Monday Reads: The Economist is Really IN (5¢)Posted: November 27, 2017
It’s Monday again Sky Dancers!
America has been held hostage by a Russian Potted plant with at least one severe Personality Disorder for 311 days. Kremlin Caligula has been busy on his golden piss pot and all I can say where are those guys with the straight jackets when a country really needs them?
My guess is that something huge is about to break on the Russian Front. Kremlin Caligula even channeled Marcia Brady with an all we ever hear is “Russia, Russia, Russia” tweet. This proximity to psychotic break and delusion has to be rooted in something more than a weekend spent bilking taxpayers for extended Golf Games at The Persian Whore House in Florida.
Meanwhile, the tax bill abomination is on the agenda which means wonky, economist kinda day for y’all. I’m actually going to focus on some stuff that may not make it to the Front page or lede first.
First off and like you didn’t know this, the measure of Income Equality for the United States is as bad as ever. This tax bill would put his so far to the right on a list of countries–which being right basically means you live in a kleptocracy–as to show we’re a not just an outlier but one that’s way outside the boundary of what should happen if it was just a random event. Our modern tax and economic policy purposefully takes money from labor and industrial capital and transfers it to Wall Street Gambling and Treasure Isle Money Laundering Land.
Let’s break that down a bit. This is the global wealth report for 2016 put out by Allianz which does economic research. The Gini Coefficient is the most widely used measure of income equality/inequality for countries. There are two measures. One is for income. The other is for wealth. It shows how those things are dispersed among a country’s population. This is from Investopedia which is a good source for simple explanations and examples of finance and economics concepts.
The Gini index or Gini coefficient is a statistical measure of distribution developed by the Italian statistician Corrado Gini in 1912. It is often used as a gauge of economic inequality, measuring income distribution or, less commonly, wealth distribution among a population. The coefficient ranges from 0 (or 0%) to 1 (or 100%), with 0 representing perfect equality and 1 representing perfect inequality. Values over 1 are theoretically possible due to negative income or wealth.
A country in which every resident has the same income would have an income Gini coefficient of 0. A country in one resident earned all the income, while everyone else earned nothing, would have an income Gini coefficient of 1.
The same analysis can be applied to wealth distribution (the “wealth Gini coefficient”), but because wealth is more difficult to measure than income, Gini coefficients usually refer to income and appear simply as “Gini coefficient” or “Gini index,” without specifying that they refer to income. Wealth Gini coefficients tend to be much higher than those for income.
Wealth–covered by this report–is basically financial assets. Let’s look at a graph to get an idea of what’s going on in the US compared to the rest of the world. The US is now number 1 on list for wealth inequality. Fortune wrote on this in 2015. The reason I bring this back up is that the dread tax bill–coupled with our next news item–will basically make this country’s wealth and income more third world banana republic level than it already is. We are the “richest and most unequal” country and believe me none of the benefits of that are trickling down. This is from 2015 a year prior to the current report.
And yet, with the overall growth of wealth, inequality remains a persistent issue, especially in the United States.
For the first time in this report series, Allianz calculated each country’s wealth Gini coefficient—a measure of inequality in which 0 is perfect equality and 100 would mean perfect inequality, or one person owning all the wealth. It found that the U.S. had the most wealth inequality, with a score of 80.56, showing the most concentration of overall wealth in the hands of the proportionately fewest people.
In comparison, when the Organisation for Economic Cooperation and Development (OECD) examined income inequality, it found that the U.S. has the fourth highest income Gini coefficient—0.40—after Turkey, Mexico, and Chile.
Ironically, the second highest Gini score overall in the Allianz report was found in Sweden, a nation long thought of as egalitarian.
I thought you might like to read this analysis from Steve Roth: ” Insanely Concentrated Wealth Is Strangling Our Prosperity. Today’s mountains of wealth throttle the very engine of wealth creation itself.”
Now of course you don’t expect 20-year-olds to have much or any wealth; there will always be households with none. But still, the environment for young households trying to build a comfortable and secure nest egg — the American dream? — has gotten wildly competitive and hostile over recent decades. (If we had a sovereign wealth fund, everyone would have a wealth share from birth.)
But here’s what’s even more egregious: that concentrated wealth is strangling our economy, our economic growth, our national prosperity. Wealth concentration drives a vicious, downward cycle, throttling the very engine of wealth creation itself.
Because: people with lots of money don’t spend it. They just sit on it, like Smaug in his cave. The more money you have, the less of it you spend every year. If you have $10,000, you might spend it this year. If you have $10 million, you’re not gonna. If you have $1,000, you’re at least somewhat likely to spend it this month.
