Feeds:
Posts
Comments

Archive for the ‘Uncategorized’ Category

In the same week that the Air Force admitted it has to repaint fuel trucks in order to keep F-35 planes in the air, the US House is on the verge of providing more money than the Pentagon requested for the most expensive plane in history.

It’s not just expensive; it doesn’t work very well, for example catching fire on the runway.

In a report posted December 6 on an Air Force web site, spokespeople for the  56th Logistics Readiness Squadron in Luke, Arizona, acknowledged they are repainting their fuel trucks white.  It’s not a fashion thing.

"We painted the refuelers white to reduce the temperature of fuel being delivered to the F-35 Lightning II joint strike fighter," said Senior Airman Jacob Hartman, a 56th LRS fuels distribution operator. "The F-35 has a fuel temperature threshold and may not function properly if the fuel temperature is too high, so after collaborating with other bases and receiving waiver approval from (the Air Education Training Command), we painted the tanks white."

NBC News notes “there have been no publicly reported cases of current jet fighters experiencing problems with hot fuel. At the same time, repainting trucks bright white could make them easier targets if based in hostile territory subject to high temperatures, such as deserts. Temperatures in Iraq, for instance, can exceed 120 degrees.“

Meanwhile in Washington, House budget writers have padded their trillion dollar proposal – which needs to be approved by tomorrow to avoid a government shut down – with “funding for four more F-35 fighter jets than the Pentagon requested, for a total of 38 of the fifth-generation stealth aircraft,” according to Brendan McGarry of military.com

It is no coincidence that Lockheed Martin, the F-35’s prime contractor, has spent more than $10 million lobbying so far this year and invested more than $4 million in politicians, according to the Center for Responsive Politics.  #GUI2016

The F-35 is the most expensive weapons program in history, with a total cost of $1.5 trillion.

The F-35 program has been plagued by cost overruns and delays, has been grounded twice, and even has been criticized by those within the Pentagon.

The $1.5 trillion that will be spent on this wasteful Pentagon program is an enormous sum. It is equivalent to the cost of the sequester.

http://f35baddeal.com/

By the way, military.com says the House proposal also includes funds for “three Littoral Combat Ships, even though the House wanted to decrease the number to two; 15 EA-18G Growlers (the Navy didn’t ask for any, but included 22 of the aircraft on its so-called unfunded priorities list); M1 Abrams tank upgrades, even though the Army says it has enough tanks; and the A-10 Warthog, even after the Air Force pushed to retire the aircraft.

“Lawmakers also included $273 million for Israeli missile-defense programs. That includes an additional $175 million for the so-called Iron Dome system, which was used extensively this summer to intercept rockets fired from Palestinian fighters in Gaza. The funding brings the total U.S. investment in the system to $1.2 billion since 2011.”

Read Full Post »

Black Lives Matter

IMG_1443

Manchester Marches for Mike Brown

IMG_1444 

Sixty people rallied, chanted, and marched through downtown Manchester, New Hampshire this afternoon in memory of Michael Brown, who was shot and killed in August by Darren Wilson, a Ferguson, Missouri police officer.IMG_1435

Organized over Facebook and word of mouth, the mixed race, mixed generation group held a speak-out by the entrance to Veterans Park on Elm Street.  Speakers denounced an epidemic of police killings of young black people and the racist system which enables such killings to recur. 

 

Many participants carried home made signs, with slogans such as “Black Lives Matter,” “Justice for Mike Brown,” “Hands Up, Don’t Shoot,” and “No Justice, No IMG_1434 Peace.”  The slogans served as chants, too.

My own sign said, “More Justice, More Peace.”

Following the speakout, the crowd marched along the sidewalk up the east side of Elm Street through the busy downtown area to the corner of Bridge Street, then crossed over and marched back on the other side.  

 

IMG_1425

IMG_1421

IMG_1427  IMG_1424

IMG_1428

IMG_1437

Read Full Post »

My colleague Gabriel Camacho and I wrote this a year ago, timed to coincide with the twentieth anniversary of the North American Free Trade Agreement.  With President Obama in China touting a new “free trade” agreement, the Trans-Pacific Partnership, this seemed like a good time to re-post it here.  The original article was published in the NH Business Review.

