Headlines of the day: Classes, deep politics, more


First, a stunning landmark is reached. From the New York Times:

The American Middle Class Is No Longer the World’s Richest

The American middle class, long the most affluent in the world, has lost that distinction.

While the wealthiest Americans are outpacing many of their global peers, a New York Times analysis shows that across the lower- and middle-income tiers, citizens of other advanced countries have received considerably larger raises over the last three decades.

After-tax middle-class incomes in Canada — substantially behind in 2000 — now appear to be higher than in the United States. The poor in much of Europe earn more than poor Americans.

On of the key mechanisms of the collapse of the middle class from Mother Jones:

How Taxpayers Subsidize the Multi-Million Dollar Salaries of Restaurant CEOs

  • Starbucks CEO Howard Schultz raked in $236 million in taxpayer-subsidized compensation over the past two years.

As the fight to raise the minimum wage has gained momentum, the restaurant industry has emerged as the biggest opponent. This is no surprise, since the industry claims the highest percentage of low-wage workers—60 percent—of any other business sector. Front-line fast-food workers earn so little money that about half of them rely on some form of public assistance, to the tune of about $7 billion a year. That hidden subsidy has helped boost restaurant industry profits to record highs. In 2013, the industry reaped $660 billion in profits, and it in turn channeled millions into backing efforts to block local governments from raising pay for low-wage workers and to keep the minimum wage for tipped workers at $2.13 an hour (exactly where it’s been for the past 22 years). But public assistance programs aren’t the only way taxpayers subsidize the restaurant industry.

A new report from the Institute for Policy Studies finds that the public has been contributing to excessive CEO compensation as well, helping to widen the gap between the lowest-paid workers and their bosses. Thanks to a loophole in the tax code, corporations are allowed to deduct unlimited amounts of money from their tax bills for executive compensation, so long as it comes in the form of stock options or “performance pay.” The loophole was the inadvertent result of an attempt by Congress to rein in CEO compensation by limiting the tax deduction for executive pay to $1 million a year. That law exempted pay that came in the form of stock options or performance pay. This loophole has proven lucrative for CEOs of all stripes, but it is particularly egregious in an industry that pays its workers so little that it is already heavily subsidized by taxpayers.

More from UC Berkeley’s Robert Reich:

Raising Taxes on Corporations that Pay Their CEOs Royally and Treat Their Workers Like Serfs

Until the 1980s, corporate CEOs were paid, on average, 30 times what their typical worker was paid. Since then, CEO pay has skyrocketed to 280 times the pay of a typical worker; in big companies, to 354 times.

Meanwhile, over the same thirty-year time span the median American worker has seen no pay increase at all, adjusted for inflation. Even though the pay of male workers continues to outpace that of females, the typical male worker between the ages of 25 and 44 peaked in 1973 and has been dropping ever since. Since 2000, wages of the median male worker across all age brackets has dropped 10 percent, after inflation.

This growing divergence between CEO pay and that of the typical American worker isn’t just wildly unfair. It’s also bad for the economy. It means most workers these days lack the purchasing power to buy what the economy is capable of producing — contributing to the slowest recovery on record. Meanwhile, CEOs and other top executives use their fortunes to fuel speculative booms followed by busts.

Renting wombs to fertilized eggs from abroad via Quartz:

Wealthy Chinese are turning to American surrogates to birth their children

The familiar image of international surrogacy until now has mainly involved Americans and Europeans crossing the world to find women to birth their children. Now, wealthy Chinese couples are seeking surrogates in the US. The practice—a new version of Chinese “birth tourism”—offers a solution to rising infertility in China, a way around Chinese population controls, and even the added bonus of US citizenship for babies born in the States.

For years, pregnant Chinese women have come to the US, mainly to the West Coast, to give birth to baby US citizens who can, at the age of 21, sponsor their parents for green cards. In a new wrinkle, some are instead paying American women to carry their children—a way of getting citizenship as well as dealing with the fact that more Chinese couples are facing trouble having children. (Other surrogacy destinations for wealthy Chinese include Thailand, India, and Ukraine, but the US is still the favorite.)

