Economic Bad Times Just Beginning
By Chuck Baldwin
September 29, 2011
A couple of weeks ago, I was honored to attend a private gathering of influential conservative leaders just outside Washington, D.C. While many differences of opinion were expressed on a variety of subjects, there was one subject on which every single attendee was unequivocally united: the US economy is soon going to tank! As one man said, “In a couple of years, these could be the ‘good old days.’” Another thing the august assembly was agreed on was that the only Presidential candidate in the two major parties who would actually have the guts to do what needs to be done is Congressman Ron Paul. And the national press corps (including FOX News) is doing everything in its power to make sure that the American people do not hear much of what Dr. Paul has to say for that very reason.
Neither the Democrat nor Republican parties in Washington, D.C., have any intention of addressing the real reasons why the American economy is on the verge of collapse. The only thing the two major parties--and the elites who dominate them--can see is the next election. The lust for power is the one thing that both the Donkeys and the Elephants share in common. And neither party is willing to disappoint their constituents who are feeding at the teat of that fat hog known as Washington, D.C.
Democrats want to extend Washington’s insatiable appetite for deficit spending in order to promote the Welfare State. And Republicans want to extend Washington’s insatiable appetite for deficit spending in order to promote the Warfare State. Conservative or liberal, hawk or dove, Christian or secularist, Democrat of Republican: they all are lining up at the back door of Uncle Sam’s kitchen begging for a handout!
Except for Ron Paul, no one is giving more than ten-second sound bites of lip service to what is necessary to conquering the real culprits of America’s economic malaise: expunging the fiat money system and returning America to hard money principles, dismantling that cabal of international criminals known as the Federal Reserve, returning America’s foreign policy to its constitutional parameters of non-interventionism, eviscerating those federal programs and entities not prescribed by the US Constitution, getting rid of the income tax, and taking the United States out from under the power and influence of the United Nations. No one else has the guts to even seriously talk about these issues, much less to actually do something about it! And if the “powers that be” successfully defeat Dr. Paul’s candidacy, it won’t matter to a tinker’s dam who gets elected President in 2012 (that is, unless a constitutionalist third-party candidate miraculously wins the Presidency)! Republican or Democrat, it will be business-as-usual. And that means this house of cards that these corrupt politicians and bankers have been playing with all these years is going to come crashing down. In fact, the signs are ubiquitous that the crash has already begun.
Writing for BlacklistedNews.com, Michael Snyder has recently produced two trenchant reports that show the handwriting on the wall for America’s financial future. Snyder begins this first report saying, “Goldman Sachs is doing it again. Goldman is telling the public that everything is going to be just fine, but meanwhile they are advising their top clients to bet on a huge financial collapse. On August 16th, a 54 page report authored by Goldman strategist Alan Brazil was distributed to institutional clients. The general public was not intended to see this report. Fortunately, some folks over at the Wall Street Journal got their hands on a copy and they have filled us in on some of the details.
“It turns out that Goldman Sachs secretly believes that an economic collapse is coming.”
Snyder concludes his report saying, “Sadly, the 54 page report mentioned above is right--we really are facing a global debt meltdown and we really are heading for an economic collapse.
“You aren’t going to hear the truth from the mainstream media or from our politicians because ‘keeping people calm’ is much more of a priority to them than telling the truth is.
“The debt crisis in the United States is unsustainable and the debt crisis in Europe is unsustainable. Right now we are in the calm before the storm, and nobody knows exactly when the storm is going to strike.
“But let there be no doubt--it is coming.
“The amazing prosperity that we have enjoyed for the last several decades has largely been a debt-fueled illusion. It was a great party while it lasted, but now it is coming to an end and the aftermath of the coming crash is going to be absolutely horrific.
“Keep watch and get prepared. We don’t know exactly when the collapse is going to happen, but it is definitely on the way and now even Goldman Sachs is admitting that.”
See Snyder’s report here. http://www.blacklistednews.com/Even_Goldman_Sachs_Secretly_Believes_That_An_Economic_Collapse_Is_Coming_/15525/0/0/0/Y/M.html
And in a second report, Michael Snyder writes, “If you think the U.S. economy is bad now, just wait for a few months. Things are about to become absolutely nightmarish. None of the long-term economic trends that are hollowing out our economy have been addressed and more bad economic news seems to come out virtually every single day. Now there is constant talk of the "next recession" in the mainstream media. But did the last recession ever truly end? The number of good jobs continues to decline, more stores are closing, incomes continue to go down, credit card debt and student loan debt are soaring, the housing market resembles a corpse, the number of Americans living in poverty continues to rise and government debt is at unprecedented levels. We are losing blood fast, and almost all of our leaders are either too corrupt or too incompetent to be able to do anything about it. The U.S. economy really and truly is about to go into the toilet, and if something is not done very quickly we are going to experience a complete and total economic disaster in this nation.”