In the twenty years since the North American Free Trade Agreement (NAFTA) went into effect, millions of Mexicans have been pushed by NAFTA to make the dangerous journey across the border into the United States, many without legal authorization. The U.S. government has responded by turning the border into a militarized zone, jailing hundreds of thousands of people, and deporting record numbers back across the border.

Militarization of the border began in 1994 with Operation Gatekeeper, which erected fencing, walls, and other barriers between San Diego, CA and Tijuana, Mexico, forcing migrants into dangerous desert terrain. stop corporate rule

This was not supposed to happen.

According to NAFTA’s backers, the agreement was supposed to promote prosperity in both countries and actually reduce the pressure to migrate.

President Bill Clinton asserted NAFTA would give Mexicans “more disposable income to buy more American products and there will be less illegal immigration because more Mexicans will be able to support their children by staying home.”

Mexico’s former President, Carlos Salinas, offered a similar opinion: NAFTA would enable Mexico to "export jobs, not people," he said in a 1991 White House news conference alongside President George H. W. Bush.

William A. Ormes wrote in Foreign Affairs that NAFTA would “narrow the gap between U.S. and Mexican wage rates, reducing the incentive to immigrate.”

So what happened? As a precondition for NAFTA, the U.S. demanded drops in Mexican price supports for small farmers. The agreement itself reduced Mexican tariffs on American products. These changes meant that millions of Mexico’s small farmers – many of them from indigenous communities – could not compete with the highly subsidized corn grown by U.S. agribusiness that flooded the local Mexican market.

Dislodged from the places where their families had lived for generations, many people did in fact seek employment in export-oriented factories and farms. But there were too few jobs to go around, and those jobs that were created did not generate the “disposable income” President Clinton had promised.

A 2008 report on “NAFTA’s Promise and Reality” from the Carnegie Endowment for International Peace concluded that while half a million manufacturing jobs were created in Mexico from 1994 to 2002, nearly three times as many farm jobs were destroyed.

As for Mexican wages, they went down, not up, during the same period. “Despite predictions to the contrary, Mexican wages have not converged with U.S. wages,” Carnegie observed.

Unable to earn a living at home or elsewhere in their own country, Mexicans did what people have done for ages; they packed their bags and headed for places where they thought they could find employment.

The experts shaping NAFTA knew that the deal would disrupt the Mexican agricultural sector. That’s why Operation Gatekeeper was implemented the same year as NAFTA. It’s impossible to integrate national economies without disrupting local ones – something that should give pause to those proposing new trade agreements today. The realities of NAFTA should not be replicated.

As the American Friends Service Committee outlines in “A New Path Toward Humane Immigration Policy,” the U.S. should advance economic policies that reduce forced migration and emphasize sustainable development. Instead of policies like NAFTA that elevate rights of transnational corporations above those of people, we need alternative forms of economic integration that are consistent with international human rights laws, cultural and labor rights, and environmental protections.

Modern-day free trade agreements are basically arrangements that take rights away from citizens and bestow expansive benefits to multi-national corporations.

Workers on both sides of the border have one thing in common: they need the ability to organize for higher wages and decent working conditions. Without the opportunity for workers to benefit from the rewards agreements like NAFTA generate for corporations, “free trade” becomes just another driver of the widening gap between the ultra-rich and everyone else.

With the Obama administration pushing hard to create a new arrangement linking the economies of eleven Pacific rim countries, and another that ties the U.S. economy to that of the European Union, it’s time for a new path.

Read Full Post »

Most of the discussion I’ve seen of wealth and income inequality has focused on trends in the USA.  Now comes the annual report from Credit Suisse, one of the world’s largest financial institutions, on wealth and inequality worldwide.  The picture looks familiar:  a small number of individuals control most of the globe’s wealth. 

Among their findings released October 14:

  • The number of millionaires worldwide is likely to increase from 35 million to 53 million in the next five years;
  • The USA is “the undisputed leader in terms of aggregate wealth;”
  • The USA, Switzerland, and Hong Kong are the most unequal “developed countries;”
  • Countries labeled as “emerging markets,” especially China, can be expected to grow their shares of global wealth in the next five years.  But there, too, inequality is rising.