Salon finds brown noses:

Welcome to Plutocrat-geddon! Obama and Thomas Friedman flatter our new billionaire overlords

  • Forget inequality! Judging by the White House and the media, the real answer is sucking up to the wealthiest

Inequality is a burning topic among economists, especially since the release of Thomas Piketty’s recent book on the subject. Many are questioning whether this is a temporary period of runaway inequality, or whether we are on the verge of an irreversible collapse into extremes of wealth and poverty. (What would we call it? The Oligopolypse? Plutogeddon?)

But numbers alone don’t tell the full story. Culture, too, is adapting to this unequal world. We idealize the wealthy today in ways that would have been unthinkable decades ago.

With the children of today’s baby boomers scheduled to inherit $30 trillion in the next several decades, politicians and the press are hard at work flattering plutocrats of all ages by portraying them as paragons of wisdom.

Another assault on the potential middle class from the New York Times:

Student Loans Can Suddenly Come Due When Co-Signers Die, a Report Finds

For students who borrow on the private market to pay for school, the death of a parent can come with an unexpected, added blow, a federal watchdog warns. Even borrowers who have good payment records can face sudden demands for full, early repayment of those loans, and can be forced into default.

Most people who take out loans to pay for school have minimal income or credit history, so if they borrow from banks or other private lenders, they need co-signers — usually parents or other relatives. Borrowing from the federal government, the largest source of student loans, rarely requires a co-signer.

The problem, described in a report released Tuesday by the Consumer Financial Protection Bureau, arises from a little-noticed provision in private loan contracts: If the co-signer dies or files for bankruptcy, the loan holder can demand complete repayment, even if the borrower’s record is spotless. If the loan is not repaid, it is declared to be in default, doing damage to a borrower’s credit record that can take years to repair.

And a warning to labor from the London Daily Mail:

The future of factories? Swarm of super-fast robotic ‘ANTS’ powered by magnets can independently climb walls and even build

  • The army of robo-ants can move at around 13.7 inches (35cm) a second
  • This is equivalent to a human running at just under the speed of sound
  • Each ant can be individually controlled using magnets on a circuit board
  • Swarm has already built a tower 30cm (11.8 inches) high from carbon rods

Business Insider sounds the alarm:

DAVID EINHORN: ‘We Are Witnessing Our Second Tech Bubble In 15 Years’

Hedge-fund manager David Einhorn, who runs Greenlight Capital, says we’re seeing another tech bubble, CNBC reported, citing his fund’s quarterly investor letter.

“Now there is a clear consensus that we are witnessing our second tech bubble in 15 years. What is uncertain is how much further the bubble can expand, and what might pop it,” Einhorn wrote in the letter (PDF) posted online by @Levered_Hawkeye.

Clicking away your rights from the Christian Science Monitor:

General Mills drops arbitration clause, but such contracts are ‘pervasive’

Consumer advocates warn that clicking ‘I agree’ to online contracts can crimp buyers’ legal rights, if a contract requires arbitration and nixes class-action lawsuits. The practice is spreading, though General Mills encountered a backlash.

When consumers click “I agree” to online contracts, two things can happen: They may give up their right to pursue a class action lawsuit if something goes wrong, and they can seek damages only through arbitration, an out-of-court legal process that many experts say weighs against the harmed consumer.

From the Los Angeles Times. Another landmark:

Supreme Court upholds Michigan ban on affirmative action

The Supreme Court upheld Michigan’s ban on the use of racial affirmative action in its state universities Tuesday, ruling that voters are entitled to decide the issue.

The 6-2 decision clears away constitutional challenges to the state bans on affirmative action, which began in California in 1996.

Justice Anthony Kennedy, speaking for the majority, said the democratic process can decide such issues. “This case is not about how the debate about racial preferences should be resolved,” he said. “It is about who may resolve it. There is no authority in the Constitution of the United States or in this court’s precedents for the judiciary to set aside Michigan laws that commit this policy determination to the voters.”

Kochs go Latino, via Reuters:

Conservative Koch-backed group uses soft touch in recruiting U.S. Hispanics

The conservative advocacy groups backed by the billionaire brothers Charles and David Koch are known mostly for spending millions of dollars to pelt Democratic candidates with negative television ads.