Snyder then goes on to highlight 30 signs that the US economy is about to go down the drain. Read his report.
And for those of you who believe that such talk is just “Chicken Little” déjà vu, you need to know that many economists, politicians, and even federal police agents are personally preparing for a prolonged economic collapse. And if you’re not preparing, you’re either not paying attention or you’re preferring to ignore the warning signs. Neither option is healthy.
I have told readers before of my friend Chuck Coppes’ phenomenal book, “America’s Financial Reckoning Day.” Once again, I urge readers to obtain this book. I further follow Chuck’s recommendation that you seriously consider getting as much as you can of your fiat paper currency converted into hard assets ASAP! The gold and silver markets are being manipulated
downward, but these tactics will not last forever. When the crash occurs, hard assets will skyrocket! That’s what virtually every economic forecaster that I have any confidence in is saying. And I believe them!
To obtain Chuck Coppes’ book or to contact him regarding obtaining precious metals, click here. http://www.soundmoneycenter.org/drbaldwin/
So readers will know up front, Chuck has felt led to support my work, and I am equally enthusiastic about supporting his work. I personally know Chuck, as he moved his business from his home State of Arizona, and has joined with us here in the Flathead Valley of Montana. (And we need many more businessmen to consider doing the same!)
As an aside, for those of you who are considering joining us here in the Flathead Valley of Montana, here is the email address of George Hudson, who, himself, “escaped” from California to join us in Montana. George has taken it upon himself to help people with the information and resources they might need to help relocate to the Valley. His email address: email@example.com
An old maxim says, “Forewarned is forearmed.” Ladies and gentlemen, we need to prayerfully and seriously weigh the evidence that is before us and make decisions NOW to prepare ourselves for the days to come. We need to heed the words of Scripture that twice say, “A prudent man foreseeth the evil, and hideth himself: but the simple pass on, and are punished.” (Prov. 22:3; 27:12 KJV)
I further highly recommend that people who are serious about preparation, relocation, and related matters glean heavily from the works of James Wesley, Rawles and Joel Skousen.
Rawles’ web site: http://www.survivalblog.com/
Skousen’s web site: http://www.joelskousen.com/
After having attended the above-referenced meeting near Washington, D.C., I am more convinced than ever that we did the right thing in relocating to the beautiful Flathead Valley of Montana. I also came away from that meeting with the firm conviction that my friend was right when he said, “In a couple of years, these could be the ‘good old days.’”
Obama's "Hate the Rich" Campaign
September 27, 2011
In his so-called jobs speeches, Obama exploits class envy shrouded in fairness. President Obama continues to escalate his divisive and evil assault on achievers, purposely pitting Americans against each other.
Obama's “Hate the Rich” campaign appeals to our lower nature and encourages the sin of covetousness. If Obama's despicable campaign proves successful, it will be a sad commentary about who we have become as a people and how far we have fallen as Americans.
It angers me that Obama and his minions in the liberal media have put achievers, risk takers, on the defensive. It angers me that Obama's looser followers think they are entitled to the fruit of someone else's labor.
Americans are extremely generous and willing to help people in need domestic and foreign. But no one is entitled to share in the bounty resulting from someone's risk, blood, sweat and tears. Any government which confiscates and redistributes wealth is immoral and evil.
God has designed life that success requires backbone; in other words, taking risks. Playing it safe profits very little. God's system is anathema to liberals. They strive to achieve “equal outcomes” or “fairness”, as they describe it, via legislation and redistribution.
Mary and I fed seagulls at the beach by throwing crackers on the sand close to us. Upon calculating the risk, seagulls moved in close and fed. Two bold seagulls feasted on crackers by feeding directly from Mary's hand. Then there were the seagulls who were too fearful to come close enough to retrieve any crackers. Interestingly, the cowardly seagulls screamed in frustration and even attacked the bold seagulls who were enjoying the rewards of their risk taking.
If a majority of Americans have become spineless, lazy and envious seagulls demanding the government take from the courageous to give to them, the spirit of America is dead.
Quite frankly, the entitlement mindset turns my stomach. My mom worked as a domestic cleaning white folks homes. My dad was one of the first blacks to break the color barrier into the Baltimore Fire Dept. My parents were hard working Christians and honorable people. My four younger siblings and I were not taught that anyone owed us anything. Today, we are all successful responsible citizens.
