Exploring economic inequality - Advocating for the bottom 50%

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, 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

Oct. 17, 2021

Questions for Virginia Candidates for Governor

As part of our work advocating for low-wage workers, the Center on Capital & Social Equity has sent this short list of questions to campaign staff of both Terry McAuliffe and Glenn Youngkin.  We hope the candidates think these are relevant questions and respond.  

 

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."

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

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

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News, Events & Opinions


Liberal frustration imperils quick Dem social spending deal - Politico

Looks like paid family leave - which is very expensive - has been thrown out. A few paid sick days - which don't cost much and would particularly benefit low-paid workers - should be kept in. Whether paid sick days survive is an indicator is whether Dems and Congress remain more responsive to the professional classes than "essential workers."  See:

To stop coronavirus, take quick action on paid sick days

"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."

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In tight Virginia governor’s race, policy takes backseat to culture wars - Virginia Mercury

"Beneath the culture-war issues is fairly conventional campaign fodder, with Youngkin running on promises to lower taxes, cut regulations and expand charter schools. McAuliffe is vowing to ensure every worker has access to paid sick days and family medical leave, speed up the implementation of a planned $15 minimum wage and boost funding for public education. But those aren’t the topics dominating the final month of the campaign."

So what exactly is a billionaires’ tax — and how would it work? - MarketWatch

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The Hidden Ways the Ultrarich Pass Wealth to Their Heirs Tax-Free - Bloomberg Business Week

"An inside look at how Nike founder Phil Knight is giving a fortune to his family while avoiding billions in U.S. taxes."

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A Generation of American Men Give Up on College: ‘I Just Feel Lost’ - WSJ

"The number of men enrolled at two- and four-year colleges has fallen behind women by record levels, in a widening education gap across the U.S...

"At the close of the 2020-21 academic year, women made up 59.5% of college students, an all-time high, and men 40.5%, according to enrollment data from the National Student Clearinghouse, a nonprofit research group. U.S. colleges and universities had 1.5 million fewer students compared with five years ago, and men accounted for 71% of the decline."

Is it time for colleges and universities to use quotas to achieve better gender equity?

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You don't need a bachelor's degree to land a high-paying job - NPR

"A new study from Georgetown University's Center on Education and the Workforce finds a growing number of people without a bachelor's degree are now out-earning those with one. The study found that in the years 2017 through 2019, on average, 16% of high school graduates, 23% of workers with some college and 28% of associate degree holders earned more money than half of all workers with a bachelor's degree."

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Harvard graduate student workers to begin three-day strike October 27 - WSWS

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Israel/OPT: Designation of Palestinian civil society groups as terrorists a brazen attack on human rights - Amnesty International

NGO Reactions to Six NGOs Being Declared “Terror Organizations”

Structural racism in action?:  Googled and couldn't find coverage of  this ban in major U.S. media for four days. 

If there it included a learning module on what's happening in Israel, perhaps CRT  would lose its cache in the U.S.  Interest might suddenly  fade on both the left and far right.

CRT curricula could feature lessons on the U.S., Germany, Israel, India, South Africa with mini courses for beginners and people with learning diabilities focusing on Armenia and Rwanda.

Comrades, remember:  "All animals are equal but some animals are more equal than others."

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Wyden’s Billionaire Income Tax Is Ambitious But Problematic - TaxVox

"President Biden proposed a much easier way to tax billionaires. He’d tax unrealized gains only at death, when assets are valued for estate tax purposes. Forcing the rich to recognize gains once at death, rather than annually, is simpler and more firmly constitutional (the tax would occur at transfer of the assets, like the estate tax)."

Possible compromise if Wyden pushes in this direction:

Getting Inflation Loss out of Capital Gains Taxation Is Fair - and Might Help Reach a Deal on Dunning the Dead

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Business people workers group.

Where Did 7 Million Workers Go? - Derek Thompson/Atlantic 

New careers, vanishing applicants: Here’s why some employers can’t find workers - Virginian-Pilot

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How to Help Your Teenage Child Become a Roth IRA Millionaire - Retirement Daily

Years ago, set up Roths for two working teenagers and helped with initial contributions.  The idea was to get them comfortable with the risk and discipline needed to navigate the U.S. defined contribution retirement savings system.

One still has the Roth account but currently contributes to a generous 401(k) offered by their employer.  The other cashed out to pay down college debt after learning in an accounting class that settling debt should come before saving.  A few years later, the young person started another Roth while working for an employer offering retirement benefits to managers but not tipped workers.

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Glenn Youngkin Is Worth Hundreds Of Millions, But Terry McAuliffe Has The Big Money In The Virginia Governor's Race - Forbes

The candidates reside in or a short ride from Northern Virginia horse country.  What would their administrations do to help low-income workers?

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A Look at Rush Limbaugh’s Fortune After His Passing - Yahoo

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“The Liberty Way”: How Liberty University Discourages and Dismisses Students’ Reports of Sexual Assaults - ProPublica

What happens when someone calls the off-campus cops?

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Langston Hughes

I, Too - Langston Hughes  1902-1967

I, too, sing America.

