Posts tagged ‘economy’

January 20, 2012

Mitt’s Unconventional IRA: Doesn’t Add Up

In an article titled, “The End of Romney” Huffington Post’s John Talbot wrote today,

“For Mitt Romney to have accumulated $20 to $100 million in his IRA suggests that somehow he had found a way around this $2,000 a year limit to contributions as there is no way contributing $2,000 a year could ever grow to $20 million in one’s lifetime, much less $100 million, regardless of how good an investor one is.

One method Mitt Romney may have employed is to have made his initial investments in a 401(k) plan on a pre-tax basis because 401(k) plans allowed up to $30,000 a year in annual contributions back in the 1980’s without the payment of ordinary income taxes. But even with making $30,000 contributions each year, it is hard to see how a $20 to $100 million fortune could be amassed in such a short time.

This suggests, and the Wall Street Journal article hints at this, that Romney was not making cash contributions to his IRA but rather parking equity shares of his companies’ investment funds there, or quite possibly putting shares of private companies that his firm bought into his 401(k).”

And regardless of whether Romney’s unconventional IRA is legal or not, he clearly represents the interests of the 1%  and appears to support a further division between rich and poor by way of tax loopholes.  

Read more

This is not the type of President we need right now.

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November 3, 2011

Demand Financial Transaction Tax Now!

We must show solidarity in demanding a tax on trades of stocks, bonds, derivatives, and other financial transactions so that large banks and investment firms can be held more responsible for their of their leading roles in the Great Recession.

The E.U currently has a financial transaction tax, and we in the United States had a financial transaction tax from 1914 to 1966. The “Robin Hood Tax” is supported by Bill Gates, the National Nurses Union, and many others.

Today over 150 Massachusetts nurses joined hundreds of protesters at the US Treasury Department to demand that Timothy Geithner and President Obama support financial transaction taxes on Wall Street. “The economic decline is literally making our patients sick,” said a U.S. nurse, “We see more and more children with conditions related to poor nutrition and stress.” Nurses around the globe believe that taxing a small percentage of Wall Street transactions could generate enough revenue to address basic human needs that have gone ignored. Protests also took place in Cannes, France, where the G-20 Summit is taking place.

So far, the US is saying “No” to the Transaction Tax, leaving the people no choice but to demand it!

October 18, 2011

When Education is a Privilege

The unemployment rate for people without college degrees is around 14.5%, and over 20% for the younger generations. This is largely the result of globalization and automation. So, people get college degrees to keep from falling behind. And as a nation, we want our citizens to be as educated as possible, as this increases our globally competitiveness and ultimately increases our GDP.

Thus, we want to promote education and make it as available as possible to capable people. Problem is, the average yearly tuition has been increasing 4x faster than real wages. So now we are at the untenable position where a single year’s tuition is, on average, around $14,000. Considering that the average american family makes slightly under $50,000 a year, most students will have to rely on loans. Loans that cannot be discharged due to hardship or through bankruptcy, mind you.

This leads us to the near-trillion dollar student loan debt and graduates entering the work force already saddled with a debt that is more and more frequently becoming larger than your average mortgage. Many people are required to pay over $1,000 a month, if they’re lucky enough to have a job. This results in people putting off buying a house, or starting a family, or starting a business, and renders them entirely dependent on the job(s) they’re lucky enough to get.

This is not to ignore the fact that many businesses have realized how much recent grads want work in their field, resulting in extended unpaid or underpaid internships and externships. This practice is actually not far off from full-fledged indentured servitude.

All in all, our current system is set up so that an intelligent and capable American, who happen to be poor, cannot be properly educated to lead our nation in technology, science and innovation.

 


October 9, 2011

Study: Income Inequality Slows Economic Growth

A new study published in the current issue of Finance & Development, the quarterly magazine of the International Monetary Fund, reported that income inequality was found to be a central component of a slowing economy. Income inequality is the gap between those making the most and least in a nation, which has gotten unusually large in the United States over the last 30 years. Below is a table with the recent ratios of CEO vs average worker pay for several countries.  Most economists suggest that a ratio around 20:1 is ideal for a prosperous economy.

The recent study compared six major economic factors across the world’s economies and found that income inequality was the largest contributor to a slow economy, finding a strong association between equally distributed income (and by equally distributed we mean a ratio around 20:1 instead of 475:1, not socialism) and economic growth.

Corporate and political figures often claim that fixing the US economy depends on lowering government debt, signing new free trade deals and attracting new foreign investments, however, this study finds that the most influential factor is income inequality.

Berg and coauthor Jonathan Ostry were mostly interested in how to sustain economic growth, rather than sparking it. “Getting growth going is not that difficult; it’s keeping it going that is hard,” Berg explains. As we ourselves have seen, the bailouts and stimulus saved us from more severe economic conditions, but have done little to sustain growth. Instead, the numbers indicate that moving toward a fair CEO-vs-average-worker income ratio will provide us a way out of this recession.