I suspect the mentality of my parents was typical of most Americans in the 1950s. Charities and churches assisted the poor before government replaced daddies (President Johnson's War on Poverty) in 1964; enslaving the poor to a cradle-to-grave dependency on government solely to secure Democrat votes. This strategy continues to devastate the black family; over 70% of black babies are born out of wedlock.
Blacks progressing from being brought to America as slaves to a black man being voted leader of the free world epitomizes the godliness and greatness of America. And yet, Obama and company, displaying a severe lack of character, relentlessly play the race, victim and class envy cards; designed to divide Americans to further the Obama administration's socialistic agenda.
Great leaders appeal to their follower's higher nature inspiring them to dig deeper into their souls and soar higher than they thought possible for themselves. America's first president, George Washington was such an inspirational leader.
As an American who happens to be black, I was badgered, “Lloyd, you should be delighted by the historical context of America electing it's first black president.” I was not.
Feeling like a lone voice crying in the wilderness, I dared to follow the instruction of an extraordinary leader, Dr Martin Luther King Jr. Therefore, I judged Barack Hussein Obama by the content of his character rather than the color of his skin.
Obama's admitted plan to “spread the wealth around” and his anti-American associations told me he was the wrong man to lead the greatest nation on the planet. Obama's divisive, dictatorial and bullying behavior have proven me correct.
Our president is nothing more than a Chicago thug community agitator stirring up discontent, inspiring racial hatred and hatred for achievers. The bottom line of every Obama speech regarding the economy is you have too little because those guys have too much.
Obama's approach is non-presidential, totally low rent appealing to our lower nature and totally despicable. Lord help us.*******
Chicago: Union Members Collect Millions in Tax $$ With Sweetheart Pension Deal
Now, don't imagine that these sort of sweetheart deals between politicians and government unions are only happening in Chicago
Warner Todd Huston
Friday, September 23, 2011
Now this is the sort of corruption we are used to seeing in Illinois, eh? This week the Chicago Tribune and WGN TV has found up to 23 retired union operatives that are collecting millions in taxpayer dollars because they had pals in government tweak the state’s pensions laws to favor them.
These former government workers that were government union members got pliant politicians to alter the pensions laws to say that their pension remuneration would be calculated not on the lower pay they received when they retired from government, but from the much higher salary they received when they worked as union operatives. These folks worked as union bosses at the same time as working on the clock for government.
The “luck” of former union boss and Dept. of Streets and Sanitation worker Thomas Villanova is a typical example. Villanova last worked full-time for the city in 1989 and made $40,000-a-year. But he was also a union big wig making $198,000 annually upon his retirement in 2008 at age 56. His city pension, it appears, was calculated on the union salary of $198,000 instead of his real salary of $40,000 — itself obviously a no-show job in the first place.
Villanova stands to make millions off the taxpayers.
Speaking of making millions, as mentioned above, the media folks also found some 20 more government union members that could make a combined $56 million in unearned pensions off the taxpayer’s back.
One of these crooks even retired at 50-years-old, then was hired back by the city for one day so that he could bump up his pension returns!
Worse, I was listening to a local Chicago radio program and one of the reporters involved in this story was saying that there may be several hundred more union/government workers that are similarly getting cushy, undeserved riches from the state pension system.
All this at a time when the pensions system is about to crash because it is so deeply in the red.
Now, don’t imagine that these sort of sweetheart deals between politicians and government unions are only happening in Chicago. These deals are endemic throughout government at every level. From your smallest city to the county, state, and federal government, these union thugs are ripping us all off on a daily basis.
Without question, this is the sort of unethical, even criminal, double dealing that you get when government employees are allowed to unionize. These people are cozy with government officials and other elected folks, donate money to their campaigns so that rules can be changed in their favor, then live off the taxpayers for decades. And for the cash in their pockets, politicians bend to union wishes every time. All the while the taxpayers get raped repeatedly.
Government workers should never, ever be allowed to unionize. Even Franklin Delano Roosevelt knew that!
Warner Todd Huston’s thoughtful commentary, sometimes irreverent often historically based, is featured on many websites such as gatewaypundit.com, renewamerica.us, rightwingnews.com, chicagonow.com, stoptheaclu.com, and americandaily.com, among many, many others. He has also written for several history magazines, has appeared on numeruous TV and radio shows and appears in the new book “Americans on Politics, Policy and Pop Culture,” which can be purchased on amazon.com. He is also the owner and operator of Publius’ Forum.
