Exploring economic inequality - Advocating for the bottom 50%

Thanks to the Washington Post for running most of our letter responding to Sen. Hawley's op-ed:

How to make the GOP more appealing to voters - WaPost

The unedited version below has something to say about both political parties:

Sen. Hawley is right on doing more for workers – but the GOP (and Dems) need to deliver concrete economic benefits

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News, Events & Opinions

Men are dropping out of the labor force because they’re upset about their social status, according to a new study - Fortune

Bottom line:  If you pay them more, more of them will work.


It’s time to support the hidden workers who keep the 1 percent running - Petula Dvorak/WaPost


Halifax homeless population doubled in a year, according to not-for-profit group - CBC

"There's a desperate lack of housing, particularly housing that's accessible to lower-income people..."


Exploring Capital Flows in Chicago - Urban


The Global Zeitenwende: How to Avoid a New Cold War in a Multipolar Era - Olaf Scholz/Foreign Affairs

Interesting perspective as German chancellor commits to increased military spending and role leading Europe and containing Russian aggression.

Once a mighty empire, Britain today sees millions struggling simply to live - NBC

"Britain once compared itself to giants like France and Germany; today many of its metrics more closely resemble Eastern Europe’s weaker economies."


Netanyahu strikes deal with fascistic Religious Zionism in bid to form Israeli government - WSWS

"According to Davar's recent socioeconomic analysis of the 25th Knesset election results, the surge in support for the far-right Religious Zionism and the secular right-wing Yisrael Beiteinu came from the higher income groups that have traditionally supported the official “centrist” and “leftist” parties. It was the three wealthiest deciles that provided the bulk of the votes for the centrist and left parties in the Lapid-Bennett coalition.

"The two strongest parties among the lowest income groups are the United Torah Judaism party that is part of Netanyahu’s bloc which has its main support base among the ultra-orthodox or Haredi Jews, with about 20 percent of the vote, and the Muslim Brotherhood-linked United Arab List, with about 15.5 percent. Both groups, Israel’s ultra-orthodox and Arab citizens, are the poorest in the country. Together, the two parties received about three quarters of the votes in the three lowest economic deciles, with almost no votes from upper income workers."


News Blog: Nov. 9 - Dec. 8, 2022 - Click here


Social Security offices critical to disability benefits hit breaking point - WaPost

"State operations that review claims face massive backlogs, leaving disabled Americans waiting months and even years for judgments."

In Austin, TX: "Nearly 40 percent of the examiners had quit since January, driven out by crushing workloads and low wages that could not compete in the high-tech boomtown...

"The same system has collapsed in many of the other state offices where Social Security has outsourced reviews of disability claims — a decentralized, convoluted structure Congress created nearly seven decades ago to let low-paid state employees rule on who should get federal benefits.

"Now more than a million Americans wait in limbo just to hear whether they will get assistance — the first step in a system of drawn-out judgments and appeals that can ultimately take years before a resolution..."


Study Reveals Encampment Sweeps Are Harmful to Homeless People’s Health - invisiblePeople



L.A. teachers union seeks 20% raise, saying educators are stressed out and priced out - LA Times


The Erosion of Employer-Sponsored Health Insurance and Potential Policy Responses - Georgetown CHIR

"About half of Americans are covered by employer-provided health insurance plans, but the adequacy of these plans has been eroding over time. This has left many low-income workers facing significant financial burden despite being enrolled in what has generally been considered the “gold standard” of U.S. health insurance coverage. High and rising health care prices are the primary contributor to this problem, but employers are ill-equipped to curb health care prices by themselves. Federal and state policymakers have several options at their disposal to control and reduce health care prices and alleviate the burden on many low-income working Americans."


Policy Approaches to Reduce What Commercial Insurers Pay for Hospitals’ and Physicians’ Services - CBO

A first step might be keeping risk-adjusted Medicare and Medicaid payment trends at or below the rate of general inflation. Medicare rates serve as a benchmark for what employer health plans pay.  Until that's a political possibility, it's hard to imagine how private payor costs could be stemmed other than shifting costs to employees or cutting benefits.


Free Cheese.

Colleges concealing soaring costs of attendance from applicants, government report finds - Fox


Financial aid letters don’t reveal the real cost of college- Michelle Singletary/WaPost

"'Most colleges are not following best practices for providing clear and standard information in their financial aid offers,' the GAO report said.

"The watchdog found that an estimated 91 percent of colleges — a staggering percentage — underestimate or don’t bother to include the net price in their offers, making it hard for families to calculate how much they will need to pay for school."


Financial Aid Offers: Action Needed to Improve Information on College Costs and Student Aid - GAO

Another case of elite U.S. institutions taking advantage of low-income families to slurp up government $$$ and re-direct them to the wealthier.  Gee, let's pack misinformed poor kids into introductory classes of 100+  taught by low-wage TAs and direct some of the revenue to high-paid profs and administrators.  Especially given the asymmetry of knowledge between buyers and sellers of higher ed, college administrators should be held liable for repaying these funds.  Some should do jail time. Deceptive advertising, marketing?

Guess who gets hurt the most when college kids discover they can't afford to be there?:

Dropout Prevention: An EPI Research Brief

"...Socioeconomic Background. National data show that students from low-income families are 2.4 times more likely to drop out of school than are children from middle-income families, and 10.5 times more likely than students from highincome families."

Meanwhile, as Hughie Long once said about studying law: "There's always room at the top."

Maryland businessman, Harvard fencing coach face jury in college bribery scandal - Fox


DC approves making buses free, but what happens next? - WUSA9

Someone will have to pay for it.  Will service vary between high- and low-income neighborhoods - especially if there's financial strain?  How will Metro (subway) financing and service be impacted?

The Beatles set out on their celebrated tour of the West Country 11th September 1967.


The mystery of rising prices. Are greedy corporations to blame for inflation? - NPR

NPR's sleuthing ends with consumers/excess demand fueled by debt but could go deeper. The main culprit is probably the Fed pumping too much money into the economy. The Fed creates money indirectly by issuing debt to banks, buying US securities, and at times bailing out failed enterprises. Evidence: changes in assets on the Fed's balance sheet. Money created by debt in most cases first benefits owners of capital before diffusing through the economy.  See:

"Could new tools allowing the Fed to pump money through ‘the people’ make U.S. monetary policy more equitable and effective?" - CCSE


Understanding How the Federal Reserve Creates Money - Investopedia


How the rich got rich and the poor got poor - Vox


How four decades of tax cuts fueled inequality - James Steele/Center for Public Integrity


Taxes and the Economy: An Economic
Analysis of the Top Tax Rates Since 1945
(2012) - CRS

"This analysis finds no conclusive evidence, however, to substantiate a clear relationship between the 65-year reduction in the top statutory tax rates and economic growth. Analysis of such data conducted for this report suggests the reduction in the top tax rates has had little association with saving, investment, or productivity growth...

"The top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution."


Does The Child Tax Credit Reduce Child Poverty Or Discourage Work? - Elaine Maag/TPC

Question:  Would raising the child tax credit for low-wage workers to what higher-income receive save employers a bit on wages?  As with the EITC, some of the benefit of the child tax credit might end up in employers' pockets by subsidizing wages.  See:

"Expanding Use, Scope of the Earned Income and Child Tax Credits: A Winning Strategy for LTC Workers and Providers" - Karl Polzer

This paper (based on a memo to the long-term care industry) makes the case that helping employees access the Earned Income Tax Credit and Child Tax Credit – along with supporting bipartisan legislation to expand these programs – can help industries with large numbers of low-to-middle wage workers. In the long-term care field, such a strategy can improve worker income through government wage supplements, thus encouraging more to enter the workforce. Increased labor supply would dampen employer wage costs – all while expanding the range of affordable services providers can offer. This could result in hundreds of millions of dollars of added value in worker earnings as well as provider and customer savings.

BTW, providing a living minimum wage is probably a better way to help people at the bottom than through tax credits. See:

Are Workers Paid the EITC Shortchanged on Social Security? - CCSE


Total National Work = Paid Work + Unpaid Work (including raising families)

The U.S. needs more kids to maintain its population and productivity.  Low- and middle-income  people produce most of them.


roubini171_Spencer PlattGetty Images_recession looming 

The Unavoidable Crash -

"After years of ultra-loose fiscal, monetary, and credit policies and the onset of major negative supply shocks, stagflationary pressures are now putting the squeeze on a massive mountain of public- and private-sector debt. The mother of all economic crises looms, and there will be little that policymakers can do about it."


‘Soft landing’ is a terrible name for what’s coming - Heather Long/WaPost

"It’s becoming increasingly clear that the best question to ask isn’t whether there will be a recession next year. It’s who’s going to get hurt?"


U.S. Debt Clock


Railroad Workers Slam Biden for Siding With Bosses to Avoid Strike - truthout

"Frustrated railroad workers consider allying with a third party after a push for paid sick leave failed in Congress."


Capital as a historic concept - Branko Milanovic/Global Inequality

Interesting...Yes, this topic merits more attention.

Initial thoughts:  Defining capital through national accounts, while useful, confines what is a dynamic concept to static, point-in-time measurements.

Capital can be seen as the risk-adjusted potential of land, tools/machinery/plant, knowledge, and financial resources to produce ongoing and future output/value, including profits, that supports human life.  Fathoming a capitalist's knowledge and resources involves measuring what's happened in the past as does leveraging resources through loans and sale of equity.  Dynamic valuation of capital involves the uncertainty of fathoming the risk of success/failure with imperfect information.  A country with a fast-growing technological sector could be overflowing with financial capital but also feature high risk destabilization and decline compared with more labor-intense economies.

It follows that if laborers own some of the capital they help produce, they bear part of the investment risk. Most already do in the sense that they will lose their jobs if an enterprise fails.  As we've advocated, they could more fully share risk and reward if they were partiallycompensated in stock (could be company shares or index funds, etc.)

Capital also is a potential value in the sense that owners of financial and other resources can choose to use them toward future production or for current consumption. 


"Does the Eagle know what is in the pit Or wilt thou go ask the Mole? Can Wisdom be put in a silver rod, Or Love in a golden bowl?"

William Blake, Book of Thel


“The road of excess leads to the palace of wisdom...You never know what is enough until you know what is more than enough.”

Blake, Proverbs of Hell


Sunday, December 4, 2022


"The love of money causes all kinds of trouble. Some people want money so much they have given up their faith and caused themselves a lot of pain."

1 Timothy 6:10

Don't like the translation?   Try another.



"Slack messages obtained by the committee show a founder of Blueacorn directing employees to ignore smaller loans in favor of larger ones." (Source: ProPublica)

Fintechs Made “Massive Profits” on PPP Loans and Sometimes Engaged in Fraud, House Committee Report Finds - ProPublica

Big pigs slurped at the troth.  Little guys pushed aside.   (That's why it's called political economics.)


Hunter Biden’s former law firm received $10M in forgiven COVID loans while donating $1M to Dems - NY Post

Yes, but par for the course.  In and around the nation's capital, thousands of non-profits with inside knowledge of how to benefit from government programs snagged loans meant for businesses struggling to survive the Covid economy.  Many insiders -- including non-profits working on economic inequality -- had already locked in funding from charitable foundations.  So it goes.


Israel strips Palestinian-French rights lawyer of Jerusalem residency - Guardian

"Israel has stripped a prominent Palestinian-French human rights lawyer of his Jerusalem residency and is expected to deport him to France, a legal first that sets a dangerous precedent for other Palestinians with dual nationality in the contested city."

Another bit of straw on the camel's back? 


Israel and Palestine: Events of 2021 - Human Rights Watch

"Across two governments, each in power for roughly half of 2021, Israeli authorities doubled down on policies to repress Palestinians and privilege Jewish Israelis. The government’s policy of maintaining the domination of Jewish Israelis over Palestinians across Israel and the Occupied Palestinian Territory (OPT), coupled with the particularly severe repression against Palestinians living in the OPT, amounts to the crimes against humanity of apartheid and persecution."

Quiz for  U.S. media and policymakers: Why is it "anti-semitic" to report the racism practised by the Israeli government?  Isn't a comparison with how the Nazi party treated Jews as it  consolidated power in 1930s Germany obvious, natural, and ironic?  Is it fair to conjecture  that increased racism in Israel, likely under its new government, may trigger more anti-Semitism?  Why is racist pro-Semitism better than anti-Semitism?  (Hint: $$$)


INTERACTIVE Mapping Palestinian villages destroyed by Israel infographic

Nakba Day: What happened in Palestine in 1948? - Aljazeera

INTERACTIVE What is the Nakba infographic map


"Under the Cover of War" is an important resource for anyone seeking to understand the full story of the 1948 Palestine war and the roots of the Arab-Israeli conflict. Rosemarie Esber meticulously documents and poignantly recounts the first phase of the Zionist conquest of Palestine and the expulsion of the indigenous Palestinians-an estimated 84 percent of whom were children under 15, pregnant and nursing mothers, the elderly, and the infirm."


Explainer: Israel, annexation and the West Bank - BBC


Jewish National Fund - Wiki

"Jewish National Fund was founded in 1901 to buy and develop land in Ottoman Syria (later Mandatory Palestine, and subsequently Israel and the Palestinian territories) for Jewish settlement...By 2007, it owned 13% of the total land in Israel...The JNF stipulates that only Jews can buy, mortgage or lease JNF land."

Extra credit Q: Would a fund dedicated to increasing property ownership by "White people"  and shrinking ownership by people "of color" go over well in the U.S.?  Would such a preference be a form of racism?

BTW: "The United States arm of the JNF, incorporated on January 26, 1926, is the largest contributor to JNF-KKL.[27] In 1996, JNF-USA was accused of mismanaging funds. According to the charges, only 21% of US donations reached Israel, and money was being diverted to Latin American JNF offices. In the wake of this scandal, the North American management was forced to resign.[33] The tax-exempt status of the JNF-USA was challenged in 2011 as violating the public policy of the United States with respect to ethnic and religious discrimination.[46] In July 2017, in response to an investigation by the Jewish Daily Forward, the New York State attorney general's office ordered JNF-USA to rescind two illegal loans totaling more than $500,000 the organization had made to its chief executive officer, Russell Robinson, and its chief financial officer, Mitchel Rosenzweig. (New York State forbids charities from lending their officers any money.) JNF-USA argued that Robinson and Rosenzweig were not officers under the meaning of the law, but the attorney general's officer rejected that argument and the two executives agreed to repay the balance of their loans.[47]"

Israeli land and property laws - Wiki


Investors Bought a Quarter of Homes Sold Last Year, Driving Up Rents - PEW

"Investor ownership began to grow after the Great Recession of 2008-2009, when large swaths of overbuilt Sun Belt homes went into foreclosure, and investors snapped them up. Investor ownership grew again last year as pandemic-related demand for suburban housing rose, and investors saw a chance to win bidding wars with cash offers."


