"In a time of universal deceit telling the truth is a revolutionary act." -George Orwell

Posts Tagged ‘Amercian Caste System’

World Of Work 2013 Report: U.S. Inequality Now Literally Off The Chart And Rising

In Uncategorized on June 9, 2013 at 7:30 pm

This new chart from the ILO's latest World of Work report doesn't have enough room to visually portray the full extent of inequality in the United States.

Oldspeak: “This new chart from the ILO’s latest World of Work report doesn’t have enough room to visually portray the full extent of inequality in the United States.”

Among the world’s major nations, documents the UN agency dedicated to labor matters, only one currently has a level of inequality both high and rising” –Salvatore Babones

The controllers seem to have done quite well for themselves in this alleged “recovery”. The People have fared significantly worse with less to come as the full effects of U.S. austerity measures are felt. The stealth depression will continue and it’s getting worse.. The People in Cyprus, Greece, Spain, Portugal, Italy, and The U.K. have made their displeasure with the current state of affairs know loudly, repeatedly and en masse, where inequality is far less severe than in the U.S. Yet there’s a far smaller and more disjointed protest movement here in the “Greatest Nation On Earth”. Why? Why in a nation founded by protestors and civil disobeyers, are there so few to be found today? Was COINTELPRO, that effective? Perhaps it never really stopped?

By Salvatore Babones @ Inequality.org:

It is well known that the level of income inequality stretches much higher in the United States than in the other developed countries of Europe and North America. Now a report from the International Labour Organization shows that U.S. inequality has literally gone off the chart.

Income inequality in the United States is soaring so high, in fact, that the authors of the ILO’s new 2013 World of Work report couldn’t even place the United States on the same graph with the other 25 developed countries their new study examines.

Income inequality reflects the sum total of all the differences between the incomes enjoyed by different households in a country. Differences between rich and poor households, rich and middle-income households, middle-income and poor households all enter into total income inequality.

Researchers usually measure income inequality using a statistic called the Gini coefficient. The Gini coefficient runs from a minimum of 0 (perfect equality in incomes across all households) to 100 (one rich household gets all the income for an entire country).

The ILO report places the US Gini coefficient at 47.7, or almost half way toward the extreme where one rich household gets everything and everyone else gets nothing.

By comparison, the levels of inequality in the other 25 developed countries studied all fall in a band between 20 and 35.

The share of U.S. adults living in middle-income households dropped from 61 to 51 percent between 1970 and 2010.

Even worse, in America inequality is not only high but rising. The Unites States is one of only three developed countries where income inequality rose during the recession of 2008-2009, then continued rising through the lackluster recovery of 2010-2011.

The other two: Denmark and France. Both these countries had much lower levels of inequality to start with. By 2011, Denmark’s inequality had risen into the high 20s and France’s inequality into the low 30s.

In the United States inequality sat at 46.3 before the recession, moved to 47.0 in 2010, and rose further to 47.7 in 2011.

Rising inequality has hit the American middle class particularly hard. But America’s middle class decline began well before the recession hit in 2008. Every year fewer and fewer Americans qualify as middle class, and those who do have lower and lower incomes.

The share of U.S. adults living in middle-income households, the new ILO report notes,  dropped from 61 to 51 percent between 1970 and 2010, and the median incomes of these  households fell 5 percent.

Where has the middle class held its own in recent decades? Well, in Denmark and France, among other countries. The country with the largest middle class according to the ILO’s calculations is Norway, where about 70 percent of the population rate as middle class.

In Norway, about 70 percent of the nation rates as middle class. In the United States, only 52 percent.

In the United States today only about 52 percent of the population can claim middle class status.

The World of Work report concludes that the middle class in the United States and around the world is suffering from “long-term unemployment, weakening job quality, and workers dropping out of the labour market altogether.” Things have been bad for a long time, but the recession has made them far worse.

