November 12, 2009
Our economy is in serious trouble. Public officials have to make a case for federal job creation. The National Jobs for All Coalition this weekend sponsored in New York City a jobs conference on this proposal. (See jobsconference.org, http://fullemployment.blogspot.com, or njfac.org) You should contact the sponsors and implement their plans. The economy runs on purchasing power, or aggregate demand, and that has been dangerously injured. I am sorry to bedevil you with implied criticism, but there is a wave of criticism coming, I’m afraid.
The private sector market is not going to rescue the economy. In 1939 unemployment still held at 19%, but due to public employment it dropped to below 2% in 1943, ‘44, ‘45. This is the positive legacy of Keynesian economic policy. Aggregate demand and the U.S. economy was restored by massive public jobs, a transfer of wealth to workers, a suppression of consumer goods manufacture, and a moratorium on household debt financing because of the war effort. This cannot be repeated, but emulated. Aggregate demand drives the economy, as Marriner Eccles, the Chairman of the Federal Reserve, explained in his 1952 memoirs, Beckoning Horizons.
Contents of Letter:
This letter will offer you two astonishing facts you need to know, then a thumbnail sketch of miserable facts you should know, then two authors’ proposals for remedying the status quo, and then an apology for being so glum.
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Distressing Economic Facts, November, 2009
Number One:
University of California economics professor Emmanuel Saez reports in “Striking It Richer”, updated August, 2009, that during the period 2001-2007 the top earning 1% of households received 65% of the economic gains that the U.S. economy achieved. The lower 99% received the remaining 35%. Combining the report of Edward Wolff with Emmanuel Saez, the top 1% of households received from 1979 to 2001 50% of the economic growth of the nation. Ask yourself what does this do to purchasing power of the U.S. consumer? It squeezes it to zero.
Number Two:
Rutgers University report, “America’s New Post Recession Employment Arithmetic,” by J. Seneca and J. Hughes. (October, 2009, from the Executive Summary):
**"To put this new millennium experience into perspective, during the final two decades of the twentieth century [1980 - 2000], the nation gained a total of 35.5 million private-sector Jobs. During the current decade, America appears destined to lose more than 1.7 million
private-sector jobs."
**"Erasing this deficit will require substantial and sustained employment growth. Even if the nation could add 2.15 million private-sector jobs per year starting in January 2010, it would need to maintain this pace for more than 7 straight years (7.63 years), or until August 2017, to eliminate the jobs deficit!" [The 2.15 million per year growth would equal the 1992-2000 growth rate.]
The Recession beginning in December, 2007, wiped out all the private sector job growth of the past 7 years. That growth was approximately 1 million private sector jobs per year, which was half the rate of the 1992-2001 period, and less than half the rate 1982-1990. Perhaps 40% of new job creation was driven by the exploding housing market, which is now has a 10 month inventory of unsold houses. The Rutgers report is too optimistic, it will take longer than 7 plus years to get back to 5% unemployment. Ask yourself what does this do to the purchasing power of the U.S. consumer?
Eighty-four percent of U.S. jobs are private sector jobs. We end the decade, January, 2010, with fewer private sector jobs than at the beginning, January, 2000. Ask yourself what does this do to purchasing power in our economy?
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This is a thumbnail sketch of the weakness of the U.S. economy:
Unemployment -- October, 2009 -- १५.7 million, 10.2% of the workforce. (If it follows past recessions it will not be before July, 2011, that private sector employment hits the bottom of the trough, or highest unemployment. That is 20 months after the official end of the recession, according to the Rutgers report. Unfortunately the recession is probably just on pause. The ARRA contributed most of the recent positive GDP gain, not the private sector. See Dean Baker’s report.)
Under-employment -- १५.3 million, 9.2% of the workforce. 12 job-wanters for every official new job opening! (See njfac.org for BLS statistics)
Working full-time for below poverty level income, 25 million, 17.1% of workforce. Total of 36.5% of all workers (56 million workers out of 155 million total workforce) either have no job, not enough job, or not enough pay from job! (njfac.org lays out these figures drawn from the BLS data)
Ask yourself what effect that has on purchasing power।
Foreclosures on home mortgages --- about 5 million already foreclosed, 10% of total, and predicted to approach 20% of all mortgages or ten million homes.
Underwater with mortgages --- currrently 27 to 30%, approaching 50% of mortgages, 26 million homes.
Household debt vs. Disposable Income --- 127%, which is still near record high of 132% in 2007. Average 1990-2000 was between 80% to 90%.
State of largest 19 banks that do 2/3rds of all loans (too big to fail banks) ---
still technically bankrupt, propped up by taxpayer dollars. Still not lending.
State of other 8,300 smaller banks -- 500 are facing bankruptcy according to the FDIC, but perhaps up to 800 will go bankrupt.
The top earning 1% of households earn annually more than the bottom earning 60% of households -- 23.5% vs. 20.3%. (See E. Saez, and Survey of Consumer Finances, Federal Reserve, and State of Working America, 2006/2007, p. 79)
The wealth of the top 1% of households is greater than the bottom 90% of households --- 34% vs. 31%.
The bottom half own only 2.5% of the nation’s net worth, which averages out to less than $25,000 for 58 million households. Not much to fall back on during a recession. The Forbes 400 own more assets than the Non-Forbes 150 million Americans, half the U.S. population, with the lowest net worth.
Children: According to an article in the AMA Archives of Pediatric and Adolescent Medicine, about 50% of U.S. children will live in families that buy their food with food stamps, and among African-American children the rate rises to 90%. This comes from a 32 year study involving 4,800 families. To qualify for food stamps the family has to have virtually no discernible assets. Another study (Hardships in America by H. Boushey, 2001) states that 28.7% of U.S. children under 12 years old live in families that cannot afford four necessities of food, housing, health care or child care.
Any additional hard shock to the economy, from national or foreign sources, could bring on a Depression.
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I have been reading and listening to Professor Jack Rasmus, St. Mary’s College in Moraga, California and contributor to Z Magazine (see KyklosProductions.com).
He offers two short term remedies:
1. Put $1 trillion directly into federal jobs creation.
2। Put $1 trillion into nationalizing the dead banks.
His long term remedies are:
1. Health care: create a single payer system, reduce total expenditure on health care from 17% of GDP to 10% by eliminating the insurance companies.
2. Banking: nationalize the banking functions by creating a utility banking system that would localize its function.
3. Create a national retirement pool, replacing the 401(K) system. Average 401(K) savings now is about $20,000 per accountee.