But this year, one Koch-backed group is using a softer touch to try to win over part of the nation’s booming Hispanic population, which has overwhelmingly backed Democrats in recent elections. The group, known as The Libre Initiative, is sponsoring English classes, driver’s license workshops and other social programs to try to build relationships with Hispanic voters in cities from Arizona to Florida – even as the group targets Democratic lawmakers with hard-edged TV ads.

Taking a cue from liberal groups that have been active in Hispanic neighborhoods for decades, Libre says it aims to use these events to build support for small-government ideas in communities that typically support big-government ideals.

From NPR, a reminder from Mother Nature:

California’s Drought Ripples Through Businesses, Then To Schools

Nearly half of the country’s fruits, nuts and vegetables come from California, a state that is drying up. , the entire state is considered “abnormally dry,” and two-thirds of California is in “extreme” to “exceptional” drought conditions.

Earlier this year, many farmers in California found out that they would get no irrigation water from state or federal water projects. Recent rains have helped a little. On Friday, government officials said there was enough water to give a little more to some of the region’s farmers — 5 percent of the annual allocation, instead of the nothing they were getting.

>snip<

Economists say it’s too early to accurately predict the drought’s effect on jobs, but it’s likely as many as 20,000 will be lost.

That might not sound like a lot, but many of those workers are already living paycheck to paycheck in communities that depend on that work.

Via the National Drought Monitor, the current state of affairs in California, ranging from lightest [abnormally dry] to darkest [exceptional drought]:

BLOG Drought

After the jump, the latest from Europe [including spiking austerian suicides], Asia’s Game of Zones, an American Nazi whose work inspired a French film, spy games, and muich more. . .

On to Europe, starting with another warning of the almost inevitable social accompaniments of economic crises from EUobserver:

Europe faces worst human rights ‘crisis’ in decades

Europe is facing its largest human rights crisis in over two decades, according to the Strasbourg-based Council of Europe (CoE).

The human rights watchdog, in a report published on Wednesday (16), says corruption, human trafficking, racism and discrimination persist across Europe.

Coupled with unemployment and poverty in many of the 47 countries under its mandate, the violations help feed extremism and fuel conflict, it notes.

The neo;liberal body count rises, via EurActiv:

Study: austerity driving Greeks to commit suicide

A direct link ties government austerity measures to a sharp rise in male suicides, according to research carried out at the University of Portsmouth.

Researchers say that for every 1% decline in government spending in Greece, there was a 0.43% rise in suicides among men. Between 2009 and 2010, 551 Greek men killed themselves “solely because of fiscal austerity”, one of the co-authors of the study, Nikolaos Antonakakis told The Guardian.

“That is almost one person per day. Given that in 2010 there were around two suicides in Greece per day, it appears 50% were due to austerity,” Antonakakis said.

Off to Asia and the Game of Zones, first from Reuters:

Obama, Japan’s Abe Under Pressure To Salvage Pacific Trade Pact

A meeting between U.S. President Barack Obama and Japanese Prime Minister Shinzo Abe this week in Tokyo may not seal one of the world’s biggest trade pacts, but it could give it a much-needed boost.

A central element of Obama’s strategic shift towards Asia, the Trans-Pacific Partnership (TPP) would connect a dozen Asia-Pacific economies by eliminating trade barriers and harmonizing regulations in a pact covering two-fifths of the world economy and a third of all global trade.

After four years of talks and missed deadlines, negotiators from several TPP countries say they hope Thursday’s summit will lay the groundwork for tough concessions, including a possible easing in Japan’s protectionist stance on beef, sugar, dairy and wheat — a step that could breathe into the struggling TPP.

The Japan Daily Press ups the ante:

New early warning patrol unit stationed in Okinawa airbase

With the increased maritime activities by Chinese vessels in territorial waters near the Japanese-administered Senkaku Islands, the Japanese government has now deployed an early warning patrol unit in the southern part of Okinawa Prefecture. The unit composed of four E-2C aircrafts is aimed at increasing monitoring of Chinese vessel movements in the area.

Scrambles against Chinese aircrafts in the area has increased in recent months, prompting the Air Self Defense Forces (ASDF) to restation permanently the unit to the Naha airbase in Okinawa from Misawa airbase in Aomori. Japan is engaged in a bitter territorial dispute with China over the Senkaku Islands, which the Chinese claims sovereignty over and calls Diaoyu. Defense Minister Itsunori Onodera led the launching ceremony of the unit in Naha. In his speech, he reminded the ASDF of the “dangerous situation” they are in as China continues their attempts to “change the status quo by force and threaten the rule of law could trigger emergencies.”