This guy is not an economist but totally can put the numbers to what economists do all the time. We determine what drives economic growth. In this country, it is the middle class spending money and saving it to buy houses, retire, and take vacations. A middle class does this in their home town not in Panama, the Channel Islands, or any of the other places the wealthy hide their treasure and buy overpriced yachts from each other.
This leads me to the second disturbing thing. The very laws and agency meant to protect the middle class from abuses of turning banking houses into gambling concerns are being destroyed. This is in the ledes and rightly so.
The Consumer Financial Protection Bureau’s top lawyer sided with the Justice Department over President Donald Trump’s appointment of Mick Mulvaney to lead the CFPB as a leadership battle over the controversial watchdog agency escalated.
In a memorandum obtained by POLITICO, CFPB general counsel Mary McLeod said Trump had the legal authority to name an acting director to the bureau under the Federal Vacancies Reform Act.
“It is my legal opinion that the president possesses the authority to designate an acting director for the bureau,” McLeod wrote in the Nov. 25 memo to the CFPB leadership team. “I advise all bureau personnel to act consistently with the understanding that Director Mulvaney is the acting director of the CFPB.”
Yet even as McLeod’s memo was circulating, Leandra English, former CFPB Director Richard Cordray’s choice to serve as acting director of the watchdog agency, sued the Trump administration in U.S District Court in Washington.
In her lawsuit filed late Sunday, English named Trump and Mulvaney as defendants and asked the court to establish her authority as acting director.
“Ms. English has a clear entitlement to the position of acting director of the CFPB,” the filing claims. “The President’s purported or intended appointment of defendant Mulvaney as acting director of the CFPB is unlawful.”
As a Republican congressman, Mick Mulvaney called the Consumer Financial Protection Bureau a “joke” and said he wished it didn’t exist. On Monday, Mulvaney showed up at the agency’s D.C. offices with a bag of doughnuts and a new title: boss.
But after a frantic weekend of political and legal posturing, Mulvaney’s arrival represented a new escalation of tensions over who ultimately will lead the agency. A day earlier, Leandra English filed suit claiming she is the “rightful acting director.”
Leadership of the agency was thrown into doubt last Friday when Richard Cordray stepped down as CFPB director and said his chief of staff, English, would temporarily replace him. A few hours later, Trump named Mulvaney, the Office of Management and Budget director and a longtime critic of the CFPB, to the job.
Both sides are pointing to the fine print in dueling federal statutes to claim authority over the job running one of the most controversial, and powerful, banking industry regulators. English filed suit late Sunday, asking for a temporary restraining order to prevent Trump from appointing Mulvaney acting director.
Here’s why the lawsuit was filed and more information from DDay at the Intercept who found Trump’s legal work is coming from a PayDay lender. There’s a succession provision in the law itself.
The succession provision was part of Congress’s intent to keep the agency independent of the president, Frank said. “We gave the director unusual independence from the president, including a five-year term. This [provision] makes that effectual,” Frank said. “Our intention was to give a full five years of independence. This was part of it.”The president still has the ability to appoint a successor, said Frank, but only one who would not destroy the agency, as such a nominee would not get through the Senate. “The way it works, the acting director stays in until a confirmed successor appointed. I don’t think the Senate would confirm someone like Mulvaney, who would destroy the agency. Remember, Senator Collins is in there and she voted for it. Republicans would like to get rid of the agency legislatively, but they don’t have the votes,” he said.
Former Rep. Brad Miller, D-N.C., the lead champion of the CFPB provision in the House, also said it was the intent of the bill’s authors to keep the acting director independent of the president. “We were very much about the task of trying to create an independent agency that would not be captured by its opponents,” he said. “The statute’s pretty clear. What happens if there’s a vacancy in the director’s spot, the deputy director steps up and serves until the Senate confirms a replacement.”
Democrats, in the past, have respected the process for other agencies that have similar succession plans, including the Federal Housing Finance Agency. “We did the same thing with the FHFA. There was a desire to get rid of [then-FHFA Acting Director Edward] DeMarco,” Miller recalled in an interview with The Intercept. “We couldn’t find a way around it because the statute was really clear. It said if there was a vacancy, the statute requires Senate confirmation. The president just can’t appoint someone to serve. It’s the same thing here, there’s a clear statutory succession.”Laurence Tribe, a renowned constitutional scholar at Harvard Law School, agreed that the statute is clear.The OLC, in the memo filed [over the weekend], to its credit, admits that the references to unavailability and absence encompass vacancy. They’re not trying to argue that the statute doesn’t cover this. They’re trying to have it both ways. They’re arguing that the president retains an option under the Federal Vacancies Reform Act to override subsequent legislation. They’re trying to have half a loaf and make it a whole loaf. It’s an interesting position but it collapses on itself. It’s completely incoherent. Laws are not typically written that way.