4। Restore unionization. This would transfer income to the non-managerial portion of the workforce, increasing purchasing power.
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I have also been reading Jeff Madrick, editor of Challenge Magazine, author of The Case for Big Government. He advocates increasing federal expenditures from 21% of GDP to 24% annually (a 14% increase in federal spending). He proposes spending an additional $432 billion annually for ten years minimum
$150 billion -- on pre-school to Kindergarten,
$120 billion -- restoring solvency to Social Security,
$50 billion -- Infrastructure, highways, bridges, ports, airports, energy conservation, renewable energy sources;
$35 billion -- College subsidies;
$25 billion -- K-12 educational services;
$25 billion -- Caregiver support;
$25 billion -- Unemployment expansion/Trade Assistance job retraining;
$2.5 billion -- Election financing.
He does not include changing to a single payer healthcare system because it will pay for itself in reduced expenses.
Again, ask yourself what these proposals will do for purchasing power or aggregate demand.
Ravi Batra, in The New Golden Age, The Coming Revolution against Political Corruption and Economic Chaos also contributes a list of reforms. David Korten in Agenda for a New Economy contributes a list too. I could make one up. Better for you would be to look to the National Jobs for All Coalition, and follow some of Rasmus’ recommendations.
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President Obama should sponsor and attend a large and prominent conference to publicize the need for a new approach. Change the public debate.
I sound a little alarmist with my prose. I tend to think that the imbalances of income and wealth are the last measure of economic health. I discovered by looking at the United Nations Human Development Index, comparisons of Inequality of Household Income and Expenditures, the U.S. ranks 75th among all nations. That’s dismal. Among all nations we are 37th in “Probability at birth to live to age 60.” Functional illiteracy is at 20% also. Even though our GDP/capita rate is above $45,000, we rank 13th in the composite ranking in 2009, and even worse we rank 75th in inequality. Our child poverty is about double other developed nations. I am long on grief, and short on praise. I hope you’ll understand.
Thanks for reading, best of luck to you all, and may you find the courage to do the right thing --- soon.
Ben Leet
San Leandro, California
http://benL8.blogspot.com --- I’ve posted this letter at this blog site.
Tuesday, November 17, 2009
Tuesday, August 11, 2009
Forbes १५०,०००,000
The Wealthy Forbes 400 Owns as Much
as the Non-Wealthy Non-Forbes 150,000,000
The net worth of the 400 notables is equal to the net worth of half of the U.S. population. This is the page on wealth posted at Inequality.org:
Wealth
In 1962, the wealth of the richest one percent of U.S. households was roughly 125 times greater than that of the typical household. By 2004, it was 190 times (EPI, State of Working America 2006-07, Figure 5B).
(note: typical means median household)
The richest one percent of U.S. households now owns 34.3 percent of the nation's private wealth, more than the combined wealth of the bottom 90 percent. The top one percent also owns 36.9 percent of all corporate stock. (EPI, State of Working America 2006-07, Table 5.1 and Figure 5F).
The total inflation-adjusted net worth of the Forbes 400 rose from $470 billion in 1995 to $1.25 Trillion in 2006. (Arthur Kennickel, Federal Reserve Board, Currents and Undercurrents: Changes in the Distribution of Wealth, 1989-2004 (pdf) and Forbes Magazine.)
The U.S. Personal Savings Rate declined from 11.2 percent in 1982 to NEGATIVE 1.1 percent in 2006. (Bureau of Economic Analysis, National Income and Product Accounts, Table 2.1)
I should pre advise that the figures I cite are not strictly precise, but they are approximately precise and the general picture I draw is accurate.
I want to note the $1.25 trillion figure, the amount of wealth held by the Forbes 400, in the third paragraph. This amount, $1.25 trillion, is equal to 2.5% of the total net worth of the U.S., according to the report cited. In the 2006 report, Currents and Undercurrents, the Federal Reserve authors state that the bottom 50% of U.S. households (half of the 118 million households) own only 2.5% of the total national net worth of just over $50 trillion. Multiplying $50 trillion by 2.5% is $1.25 trillion, the same amount that the report claims that the Forbes 400 owns. Therefore, with a population of 300,000,000 citizens, one can make a case that the richest 400 individuals own the same amount as the poorest half, or 150,000,000 citizens. Pretty amazing. It reminds one of Russia under the Czars, or of the reasons for fighting the Revolutionary War. Thomas Paine where are you? The city of Oakland has over 350,000 people; 400 divided into 150,000,000 is 375,000. One rich Forbes individual owns an amount equal to the population of Oakland, if all of Oakland were in the bottom 50% of wealth holders. Plutocracy lives.
This nation should tax those extremely wealthy individuals and use that money to create millions of jobs for the unemployed and underemployed, it should create subsidies for employers to hire additional workers, and it should increase the wages of poorly paid workers, increase the Earned Income Tax Credit, and so on. We have done this before.
On page 255 of State of Working America, 2006/2007, the table “Changes in average wealth by wealth class, 1962 - 2004 (thousands of 2004 dollars)” the average wealth per household is listed at $430.5 (thousand). With 118 million households, the total net worth or wealth of the nation comes to over $50 Trillion. (118 xs 430.5 = 50,799). From 1962 to 2004 the median net worth of household wealth has increased by 73% while the average net worth has increased by 157%, an indication of the one-sided growth that advantaged the wealthiest sector of our society. The recent decrease in the housing market values will take down both median and average net worth values. In 1989 the household median net worth was $67,700. It had climbed to $77,900 by 2004, but much of that was unrealized gains in the housing values that increased, inflation adjusted, by 84% in ten years, 1995 to 2005. That bubble has popped. In any case, the health of the nation would be greatly improved by a public jobs program. As noted before, 35.6% of the workers are unemployed, underemployed or working for below poverty wages (see njfac.org for reference to BLS current figures).
______________________________________________________________
Some readers may be unconvinced of my data, so I offer these additional supports. Here is a selection of quotes, a few from the Federal Reserve report, and another from Les Leopold reporting in the Huffington Post, August 19, 2009.
"For example, from 1992 to 2004 the wealth share of the least wealthy half of the population fell significantly to 2.5 percent of total wealth."
from the Abstract, page one, of Currents and Undercurrents: Changes in the Distribution of Wealth, 1989-2004, Arthur B. Kennickell, Senior Economist and Project Director, Survey of Consumer Finances.