Mother Jones included these tables from the study:

Andrew Berg & Jonathan Ostry
Andrew Berg & Jonathan Ostry
October 8, 2011

Occupy Dallas Stands Out

Occupy Dallas is kinda kickin’ butt right now!! Though their numbers are (still) low, the police have recognized themselves as part of the 99% and have been extremely accommodating and supportive of the occupiers. Because the Dallas police have been so helpful, organizers have been able to provide amenities for its protesters such as “Occuplay” daycare for kids, free legal assistance from a constitutional lawyer, wifi, and even portable stone ovens. Everyone is coming together realizing that they’ve all been screwed, together. Police officers, just like teachers, students, and 99% of the country have been equally affected by Wall Street and corporate political control, and in Dallas the police decided to be part of the impending change.  We are all realizing how important it is that we participate in our own governance. We are also learning to what extent 99% of the people have actually been silenced and removed from the political process. Occupy Dallas sets a good example for peaceful Occupy protests and police departments everywhere.

Read more about the supportive Dallas police at Gather.com, and Occupy Dallas protester amenities at the Occupy Dallas Facebook page.

October 6, 2011

Day 20: Occupy Wall St.

Occupy Wall Street was in full action today. We dropped by to see Naomi Klein speak to the crowd, using the the People’s Mic. Very cool. Everyone was calm and focused, and the crowd was well-organized. We were very impressed with the coordination of communication, which included live streaming, hand signals, double echos, and calls for peaceful protest.

October 2, 2011

Media Delegitimizes “Occupy” Movement

The media doesn’t quite know how to handle the huge movement that has become Occupy.  It started with Occupy Wall Street, but has already evolved to include Occupy Los Angeles, Occupy Boston and Occupy Chicago. Yet, the media continues to belittle and delegitimize the unification of the people. They have described Occupy as fragmented, “similar to the tea party,” and a phase that will likely pass.

It is important to recognize that Occupy is not similar to the tea party (Did you see any tea party people brutally attacked by police?), it is not fragmented, and it will not blow over soon. While the tea party was driven by hidden corporate influences and was made up of mostly older, white and conservative Americans, Occupy represents the bottom 99% and much more accurately captures the American Voice. Occupy includes all ages, demographics and professions, and even unions are joining the fight. Yet, media conglomerates ignored it for several weeks until people began getting maced.  Fortunately that American Voice is just getting warmed up, and bound to get louder.

September 5, 2011

The Middle Class is Losing its Political Voice

Politicians say that they love the American middle class, but do they really?

Capitol Hill is making sure that the middle class takes hit after hit, as the super rich enjoy soaring profits with little or no societal responsibilities.  It appears that the middle class is no longer being represented, as politicians turn to the desires of ridiculously wealthy donors.

Politicians now see the super rich, who have received larger and larger percentages of national wealth over the last 30 years, as the center of  economic growth instead of the middle class. The rich don’t create jobs – a strong middle class does!

Unfortunately, it is the growing inequality between the super rich and the middle class, that is causing our economic troubles.  Currently, it would take an average American family over 35,000 years of work to earn what top Hedge Fund managers make in one measly little year. Yet, the super-rich continue to act destructively selfish as the middle class continues to suffer.

Read more at The Tennessean.

August 28, 2011

Hurricanes, Earthquakes & Why We Need Government

Some Americans seem to want to eliminate  our government, promising adamantly that the private sector can do it all! I am sure that businesses could figure out how to provide for-profit education and health insurance at ridiculously high prices, but there are some things they can’t do – and that is care about the basic well-being of American citizens. Why? Businesses are entities that create profit – and protecting and caring for citizens does not accomplish this goal.

The reason we have a government is to make sure that the basic needs of our people are met, that they are protected from other countries and mother nature, and that we are provided a voice against large interest groups (such as corporations). This is because we the people believe that we stand stronger united as one.

We don’t seem to understand that corporations don’t care if we live or die unless of course they are making a profit off our life or death (e.g. Rick Perry’s “Dead Peasant Insurance“). Corporations don’t care about the well-being of US citizens, and why should they? It is the government’s job to look out for the people’s basic needs and safety. Things like FEMA, meteorology, the army, prisons, education and health care simply can’t be provided only by the private sector – as, again, caring and profit often get in each other’s way. Infrastructure, too, is something that is difficult to profit from. Bridges, tunnels, roads, and trains are all extremely expensive to build, yet don’t bring in a whole lot of cash. Profit isn’t, and can’t be, the only driving force for a nation.  As we recuperate from hurricane Irene and the recent earthquake, lets celebrate the fact that we enjoy having, and desperately need, a functional government!

August 5, 2011

US Rating is Downgraded by S&P

This evening the US had its rating downgraded from AAA to AA+ by Standard & Poor’s. The US had had its AAA rating since 1941, and has never been downgraded before. Washington is protesting the decision, arguing that S&P made math errors and should be ignored by lenders. This rating reduction will likely have several negative consequences for the already weak US economy.

Read more at Bloomberg.com

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