Warner can be reached at: firstname.lastname@example.org*******
The World's Super-Rich
Billionaires Flourish, Inequalities Deepen as Economies “Recover”
by Prof. James Petras
Global Research, March 23, 2011
The bailouts of banks, speculators and manufacturers served their real purposes: the multi-millionaires became billionaires and the later became multi-billionaires. According to the annual report of the business magazine Forbes there are 1,210 individuals – and in many cases family clans – with a net value of $1 billion dollars (or more). There total net worth is $4 trillion, 500 billion dollars, greater than the combined worth of 4 billion people in the world. The current concentration of wealth exceeds any previous period in history; from King Midas, the Maharajahs, and the Robber Barons to the recent Silicon Valley – Wall Street moguls of the present decade
An analysis of the source of wealth of the super-rich, the distribution in the world economy and the methods of accumulation highlights several important differences with major political consequences. We will proceed to identify these specific features of the super-rich, starting with the United States and follow with an analysis of the rest of the world.
The Super-Rich in the US: Greatest Living Parasites
The US has the most billionaires in the world (413), better than one third of the total, the greatest proportion among the “big countries in the world. A closer look also reveals that among the top 200 billionaires (those with $5.2 billion and more) there are 57 from the US (29%). Over one third made their fortune through speculative activity, predators on the productive economy and exploiters of the property and stock market. This is the highest percentage of any major country in Europe or Asia (with the exception of England). The enormous concentration of wealth in the hands of this tiny parasitical ruling class is one reason why the US has the worst inequalities of any advanced economy and among the worst in the entire world. Speculators do not employ workers, they secure tax loopholes and bailouts and then press for cuts in the social budget, since they do not require a healthy, educated workforce (except for a tiny elite). In 1976 the top 1% held 20% of the wealth; in 2007 they commanded 35% of total wealth. Eighty percent of Americans own only 15% of the wealth. The recent economic crises, which initially reduced the total wealth of the country, did so in an uneven fashion – hitting the majority of workers and employees worse. The Bush-Obama bailout led to the economic recovery, not of the “economy in general”, but was confined to further enhancing the wealth of the billionaires – which explains why the unemployment/under employment rate has hardly moved, why the fiscal debt and trade deficit grows and the state lowers corporate taxes and slashes federal, state and municipal budgets. The “dynamic” sector composed of parasitical capitalists employ few workers, exports no products, pays lower taxes and imposes greater cuts in social spending for productive workers. In the case of the US, billionaires , their wealth is largely accrued via the pillage of the state treasury and productive economy and via speculation in the information technology sector which houses one-fifth of the top billionaires.
BRIC’s: The New billionaires: Exploiting Labor of Nature
The leading emerging capitalist countries, Brazil, Russia, India and China (BRIC) hailed by the mass media for their rapid growth over the past decade are producing billionaires at a faster rate than any bloc of countries in the world. According to the latest data in Forbes (March 2011), the number of billionaires in the BRICs increased over 56% from 193 in 2010 to 301 in 2011, exceeding that of Europe.
The high growth of the BRICs - has led to the concentration and centralization of capital, in every case promoted by state policies which provides low interest loans, subsidies, tax incentives, unrestricted exploitation of natural resources and labor, the dispossession of small property owners and the give-away of publically owned enterprises.
The dynamic growth of billionaires in the BRICs has led to the most egregious inequalities in the world. Among the BRICs, China leads the way with the greatest number of billionaires (115) and the worst inequalities in all of Asia, in sharp contrast to its Communist past when it was the most egalitarian country in the world. An examination of the source of wealth of China’s super rich reveals that it has resulted from the exploitation of labor in the manufacturing sector, speculation in real-estate and construction and trade. China has surpassed the US as the world’s biggest manufacturer in 2011, as a result of the super-exploitation of labor in China and the growth of parasitical financial capital in the US.
In contrast to the US, China’s working class is making significant inroads into the profiteering of its manufacturing and real estate elite.As a result of working class struggle, wages have been growing between 10% and 20% over the past 5 years; protests by farmers and urban households against state sanctioned evictions by real estate speculators have exceeded 100,000 per year.
The wealth of Russian billionaires on the other hand resulted from the violent theft of public resources (oil, gas, aluminum, iron, steel, etc.), developed by the previous Communist regime. The great majority of Russian billionaires depend on the export of commodities, pillaging and devastating the natural environment under a corrupt and deregulated regime. The contrast in living and working conditions between the western oriented billionaires and the Russian working class is largely the result of the siphoning off of wealth to overseas accounts, offshore investments and extraordinary personal luxuries including multi-million dollar real estate. In contrast to China’s industrial elite, Russia’s billionaires resemble the parasitical ‘rentiers’ found among Wall Street speculators and Persian Gulf sheiks.