Investor Purchases of Rental Housing Increase Eviction and Racial Transition in Neighborhoods - National Low Income Housing Coalition


"Evicted" Teacher’s Guide - Matthew Desmond



Mobile home dwellers hit even harder when facing eviction - NBC


"A Decent Home addresses urgent issues of class and economic (im)mobility through the lives of mobile home park residents who can’t afford housing anywhere else. They are fighting for their dreams — and their lives — as private equity firms and wealthy investors buy up parks, making sky-high returns on their investments while squeezing every last penny out of the mobile home owners who must pay rent for the land they live on."

The Last Trailer Park - PBS

"Trailer parks. Beyond the stigma and the stereotypes, for families who can’t afford a traditional home, they can be a lifeline worth fighting for. That’s why neighbors from a Long Island trailer park in Nassau County recently banded together to stave off eviction and save their homes. Their struggle is the subject of a Newsday documentary, The Last Trailer Park."


House committee to release first-of-its-kind documentary on economic inequality - WaPost


Energy Insecurity Threatens to Destabilize Households this Winter - Harvard Joint Center for Housing


Senate Blocks Sick Days for Rail Workers, Averts Strike by Forcing Biden Agreement - Intercept

"Railroads have invested heavily in Congress. They got their payoff in the Senate."

Senate adopts deal to block rail strike, sending it to Biden - WaPost

"The vote staves off what would have been a costly shutdown entering the holiday season, but lawmakers could not act to provide rail workers with additional paid sick leave...

"...Under the agreement, rail workers are set to see a roughly 24 percent pay increase by 2024 while gaining more flexibility to take time off for doctor’s appointments. The measure also grants them one paid personal day, though that does not include any new, dedicated time off for illnesses...

"Democratic leaders permitted (votes) in the House, adopting the rail contract along with a separate measure Wednesday that would give workers seven paid sick days. But it faltered a day later in the Senate, with lawmakers voting 52-43 on the amendment, which required 60 votes to pass.

"In the process, though, it drew unexpected support from some Republicans, including Sens. Josh Hawley (Mo.), Ted Cruz (Tex.) and Lindsey O. Graham (S.C.). Their favorable votes came as a shock to some Democrats, since GOP lawmakers generally have criticized unions — and opposed federal sick leave legislation in Washington.

“I will absolutely not support it without some sick leave,” Hawley said in the days before the vote.

"Speaking to reporters in Washington, Biden blasted Republicans for having stood in the way of paid leave benefits previously. The president also stressed he would not 'back off' from the issue, stressing: 'I’ve made it very clear: I’m going to fight for paid leave, not only for rail workers but for all Americans.'”


Dear WH:  To make a serious attempt at passing legislation ensuring all workers paid sick days, Dems need to separate the issue from paid family leave.

It's interesting to see some GOP senators support paid sick days.  R's: How will the party  leadership react after it takes control of the House next month?

BTW, while working on a project at the Employee Benefit Research Institute with a Chicago lawyer who had been in charge of health  benefits for a conglomerate that owned a railroad, he mentioned  it's especially important to provide railway workers with health benefits including mental health and substance abuse counselling both from humanitarian and risk-management perspectives.  When accidents happen on railways -- whether the cause may be related to health, fatigue, or other factors -- they can "take out whole towns," R.W. said. Railroad owners and managers should take heed.


House passes legislation to avert 'catastrophic' rail strike, provide rail workers paid sick leave - USA Today

On to the Senate...It will be interesting to see how Sen. Josh Hawley and other Rs vote after his op-ed calling for a new GOP focused on the needs of workers.  (See CCSE posts above.)

A mandated settlement including paid sick days raises the issue of why Congress hasn't acted to ensure paid sick days for blue collar workers in less-unionized occupations with less leverage to improve wages and working conditions (e.g., food workers, health care aides, warehouse staff, taxi drivers, etc.). 

Unionization may be more likely, and effective, in industries with monopoly or oligopoly power, whether natural, structural, or the result of government policy or technological innovation and  patents. Monopolies can raises prices above what would occur in more competitive markets, resulting in surplus profits that can be split with unions (and cover the costs of union dues).  Unions representing employees of monopolies also may increase their bargaining leverage if a work stoppage impacts other segments of the economy.  However, as evidenced by current railway worker negotiations, the threat to deprive the economy of key functions has limits, especially if the potential damage is great enough to elicit government action.  (Hospitals, schools, police, air traffic controllers  also provide essential services whose absence has  wide ranging impacts.)


Progressives Fold on Railroad Deal – 115,000 British Postal Workers Strike – Literary Agents Back HarperCollins Strikers - Payday Report


‘Biden blew it’: Railroad workers unions lash out at president - NY Post

"...Sadly, he could not bring himself to advocate for a lousy handful of sick days. The Democrats and Republicans are both pawns of big business and the corporations...”


Congressional leaders vow to avert rail strike - WaPost


As Congress joins forces with the White House to shut down a threatened railway strike, both political parties reveal whom they truly fight for: professional and managerial elites and corporations. If US lawmakers valued workers, they would take this opportunity to require all employers to provide paid sick days  (pick a number > 4).

Government officials, like the vast majority of professionals and managers, take their paid sick days for granted. But a large percentage of low-wage workers get none.  For millions of people in the "bottom 50%," going to the doctor or hospital means losing wages. This reduces the value of health benefits they are less likely to be offered and which usually are less affordable for them than high-income employees.

For many years, CCSE has been calling for Congress to mandate the equivalent of 5 paid sick days annually. See:

"To stop coronavirus, take quick action on paid sick days" - WashExaminer

"In a Health Affairs article published at the beginning of this Congress, I identified political obstacles to getting a paid sick leave requirement into law. Liberals have packaged paid sick days, which would primarily affect low-wage workers, as part of an ambitious legislative push for much more expensive paid family leave. Thus, a relatively low-cost benefit for many healthcare and other workers on the front lines is being held hostage to a much more expensive middle- and upper-middle-class objective.

"Obstacles on the political right are obvious. Leery of offending business interests, conservatives historically avoid legislation raising the cost of labor. Paid sick days are no exception."  See:

"All Workers Should Have A Few Paid Sick Days. The President And Congress Can Make It Happen" - HealthAffairs



Rising Loan Limits Are a New Federal McMansion Subsidy - WSJ

"Biden’s housing regulator order taxpayers to underwrite million-dollar mortgages."


Crypto Meltdown is a Great Time to Eliminate Waste in Bloated Financial Sector - Dean Baker/CEPR

As we have said before, expanding the current tiny US financial transaction tax, which helps cover the cost of operating the SEC, could provide seed capital for a universal 401(k)/IRA system with possibly positive impacts on financial markets.  The US political economic system, in which the virtues of capitalism are often extolled, should provide all workers with the opportunity to own working capital. See:

"Half of Americans have no retirement savings — here’s how Congress can look out for them" - WashExaminer op-ed

Agree with Baker that the financial sector is bloated and inefficient.  We've pointed out that the US credit card payment system is not only inefficient, but redistributes billions  from low- and middle-income consumers to higher-income consumers and owners of bank stocks. See:

"The U.S. (quietly) lets banks extract high credit card transaction fees. This raises prices for everyone and shifts $billions from poorer to wealthier Americans." - CCSE


The Parable of the Child Tax Credit: Democrats hope to expand this bad policy in the lame-duck session. - WSJ editorial board

This misleading WSJ editorial picks on poor people and fails to mention that most taxpayer dollars spent on the child tax credit now go to higher-income families while many low-income families receive little or nothing.  Congress should either make the child tax credit progressive or get rid of it altogether and use the savings to help low-income families through better-targeted programs.

Who needs it more?


Basic Facts About Low-Income Children


CCSE work on this issue:

The Case for Renewing  the Expanded Child Tax Credit - Richmond Times-Dispatch

Congress’ failure to re-up expanded child tax credit displays longtime favoritism toward higher income


Endgame: How the Visionary Hospice Movement Became a For-Profit Hustle - ProPublica

"In the absence of guardrails, whistleblowers like Farmer and Richardson have become the government’s primary defense against hospice wrongdoing — an arrangement that James Barger, their lawyer, describes as placing 'a ludicrous amount of optimism in a system with a capitalist payee and a socialist payer.'"

Cheating Death Casket Reaper Mini Decal/Sticker

Cheating death American-style? 


Odysseus Visits the Spirit of Achilles in the Underworld

"These words (Achilles) answered, swiftly: 'Glorious Odysseus: don’t try to reconcile me to my dying. I’d rather serve as another man’s labourer, as a poor peasant without land, and be alive on Earth, than be lord of all the lifeless dead...'"


Sunday, November 28, 2022


The U.S. Needs More Housing Than Almost Anyone Can Imagine - Atlantic

Among the problems:  Investors can make more $$$ building for the top layer of the market.  High-income homeowners make sure zoning rules prevent construction of housing for lower-income workers serving their neighborhoods.  Educated elite policymakers make money analyzing and framing the housing problem rather than solving it...

Seems like unfettered  capitalism could handle this one.  Build, baby, build!!


The declining leverage and status of ordinary people Brink Lindsey/Niskanen Center

"Ordinary workers also lost the dream of a brighter future...."


How the American middle class has changed in the past five decades - PEW

Interesting trend.  Note that there are many ways to define  upper, middle, and lower income. 


The wage price spiral refuted - Michael Robert's Blog

"What does the IMF conclude?  'We conclude that an acceleration of nominal wages should not necessarily be seen as a sign that a wage-price spiral is taking hold.'  In inflationary episodes, wages just try to catch up with prices."

When analyzing causality in the role wages play in persistent price inflation, it's important to move beyond relationships of abstract aggregate quantities and look at who has the power to change the wage level.  Absent union bargaining, which is no longer a prevalent force in the US and many other countries, employers generally have exclusive power to determine the rate of pay and the timing of raises.  This adds to the argument that wage increases are  likely to respond to general inflation rather than lead it.

In the 1950s, major union contract talks set the tone for wage movements across the economy and likely had more impact on subsequent wage and unemployment levels.  (The Phillips curve worked better back then.)


Contrary to popular and academic belief, Adam Smith did not accept inequality as a necessary trade-off for a more prosperous economy - LSE blog


If alive today, Adam Smith, the father of modern economics, might favor policies creating a more inclusive economy for both ethical and practical reasons - CCSE

Adam Smith on equity for a nation's workers:

“Is...improvement in the circumstances of the lower ranks of the people to be regarded as an advantage or as an inconveniency to the society? The answer seems at first sight abundantly plain. Servants, labourers and workmen of different kinds make up the far greater part of every great political society. But what improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, cloath and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed and lodged.”


UK inflation rate: Prices rise to 41-year highs as energy costs push households to brink - capital.com

The renters facing homelessness as soaring demand pushes prices sky-high - Independent

UK single parents skipping meals due to food price inflation, Which? finds - Guardian


50 Activities | Alzheimer's Association
A French Village’s Radical Vision of a Good Life with Alzheimer’s - New Yorker

‘What is the tolerable level of freedomto let the person live?’


Alzheimer's Disease Facts and Figures 2022 - Alzheimer's Association

2020 Alzheimer's disease facts and figures


Dementia Care Costs by State: An Overview of Costs, Types of Dementia Care, and the Cost of Dementia Care by State - Seniorlink Blog

Though 5 years old, the data illustrate the wide variation in costs among states.


Fifa World Cup von Amir Taqi | Politik Cartoon | TOONPOOL

The FIFA World Cup in Qatar: geopolitics, money and double standards - Peter Schwarz/WSWS

A case for socialist ethics in sports...

BTW, bribery thrives is all economic systems...Didn't know the head of FIFA was non-binary.


Thanksgiving: Is there still a place at the table for the Middle Class? - Crosscut

Still on target almost a decade later. 


Click here for our articles on Social Security and retirement savings policy:


Bidens back at private equity billionaire’s $20M Nantucket pad for Thanksgiving - NY Post




These 2 charts show how much more expensive Thanksgiving dinner is this year - Business Insider

"The average 2022 cost for a 'classic' Thanksgiving dinner for 10 is $64.05, according to results from the American Farm Bureau Federation.  That's $10.74, or 20%, higher than what it was in 2021."


U.S. bans sugar from biggest producer in Dominican Republic - WaPost

"The move stemmed from an investigation that found indications of forced labor at Central Romana, and comes as sugar prices are already up 14 percent."

CBP bars sugar imports from Dominican Republic's largest producer - PoliticoPro


Huge Foxconn iPhone plant in China rocked by fresh worker unrest - Reuters


State Child Tax Credits and Child Poverty: A 50-State Analysis - ITEP

"The temporary 2021 federal Child Tax Credit expansion dramatically reduced child poverty and material hardship. Extending the federal policy would provide the broadest poverty reduction across the country. States can also build on the success of the credit. This report presents state Child Tax Credit options that would reduce state child poverty rates by 25 or 50 percent when coupled with existing federal law, which provides a maximum of $2,000 per child, is not fully refundable and phases in with earnings.

"There is increasing momentum in the states toward adopting and expanding Child Tax Credits. Heading into 2023, ten states currently have some form of a Child Tax Credit and many others are considering one."


Easing Cash Assistance Rules During COVID-19 Was Associated With Reduced Days Of Poor Physical And Mental Health - HealthAffairs


Some States Open College Savings Accounts for Every Newborn - PEW

What happens to the money for the kids who don't go to college?  Could it be rolled into retirement accounts?


Thucydides’s Trade Trap - Project Syndicate

U.S. v. China: Echos of Athens v. Sparta?  (but without a common language except $$) 


Thucydides Trap - Wikipedia

A major theme in Thucydides'  "History of the Peloponnesian War" is the interplay of political and economic revolution and the conflict between the two major power blocs in the Greek world then spanning from Asia Minor to Sicily.  Ironically, Athens' empire was rooted in a city-state democracy.  Sparta's allies were mostly oligarchies, Syracuse being an exception.  The historian noted Athens met its match when it attacked a democracy as dynamic as itself in order the increase its wealth and power.  (Note: Both types of  political systems involved slavery at the bottom.)



'A War Like No Other': Where Hubris Came From - NYT

"This Greek civil war, between Athens and her allies and Sparta and her allies, lasted 27 years, from 431 to 404 B.C., and ended with the capitulation of Athens and its occupation by Sparta. Its interest for Hanson is in comparing Athens to the United States. At the outset of the war, Athens was the richest city in the world and, within Greece, the sole superpower, with an omnipotent navy. Athens was also a democracy, anxious to export her political system and way of life throughout the Greek world, if necessary by force. The war was fought because Sparta, a military oligarchy, feared Athenian imperialism and cultural dominance, and persuaded other Greek cities to join with it in an attempt to cut Athens down to size. Hanson sees the United States as sharing Athenian hubris and inviting nemesis by trying to export democracy to countries like Iraq and Afghanistan. The fact that Hanson himself supports American policy gives his book an ironic twist."