I am the darker brother.
They send me to eat in the kitchen
When company comes,
But I laugh,
And eat well,
And grow strong.

Tomorrow,
I'll be at the table
When company comes.
Nobody'll dare
Say to me,
“Eat in the kitchen,”
Then.

Besides,
They'll see how beautiful I am
And be ashamed—

I, too, am America.

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There Are Still Honest People in the World – And That Honesty Can Lead to ‘Miraculous’ Outcomes - Good News Network

Sunday, October 24, 2021

May be a cartoon of 1 person

Artist - R. Crumb

Quiz: In which frame does the cartoonist possibly misquote God?  Hint.

Extra Credit: Memorize by next week:

Judaism 101 - Halakhah: Jewish Law

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Ad exaggerates potential impact of Biden estate-tax plan - WaPost fact checker

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Democrats move to finalize new ‘billionaire’ tax proposal, targeting 700 wealthiest Americans as key source of revenue for spending plan - Washington Post

"Under the 'Billionaire Income Tax' proposal, a summary of which was obtained by The Washington Post, the federal government would require billionaires to pay taxes on the increased value of assets such as stocks on an annual basis, regardless of whether they sell those assets. Billionaires would also be able to take deductions for any annual loss in value of those assets."

As noted on this blog yesterday, we hope the article below, which we sent to Sen. Wyden's staff and tax think tanks in September, was helpful in negotiations over how to finance social infrastructure legislation.

Getting Inflation out of Capital Gains Taxation Is Fair - and Might Help Reach a Deal on Taxing the Dead

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The universal basic income is a bad idea whose time will never come - Allison Schrager/Quartz

She makes solid arguments against UBI including national affordability and that it’s not the best tool to fight poverty.  UBI also could increase wealth inequality:  the better-off will save and invest the additional income while the poor and low-income will use it to pay for necessities.  We see this happening with the expanded child tax credit.

Social Security is the closet program to UBI in the U.S.  It's structured somewhat progressively and based on work.  Before considering a broad UBI, the U.S. should fill Social Security's $16-trillion long-term financing gap.

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Still Talking Corporate Taxes, CTC, Capital Gains - TPC blog

"Taxing capital gains. Once Sen. Kyrsten Sinema’s objections to any corporate and individual tax rates hikes surfaced, Democratic leaders gave a second look at annual mark-to-market taxation of capital gains. A version of the idea has the backing of Senate Finance Committee Chair Ron Wyden but immediately ran into another roadblock. Moderate Democrat John Tester warned the idea had “challenges.” Tester strongly opposed the similar idea of taxing unrealized capital gains at death. Losing Tester’s vote would sink the bill even if Sinema goes along."

BTW, hoped we helped 'connect the dots' regarding Sen. Wyden's "market to market" proposals and beginning to tax  capital gains at death.  Sent this article to Senate Finance Committee majority staff:

"Getting Inflation Loss out of Capital Gains Taxation Is Fair -
and Might Help Reach a Deal on Dunning the Dead"

"Taxing capital gains during their transfer from the deceased to heirs offers Sen. Wyden and other proponents an opportunity for a test run of “mark to market” reforms while moderating wealth inequality. Revaluations are already performed  under current law. All that needs to be done is to apply a tax."

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House reconciliation bill struggles with Biden’s flawed $400,000 tax pledge - Alan Viard/AEI

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5 Million Children in Veteran and Active-Duty Families Will Lose Out if Child Tax Credit Expansions End - CBPP

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Soldier who helped secure Kabul airport with Toyota technical traded for dip gets promoted. Well deserved. - Task & Purpose

Good to see individual initiative rewarded.

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9 in 10 Families With Low Incomes Are Using Child Tax Credits To Pay for Necessities, Education - CBPP

"Congress should make it a top priority to ensure that the full credit remains permanently available to children in families with the lowest incomes, a measure that in percentage terms drives 87 percent of the expansion’s anti-poverty impact."

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When Employers Demand a Salary Range From Applicants but Refuse to Suggest One - Pocket Worthy

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Labor economist Lawrence Katz looks at ‘Great Resignation’ and where it might lead - Harvard Gazette

"Upper­-middle-class and well-off people are doing quite well with the stock market boom and have saved a lot. But even people in the bottom two quartiles of the income and wealth distribution are in much better financial situations than in previous economic recoveries, so we’ve seen a slow return from unemployment given the job openings. Having a stronger safety net and having built up some savings means people can put more weight on their caregiving responsibilities, or can look for something better. They can invest in a training or another program that they might not have been able to do in the past.

"Whether this is a temporary phenomenon or whether this is truly a once-in-a-generation change in labor activism is an open question..."

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Supply-Shock Therapy - Project Syndicate

"In this Big Picture, the University of Cambridge’s Diane Coyle compares today’s supply shocks to the 2008 global financial crisis, and explains why a similarly bold policy response may be needed. In a similar vein, Dalia Marin of the Technical University of Munich argues that advanced-economy governments should help to provide firms with more potential alternative suppliers. But, as Richard Haass of the Council on Foreign Relations notes, a targeted and limited industrial policy aimed at building resilience should not become a cover for protectionism.