Another escalation from NHK WORLD:

Japanese lawmakers visit Yasukuni Shrine

About 150 Japanese lawmakers and a cabinet minister have visited Yasukuni Shrine in Tokyo for its spring festival.

The shrine honors Japan’s war dead. Those remembered include leaders convicted of war crimes after World War Two.

The lawmakers offered prayers at the shrine’s main hall on Tuesday morning.

They include Hidehisa Otsuji, a senior member of the governing Liberal Democratic Party, and Yuichiro Hata, a senior member of the opposition Democratic Party.

From MintPress News, the deep politics of dastardly deeds:

Seymour Hersh: Benghazi Attack A Consequence Of Weapons “Rat-Line” To Syria

A veteran journalist presents a damning timeline of the lead up to the attack on the U.S. Consulate in Benghazi and alarming details of how the U.S. was feeding weapons to Syria.

Though it is not often discussed, the fact that the Obama administration channeled Libyan heavy weapons to the Syrian rebels — the existence of a weapons “rat-line” — has been openly disclosed. In a December 2012 report, Christina Lamb of the Sunday Times of London pointed out that the United States had been secretly purchasing the stockpiled weapons of former Libyan dictator Muammar Gaddafi — including anti-aircraft SA-7 missiles, anti-tank rounds, rocket-propelled grenades and mortar shells. Via a connection of Middle Eastern nations that was already supplying the rebels, such as Turkey, it had also been providing the rebels with these weapons in an attempt to counter Syrian President Bashar Assad’s campaign to suppress the opposition.

It has also been publicly speculated that late Ambassador Stevens had at least a working knowledge of what was going on. On Sept. 6, 2012, a Libyan ship, captained by “a Libyan from Benghazi,” docked in southern Turkey with 400 tons of weapons meant for the Syrian opposition. The man that organized the shipment, Tripoli Military Council leader Abdelhakim Belhadj, was said to have worked directly with Stevens during the Libyan Revolution. According to a source that spoke with Fox News, Stevens was in Benghazi at the time of the attack “to negotiate a weapons transfer in an effort to get SA-7 missiles out of the hands of Libya-based extremists.”

And a spooky response via the McClatchy Washington Bureau:

Intelligence chief forbids unauthorized talks with reporters

Employees of U.S. intelligence agencies have been barred from discussing any intelligence-related matter _even if it isn’t classified _ with journalists without authorization, according to a new directive by Director of National Intelligence James Clapper.

Intelligence agency employees who violate the policy could suffer career-ending losses of their security clearances or outright termination, and those who disclose classified information might face criminal prosecution, according to the directive, which Clapper signed March 20 but was made public only Monday by Steven Aftergood, who runs the Federation of American Scientists’ Project on Government Secrecy.

Under the order, only the director or deputy head of an intelligence agency, public affairs officials and those authorized by public affairs officials may have contact with journalists on intelligence-related matters.

Law and order, and not colorblind, via NORML Blog:

Minnesota: African Americans Six Times More Likely Than Whites To Be Arrested For Marijuana Possession

African Americans are arrested for marijuana possession offenses in Minnesota at a rate that is more than six-times higher than that of Caucasians, according to an analysis of 2011 FBI arrest data released today by the nonpartisan think-tank Minnesota 2020 and commissioned in part by Minnesota NORML.

Although African Americans comprise less than six percent of the state’s population, they represented over 27 percent of those persons arrested for violating marijuana possession laws in 2011. By comparison, whites comprise some 87 percent of the state’s population and constituted 69 percent of those arrested for violating marijuana possession laws. “Thus, the black arrest rate for marijuana possession was 687 and the white arrest rate was 107, making blacks 6.4 times more likely to be arrested for marijuana possession than whites,” the study found.

From Russia, a curb on designer genes from RT:

Russia postpones planting of GMOs by 3 years

Russia will not start certifying GM seeds for at least three more years due to delays in creating the necessary infrastructure, Prime Minister Dmitry Medvedev told MPs. Earlier Russia had expected to allow planting such seeds from June.

