Tag: inequality

And In Gender Equity News

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A study has shown that weakening unions increases gender inequality:

Barbara Biasi, assistant professor of economics at the Yale School of Management, recently published a study that concluded that eliminating unions increases the gender gap in wages.

She looked at data from Wisconsin, before and after Scott Walker eliminated collective bargaining rights in 2011, in his Koch-funded effort to destroy unions. 

………

Barbara Biasi, an assistant professor of economics at Yale SOM, had an opportunity to examine this question when Wisconsin passed Act 10, legislation that essentially weakened the power of teachers’ unions. Afterward, schools had much more latitude in deciding how much to pay teachers.

Five years after union agreements expired, male teachers earned about 1% more per year than female colleagues with similar experience and skills, reported Biasi and her co-author, Heather Sarsons at the University of Chicago Booth School of Business. The gender gap was even higher among younger teachers.

The anti-union wing of the Democratic Party (the identity politic folks) has always dismissed unions as bastions of racism and sexism, and the history clearly shows that, but dismissing unions hurts the people that they claim to want to help.

Pass the damn Pro Act, and strengthen the rights of workers to organize.

Tweet of the Day

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THE SEVEN SECRETS OF HIGHLY SUCCESSFUL PEOPLE

1. Private school
2. Legacy Ivy admission
3. Nepotism hire
4. Seed capital from family
5. Club memberships
6. Personal assistant, nanny, ghost writer
7. Journalists who ask, “What’s your secret?” and uncritically publish the answer

— Sandra Newman (@sannewman) November 26, 2019

This is what it means when I say that someone was born on 3rd base, and thought that they hit a triple.

The problem with aristocracy is that we grant money and power to drooling idiots who won the birth lottery.

Recognizing the Obvious After 50 Years

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Tax cuts for the rich do not boost the economy. 

That money goes into speculative and parasitic activities:

You don’t have to be a scholar to understand why it’s absurd to suggest that reducing the tax burden for rich people isn’t likely to be a particularly effective strategy when it comes to juicing economic activity.

………

Let’s be honest: Very few rational people believe in trickle-down economics. That’s not to say no rational people promote it. It’s just to say that the rational people who do, almost always have ulterior motives, usually involving the preservation of their own wealth.

………

There’s little utility in rehashing this further. I’m preaching to the choir. But I bring it up Friday because I’m running through the “checklist” of stories I keep on a yellow legal pad next to my second monitor. I try to get through that checklist each week. Sometimes, Friday is a “catch up” day. One of the stories I wanted to highlight this week, but didn’t get around to mentioning, is a new working paper by David Hope, of the London School of Economics, and Julian Limberg, of King’s College London, both PhDs.

The paper “utilizes data from 18 OECD countries over the last five decades to estimate the causal effect of major tax cuts for the rich on income inequality, economic growth, and unemployment.”

You’ll never guess what Hope and Limberg found.

I’m just kidding. Their findings are entirely predictable. Here are the main points:

  • The results suggest that tax reforms do not lead to higher economic growth. The effect size of major tax cuts for the rich on real GDP per capita is close to zero and statistically insignificant. The findings are very similar when matching upon pre-treatment covariate trajectories. Major tax cuts for the rich do not lead to higher growth in either the short or medium run.
  • Although the results show very slight indications of a flash in the pan effect of tax cuts for the rich on unemployment, these findings are neither statistically significant nor robust.
  • The results show that major tax cuts lead to a significant increase in inequality and that this effect becomes stronger with time. Three years after the reform, the top 1% income share increases by almost 0.6 percentage points in countries with a major tax cut. Over five years, tax reforms increase the top 1% share of pre-tax national income by more than 0.8 percentage points. This effect is highly statistically significant, with P<0.0001.

So not surprised. 

Trickle down has never been about improving the public welfare, it’s been about the powerful preserving their power.

At least, that’s what the Bolsheviks at the London School of Economics say.

Not Enough Bullets

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In the midst of rising Covid-19 cases, and an explosion of evictions, the CEO of Blackstone is crowing about jacking up rents across the country. 

Getting Wall Street and hedge funds out of real estate should to be a priority of the Biden and the Democratic Party.