Credit Suisse, which no doubt wants to handle those millionaires’ accounts, also finds that the USA leads the world with 14.2 million millionaires, 41% of the members of the worldwide millionaire club.  Credit Suisse  refers to them as ‘high net worth” or “HNW” individuals.

http://www.hangthebankers.com/wp-content/uploads/2014/10/Credit-Suisse-report-wealth.jpg

Above the HNWs on the ladder are the UHNWs, the “ultra high net worth individuals,” those with with more than $50 million in net assets. The Global Wealth Report says this group has 128,200 members, 49% of whom live in the USA.  

http://www.slate.com/content/dam/slate/blogs/moneybox/2014/10/21/global_millionaires_credit_suisse_wealth_report_finds_they_re_growing_faster/screen_shot_20141021_at_12.33.50_pm.png.CROP.promovar-mediumlarge.33.50_pm.png

“The number of HNW and UHNW individuals has grown rapidly in recent years, reinforcing the perception that the very wealthy have benefitted most in the favorable economic climate,” the report says.  Indeed.

“HNW and UHNW individuals are heavily concentrated in particular regions and countries, and tend to share more similar lifestyles, participating in the same global markets for luxury goods, even when they reside in different continents,” the authors observed.

Here’s more numbers:

  • The poorest 50% of the global population owns less than 1% of the world’s wealth.
  • The wealthiest 10% (those with more than $77,000 of net worth) owns 87% of the world’s wealth. 
  • The top 1% (more than $798,000 of wealth) owns 48.2% of the world’s wealth.
  • The world now has 35 million millionaires, less than 1% of the population.  Together they own 44% of the wealth.

Figures such as these demonstrate that the world’s wealth is in the hands of a very small group of individuals. The figures don’t, by themselves, tell us anything about trends in wealth distribution.  But this topic has finally gotten the attention of policy makers and bankers, even those whose clientele is ultra-rich.

“The changing distribution of wealth is now one of the most widely discussed and controversial of topics, not least owing to Thomas Piketty’s recent account of long-term trends around inequality. We are confident that the depth of our data will make a valuable contribution to the inequality debate,”  the report’s introduction says.  

Credit-Suisse also says, “During much of the last century, wealth differences contracted in high income countries, but this trend may have gone into reverse.” 

It may be significant that the Global Wealth researchers find that while the top 10% has seen its share of the global pie rise from 67% in 1989 to 72% in 2007 and topped 75% in 2013, the share in the pockets of the top 1% has “shown little upward movement for the past two decades.” 

For the USA, however, they find that shares held by the top 10% and the top 1% have held steady, at about 75% and 38% respectively.  This finding contrasts with that of Emmanuel Saez and Gabriel Zucman, who recently wrote

“Wealth inequality [in the USA] has considerably increased at the top over the last three decades.  By our estimates almost all of the increase is due to the rise of the share of wealth owned by the 0.1% richest families, from 7% in 1978 to 22% in 2012.

The conflict may result from differences in methodology or from Saez and Zucman’s attention to the top 0.1%, a smaller sliver than Credit Suisse studied. Nevertheless, both reports add to a body of evidence that the economy is doing just fine for a tiny class of people while just about everyone else is getting left behind. 

It wasn’t long ago that economists generally avoided discussion of the distribution of wealth.  Even if they now differ on some fine points, it probably represents progress when economists working for an institution like Credit Suisse are adding their weight to a call for a change of direction.

“In mature economies,” they conclude, “policies to address wealth inequality are receiving increased attention and can hopefully be designed to avoid unwanted effects on growth or economic security. Among emerging markets, policy makers would be advised to study countries, such as Singapore, which have tried to ensure that wealth gains are broadly shared, and which have succeeded in keeping wealth inequality in check.”

[Note: There’s a link to the Global Wealth Report pn the Credit Suisse publications page, but the link did not work for me.  Instead, I contacted the bank’s New York press office, where I found someone to send me a copy.]

Read Full Post »

Janet Yellin is not the only one with a new analysis of the growing chasm between the ultra-rich and everyone else  If you can handle some dense economics (or like me willing to skip past the fancy equations), take a look at a new paper by Emmanuel Saez and Gabriel Zucman on “Wealth Inequality in the United States since 1913.”