"Supply-chain disruptions do not affect only rich countries, of course. Jonathan Woetzel of McKinsey & Company and Mekala Krishnan of the McKinsey Global Institute show why export-oriented emerging economies must now focus on boosting resilience in order to maintain their positions in global value chains – or even capture a bigger share of global production. On that score, Keun Lee of Seoul National University, the chief economic adviser to South Korea’s president, thinks that South Korea and Vietnam in particular stand to benefit from the accelerating exodus of manufacturing from China, and should thus take steps to encourage relocation and reshoring."

The shortages hitting countries around the world - BBC

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Pfizer’s Power - Public Citizen

"In February, Pfizer was accused of 'bullying' governments in COVID vaccine negotiations in a groundbreaking story by the Bureau of Investigative Journalism.[1] A government official at the time noted, 'Five years in the future when these confidentiality agreements are over you will learn what really happened in these negotiations.'[2]

"Public Citizen has identified several unredacted Pfizer contracts that describe the outcome of these negotiations. The contracts offer a rare glimpse into the power one pharmaceutical corporation has gained to silence governments, throttle supply, shift risk and maximize profits in the worst public health crisis in a century. We describe six examples from around the world below.[3]"

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Epipen price rise | Editorial cartoon, Bees knees, Big pharma

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Strikers have a new bargaining chip - Axios

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Democrats, facing a Republican barrage, scale back plans for a crackdown on tax cheating. - NYT

"Senator Kevin Cramer, Republican of North Dakota, warned darkly, 'Marx is at the doorstep.'

"Mr. Wyden called the Republican accusations a flat-out 'lie' promulgated by lawmakers at the behest of 'donors and allies' who 'want nothing more than a crippled I.R.S. unable to go after their cheating.' "

He who pays the piper calls the tune... Speaking of Marx, check out this blast from the past:

This Crusading Socialist Taught America’s Workers to Fight—in 1929 - Pocket Worthy

Screen Shot 2021-09-20 at 4.56.55 PM.png

The 16 workers who were arrested. (Photo courtesy New York, Pub. for National Textile Workers Union by Workers Library Publishers.)

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May be an image of 1 person and text that says 'Political language is designed to make Lies sound Truthful and Murder respectable -George Orwell,'

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Effects of the Expanded Child Tax Credit on Employment Outcomes - Center on Poverty & Social Policy

In the first few months of the  expanded child tax subsidy, researchers find little impact on employment.  Giving low-income people more choice between paid work outside the household and unpaid work raising their kids is likely will show up in the statistics in the longer run.  That may be a good thing. 

See comment just below.

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Manchin’s work requirement for child benefits would throw grandparent-led families under the bus - Catherine Rampell/WaPost

For years, high-income families in the U.S. have netted billions of dollars through  a child tax deduction with no paid work requirement for parents staying at home to take care of kids.  Now that Congress has temporarily extended this benefit to low-income families via a refundable tax credit, work requirements are suddenly a big political issue.

Work does not have to be paid to have value to a society.  Total national work = paid work + unpaid work which includes raising kids.

Do Sen. Manchin and others think low-income families will put less effort into raising their kids than higher-income people because they get some aid from the government?   Do they fear people will quit paid jobs if they get a stipend to help with child expenses?  Are they worried that swarms of "welfare queens" might  reappear in the nation's urban  ghettos and trailer parks in embarrass them in the headlines? 

If lawmakers decide to add a paid work mandate to curtail possible abuse, it could be adjusted to require only part-time employment for low-income single parent households, which by definition have the hardest time earning a living wage.  Alternatively, low-income parents facing work requirements could be provided with adequate subsidies for child care, which the current tax credits amounting to $3K-$3.6K a year are  insufficient to cover.  How can single parents work outside the home if they can't afford child care?

If low-income parents must work outside the home to get child tax credits, why shouldn't higher-income parents?  In the end, most of the tax benefits for raising the nation's kids should flow to low-income families that need them rather than to higher-income families that don't.  Our national debt is too high and economic inequality to extreme for the government to be able to provide broad-based social insurance for every need.

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Low-income students in Virginia are filling out fewer FAFSA forms and putting off college - Richmond Times-Dispatch

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The Great Pay Disparity: A look at the median pay of the average American worker compared with the salary and compensation of the nation’s top CEOs. - Capital & Main

BTW, Capital & Main just won 5 first-place prizes in the  63rd annual Southern California Journalism Awards for the best reporting of 2020.  A couple of examples:

Judge Orders California City to Zone for Affordable Housing

Death Trap: When COVID-19 Hit L.A. Nursing Homes, Where Was the County’s Department of Public Health?

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Don’t give campus officials a free pass in college admissions scandals - Frederick Hess/AEI

"It’s time that we held college leaders to account for the petty larceny, gross negligence, and crude shakedowns that have unfolded on their watch."

Here's some "Critical  College Admission Bribery Theory":  University staff and executives who participated in, sanctioned,  or knew about admissions  bribery and did nothing should do jail time.  (Same goes for church overseers who knew about chronic child abuse perpetrated on their watch and did nothing.) 