India’s billionaires are a combination of old and new rich drawing their wealth by exploiting low wage industrial workers, dispossessing slum and tribal peoples, as well as from diversified holdings in real estate, IT and software. India’s billionaires accumulated their wealth through their class-kin linkages to the very corrupt higher echelons of the political class, securing monopolies via state contracts. India’s high growth over the past decade (averaging 7%) and the upsurge in billionaires upward to 55 by 2011, are both linked the neo-liberal policies of deregulation, privatization and globalization, which have concentrated wealth at the top, undermined small scale producers and dispossessed tens of millions.
Brazil’s billionaire class has expanded rapidly, especially under the leadership of the Workers Party, to 29, up from single digits a decade earlier. Today over two-thirds of Latin America’s billionaires are Brazilians. The centerpiece of Brazil’s super rich wealth is the financial-banking sector which has benefited enormously from the monetary, fiscal and neo-liberal policies of the Lula Da Silva regime. Billionaire bankers have been the principle beneficiaries of the agro-mineral export economy which has flourished over the past decade, at the expense of the manufacturing sector. Despite claims by Workers Party leaders, the class inequalities between the mass of minimum wage workers ($380 per month as of March 2011) and the super-rich continues to be worst in Latin America. An analysis of the source of wealth among Brazilian billionaires reveals that 60% accrued their wealth in the finance, real estate and insurance (FIRE) sector and only one (3%) in the capital or intermediary maufacturing sector. Brazil’s boom in economic growth and billionaires fits the profile of a ‘colonial economy’: heavy in conspicuous consumption, commodity exports and presided over by a dominant financial sector which promotes neo-liberal policies. Over the course of the past decade despite the populist political theatrics and paternalistic poverty-programs sponsored by the “center-left” Workers Party, the major socio-economic outcome has been the growth of a class of “super-rich” billionaires concentrated in banking with powerful links to the agro-mineral sectors. The free-market high growth financial-agro-mineral class has degraded the manufacturing sector, especially textiles and shoes, as well as capital and intermediary goods producers.
The BRICs are producing more,and growing faster than the established imperial powers in Europe and the US but they are also producing monstrous inequalities and concentrations of wealth .The socio-economicconsequences have already manifested themselves in increasing class conflict especially in China and India, as intensive exploitation and dispossession have provoked mass action. The Chinese political elite seems to be the most conscious of the political threat posed by the growing concentration of wealth and is in the midst of promoting substantial wage increases and greater local consumption which seems to be lowering profit margins among some sectors of the manufacturing elite. Perhaps the ‘historical memory’ of the “cultural revolution’ and the Maoist legacy plays a role in alerting the political elite to the political dangers resulting from “capitalist excesses” associated with the high levels of exploitation and the rapid growth of a class of politically connected kinship based billionaires.
Over the past decade the most dynamic country in the Middle East has been Turkey. Led by a liberal democratic regime of Islamic inspiration, Turkey has led the region in GDP growth and in the production of billionaires. The Turkish economic performance has been presented by the World Bank and the IMF as a model for the post dictatorial regimes in the Arab world – ‘high growth’, a diversified economy based on the growing concentration of wealth.Turkey has 35% more billionaires (37) than the Gulf and North African states combined (24). The ‘secret’ of Turkish growth is the high rates of investments in diverse industries and the intensive exploitation of labor. Many Turkish billionaires(14) derive their wealth via ‘conglomerates’, investments in diverse manufacturing, finance and construction sectors . Apart from the ‘conglomerate’ billionaires, there are ‘specialist billionaires’ who have accumulated wealth from banking, construction and food manufacturing. One of the reasons Turkey has rebuked and challenged Israeli power in the Middle East is because its capitalists are eager to project investments and penetrate markets in the Arab world. Apart from the highly Zionized US political system, the ruling elites and publics in Europe and Asia have looked favorably on Turkey’s opposition to Israel’s massacres in Gaza and violation of international law on the high seas. If a modern liberal Islamic regime can grow rapidly through the rapid expansion of a diversified class of the super-rich,so does Israel, a modern neo- liberal-Judaic state based on the rapid growth of a highly diverse class of billionaires.
Israel with 16 billionaires is a country with the fastest growing class inequalities in the region-with the highest per-capita billionaires in the world… Israel’s “growth sectors”, software, military industries, finance, insurance and diamonds and overseas investments in metals and mining are led by billionaires and multi-millionaires who have benefited from Zionist induced financial handouts from the US pillage of resources from the ex USSR and transfer of funds by Russian-Israeli oligarchs and though joint ventures with Jewish-American billionaires in software corporations, especially in the “security” sector.