The ILO, founded in 1946, now operates a specialist agency of the United Nations. The world’s employers and workers are equally represented on its governing board, alongside the representatives of 28 governments, including the United States government.

Different international organizations use different data sources for comparing inequality levels across countries. The ILO World of Work report uses raw data from the Census Bureau for the United States and from Eurostat for European countries.

All these sources agree that income inequality has widened more in the United States than in other developed countries. The ILO report finds a much larger difference than other organizations, such as the OECD. One reason for the difference: As a UN organization, the ILO is committed to using data from official sources like the U.S. Bureau of the Census and published, peer-reviewed scientific journal articles.

Other organizations like the OECD and private think tanks make their own estimates of national inequality levels using data that may not be publicly available and methodologies that may not be transparent or audited.

Rising inequality is not inevitable. The rich are not winning everywhere.

According to the official data compiled by the ILO and documented in the World of Work report, only South Africa and about a dozen Latin American countries have higher levels of inequality than the United States.

In nearly all of these countries inequality appears to be either stable or falling. Out of a total of 57 countries studied by the ILO, 31 developing and 26 developed, only one — the United States — has a level of income inequality both high and rising.

This simple fact — that only one nation has inequality both “high and rising” — shows that high and rising inequality is not inevitable. The rich are not winning everywhere, just as the rich have not always won in the United States.

We can have sensible policies that reduce inequality and bolster the middle class. The ILO suggests that we prioritize employment growth over budget cuts, increase public investment to make up for a lack of private investment, and raise taxes on unearned income from financial transactions.

The folks at the ILO are smart enough to understand that the reasons our governments don’t give us good, pro-people policies are not technical or economic, but political and ideological.

“Against mounting evidence,” the ILO concludes, “a fundamental belief persists in some quarters that less regulation and limited government will boost business confidence, improve access to international financial markets, and increase investment, although these results have not been evident.”

The empirical evidence says that we can reduce inequality and bolster the middle class by putting people back to work. But that will take government action. And government action is the one thing we don’t seem to have.

 

Salvatore Babones is a senior lecturer in sociology and social policy at the University of Sydney and an associate fellow at the Institute for Policy Studies.

 

Money-Laundering Banks Still Get a Pass From U.S. Justice System

In Uncategorized on April 1, 2013 at 7:16 pm

https://i2.wp.com/www.cfoinnovation.com/system/files/cfo/money_laundering.jpgOldspeak: “Look North Korea is threatening us! Look! Rush Limbaugh said something about President Obama! Look! A D.A. got shot in Texas. Look! We need gun control now! Meanwhile those fortunate enough to be in America’s 1st tier of justice flout the law,  profit from downturns, war and the illegal drug trade. Their punishment? Earnest protestations and little else from Law Enforcement: “I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy.” –Attorney General Eric Holder  “Yes, well, that could explain it. When the banks hold a gun to the head of the economy, it is no longer the relationship between regulator and regulated, but a hostage relationship. A relationship made even more complex, no doubt, by the fact that the hostage-taker is also the principal corporate funder of the bosses of the putative hostage negotiators.” –Mike Lofgren This class based application of justice is not sustainable. These banksters who are holding our financial, political and justice systems hostage are subverting liberty and justice for all. They’re subverting democracy, and government by the people. It cannot continue.

By Simon Johnson @ Bloomberg News:

Money laundering by large international banks has reached epidemic proportions, and U.S. authorities are supposedly looking into Citigroup Inc. (C) and JPMorgan Chase & Co.

Governor Jerome Powell, on behalf of the Board of Governors of the Federal Reserve System, recently testified to Congress on the issue, and he sounded serious. But international criminals and terrorists needn’t worry. This is window dressing: Complicit bankers have nothing to fear from the U.S. justice system.

To be on the safe side, though, miscreants should be sure to use a really large global bank for all their money-laundering needs.