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EAST MOLINE, ILLINOIS - OCTOBER 14: Workers picket outside of John Deere Harvester Works facility on October 14, 2021 in East Moline, Illinois. More than 10,000 Deere employees represented by the UAW walked off the job at midnight after failing to agree to term of a new contract. About 1,400 workers walked off the job at the Harvester Works plant where the company builds combines.  (Photo by Scott Olson/Getty Images)

The John Deere Strike Shows the Tight Labor Market Is Ready to Pop - Intercept

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The Pandora Papers and the Threat to Democracy -

These Billionaires Just Contributed $1.3 Million To Help Republicans Take Control Of The House In 2022 - Forbes

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Want to see a food fight in Congress? Try changing the formula through which the U.S. government matches Medicaid payments in richer and poorer states.

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1 Oz Canadian Maple Leaf Gold Coin

Equalization referendum debate heats up in Alberta as Kenney's approval further plummets - CTV News

Today's the big day!  All things being equal, some provinces must be more equal than others.

A Primer on Alberta’s Equalization Referendum - Business Council of Alberta

Sunday, October 17, 2021

An Urban Organizer Wants ‘Race off the Table’ - WSJ

"Mr. Woodson doesn’t see the problems of black America through a racial prism. The institutions and traits that make healthy communities are the same for all human beings. “Tell me how ending institutional racism is going to prevent a kid in Silicon Valley from taking his life, or a kid in Appalachia taking drugs, or a kid from shooting somebody in the head,” he says. Mr. Woodson wants to “deracialize race”—to make it an incidental category in social-improvement projects rather than the salient one."

Waking the Sleeping Giant: Poor and Low-Income Voters in the 2020 Elections - Poor People's Campaign

  • "In the 2020 elections, LIV exceeded 20% of the total voting population in 45 states and Washington D.C. In tight battleground states, LIV accounted for an even greater share of the voting population,  including in states that flipped party outcomes from 2016 to 2020. 

  • "Where the margin of victory was near or less than 3%, LIV accounted for 34% to 45% of the voting population: Arizona (39.96%), Georgia (37.84%), Michigan (37.81%), Nevada (35.78%), North Carolina  (43.67%), Pennsylvania (34.12%), and Wisconsin (39.80%).  

  • "A closer look at the racial demographics of LIV in nine battleground states (Arizona, Florida, Georgia, Michigan, Nevada, North Carolina, Pennsylvania, Texas and Wisconsin) shows that white LIV accounted for a higher vote share than all other racial groupings of LIV combined. This underscores  the necessity of organizing low-income white, Black, and Hispanic voters together in multi-racial political coalitions."

We support the call for unity from Rev. Barber and other leaders of the Poor People's Campaign. Some CCSE  writings on this issue:

Tracking the COVID-19 Economy’s Effects on Food, Housing, and Employment Hardships - CBPP

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THOUSAND OAKS, CA - OCTOBER 07, 2021: Armando Mares holds a photograph of his parents, Antonio and Socorro, from their wedding day. Mares fought against a state Medicaid claim against his late parents' estate.
Debt After Death: The Painful Blow of Medicaid Estate Recovery - Sarah True/USNWR

"A congressionally mandated system designed to recoup the costs of long-term care can hit people with the crushing prospect of losing a home, posing a particularly insidious threat for low-income families and people of color."

Well-researched article.  Senior officials in the Trump Treasury Department made a special project of trying to up the 1% Medicaid estate recovery rate.  But most states are not eager to chase down money from vulnerable people often living in deteriorated housing.  Owner-occupied houses with moderate amounts of equity should be exempt.  Medicaid asset recovery law is so complex and convoluted that it can’t signal economic incentives years in advance of a health crisis unless someone can afford legal counsel. This case is a  good example.  

Q - Why do the feds make a point of chasing down low-income people with limited assets for estate recovery, when they are fine with letting wealthy people inherit millions of dollars in stock without paying capital gains tax?

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Harvard's endowment swells by $11.3 billion as 20% of US households lose all savings during pandemic - Fox

No money for low-income housing?

What about hitting up  university endowments, non-profits, TV preachers, et cetera? 

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State of Homelessness: 2021 Edition - National Alliance To End Homelessness

California spending billions to house homeless in hotels - AP

San Francisco homeless man dies after being lit on fire while sleeping - Yahoo

DC changes how it clears homeless encampments after equipment picks up resident inside tent - WTOP

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Nashville, Tennessee downtown skyline at twilight
Health Disparities, Discrimination, And Racial Gaps: An Honest Look Below The Surface Of An Otherwise Thriving American City - Bill Frist/Forbes

Excellent article by former U.S. Senate leader.  Now, what will his colleagues do to address these issues in terms of insurance coverage, resources for impoverished areas, and reining in the cost of the medical industrial complex?

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A new problem for Democrats: Americans suddenly want smaller government after all - Catherine Rampell/WaPost

"Democratic lawmakers argue that every major plank of their agenda is popular, so they should just pass them all. Most of their individual policies do poll well in isolation. Survey after survey has found strong support for universal pre-K, paid leave, free community college, Medicare expansions, lower Medicare drug prices and so on...