Western money and Eastern promises - Global Inequality

Book review: "How the oil shock revived capitalism and ended communism"


Now that the elections are over...

Unions Representing Majority of Railroad Workers Reject Deal – Payday Report

Also: "Ontario Teachers Pension Plan Hosed in FTX Cryptocurrency Scam – Union of Southern Service Workers Launched"


Kaiser's 22.5% raises avert nurse strike - Becker's Hospital Review


Alan Blinder: ‘A Monetary and Fiscal History of the United States, 1961-2021’ - Brookings

After this excellent talk and discussion yesterday, asked Prof. Blinder what is known about distributional impacts of Fed rate hikes intended to moderate inflation by suppressing economic activity:  Does it matter if resulting unemployment occurs most  at the top, middle, or bottom of the income distribution?  It matters a lot, he said, but not much research and analysis has been done on the issue.  (Macroeconomics mainly deals in averages.)

He added that one often hears that inflation hits the poor the hardest but unemployment is worse for them than inflation. 

Fed actions to control inflation are indirect and could take a while to dampen investment because of accumulated capital at the top resulting from years of monetary accommodation and other policies.  Ratcheting up interest rates will evenually lead to pain likely to be concentrated in the middle and bottom.  Blinder and other economists say a recession is likely in 2023.


The Fed and the Dual Mandate - St. Louis Fed

"The Fed’s goals of maximum employment and price stability are generally complementary. An economy with low and stable inflation provides economic conditions that are friendly to business planning, saving, and investing, which results in a growing economy. A growing economy needs workers to produce goods and services. Of course, there are times when the goals are not complementary. In the late 1970s and early 1980s, for example, the economy experienced both high inflation and high unemployment (low employment). The Fed decided to reduce the high inflation rate by raising interest rates to very high levels, which contributed to two back-to-back recessions..."


The richest 20% of America are the real pandemic supersavers - Yahoo

Wage increases are often blamed for high inflation.  A more significant factor is the trillions that the Fed and US government pumped into the economy in response to the Great Recession and Covid pandemic.  While low-wage families spent about the same trying to balance their budgets, most of the rescue money floated up to people at the top, equipping them to bid up prices in response to recent supply shortages.


Spending Their Future - HumbleDollar

Throughout their working years, low savers consistently spend more on these three categories than middling savers:  housing, transportation, and food and beverages.


  • See the source image

Bill Gates owns a lot of US farmland, but not the majority

An Open Letter to Bill Gates on Food, Farming, and Africa - Common Dreams

"We, 50 organizations focused on food sovereignty and justice worldwide, want you to know there is no shortage of practical solutions and innovations by African farmers and organizations. We invite you to step back and learn from those on the ground."

Can local know-how and shit do better in Africa than high tech and chemicals?



US Defends Grant of Immunity to Saudi Crown Prince - VOA

Journalism can be a dangerous occupation especially when  human lives are worth less than the price of gas or national security.


DOJ finally orders FBI to Investigate Israeli Killing of US Journalist Shireen Abu Akleh; Israel Sniffs: Will not Cooperate -

Judeo-Christian Teachings:  Working For Fair Pay


Sunday, November 20, 2022


The GOP is dead. A new GOP must listen to working people. - Sen. Josh Hawley/WaPost

Click here for ungated op-ed summary

Though the GOP is far from taking its last breath, we agree with Sen. Hawley's appeal to the party to fight more for the working class - and less for the country's wealthy and more powerful interests.  Many Republicans understand this and the party has been making inroads among middle-to-lower income voters, with whom Democrats still hold an advantage. 

At some point, however, to maintain  credibility in this effort, Republican leaders will confront the reality of delivering concrete economic benefits to low-income people.  The party will have to move beyond cultural hot buttons and fight for wages that can cover the cost of living.  That means working with Democrats to raise the minimum wage, which has been stuck at $7.25 for more than a decade ($2.13 for tipped workers).  It also means taking a hard look at regressive tax breaks for health and  retirement employee benefits, and child tax credits, that now transfer  billions of dollars from the middle and bottom of the workforce to the top. Are these core economic issues -- and immigration reform for that matter -- Rubicons the GOP is willing to cross?

In recent years, neither party has done much to help frontline workers.  Instead of fighting for the entire bottom 50%, Democrats have focused on benefiting selected racial and gender groups while often prioritizing policies that most benefit  professionals, managers, and other  higher-educated  and higher-income groups.  Democrats could decide at some point to respond to Republican inroads among working class voters by returning to the party's egalitarian New Deal roots.  If so, how might the GOP respond?  More competition for their votes could improve working people's lives.


Why Walmart Workers Are Still Broke - Capital & Main

"Rick Wartzman’s new book examines how improvements in pay by the retail giant fall far short of what society owes workers"

"In the eyes of many, Walmart has really embraced stakeholder capitalism and is taking positive steps.
"But again, at the end of the day, its average worker is making less than $29,000 a year. It still has far too many workers — I think one is too many — on Medicaid and food stamps. It has workers struggling to make ends meet, folks who wake up every day and work hard. And so what this showed me is we can only solve this as a collective. Corporate America will never go far enough or fast enough on its own. This needs to be a public solution. We need a government-mandated living wage of $20 an hour."

Policy Q:  Would a law requiring corporations to reimburse the government for Medicaid and food stamp costs incurred by their employees provide an incentive to raise wages to cover the cost of living?

Looks like House Republicans will be trying to cut federal spending and debt:

American Renewal: A Conservative Plan to Strengthen the Social Contract and Save the Country's Finances - AEI


Brits face sharpest fall in living standards on record as government tightens its belt - CNBC

Sounds like a depression. People in "the middle" are expected to be hardest hit.  Brits, however, have trouble distinguishing the middle from either end:

Why do so many professional, middle-class Brits insist they're working class - Guardian
Social class in the United Kingdom - Wikipedia


The Secret Finances of the Vatican Economy - Investopedia



Maryland probe finds 158 abusive priests, over 600 victims - AP

“Once again, the church has lied about the number of abusive priests,” Lorenz said in a statement. “Many parishes were dumping grounds for predators, some housed almost ten. It is very clear that nobody was safe. Sadly, it is no different than any diocese or secular report in the country.”

Research Q: Were the church's  'dumping grounds' in low-income neighborhoods as reportedly happened in Boston (parishes where parents had  less power and money to defend themselves and their families)?

As suggested  in a 2019 letter to the Washington Post, supervisors who covered up these crimes should do jail time along with the abusers.  Jesus teaches that harming children is one of the greatest offenses in God's Kingdom.  He also urges his followers to visit those in prison.  Is there a more fitting purgatory?

"If crimes against children can’t be stopped from within, the Vatican and its subsidiaries need purging from the outside"


Whatever happened to the 40-hour work week? (WSJ illustration)

‘I’m selling my blood’: millions in US can’t make ends meet with two jobs - Guardian

"More Americans have been working two or more jobs over the past few decades, census data shows."

Estimates of the number of Americans working more than one job vary widely (BLS: 5%, Census: 7.8%, Fed: 16.4%) and probably miss many workers.

For employers, hiring more part-time workers can provide flexibility while reducing the cost of benefits and pay.  For a large section of the low-wage workforce, the standard 40-hour work week that organized labor fought for a century ago is an artifact of the past.  US law requires employers to pay overtime for work exceeding 40 hours but this can only be enforced for one employer.  The law doesn't help someone who works 32 hours at one job  and 20 hours at another.  Multiple jobs require multiple commutes that can cut into time available to spend with family.

While US overtime law is based on hours worked, it does not define "full time" work. That is largely left to an employer's discretion:

Who is a full-time employee? - Employment Law Handbook

"In a large number of instances, when the questions about full-time employment are asked, the person asking wants to know if an employer is legally obligated to provide some kind of fringe benefit. This includes health insurance, vacation leave, sick leave, retirement benefit, and more.

"Frequently, employers only offer such benefits to full-time employees. Employees who do not qualify for the fringe benefits want to make sure their employers are not unfairly denying them those benefits."

Current employment law combined with  marketplace behavior results in extreme inequality in employee benefits (many subsidized by taxpayers) between higher-paid and lower-paid workers, particularly those who work part-time. See:

Where Are the Workers?? … Show Them the Money - and Benefits!!

"For some types of benefits, there are especially stark contrasts in what the labor market yields at the top and bottom. On average, our professional receives about $13,000 in health coverage while the line worker gets about $1,600. An 8-to-1 ratio. The professional receives more than 14 times more in paid leave: $13,000 worth of time off, compared to $900. Many low-paid workers receive no paid sick days at all.

"Most striking is the 37-to-1 difference in retirement and savings benefits. The high-paid employee receives $11,604 while his or her low-paid co-workers average just $313. That is, if they can keep their jobs, are offered a 401(k),
become vested, and don’t need to borrow for an emergency expense (should the employer allow the retirement plan to loan them money)."


The history of the 40-hour work week

  • 1817: After the Industrial Revolution, activists and labor union groups advocated for better working conditions. People were working 80 to 100 hour weeks during this time.
  • 1866: The National Labor Union asked Congress to pass a law mandating the eight-hour workday. While the law wasn’t passed, it increased public support for the change.
  • 1869: President Ulysses S. Grant issued a proclamation to guarantee eight-hour workdays for government employees. Grant's decision encouraged private-sector workers to push for the same rights. 
  • 1886: The Illinois Legislature passed a law mandating eight-hour workdays. Many employers refused to cooperate, which led to a massive worker strike in Chicago, where there was a bomb that killed at least 12 people. The aftermath is known as the Haymarket Riot and is now commemorated on May 1 as a public holiday in many countries.
  • 1926: Henry Ford popularized the 40-hour work week after he discovered through his research that working more yielded only a small increase in productivity that lasted a short period of time. 
  • 1938: Congress passed the Fair Labor Standards Act, which required employers to pay overtime to all employees who worked more than 44 hours a week. They amended the act two years later to reduce the work week to 40 hours. 
  • 1940: The 40-hour work week became U.S. law.


Starbucks workers strike at more than 100 stores in largest labor action since union campaign - PBS
Starbucks workers strike on ‘Red Cup Day’ over stalled labor talks - WaPost

"Workers say they want a contract that provides more stable hours and provisions to force Starbucks to address understaffing and inadequate training.

"Union officials have accused the company of cutting the work hours of local union leaders so they no longer qualify for the company’s health insurance plan, or working them until they burn out by purposefully understaffing the busiest hours."


5 scathingly funny cartoons about Elon Musk's Twitter bid ...


Elon Musk heads to court over Tesla pay that made him the world’s richest person - CNN

Modern courts of equity?


Millionaires are conduits for news and opinion shapers for millions of Americans:

The Salaries of TV’s Top Reporters May Surprise You! - Heraldweekly


Extending the student loan moratorium (again) is a terrible idea - WaPost

Unlike Biden's student loan forgiveness effort, "(t)he student-loan moratorium...applies to all borrowers, including lawyers, doctors and other highly paid professionals. The largest benefits go to well-off Americans, who have already enjoyed nearly three years of no repayments and no interest accumulation. Hard-working taxpayers who did not go to college, or who did not borrow to do so, would surely love to get this kind of deal."

BTW, there's also an "inflation subsidy": If and when loan payments start up again, the current run of high inflation means debtors with fixed rates will re-pay in discounted dollars.

In the future, government help for low-income students attending college should come more from grants, less from loans. Interest rates for low-middle  income students could be pegged just above what the Fed charges banks to maintain liquidity. The country needs to utilize the brain power of all segments of society in order to compete/thrive. Some socialism at the bottom can help capitalism  work better at the top.


Year-End Tax Policy Priority: Expand the Child Tax Credit for the 19 Million Children Who Receive Less Than the Full Credit - CBPP

Good to see a progressive think tank leading with a call for economic fairness for ALL children and families rather than drenching its arguments in identity politics that can alienate segments of the bottom 50%.  Is this a sign that the Dems are trying to reconnect with the working class?  Shifting preferences of the foundations that fund them?  The House in GOP hands?


Who Benefits from Income and Wealth Growth in the United States? - Realtime Inequality/UC Berkely

"Realtime Inequality provides the first timely statistics on how economic growth is distributed across groups. When new growth numbers come out each quarter, we show how each income and wealth group benefits. Controlling for price inflation, average national income per adult in the United States increased at an annualized rate of 1.8% in the third quarter of 2022, and average income for the bottom 50% grew by 1.5%."

How groups with different levels of income compare depends a lot on framing.  For example, compare differences in income trends for the top, middle, and bottom over the past 50 years, 10 years, and 12 months. 

Here's the focus that Axios chose yesterday:  

Wage Winners


UC officials call for mediator as strike by 48,000 academic workers causes systemwide disruptions - LA Times

Not all low-income workers are blue collar and lack college degrees.


As Supreme Court Considers Affirmative Action’s Future, Legacy Admissions Also Need to End - AEI

"If affirmative action is a violation of equal opportunity, then legacy and donation-driven admissions are something far more troubling. It’s time for them to end. Congress should simply amend federal funding language to dictate that colleges that wish to collect federal funds or be eligible for federal lending should be required to erect and maintain a firewall between giving and admissions. States should adopt similar policies for public institutions, conditioning aid on a commitment to merit-based admissions."


Recent trends in global income distribution : take aways from Branko Milanovic London School of Economics lecture

"Post-2008 Financial Crisis, the Elephant curve has changed, but the underlying mechanisms remain the same. Rapid growth in China left an “empty spot” at the bottom quintile which was filled by India, a phenomenon called the “sucking below” effect."

"Indians now comprise 40 percent of the bottom quintile of the income distribution statistics."

There's always room at the bottom!


Nouriel Roubini Interview on MegaThreats - Project Syndicate



Amazon founder Jeff Bezos warns a recession is looming - and Americans should 'prepare for the worst' - msn

BTW, Amazon believes in investing its  higher income employees in capitalism:

Amazon Giving Out Record Amounts of Stock to Employees. Why? - Dice

But, for hourly employees, not so much:

Amazon Ends RSU Grants To Hourly Employees, But The Benefits Of Broad-Based Employee Stock Grants Live On Elsewhere - myStockOptionsblog

CCSE believes capitalism should be inclusive: As many workers as practicable should own working capital on an individual basis.  Paying employees in company stock can achieve this goal for successful, publicly traded companies like Amazon, especially if they enjoy monopoly power.  Other employers can do this through retirement plans offering a mix of investment options.

The US government could make sure every worker has a retirement account and a minimum contribution to invest in it annually.  Now, almost half the workforce owns zero net assets. 

In Amazon's case, while stock compensation was discontinued for hourly employees, the company offers only a 2% match on 401(k) contributions.

The company in essence employs two tribes: higher-paid managerial and technological staff that own a stake in the enterprise and hourly workers struggling to pay bills with little opportunity to save and invest.  A compensation system like this can be expected to magnify wealth inequality.