Total net worth of nation, All Families, $50,250.6 billions. Total assets of 0 -50 percentile group, $1.278.6 billions (page 29). (2004)
same report, page 7, "following the pattern of growth in the top rank of the Forbes group, the proportion jumped to 2.5 percent in 1998, before falling off a bit in both 2001 and 2004. In 2005 the fraction was 2.0 percent." --- not the same amount as reported by extremeinequality.org.
same report, page 7, "For example, in 1989, 26.5 percent of families had net worth of less than $10,000; by 2004 the figure was 22.7 percent. Over the same period, the share of families with at least $500,000 in net worth rose from 10.8 percent to 17.7 percent." --- very positive news, but does it counter-weigh the fact of half owning 2.5%???
____________________________________________________________________________________________________________
Why Warren Buffett Must Take Aim on Our Obscene Distribution of Wealth
August 19, 2009, Huffington Post, Les Leopold
This is the perfect time to call for a new progressive tax schemes on the superrich. In fact, if we had in place a fair system, there would be no deficit problem at all. Consider the fact that by 2008, the top 400 billionaires in the U.S. averaged $3.4 billion in assets each! Their total net worth was a whopping $1.56 trillion. That capital accumulated because, as a matter of policy, we encouraged income and wealth to concentrate at the very top of the income ladder. If we had kept in place the Eisenhower era tax system, the deficit Buffett worries so much about would nearly vanish.
http://www.huffingtonpost.com/les-leopold/why-warren-buffett-must-t_b_263500.html
The top marginal tax in 1980 when Reagan won the election was 70% on income over $400,000. Effectively the tax was much lower. Leopold has access to very current wealth data that I do not know about.
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There is surprisingly little academic information about wealth and its effects. I have not read these books, but I’ll recommend them anyway. Top Heavy: The Increasing Inequality of Wealth in America and What Can Be Done About It, Second Edition, 2002, by Edward N. Wolff. Two books by Lisa A Keister, Wealth in America: Trends in Wealth Inequality, 2000, and Getting Rich: America’s New Rich and How They Got That Way, 2005. And the last unread recommendation is Who Rules America? Challenges to Corporate and Class Dominance by G. William Domhoff, 2009.
http://benL8.blogspot.com --- August 11, 2009
as the Non-Wealthy Non-Forbes 150,000,000
The net worth of the 400 notables is equal to the net worth of half of the U.S. population. This is the page on wealth posted at Inequality.org:
Wealth
In 1962, the wealth of the richest one percent of U.S. households was roughly 125 times greater than that of the typical household. By 2004, it was 190 times (EPI, State of Working America 2006-07, Figure 5B).
(note: typical means median household)
The richest one percent of U.S. households now owns 34.3 percent of the nation's private wealth, more than the combined wealth of the bottom 90 percent. The top one percent also owns 36.9 percent of all corporate stock. (EPI, State of Working America 2006-07, Table 5.1 and Figure 5F).
The total inflation-adjusted net worth of the Forbes 400 rose from $470 billion in 1995 to $1.25 Trillion in 2006. (Arthur Kennickel, Federal Reserve Board, Currents and Undercurrents: Changes in the Distribution of Wealth, 1989-2004 (pdf) and Forbes Magazine.)
The U.S. Personal Savings Rate declined from 11.2 percent in 1982 to NEGATIVE 1.1 percent in 2006. (Bureau of Economic Analysis, National Income and Product Accounts, Table 2.1)
I should pre advise that the figures I cite are not strictly precise, but they are approximately precise and the general picture I draw is accurate.
I want to note the $1.25 trillion figure, the amount of wealth held by the Forbes 400, in the third paragraph. This amount, $1.25 trillion, is equal to 2.5% of the total net worth of the U.S., according to the report cited. In the 2006 report, Currents and Undercurrents, the Federal Reserve authors state that the bottom 50% of U.S. households (half of the 118 million households) own only 2.5% of the total national net worth of just over $50 trillion. Multiplying $50 trillion by 2.5% is $1.25 trillion, the same amount that the report claims that the Forbes 400 owns. Therefore, with a population of 300,000,000 citizens, one can make a case that the richest 400 individuals own the same amount as the poorest half, or 150,000,000 citizens. Pretty amazing. It reminds one of Russia under the Czars, or of the reasons for fighting the Revolutionary War. Thomas Paine where are you? The city of Oakland has over 350,000 people; 400 divided into 150,000,000 is 375,000. One rich Forbes individual owns an amount equal to the population of Oakland, if all of Oakland were in the bottom 50% of wealth holders. Plutocracy lives.
This nation should tax those extremely wealthy individuals and use that money to create millions of jobs for the unemployed and underemployed, it should create subsidies for employers to hire additional workers, and it should increase the wages of poorly paid workers, increase the Earned Income Tax Credit, and so on. We have done this before.
On page 255 of State of Working America, 2006/2007, the table “Changes in average wealth by wealth class, 1962 - 2004 (thousands of 2004 dollars)” the average wealth per household is listed at $430.5 (thousand). With 118 million households, the total net worth or wealth of the nation comes to over $50 Trillion. (118 xs 430.5 = 50,799). From 1962 to 2004 the median net worth of household wealth has increased by 73% while the average net worth has increased by 157%, an indication of the one-sided growth that advantaged the wealthiest sector of our society. The recent decrease in the housing market values will take down both median and average net worth values. In 1989 the household median net worth was $67,700. It had climbed to $77,900 by 2004, but much of that was unrealized gains in the housing values that increased, inflation adjusted, by 84% in ten years, 1995 to 2005. That bubble has popped. In any case, the health of the nation would be greatly improved by a public jobs program. As noted before, 35.6% of the workers are unemployed, underemployed or working for below poverty wages (see njfac.org for reference to BLS current figures).
______________________________________________________________
Some readers may be unconvinced of my data, so I offer these additional supports. Here is a selection of quotes, a few from the Federal Reserve report, and another from Les Leopold reporting in the Huffington Post, August 19, 2009.
"For example, from 1992 to 2004 the wealth share of the least wealthy half of the population fell significantly to 2.5 percent of total wealth."
from the Abstract, page one, of Currents and Undercurrents: Changes in the Distribution of Wealth, 1989-2004, Arthur B. Kennickell, Senior Economist and Project Director, Survey of Consumer Finances.