"But nearly all of these initiatives (child care, paid leave, etc.) are complex and will be difficult to get off the ground. Shortchanging them, or adding uncertainty about their duration, increases the odds of a bungled rollout. And if you think opposition to “big government” is too high now, imagine the political blowback after months of coverage about expensive, incompetently executed safety-net expansions. I’m already having flashbacks to the 2010 tea party revolution.

"...Democrats should do fewer things better, not more things poorly."

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No college degree? More employers than ever just don't care - CNN

Elite University Endowments Soar As Higher Ed Divide Grows - Forbes

"Blockbuster growth was not limited to Ivy League institutions. Across the nation, university endowments - particularly the already bigger ones - realized their best returns in decades, due to a substantial increase in the stock market and huge gains from venture capital and private equity, an investment area that larger endowments are more likely to pursue... "

"As exciting as these skyrocketing assets are, they also highlight once again the growing divide between higher education’s “haves” and “have nots.” It’s a gap involving money, status and influence.

"The vast majority of American colleges and universities don’t have multi-billion dollar endowments, they don’t mount billion dollar fund-raising campaigns, and they are not the usual recipients of philanthropists’ mega gifts. They are not elite. They are not wealthy. And they are not highly selective in the students they educate.

"What do they do instead? Much of the higher education work of the country.

"They educate most of the nation’s students, including a large share of students from low-income backgrounds and those who are the first in their families to go to college.

"They serve as avenues of upward mobility for far more students than do their elite counterparts."

How Much Are Most Colleges Paying in Endowment Tax?
America’s largest foundations: Examining payout rates and perpetuity - Howard Husock/AEI
Los Angeles City council member indicted on federal bribery charges - Axios

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New study blows a hole in Joe Manchin's argument that the revamped child tax credit discourages people from working - Markets Insider

It will dampen paid work outside the household to some degree - but not "total national work."  Don't we want parents to be able to spend more time with their kids?  Incentives need to be balanced and fair.  Work requirements shouldn't cut out low-income households.

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Registered Nurses and supporters stand in a picket line and wave to cars as they drive by outside St. Vincent Hospital in Worcester, Massachusetts on February 24, 2021.

U.S. Workers Are Realizing It's the Perfect Time to Go on Strike - Time

John Deere workers go on strike after rejecting wage deal - CNN

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How the Fed Finances U.S. Debt - July Shelton/WSJ

"Look behind the federal books to see the ways monetary policy has come to abet runaway spending."

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Social Security cost-of-living increase will boost benefits 5.9% in 2022 as inflation spikes - USA Today

How the pandemic is changing the contours of the economy. - KPMG

Excellent diagnostics for policymakers and investors.

"Until the pandemic, both those with and without college degrees reported that they required a 1.9% wage increase to take a new role -- the reservation wage.
During the recovery, everyone has demanded higher wages.
For those with college degrees, who can largely work from home, the reservation wage is up by 2.9% since February 2020.
For those without college degrees, most of whom must work from their job sites, the reservation wage is
substantially higher at 16.5%.
A higher wage for those who must work at a job site is consistent with past pandemics. This is amplified by data on the makeup of the labor force showing a scarcity of those without bachelor's degrees."

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A record number of workers are quitting their jobs, empowered by new leverage- WaPost

"The phenomenon is being driven in part by workers who are less willing to endure inconvenient hours and poor compensation, who are quitting instead to find better opportunities. According to the report, there were 10.4 million job openings in the country at the end of August — down slightly from July’s record high, which was adjusted up to 11.1 million, but still a tremendously high number. This gives workers enormous leverage as they look for a better fit."

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Employment Protection and Corporate Cash Holdings: Evidence from China’s Labor Contract Law - VoxChina

"We examine whether and how employment protection influences corporate cash holdings using Chinese firm-level data. Our empirical results show that labor-intensive firms in China significantly increased their cash holdings following the enactment of China’s Labor Contract Law. Further analyses suggest that the results are generally consistent with a “labor adjustment costs” channel: employment protection increases labor adjustment costs and hence the expected costs of financial distress for labor-intensive firms, so these firms are likely to increase their cash holdings to reduce the risk of financial distress when employment protection is strengthened."

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Workers in Vietnam forced to work to maintain profits of US companies - WSWS

Vietnam factories rethink ‘sleepover’ approach to stopping Covid - Financial Times

"Country’s virus woes pose risks for global supplies of sneakers and smartphones."


"Thousands of Vietnamese have spent the past month living at work, away from their families. The situation has taken a heavy toll on mental health and corporate balance sheets. Now some companies are questioning the approach and asking the government for vaccines and “safe zones” where workers can live near plants, and for it to take other measures."

Dear Capitalists, Communists & Socialists: We advocate for policies that empower workers to own working assets, preferably diversified, and share in economic gains.  One way to do this is through a universal retirement savings system.  Boosting individual savings and investment by low-wage workers can reduce both economic inequality and poverty while increasing their personal freedom and standard of living.

Disclosure: The Poor Man's Hedge Fund, which supports this web site, sold shares of a Vietnam index fund earlier in 2021.

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Just like his father before him, Jon Kent has fallen for a reporter. - DC Comics

New Superman will be revealed as bisexual in an upcoming DC Comics issue - Fox

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How the expanded child tax credit is helping families - Washington University in S.L.