Israel’s high percentage of billionaires at a time of sharp cuts in social spending puts the lie to its claim to be a ‘social democracy’ in the midst of Arab ‘sheiksdoms.’ As a matter of record, Israel has twice as many billionaires (16) as Saudi Arabia (8) and more super-rich than the entire Gulf countries (13). The fact that Israel has more billionaires per capita than any other country has not prevented its Zionist supporters in the US from pressing for additional 20 billions in aid over the next decade. Unlike the past,today Israel’s wealth concentration has less to do with its being the biggest recipient of foreign aid ...Israel’s handouts is a political issue: Zionist power over the Congressional purse. Given the total wealth of Israel’s billionaires a five percent tax would more than compensate for any cut off of US foreign aid. But that is not about to happen simply because Zionist power in America dictates that the US taxpayers subsidize Israel’s plutocrats by paying for their offensive weaponry.
The “economic crises” of 2008-2009 inflicted only temporary losses to some (US-EU) billionaires and not others (Asian). Thanks to trillion dollar/Euro/yen bailouts, the billionaires class has recovered and expanded, even as wages in the US and Europe stagnate and ‘living standards’ are slashed by massive cutbacks in health, education, employment and public services.
What is striking about the recovery, growth, and expansion of the world’s billionaires is how dependent their accumulation of wealth is based on pillage of state resources; how much of their fortunes were based on neo-liberal policies which led to the takeover at bargain prices of privatized public enterprises; how state de-regulation allows for plunder of the environment to extract resources at the highest rate of return; how the state promoted the expansion of speculative activity in real estate, finance and hedge funds, while encouraging the growth of monopolies, oligopolies and conglomerates which captured “super profits” – rates above the ‘historical level’. Billionaires in the BRICs and in the older imperial centers (Europe, US and Japan) have been the primary tax beneficiaries of reductions and elimination of social programs
and labor rights.
What is absolutely clear is that the state not the market plays a essential role in facilitating the greatest concentration and centralization of wealth in world history, whether in facilitating the plundering of the treasury and the environment or in heightening the direct and indirect exploitation of labor .
The variations in the paths to ‘billionaire’ status are striking: in the US and UK, the parasitical – speculative sector predominates over the productive; among the BRICs – with the exception of Russia diverse sectors incorporating manufacturers, software, finance and agro-mineral billionaires predominate. In China the abysmal economic gap between the billionaires and the working class, between real estate speculators and dispossessed household is lead to increasing class conflict and challenges, forcing significant increases in wages (over 20% the past 3 years) and demands for increased public spending on education, health and housing. Nothing comparable is occurring in the US , EU or in the other BRICs.
The sources of billionaire wealth are , at best,only partially due to ‘entrepreneurial innovations’. Their wealth may have begun, at an earlier phase, from producing useful goods and services; but as the capitalist economies ‘mature’ and shift toward finance, overseas markets and the search for higher profits by imposing neo-liberal policies, the economic profile of the billionaire class shifts toward the parasitical model of the established imperial centers.
The billionaires in the BRICs, Turkey and Israel contrast sharply from the Middle East oil billionaires who are ‘rentiers’ living off ‘rents’ from exploiting oil and gas and overseas investments especially in the FIRE sector. Among the BRICs only the Russian billionaire oligarchs resemble the rentiers of the Gulf. The rest, especially Chinese, Indian, Brazilian and Turkish billionaires have taken advantage of state promoted industrial policies to concentrate wealth under the rhetoric of ‘national champions’, promoting their own ‘interests’ in the name of a “successful emerging economy”. But the basic class questions remains: “growth for whom and who benefits?”. So far the historical record shows that growth of billionaires has been based on a highly polarized economy in which the state serves the new class of billionaires, whether parasitical speculators as in the US, rentier pillagers of the state and environment such as Russia and the Gulf states or exploiters of labor such as in the BRICs.
The Arab revolt can be seen in part as an effort to overthrow ‘rentier capitalist clans’. Western intervention in the revolts and support of the “opposition” military and political elites is an effort to substitute a ‘neo-liberal’ capitalist ruling class.This “new class”would be based on the exploitation of labor and dispossession of current crony-clan-kin owners of resources. Major enterprises would be transferred to multi-nationals and local capitalists. Much more promising are the internal working struggles in China and to lesser degree in Brazil and the rural based Maoist peasant and tribal movements in India which oppose rentier and capitalist exploitation and dispossession.*******
The Middle Class in America Is Radically Shrinking. Here Are the Stats to Prove it
by Michael Snyder in Recession
Posted Jul 15, 2010
From The Business Insider
Editor's note: Michael Snyder is editor of theeconomiccollapseblog.com
The 22 statistics detailed here prove beyond a shadow of a doubt that the middle class is being systematically wiped out of existence in America.
