylor, John Christensen of the Tax Justice Network and the people of Occupy London. It had something of the flavour of the Putney debates of 1647. For the first time in decades – and all credit to the corporation officials for turning up – financial power was obliged to answer directly to the people.
It felt like history being made. The undeserving rich are now in the frame, and the rest of us want our money back.
One in 15 Americans now officially living in poverty as number receiving food stamps rises 8.1% in a year
Army veteran and his wife die in tragic ‘suicide pact’ after becoming ‘too poor to live through the winter’
By CHRIS PARSONS
Last updated at 11:33 PM on 9th November 2011
A newly married couple forced to live on £57 a week killed themselves in despair after being ‘abandoned’ by social services, their friends claimed yesterday.
The bodies of Mark and Helen Mullins were found lying side by side at their run-down home in an apparent suicide pact.
News of the tragedy emerged yesterday as friends told how they had been forced to live ‘hand to mouth’, making a weekly 12-mile trip to a soup kitchen on foot after Mrs Mullins’ benefits were stopped 18 months ago.
Tragic: Mark and Helen Mullins could not face another freezing winter on the poverty line, according to neighbours
The couple were given free vegetables at the soup kitchen in Coventry each Sunday, which they boiled into a broth on a camping stove.
They lived in just one room of their terraced house to save on heating costs and could not afford a fridge so kept their food in plastic bags in the garden.
They are believed to have killed themselves after 18 months of struggling to survive on the £57.50 Jobseeker’s Allowance payment Mr Mullins, a 48-year-old former Army physical training instructor, was able to claim.
Their heart-breaking plight was revealed yesterday, five days after their bodies were discovered at their council house in Bedworth, Warwickshire.
Charity workers who befriended the couple said society had allowed them to ‘slip through the net’.
Mrs Mullins, 59, suffered from learning difficulties and social services are understood to have taken her 12-year-old daughter away last year after she was considered to be incapable of looking after her.
As a result, her child benefits were stopped but she was ineligible to claim Jobseeker’s Allowance because she was not deemed fit to work.
She was also told she did not qualify for incapacity benefit because she had not been officially diagnosed with a medical condition.
Mr Mullins was his wife’s full-time carer. He fought to get a carer’s allowance but was told he could not claim until she was diagnosed with a disorder.
Officers discovered their bodies after neighbours reported they had not been seen for some days. Kervin Julien, who runs the Salvation Army soup kitchen in Coventry used by the couple, said: ‘The question needs to be asked – why was it they felt they had no one else to turn to?
‘It’s sad that in this day and age we have still got prehistoric services that are not meeting the needs of the people who need them.’
Mr Julien, who appeared in TV programme The Secret Millionaire, added: ‘They walked everywhere hand in hand, like young lovers.
‘Mark talked about the authorities taking Helen’s daughter away from her but not acknowledging her mental health problems.
‘They had been staying with relatives and friends to try and avoid the authorities, as they believed they wanted to section Helen. They just wanted support.’
It is understood the couple married in July last year, shortly after they appeared in an online documentary about people living below the poverty line in Warwickshire.
Mr Mullins said in the interview: ‘The job centre decided Helen couldn’t sign on as she was incapable of employment as she has no literacy and numeracy skills.
‘However, the incapacity people wouldn’t recognise her disabilities. We’re in a catch 22 situation. We’re living hand to mouth.’
One neighbour said: ‘The authorities turned their back on them.”
‘They obviously couldn’t face another freezing winter and felt they had no other choice but to kill themselves.’
Police said they were not looking for anyone else in connection with the deaths. Warwickshire County Council refused to comment because the couple are yet to be formally identified.
A spokesman for the Department for Work and Pensions said: ‘The couple in question had been receiving weekly benefits from the department since February 2010 – these included money for disability and caring responsibilities as well as out of work support.
‘We had not received any complaint from them about their benefit claim.’