Click here for CCSE work on Social Security and the U.S. retirement savings system


Her Child Was Stillborn at 39 Weeks. She Blames a System That Doesn’t Always Listen to Mothers. - ProPublica

"Every year more than 20,000 pregnancies in the U.S. result in a stillbirth, but not all of these tragedies were inevitable. As many as one in four stillbirths are potentially preventable."


Women need to stop shaming men for being ‘too masculine’ - Melanie Notkin/NY Post


There’s Plenty Of GOP Blame To Go Around, But One Person Deserves More Than Others - Derek Hunter/Townhall

"After decades of conservatives saying if Roe v Wade were overturned all it would mean is the issue would return to the states, Graham decided to take a dump on that concept and go against federalism, re-energizing those liberals who’d moved on."


As Democrats celebrate averting election disaster, we can't ignore the voters we're losing - Eric Adams/USA Today

"The people – working people – are our north star. Their priorities must be our priorities. Their values must be respected. Their voices must be heard."



Poor, Low-Income Residents Were a Third of Voters in 2020 Presidential Election: Study - Washington Informer


Sunday, November 13, 2022


"Write the vision; make it plain on tablets, so that a runner may read it..." - Habakkuk 2


Rich countries like Australia shouldn’t balk at climate spending – it will soon pay for itself - Guardian


Meet Chloe Cole, the 18-year-old leading the fight to protect children from transgender surgeries - CNA


Follow the money: Medical experts are mutilating gender-confused people because it's profitable - Washington Examiner



U.S. Sex Reassignment Surgery Market Size, Share & Trends Analysis Report By Gender Transition - Grand View Research


HarperCollins Workers Are Demanding Murdoch’s News Corp Pay Them a Living Wage - truthout


Payday Report - Mike Elk



Why Didn't the Government Stop the Crypto Scam? - Matt Stoller/BIG

"Gary Gensler is the sheriff of Wall Street. So why couldn't he stop the fraud revealed by the blow-up of Sam Bankman-Fried?"

Q for financial regulators: If this guy somehow is convicted of fraud for manipulating imaginary money, could he do time in a virtual jail somewhere in the cloud?

Some music to regulate by:

"Somewhere over the Rainbow"


Palestinian parents fear for their children as Israel’s far right rises - WaPost

"In the West Bank, meanwhile, 2022 is on course to be the deadliest year for Palestinians since the United Nations began tracking fatalities in 2005. At least 28 Palestinians younger than 18 have been killed so far this year, compared with 17 in all of 2021, according to U.N. data. More than 800 minors have been injured. The United Nations voiced concerns last month that Israel is using excessive force against children...

"Ben Gvir’s Jewish Power party is the political descendant of the far-right Kach party, which was banned from the Knesset for being racist and undemocratic. Ben Gvir has been convicted multiple times for inciting hatred against Arabs and was exempted from mandatory military service as a young man after he threatened Prime Minister Yitzhak Rabin for trying to make peace with the Palestinians. Rabin was assassinated by an Israeli ultranationalist three weeks later.

"Israeli ultranationalist lawmaker Itamar Ben Gvir, center, arrives Thursday at the president's residence in Jerusalem for consultations on the next government. (Ronen Zvulun/Reuters)

"Now, Ben Gvir is likely to become Israel’s next public security minister, in charge of the police, prisons and security around Jerusalem religious sites, which have long been flash points in the Israeli-Palestinian conflict.

"He has called for giving police and soldiers wider latitude to use live ammunition and shielding them from criminal prosecution for killing or injuring Palestinians."


Disciplining workers in a workers’ state - Branko Milanovic

"The most important thing to realize is that work effort was much less, and the number of hours of effective work probably even less than in an equivalent capitalist-run firm..."

The result might be different if workers owned shares of the companies they worked for - and owned working capital in the economy as a whole.


How the FCC Shields Cellphone Companies From Safety Concerns - Propublica

New technology is a powerful deity that often  gets a free pass to enter the market without precaution.  As with tobacco, wireless products will have to cause irrefutable damage to humans before the US government takes meaningful action to probe and regulate their safety. 

Science isn't an even playing field. Relatively few independent researchers are funded to look into wireless safety while industry scientists  owe their first loyalty to their corporations.  If a wireless company researcher found health impacts, do you think the study would be published? 



Is the  proposed fine sufficient to influence corporate behavior?

The price of a worker’s life in America: OSHA fines Caterpillar $145,027 for “willful” safety violation that led to Steven Dierkes’ death - WSWS



IRA and 401(k) Contribution Limits Are Increasing. That’s Great News If You Are Rich - TPC

"In response to the recent burst of inflation, the IRS is raising contribution limits for the full range of retirement savings accounts. That’s great news. If you make a lot of money.

"But it won’t make the slightest difference to the vast majority of working-age Americans, who contribute far less than the existing limits, or nothing at all.

"This is no criticism of the IRS, which is doing exactly what the tax law requires when it increases these limits to account for inflation. But it is yet another reason why the entire retirement savings system needs to be overhauled so that it benefits those who need the help, not those who have plenty of opportunity to put away money for old age and the Wall Street firms that service their accounts."


Lightning strikes the Badlands

South Dakota voters decide to extend Medicaid coverage to 45,000 people - Politico

"Yet another Medicaid expansion ballot measure passed in a Republican state."

Low-wage workers need and deserve medical coverage and a living wage.  They are almost half the working population.  Both parties could do a lot more for these people.


With inflation top of mind, voters raise minimum wage in two states - WaPost

"Democrats have generally tended to embrace hiking the minimum wage...Yet Republican voters often support raising the minimum wage, as well. Between 1996 and 2022, there have been 28 minimum wage increase initiatives on state ballots. Only two have been voted down."

Deep-red Nebraska joins liberal states in adopting $15 minimum wage - ABC

"The last federal minimum wage hike took place in 2009, when Congress raised the pay floor to its current level of $7.25. As of August, 30 states have raised their minimum wage above the federal level, according to the National Conference of State Legislatures."


CCSE work on raising the national  minimum wage:

"Considerations on Raising the U.S. Minimum Wage To Help Workers and Families While Minimizing Negative Impacts"

"Yes, raise the minimum wage, but don't stop there" - op-ed


‘Enough’: Nurses in UK to go on strike for first time in history - Aljazeera

The messy true story of the last time we beat inflation -


What is Modern Monetary Theory? Understanding the alternative economic theory that's becoming more mainstream - Business Insider


Modern Monetary Theory, debunked everywhere except among government big-spenders - Mitch Daniels/WaPost


Inflation and the Fall of the Roman Empire - Joseph Peden/Mises Institute

"...One of the odd things about inflation is, in the Roman Empire, that while the state survived — the Roman state was not destroyed by inflation — what was destroyed by inflation was the freedom of the Roman people. Particularly, the first victim was their economic freedom...

"While the state had solved the monetary problem for its own constituents, it had failed to solve it for the masses. Rome continued to use an oppressive system of taxation in order to fill the coffers of the ruling bureaucrats and soldiers."






Education workers agree to end strike in Canada's Ontario - Reuters


How Tennessee Disenfranchised 21% of Its Black Citizens - ProPublica


News Blog: Oct. 9 - Nov. 8, 2022 - Click here


Will Growing Inequality Make Social Security & Long Term Care Financing Fixes Harder?

2020 Society of Actuaries Living to 100 Symposium

June 2019

Mixing Capitalism and Socialism

Policies To Moderate Systemic Wealth Concentration in the United States

Karl Polzer/Center on Capital & Social Equity

This essay explores two basic questions.  The first is the extent to which capitalism, which emphasizes the rights of individuals to pursue their interests, and socialism, which focuses on group needs, tend to function in tandem as much as they do in conflict. As many agree that the political pendulum in recent decades has swung in favor of capitalism, the paper also discusses a range of public policies that can be used to reduce its imbalances and risks, with particular emphasis on moderating capitalism's tendency toward systemic inequality. Policy options range from programs to help the poorest, social insurance, higher taxation of income and wealth, and re-channeling to all citizens a portion of profits from private exploitation of public assets and business activities enabled by public laws and infrastructure.

Quick Links

Including all workers in our retirement savings system requires 2 things: a universal tax credit and a secure place to invest it.

Congress should be working on both.

Almost half of Americans have no net assets and little or no retirement savings.  Many have no money to save, and if they did, and no retirement account to put it in.  Meanwhile, Americans at the top of the economic heap get generous tax breaks for retirement savings – and capital gains from these assets widen the wealth gap.

Establishing a national retirement savings system and reshaping tax policy to provide every American worker a modest tax credit to put in a retirement account could improve economic security, help people prepare for old age, and facilitate saving for emergency expenses.  This type of inclusive capitalism would make every American worker an owner of assets generating income.  Such a system could be funded via a relatively small sacrifice to high earners without increased federal spending.  

Include Everyone in the Retirement Savings  System

Related initiatives and proposals:

If you know of other proposals along these lines or would like to comment, please go the "Contact Us" page on this site and send us an email. 

CCSE Proposes Universal Starter IRAs

Australia as a Model?

Australia’s “superannuation” system  requires employers to contribute a percentage of employees’ income into diversified retirement funds managed by trustees.  By 1999, 97 percent of Australia’s full-time employees and 76 percent of part-time employees were covered by the superannuation system.  Over the years, Australia has increased required contributions and continued to refine the system, which has been credited with raising levels of capital accumulation and improving retirement security.

According to a July 2016 report, the Australian superannuation system continues to broaden coverage, but may be contributing to growing wealth inequality in its current form.

Research shows dramatic growth of upper middle class, major shift in economic resources

An Urban Institute report published in June 2016 found that since 1979 the percentage of wealthy and upper-middle-class Americans have grown dramatically while the middle- and lower-middle class has become smaller.  The study found that "the proportion of the population in the upper middle class went from under 13 percent in 1979 to over 29 percent in 2014."

The report documents a major shift in the distribution of economic resources. "In 1979, the bottom three income groups controlled 70 percent of all incomes, and the upper middle class and rich controlled 30 percent. By 2014, this distribution shifted to 37 percent for the bottom three groups and 63 percent for the upper middle class and rich groups. The middle class alone saw its share of income decline from 46 percent in 1979 to 26 percent in 2014."   

The study divides the population into five classes. The poor and the near-poor had annual incomes from $0 to $29,999; the lower middle class, from $30,000 to $49,999; the middle class, from $50,000 to $99,999; the upper middle class, from $100,000 to $349,999; and the rich, $350,000 and up. 

Pew study shows long-term decline in size of middle class, rise in number of poor

After more than four decades of serving as the nation’s economic majority, the American middle class is now matched in number by those in the economic tiers above and below it, according to a study released in December. In early 2015, 120.8 million adults were in middle-income households, compared with 121.3 million in lower- and upper-income households combined, according to the Pew Research Center analysis of government data.  Highlights include the following:

"While the share of U.S. adults living in both upper- and lower-income households rose alongside the declining share in the middle from 1971 to 2015, the share in the upper-income tier grew more.

"Over the same period, however, the nation’s aggregate household income has substantially shifted from middle-income to upper-income households, driven by the growing size of the upper-income tier and more rapid gains in income at the top. Fully 49% of U.S. aggregate income went to upper-income households in 2014, up from 29% in 1970. The share accruing to middle-income households was 43% in 2014, down substantially from 62% in 1970.

"And middle-income Americans have fallen further behind financially in the new century. In 2014, the median income of these households was 4% less than in 2000. Moreover, because of the housing market crisis and the Great Recession of 2007-09, their median wealth (assets minus debts) fell by 28% from 2001 to 2013.

"Meanwhile, the far edges of the income spectrum have shown the most growth. In 2015, 20% of American adults were in the lowest-income tier, up from 16% in 1971. On the opposite side, 9% are in the highest-income tier, more than double the 4% share in 1971. At the same time, the shares of adults in the lower-middle or upper-middle income tiers were nearly unchanged.

"These findings emerge from a new Pew Research Center analysis of data from the U.S. Census Bureau and the Federal Reserve Board of Governors. In this study, which examines the changing size, demographic composition and economic fortunes of the American middle class, ‘middle-income’ Americans are defined as adults whose annual household income is two-thirds to double the national median, about $42,000 to $126,000 annually in 2014 dollars for a household of three. Under this definition, the middle class made up 50% of the U.S. adult population in 2015, down from 61% in 1971."

Impact of Raising the Minimum Wage

Increasing the minimum wage would have two principal effects on low-wage workers, according to an analysis by the Congressional Budget Office.  Most of them would receive higher pay that would increase their family’s income, and some of those families would see their income rise above the federal poverty threshold. But some jobs for low-wage workers would probably be eliminated, the income of most workers who became jobless would fall substantially, and the share of low-wage workers who were employed would probably fall slightly.

  • Five Facts about the Minimum Wage.
  • Living Wage Calculator:  The cost of meeting basic needs varies widely depending on where you live. MIT offers an on-line tool to help determine such costs and the living wage in each county and metropolitan area in the U.S.  The site also has articles on related issues.
  • State Minimum Wage Levels:  Federal minimum wage law supersedes a state's minimum wage law if the state level is lower. In those states where the state minimum wage is greater than the federal level, the state minimum wage prevails. Two states have a minimum wage set lower than the federal minimum wage. In 29 states and DC, the state minimum wage is higher than the federal minimum. Fourteen states have a minimum wage that is the same as the federal requirement. The remaining five states have not established a minimum wage.

The Economics of Inequality

Deaton Wins Nobel Prize

"The award comes at a time when there is rising academic and popular interest in the study of inequality. Several economists, including Anthony Atkinson of the London School of Economics (who was among the leading contenders for a Nobel prize this year) and Thomas Piketty of the Paris School of Economics (who is still a bit too young for one), have published widely-read volumes on the subject over the last two years. Mr Deaton published his, The Great Escape: Health, Wealth, and the Origins of Inequality, in 2013. In it, he argued that while most people in the world have gained in terms of health and well-being from GDP growth over the last few decades, there are many groups that have missed out, particularly if on measures beyond those most commonly examined."

-- The Economist

Milanovic Explores Dynamics of Income Inequality in Age of Globalization

In “Global Inequality: A New Approach for the Age of Globalization,” Branko Milanovic identifies five forces pushing up inequality in the United States:

1. The increasing share of national income that accrues to owners of capital.

2. Very high and rising concentration of incomes from capital.

3. People holding high-paying jobs also often have high capital income.

4. The tendency of high-income individuals to marry each other.

5. The rising political power of the rich.

Revisiting the work of American economist Simon Kuznets, Milanovic describes how global income economy waxes and wanes in "waves" driven by economic and political forces. 


CBO report analyzes impact of government transfers, taxes on rising U.S. income inequality

According to the June 2016 report

"Between 1979 and 2013, all three measures of income examined in this report—market income, before-tax income, and after-tax income—became less equally distributed, based on a standard measure of inequality known as the Gini index. The increase in inequality in both before-tax and after-tax income over the 35-year period stemmed largely from a significant increase in inequality in market income, mostly because of substantial income growth at the top of the market income distribution.