Senate Minority Leader Chuck Schumer, D-N.Y., pushed back against the Mulvaney pick. “The process for succession laid out in Dodd Frank is clear: Leandra English, not Mick Mulvaney, is the acting director of the CFPB. By attempting to install Mr. Mulvaney as director, the Trump administration is ignoring the established, proper, legal order of succession that we purposefully put in place, in order to put a fox in charge of a hen house,” he said in a statement.
Our democracy is being attacked two ways. First, our alliances and influence are being undermined through Trump’s unbound loyalty to Russia and the greed of those who are like Trump himself. Like Trump, many are Trust Fund babies who would have never been successful without the largess of their fathers and grandfathers. Second, all social contracts which help Americans join and keep Middle Class Status are being dismantled while we sit like frogs in a pan of water set to boil. They are going after everything in the chaos of right now and all at once. We’re pulled in many directions trying to protect everything.
In even more depressing news, the Koch Brothers–again Trust Babies for Stealing the Nation’s Wealth–have bought Time Magazine. At a time when our free press is so under constant attack, this is really bad.
That Charles and David Koch are putting $650m into Meredith Corp’s purchase of Time would ordinarily be cause for great soul-searching in media. But these are not ordinary times.
Meredith’s Koch-backed deal with Time – which owns, in addition to Time magazine, titles including People, Fortune and Sports Illustrated – was sealed Sunday night. Meredith said in a statement announcing the deal that they are building “a premier media company serving nearly 200 million American consumers.”
Observers of Koch Industries, a longtime supporter of libertarian and conservative causes, especially generous with funding for climate denial through thinktanks and research groups, say more than business is at stake.
“It’s a very proper business decision – a cheap way to wield even more political influence,” said Bill McKibben, a former New Yorker writer and key figure in the environmental movement as founder of the group 350.org. “The return on investment on their political work is off the charts, I fear.”
At first glance, the oil and gas giant’s reason for backing the bid by Meredith is not readily apparent. Sure, the Kochs have appeared on the Time 100 list – in 2011, 2014 and 2015 – and David Koch has lunched with the magazine’s former editor. But what kind of money-minded mogul would pivot to print in 2017 – and to Time, of all places?
“Time magazine doesn’t move the needle on anything any more,” said Jay Rosen, a journalism professor at New York University. “It just doesn’t make a lot of sense to me. Unless they want to influence the Fortune 500 rankings or something.”
As a spokesman put it to a media reporter recently, Koch Industries, the second-largest private company in the US, virtually all of which is co-owned by the brothers, “has a longstanding policy of not commenting on deals” — and this latest infusion of cash to Meredith from their private equity arm, Koch Equity Development, is no exception to that rule. But at least some of what the brothers have poured money into over the years is a matter of public record.
The Kochs have, for instance, spent hundreds of millions on not-for-profit organizations, universities, advocacy groups and political campaigns. Though payback on donations is perceptible only through influence, in Time, they would also have an asset.
I’ll end with What Sarah Wrote.
The erosion of freedom of speech and assembly has always been a hallmark of dictatorship, one traditionally associated with formal decrees of censorship or dramatic acts like book burning. In Mr. Trump’s corporatized administration, overt state censorship is unnecessary and undesirable: Instead, technology can be manipulated while excessive litigation can force the media into self-censorship. The subtler gesture of removing the neutrality of the internet allows constitutional rights to remain intact on paper but demolished in practice.
The FCC’s proposed rollback of net neutrality arrives with two other measures that mark the beginning of a more abjectly fascist phase for the United States – a systemic transformation that will likely endure after Trump leaves office. Along with the loss of a free internet, we face the packing of the courts with conservative extremists who legal scholars worry will decimate constitutional rights. Many of these judicial appointments are for a lifetime, curbing civil liberties for generations to come.
Americans also face a serious threat to the integrity of elections, with gerrymandering, restrictive voter ID laws, a bogus “voter fraud” commission, insecure voting machines, and foreign interference that is not only unchallenged but is sometimes encouraged by Republicans all adding up to the likelihood that the 2018 midterm elections will not be free or fair. Voter suppression will likely be rampant, with non-white and immigrant Americans the primary targets of disenfranchisement.
And here we lie at the interconnected horror of the Trump administration’s autocratic manoeuvres. Consider this scenario for 2018: The repeal of net neutrality will stem the flow of information, making voter suppression harder to document. The packing of the courts will make the voter suppression that is documented harder to challenge. And the long-standing solution to purveyors of unpopular policies – vote them out – will be, by definition, impossible, since the election is rigged and the rigging uncontestable. This carefully constructed web of repression is how democracy dies.
What’s on your reading and blogging list today?