The rich are getting richer and the poor are getting poorer at a staggering rate. Once upon a time, the United States had the largest and most prosperous middle class in the history of the world, but now that is changing at a blinding pace.
So why are we witnessing such fundamental changes? Well, the globalism and "free trade" that our politicians and business leaders insisted would be so good for us have had some rather nasty side effects. It turns out that they didn't tell us that the "global economy" would mean that middle class American workers would eventually have to directly compete for jobs with people on the other side of the world where there is no minimum wage and very few regulations. The big global corporations have greatly benefited by exploiting third world labor pools over the last several decades, but middle class American workers have increasingly found things to be very tough.
Here are the statistics to prove it:
• 83 percent of all U.S. stocks are in the hands of 1 percent of the people.
• 61 percent of Americans "always or usually" live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.
• 66 percent of the income growth between 2001 and 2007 went to the top 1% of all Americans.
• 36 percent of Americans say that they don't contribute anything to retirement savings.
• A staggering 43 percent of Americans have less than $10,000 saved up for retirement.
• 24 percent of American workers say that they have postponed their planned retirement age in the past year.
• Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.
• Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.
• For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.
• In 1950, the ratio of the average executive's paycheck to the average worker's paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.
• As of 2007, the bottom 80 percent of American households held about 7% of the liquid financial assets.
• The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.
• Average Wall Street bonuses for 2009 were up 17 percent when compared with 2008.
• In the United States, the average federal worker now earns 60% MORE than the average worker in the private sector.
• The top 1 percent of U.S. households own nearly twice as much of America's corporate wealth as they did just 15 years ago.
• In America today, the average time needed to find a job has risen to a record 35.2 weeks.
• More than 40 percent of Americans who actually are employed are now working in service jobs, which are often very low paying.
• or the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.
• This is what American workers now must compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.
• Approximately 21 percent of all children in the United States are living below the poverty line in 2010 - the highest rate in 20 years.
• Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.
• The top 10 percent of Americans now earn around 50 percent of our national income.
Giant Sucking Sound
The reality is that no matter how smart, how strong, how educated or how hard working American workers are, they just cannot compete with people who are desperate to put in 10 to 12 hour days at less than a dollar an hour on the other side of the world. After all, what corporation in their right mind is going to pay an American worker 10 times more (plus benefits) to do the same job? The world is fundamentally changing. Wealth and power are rapidly becoming concentrated at the top and the big global corporations are making massive amounts of money. Meanwhile, the American middle class is being systematically wiped out of existence as U.S. workers are slowly being merged into the new "global" labor pool.
What do most Americans have to offer in the marketplace other than their labor? Not much. The truth is that most Americans are absolutely dependent on someone else giving them a job. But today, U.S. workers are "less attractive" than ever. Compared to the rest of the world, American workers are extremely expensive, and the government keeps passing more rules and regulations seemingly on a monthly basis that makes it even more difficult to conduct business in the United States.
So corporations are moving operations out of the U.S. at breathtaking speed. Since the U.S. government does not penalize them for doing so, there really is no incentive for them to stay.
What has developed is a situation where the people at the top are doing quite well, while most Americans are finding it increasingly difficult to make it. There are now about six unemployed Americans for every new job opening in the United States, and the number of "chronically unemployed" is absolutely soaring. There simply are not nearly enough jobs for everyone.
Many of those who are able to get jobs are finding that they are making less money than they used to. In fact, an increasingly large percentage of Americans are working at low wage retail and service jobs.
But you can't raise a family on what you make flipping burgers at McDonald's or on what you bring in from greeting customers down at the local Wal-Mart.
The truth is that the middle class in America is dying -- and once it is gone it will be incredibly difficult to rebuild.*******
How can it be that you pay more to the IRS than General Electric?
HOUSTON -- As you work on your taxes this month, here's something to raise your hackles: Some of the world's biggest, most profitable corporations enjoy a far lower tax rate than you do--that is, if they pay taxes at all.
The most egregious example is General Electric ( GE - news - people ). Last year the conglomerate generated $10.3 billion in pretax income, but ended up owing nothing to Uncle Sam. In fact, it recorded a tax benefit of $1.1 billion.