"Because government transfers go predominantly to lower-income households, before-tax income (which is equal to market income plus government transfers) was more evenly distributed in each year than market income. And because higher-income households pay a larger share of federal taxes than lower-income households do, after-tax income was more evenly distributed than before-tax income.

"In each year between 1979 and 2013, government transfers reduced income inequality significantly more than the federal tax system did."

 View from the Paris School of Economics


Lecture Highlights:

  • The return of a patrimonial (or wealth-based) society in the Old World (Europe, Japan).
  • Inequality in America: Is the New World developing a new inequality model that is based upon extreme labor income inequality more than upon wealth inequality? Is it more merit-based, or can it become the worst of all worlds?
  • In all nations with capitalist economies examined, the poorest half of the population owns virtually no assets or is in debt.
  • In general, when the rate of growth of capital exceeds the rate of growth of the overall economy, wealth tends to concentrate.  There is no natural market mechanism to counter this tendency; a nation's degree of wealth concentration in large part is a function of public policy.

"The Spirit Level: Why Greater Equality Makes Societies Stronger"

In this book, Richard Wilkinson and Kate Pickett present data making the case that countries with greater income inequality tend to have more health and social problems.  Furthermore, there is evidence that the negative effects of inequality impact not just the poor, but people at all social levels.  The Equality Trust provides slides of some of the supporting data.

This short Wall Street Journal video describes competing views of the wealth inequality issue and how to address it.

Thomas Piketty reviews Anthony Atkinson's book, Inequality: What Can Be Done? , and evaluates its prescription for Great Britain's economy.

Economists Discuss Atkinson's Ideas on Reducing Inequality

Robert Solow, the Russell Sage Foundation’s Robert K. Merton Scholar and Institute Professor Emeritus at MIT, joined New York Times columnist Paul Krugman and moderator Janet Gornick (Director of the Luxembourg Income Study Center and a former RSF Visiting Scholar) at the Foundation for a conversation on Inequality: What Can Be Done?, a new book by British inequality scholar Anthony B. Atkinson. In the book, Atkinson argues that economic inequality has reached unacceptable levels in many countries and lays out an agenda for reducing inequality. His policy proposals span five areas: technology, employment, the sharing of capital, taxation, and social security.

Columbia's Joseph Stiglitz takes on "The Great Divide"

Click on highlighted words to hear interview.

Hayek Revisited: Is Compromise Possible?

Is Friedrich Hayek's classic defense of individual liberty and economic freedom, rooted in moral tradition, just as relevant today as during World War II?  Click here to read a summary of Hayek's "The Road to Serfdom," published by Reader's Digest as that war came to an end and a new international economic order was developed. 

Today, how can monopoly power, whether wielded by corporations or government agencies, be checked while expanding economic opportunity and inclusion for all including the young, old, and those with few assets?  If Hayek could have foreseen the ability of  modern corporations to concentrate wealth and power, what policies would he recommend?       

"...Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance -- where, in short, we deal with genuinely insurable risks -- the case for the state's helping to organize a comprehensive system of social insurance is very strong. ...

"(T)here is no incompatibility in principle between the state's providing greater security in this way and the preservation of individual freedom."

 --  F. Hayek, The Road to Serfdom, Chapter 9/Security  and Freedom


Go Dawgs!

Capitalizing on college football

"In U.S. college sports -- as in the nation’s broader blend of capitalism and socialism -- political leverage can be advantageous. Winning football coaches now sit at the top of the public university food chain. They are emblems of both American economic opportunity and inequality..."

Thanks to the Washington Examiner for publishing this op-ed.


P.S. The draft, titled "Capitalizing on the public-private college football plantation," includes links to the classic Marx Brothers film "Horsefeathers."

American ranch-style house

April 6, 2022

Russia, Nuclear Disaster and What To Do with Our House

Karl Polzer, Center on Capital & Social Equity

Click here to read article.

Thanks to the Washington  Post for publishing our letter.

P.S. (March 3, 2022)  As the invasion escalates, it appears that Putin's operational objectives may include: 1) ongoing military and political control of Belarus; 2) depopulation of non-Russian speaking Ukraine to facilitate larger annexation (a la Israel/Palestine); and 3) constricting the mobility and internal political threat of Russian oligarchs (a la Xi and Chinese capitalists).

Western State Hospital home page - December 2020



March 5 - This week, the Senate approved HB 388 with amended text. The House then passed the Senate version.  Both votes were unanimous.  The bill now goes to Virginia's Governor.  Unlike other states, if the Governor does not act on a bill, it becomes law without his signature in 30 days (the majority of bills are not signed). 

Virginia becomes first state to ensure mental hospital patients, families have access to video visitation

April 11 - It's a law!  Gov. Youngkin signed HB 388, which was passed unanimously by both Virginia's House and Senate.  Effective July 1, 2022, the bill requires the director of each of the state's 10  mental health hospitals to have a process in place to facilitate virtual visitation. It will help thousands of patients and their families and friends stay connected and could positively impact patient care and hospital transparency. 

The Center on Capital & Social Equity  worked with staff at Western State Hospital in Staunton to develop a pilot program when in-person visitation was suspended due to Covid 19.  We then advocated to expand access to video visits  to patients at all state hospitals.  Special thanks to the staff at Western State, the Virginia chapter of the National Alliance on Mental Illness, and Del. Rod Willett and his staff who were instrumental in making this happen.

To our knowledge, Virginia is the first state to make sure that mental hospital patients and families have access to video visitation.  Today, the world is slightly less unequal!


COVID Ended In-Person State Hospital Visits So Father Pushed For Virginia Law Allowing Zoom-Like Calls For Patients - Pete Earley

Thanks to Peter Earley for posting on our work to increase connectivity between people living in institutional settings and their families and the larger community.

Extending the Expanded   Child Tax Credit:

"In the bigger picture,
total national work = paid work + unpaid work, which includes raising children."


Also see last section of the paper below on raising the minimum wage: "Combining a minimum wage hike with the EITC, more aid to raise children" on p.11:

"Considerations on Raising the U.S. Minimum Wage To Help Workers and Families While Minimizing Negative Impacts"


Families With Low Incomes Spend Expanded Child Tax Credit on Most Basic Needs, Education

 sick leave

Click on the article above for the answer to the puzzle below:

Nov. 4, 2021

White House’s promised childcare subsidies face a host of ‘devils in the details’

Karl Polzer, Center on Capital & Social Equity

"The $1.75-trillion Build Back Better (BBB) proposal’s  promise to cap childcare expenses at 7% of income for families earning up to $300,000 faces a series of policy hurdles regarding cost, equity, long-term impacts, and how such a program might be administered.  While subsidized childcare would meet a pressing need for many low- and modest-income working parents, providing benefits to upper-income professionals and inflationary impacts could push the program’s cost as high as $1 trillion over 10 years.  

"Some analysts warn that massive subsidies combined with costly regulatory requirements could end up reducing care choices for many low-income families, particularly those preferring to look after their children at home..."

Click here to read article

Nov. 20, 2021

Why our grandchildren will being moving back from the ocean and heading north

Karl Polzer – Center on Capital & Social Equity

As the fog lifts from what was achieved during last week’s international negotiations over controlling climate change, some outlines of future reality come into focus.  Layers of carbon pollution girding the Earth will continue to drive up temperatures and sea levels.  The world’s 195 countries will not be able to change human behavior enough to stop major climate change.   By later this century, billions of people will face pressure to move away from eroding seashores to higher ground and north to cooler places to live.

There are several reasons to expect this...

Oct. 26, 2021

Responses received from Virginia campaigns for governor

Last week, the Center on Capital & Social Equity, which operates from Northern Virginia, sent a short list of questions to policy and press people working on the two Virginia campaigns for governor.  We are pleased that both campaigns sent responses but would have liked to see more specific answers to many of the questions.

Our motivation in asking these questions is to help focus the next governor on the needs of low-income people who make up a large portion of Virginia’s population.  Their everyday challenges are often ignored by their political representatives.  Attention to detail and commitment will be keys to developing and implementing policies that will help improve their lives on issues including adequate wages, paid sick days, access to mental health care, the cost of living,and affordable health care.  We look forward to working with the next administration on these and other matters.

Do U.S. Expats Need to File Virginia State Taxes? | MyExpatTaxes

November 20th, 2021 Grocery Store Labor Action - All Workers Deserve Paid Sick Days - Virginia Interfaith Center for Public Policy

"Grocery store workers are one of the best examples of why Virginia needs a paid sick day standard.  Two-thirds of grocery store workers have no paid sick days. Virginians for Paid Sick Days is partnering with UFCW Local 400 to hold actions outside grocery stores on the Saturday of November 20, 2021 (the Saturday before Thanksgiving) highlighting the need for all grocery store workers to have paid sick days."


July 12, 2021

"Congress could do many relatively inexpensive things to improve working people’s lives.  At spending levels near the bottom of what’s being now debated, all workers – including the lowest-paid -- could have additional funds to raise their kids, paid sick days, more job training, and some savings for retirement and emergencies.  Millions more could have higher wages and health care coverage.  And millions more disabled and elderly people could move above the poverty line.  Much of this could be done by modifying existing programs and policies."

Social ‘infrastructure’ improvements for the working class

  • Target subsidies for families (child tax credits, daycare, college) to people most in need.
  • Raise the minimum wage and index it for inflation.  Give states reasonable flexibility to adjust the minimum.  All workers get paid sick days.
  • Repair and improve SSI.
  • Establish a universal retirement savings system.
  • Incentivize states to expand Medicaid.  Hold Medicare spending increases to general inflation or less.
  • Improve Social Security benefits for the bottom 50%. Achieve long-term solvency through higher taxes mostly on the top 20%.
  • Improve the unemployment insurance system and job training.

Click here to read essay.

Jeff Bezos (left to right), Elon Musk and Richard Branson are in a neck-and-neck battle to see who can win the trio’s own space race.

Thanks to the Washington Post for publishing most of our letter:

"Push the pain of taxes into the afterlife"

Really don't think that a particular billionaire (hint: cojones enough to be shot into space) would have objected to being mentioned as in the letter submitted:

"A Smart Way To Tax the Rich: Let Sleeping Billionaires Lie"

Thanks to the Washington Examiner for featuring this.

capital spending - government waste - government debt stock illustrations

Biden’s spending spree could destabilize Social Security - Karl Polzer

"President Joe Biden’s plan to inject $4 trillion of social and capital infrastructure spending into a $21 trillion economy could help many people take care of their families. But there are also major economic and political downsides. These risks could be reduced, and the proposal’s value increased, by putting Social Security on the table and targeting new social spending to people most in need..."

Click here to read the op-ed

Where's Social Security?

How much can we tax the wealthy to finance long-run social and physical infrastructure needs?

 Karl Polzer, Center on Capital & Social Equity

A government, already paying interest on more than its people produce each year (hint: $22 trillion), now proposes to tax its wealthiest citizens in the vicinity of $3 trillion more to finance a growing list of social and physical infrastructure needs.  Like families paying off mortgages, indebted governments should know that each major purchase narrows its ability to raise capital for future needs... 

So, what do we need and how can the wealthy be tapped to pay for it? What's missing?...

Click here to read the paper


Thanks to the Washington Examiner for timely publication of this op-ed. 

Yes, raise the minimum wage, but don't stop there

March 1, 2021

"...States could be given flexibility. Congress could set the national minimum at the high end of current proposals, say at $15 or $16, and allow states to adjust it downward by a certain margin, say 20% or 25%, but no lower. A national minimum wage corridor, rather than a line, could help California and New York build up and adjust down from a higher platform. Poorer states could choose lower levels in the corridor, say $12 to $13 an hour.

"Policymakers also should consider how changes to the earned income tax credit and child tax credit can complement wages for working-class families. Members of both parties support higher subsidies to raise children. Such payments should be targeted to help the poorest the most. Yet the current child tax credit provides the most money to higher-income families."

Click here to read the op-ed.

Feb. 17, 2021

Analysis: Ways To Raise the U.S. Minimum Wage To Help Workers, Families, While Minimizing Negative Impacts

Karl Polzer, Center on Capital & Social Equity

A recent Congressional Budget Office (CBO) analysis reinforces the case that raising the national minimum wage is long overdue. But it also provides reasons for caution.  Dialing up wages at the bottom up too fast and too much could increase the magnitude of negative side effects including job loss and price increases.

This paper examines potential impacts of raising the federal minimum wage nationally and in selected states and local areas. It ends with suggestions to temper negative side effects resulting from a higher minimum wage and discusses the need to fill income gaps that are too large for a higher minimum wage to address adequately, especially for some types of families.  Options include setting a national corridor in which states can choose a minimum wage best fitted to them and supplementing low wages with more support for raising children.        

Click here to read the paper.

Thanks to the Washington Examiner for running this op-ed and its openness to air a variety of views including our work exploring inequality and advocating for the bottom 50%.  The Examiner's audience includes conservative members of Congress whose votes are needed to pass and sustain  legislation advancing  working class interests.

Biden's stimulus risks sending aid to those who don't need it - Karl Polzer/Washington Examiner op-ed

Who exactly will get the enhanced cash aid, and who won't, in the stimulus package the Biden administration will soon negotiate with Congress? This is the first of many distributional challenges awaiting lawmakers on both sides of the aisle. Choices on targeting increasingly scarce public funds will reveal which income groups both parties are committed to represent.

Details of the relief proposal had not been released as of this writing. But it is likely that the administration has been working from the distribution template in legislation Democrats introduced at the end of December. That bill, the Cash Act of 2020, would increase the $600 COVID-19 cash relief authorized last month to a total of $2,000 ($4,000 for couples). It also would send billions of dollars to well-off people that don’t need the money. As with previous COVID-19 cash aid legislation, an argument can be made that the distribution scheme shortchanges millions of people who need money to pay for food and rent.

Click here to read full article

The Center on Capital & Social Equity explores and promotes ways to include all workers and families in the output of capitalist economies. (See chart above.)  All should have the opportunity to own shares of working capital.  One way to mitigate the negative effects of monopolies, which antitrust regulation cannot entirely control, is through widespread profit sharing.  This can be done by setting up a universal retirement savings system.

Economy of India - Wikipedia

Missionary being eaten by a jaguar  (Noé León, 1907)

Making Sure We Get to Universal Coverage: a letter to Sen. Bernie Sanders

Feb. 23, 2020 

Dear Sen. Sanders,

Among all candidates for president, we think you are the most committed to making sure that ALL Americans have health insurance and access to comprehensive health care.  We commend you for your leadership on this issue.

Unfortunately, it is hard to see how the Medicare-for-all legislation you propose could gain Congressional approval in the foreseeable political future.  As a longtime member of the U.S. Senate, you must be able to understand the grounds for this concern.