Total net worth of nation, All Families, $50,250.6 billions. Total assets of 0 -50 percentile group, $1.278.6 billions (page 29). (2004)
same report, page 7, "following the pattern of growth in the top rank of the Forbes group, the proportion jumped to 2.5 percent in 1998, before falling off a bit in both 2001 and 2004. In 2005 the fraction was 2.0 percent." --- not the same amount as reported by extremeinequality.org.
same report, page 7, "For example, in 1989, 26.5 percent of families had net worth of less than $10,000; by 2004 the figure was 22.7 percent. Over the same period, the share of families with at least $500,000 in net worth rose from 10.8 percent to 17.7 percent." --- very positive news, but does it counter-weigh the fact of half owning 2.5%???
____________________________________________________________________________________________________________
Why Warren Buffett Must Take Aim on Our Obscene Distribution of Wealth
August 19, 2009, Huffington Post, Les Leopold
This is the perfect time to call for a new progressive tax schemes on the superrich. In fact, if we had in place a fair system, there would be no deficit problem at all. Consider the fact that by 2008, the top 400 billionaires in the U.S. averaged $3.4 billion in assets each! Their total net worth was a whopping $1.56 trillion. That capital accumulated because, as a matter of policy, we encouraged income and wealth to concentrate at the very top of the income ladder. If we had kept in place the Eisenhower era tax system, the deficit Buffett worries so much about would nearly vanish.
http://www.huffingtonpost.com/les-leopold/why-warren-buffett-must-t_b_263500.html
The top marginal tax in 1980 when Reagan won the election was 70% on income over $400,000. Effectively the tax was much lower. Leopold has access to very current wealth data that I do not know about.
__________________________________________________________________
There is surprisingly little academic information about wealth and its effects. I have not read these books, but I’ll recommend them anyway. Top Heavy: The Increasing Inequality of Wealth in America and What Can Be Done About It, Second Edition, 2002, by Edward N. Wolff. Two books by Lisa A Keister, Wealth in America: Trends in Wealth Inequality, 2000, and Getting Rich: America’s New Rich and How They Got That Way, 2005. And the last unread recommendation is Who Rules America? Challenges to Corporate and Class Dominance by G. William Domhoff, 2009.
http://benL8.blogspot.com --- August 11, 2009
Saturday, August 8, 2009
Wages Must Rise
Wages Must Rise
Wages must rise. Public employment is a solution.
The wealthiest 1% of U.S. households own more wealth than the lower 91% of households. They earn each year almost as much as the lower 60% of households. This is why our economy does not work well.
(Sources: Federal Reserve report, Survey of Consumer Finances, Currents and Undercurrents, 2006; and Tax Policy Center, Brookings and Urban Institutes, quoted in State of Working America, 2006/2007, page 79, by Mishel, Bernstein, Allegretto)
Any economy is limited by the wage rate for most workers. When workers as a group cannot afford to purchase what they produce as a group because their wages are depressed as a group, then the economy must constrict. This is an inviolable law, just like supply and demand. That is why wages must be kept high. As anyone can see, capitalism tends to suppress wages; inherently capitalism’s competitive nature constantly forces a reduction in production costs, but in doing so this inescapable depressing force deprives the economy of purchasers. The economy then plummets to the level of available income and savings. This should be recognized as an inviolable law of economics. Marriner Eccles, the Chairman of the Federal Reserve during the Great Depression, cited this shrinkage of aggregate demand as the cause of the economic depression. Economist Ravi Batra says that wages are demand and productivity is supply, and they must be in balance.
In 2009 we have 35.6% of the workforce, or 55 million workers in a workforce of 155 million, who either have no job (9.4%), not enough job (involuntary part-time workers and discouraged workers --- 10%) or they are working for below poverty wages (16.2%). (See njfac.org for BLS statistics to confirm.) One out of three of workers are not buying much. As a result we have one in nine buying food with food stamps, one in six without health care, and over one in four children living in poverty. Among developed nations we have the highest inequality and the highest child poverty rate. We need to raise wages, but it requires a concerted strategy.
In 1939, ten very long years after the commencement of the Great Depression, the rate of unemployment still stood at 19%. Four years later, in 1943, ‘44, ‘45, it was below 2%. How this was done should be question number one for the general public. Simply put, public jobs were created. This transferred idle wealth into paychecks of working people. The same principle will work today, but we do not need a world war to prod us into a good policy. Wealth was idle because no one had money to buy additional products (called aggregate demand); very many people were very poor while very few people were very wealthy. Wealth was transferred, and massive public employment changed business expectations as more buyers entered the marketplace through this transfer of wealth. This activated the latent energy in America.
When government hires workers, it transfers idle money into paychecks of formerly non-working people. The most recent stimulus of $787 billion dollars promises to save -- or create -- 3.5 million jobs. Yet there are 15 million workers without jobs. Creating new jobs helps in two ways, it shrinks the job market which forces private employers to pay higher wages, and it transfers wealth to non-purchasing unemployed workers. Those newly employed government workers begin purchasing, and eventually enough traction creates demand in the private market so that employers hire again. (Economist E. James Welsh has a good essay about this phenomenon, available at InvestorsInsight.com, April 9, 2009.) Furthermore, we can increase the Earned Income Tax Credit, we can provide subsidies for food, child care, housing, health care, and education. And we can make it simpler for workers to form unions. All these create added demand in the economy, at the cost of future loan repayments or higher taxes to the top one percent who own more than 91% of the U.S. households combined.
One demerit of public job creation is that productivity rates fall, but that is not a permanent effect. Another is that interest rates rise because of government borrowing, and this brakes private investment because their expansion credit costs rise. This also is temporary.
From 1942 to 1960 -- Roosevelt, Truman and Eisenhower -- the maximum marginal income tax was 91% on incomes over $3.4 million. You may call this “confiscatory” but keep in mind it saved the overall economy. Over the past decades only a few boats have risen with the rising tide, in the 50s and 60s all boats were rising. Another benefit would be that the insanity of billion dollar hedge fund operators being taxed at lower rates than their secretaries would be put to an end. Today, a reinstated high marginal income tax would finance economic recovery quickly.
I recommend Jack Rasmus's solutions. He is an economics professor, see kyklosproductions.com, or see Dean Baker, or my own blog, http://benL8.blogspot.com. Jeff Madrick, the editor of Challenge Magazine and author of Why Economies Grow says much the same thing. John Mauldin’s Investors’ Insights has contributors from many sides, especially the skeptical side. Also Ravi Batra agrees with raising wages. He says that productivity equals supply and wages equal demand and the two must balance for growth and widespread prosperity. It's pretty obvious. But since 1980 that logic has been reversed.