It seems that reliable data on wealth is not easy to come by.  So Saez and Zucman had to do some fancy calculation to figure out who owns how much and how the proportions have changed over time.   They find

wealth inequality has considerably increased at the top over the last three decades.  By our estimates almost all of the increase is due to the rise of the share of wealth owned by the 0.1% richest families, from 7% in 1978 to 22% in 2012.

That’s a level of inequality comparable to the early 1900s, before the Progressive Era.

Occupy movement, if you’re still out there, take notice. 

“Wealth concentration has followed a U-shaped evolution over the last 100 years,” they write  “It was high in the beginning of the twentieth century, fell from 1929 to 1978, and has continuously increased since then.”

(You can see the U-shaped curve and other charts at:  http://gabriel-zucman.eu/files/SaezZucman2014Slides.pdf.)

The top 0.1% is just 160,000 families whose wealth rose at 5.3% per year from 1986 to 2012. In the same period the bottom 90% saw its wealth stagnate. 

The key factors driving the wealth gap, Saez and Zucman conclude, is a surge in labor income among those at the tippy top and a decline in savings for those in the middle class.  That leads the authors to a set of recommendations.

First and perhaps most obvious, they recommend progressive income taxes and estate taxes.  

“Yet tax policy is not the only channel,” they say.

Other policies can directly support middle class incomes—such as access to quality and affordable education, health benefits, cost controls, minimum wage policies, or more generally policies shifting bargaining power away from shareholders and management toward workers.  [emphasis added]

It’s good to see a solution that deals with the cause of the problem.  Janet Yellin take notice.

 

Read Full Post »

Fed Head Takes on Inequality

Diagnosis unmatched by prescription

Janet Yellin, who chairs the Board of Governors of the Federal Reserve System, delivered an unusual and important speech two days ago about the growing gap between the richest Americans and everyone else.   

Speaking at a conference at the Federal Reserve Bank of Boston, Yellin  offered “Perspectives on Inequality and Opportunity from the Survey of Consumer Finances.”  She said,

It is no secret that the past few decades of widening inequality can be summed up as significant income and wealth gains for those at the very top and stagnant living standards for the majority. I think it is appropriate to ask whether this trend is compatible with values rooted in our nation’s history, among them the high value Americans have traditionally placed on equality of opportunity.

It’s fair to assume that was a rhetorical question and the answer is, no, the widening gap between the ultra-rich and the rest of the population is a threat to democracy and the economic futures of most people.

While the trend of wage stagnation for working Americans goes back to the 1970s, Yellin focused on the most recent period of economic history, 1989 to 2013.  This is useful because it includes the recent economic meltdown as well as the so-called “recovery.”  

Yellin illustrated her talk with an obligatory set of graphs (she’s an economist after all), including this one depicting changes in net worth (i.e. wealth) for the wealthiest 5% of Americans, the next 45%, and the bottom half of the population.   

As the chart makes obvious, the wealthiest 5% of Americans saw their share of the nation’s wealth climb from about 55% to about 65%, while the next 45% saw its share go from from 45% to 35% and the share held by bottom 50% approaching zero percent.   

It’s good to know the nation’s top economist is alarmed. 

The second half of Yellin’s speech concerned what she called “four building blocks of opportunity,” access to early education, access to higher education, ownership of private businesses, and inheritance.  The first three could be useful ways for individuals and families to do better in a time of widening inequality, but do not affect tax policy, deindustrialization, political and business attacks on organized labor, and the growth of the finance sector’s share of the economy, i.e. the factors driving the equality gap to historic highs. 

For a more incisive analysis of what went wrong, I recommend the latest issue of Dollars and Sense, especially an article by Gerald Friedman on “What Happened to Wages?”  He writes,

From the dawn of American industrialization in the 19th century until the 1970s, wages rose with labor productivity, allowing working people to share in the gains produced by capitalist society.  Since then, the United States has entered a new era, in which stagnant wages have allowed capitalists to capture a growing share of the fruits of rising productivity.

I recommend examining Friedman’s charts alongside Yellin’s.  And try to follow Yellin’s fourth piece of advice:  inherit a fortune.  

Read Full Post »

A Visitor in the Garden

October 19, 2014

Read Full Post »

Older Posts »

Follow

Get every new post delivered to your Inbox.

Join 88 other followers