Please answer this question:  If, during your presidency, Congress could agree to pass a universal coverage bill using a different, perhaps more traditional, approach, would you sign it?

Getting ALL Americans affordable coverage as soon as possible is an important part of our policy agenda.  We cannot wait until a political moment in the unforeseeable future in which a Medicare-for-all system can gain approval.  We also recognize that any universal system put in place will need to enjoy long-lasting acceptance spanning the ebbs and flows of partisan politics.

Our question is of deepest sincerity.  Your answer could be key to broadening your base of support and winning the presidency.

Thank you again for your leadership. 

Karl Polzer, Center on Capital & Social Equity

Interesting evidence on how CARE Act stimulus helped low-income people get through the summer, despite large job losses, and why we need more stimulus now.

Thanks to the Washington Post for publishing this as leaders in Congress negotiated changes to Covid-19 relief legislation:

Low-income Americans are left out of covid stimulus - Center on Capital & Social Equity

Dec. 11, 2020 at 4:31 p.m. EST

Sens. Mark R. Warner (D-Va.) and Susan Collins (R-Maine) said in their Dec. 8 op-ed, “We can’t afford inaction on the covid-19 compromise package,” that their compromise “would help Americans at least get through the next four months.” With due respect to their bipartisan efforts, that was dead wrong. 

Very little in the coronavirus relief package would help low-income Americans make it through even one month. What’s needed most is rent relief and money to cover food and utility bills. Yet no direct payments to low-income individuals similar to the checks issued under the Cares Act in the spring are to be found. The bipartisan proposal mainly would benefit interests with access to Congress: businesses (via cheap or free money, plus a liability shield), nonprofits/associations/churches, state governments, and professional classes including doctors, lawyers and accountants.  

The D.C. government’s decision to send $1,200 checks to people among the hardest hit sets a good example for states and the federal government. Congressional leaders, many perched in the nation’s wealthiest strata, need to understand that about half of the U.S. workforce earns low wages or is out of a job. Viewed from the bottom up, the United States is becoming a much more impoverished nation.   

Karl Polzer, Falls Church

The writer is founder of the Center on Capital & Social Equity.

Center on Capital & Social Equity

Policy Goals: Increase economic inclusion at reasonable public cost 

  • Raise minimum wage with annual COLA (option: give states some leeway to adjust ↓ to reflect cost of living/labor).
  • Five PAID sick days annually for ALL workers.
  • 100% of Americans with health coverage by 2025 - with strong cost controls (any number of payers will work).
  • Universal retirement savings system with minimum $500 annual government contribution (so, all Americans own working capital, have stake in market economy).
  • No surprise medical bill >$500.
  • Cut cost of college/expand apprenticeship programs.
  • Improve Social Security benefits for bottom 50%. Achieve long-term solvency through higher taxes mostly on top 20%.
  • Increase refundable child tax credit.

Life expectancy has not increased for the lowest-paid workers - National Academy of Sciences

Race-neutral, progressive economic policies deliver $$ to minority communities

"Although much of it may turn out to be pre-election packaging, legislation unveiled last week by Democrats to help racial minorities is a poorly conceived policy approach that fails to treat the nation’s low-wage workers fairly or equally.  Senate leadership is billing the Economic Justice Act as a “major new legislative proposal to make $350 billion in immediate and long-term investments in Black communities and other communities of color.”  However, policies that reward or punish citizens based on skin color not only rest of shaky legal and ethical ground.  If enacted, they may ignite a political backlash that will set minority communities back rather than helping them move forward."   

Click here to read article.

A Sea Change for Wages v. Capital?

Addicted to Identity Politics, Progressives May Miss a Historic Chance To Connect with America’s Working Class

Karl Polzer – Center on Capital & Social Equity

 New research affirms what has been known for centuries.  In the wake of a pandemic, a smaller, more risk-averse work force is often in position to demand higher wages.  After the Black Death ripped through Europe, for example, peasants, shop workers and craftsmen realized they had gained bargaining power.  Wages rose and the return on capital fell.

Though the impact of the current pandemic probably will be much milder, millions in the American working class suddenly deemed to be “essential” may come to a similar realization.  People working with their hands in nursing homes, grocery stores, meat packing plants, or as home health aides, might ask whether they are getting a fair deal.  Why, they might ask, are we expected show up to work and risk contagion for wages that barely cover the rent, while millions in the professional, management, and bureaucratic classes can shelter at home and still pull down a good salary?  Why don’t we get paid sick days, health insurance, and other basic benefits like they do?  Why can’t we spend more time raising our kids to help them get ahead?

In just two months, the Covid virus has upended the American workforce.  Incomes have crashed.   Unemployment has rocketed.   Whatever new normal emerges will be different and probably more unequal.  A larger portion of the workface – and the electorate -- may well be unemployed or working for low wages.  Jobs that can support a middle-class lifestyle may be harder to find. 

This is the perfect time for elected officials to talk to all American workers about how to improve their lives. Unfortunately, many Democrat leaders are deeply rutted in rituals of race and gender politics.  The Democratic party may be blowing its chance to regain working class support -- once its bread and butter -- in two important ways.   First, its policy agenda largely reflects upper-middle class priorities.  Second, the party’s world view and messaging for many years has presumed that low-wage work is exclusive to blacks and Hispanics.  To many Democratic leaders, pale-skinned poor people seem to have no standing.  It’s almost as if they don’t exist...

July 1, 2020

Letter to U.S. Political Leaders and Media

It’s past time the White House, Congress required - and funded - Covid testing in nursing homes

What wasn’t said at last week’s Congressional hearings on Covid-19 should raise alarm.   Federal officials testified the CDC plans to issue “more targeted” testing "guidelines" for states and nursing homes.  More advice is not enough.  After five months and more  than 120,000 virus deaths, lack of federal and state action -- and adequate funding -- for testing in nursing homes is homicide by negligent policy...

July 14, 2020

CMS to deliver ‘point-of-care’ COVID-19 test kits to all nursing homes

Yes!  Credit to CMS Administrator Verma and the Administration. We've been calling on the feds to deploy rapid, comprehensive testing for nursing home residents and staff for 4 months.  This is a major step toward reducing deaths from the pandemic.  Now, make sure to include long term care providers not directly regulated by CMS, such as assisted living facilities, in the testing program. About 1.5 million live in nursing homes and one million in assisted living.

June 15, 2020

Op-ed:Upgrade Medicaid, don't gut it

Thanks to the Washington Examiner for running this article.

"The current Medicaid regime is a mixture of bad and good. It often renders low quality nursing home care. But Medicaid does provide universal long-term care coverage, a rarity in American social policy. That’s a good thing. Medicaid needs to be upgraded – not gutted. Long-term care insurance and personal savings simply can’t fill the gap cutting Medicaid would leave." ...

"Witness the Trump administration’s delegation of most of the responsibility for the COVID-19 nursing home policy to the states. It recommended, for example, that states make sure COVID-19 testing gets done in nursing homes rather than having CMS require it nationally. Washington’s failure to take the lead on testing can’t bode well for nursing home quality and mortality rates."

Detroit Industry - Diego Rivera

The World Inequality Lab Newsletter - July 2020

Thomas Piketty - Why Capitalism Must Be Reformed | The Daily Social Distancing Show

Capital Gains and U.K. Inequality - Arun Advani and Andy Summers

Three policy recommendations include: "Capital gains tax rates need to be aligned more closely with marginal income tax rates, since large gaps lead to repackaging of income, reducing the redistributive effects of tax, creating horizontal inequity, and biasing measures of vertical inequality."

The Missing Profits of Nations: How much each country loses or attracts because of tax competition - Thomas Torslov, Ludvig Wier and Gabriel Zucman

June 2020

Opposing Racism and Human Bondage in the United States

 Center on Capital & Social Equity

Awakening Slaves - Michelangelo

"Capital and Ideology": Notes and Figures - Thomas Piketty, 2020

"In this talk, I present some of the figures & tables gathered in my book Capital and Ideology (2020) - an economic, social & political history of inequality regimes, from trifunctional and colonial societies to post-communist, post-colonial hyper-capitalist societies. As compared to Capital in the 21st Century  (2014): Capital and Ideology is less western-centered, more political and focuses on the fragilities and the transformation of inequality ideologies. A much better book (I believe!)"

The Saving Glut of the Rich and the Rise in Household Debt - NBER

Comment: Excellent new paper. Remember Macro 101: national savings = national investment?  This takes Keynes one step further. Instead of being invested, savings glut at top generates rents, increases systemic inequality, through increased lending to bottom 90%.  Who pays high credit card interest and transaction fees, and who profits, e.g.?

Great Flower Moon - Richard Coleman

Letter to the Washington Post, Other Media - April 3, 2020

U.S. news media should make coronavirus coverage available to everyone

The Washington Post and other newspapers have done yeoman work in covering the coronavirus outbreak. Getting reliable and thoughtful information to the public quickly plays a critical role in helping to coordinate responses and saves lives. Unfortunately, the normal practice of restricting access to paid subscribers slows down dissemination of critical information, particularly to lower-income people.

Until this national emergency is over, the Post and other media should "ungate" all coverage related to the pandemic. That way people and organizations that subscribe can quickly get the word out about latest developments. This would be a great service to the public.

Karl Polzer/Center on Capital & Social Equity

March 3, 2020   -   Letter to the Washington Post 

A wealth tax could be both fair and enforceable

 The Post’s March 3 article “Bernie Sanders and Elizabeth Warren want a wealth tax. Wealthy Swiss say their model could work for America” raises key issues of tax fairness and enforcement.

 Why would it be unfair to tax the super wealthy on total net assets when middle-class homeowners already are taxed on the value of homes largely financed through debt on which they pay interest to banks (whose profits flow disproportionately to the wealthiest)?   Existing American wealth taxes -- state and local property taxes -- now finance most K-12 education.  A national wealth tax could be used to make school funding more equitable and lessen the tax burden on the middle class.  We already tax the middle class on property it partially owns.  So why not tax the wealthiest on the value assets they own lock, stock and barrel?

 Incentives are key to enforcement.  A progressive wealth tax -- rising in increments from point A to point B -- could be enforced by applying the maximum rate to all households with wealth over a given threshold, and leaving it up to filers to document to the IRS that the lowest allowable rate is appropriate.  Finally, a reasonable tax rate could provide an incentive for investment that spurs economic growth.  A high rate could stifle it.

Karl Polzer/Center on Capital & Social Equity

A full time worker paid the federal minimum wage earns 13% of the average national income per worker in the US -- the lowest level since the creation of the minimum wage in 1938.

   Source: Gabriel Zucman.

"Fastest way to cut carbon emissions is a 'fee' and dividend, top leaders say," Washington Post, 2/14/20

The article above is an example of how the virtue of economic analysis can't be measured by the pound or aggregate number of titles. The insight of a single analyst can contain more wisdom than collective opinion of 100.


How to make carbon taxes more equitable - letter to the Washington Post

Jan. 28, 2020 at 5:40 p.m. EST

The Jan. 25 news article “At Davos, enthusiasm for trees but not a carbon tax” did not mention an important reason political leaders might balk at levying higher carbon taxes. Carbon taxes, including those on gasoline, are highly regressive, affecting lower-income people much more than higher-income. For example, if gas taxes were doubled in the Washington area, most well-paid professionals would have enough capital (or access to credit) to easily switch to a hybrid vehicle. Over the life of the vehicle, their savings in fuel and taxes would probably cancel out any initial expense. In contrast, for lack of capital, a person driving a used gas guzzler to two low-paying jobs would be stuck driving the gas guzzler along with higher fuel costs.

Hiking fuel taxes would make it even harder for the growing share of the U.S. population working low-paying jobs to make ends meet and raise families. Carbon taxes would be more equitable and politically feasible if governments also made sure that workers struggling to pay their bills could afford the switch to clean-energy technology. 

Karl Polzer, Falls Church

The writer is founder of the Center on Capital & Social Equity.

Response to WaPo  dialogue stemming from our letter on carbon taxes

Dear Washington Post Editors:

Sabrina S. Fu made excellent points in her Feb. 4 letter “Quit saying ‘carbon tax.’ It’s a fee and dividend” addressing concerns I raised in a letter last week.  Her proposal, however, would work best an ideal political world where one can control opponents' and skeptics' language used to frame an issue.   My concern over tax fairness would remain because in the legislative bargaining process -- including a last-minute deal in conference committee -- the redistribution part of the proposal could easily be watered down, or eliminated, while the regressive "tax" or "fee" would become law.

Why don’t we start by applying her proposal to the current gasoline tax?  If it survives the legislative process and works for current energy taxes, then move on to carbon writ large.  Bottom line: advocates for low- and middle-income people trying to survive today need to keep a sharp eye on idealistic proposals coming from the better-situated trying to save the planet in the next century.

 Karl Polzer

Center on Capital & Social Equity


Aug. 7, 2019

By letting banks charge excessive credit card fees, US raises prices for all, shifts billions of $$$ to the wealthier

Karl Polzer

There are many mechanisms through which the financial establishment systematically drains money from workers struggling to pay their bills.  Some hum along in plain sight while regulators and members of Congress barely take notice.  Such is the case with the $80 billion in fees that banks will extract from credit and debit card transactions this year.  

While other countries have lowered credit card transaction costs, either through non-bank market innovation (in China) or regulation (in the European Union, Australia, and other nations), U.S. policymakers empower banks and credit card networks to levy what amounts to a doubly regressive national sales tax...

(Also see the note on excessive credit card interest rates beginning on p. 6.)

A winner for the poor? Soda machine offers lower price for cash in Poulsbo, WA

Photo by Tom Hahler

Letter to Washington Post - Nov. 17, 2019

The Post’s call for vigorous debate on capitalism raises issue of its role as honest broker

Today’s lead editorial (“Capitalism itself is on the 2020 ballot: Every billionaire is not a policy failure, but each can afford to pay more”) begins by defending core values of capitalism. It then endorses higher taxes on the super wealthy to temper growing inequality.  On the critical issue of how much more wealthy people should pay toward government operation and programs, the editorial is silent.  It ends with a call for vigorous and informed debate over these critical issues during the 2020 election.

Along the way, by carefully acknowledging that its current owner, Jeff Bezos, bought the Post from the “civic minded” Graham family six years ago, the editors raise another important issue.  That is whether one of the world’s most influential sources of news and public opinion can maintain both neutrality and vigor in the debate over capitalism if owned by one of the world’s richest people.  As the debate deepens, this potential conflict of interest may become more awkward and harder to explain. 

Karl Polzer, Founder, Center on Capital & Social Equity

Saez/Zucman's "The Triumph of Injustice: How the Rich Dodge Taxes and How To Make Them Pay"

Branko Milanovic's "Capitalism, Alone"

Map of golf clubs in and around San Francisco

Ways To Replace the "Cadillac" High-Cost Health Plan Tax

click below

Warning: Read the article above at your own risk. Author declaims any responsibility for variation in sense of humor. Note that some links in this article are intended to provide useful information, others irony.