In 2008 the annual GDP was $14.3 trillion and the number of active workers equaled 141 million. That means that almost $100,000 of value was produced by each worker in 2008, on average. Yet half the workers earned less than $40,000 a year, the median income for individual workers was below $40,000. (This from U.S. Census, 2007) The bottom half earned about 15% of the total national income, the top half earned 85%. The top one percent of households in 2006 earned 18.3% of the national income, while the bottom 60% earned only 20.3%. (See State of Working America, 2006/2007, page 79) The figures for wealth are even more egregious. The top one percent of households owns more wealth than the combined wealth of the lower 91% of households. Half the households own 2.5% of the national wealth, the other half own 97.5% of the national wealth. (See Currents and Undercurrents, 2006, Arthur Kennickel, U.S. Department of Treasury, Federal Reserve, Survey of Consumer Finances) Time for readjustment through higher wages?
We suffer from chronic low wages and a slavery mentality. In theory (only) Capitalism could actually seize up and die if corrections are not made. We have lots of room to increase wages in a systematic way. Only the richest, 3% at the top, would feel any loss, and their gain will be to live in a much happier world, a saner world, a safer world, and a world more just and productive.
I feel like ranting a little, so here goes:
Food stamps feed 11% of the population, one in nine Americans, in June of 2009, the number has nearly doubled from 17 million in 2000 to 33 million in 2009. (See http://www.msnbc.msn.com/id/27827700// for an interesting news article on food stamps) You must have less than $2000 in assets to receive them, but 70% of food stamp recipients (that’s 23 million Americans) have “no countable resources”. Half the recipients are children. (Our child poverty rate is double the average for developed nations.) That’s almost 20% of the nation’s children. $95 a month is the median benefit, when the typical (median) American household spends $184 a month per person on food. In November, 2008, approximately 67% of those eligible were receiving the food stamp benefit. If all who are eligible applied, over 40 million would qualify, more than one in every eight Americans. The economic multiplier for every dollar of food stamps is about $2 of added economic activity. The same applies for creating public jobs.
The article features a retired postal worker, Adell Davis age 63, who declined the $20 a month food stamp benefit when she moved into subsidized senior housing. She lives on a $672 Social Security check, and has about $200 a month left over after paying her bills. “I thought someone else could use it better than me,” she says. She never eats bacon and eggs nor fresh fruit and vegetables. Davis probably would qualify for work as a public school auxiliary classroom assistant, or many other valid work activities that public jobs could create. If we would let the banks go bankrupt, and transfer the $700 billion we kicked in to keep them solvent, and the $23 trillion in guarantees, we could easily employ the unemployed and create economic security for all citizens. No, instead we shovel taxpayer money to failed business men so they can continue their get-rich-at-all-cost schemes--- even collective bankruptcy --- before we employ those who cannot find full-time, decent paying work, the 55 million Americans whom I mentioned in the first paragraphs of this essay. We shovel $1.1 trillion a year in the military, double all other nations combined (See Chalmers Johnson, "Going Bankrupt" ZMagazine, and Tomsdispatch.com, January 24, 2008), even though there is no significant threat to our security, the most significant being the global economic depression that we created ourselves through non-regulation of the financial sector and low wages to 80% of the workforce over the past 30 years.
We should try to raise wages. In the U.N. Human Development Index we rank 15th now, despite the fact that our economy generates $41,890 per capita, more money per capita than all but one other nation. The median personal income (for 141 million workers) is less (about $40,000 per worker) than the per capita income for over 300 million citizens. Go figure.
How can anyone be poor in such a wealthy nation?
Ben Leet, see http://benL8.blogspot.com
Wages must rise. Public employment is a solution.
The wealthiest 1% of U.S. households own more wealth than the lower 91% of households. They earn each year almost as much as the lower 60% of households. This is why our economy does not work well.
(Sources: Federal Reserve report, Survey of Consumer Finances, Currents and Undercurrents, 2006; and Tax Policy Center, Brookings and Urban Institutes, quoted in State of Working America, 2006/2007, page 79, by Mishel, Bernstein, Allegretto)
Any economy is limited by the wage rate for most workers. When workers as a group cannot afford to purchase what they produce as a group because their wages are depressed as a group, then the economy must constrict. This is an inviolable law, just like supply and demand. That is why wages must be kept high. As anyone can see, capitalism tends to suppress wages; inherently capitalism’s competitive nature constantly forces a reduction in production costs, but in doing so this inescapable depressing force deprives the economy of purchasers. The economy then plummets to the level of available income and savings. This should be recognized as an inviolable law of economics. Marriner Eccles, the Chairman of the Federal Reserve during the Great Depression, cited this shrinkage of aggregate demand as the cause of the economic depression. Economist Ravi Batra says that wages are demand and productivity is supply, and they must be in balance.
In 2009 we have 35.6% of the workforce, or 55 million workers in a workforce of 155 million, who either have no job (9.4%), not enough job (involuntary part-time workers and discouraged workers --- 10%) or they are working for below poverty wages (16.2%). (See njfac.org for BLS statistics to confirm.) One out of three of workers are not buying much. As a result we have one in nine buying food with food stamps, one in six without health care, and over one in four children living in poverty. Among developed nations we have the highest inequality and the highest child poverty rate. We need to raise wages, but it requires a concerted strategy.
In 1939, ten very long years after the commencement of the Great Depression, the rate of unemployment still stood at 19%. Four years later, in 1943, ‘44, ‘45, it was below 2%. How this was done should be question number one for the general public. Simply put, public jobs were created. This transferred idle wealth into paychecks of working people. The same principle will work today, but we do not need a world war to prod us into a good policy. Wealth was idle because no one had money to buy additional products (called aggregate demand); very many people were very poor while very few people were very wealthy. Wealth was transferred, and massive public employment changed business expectations as more buyers entered the marketplace through this transfer of wealth. This activated the latent energy in America.
When government hires workers, it transfers idle money into paychecks of formerly non-working people. The most recent stimulus of $787 billion dollars promises to save -- or create -- 3.5 million jobs. Yet there are 15 million workers without jobs. Creating new jobs helps in two ways, it shrinks the job market which forces private employers to pay higher wages, and it transfers wealth to non-purchasing unemployed workers. Those newly employed government workers begin purchasing, and eventually enough traction creates demand in the private market so that employers hire again. (Economist E. James Welsh has a good essay about this phenomenon, available at InvestorsInsight.com, April 9, 2009.) Furthermore, we can increase the Earned Income Tax Credit, we can provide subsidies for food, child care, housing, health care, and education. And we can make it simpler for workers to form unions. All these create added demand in the economy, at the cost of future loan repayments or higher taxes to the top one percent who own more than 91% of the U.S. households combined.