The truth about ‘class war’ in America
Republicans claim, in Orwellian fashion, that Obama’s millionaire tax is ‘class war’. The reality is that the super-rich won the war
Richard Wolff guardian.co.uk, Monday 19 September 2011 15.55 EDT
Republicans and conservatives always fight back against proposals to raise taxes on corporations and rich individuals by making two basic claims. First, proposals amount to un-American “class warfare”, pitting the working class against corporations and the rich. Second, such proposals would take money for the government that would otherwise have been invested in production and thus created jobs.
Neither logic nor evidence supports either claim. The charge of class war is particularly obtuse. Consider simply these two facts. First, at the end of the second world war, for every dollar Washington raised in taxes on individuals, it raised $1.50 in taxes on business profits. Today, that ratio is very different: for every dollar Washington gets in taxes on individuals, it takes 25 cents in taxes on business. In short, the last half century has seen a massive shift of the burden of federal taxation off business and onto individuals.
Second, across those 50 years, the actual shift that occurred was the opposite of the much more modest reversal proposed this week by President Obama; over the same period, the federal income tax rate on the richest individuals fell from 91% to the current 35%. Yet, Republicans and conservatives use the term “class war” for what Obama proposes – and never for what the last five decades have accomplished in shifting the tax burden from the rich and corporations to the working class.
The tax structure imposed by Washington on the US over the last half-century has seen a massive double shift of the burden of taxation: from corporations to individuals and from the richest individuals to everyone else. If the national debate wants seriously to use a term like “class war” to describe Washington’s tax policies, then the reality is that the class war’s winners have been corporations and the rich. Its losers – the rest of us – now want to reduce our losses modestly by small increases in taxes on the super-rich (but not, or not yet, on corporations).
To refer to this effort as if it had suddenly introduced class war into US politics is either dishonest or based on ignorance of what federal tax policies have actually been. Or perhaps, for conservatives, it is a convenient mixture of both.
Much the same sort of analysis applies to the Republican claims that taxing corporations and rich people takes money that would otherwise be invested in business growth and thus create jobs. Last Friday, the US Federal Reserve reported a record quantity of cash on the books of US businesses (over $2tn). Even with the currently low taxes on businesses and the rich, that money is not being invested and is not creating jobs. It is not being distributed to anyone else and so is not being spent on consumer goods either. Taxing a portion of that money to finance Washington’s stimulation of the economy by spending that money – or even better, by using it to hire and pay the unemployed – would be a much more effective way to provide jobs than leaving it as cash hoards in corporations’ coffers.
Last month, Warren Buffett upset many of his “mega-rich friends” by what he stated categorically in a New York Times op-ed. He made it clear that he had never encountered any serious investor who decided whether or not to invest based on tax rates. It was always the prospects of profit that made the difference. He then urged Americans to raise taxes on the rich like himself. He also hinted – none too subtly – that it was becoming politically dangerous for the whole economic system’s survival to keep having the minority of extremely rich people paying federal tax at lower rates than the middle- and low-income majority.
The final irony of loose talk about class war is this: the Republican and conservative voices opposing all tax increases for corporations and the rich thereby provoke, as Buffett intimated and New York Mayor Michael Bloomberg more explicitly warned last week, a renewal of class consciousness in the US. Then, Washington might learn what class war really is.
For the Rich, Cargo Vans on Steroids
Published: November 20, 2011
Steve Kantor admits that he likes to travel in style. He is an affable investment banker, concerned about flaunting his wealth, but he drives around Manhattan in what looks like a simple black delivery van
Of course, most vans do not have chauffeurs, as Mr. Kantor’s has. Or a built-in office, custom installed.
“I have two big-screen televisions; I have a couch in the back that goes into a bed,” Mr. Kantor said. “I have four chairs that go back and massage you. It has a desk, a table and an intercom so you can have meetings in there if you want to.”
As the economy limps along and more attention is paid to the so-called 1 percent, some of the richest New Yorkers have taken to driving around in vehicles that ooze neither wealth nor privilege. But on the inside, the vans may be as lavishly decorated as the private railroad cars owned by turn-of-the-century industrialists.
Some owners use them as mobile offices, outfitted with fine leather chairs and Persian rugs; vans may also double as a child’s playroom on wheels, complete with a built-in vacuum to clean what the children dirty.