It won’t be a priority, but it should be:

The world’s largest private equity firm has bankrolled campaigns against rent control and been accused by the United Nations of fueling a global housing crisis. Now, as millions are threatened with eviction during the pandemic, Blackstone’s top executive is openly bragging that the firm is making huge profits off of rent increases.

At the Goldman Sachs’ Financial Services Conference on December 9, Blackstone’s billionaire CEO Stephen Schwartzman boasted that after the 2008 financial crisis, his firm was able to cash in on the mortgage crisis. At the time, the company was able to buy up foreclosed homes and convert them into rental properties subsequently plagued by accusations of dilapidation and excessive fees — all while it received a big financial boost from the government. 

Schwartzman, a top Republican donor and close ally of President Trump, indicated his firm is positioning itself for a similar jackpot.

“You always have winners and losers — Blackstone was a huge winner coming out of the global financial crisis and I think something similar is going to happen,” he said.

Noting that about half of his private equity firm’s revenues are now from real estate, Schwarzman added: “We’re the largest owner of real estate in the private world. And that asset class has boomed with huge increases in rents, almost no occupancies, [and] rent collections from almost everyone.”

………

Blackstone has also been evicting residents during the pandemic, according to court filings compiled by the Private Equity Stakeholder Project. And Blackstone has faced a legal showdown with New York tenants at one of the city’s largest rental complexes, which it owns. There, the company has been trying to exempt thousands of units from rent regulation laws. The company has reportedly even kept Manhattan units empty rather than face rent control regulations.

During the Goldman Sachs conference, Schwarzman seemed to insinuate that his firm may buy up even more residential real estate to try to squeeze even more revenue out of renters in the pandemic-ravaged economy.

Wall Street is the enemy of a good and just society, and it should be treated as such.

This Is Not a Bad Thing

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It appears that the City of London’s position as money launderer to the world is threatened by Brexit.

Financial companies are moving their EU operations to nations that will stay in the EU.

While the PTB in the UK are freaking out about this, this is actually a good thing.

The average Briton has been harmed by the growth of the UK financial industry, much in the same way that US citizens have been harmed by the US financial industry.

Above a certain size, a bloated financial industry reduces growth and becomes parasitic.

London will become more affordable for people who do productive work, and the resources and brain power that have been devoted to financial engineering will go to productive pursuits.

If these people move to Paris, or Frankfurt, or Brussels, it will make the lives of the people there worse, and the lives of the people in south east England better.

The UK will end up a more humane and more equal place as a result.

I Do Not Approve

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I do not approve of Wall Street rich pigs trying to dictate political outcomes, even if it is put a boot into Donald J. Trump’s flabby white ass.

Wall Street executives are threatening not to drop money on the Georgia Senate runoffs unless Trump concedes.

I get that they want this.  I want Trump to die in flagrante delicto with Mike Pence, but that does not mean that I am entitled to this.  

Get over yourselves.  You are lucky and rich, and not better than anyone else.

You deserve no special favors:

Concerned that President Trump’s refusal to accept the election results is hurting the country, more than 160 top American executives asked the administration on Monday to immediately acknowledge Joseph R. Biden Jr. as the president-elect and begin the transition to a new administration.

Even one of Mr. Trump’s stalwart supporters, Stephen A. Schwarzman, the chief executive of Blackstone, the private equity firm, said in a statement that “the outcome is very certain today and the country should move on.” While he did not sign a letter sent to the administration by the other executives, he said he was “now ready to help President-elect Biden and his team.”

Signatories to the letter included the chief executives of Mastercard, Visa, MetLife, Accenture, the Carlyle Group, Condé Nast, McGraw-Hill, WeWork and American International Group, among others. They included some of the most important players in the financial industry: David M. Solomon, the chief executive of Goldman Sachs; Laurence D. Fink, chief executive of the asset management giant BlackRock; Jon Gray, Blackstone’s president; and Henry R. Kravis, a prominent Republican donor who is the co-chief executive of KKR, a private equity firm.