"When asked what parents intended to do with the credit, the most common responses were:

  • save for emergencies (74.8%)

  • apply the money towards housing, food, and utilities (66.6%)

  • purchase clothing or other essentials for their child(ren) (58.1%)

  • purchase more or better quality foods for their family (49.0%)

  • contribute to a college fund for their child(ren) (41.9%)"

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In their own words: 5 Latina immigrant housekeepers on how the pandemic has impacted their lives - The Lily

‘We’re completely invisible,’ said one woman living in San Francisco.

Should I cancel my house cleaners? - MITMedical

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A growing worry for charities: Tax havens for the rich - AP

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Americans strongly favor raising taxes on the rich. Why are Dems struggling to do so? - David Leonhardt/NYT

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Democrats are divided over how much Biden’s agenda should benefit the wealthy - LA Times

"Under Democrats’ “Build Back Better” plan, a married couple earning a combined $500,000 a year could get $10,000 a month from the federal government when taking paid family leave to care for a sick relative or a newborn baby.

"The same program would provide a middle-class family with one wage earner much less, about $3,100 a month."

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A Carbon Tax is Not the Solution to Global Climate Change - Eric Toder/TPC

A welcome conversion from the legions of woke economists...We have been advocating that the key to lower carbon emissions is developing cleaner technology that low-income people who need to get to work and heat/cool their homes can afford.

See letter to editor and related dialogue:

"How to make carbon taxes more equitable - Washington Post"

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She’s 51, a mother and a devout Catholic. She plans to die by euthanasia on Sunday. - WaPost

This woman could have lived years with her terminal illness. She chose to die instead. - NBC

Sunday, October 10, 2021

How and when will French Church compensate victims of ‘systemic’ child abuse? - France 24

One of downsides of operating a religious organization in a secular world is having to comply with its laws and ethical standards.  Supervisors and managers who covered up crimes against children and abetted in perpetuating injuries to them should be prosecuted and do jail time.  Money transfers aren't enough to deter future crimes.  

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Joel Osteen's Lakewood Church repaying $4.4M in forgivable PPP loans - Houston Chronicle

"The program was unprecedented — and controversial — because it marked the first time the federal government extended a direct lifeline to untaxed religious and nonprofit institutions. Prior to the CARES Act, federal money had gone to some religious programs such as chaplaincies. But there had never been a direct line from the federal government’s coffers to untaxed religious groups.

"Under the legislation, churches and nonprofits with fewer than 500 employees were eligible for loans that are forgivable if they are used on basic costs such as payroll or utilities."

Before casting a stone at the TV preacher, check out how the thousands of beltway "non-profits” took advantage of the PPP (paycheck protection program).  They were among the first to know about the money and how to apply. After being called  out out, the Aspen Institute decided to return $8 million in PPP funds after arguing money was necessary to keep its 430-person staff on payroll despite a $115 million endowment and several billionaires among its trustees.

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Honeyboy Edwards | Flickr : partage de photos !

Delta Blues Sounds - Best Of The Mississippi Stars - YouTube

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The Radically Changing Labor Market - Barry Ritholtz

"This month’s consensus payroll miss is no surprise. But focus on these three noteworthy numbers:

-0.4% drop in the unemployment rate, from 5.2% to 4.8%

-4.6% wage growth (annualized)

-11 million unfilled job openings

"Those numbers are telling. But rather than rag on economists for being bad forecasters, it’s worth pointing out that the labor market is in the midst of a massive upheaval. The old models that were not that great to begin with are struggling, they are mostly useless when attempting to make sense of the current circumstances.

"The data this month should also end the debate about Unemployment insurance preventing people from going back to their old crappy jobs. Now that the enhanced unemployment insurance has expired, it is no longer a viable reason for the difficulty in hiring. Something else is obviously going on.

"Skip the NFP forecast, and instead consider the various cross-currents that must be accounted for trying to get a good handle on the labor markets:

• Wages have lagged most measures of the economy — since the 1970s;
• Technology keeps creating and destroying entire market sectors;
• Demographics is increasing demand for specific jobs, and not just in health care;
• Household balance sheets are as cash rich and debt managed as ever;
• Actual wealth in the US is at record highs;
• 18 months of remote work have changed peoples’ perception of their jobs;
• Early retirement is pulling workers away from the labor market;
• Childcare remains a challenge in most of the country;
• Covid-19 is still a threat to frontline workers."

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May be a cartoon of text that says 'Solving the Labor shortage in the McDonald's Boardroom... $100 sign on bonus free phone! Raise wages, paid sick time, workplace free from sexual harassment. … FIGHT $15'

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Kaiser Permanente Employees May Strike Over Two-Tier Pay System - Capital & Main

"But after a long period of sustained growth and profitability — Kaiser made $6.8 billion in operating profits from 2018 to 2020 alone, according to the Alliance — the company began moving toward more aggressive negotiating tactics a few years ago, several nurses say."

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Obamacare Health Insurance Family Glitch Explained - Eric Bricker

Congress should deal with this gap in affordable coverage.  The issue also intersects with debate over targeting of child tax credits and whether there should be work requirements to get them....For those considering Medicare expansion, maybe kids are a place to start.  Do employers really want to cover them?  States?