And while some owners say they are drawn to the vehicles’ vanilla exteriors, their outsize profiles cannot help but draw attention: at more than 22 feet long and nearly 9 feet tall, they look like cargo vans on steroids, their high roof lines dwarfing nearly all that surrounds them on the streets of New York. And that’s before the satellite dishes are raised.
They are a striking and sometimes unwelcome counterpoint to other trends seen on city streets, where tiny Smart cars dart around hybrid taxis and traffic lanes once reserved for gas-guzzlers are now for bicycles or pedestrians.
“Using your vehicle as a luxury lounge is just usurping public space for your own private use,” said Michael Murphy, a spokesman for Transportation Alternatives, an advocacy group that encourages New Yorkers to travel around the city more responsibly. “Streets are shared space and belong to the community.”
Nonetheless, during morning spin classes at Soul Cycle, the Upper East Side studio, the parking spaces cannot accommodate the Sprinter vans, Range Rovers and Lexus GX470s that are sometimes double-parked. A modified black Mercedes van owned by Philip A. Falcone, the chief of Harbinger Capital Partners, has become a fixture on the Upper East Side, idling by the Michael Kors shop on Madison Avenue.
Jill Kargman, a writer and mother of three who lives on the Upper East Side, said that play dates adhered to a certain pecking order: those that start in one of these ultra-luxury vans are preferable because they can “just bop into a souped-up bulletproof living room on wheels,” she said.
The most popular model is made by Mercedes: a stripped-down, basic version of the van, the Sprinter, starts at $41,315; Mr. Kantor’s version, which Mercedes-Benz Manhattan arranged to have customized, is fitted with satellite television, a Wi-Fi network and flat-screen monitors, and sells for $189,000. Even that is not quite enough for some New Yorkers, who employ designers to install even pricier custom details that easily drive up the total cost to $500,000.
Daniel Barile, a Mercedes-Benz spokesman, said that because many buyers were going to after-market shops to decorate their van interiors, Mercedes started releasing its own version in early 2010, and sold 8,000 the first year. Mercedes has sold 13,000 this year.
And although the modified Mercedes van is popular in several large cities, Howard Becker, president of Becker Automotive Design in Oxnard, Calif., said New York, with its executives in hedge funds and finance, had become his best market.
Hyde Ryan, a designer who worked with a wealthy New York family on decorating the interior of their Mercedes Sprinter van, said that the family wanted gold-plated fittings for every button that would be pushed. The owner installed a vacuum cleaner so the chauffeur could remove every crumb and grain of sand each time the children stepped out of the van.
The vacuum option could be seen on a recent morning on Park Avenue, when Carmelo Umpierre, a 44-year-old chauffeur, idled the $425,000 van he drives for an executive based in Connecticut. It is nearly impossible to find a parking space for such a large vehicle, so Mr. Umpierre often waits for his boss in illegal spots, and moves when the police come by.
The car’s owner declined to be interviewed, saying he did not want to draw attention to himself. But he allowed Mr. Umpierre to display the van’s interior: the seats were upholstered with heavily scented leather and a stocked bar had individual lighting for each wine glass and Champagne flute. Mr. Umpierre said he vacuumed the interior every night and covered the custom-designed gray wool rugs with towels when it rained. He said he tried to navigate the van through side streets so gawkers could not peek in when he dropped off his boss.
“He likes to be private,” Mr. Umpierre said of his employer. “He doesn’t like to be dropped off in the front.”
On Friday, Martin Brass, a 43-year-old former Wall Street executive turned investor, was shopping for a Mercedes Sprinter at a Manhattan dealership. Mr. Brass, whose work-related travel often finds him in New York or Hawaii, said he planned to buy a basic model and then have some after-market improvements made to the interior.
Mr. Brass did not so much want to be bathed in luxury, he said; he simply wanted to “have meetings and presentations in those vehicles.”
The more luxurious accouterments, he said, were not really part of his style. “That’s New York City,” he said. “There are people who have endless amounts of money.”
Revealed: How housing director only worked 15 DAYS for his $360,000 pay check
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