There may be fines, but the largest financial companies are unlikely to face criminal actions or meaningful sanctions. The Department of Justice has decided that these banks are too big to prosecute to the full extent of the law, though why this also gets employees and executives off the hook remains a mystery. And the Federal Reserve refuses to rescind bank licenses, undermining the credibility, legitimacy and stability of the financial system.

To see this perverse incentive program in action, consider the recent case of a big money-laundering bank that violated a deferred prosecution agreement with the Justice Department, openly broke U.S. securities law and stuck its finger in the eye of the Fed. This is what John Peace, the chairman of Standard Chartered Plc (STAN), and his colleagues managed to get away with March 5. The meaningful consequences for him or his company are precisely zero.

Chairman’s Statement

At one level, this is farce. Standard Chartered has long conceded that it broke U.S. money-laundering laws in spectacular and prolonged fashion. In late 2012, it entered into a deferred prosecution agreement with the Justice Department, agreeing to pay a fine that amounts to little more than a slap on the wrist (in any case, such penalties are paid by shareholders, not management).

Then, on a March 5 conference call with investors, Peace denied that his bank and its employees had willfully broken U.S. law with their money-laundering activities. This statement was a clear breach of the deferred prosecution agreement (see paragraph 12 on page 10, where the bank agreed that none of its officers should make “any public statement contradicting the acceptance of responsibility by SCB set forth above or the facts described in the Factual Statement”). Any such statement constitutes a willful and material breach of the agreement.

This is where the theater of the absurd begins. For some reason, it took the bank 11 business days, not the required five, to issue a retraction. No doubt a number of people, in the private and public sectors, were asleep at the switch. (The Justice Department and Standard Chartered rebuffed my requests for details on the timeline.)

The implications of the affair are twofold. First, with his eventual retraction, Peace admitted that he misled investors. It also was an implicit admission that he had failed to issue a timely correction. Waiting 11 days to correct a material factual error is a serious breach of U.S. securities law for any nonfinancial company. Wake me when the Securities and Exchange Commission brings a case against Standard Chartered.

Of course, it’s possible that Peace didn’t deliberately violate the deferred prosecution agreement because he hadn’t read it, or at least not all the way to page 10. Peace is an accomplished professional with a long and distinguished track record. Everyone can have a forgetful moment. That still doesn’t explain why the bank took so long to correct the facts.

Leadership Matters

Tone at the top matters, as reporting around JPMorgan Chase and its relationship with regulators makes clear. Will Chief Executive Officer Jamie Dimon be more cooperative than he was, for example, in August 2011 when he refused to provide detailed information on the goings-on in his investment bank?

Why hasn’t Standard Chartered’s board, which is made up of talented and experienced individuals, forced out Peace as a result of this bungling? (I called for his resignation on my blog last week.)

The only possible explanation is that the board thinks Peace did nothing wrong. They may even regard U.S. laws as onerous and the Department of Justice as heavy-handed.

They would be entitled to their opinions, of course. But if they would like their bank to do business in the U.S., the rules are (supposedly) the rules. If used appropriately, permission to operate a bank in the U.S. grants the opportunity to earn a great deal of profit.

At a recent congressional hearing, Senator Elizabeth Warren of Massachusetts asked what it would take for a company to lose its U.S. banking license. Specifically, “How many billions of dollars do you have to launder for drug lords?”

Powell, the Fed governor, replied that pulling a bank’s license may be “appropriate when there’s a criminal conviction.”

I have failed to find any cases of the Fed ordering the termination of banking activities in the U.S. for a foreign bank after a criminal conviction for money laundering. Nor, for that matter, has the Fed taken action to shut down a bank that signed a deferred prosecution agreement, which, in the case of Standard Chartered (STAN), was an acknowledgment of criminal wrongdoing. Nor has it taken action when such an agreement was violated.

To see what the Fed is empowered to do under the International Banking Act, and working with state authorities, look at the case of Daiwa Bank, which received an Order to Terminate United States Banking Activities in 1995. Note to big banks: Don’t allow illegal trading in the U.S. Treasury market; on this, we may still have standards. By the way, in the case of Daiwa, there was no criminal conviction.

