Home ownership has been called “the quintessential American dream.” Yet today less than 65% of American homes are owner occupied, and more than 50% of the equity in those homes is owned by the banks. Compare China, where, despite facing one of the most expensive real estate markets in the world, a whopping 90% of families can afford to own their homes. Over the last decade, American wages have stagnated and U.S. productivity has consistently been outpaced by China’s. The U.S. government has responded by engaging in a trade war and imposing stiff tariffs in order to penalize China for what the White House deems unfair trade practices. China’s industries are said to be propped up by the state and to have significantly lower labor costs, allowing them to dump cheap products on the U.S. market, causing prices to fall and forcing U.S. companies out of business.
Eighty two percent of the wealth generated last year went to the richest one percent of the global population, while the 3.7 billion people who make up the poorest half of the world saw no increase in their wealth, according to a new Oxfam report released today. The report is being released as political and business elites, including President Trump, are heading to Davos, Switzerland for the World Economic Forum. Oxfam’s report, ‘Reward Work, Not Wealth,’ reveals how the global economy enables the wealthy elite to capture vast wealth while hundreds of millions of people struggle to survive on poverty pay. This includes the stunning new finding that the economy created a new billionaire every other day over a period of one year.
By Joseph E. Stiglitz for Project Syndicate. A politically astute president who understood deeply the economics and politics of corporate tax reform could conceivably muscle Congress toward a reform package that made sense. Trump is not that leader. If corporate tax reform happens at all, it will be a hodge-podge brokered behind closed doors. More likely is a token across-the-board tax cut: the losers will be future generations, out-lobbied by today’s avaricious moguls, the greediest of whom include those who owe their fortunes to scummy activities, like gambling. The sordidness of all of this will be sugarcoated with the hoary claim that lower tax rates will spur growth. There is simply no theoretical or empirical basis for this, especially in countries like the US, where most investment (at the margin) is financed by debt and interest is tax deductible. The marginal return and marginal cost are reduced proportionately, leaving investment largely unchanged. In fact, a closer look, taking into account accelerated depreciation and the effects on risk sharing, shows that lowering the tax rate likely reduces investment.
By Chris Kanthan for Nation of Change. If we want to create a vibrant middle class, we have to abandon slogans and simplistic solutions and understand the bigger picture. There is no doubt that majority of Americans have gotten poorer over the last few decades even while the top 10% or so have done extremely well. In a world of slogans and minuscule attention span, the media and the pundits either completely deny this fact or justify it by focusing on advancements in technology or turn it into a partisan blame game. The reality is that multiple developments contributed to this decline of prosperity, much of it due to deliberate but gradual social and financial engineering. Without assigning ranking or weight, here is a look at twelve major reasons why Americans became poor.
By Dariel Garner for Common Dreams - America’s richest 20 people own more than the bottom half of America - 152 million people combined. That is just one of the startling revelations in a new report,Billionaire Bonanza: The Forbes 400 and the Rest of Us, just released by the Institute for Policy Studies. Wealth inequality has reached new heights. The wealthiest 100 people now own about as much wealth as the entire African American population in the United States. Among the Forbes 400, but not in the top 100, just two individuals are African American—Oprah Winfrey and Robert Smith.
By Kate Aronoff for Waging Nonviolence - In a political and economic system seemingly tailor-made for the 1 percent, backlash against “wealth therapy” — the trend of moneyed Americans seeking counsel through their Occupy-induced feeling of shame and isolation — is well-placed. While the top 0.1 percent of families in the United States possess as much wealth as the bottom 90 percent, money psychologist Jamie Traege-Muney moaned to The Guardian that the movement wrongly “singled out the 1 percent and painted them globally as something negative.” But a growing cadre of this statistical owning class are now crafting a healthier relationship to the rabble at their doorstep.