One demerit of public job creation is that productivity rates fall, but that is not a permanent effect. Another is that interest rates rise because of government borrowing, and this brakes private investment because their expansion credit costs rise. This also is temporary.
From 1942 to 1960 -- Roosevelt, Truman and Eisenhower -- the maximum marginal income tax was 91% on incomes over $3.4 million. You may call this “confiscatory” but keep in mind it saved the overall economy. Over the past decades only a few boats have risen with the rising tide, in the 50s and 60s all boats were rising. Another benefit would be that the insanity of billion dollar hedge fund operators being taxed at lower rates than their secretaries would be put to an end. Today, a reinstated high marginal income tax would finance economic recovery quickly.
I recommend Jack Rasmus's solutions. He is an economics professor, see kyklosproductions.com, or see Dean Baker, or my own blog, http://benL8.blogspot.com. Jeff Madrick, the editor of Challenge Magazine and author of Why Economies Grow says much the same thing. John Mauldin’s Investors’ Insights has contributors from many sides, especially the skeptical side. Also Ravi Batra agrees with raising wages. He says that productivity equals supply and wages equal demand and the two must balance for growth and widespread prosperity. It's pretty obvious. But since 1980 that logic has been reversed.
In 2008 the annual GDP was $14.3 trillion and the number of active workers equaled 141 million. That means that almost $100,000 of value was produced by each worker in 2008, on average. Yet half the workers earned less than $40,000 a year, the median income for individual workers was below $40,000. (This from U.S. Census, 2007) The bottom half earned about 15% of the total national income, the top half earned 85%. The top one percent of households in 2006 earned 18.3% of the national income, while the bottom 60% earned only 20.3%. (See State of Working America, 2006/2007, page 79) The figures for wealth are even more egregious. The top one percent of households owns more wealth than the combined wealth of the lower 91% of households. Half the households own 2.5% of the national wealth, the other half own 97.5% of the national wealth. (See Currents and Undercurrents, 2006, Arthur Kennickel, U.S. Department of Treasury, Federal Reserve, Survey of Consumer Finances) Time for readjustment through higher wages?
We suffer from chronic low wages and a slavery mentality. In theory (only) Capitalism could actually seize up and die if corrections are not made. We have lots of room to increase wages in a systematic way. Only the richest, 3% at the top, would feel any loss, and their gain will be to live in a much happier world, a saner world, a safer world, and a world more just and productive.
I feel like ranting a little, so here goes:
Food stamps feed 11% of the population, one in nine Americans, in June of 2009, the number has nearly doubled from 17 million in 2000 to 33 million in 2009. (See http://www.msnbc.msn.com/id/27827700// for an interesting news article on food stamps) You must have less than $2000 in assets to receive them, but 70% of food stamp recipients (that’s 23 million Americans) have “no countable resources”. Half the recipients are children. (Our child poverty rate is double the average for developed nations.) That’s almost 20% of the nation’s children. $95 a month is the median benefit, when the typical (median) American household spends $184 a month per person on food. In November, 2008, approximately 67% of those eligible were receiving the food stamp benefit. If all who are eligible applied, over 40 million would qualify, more than one in every eight Americans. The economic multiplier for every dollar of food stamps is about $2 of added economic activity. The same applies for creating public jobs.
The article features a retired postal worker, Adell Davis age 63, who declined the $20 a month food stamp benefit when she moved into subsidized senior housing. She lives on a $672 Social Security check, and has about $200 a month left over after paying her bills. “I thought someone else could use it better than me,” she says. She never eats bacon and eggs nor fresh fruit and vegetables. Davis probably would qualify for work as a public school auxiliary classroom assistant, or many other valid work activities that public jobs could create. If we would let the banks go bankrupt, and transfer the $700 billion we kicked in to keep them solvent, and the $23 trillion in guarantees, we could easily employ the unemployed and create economic security for all citizens. No, instead we shovel taxpayer money to failed business men so they can continue their get-rich-at-all-cost schemes--- even collective bankruptcy --- before we employ those who cannot find full-time, decent paying work, the 55 million Americans whom I mentioned in the first paragraphs of this essay. We shovel $1.1 trillion a year in the military, double all other nations combined (See Chalmers Johnson, "Going Bankrupt" ZMagazine, and Tomsdispatch.com, January 24, 2008), even though there is no significant threat to our security, the most significant being the global economic depression that we created ourselves through non-regulation of the financial sector and low wages to 80% of the workforce over the past 30 years.
We should try to raise wages. In the U.N. Human Development Index we rank 15th now, despite the fact that our economy generates $41,890 per capita, more money per capita than all but one other nation. The median personal income (for 141 million workers) is less (about $40,000 per worker) than the per capita income for over 300 million citizens. Go figure.
How can anyone be poor in such a wealthy nation?
Ben Leet, see http://benL8.blogspot.com
Wednesday, July 22, 2009
Comments and Suggestions
My suggestion to a local radio show,
Your Call Radio,
July 19, 2009
This is my Agenda for a New Economy.
We must raise wages for the lower 80% of workers.
To do this we need public education. That’s where your show comes in.
Then a program to create about 7 million public jobs, plus a more generous Earned Income Tax Credit, and lastly and somewhat later a higher minimum wage rate. In 1939 the country’s unemployment rate, after 10 years of depression, was 19%. In 1943, 44, 45, it was below 2%. Massive public job creation caused the change. (I think I got the unemployment figures out of Wikipedia.) It ended the Great Depression as well. About 15 million are unemployed today, another 15 are stuck in part-time work, and another 25 million work full time for less than poverty wages. That comes to 55 million workers in a workforce of 155 million, or 35.6% who are with no job, not enough job, or lousy pay. (Go to njfac.org and find the Bureau of Labor Statistics data to confirm.)
One percent of the society, known as U.S. households, owns more wealth than
91% of households. That translates out to a population of a little over 300 million,
and about 3 million who have more net worth than the bottom 273 million. Three million own more than 273 million. 1 % own more than 91%. That’s wealth, the end result, the outcome, of how our economy works. Naturally they don’t do 91 times more work, but their reward is 91 times greater. (These figures come from the 2006 report of the Federal Reserve’s Survey of Consumer Finances, titled Currents and Undercurrents, by Arthur Kennickel. It’s on the web.)