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Waning of BNT162b2 Vaccine Protection against SARS-CoV-2 Infection in Qatar - NEJM

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Covax doses arrive in Mogadishu

Why the Covax vaccine program failed - Quartz

One for you.  Five for me.

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Netflix to edit 'Squid Game' phone number after woman inundated with calls - Reuters

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The Facebook Whistleblower Is Heroic... And Terribly Wrong - Matt Stoller

"Frances Haugen got a lot right. But a digital regulator that legitimizes Facebook's power would be the worst possible outcome..."

"Here’s the solution. First, we need to ratchet back Section 230 as Haugen suggests (or even further), which would simplify the business model. Second, we need to break up Facebook, as well as the other big tech firms. Third, we need to ban surveillance advertising. (There are other rules to consider, such as interoperability mandates, but that should happen after the monopoly power is smashed.) The institutional home to do this properly is the Federal Trade Commission, which already has legal authority, research capacity, buildings, and a staff. Already, new FTC Chair Lina Khan is moving in this direction; she has an antitrust suit against Facebook, and has had the FTC combine its consumer protection/privacy apparatus with their antitrust apparatus, ensuring that policymakers are looking at the whole picture."

Congress also could require that FB give users the option to keep data generated from their profiles and use from being used or sold and give people a legal remedy with teeth for enforcing privacy protections such as these.

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‘A War for Talent’ - WSJ

"For the first time ever, the NFIB monthly employment survey finds that most small businesses had open positions they could not fill."

So many jobs to fill.  So many unemployed men.  Why isn't this commerce heaven?

The crisis of men without work - Nicholas Eberstadt/AEI podcast

As U.S. private wealth broke through the $100-trillion mark, more of its  less-skilled, less-educated men have left workforce. How can they contribute to the society?  

Men Are Losing Their Grip in the New Economy - Bloomberg

"Job growth and education are putting women in a prime position to dominate. Should we rejoice or worry?"

Young Men- The Reformed Broker

Higher-income increasingly choose to marry higher-income: Branko Milanovic discusses implications of "assortative mating" - NPR

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Wave of US labor unrest could see tens of thousands on strike within weeks - The Guardian

"From healthcare to Hollywood, workers are demanding higher wages, fighting cuts and seeking better safety and conditions."

Kellogg's 'implementing contingency plans' as workers strike for third straight day - News Channel 3

The growing strike movement in the United States and the case for rank-and-file committees - WSWS

Dear Trotskyists:  Could workers organize and negotiate effectively without a union?

The 10 Biggest Strikes In U.S. History - Investopedia

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bright saturn and rings against black space

New York Times Might Be One of Ford Foundation’s Neediest Cases - Ira Stoll/NY Sun

Garden variety example of the rings of dead capitalist $$$ that non-profits shell out every day to reinforce those with wealth and power.

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Secret trove illuminates the lives of billionaires - WaPost

"Only a handful of U.S. billionaires show up in the records obtained by the ICIJ. Absent from the Pandora Papers are some of the nation’s wealthiest — Tesla founder Elon Musk; billionaire investor Warren Buffett; and Amazon founder Jeff Bezos, who owns The Washington Post.

"In part, this may be because U.S. residents generally do not use the financial services providers whose records were obtained. In part, experts said, it is because U.S. billionaires pay so little in taxes relative to their incomes that hiding money offshore is mostly unnecessary."

Governments vow investigations within hours of Pandora Papers revelations - ICIJ

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Student loan forgiveness: Half a million people to benefit from overhaul, some immediately - USA Today

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Global deal on 15% minimum tax rate for multinationals edges closer- Guardian

Ireland moves step closer to ditching 12.5% corporate tax rate - Examiner

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May be a Twitter screenshot of text that says 'Robert Reich @RBReich The effective federal corporate income tax rate: 1950: 50% 1960: 37% 1970: 32% 1980: 1990: 2000: 2010: 15% 2020: 13% It's time corporations pay their fair share.'

'Pandora Papers' bring renewed calls for tax haven scrutiny - AP/StarTribune

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https://socialeurope.eu/wp-content/uploads/2021/09/Screenshot-2021-09-25-at-18.29.34.png.webp

Coming second in the game of life - Kate Pickett/Social Europe

Similar life expectancy pattern in the U.S.   See below, for implications for Social Security:

"A Widening Gap in Life Expectancy Makes Raising Social Security’s Retirement Age a Particularly Bad Deal for Low-Wage Earners" - K. Polzer/Society of Actuaries

"Will Growing Inequality Make Social Security & LTC Financing Fixes Harder?" -  Center on Capital & Social Equity - Living to 100 Symposium (2020)

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Methamphetamine-involved overdose deaths nearly tripled between 2015 to 2019 - NIH

"Patterns of methamphetamine use have become riskier, diversified across U.S. population."