The delay comes amid the general GMO-skeptic mood that the Russian government adopted recently. The country may even ban the cultivation and import of genetically modified foodstuffs.

Last year, the government allowed the planting of GM seeds starting July 2014 as part of Russia’s accession to the World Trade Organization. Now the deadline will have to change, Medvedev told Russian MPs.

Indian Country Today covers a delay in fuelish imperialism:

Keystone XL Decision Delayed Yet Again as State Department Invokes Nebraska Court Ruling

All eyes are on Lincoln, Nebraska as the U.S. Department of State has invoked a recent court ruling there as its latest reason to avoid making a decision on the controversial Keystone XL pipeline.

As the State Department announced it would extend the amount of time it would give eight federal agencies to give feedback on the proposal—it is currently being assessed to see whether it is in the U.S.’s national interest—TransCanada Corp., the would-be builder, expressed “frustration and disappointment” at the delay. So did Canada’s government.

“Agencies need additional time based on the uncertainty created by the ongoing litigation in the Nebraska Supreme Court which could ultimately affect the pipeline route in that state,” the State Department said in a statement on April 18. “In addition, during this time we will review and appropriately consider the unprecedented number of new public comments, approximately 2.5 million, received during the public comment period that closed on March 7, 2014.”

Also on the energy front, we have this from TheLocal.de:

‘Fracking won’t save Germany from Putin’

Germany’s reliance on Russian gas continues to limit the nation’s diplomatic leverage in the Ukraine crisis. But as leaders once again explore fracking as an alternative, critics told The Local the risks were too high.

Fracking – the process of extracting hard-to-access shale gas from the ground using highly-pressurized chemicals – has never been popular in environmentally-conscious Germany.

>snip<

But as the Ukraine crisis has made clear, Germany’s reliance on Russian gas imports is becoming increasingly dangerous. Now fracking is being put forward again as a way of liberating the country’s energy supply from the whims of Russian President Vladimir Putin.

Yet as calls for Germans to reconsider fracking grow louder, critics, including Environment Minister Barbara Hendriks and Friends of the Earth Germany (BUND), are calling for an outright ban. They say the country is not big enough to withstand large scale use of fracking chemicals, which carry a potential risk to drinking water.

BLOG PlaytimeWe close with a blast from the past, a tale about the man who put us in those glass boxes and the accompanying social interactions so brilliantly parodied by Jacques Tati in his brilliant 1967 film Playtime [and here], a sadly oft-overlooked masterpiece focused on the dissection of architecture’s phenomenal role in the shaping of our lives: It’s a much-watch film for every student of our times.

Trailer for Playtime, 1967

Program notes:

Monsieur Hulot has to contact an American official in Paris, but he gets lost in the maze of modern architecture which is filled with the latest technical gadgets. Caught in the tourist invasion, Hulot roams around Paris with a group of American tourists, causing chaos in his usual manner. France, 1967, comedy

And an interestingly answered question about the figure in question from Paleofuture:

One of America’s Most Famous Architects Was a Nazi Propagandist

American architect Philip Johnson designed some of the most iconic buildings of the 20th century. Johnson, who died in 2005, has long been hailed as one of the greats. But there’s one fact about the man that many people in the architecture community don’t like to talk about: Johnson was a fascist who openly supported Adolf Hitler and the Nazis for nearly a decade.

Today is the 50th anniversary of the 1964 New York World’s Fair opening, so special attention is being paid to one of Johnson’s most beloved buildings: the New York State Pavilion in Flushing Meadows. It’s open today for the first time in nearly 27 years, and there’s a line around the block just to get in to see the crumbling structure.

The debate over whether to restore the site rages on. But one thing almost never mentioned when discussing this structure or his architecture in general is that Philip Johnson was a terrible, hateful human being. And he wasn’t just some casual Nazi sympathizer whispering, “maybe Hitler has some good ideas” in shadowy bars, either. He actively campaigned for Nazi causes in the U.S. and around the world.

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2 responses to “Headlines of the day: Classes, deep politics, more

  1. Pingback: The American Middle Class Is No Longer the World’s Richest | Plutocracy Ascendant

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