NRA HQ in the Northern Virginia suburbs.

States strike back in federal court on AHPs

CCSE asked to co-sign amicus brief opposing U.S. Labor Dept.'s AHP rule, which increases risk of stripped-down benefits (e.g. no mental health coverage), healthplan insolvency, and consumers being defrauded.

Effects of Raising the Federal Minimum Wage

Congressional Budget Office - July 2019

Findings: "In an average week in 2025, the $15 option would boost the wages of 17 million workers who would otherwise earn less than $15 per hour. Another 10 million workers otherwise earning slightly more than $15 per hour might see their wages rise as well. But 1.3 million other workers would become jobless, according to CBO’s median estimate. There is a two-thirds chance that the change in employment would be between about zero and a decrease of 3.7 million workers. The number of people with annual income below the poverty threshold in 2025 would fall by 1.3 million." … Similar, but smaller effects for minimum wage of $12 … Ditto for $10 minimum wage.

MIT Living Wage Calculator Provides Powerful Tool for State and Local Policymakers

Many U.S. households earning less than a living wage: MIT analysis

"Across all family sizes, the living wage exceeds the poverty threshold, often used to identify need. State minimum wages provide for only a portion of the living wage. For two adult, two children families, the minimum wage covers 73.0% of the living wage at best in the District of Columbia and 41.8% at worst in Virginia. This means that families earning between the poverty threshold ($25,298 for two working adults, two children on average in 2018) and the living wage $67,146) on average for two working adults, two children per year before taxes), may fall short of the income and assistance they require to meet their basic needs."

Example: Maryland is one of the wealthiest states in the U.S., but income varies widely by region. This has made it difficult for the legislature to set a uniform minimum wage.

Possible option: Set a statewide minimum wage at $15/hour (or other level) and let local governments reduce it up to a fixed percentage (say 30%) to account for regional differences. It's important to index any minimum to inflation.

Joseph Stiglitz discusses his new book and "progressive capitalism" plan to rebuild America’s middle class on SalonTV.

If crimes against children can’t be stopped from within, the Vatican & its subsidiaries need purging from the outside: Letter to Washington Post

Every Catholic and every U.S. citizen should carefully read The Post’s Feb. 20 front-page article “ ‘The tragedy that keeps playing out.’ ” It is the latest in an endless stream of detailed evidence that the church power structure is incapable of changing from within to protect children in its care from sexual abuse. Senior church officials should be charged with criminal negligence for failing to remove predators they employ from positions from which they could injure children. Billions of dollars should be removed from the Vatican and its subsidiaries through the courts and distributed to victims. Still, would they change their ways?

Until this systemic problem is forcibly corrected, every church, school and other Catholic facility whose employees come into contact with children should undergo thorough inspection every year on the presumption that abuse may be occurring. If this cannot be corrected from within, then the Catholic Church should be broken up and reorganized. The same should happen with any church operating this way. Jesus commands that those in power do not harm those in their care, particularly children.

America: Build This Wall! :)

 The stand off over building a border wall sadly embodies the narrow-mindedness of America’s leaders and disrespects the creative potential of American capitalism.  It’s an undeniable fact that Donald, Chuck and Nancy are thinking way too small to discern the proper dimensions of a win-win agreement that could profit the United States for centuries...

Distribution of Household Income before/after Transfers and Taxes: CBO

Summary of slides released November 2018

In 2015, household income was unevenly distributed: Households at the top of the income distribution received significantly more income than households at the bottom of the distribution.

Before accounting for the effects of means-tested transfers and federal taxes:

  • Average income among households in the lowest quintile (or fifth) of the income distribution was about $20,000.
  • Average income among households in the highest quintile was about $292,000.
  • Within the highest quintile, income was highly skewed toward the very top of the distribution: Among households in the bottom half of the highest quintile (the 81st to 90th percentiles), average income was $157,000; among the 1.2 million households in the top 1 percent of the distribution, it was $1.9 million.

The combined effect of means-tested transfers and federal taxes in 2015 was, on average, to increase income at the bottom of the income distribution and decrease income at the top of the distribution.

After accounting for the effects of means-tested transfers and federal taxes:

  • Average income among households in the lowest quintile of the income distribution was about $33,000.
  • Average income among households in the highest quintile was about $215,000.
  • Among households in the bottom half of the highest quintile, average income was $125,000; among households in the top 1 percent, it was $1.2 million.

Below: Taxes, transfers resulted in significantly more income growth from 1979-2015 for the bottom income group than the middle three, while the top income group was held harmless.

Would Adam Smith favor policies creating a more inclusive economy?

Karl Polzer Center on Capital & Social Equity

In a recent op-ed, I suggested that Congress establish a universal retirement savings system, possibly funded by a tiny tax on financial market transactions. In another, that growing income and wealth inequality has shrunk Social Security’s revenue and that taxing capital gains and high earnings could help the program stay solvent without cutting benefits.  What would Adam Smith, the father of modern economic analysis, think of taxing financial transactions and capital gains?  The notion of including all workers in saving and ownership of working capital?  Helping correct the tendency of modern capitalism to concentrate wealth?  Although conservative economists often cite Smith as a siren of an unfettered market, he might give these proposals serious consideration.  Times have changed.  Yet his manner of reasoning remains vital in addressing issues we face today.

Growing inequality has shrunk Social Security’s tax base. Revitalizing it could restore solvency without cutting benefits.

As the graying and outsized baby boom generation claims Social Security benefits, Americans increasingly doubt whether the program can pay all that it has promised – or even continue to cut checks at all.  In their annual report released June 5, Social Security’s Trustees warn that, unless Congress acts to restore the program’s long-term solvency, by 2034 it will only have sufficient funds to pay 77 cents of each dollar currently promised. By then, the Social Security trust fund will be empty and the program will lack legal authority to pay out more than it can bring in through earmarked taxes. An adjustment this size in 2018 would drop the average annual  Social Security payment of $16,848 to $12,973. Most older Americans depend on Social Security for all or most of their income. 

The longer Congress plays chicken on this issue, the greater the risk that changes such as tax increases or benefit cuts, or a combination, will have major economic impacts on retirees and workers. The trustees’ report emphasizes the growing ratio of retirees receiving benefits to workers contributing payroll taxes as a major force impinging on the program’s solvency. Underlying factors include the size of the baby boom generation and a lower birth rate.  But other forces are at work.  Growing wealth and income inequality have significantly eroded Social Security’s tax base.    

First, wealth inequality: As Americans at the top of the economic spectrum continue to amass equities, bonds, and other assets, the portion of national income from capital investment has increased significantly, pushing down the portion earned through labor.  In the United States, labor’s share of earnings fell about eight percentage points between 1995 and 2013 (compared to a bit over three percentage points in other Organization for Economic Co-operation and Development countries).  Since Social Security relies primarily on a tax on labor for its sustenance, the relative growth of capital income gradually is choking off a source of revenue.  

Second, income inequality: As part of its structure to promote fairness between economic classes, Social Security replaces relatively more lifetime income for lower-wage workers than those with higher wages – but also caps wages subject to its payroll tax, in part to increase the net value of Social Security in the eyes of higher earners.  The wage cap for 2018 is $128,400.  Over the past several decades, wages of lower-income Americans have stagnated, while those at the top have grown significantly.  As a result, the trustees note that portion of wage income taxed by Social Security has dropped by about six percentage points (see p. 144). In agency jargon, the “taxable ratio” of payroll fell from 88.6 percent in 1984 to 82.6 percent in 2000, and has fluctuated near the latter level since then. Social Security Administration (SSA) actuaries assume the ratio will remain about 82.5 percent over the next decade.  In summary, unless the tax cap on earnings keeps up with the growing prosperity of those at the top, Social Security’s tax base shrinks as a portion of national income.

America's Inequality and What To Do about It

The Poor Will Always Be with Us. Will the Middle Class?

Why the Wealth Gap Hits Families the Hardest - NYT

"The top 1 percent saw their wealth increase by 156 percent (from 1989 to 2013), while parents in the bottom half saw their wealth shrink by 260 percent. About a third of all families with children in 2013 had no wealth, only debt."

"Rising Inequality and the Changing Structure of Political Conflict" - Piketty lecture at the Kennedy School

Extreme Income Inequality: Brazil, India, the Middle-East and South Africa

This paper presents findings about inequality dynamics in Brazil, India, the Middle-East and South Africa by combining tax data, household surveys and national accounts.

In all of these four regions, top 10% earners receive more than 50% of national income. These societies are characterized by a dual social structure, with an extremely rich group at the top whose income levels are broadly comparable to their counterparts in high-income countries, and a much poorer mass of the population. The authors highlight the importance of the historical legacy of social segregation and of modern institutions in shaping income disparities.

Which Way Is Your Country Headed?

Analysis including Housing Assets Finds Piketty May Have Underestimated Wealth Gap

The Rate of Return on Everything - CEPR

"One of the most intensely debated economic questions in recent years is the relationship between real returns on wealth, and the real rate of growth. In his influential book, Piketty (2014) argued that if the return to capital exceeded the rate of economic growth, rentiers would accumulate wealth at a faster rate than incomes grow. Comparing returns to growth, or “r minus g'' in Piketty's vernacular, we uncover that in fact “r >> g” for more countries, more years, and more dramatically than Piketty himself reported."

These two figures show that the only exceptions to “r>>g” happen in very special periods: the years in or right around wartime. In the pre-WW2 period, r minus g was on average 5% per annum (excluding WW1). As of today, this gap is still quite large – in the range of 3%–4% – and it narrowed to 2% during the 1970s oil crises, before widening in the years leading up to the Global Crisis.


"We show that income inequality has increased in nearly all world regions in recent decades, but at different speeds. The fact that inequality levels are so different among countries, even when countries share similar levels of development, highlights the important roles that national policies and institutions play in shaping inequality."

How Humans Extract Rent from Nature's Gifts

"As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce. The wood of the forest, the grass of the field, and all the natural fruits of the earth, which, when land was in common, cost the labourer only the trouble of gathering them, come, even to him, to have an additional price fixed upon them. He must then pay for the licence to gather them, and must give up to the landlord a portion of what his labour either collects or produces. This portion, or, what comes to the same thing, the price of this portion, constitutes the rent of land, and in the price of the greater part of commodities, makes a third.” 

― Adam SmithWealth of Nations

This chart shows that collective income accruing to India's “middle 40” rose to just over 45 percent by the early 1980s, while that of the top 10 percent declined from about 37 percent in 1951 to 30 percent. After 1990 the two trends reverse. The top 10 percent garnered more than 55 percent of all income in 2014, almost double its share in the early 1980s, while the middle 40 percent’s share fell to just over 30 percent.

U.S. Tax Policy Should Boost Retirement Savings for All Workers, Not Just the Wealthiest

Center on Capital & Social Equity - October 2017

Current tax breaks for retirement savings mainly subsidize the top half of the income distribution, leaving almost half the workforce out of the system. Part of the federal tax subsidy for 401(k)s should be rechanneled into a retirement savers tax credit that all workers get ($500 to $1,000 a year).

In 2017 employees can put up to $18,000 in tax-deferred defined contribution plans (e.g., 401(k)s) and those 50 or older can put aside an additional $6,000. Total employee and employer contributions are limited to $54,000. The Tax Policy Center estimates that in 2016 the tax savings from all tax-qualified pension and defined contribution accounts averaged about $1,040 per taxpayer. (No kidding: 1040.) These tax savings, however, were extremely tilted toward the well-off. Only 4.4 percent of workers in the lowest fifth of the income distribution received any tax benefit and their average tax savings in 2016 was $20. In contrast, 82 percent of the highest-paid quintile received a tax benefits with an average benefit of $4,750. About 48 percent of the middle fifth received a tax benefit with an average savings of $580.

The result of this tax policy? About half the American population has put aside virtually nothing for retirement, while many wealthy people are being paid to save money they would have saved anyway. It’s clear that retirement savings tax breaks could be better targeted.  For more information see:

Atlas freed?

"Worry not at all about inequality if it is achieved by smart betterment....But do worry about inequality if it is achieved by using the government to get protection for favored groups.  It is what a large government, worth capturing to get the protection, is mainly used for, to the detriment of most of the people off-stage."

Are Workers Receiving the EITC Being Shortchanged on Social Security?

updated October 2017

..."Under the current system, a person whose highest earnings averaged $15,000 a year over 35 years would end up with about $10,542 in annual Social Security benefits – the same as a worker averaging $15,000 wages plus various amounts of EITC.  A worker averaging $20,000 in wages would end up with $1,600 (15%) more in annual Social Security benefits compared with another with the same total income but instead averaging $15,000 wages and taking home $5,000 in EITC.  Similarly, someone averaging $25,000 in wages would end up with $3,200 (30%) more in Social Security benefits than a counterpart averaging $15,000 and receiving $10,000 in EITC."

Green lines: current law    Purple: proposed increases 

D's Push for Major EITC Expansion

September 2017

Two members of Congress are teaming up to bring much-needed relief to low-wage workers and their families through an expanded Earned Income Tax Credit (EITC).

Senator Sherrod Brown (D-OH) and Representative Ro Khanna (D-CA) introduced the  Grow American Incomes Now (GAIN) Act in both the House and Senate. Currently, a family of three can receive a maximum EITC of $6,318, while workers without dependent children can receive at most a $510 credit.  The legislation would roughly double the EITC for eligible workers raising children and increase the credit for workers without dependent children nearly six fold. The bill also lowers the qualifying age for the EITC from 25 to 21.

CCSE comment:

Expanding the EITC is a good idea. However, as the share of workers' income provided by government subsidies rises, the case becomes stronger for the federal government to begin making corresponding payments to Social Security.  Also, a way to simplify tax policy might be to coordinate the EITC and Child Tax Credit (CTC) in the following way: the EITC could be based solely on income, not family structure. The refundable component of the Child Tax Credit could be expanded to provide additional income for low- and middle-income families.

September 2017 - Karl Polzer

Expanding Use, Scope of the EITC & Child Tax Credit: a Win-Win for Workers and Employers

This paper makes the case that helping employees access the Earned Income Tax Credit and Child Tax Credit – along with supporting bipartisan legislation to expand these programs – can help industries with large numbers of low-to-middle wage workers. In the long-term care field, such a strategy can improve worker income through government wage supplements, thus encouraging more to enter the workforce. Increased labor supply would dampen employer wage costs – all while expanding the range of affordable services providers can offer. This could result in hundreds of millions of dollars of added value in worker earnings as well as provider and customer savings.

From Soviets to Oligarchs: Inequality and Property in Russia 1905-2016

"...(T)op  income  shares  are  now  similar to (or  higher than) the levels observed in the U.S.  ... inequality  has  increased substantially more in Russia than in China and other ex-communist countries in Eastern Europe. ...the wealth held offshore by rich Russians is about three times larger than official net foreign reserves, and is comparable in magnitude to total household financial assets held in Russia."

