|To: ryanaka who wrote (38)||11/19/2019 6:12:39 PM|
|We discussed this here on SI when Obama was president. SI liberals like you argued that is was a good policy to give free money to rich white people. I disagreed, but SI liberals insist they are smarter than I .|
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|To: ryanaka who wrote (38)||11/30/2019 7:19:00 PM|
|Are we in for a repeat of the ‘Long Depression’?|
There are a lot of parallels between the present moment and the late 1800s, including a backlash against globalization: economist
A financial crisis that left in its wake deflationary price pressures, low productivity, stagnant incomes, a spike in populism, a backlash against globalization: if that all sounds familiar, you may not like the following insight.
It comes from Dario Perkins, global macro economist for TS Lombard, who, in a Wednesday note, described the historical period he thinks most resembles the current moment. That era is called, a bit bleakly, the Long Depression, and stretched from 1873 to about 1896, depending on the country.
The U.S., for example, was in recession from October 1873 to March 1879, a stretch that remains the longest downturn on record, and which was followed by four more recessionary periods, for a total of 161 months, or over 13 years, in contraction during that time frame.
“The panic of 1873 was arguably the first truly international crisis,” Perkins explained. “It began in central Europe with the collapse of the Vienna stock market, then spread to the United States after the failure of the banking house of Cooke and Co. over its investment in the Northern Pacific Railroad.”
A financial crisis kick-starting a long period of economic malaise may also sound familiar, but Perkins is more interested in other features of the depression. He notes the slump in productivity that hit Great Britain especially hard: “this is the only period in the last three hundred years with a downturn comparable to what we see today.”
Perkins also calls attention to deflation. While most analysts agree that the effects of globalization, technological innovation, and a shift to a services-oriented economy away from manufacturing have all combined to keep inflation tepid, “these deflationary pressures were even stronger in the late 1800s, producing a sustained period of failing prices,” he writes. “U.K. inflation averaged -1.4% between 1873 and 1888.”
See: The world is de-globalizing. Here’s what it may mean for investors.
Another feature of the Long Depression was polarization of the job market, caused by rapid technological change that “hollows out” the middle-wage segment of the workforce. In the late 1800s, that innovation included the invention of the telephone, the lightbulb, the automobile, and more; today, we‘re trying to learn how to live with machines that learn, microwaves that connect to the internet, and cameras tracking our every move.
The second half of the 19th century brought about a surge of globalization, Perkins noted, that was just as disruptive to people then as the one we’ve just lived through. “Industrialization plus huge advancements in transportation and communication allowed mass production and the shipping of agricultural products and cheap manufactured goods.”
It is probably not surprising, then, that populism as we know it now originated in the late 1800s. “The word ‘populist’ first appeared in 1891, as the name for a dynamic movement launched by farmers and workers in the Midwestern and Southern United States. Most socialist parties were also founded in the late 1800s. Some feared a Marxist revolution.”
So what gave? The positive effects of the newly emerging technologies finally found their way to consumers, Perkins says. “This is a reminder that technology can provide a way out of today’s slump, if the gains spread beyond the ‘superstars’.” (In earlier research, Perkins explained the idea of “superstars” as “a powerful winner-takes-most dynamic where a small number of firms gain a very large share of the market.” Some examples include Amazon.com Inc. AMZN-0.97% and Google. GOOG-0.61% )
In the 1890s, growth also got a boost from an acceleration in wages, he noted. “ Populism played a role, especially as it led to the development of the welfare state and the organization of workers into trade unions. There was no Marxist revolution but worries about ‘socialism’ did cause a powerful shift in the distribution of income. So, while many investors struggle to understand the appeal of movements such as Modern Monetary Theory, ‘the left’ might actually have history on its side.”
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|From: ryanaka||12/3/2019 7:54:53 PM|
|FRA=Full Retirement Age|
Lifetime Social Security Benefit by Earnings Quintile:
As reported in 2016, among the top 1% of earners (average household income of about $2 million), the average life expectancy is about 89 for women and 87.3 for men. Among the bottom 20% (average household income of about $25,000), the average life expectancy is about 83 for women and 78 for men.
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|From: ryanaka||12/9/2019 7:56:05 PM|
As jobs are automated out of existence, the division between the very wealthy and the very poor will grow — and any notion of a comfortable middle class will vanish.
That’s according to Roey Tzezana, a future studies researcher at Israel’s Tel Aviv University, according to Haaretz. That stands in contrast to the common argument that new jobs will emerge as others vanish, painting a grim picture for the workforce and global economy.
Tzezana argues that the jobs that tend to survive automation are lower-paying, according to Haaretz, meaning that as companies generate increased wealth, almost none of it ends up in the pockets of workers. Instead, more people are stuck living paycheck to paycheck, even if unemployment rates are technically low.
“This figure is the end of the world for the average people,” Tzezana said, speaking about the growing gap between labor productivity and wages. “It reflects a rather depressing picture: The state and the economy are advancing by storm — but the workers are almost not benefitting from this progress and are left behind. It is almost a catastrophe.”
The end result? A society defined by pockets of extreme wealth but otherwise dominated by people who barely have enough to get by
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|From: ryanaka||12/10/2019 12:21:29 PM|
|Trump Wants to Take From the Poor and Give to the Wealthy|
The administration’s food stamp cuts expose the cruel truth of Republican hypocrisy.