Avoiding taxes is nothing new for General Electric. In 2008 its effective tax rate was 5.3%; in 2007 it was 15%. The marginal U.S. corporate rate is 35%.
How did this happen? It's complicated. GE's tax return is the largest the IRS deals with each year--some 24,000 pages if printed out. Its annual report filed with the Securities and Exchange Commission weighs in at more than 700 pages.
Inside you'll find that GE in effect consists of two divisions: General Electric Capital and everything else. The everything else--maker of engines, power plants, TV shows and the like--would have paid a 22% tax rate if it was a standalone company.
It's GE Capital that keeps the overall tax bill so low. Over the last two years, GE Capital has displayed an uncanny ability to lose lots of money in the U.S. (posting a $6.5 billion loss in 2009), and make lots of money overseas (a $4.3 billion gain). Not only do the U.S. losses balance out the overseas gains, but GE can defer taxes on that overseas income indefinitely. The timing of big deductions for depreciation in GE Capital's equipment leasing business also provides a tax benefit, as will loan losses left over from the credit crunch.
But it's the tax benefit of overseas operations that is the biggest reason why multinationals end up with lower tax rates than the rest of us. It only makes sense that multinationals "put costs in high-tax countries and profits in low-tax countries," says Scott Hodge, president of the Tax Foundation. Those low-tax countries are almost anywhere but the U.S. "When you add in state taxes, the U.S. has the highest tax burden among industrialized countries," says Hodge. In contrast, China's rate is just 25%; Ireland's is 12.5%.
Corporations are getting smarter, not just about doing more business in low-tax countries, but in moving their more valuable assets there as well. That means setting up overseas subsidiaries, then transferring to them ownership of long-lived, often intangible but highly profitable assets, like patents and software.
As a result, figures tax economist Martin Sullivan, companies are keeping some $28 billion a year out of the clutches of the U.S. Treasury by engaging in so-called transfer pricing arrangements, where, say, Microsoft's ( MSFT - news - people ) overseas subsidiaries license software to its U.S. parent company in return for handsome royalties (that get taxed at those lower overseas rates).
"Corporations are paying lower amounts of their profits in taxes now than in the past," says Douglas Shackelford, who teaches tax law at the University of North Carolina at Chapel Hill. "Other countries have been lowering their rates, but not the U.S."
Mind you, not all global megacorps enjoy such low tax rates. Try to muster some pity for Big Oil. ExxonMobil ( XOM - news - people ) in its 2009 annual report to the SEC, recorded a larger income tax expense than any other U.S. company last year, some $17.6 billion, or 47% of pretax earnings. Exxon's peers Chevron ( CVX - news - people ) and ConocoPhillips ( COP - news - people ) likewise recorded similarly high effective tax rates. The oil companies are oddities among the multinationals because many of the oil-rich countries where they do business levy even higher taxes than the U.S.*******
IRS: 400 richest averaged $345M in '07 income, 16% tax rate
Posted by Michael Winter
Feb 18, 2010
On a day when the Internal Revenue Service came under literal attack, the agency reports that the nation's 400 highest-earning households reported an average income of $345 million in 2007 — up 31% from 2006 — and that their average tax bill fell to a 15-year low.
Bloomberg writes that the elite 400's average income more than doubled that year from $131.1 million in 2001, the year Congress adopted tax cuts urged by then-President George W. Bush.
Each household in the top 400 of earners paid an average tax rate of 16.6 percent, the lowest since the agency began tracking the data in 1992, the Internal Revenue Service statistics show. The top 400 paid $23 billion in taxes in 2007, up from $18 billion a year earlier, and a bigger amount than any year since 1992.
Their average effective tax rate was about half the 29.4 percent in 1993, the first year of President Bill Clinton's administration, when taxes were increased. The top 400 earners reported an average of $46 million of income that year. ..
The top 400 earners received a total $138 billion in 2007, up from $105.3 billion a year earlier. On an inflation-adjusted basis, their average income grew almost fivefold since 1992, the data show. The data doesn't disclose the identities of the top 400 taxpayers, and the people on the list change from year to year as their incomes rise and fall. Some 6,400 households have been included in the top 400 since the IRS began tracking their incomes 16 years ago. ...
Almost three-quarters of the highest earners' income was in capital gains and dividends taxed at a 15 percent rate set as part of Bush-backed tax cuts in 2003, the statistics show. Of the 400 earners, 289 paid a total effective federal tax rate of 20 percent or less in 2007, the last year for which figures were available, the data show. ..
To be included among the fortunate 400, the IRS says, a household had to earn at least $143 million.*******