Why public jobs? It will tighten the job market, and in effect it transfers wealth from wealthy and idle accounts into paychecks to working Americans. The tightened job market will raise the price of labor, meaning wages, and the transfer will increase aggregate demand to stimulate the economy, and the actual work done will enrich the country. The EITC does the last two mentioned goals. The minimum wage hike also accomplishes those two goals, but it is damaging to small businesses and should be gradual. The Economic Policy Institute reported that 27.3% of the children in the country are living in poverty in 2009, I suspect they take their figures from the U.S. Census. Those parents need a higher wage. In 2001 the book Hardships in America stated that 28.7% of children under 12 lived in families who could not afford all four necessities, housing, health care, childcare, and food. Those parents need a higher wage.
In fact, 143 million workers are working in our economy, and each produces about $100,000 of value each year.
Here’s a little math that proves that half of the workers are receiving 85% of the total national income, the other half receive 15%.
The median income for 143 million individual workers, in 2007, was below $40,000 a year (the median for men was $44,240 and for women $34,240 --- U.S. Census, 2007, Income, Earnings, and Poverty Data From the 2007 American Community Survey). Our economy produces more than $40,000 per person for over 300 million people, but the typical (median) worker earns less than $40,000. Why are not the median income (less than $40,000) and the average income (almost $100,000) closer? Do the math. We have 100 people working in a community, we pay them a combined amount of $100,000, on average $1,000 to each worker. But half of them earn less than $400, more like about $300 on average for the lower half, for a total of $15,000 combined ($300 times 50 workers is $15,000). The other $85,000 goes to the workers in the upper half. Conclusion: wages need to be raised for the bottom half.
This is confirmed by looking at State of Working America, 2006/2007, page 79, that says that the U.S. households broken into quintiles (20% groups) of earnings per household earn, from lowest quintile to highest, accordingly: 2.5%, 6.4%, 11.4%, 19.8%, and 60.3%. The bottom 60% of households receive a combined 20.3%. (2.5% plus 6.4% plus 11.4% equals 20.3%) The top one percent receives 18.4% of the total national income, in 2006.
Conclusion: wages need to be raised for the bottom half.
I know math is tiresome, but this is not too difficult.
We produce over $40,000 per capita in our economy, and we do, how can anyone remain poor? Answer: really bad distribution of income, which in short means Low Wages।
I’m reading William Quigley’s book An End to Poverty as We Know It (2003, Temple University Press). He has a page on job creation ideas, page 152, and he mentions Robert Haveman of University of Wisconsin who talks about a wage subsidy for employers, a $10,000 a year subsidy that reduces employers wage expense by almost a half for new employees hired over the year before. That could create a lot of new jobs, not government jobs. Those subsidies could be auctioned off to employers.
L. Randall Wray, University of Missouri, Kansas City, wrote Understanding Modern Money, and presents arguments for full employment. One of his graduate students had an article about Argentina’s experiment with government created jobs after their 2001 financial and economic crash. It was published in Dollars and Sense magazine, sorry, I don’t have the date, but it was last year.
I’d like Your Call to schedule a program along these lines. That’s my Agenda. Dean Baker and Robert Pollin co-authored a book about it. You could find someone. By the way, if the nation created 7 million new jobs that would equal to 9,100 new jobs in Oakland, California, to keep it in perspective. Just what agencies or businesses would increase their workforce I have not figured out yet. Maybe you know someone would could answer that question.
Thanks a million, not dollars, just thanks, for your shows.
You’ve got interesting speakers as guests.
Yours, Ben Leet
Find someone who will make a movie, One Percent Own More than 91 Percent, Another Inconvenient Truth।
This is a comment to an article in AlternetJuly २१, २००९, about Phil Angelides new job
From 2000 to 2007 the combined debt of the nation, meaning government, consumer, and corporate debt, increased from $27 trillion to $49 trillion, an added $22 trillion of new debt, of which $18 trillion came from financial corporations (according to professor Jack Rasmus who publishes with Z Magazine. He takes the figures from the Flow of Funds report of the Federal Reserve.) Since the private net worth of the entire nation was valued at $50 trillion (Survey of Consumer Finances, 2006, Currents and Undercurrents) this amounted to the creation of phantom wealth, almost all new wealth being financial. The story is not well reported in the media, but it has to do with the explosion of financial engineering products, and unsustainable lending. They leveraged themselves into inevitable collapse. We should create public finance services, see professor Peter Dorman or Ralph Nader's plan, and dump the bankrupt banks into the abyss where they belong. Angelides should also note that the inequality generated since Reagan is the core problem that created excess footloose capital in an environment of dropping consumer demand, aggregate demand. Credit expansion took the place of wage increases, hence the financial meltdown, and a systemic economic problem that Obama is not dealing with. We need public jobs and tighter labor markets that force higher wages, more Earned Income Tax Credits funding, and higher minimum wages. See my blog, http://benl8.blogspot.com. See The Trillion Dollar Meltdown by Charles Morris and David Korten's Agenda for a New Economy.
Posted July २१, 2009
________________________________________________________________
Another comment appeared after the article. This is not my comment:
(p.s. -- the GDP in 2008 = $14.3 trillion, national assets = $51 trillion)
Americans better hope and pray that Angelides and the Financial Crisis Inquiry Commission get to the roots of our economic crisis. Given the predisposition of Congress and the White House to ignore, obfuscate, deny and lie about the causes and even the current state of our economy.
The sheer magnitude of taxpayer involvement was laid bare in Congressional testimony.
From Bloomberg: "U.S. taxpayers may be on the hook for as much as $23.7 trillion to bolster the economy and bail out financial companies, said Neil Barofsky, special inspector general for the Treasury’s Troubled Asset Relief Program."
Tax Payers on the Hook for $23.7 trillion!
Your Call Radio,
July 19, 2009
This is my Agenda for a New Economy.
We must raise wages for the lower 80% of workers.
To do this we need public education. That’s where your show comes in.
Then a program to create about 7 million public jobs, plus a more generous Earned Income Tax Credit, and lastly and somewhat later a higher minimum wage rate. In 1939 the country’s unemployment rate, after 10 years of depression, was 19%. In 1943, 44, 45, it was below 2%. Massive public job creation caused the change. (I think I got the unemployment figures out of Wikipedia.) It ended the Great Depression as well. About 15 million are unemployed today, another 15 are stuck in part-time work, and another 25 million work full time for less than poverty wages. That comes to 55 million workers in a workforce of 155 million, or 35.6% who are with no job, not enough job, or lousy pay. (Go to njfac.org and find the Bureau of Labor Statistics data to confirm.)