The letter was also signed by George H. Walker, the chief executive of the money manager Neuberger Berman and a second cousin to President George W. Bush, and Jeff T. Blau, the chief executive of one of New York City’s largest private developers, the Related Companies, who has been a major donor to the National Republican Senatorial Committee, filings show.

………

As a way of gaining leverage over the G.O.P., some of the corporate executives who signed on to the joint letter Monday have also discussed withholding campaign donations from the two Republican Senate candidates in Georgia unless party leaders agree to push for a presidential transition, according to four people who participated in a conference call Friday in which the notion was discussed. The two runoff elections in Georgia, which will take place in early January, will determine the balance of power in the United States Senate.

………

At least one participant, Rob Speyer, the chief executive of Tishman Speyer, suggested that some wealthy donors had already been considering withholding support, according to four people with knowledge of his comments.

Call me old fashioned, but I think that if you are going to chase a monster out town, it should be peasants with torches and pitch forks, not the princelings of finance.

World Class Snark

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Loretta Donelan explains that it’s unfair to forgive student loan debt, because if it is, “How Will I Have An Automatic Advantage Over My Peers?”

Recently, I’ve heard a lot of politicians talking about cancelling everyone’s student loan debt. Some people are for it, some people are against it, some people already paid off their loans and don’t want others to have better lives than them, but there’s one thing that no one is talking about: if all my peers’ student loan debt is cancelled, how will I personally have an automatic advantage over them?

It’s maybe a 5 minute read, and it is hysterical.

Tweet of the Day

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Rancid lawlessness has been happening in the white collar world for twenty years with no handcuffs so it’s not a surprise to see it everywhere else. The trickle down theory works apparently.

I mean Elon Musk openly committed securities fraud.

— Matt Stoller (@matthewstoller) August 26, 2020

These days, it seems that about 80% of what goes on in Wall Street, and in Silicon Valley is unproductive bullsh%$ that is regulatory arbitrage at best, and more likely outright criminality.

As the saying goes, a fish rots from the head.

I So Wish that Sanders Were the Nominee

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Elon Musk, welfare queen and libertarian, decided to go after Bernie Sanders’ proposal for a wealth tax, Sanders notes that most of Musk’s wealth is from government subsidies. (Literally, Tesla would not have generated a penny of profit without the various subsidies that it has benefited from and resold)

Elon Musk believes that everyone should have the initiative that he had, and inherit an emerald mine:

Bernie Sanders showed Friday he isn’t afraid to call out hypocrisy – particularly when it comes from someone like Tesla CEO Elon Musk.

Musk on Friday tweeted out a meme critical of Sanders and his brand of socialism. The tweet was in response to an article about a bill Sanders introduced Thursday that would place a 60% tax on the wealth gained by billionaires such as Musk during the coronavirus pandemic. The meme, dubbed the “Official Bernie Sanders drinking game!” showed a picture of Sanders along with the text: “Every time the Bernster mentions a free government program, chug somebody else’s beer.”

Sanders, who’s no neophyte when it comes to defending his leftist views and programs, wasn’t about to back down from such criticism. In a tweeted response, he called out Musk for benefiting to the tune of billions of dollars from government subsidies and linked to an article from The Los Angeles Times that detailed the assistance Musk and his companies have received.

“Every time Elon Musk pokes fun at government assistance for the 99%, remember that he would be worth nothing without $US4.9 billion in corporate welfare,” Sanders wrote. “Oh, Elon just l-o-v-e-s corporate socialism for himself, rugged capitalism for everyone else.”

Elon Musk is one disfiguring accident away from being a super-villain.

Tweet of the Day

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Space exploration is being used by billionaires as a narrative management tool to sell the myth of unlimited expansionism. These guys know ecosystemic collapse is coming at us far faster than their little space dildos can happen but they need the idea of it to keep us at bay.

— Caitlin Johnstone ⏳ (@caitoz) August 7, 2020

This is a cynical view of the the oligarchs’ space activities, but there is precedent.

One need only look at all the libraries named after the 19th robber-barons.

Not Enough Bullets

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Silly rabbit, sacrifice is only for the little people:

When the pandemic prompted companies to furlough or lay off thousands of employees, some chief executives decided to show solidarity by forgoing some of their pay.

But it turns out that their sacrifice was minimal.