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https://www.hollywoodreporter.com/wp-content/uploads/2021/10/IATSEsplit.jpg?w=1296&h=730&crop=1

“Unsustainable and Unhealthy”: As IATSE Workers Go Public, Pressure Mounts on Studios Amid Looming Strike - Hollywood Reporter

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US Trade Rep Katherine Tai  condemns China's 'unfair trade practices' - CNN

China blames US for tensions over incursion near Taiwan - Reuters/Times of India

Diplomatic juggling (tariffs, prices, jobs, wages, territory) on a  tightrope of threatened war. 

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Offshore havens and hidden riches of world leaders and billionaires exposed in unprecedented leak - ICIJ

"The leaked records come from 14 offshore services firms from around the world that set up shell companies and other offshore nooks for clients often seeking to keep their financial activities in the shadows. The records include information about the dealings of nearly three times as many current and former country leaders as any previous leak of documents from offshore havens.

"In an era of widening authoritarianism and inequality, the Pandora Papers investigation provides an unequaled perspective on how money and power operate in the 21st century – and how the rule of law has been bent and broken around the world by a system of financial secrecy enabled by the U.S. and other wealthy nations."

Pandora papers: biggest ever leak of offshore data exposes financial secrets of rich and powerful - The Guardian

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Please send me a bill': Strangers offer to help out dad accused of stealing  diapers after credit cards get declined – Boston News, Weather, Sports |  WHDH 7News

Florida police department criticized for seeking arrest of man who stole diapers for kids - South Florida Sun-Sentinel

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https://cdn.cnn.com/cnnnext/dam/assets/210929133837-squid-game-netflix-03-super-169.jpeg

Social inequality and hyper violence: why the bleak world of Netflix’s Squid Game is a streaming phenomenon  - The Conversation

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https://www.washingtonpost.com/wp-apps/imrs.php?src=https://arc-anglerfish-washpost-prod-washpost.s3.amazonaws.com/public/UE7CGBAXC4I6ZIAZZMMTWKFKOM.jpg&w=916

Mississippi aid program gave little help to renters but millions to a top law firm- WaPost


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...

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

A Widening Gap in Life Expectancy Makes Raising Social Security’s Retirement Age a Particularly Bad Deal for Low-Wage Earners

Essay - Karl Polzer   

"Social Security’s long-term financial problems result in part from an increase in average life expectancy driven by wealthier people living longer, and, thereby, collecting more benefits.  Policymakers should not use funding shortfalls attributable these trends as an excuse to cut monthly benefits alike for those who have gained (high earners) and for those who haven’t (low earners)."

February 2020

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

 

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)

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.

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.

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.

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

Posted April 16, 2020 and updated as noted

Pinpointing Disease Pathways, Treatments: Which (If Any) of The Dots Connect?

Changes in blood chemistry - hypoxia - bloods clots - organ damage

Blood

COVID-19: Attacks the 1-Beta Chain of Hemoglobin and Captures the Porphyrin to Inhibit Human Heme Metabolism -ChemRxIV (April 13)

Heme in pathophysiology: a matter of scavenging, metabolism and trafficking across cell membranes

Hypoxia, such as encountered at high altitude, promotes deep vein thrombosis in mice

A Possible Explanation for the COVID-19 Racial Disparity — And a possible solution (posted April 19)

Doctors try to untangle why they're seeing 'unprecedented' blood clotting among Covid-19 patients (posted April 23)

New link between hypoxia and blood clot risk (posted April 23)

15 Children Are Hospitalized With Mysterious Illness Possibly Tied to Covid-19 (posted May 7)

Blood thinners may improve survival among hospitalized COVID-19 patients (posted May 8)r

COVID Hypoxemia: Finally, an Explanation — Mt. Sinai team uncovers a compelling mechanism (posted Sept. 9)

Full-Dose Clot Prophylaxis Improves Outcomes in Moderate COVID-19 (posted Jan. 23, 2021)

General Info

What Does It Mean to be Oxygen Deprived

U.S. races to stock up on dialysis supplies as kidney failure ravages virus patients – Politico  Approximately 20 percent of coronavirus patients in intensive care around the city need the kidney treatment, often for weeks.

Coronavirus destroys lungs. But doctors are finding its damage in kidneys, hearts and elsewhere

Doctors keep discovering new ways the coronavirus attacks the body (posted May 11)

Obese COVID Patients More Likely to Have Pulmonary Embolism, Even Outside the ICU (posted June 3)

Cheap drug has been helping to save lives of COVID-19 patients (posted June 18)

More Data Suggest Proning Helps COVID-19 Patients (posted June 18)

More covid-19 patients are surviving ventilators in the ICU (posted July 4)

RECOVERY: Steroid Benefit in Severe COVID-19 Holds Up -- Sickest patients helped the most, drug already added to NIH guidelines (posted July 18)

Common steroids reduce deaths among critically ill Covid-19 patients, new analysis confirms - CNN (posted Sept. 3)

The Contagion Year: What we learned about treating COVID-19 in Year One of the pandemic -

Lungs

Autopsies Turn Up Strange Feature of COVID-19 Lungs — Study finds more thrombi and a new puzzle in the vessels (posted May 27)

Kidneys

Hypoxia: The Force that Drives Chronic Kidney Disease

Sense of Smell

The Effects of Hypoxic Hypoxia on Olfactory Sensitivity in Humans

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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