One percent of the society, known as U.S. households, owns more wealth than
91% of households. That translates out to a population of a little over 300 million,
and about 3 million who have more net worth than the bottom 273 million. Three million own more than 273 million. 1 % own more than 91%. That’s wealth, the end result, the outcome, of how our economy works. Naturally they don’t do 91 times more work, but their reward is 91 times greater. (These figures come from the 2006 report of the Federal Reserve’s Survey of Consumer Finances, titled Currents and Undercurrents, by Arthur Kennickel. It’s on the web.)
Why public jobs? It will tighten the job market, and in effect it transfers wealth from wealthy and idle accounts into paychecks to working Americans. The tightened job market will raise the price of labor, meaning wages, and the transfer will increase aggregate demand to stimulate the economy, and the actual work done will enrich the country. The EITC does the last two mentioned goals. The minimum wage hike also accomplishes those two goals, but it is damaging to small businesses and should be gradual. The Economic Policy Institute reported that 27.3% of the children in the country are living in poverty in 2009, I suspect they take their figures from the U.S. Census. Those parents need a higher wage. In 2001 the book Hardships in America stated that 28.7% of children under 12 lived in families who could not afford all four necessities, housing, health care, childcare, and food. Those parents need a higher wage.
In fact, 143 million workers are working in our economy, and each produces about $100,000 of value each year.
Here’s a little math that proves that half of the workers are receiving 85% of the total national income, the other half receive 15%.
The median income for 143 million individual workers, in 2007, was below $40,000 a year (the median for men was $44,240 and for women $34,240 --- U.S. Census, 2007, Income, Earnings, and Poverty Data From the 2007 American Community Survey). Our economy produces more than $40,000 per person for over 300 million people, but the typical (median) worker earns less than $40,000. Why are not the median income (less than $40,000) and the average income (almost $100,000) closer? Do the math. We have 100 people working in a community, we pay them a combined amount of $100,000, on average $1,000 to each worker. But half of them earn less than $400, more like about $300 on average for the lower half, for a total of $15,000 combined ($300 times 50 workers is $15,000). The other $85,000 goes to the workers in the upper half. Conclusion: wages need to be raised for the bottom half.
This is confirmed by looking at State of Working America, 2006/2007, page 79, that says that the U.S. households broken into quintiles (20% groups) of earnings per household earn, from lowest quintile to highest, accordingly: 2.5%, 6.4%, 11.4%, 19.8%, and 60.3%. The bottom 60% of households receive a combined 20.3%. (2.5% plus 6.4% plus 11.4% equals 20.3%) The top one percent receives 18.4% of the total national income, in 2006.
Conclusion: wages need to be raised for the bottom half.
I know math is tiresome, but this is not too difficult.
We produce over $40,000 per capita in our economy, and we do, how can anyone remain poor? Answer: really bad distribution of income, which in short means Low Wages।
I’m reading William Quigley’s book An End to Poverty as We Know It (2003, Temple University Press). He has a page on job creation ideas, page 152, and he mentions Robert Haveman of University of Wisconsin who talks about a wage subsidy for employers, a $10,000 a year subsidy that reduces employers wage expense by almost a half for new employees hired over the year before. That could create a lot of new jobs, not government jobs. Those subsidies could be auctioned off to employers.
L. Randall Wray, University of Missouri, Kansas City, wrote Understanding Modern Money, and presents arguments for full employment. One of his graduate students had an article about Argentina’s experiment with government created jobs after their 2001 financial and economic crash. It was published in Dollars and Sense magazine, sorry, I don’t have the date, but it was last year.
I’d like Your Call to schedule a program along these lines. That’s my Agenda. Dean Baker and Robert Pollin co-authored a book about it. You could find someone. By the way, if the nation created 7 million new jobs that would equal to 9,100 new jobs in Oakland, California, to keep it in perspective. Just what agencies or businesses would increase their workforce I have not figured out yet. Maybe you know someone would could answer that question.
Thanks a million, not dollars, just thanks, for your shows.
You’ve got interesting speakers as guests.
Yours, Ben Leet
Find someone who will make a movie, One Percent Own More than 91 Percent, Another Inconvenient Truth।
This is a comment to an article in AlternetJuly २१, २००९, about Phil Angelides new job
From 2000 to 2007 the combined debt of the nation, meaning government, consumer, and corporate debt, increased from $27 trillion to $49 trillion, an added $22 trillion of new debt, of which $18 trillion came from financial corporations (according to professor Jack Rasmus who publishes with Z Magazine. He takes the figures from the Flow of Funds report of the Federal Reserve.) Since the private net worth of the entire nation was valued at $50 trillion (Survey of Consumer Finances, 2006, Currents and Undercurrents) this amounted to the creation of phantom wealth, almost all new wealth being financial. The story is not well reported in the media, but it has to do with the explosion of financial engineering products, and unsustainable lending. They leveraged themselves into inevitable collapse. We should create public finance services, see professor Peter Dorman or Ralph Nader's plan, and dump the bankrupt banks into the abyss where they belong. Angelides should also note that the inequality generated since Reagan is the core problem that created excess footloose capital in an environment of dropping consumer demand, aggregate demand. Credit expansion took the place of wage increases, hence the financial meltdown, and a systemic economic problem that Obama is not dealing with. We need public jobs and tighter labor markets that force higher wages, more Earned Income Tax Credits funding, and higher minimum wages. See my blog, http://benl8.blogspot.com. See The Trillion Dollar Meltdown by Charles Morris and David Korten's Agenda for a New Economy.
Posted July २१, 2009
________________________________________________________________
Another comment appeared after the article. This is not my comment:
(p.s. -- the GDP in 2008 = $14.3 trillion, national assets = $51 trillion)
Americans better hope and pray that Angelides and the Financial Crisis Inquiry Commission get to the roots of our economic crisis. Given the predisposition of Congress and the White House to ignore, obfuscate, deny and lie about the causes and even the current state of our economy.
The sheer magnitude of taxpayer involvement was laid bare in Congressional testimony.
From Bloomberg: "U.S. taxpayers may be on the hook for as much as $23.7 trillion to bolster the economy and bail out financial companies, said Neil Barofsky, special inspector general for the Treasury’s Troubled Asset Relief Program."
Tax Payers on the Hook for $23.7 trillion!
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