This 2013 article “How Much Money Would It Take to Eliminate Poverty” (http://prospect.org/article/how-much-money-would-it-take-eliminate-poverty-america) addresses this question. The answer then was $175 billion. This is a ridiculously small number in the context of a $16 trillion GDP.
As someone who is on the homeowners gravy train I was stuck by this part of the article:
“The utterly ridiculous tax expenditures directed toward the disproportionately affluent class of people called homeowners—mortgage interest deduction, property tax deduction, exclusion of capital gains on residences—by themselves sum to $115.3 billion in 2012.”
Of course we live in a society that knows that poor people are poor because they are shiftless, drug addled and lazy. We certainly can’t reward those people with any help. Meanwhile the rich and corporations are worthy recipients of government handouts without fear that we will be corrupting them.
I’ve often thought it would be a salutary exercise if we handed out these tax breaks at a universal government payout office. Here, everyone receiving funds from the government would line up. As they received their check a big sign above the window would flash out the amount of their check. I think people on SSI would be outraged at how their measly few hundred dollars a month compared to the payouts to the rich and corporations.
So much of this is a question of what and whose priorities are being met by government action/inaction. Presently we don’t have a political system even vaguely responsive to the vast majority of Americans. In fact it is serving the rich and corporations quite admirably.
Dollars and Sense has been around since the 1970s. Always a source of well researched critiques of capitalism. I recently, after a more than 30 year hiatus, re-upped a subscription.
Dear Dollars & Sense,
Your new issue showed up the other day with the word “neoliberalism” in bold type on the cover. The continuing use of this term is not helpful. When I first saw this word a few years ago I wondered how the word “liberal” and “neoliberal” are connected? Then, I remembered the little I can recall about 19th century European political philosophy. Oh, its that liberalism that is new!
Really, outside of academic circles no one knows what this word means. Most in my circle find it off-putting, obscure and boring.
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President Reagan was not the originator of this central trope of free-market (neo-liberal) politics, but he famously said in his first Inaugural Address in 1981, “Government is not the solution to our problem; government is the problem.” President Clinton, a Democrat, continued this theme during his terms culminating the the deregulation of the financial industry in 1999 setting the table for the collapse of 2008 and the Long Recession. Listening to almost any discussion by Republicans and Democrats you can find this theme, “If just get government out of the way, free markets will solve our problems.”
This ideology is ahistorical, counter-factual nonsense. It is asserted without any basis in fact. It is rhetorical cover for policies that have led to the vast enrichment of the wealthy and corporations and the impoverishment of everything public.
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There is much ongoing discussion about steps needed to turn the enormous one day action of the global Women’s March in to a sustained movement to achieve better outcomes for the vast majority of Americans. To focus on just one strategic element, the movement needs to move beyond identity politics to embrace class warfare. The rich and corporations have carried out a sustained and successful class war for more than 40 years. They control the government and the economy. Donald Trump is just a symptom of the underlying issues. We need to break this hammerlock and shift the rules of politics and the economy back towards us, the 90% who are living off the remainders, the scraps from their feast.
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“There” is our current situation in which our government has been bought by the rich and corporations, over 80% of the population has not had a pay raise in 40 years and the public sphere, schools, parks, our infrastructure, really anything not behind the gated walls of private wealth, is being starved in the name of free market ideology. The American promise that hard work, pluck and a bit of luck can bring success to anyone, regardless of their rank at birth, is an empty myth. If you are born poor you will die poor. Even if you are middle-class, there is a significant chance that you will sink and at any rate you will always struggle just to keep that middle-class status.
The rich and corporations have waged a 40 year class war. At this point they have won all of the battles and continue to take home the spoils.
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The Rise and Fall of American Growth: the US standard of living since the Civil War by Robert J. Gordon is a weighty book in every regard. At 762 pages it is a heavy lift – not beach reading or even bed-time either. But I found it almost a page turner. It is very well structured and written. None of the fussiness or obscurantist language one often finds in academic works. The central point of the book is that during the period from 1870 to 1970 the US economy grew at an extraordinary and we will not see a return to that rate for some pretty fundamental reasons.
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The relationship between our financial services industry, our government, and us, ordinary citizens who have repeatedly suffered the consequences of the avarice and incompetence of this industry, has always been troubled. Booms, busts, crashes, bubbles, depressions, inflation. Since the beginning of the 2008 Great Recession we have hoped that the government would return to applying some real rational restraints on the financial system. To be honest, with both political parties deep in the pocket of the industry, this is probably merely wishful thinking.
The Secret recordings of Carmen Segarra
While you are listening to this report of regulators captured by the industry they are paid to supervise, think of the endless series of Wall St and corporate chieftains who have worked for every President of our life time. So, don’t miss the current This American Life story about the Federal Reserve: “The Secret Recordings of Carmen Segarra” ((http://www.thisamericanlife.org/radio-archives/episode/536/the-secret-recordings-of-carmen-segarra))
photo by Patricia Wall/ NYTs
The new book, Flash Boys, by Michael Lewis has reignited the discussion of how our financial markets are rigged by high frequency trading. From my 2012 note:
To turn back to HFTs, why do we need this kind of transaction? How do they contribute to economic growth? These activities are by definition a zero sum game. They are like every other form of gambling a zero sum game. There are winners and losers, but no incremental gain for the economy. Other than enriching the HFTs at cost to others with smaller computers and fewer PhDs on staff what do we get for allowing these activities? Potentially catastrophic destabilization of financial markets? Where is the upside for society as a whole? Isn’t a primary purpose of any economy to increase the size of the pie, not just to redistribute existing wealth?
We should demand that our financial markets serve their fundamental purposes – connect investors with those who can deploy those resources to create new products and services and enable the flow of these goods and services. To call holding financial instruments whether stocks, bonds, or other assets for mere seconds investments is to beggar the mind. Government needs to step in to penalize economic activity that looks like gambling and certainly does not “grow the pie”. A sliding scale of transaction costs (aka a tax) could bring this to a screeching halt. There are sure to be complexities in how to implement such a strategy. But, if at every step we ask how a financial transaction contributes to economic growth at a systemic level, solutions will appear. Right now we have financial markets that are not only rigged but so complex and non-transparent that we are certainly setting ourselves up for future calamities like that which struck us in 2008.
photo courtesy of Chance Agrella, photographer
An article in the NY TImes today reports that NY Attorney General Schneiderman is pursuing various information providers, Thomson Reuters in the immediate case, for their practices of selling market sensitive information preferntially. Those paying a premium get information several minutes before its release to the general public. This is more evidence that Wall St (standing in here for the financial sector as a whole) is largely a fixed gambling racket. Not much different than a casino.
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May Day 2013 brought a piece in the NY Times by Thomas Friedman, “It’s a 401(k) World” that points out the enormous changes in employment, technology, personal access to information and personal responsibility for larger swaths of life. Work changed from a steady job as a regular feature of life to a series of part-time or short term engagements with corporations who view labor as a throw away element.
Reading this op ed leaves one with the notion that these changes have arisen through some immutable forces of nature.
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