Cleaning House

Last summer, when Barclays’s Chief Executive Officer Robert Diamond was less than fully cooperative with the Bank of England in providing details of the Libor scandal, he was gone within 24 hours. Any bank supervisor has the right and the obligation to force out a manager who impedes the proper functioning of the financial system.

The new CEO of Barclays (BARC) is trying to clean house. The obstreperous approach of the previous management set the tone for the entire organization, creating a mess of macroeconomic proportions.

Will any senior executives at Standard Chartered be forced out? Could the bank lose its ability to operate in the U.S.? Based on what we have seen so far, neither seems plausible.

If Standard Chartered violates its cease-and-desist order with the Fed, would it then lose its license? Not according to what Powell said in his congressional testimony. The Fed has no teeth whatsoever, at least when it comes to global megabanks, hence the continuing pattern of defiance from JPMorgan (JPM) and Dimon.

If you or I tried to launder money, even on a small scale, we would probably go to jail. But when the employees of a very big bank do so — on a grand scale and over many years — there are no meaningful consequences.

(Simon Johnson, a professor at the MIT Sloan School of Management as well as a senior fellow at the Peterson Institute for International Economics, is co-author of “White House Burning: The Founding Fathers, Our National Debt, and Why It Matters to You.” The opinions expressed are his own.)

To contact the writer of this article: Simon Johnson at .

To contact the editor responsible for this article: Max Berley at mberley@bloomberg.net.

 

The Universal Pre-K Diversion: Why Isn’t Closing 129 Chicago Public Schools National News?

In Uncategorized on March 2, 2013 at 7:36 pm

Oldspeak:“President Obama waxed poetic at his state of the union speech; tours the country crowing about providing universal pre-k education and increasing access to college education, and receives thunderous applause. One has to wonder why then, he has been silent about the decimation of public school systems nationwide? Even though most of the school closings and privatizations are occurring in socioeconomically disadvantaged minority-majority communities where he presumably did his much ballyhooed community organizing. Why no discussion of the increasing corporatization and militarization of public schools that has no measurable benefits for students?  Probably because he appointed as his education secretary Arne Duncan, a non-educator & former CEO of Chicago Public Schools who was instrumental in implementing the CPS’s “Renaisance 2010” school privatization scheme. Yes, Mr. Duncan oversaw the conversion of  over 100 public schools to charter schools during his tenure in Chicago. What about others in the political class, red and blue? Why the silence on this? Bruce A. Dixon has an interesting take.

Related Stories:

Educators Push Back Against Obama’s “Business Model” for School Reforms

“Who’s Killing Philly Public Schools?”: Daniel Denvir on Plan for School Closings, Privatization

A Look at Arne Duncan’s VIP List of Requests at Chicago Schools and the Effects of his Expansion of Charter Schools in Chicago

Zombie Politics, Democracy, And The Threat of Authoritarianism

By Bruce A. Dixon @ Black Agenda Report:

It’s an obvious question, with an easy answer. Our nation’s bipartisan political elite have decided to privatize public education. They know the only way they can execute this deeply unpopular policy is to do it on the down-low, with a minimum of coverage, and no mention of the p-word, especially of growing civic resistance to it.

If you don’t live in Chicago you might not know that the CEO and the dozens of other six figure a year mayoral cronies who run the Chicago Public Schools want to close 129 public schools this year, more than a third of the city’s total. It’s not national news for the same reason that closing 40 public schools in Philadelphia last year wasn’t national news, and massive school closings in the poorer neighborhoods of cities across the country is not news either.

It’s not news because school closings and school privatization, the end game of the bipartisan policies the Obama administration, Wall Street, the US Chamber of Commerce, a host of right wing foundations and deep pockets and hordes of politicians in both parties from the president down are pushing down the throats of communities across the country, are deeply unpopular. The American people, and especially the parents, teachers, grandparents, and other residents of poorer neighborhoods where closings and privatization are happening emphatically don’t want these things.

