Inequality undermining Social Security

The upward redistribution of income in the U.S. is undermining the nation’s Social Security:

if you’re a millionaire, February 16th is the last day that you will pay into the social security for the entire year. That’s because the Federal payroll tax cap is set at $127,000, so any money made beyond this point, is not subject to taxation that would fund this very crucial Federal social program.

See Real News Network interview with Dean Baker of the Center for Economic Policy Research here.

The people’s park service

U.S. National Park Service employees defend the people’s commons:

Read about it here.

American bifurcation

Inequality by the numbers:

Source: “Economic growth in the United States: A tale of two countries,” by Thomas Piketty, Emmanuel Saez and Gabriel Zucman for the Washington Center for Equitable Growth.

Taxing inequality in Portland

Portland, Oregon, has instituted a first-ever tax on corporations that pay their CEOs more than 100 times as much as their workers. Econ4’s Doug Smith told the Portland City Council:

“Instead of building a real economy beneficial to all, these unethical pay practices spread outsourcing, offshoring, tax avoidance, downsizing and the substitution of good-paying permanent jobs with temporary, precarious employment.”

Read about it here.

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Here are the 50 states, ranked from “most shortchanged” to “least shortchanged” by the U.S. government. The ranking is based on an index combining: (i) votes in the Electoral College per state resident and (ii) benefits received per tax dollars paid to the federal government.

Source: New York Times.

Universal basic assets

Econ4’s Jim Boyce and Peter Barnes, author of With Liberty and Dividends for All, break down how universal basic income could be funded by common wealth:

The wealth we inherit and create together is worth trillions of dollars, yet we presently derive almost no income from it. Our joint inheritance includes invaluable gifts of nature such as our atmosphere, minerals and fresh water, and socially created assets such as our legal and financial infrastructure, without which private corporations couldn’t exist, much less thrive. If our common assets were better managed, they could pay every American, including children, several hundred dollars a month.

Read their piece here.

Power & antitrust

AT&T’s proposed $85 billion purchase of Time Warner is raising eyebrows – and fundamental questions about the purposes of antitrust law, writes James Stewart in the Times:

Politicians were piling on this week to criticize the deal, including Donald J. Trump; Tim Kaine, the Democratic nominee for vice president; and Senators Bernie Sanders of Vermont and Al Franken of Minnesota….

A younger generation of antitrust scholars who are rethinking the nation’s fundamental approach to antitrust law may prove even more influential.

“Over the last 40 to 50 years, antitrust law has evolved to be almost completely indifferent to vertical mergers,” said Tim Wu, an antitrust and internet expert at Columbia Law School who coined the phrase “net neutrality” …

In vertical mergers, a company buys a supplier; in horizontal mergers, direct competitors combine.

But the new generation harks back to the original trustbusters of the early 20th century, who were most concerned about preventing corporations from gaining too much power.

“The antitrust system as it stands is focused on prices to consumers, innovation and efficiencies,” Mr. Wu said. “That reflects the triumph of the University of Chicago school of economics. But there’s an older tradition, embodied by Supreme Court Justice Louis Brandeis, that says a concentration of too much power in too few hands is bad for democracy and bad for consumers.”

Read more here. For more on corporate pursuit of power, see this piece by Econ4’s James Boyce.

This is not a typo

When I first saw this, I thought it must be a typo. Incredibly, it’s not.

[T]he Defense Department’s inspector general found more than $6.5 trillion “wrongful adjustments to accounting entries” in the Army’s general fund in 2015 alone. It’s a number that’s difficult to wrap your head around. First of all, it’s much larger than the entire annual federal budget. But that sum represents not only current spending, but a lot of money from previous years that can’t be accounted for either. The sheer scope of the malfeasance is so staggering that the question that comes to mind isn’t “Why?” but “How?”

Read more here. And here. And here.

You can download the Inspector General’s report that uncovered the mess here.

The Trumpbeat of inequality

Nobel laureate Joe Stiglitz writes:

Where the trade agreements failed, it was not because the US was outsmarted by its trading partners; it was because the US trade agenda was shaped by corporate interests….

We need to rewrite the rules of the economy once again, this time to ensure that ordinary citizens benefit. Politicians in the US and elsewhere who ignore this lesson will be held accountable. Change entails risk. But the Trump phenomenon – and more than a few similar political developments in Europe – has revealed the far greater risks entailed by failing to heed this message: societies divided, democracies undermined, and economies weakened.

Read more here.

The deserving rich?

Nancy Folbre takes issue with Harvard professor Gregory Mankiw’s defense of the one percent:

The rich are not like you and me. They contribute far more to society than everybody else, so argues Harvard University economist Gregory Mankiw in his essay “Defending the One Percent.” Mankiw’s praise for talented superstars such as Steven Jobs, J.K. Rowling, and Steven Spielberg quickly blooms into a more general argument that competitive labor markets pay workers what they deserve. This is music to the ears of high earners, and it sings to a very human desire to believe that the world is fair….

Some of us contribute more than members of the top one percent to the economy, and some of us contribute less. None of us gets exactly what we deserve. One difference between the rich and us is that they have more money. They also enjoy—both as cause and effect—a lot more power.

Read her blog here; read her working paper on “just desserts” here.