By Gracy Olmstead
Dec. 10, 2019, 11:00 a.m. ET
The Trump administration is highly selective in how it applies the standard of “self-sufficiency” for programs. To move food stamp beneficiaries toward that goal in all states, Secretary of Agriculture Sonny Perdue laid out a plan to strengthen work requirements for federal beneficiaries by April 2020.
The new rule makes it more difficult for states, no matter if they have areas of economic distress, to waive a requirement that able-bodied adults work at least 20 hours a week to maintain their Supplemental Nutrition Assistance Program (food stamp) benefits. The new measure could eliminate benefits for nearly 700,000 adults (it would not affect food stamp recipients with dependents, those over age 50, those with a disability or pregnant women).
“Government dependency has never been the American dream,” Mr. Perdue said. “We need to encourage people by giving them a helping hand but not allowing it to become an indefinitely giving hand.”
But Republican distaste for “government handouts” seems to be strictly on a case-by-case basis. For example, with the Farm Bill, Mr. Perdue and others within the party are quite comfortable turning a blind eye to corporate welfare and crony capitalism. And “handouts” — or if you prefer, “bailouts” — to wealthy agribusinesses are not limited to the Farm Bill. Over the past year, as farmers throughout America were hit hard by President Trump’s trade wars, the administration put together a $28 billion package that, according to some reports, could actually be overpaying some farmers for their losses.
The list goes on. Last year, House Republicans wanted to make it possible for 10 percent or more of the nation’s commodity farms to receive unlimited subsidy payments. They sought to remove payment limitations from marketing assistance loan gains and loan-deficiency payments and tried to make it easier for general partnerships to reorganize as “family farms” and thus qualify for greater subsidy payments. The House version of the Farm Bill also exempted certain business arrangements — partnerships, joint ventures, LLCs and Subchapter S corporations — from the adjusted gross income means-testing provision, a measure that has so far limited commodity and conservation payments to the nation’s wealthiest producers.
To be sure, the struggles of many farmers across the country are real and troubling, but the farm bailout’s aid payments are not getting to some truly struggling farms. The Environmental Working Group found that most bailout money has gone to the nation’s biggest farms. One farm has received $2.8 million in payments. With the aid they’ve received from the Trump administration this year, some farmers will net their highest profits in six years.
In essence, the Trump administration’s measures are aimed at making it easier for wealthy Americans to receive unlimited government handouts — to, in the words of Mr. Perdue, secure for themselves an “indefinitely giving hand.”
Ever since the New Deal, the farm-focused portion of the Farm Bill has been geared toward providing economic aid to farmers — and both farmers and Congress have “clearly moved away from the Jeffersonian ideal that championed minimal government and maximum personal independence,” as R. Douglas Hurt writes in his book “Problems of Plenty.” Farm Bill subsidy recipients are often deeply dependent on the federal government for support.
Yet rather than speaking of this as laziness, or bemoaning the burden this causes for taxpayers, Mr. Perdue and others within the administration bolster supports for the nation’s largest, wealthiest agricultural producers.
This is not to suggest that there is no need in rural America for investment, reform and assistance. Many farm communities are hurting, but very few federal dollars go to the small to midsize farmers who actually need assistance. About 75 percent of total subsidy payments go to the largest 10 percent of farming companies. Agribusiness monopolies eat away at farmers’ profit, from the seeds they grow to the chemicals they buy to the supply chain that gets their product to market. Tens of thousands of farms have gone under in recent years, and farmer suicides are alarmingly high. The opioid crisis is as intense in farm country as it is in other geographic areas, and many parts of rural America are plagued with the same “food deserts” that plague many urban neighborhoods.
Mr. Perdue isn’t wrong when he says that the American dream does not consist of government dependency. But utter self-sufficiency is, if we are honest, impossible for most of us. People will always need a “safety net” of sorts — but ideally, we should want people to find that support in community, family, churches and associations, as well as other local ties, not (or at least not only) through a distant government bureaucracy.
That said, at a time when many local social threads have broken, and our society is increasingly fragmented and frayed, there is a need for the government to provide support where no other support is available.
Mr. Perdue and others in Washington assume that stringent work requirements will push food stamp recipients to find the number of working hours necessary for eligibility. They suggest, without saying so explicitly, that any unemployment currently experienced by these beneficiaries is because of laziness, not lack of opportunity.
But many people in both rural and urban areas of America know that reality is a lot messier than this. Available work is not distributed evenly over every state or region. Threatening to take away someone’s food stamps until they find steady work does nothing to solve the problems of postindustrial collapse, community breakdown, economic inequality, racism, systemic poverty, homelessness or drug addiction that have prompted many to find help in the first place — just as a farm bailout does nothing to repair the economic, cultural and political conditions that are feeding our current farm crisis.
But as farmers’ plight has grown, they’ve been offered the “indefinitely giving hand” that Mr. Perdue does not want food stamp recipients to receive. It seems hypocritical to demand that the poorest Americans pull themselves up by their bootstraps while covering the business risk of the nation’s wealthiest agribusinesses.
So if Mr. Perdue and the Trump administration want to foster fiscal self-sufficiency, perhaps — rather than starting with Americans struggling to put food on their table — they should start at the top of the food chain instead.
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