High earnings of labour are an advantage to the society - Adam Smith

“Is this improvement in the circumstances of the lower ranks of the people to be regarded as an advantage or as an inconveniency to the society? The answer seems at first sight abundantly plain.  Servants, labourers and workmen of different kinds make up the far greater part of every great political society.  But what improves the circumstances of the greater part can never be regarded as an inconveniency to the whole.  No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.  It is but equity, besides, that they who feed, cloath and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed and lodged.”

-- The Wealth of Nations (originally published in 1776)

A Life Lived in Truth

For the last eight years of Liu Xiaobo’s life, the Chinese authorities robbed him of his liberty and his dignity. But in the state-enforced silence surrounding Liu’s stage-managed death, the words of his Nobel Prize lecture ring out even louder: “Freedom of expression is the foundation of human rights, the source of humanity, and the mother of truth.”

Warren Buffett: Government Should Do More on Income Inequality - short video

"Natural forces of a market economy and capitalism will drive that disparity unless government does things to help." Buffett says EITC should be expanded so workers can have decent lives. (See CCSE article on this site about relationship of EITC and Social Security.)

Capital Accumulation, Private Property and Rising Inequality in China, 1978- 2015

Thomas Piketty, Li Yang, Gabriel Zucman

Researchers find that the share of public property in China'snational wealth has declined from about 70% in 1978 to 30% in 2015...

"The top 10% income share rose from 27% to 41% of national income between 1978 and 2015, while the bottom 50% share dropped from 27% to 15%. China’s inequality levels used to be close to Nordic countries' and are now approaching U.S. levels."

Robin Hood Tax Reform - May 2017

How Modest Changes in Health, Retirement Tax Breaks Could Produce Major Gains in US Health Access, Financial Security – at Little or No Added Government Cost

..."The positive impacts of two such changes discussed below could include 1) lowering the rate of health care cost inflation; 2) providing revenue to help subsidize health insurance for the unemployed; 3) creating seed money and a low-cost infrastructure for a universal retirement savings system; and 4) increasing retirement security for low- and middle-income people; and 5) helping people save for long-term care costs. Looking at benefit tax exclusion is already on the table as Congress faces the unsavory chore of developing a fix for the Affordable Care Act’s clumsily designed “Cadillac” health plan excise tax. Most importantly, these changes could result in greater economic fairness and inclusion."

Eyes on the Prize: Universal Health Insurance Is the Goal

Letter to the Washington Post:

Charles Krauthammer’s March 31 op-ed, “The road to single-payer health care,” was largely on point. However, it is important to separate the concepts of “single-payer,” which is a means toward a goal, and “universal coverage,” which should be the primary goal. Universal coverage can be achieved without having the government cover every citizen. Even if government programs cover most citizens, there will always be multiple payers, including individuals and taxpayers; a universal system also could allow employer plans to operate. Ironically, creating a larger government role in sponsoring and subsidizing health insurance could result in a more competitive market for providing services.   Karl Polzer - April 2, 2017

Reformed Tax Incentives Among Tools Needed To Boost Retirement Saving

David Kamin of NYU law school presents proposed changes at the Aspen Institute.

Obama Signs Bipartisan Bill To Speed Miracle Cures to Market.  Who Will Have Access to the New Technology?  Who Won’t?

In a city that’s witnessed trench warfare between Congress and the White House during the last six years of the Obama Administration, this was a rare moment: a bipartisan love fest.  On Dec. 13, 2016, President Obama signed the "21st Century Cures Act," which includes expanded funding to push medical technology through the development pipeline. “We are bringing to reality the possibility of new breakthroughs to some of the greatest health-care challenges of our time,” Obama said. “It is wonderful to see how well Democrats and Republicans in the closing day of this Congress came together around a common cause.”

The legislation was backed by a coalition of interests, including the powerful pharmaceutical industry, academia, and consumer groups supporting speedier medical research.  Its few critics have mainly argued that the popular funding provisions “mask a worrisome loosening of regulations at the Food and Drug Administration that could put patients at risk.”

Hardly anyone, however, is asking the million-dollar question:  Which Americans will end up having access to new miracle cures, many of which promise to be extremely expensive?  And, who will not?  The country’s patchwork of health insurance already is rationing expensive new technology to some populations, particularly low-income people.  Congress, meanwhile, has begun a fractious debate over repealing, and possibly replacing, the Affordable Care Act (ACA).  So, while lawmakers have just put their collective foot on the technology gas pedal, they may soon slam the brakes on funding for expanded coverage, potentially throwing millions of Americans into the ranks of the uninsured...              

Traditions of Democracy

    "The tradition of Jefferson and Jackson might recede, but it could never disappear.  It was bound to endure in America so long as liberal capitalistic society endured, for it was the creation of the internal necessities of such a society.  American democracy has come to accept the struggle among competing groups for the control of the state as a positive virtue -- indeed, as the only foundation for liberty.  The business community has been ordinarily the most powerful of these groups, and liberalism in America has been ordinarily the movement on the part of other sections of society to restrain the power of the business community.  This was the tradition of Jefferson and Jackson, and it has been the basic meaning of American liberalism."  

Excerpt from Chapter 37, "The Age of Jackson," Arthur M. Schlesinger, Jr.

June 30, 2016

Reflections on American Wealth Concentration – and What To Do About It

Just over one year ago, the Center on Capital & Social Equity (CCSE) began exploring the phenomenon of growing wealth concentration and inequality, while advocating for a more inclusive form of capitalism. Following are some general observations.

Over the past year, the issue of economic inequality in the United States has moved from the backburner to center stage. Much credit for this goes to Sen. Bernie Sanders’ attack on the “top one percent” in his run for the Democratic nomination. While there is ample reason to question many details of his proposals, Sanders’ call for an increased role for government in providing opportunity and essential services resonated with many Americans who feel they have been left out of the economic mainstream. Yet the problems posed by rising economic inequality are deeply rooted and go well beyond the disproportional gains of the top one percent. They will be harder to address than portrayed in election rhetoric and require judicious use of public resources.

Three observations can be made about economic inequality in the United States. First, income and wealth inequality have grown steadily since the 1980s, suggesting that some of the causes are structural in nature. Second, high levels of inequality increase the risk of political and economic instability. Finally, moving toward an economy that is less unequal and offers opportunity to more Americans will require major changes in public policy and shifts in spending.

Life Expectancy Gap is Large - and Expanding

The gap in life expectancy between the richest 1% and poorest 1% was 14.6 years for men and 10.1 years for women.  A study published in the Journal of the American Medical Association also found that inequality in Americans' life expectancy is growing over time.

How the U.S. Retirement Savings System Magnifies Wealth Inequality

Karl Polzer, Center on Capital & Social Equity 

Economic inequality and wealth concentration have have emerged as central issues in the U.S. presidential race. While these concerns appear to have risen to the forefront quite suddenly, forces driving wealth concentration have been building for decades. As analysts probe the dynamics beneath these trends, they may find that America's shift to a defined contribution retirement system is playing an increasing role in the concentration of wealth... 

So, What Does Jesus Say about Wealth Concentration and Inequality?

Karl Polzer 

In recent years, the tendency for wealth to concentrate in the hands of a powerful few has come under scrutiny, prompting concern about growing inequality from political and religious leaders, most notably Pope Francis. While excessive wealth concentration is likely lead to greater social ills and unrest, how to rein in growing inequality is a more difficult question.  Should we move away from capitalism and the market system?  Develop a more socialist model?  Reform capitalism from inside to benefit people more equitably? ... 

Virginia's push to end veteran homelessness faces steep challenges

On Nov. 11, 2015, Virginia Gov. Terry McAuliffe announced that the state was the first to "functionally" end homelessness among veterans of the U.S. armed forces.  To assist two veterans living on the street not aware of the program, the Center on Capital & Social Equity contacted the governor's office, asking how veterans can gain access to housing and other services under the collaboration involving state, federal, and local government agencies.

The Virginia Department of Veterans Services provided information (click on the button below), including contact points at the local and state levels where veterans and their advocates can begin the process of finding temporary or permanent housing.

To follow up, we contacted three Northern Virginia jurisdictions and found an array of barriers to functionally ending veteran homelessness.  These problems include lack of  knowledge on the part of local officials of the state's initiative; lack of affordable and subsidized housing resources; high housing prices; lack of shelter space (for example, Fairfax County has 1 million residents but only three homeless shelters that can't meet wintertime demand); unwillingness by many street people to seek help (for a variety of reasons); coordination issues between state and local, local and local, and federal and state and local agencies; bottlenecks like having to go through shelters to gain access to housing, when shelter space is limited; and many other factors.

While helping one of the veterans gain access to temporary shelter and services, we reported these issues back to the state officials who said they will take steps to increase awareness of the governor's initiative, including posting information about the program on a state website.  For more detail, see our correspondence with state and local officials, which can be accessed by clicking the second button below.

Let’s sell health insurance “across states lines” – through Medicare

Republicans, stop with being the party of “no.” It’s time to step up to the plate and seize the initiative on health policy...

Playing Immigration Piñata

Deception and hypocrisy are no strangers to politics. This seems particularly true in recent incantations about illegal immigration. Republican presidential candidates – other than Jeb Bush – mostly want to round up illegals and dump them into Mexico. Donald Trump wants to spend billions to build a massive wall in the wrong place...

How Can U.S. Policy Reduce Financial Risk for the Very Old?

CCSE explores ways to reduce retirement risk and pay for long term care in Society of Actuaries monograph.

Finding:  401(k)rule changes including new "sub-accounts" could help seniors better save for needs in very old age.

Retirement Strategy:  When Should I Start Receiving Social Security Checks?

Americans can begin taking Social Security between ages 62 and 70. Waiting to take Social Security can increase the amount on your check significantly.  Collecting Social Security benefits early has the opposite effect. 

When to start depends on many factors including your life situation,  needs and plans.  Most Americans begin taking Social Security early.

The U.S. Consumer Financial Protection Bureau offers this planning tool and other information to help people work through this decision.   

Baltimore 2015

A Dream Deferred

by Langston Hughes

What happens to a dream deferred?

Does it dry up
like a raisin in the sun?
Or fester like a sore--
And then run?
Does it stink like rotten meat?
Or crust and sugar over--
like a syrupy sweet?

Maybe it just sags
like a heavy load.

Or does it explode?

Still I Rise

You may write me down in history
With your bitter, twisted lies,
You may tread me in the very dirt
But still, like dust, I'll rise.

Does my sassiness upset you?
Why are you beset with gloom?
'Cause I walk like I've got oil wells
Pumping in my living room.

Just like moons and like suns,
With the certainty of tides,
Just like hopes springing high,
Still I'll rise.

Did you want to see me broken?
Bowed head and lowered eyes?
Shoulders falling down like teardrops.
Weakened by my soulful cries.

Does my haughtiness offend you?
Don't you take it awful hard
'Cause I laugh like I've got gold mines
Diggin' in my own back yard.

You may shoot me with your words,
You may cut me with your eyes,
You may kill me with your hatefulness,
But still, like air, I'll rise.

Does my sexiness upset you?
Does it come as a surprise
That I dance like I've got diamonds
At the meeting of my thighs?

Out of the huts of history's shame
I rise
Up from a past that's rooted in pain
I rise
I'm a black ocean, leaping and wide,
Welling and swelling I bear in the tide.
Leaving behind nights of terror and fear
I rise
Into a daybreak that's wondrously clear
I rise
Bringing the gifts that my ancestors gave,
I am the dream and the hope of the slave.
I rise
I rise
I rise.

Maya Angelou

Easter Essay: Is the Golden Rule Enough? Mathematics of the Two Great Commandments

Whether people see themselves as Christians, followers of other faiths, or atheists, all are pulled by the power of many gods: the god of money, the god of technology, the nymph of new electronic gadgets, satyrs of TV and the worldwide net, and so on. In adoration of possessions, money, and power, atheists and believers are equal -- even deeply religious in the way that Paul sarcastically described the polytheistic statuary of Athens as evidence of its faith. Some of today’s humanists and atheists are more Christian in spirit and behavior than nominal Christians. And, unlike some Christians, many have thought through their views on religion and feel they need to have moral justification they can explain. The conventional morality of good people often is a humanism expressed by the Golden Rule.

Jesus taught the Golden Rule two thousand years ago, as one of two great principles. But to Jesus the Golden Rule, while essential, is incomplete without a first principle. Jesus preached the Golden Rule in the Sermon on the Mount. "Therefore, whatever you want men to do to you, do also to them, for this is the Law and the Prophets." (Mat 7:12 NKJV).) Here he is speaking to a large crowd that can't hear him that well and needs a simple guideline.

Later, speaking to religious leaders, he aligns the Golden Rule with the first commandment. In Matthew 22:34-40, "hearing that Jesus had silenced the Sadducees, the Pharisees got together. One of them, an expert in the law, tested him with this question: ‘Teacher, which is the greatest commandment in the Law?’ " To this audience, Jesus provides more context: "'Love the Lord your God with all your heart and with all your soul and with all your mind.' This is the first and greatest commandment. And the second is like it: 'Love your neighbor as yourself.' All the Law and the Prophets hang on these two commandments."

The interaction of the two great commandments shows why the second commandment is not sufficient and why God -- an overarching Spirit that connects individual people -- is necessary, even for a functional morality. For example, if we only love our neighbor as ourselves -- and we happen to be filled with hate and rage for ourselves -- then we won't treat our neighbors very well. The Golden Rule can remedy part of this problem by changing the focus from "loving" to "treating" neighbors as we would have them treat us -- thereby imposing our view of ideal behavior and not raw emotion as the standard. But that won't work for some people either, especially those who lack a model of ideal behavior. So, these folks still might act destructively to people around them.

The idea of a single God, or life force, connecting all people creates a vertical pull toward a connecting spirit (the first commandment) to accompany the horizontal equity of the second commandment. Mathematically, the second commandment is nothing more than a simple equation: Love for me = Love for you. The first commandment is a command to maximize Love to the limit of capacity. Without the first commandment, the potential of a person's love would be limited by inherited and culturally absorbed defects and injuries. The two commandments can be seen as consistent with scientific theories of evolution. The first commandment reflects the biological imperative that no individual can carry on life on his or her own. Individuals must interact and communicate with others to continue the stream of life. The Golden Rule suggests that individuals have the freedom to choose the way they interact and communicate with others. Perhaps those with greater faith and sense of fairness are more likely to pass along their genes. --

Karl Polzer, Easter 2017 

"In God We Trust" was adopted as the official motto of the United States in 1956 as an alternative or replacement to the unofficial motto of E pluribus unum, which was adopted when the Great Seal of the United States was created and adopted in 1782. Secularists have expressed objections to its use and have sought to have the religious reference removed from the currency.  Wikipedia, 2015


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