Even the word describing their policy, “privatization” is so vastly unpopular that they’ve taken it out of circulation altogether. The best way, our leaders imagine, to contain and curtail resistance to their deeply unpopular policies is to avoid naming them for what they are, to keep them on the down low, to not report on their implementation, and certainly to not cover any civic resistance to them.

Local elites in each city and school district concoct real or imaginary “crises” to which the solution is always firing more experienced teachers, hiring more temps in their place, instituting more high-stakes testing, closing more public schools and substituting more unaccountable (and often profitable) charter schools, frequently in the same buildings that once housed public schools. In Chicago the “crisis” is precipitated every year when the CPS (that’s Chicago Public Schools – Chicago’s never had an elected school board, they’re all mayoral appointees) honchos announce the schools are in a billion dollar hole. The Chicago Teachers Union of course, took a look over the same books and revealed that despite the host of top $100,000 a year officials whose jobs never seem to be cut, the system was nine figures in the black, not ten in the red. Naturally, local and national media didn’t report that either.

Chicago’s teachers have done what those in New York, Houston, Dallas, L.A. and others have not, and spent their union dues funding outreach and collaboration with parents across the city, so neighborhood hearings on the school closings are packed to overflowing with outraged parents, indignant local business people, angry teachers and concerned students. If CNN, MSNBC, or Fox News gave the school closings and privatization story a fraction of the coverage they gave deceptive and dishonest pro-privatization movies like Waiting For Superman and Won’t Back Down, the outrage against the move to privatize education would be unstoppable. The most coverage the wave of school closings have received lately was a misleading segment on Melissa Harris-Perry’s weekly TV show on whether school closings were “racist” or not, with no examination of the how or why they happen or the growing resistance to them.

Oceans of ink and hot air have been expended claiming that “social media” would somehow take up the slack created by the disappearance of local news gathering organizations, and how these things can somehow fuel and sustain a wave of public outrage that can topple unjust authority and make the will of the people felt. But when it comes to the war of our elite waged to privatize public education, we haven’t seen it yet.

For Black Agenda Radio, I’m Bruce Dixon. Find us on the web at www.blackagendareport.com.

Bruce A. Dixon is managing editor at Black Agenda Report. A longtime Chicagoan, he now lives in exile near Marietta GA, where he is a state committee member of the Georgia Green party and a partner in a tech firm. Contact him via this site’s contact page, or at bruce.dixon(at)blackagendareport.com.

The Hideous Inequality Exposed By Hurricane Sandy In New York

In Uncategorized on November 1, 2012 at 4:23 pm

Oldspeak:”Divides between the rich and the poor are nothing new in New York, but the storm brought them vividly to the surface. There were residents…who could invest all of their time and energy into protecting their families. And there were New Yorkers who could not. Those with a car could flee. Those with wealth could move into a hotel. Those with steady jobs could decline to come into work. But the city’s cooks, doormen, maintenance men, taxi drivers and maids left their loved ones at home.” -David Rohde The vast inequality generated by rigidly hierarchical, competition based, profit driven, casino capitalist system is on full display in times like these. Employment and acquiring money trump safety and security – for the poor. The rich have the option to choose the opposite.  The poor continue to serve while the rich plan which hotels to stay in or what other means to use to avoid danger. Corporate owned-news outlets focus almost exclusively on the devastation visited on exclusive beachfront properties of those with means, largely ignoring poor communities… And America’s caste system continues on, unquestioned. While compassion and consideration are not extended to the most vulnerable members of our society.

Related Story:

Without Power and Aid, Low-Income Residents of NYC’s Lower East Side Struggle in Storm’s Aftermath

By David Rohde @ The Atlantic:

A hotel bellman said he was worried about his mother uptown. A maid said she had been calling her family in Queens. A garage attendant said he hadn’t been able to contact his only relative – a sister in New Jersey – since the storm hit. Asked where he weathered the hurricane, his answer was simple.