A survey of some 3,000 public companies shows that the cuts — which, so far, have come in the form of salary reductions — were tiny compared with their total pay last year. Total pay includes things like bonuses and stock awards that typically make up the bulk of what corporate bosses take home.

Only a small percentage of the companies cut salaries for their senior executives at all, which is surprising given that the pandemic has crushed profits and sales for many companies, forcing large layoffs. But even among businesses that did cut the boss’s pay, two-thirds of the chief executives took reductions that were equivalent to only 10 percent or less of their 2019 compensation, according to an analysis by CGLytics, a compensation analysis firm.

………

“These salary cuts were more window dressing than anything else,” said Liz Shuler, secretary-treasurer of the A.F.L.-C.I.O. The labor federation on Wednesday released a report showing that companies in the S&P 500 stock index last year paid chief executives on average 264 times as much as median employees, down from 287 times in 2018.

I so want the guillotine concession when the revolution comes.

Tweet of the Day

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In the future, definitions in @Dictionarycom are going to need to include what “essential worker” came to mean during the COVID crisis.

You were essential, but your health, your income, your life, your safety net, and your well being turns out are “not as essential.” 2/

— Andy Slavitt @ 🏡 (@ASlavitt) July 7, 2020

The whole Twitter thread is worth a read.

It tersely (Twitter, you know) documents how the weakest, poorest, and most vulnerable are being made to bear the burden of dealing with a pandemic than the rich, who have looted the sh%$ out of this crisis.

It’s why I want the Guillotine concession when the revolution comes.

Prime Candidate for an Unfortunate Accident

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I am referring, of course to Ghislaine Maxwell who was just arrested in connection to Jeffrey Epstein’s child sex ring.

There are a large number of VERY powerful people who might be implicated, and strong circumstantial evidence that Epstein was an asset of US intelligence services, so I’m pretty sure that there a number of people who have a vested interest in Maxwell never telling her story:

Ghislaine Maxwell, the British socialite, has appeared via video in a US court after being arrested in relation to alleged sex crimes, conspiracy and perjury involving her late close friend and convicted sex offender, Jeffrey Epstein.

Maxwell, who was arrested at a luxury hideaway in a small town in New Hampshire early on Thursday, appeared at the state’s federal courthouse. Magistrate judge Andrea Johnstone, asked Maxwell questions about whether she understood her rights and she responded in the affirmative, using short phrases such as “I do.”

………

The 17-page, six-count indictment filed by the Manhattan US attorney charges Maxwell with a host of crimes, including conspiracy to entice minors to travel to engage in illegal sex acts, enticement of a minor to travel to engage in illegal sex acts, conspiracy to transport minors with intent to engage in criminal sexual activity, transportation of a minor with intent to engage in criminal sexual activity, and perjury.

The indictment described Maxwell’s relationship to Epstein as “personal and professional” – and that she was “in an intimate relationship” with him from about 1994 to 1997.

I would dearly love to see her testify, or talk to reporters.

Jeff Bezos is Evil, Part MCMLXXVI

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In response to potential sick-leave shortages at Whole Foods as a result of the coronavirus, Jeff Bezos, wants the rank and file workers at the organic grocery to donate some of their sick days to a pool.

Bezos’ net worth is somewhere around $110 Billion dollars.

If he wanted to donate just ¼% of his fortune to handling this, he could get sick days equivalent to at least 9000 man years.

This isn’t even a rounding error, and he wants to coerce his low played employees into giving away their paid time off:

When progressives like Sen. Bernie Sanders say “now is the time for solidarity” amid the coronavirus outbreak, they likely do not mean that employees of Whole Foods—owned by the world’s richest man, Jeff Bezos—should be asked to give their own accrued paid sick days to their co-workers who have either contracted the deadly virus or been forced to take time out of work because of what is now a global pandemic.

But that is exactly what executives with the grocery chain are asking its employers to do, even though Bezos’ could effectively give them unlimited paid sick leave during the current national emergency without barely a scratch in his bank account.

In a letter sent to employees earlier this week, Whole Foods CEO John Mackey explained that one of the options available to workers was for them to “donate” their “paid time off” (pto) days to a pool that other workers could draw from.