“I slept in my car,” he said.

Sandy humbled every one of the 19 million people in the New York City metropolitan area. But it humbled some more than others in an increasingly economically divided city.

Hours before the storm arrived on Monday night, restaurants, corner grocery stores and hotels were open in the Union Square area of Manhattan. (My wife and I moved to a hotel there after being ordered to evacuate our apartment in lower Manhattan.) Instead of heading home to their families as the winds picked up, the city’s army of cashiers, waiters and other service workers remained in place.

Divides between the rich and the poor are nothing new in New York, but the storm brought them vividly to the surface. There were residents like me who could invest all of their time and energy into protecting their families. And there were New Yorkers who could not.

Those with a car could flee. Those with wealth could move into a hotel. Those with steady jobs could decline to come into work. But the city’s cooks, doormen, maintenance men, taxi drivers and maids left their loved ones at home.

New census data shows that the city is the most economically divided it has been in a decade, according to the New York Times. As has occurred across the country, the rich are getting richer and the poor are getting poorer. Twenty-one percent of the city is in poverty, and the median household income decreased by $821 annually. Per the Times:Median income for the lowest fifth was $8,844, down $463 from 2010. For the highest, it was $223,285, up $1,919.”

Manhattan, the city’s wealthiest and most gentrified borough, is an extreme example. Inequality here rivals parts of sub-Saharan Africa. Last year the wealthiest 20 percent of Manhattan residents made $391,022 a year on average, according to census data. The poorest 20 percent made $9,681.

All told, Manhattan’s richest fifth made 40 times more money than its poorest fifth, up from 38 times in 2010. Only a handful of developing countries – such as Namibia and Sierra Leone – have higher inequality rates.

In the Union Square area, New York’s privileged – including myself – could have dinner, order a food delivery and pick up supplies an hour or two before Sandy made landfall. The cooks, cashiers and hotel workers who stayed at work instead of rushing home made that possible.

They were a diverse group. Some were young people in their twenties. Others were middle-aged Americans who had never landed white-collar jobs. Most were immigrants.

On the other end of the wealth spectrum, New York’s age-old excesses emerged. Some families brought their nannies to the hotel to help care for their children through the hurricane. Others panicked when the power went off. All the while, waiters, maids and doormen continued to help them.

The storm affected the affluent as well. Tourists and business people from Boston, California, Britain and Japan were stranded in our hotel. They found themselves without power, water or transportation, and completely at the mercy of strangers.

But the city’s heroes were the tens of thousands of policemen, firefighters, utility workers and paramedics who labored all night for $40,000 to $90,000 a year. And the local politicians who focused on performance, not partisanship, such as New Jersey Governor Chris Christie, New York Mayor Michael Bloomberg and Newark Mayor Corey Booker.

Twenty-four hours after the disaster, ugly political lines were already being drawn. Democrats pounced on a statement by Mitt Romney in a Republican primary debate last year that disaster response should be shifted to the states and, where possible, privatized. Michael Brown, the much criticized director of the Federal Emergency Management Agency under George W. Bush, argued that the Obama administration had responded more quickly to Hurricane Sandy than it did to the terrorist attack in Benghazi.

“One thing he’s gonna be asked is, why did he jump on this so quickly and go back to D.C. so quickly when in … Benghazi, he went to Las Vegas?” Brown was quoted as saying to a Denver alternative newspaper. “This is like the inverse of Benghazi.”

Over the next few days, Obama’s and Romney’s reactions to the storm will be parsed. The role of the federal government in covering the costs of the disaster will be praised and assailed. Politicians, as always, will jockey for advantage.

The storm showed many things about New York. It exposed the city’s vulnerabilities. It also displayed its strengths. And to me, it showed New York’s growing economic divide. I’m sure that many of the people who remained at work yesterday chose to do so voluntarily. But I fear that many of them did not.