Journalist Lauren Kaori Gurley, who broke the story with reporting for Motherboard, notes that “as a subsidiary of Amazon, the world’s biggest company, Whole Foods could easily afford to pay its hourly employees for sick days taken during the coronavirus outbreak without breaking the bank. Instead, the company has put the onus back on workers, and they’re not happy about it.”

You know, if I were on the jury of someone accused of murdering him, I would be hard pressed to vote for a conviction.

From the Department of “About F%$#ing Time”

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There is a bill in California which would tax companies with overpaid CEOs:

In response to growing income inequality, some California lawmakers are looking at the possibility of tying tax rates for corporations to the gap between how much they pay their CEOs and what their average employees take home. That’s the idea behind state Senate Bill 37, legislation first introduced by Senator Nancy Skinner (D-Berkeley) in December 2018.

Currently, California taxes corporations at a rate of 8.84 percent, and financial institutions at a rate of 10.84 percent. Under SB 37, corporations making over $10 million annually would be subject to a tax rate between 10.84 and 14.84 percent (12.84 and 16.84 percent for financial institutions), depending on the ratio of their CEO salaries to average worker wages. Companies with a ratio of more than 300 to one would pay the highest rate. SB 37 would also increase these tax rates for companies outsourcing to independent contractors or workers in foreign companies.

Revenue generated by the law would go to educational and early childhood programs. “The goal of SB 37 is to shrink income inequality,” said Sen. Skinner in a January 2020 hearing, adding, “The design of SB 37 … recognizes that reliance on state services increases when corporations underpay their workers.”

Personally, I’d just start levying a payroll tax on companies for a salary over $400,000.00 (The Salary of the President of the United States), but I’ll take what I can get.

It’s Not the Money Asymmetry, It’s the Power Asymmetry

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Alexandria Ocasio-Cortez notes what should be obvious, that the problem with inequality in our society is not the money, it’s the power:

On Monday morning, Jeff Bezos announced the creation of a new $10 billion environmental foundation, the Bezos Earth Fund. This is on top of the $2 billion he already committed to the Bezos Family Foundation to build preschools and fight homelessness.

The combined sum might be a fraction of his net worth, and Bezos might have a history of standing in the way of political efforts to address some of the same problems he seeks to address with his charity. Even so, many would argue that his efforts are still praiseworthy.

In a Martin Luther King Jr Day discussion with Ta-Nehisi Coates, Alexandria Ocasio-Cortez argued for a very different perspective. If Jeff Bezos “wants to be a good person,” she said, he should “turn Amazon into a worker cooperative.” She argued that our primary message to billionaires shouldn’t be that we want to redistribute their money. Instead, it should be that “we want their power.”

In making this distinction, Congresswoman Ocasio-Cortez was giving voice to an idea with deep roots in socialist thought — that the unequal distribution of wealth is just a symptom of the deeper problem of the unequal distribution of economic power.

Inequality is a self-reinforcing phenomenon.

As inequality increases, the powerful are increasingly in the position of stacking the deck in their own favor.

Rinse, lather, repeat.

Time to Organize a Telethon for Overprivileged Youth

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Seriously, the whining over the small bonuses that Wall Street bankers are getting this year is not, and should not be, viewed as a catastrophe.

In fact, in a just world, it should be seen as a good start:

Most Wall Street banks announced their fourth quarter profits beat industry expectations last week. But by the end of this week, bank sources and compensation experts told Reuters, most of their staff will be underwhelmed by their bonuses.

Many dealmakers, traders and even one big bank CEO are getting flat-to-down bonuses and total compensation for their performance in 2019 even though overall profits grew, the sources and experts said.

Morgan Stanley reduced incentive compensation for staff and cut Chief Executive Officer James Gorman’s total compensation by 7% for last year compared to 2018, as the bank worked to reduce expenses, which climbed in the fourth quarter.

………

While some are disappointed by their bonuses, many admit they are still richly rewarded. Morgan Stanley’s CEO Gorman’s total pay for 2019 was $27 million, compared to $29 million in 2018.

Mt heart bleeds for the contemptible greed-head motherf%$#ers.