Child Poverty In Britain Set To Reach New Record High

"Across all regions, relative child poverty is projected to increase markedly," according to new research from the Institute for Fiscal Studies.

The thinktank predicts an increase of more than a million in the number of children living in poverty, more than reversing all the progress made over the past 20 years.

As The Guardian reports, the number of children living in poverty will soar to a record 5.2 million over the next five years as government welfare cuts bite deepest on households with young families.

Weakness in income growth since the recession had been unprecedented in recent times, according to the research, and living standards will continue to be under pressure over the coming years.

“The larger projected rises occur in areas where families with children are more reliant on benefits than earnings for their income, and where more families are likely to be adversely affected by the new two-child limit on means-tested benefits.”

The IFS said the increase in relative poverty over the coming years would be concentrated among families with children.

Poverty rates for working-age adults without children and for pensioners would remain roughly unchanged...

“with real earnings growth boosting the incomes of those at the top of the distribution more, while benefit cuts fall largely on those nearer the bottom."

The report’s findings, which also predict a widening of the gap between rich and poor and four more years of weak income growth, pose a direct challenge to Theresa May, who arrived in Downing Street pledging to help those “just about managing”.

"If You Want To Get Rich...Climb Into A Time Machine"

Authored by Charles Hugh Smith via OfTwoMinds blog,

There"s a profound difference between assets that produce no income and those that produce net income.

To those of us nutty enough to pore over dozens of pages of data on wealth and income in the U.S., the Federal Reserve"s quarterly Z.1 reports and annual Survey of Consumer Finances (SCF) are treasure troves, as are I.R.S. tax and income reports.

Allow me to share a few observations on family wealth and income drawn from my review of these documents:

Changes in U.S. Family Finances from 2013 to 2016 (42 pages)

Financial Accounts of the United States (198 pages)

Corporate profits clock in at $2.135 trillion annually, around 11% of the nation"s GDP (gross domestic product). (Page 10 of Z.1) This has changed very little over the past few years; corporate profits totaled $2.140 trillion in 2014.

Most people who follow financial matters closely probably know corporate profits have been around $2 trillion annually for awhile.

But how many know that proprietors" income from small businesses ($1.375 trillion) and rental income of persons--i.e. not corporations--($740 billion) together equal corporate profits? ($2.115 trillion for small biz/rentals, $2.135 trillion for corporate profits.

How many financially savvy people know that proprietors" income and private rental income rose by $189 billion since 2014, while corporate profits flatlined?

Clearly, the families that own the proprietorships and rentals pulling down $2.1 trillion in annual profits are doing a bit better than OK.

As the charts below reveal, most of this profitable business equity is owned by the top 10% of families. There are a few clues that suggest that family-owned business equity is distributed along a power-law curve, i.e. the majority of wealth and income is held by the top and the rest is distributed over the rest of the owners.

On Page 28 of the Survey of Consumer Finances (SCF), we find that the business equity owned by families in the bottom 50% of family incomes has a mean value of $208,000, up marginally from $204,000 in 2010, the business equity held by the top 10% of families rose from $2.265 million in 2010 to $3.3 million in 2016--a gain of over $1 million.

As always, I want to stress the profound difference between assets that produce no income and those that produce net income. This excludes hobby businesses that lose money or tax shelters that are intended to lose money. I"m talking about businesses that generate revenues in excess of all expenses: net profit that is taxable.

Owning a vacation home that is rented out a few weeks a year is one thing, owning a rental property that"s rented out 50 weeks a year is considerably different. The first is an expense, the second generates net income.

Somewhat to my surprise, almost 14% of households own some residential property equity other than their primary residence (page 18 of the SCF). Unfortunately, the Fed lumps second homes and vacation properties in with rental properties of up to 4 units, while rentals with 5 or more units are lumped in with farmland and commercial properties in equity in nonresidential property.

Only 6% of households own any equity in nonresidential property, a category of wealth that gained 72% from 2013 to 2016. Interestingly, the percentage of families owning this form of wealth actually declined from 7.2% in 2013 to 6.2% in 2016, suggesting to me that the corporations and hedge funds snapping up multi-unit residential properties are buying properties from families.

Based on my previous surveys of I.R.S. income tax data, much of this small-business equity and family owned-rental property is owned by the top 4% to 5% of families, with the majority owned by the top 10%, as shown in the chart below.

The number of families with business equity has been declining, eroded by recession and stagnation, despite the recent bounce higher.

Most of the biz-equity is owned by the top 10%:

While the financial media focuses on billionaires and hedge fund managers playing for billions, much of the wealth and income of the nation is firmly in the hands of families that own proprietorships and rental properties.

These assets have risen sharply in value, and they"ve also generated gains in income.

If you want to get rich, you can climb into a time machine, return to 2010 and buy a couple thousand bitcoin for $1 each. Alternatively, you can marry extremely well. If neither of these options is available, then starting a profitable proprietorship that enables the purchase of rental properties is another option.

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If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com. Check out both of my new books, Inequality and the Collapse of Privilege ($3.95 Kindle, $8.95 print) and Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle, $8.95 print, $5.95 audiobook) For more, please visit the OTM essentials website.

The 'Koyaanisqatsi' Economy

Authored by Raul Ilargi Meijer via The Automatic Earth blog,

The film Koyaanisqatsi was released in 1982. The title means ‘life out of balance’ in the language of the Hopi, a Native American tribe who live(d) mainly in what is now north-east Arizona. It is directed by Godfrey Reggio with music by Philip Glass and cinematography by Ron Fricke. There are no actors, and no dialogue. Philip Glass’s music underlies a series of film fragments that contrast the beauty of American nature with the noise and pollution mankind has added to it. Wikipedia:

The film consists primarily of slow motion and time-lapse footage of cities and many natural landscapes across the United States. The visual tone poem contains neither dialogue nor a vocalized narration: its tone is set by the juxtaposition of images and music. Reggio explained the lack of dialogue by stating “it’s not for lack of love of the language that these films have no words. It’s because, from my point of view, our language is in a state of vast humiliation. It no longer describes the world in which we live.”

Due to its initial success, Reggio and Glass made two sequels to the film, Powaqqatsi (1988), meaning “parasitic way of life” or “life in transition”, and Naqoyqatsi (2002) which means “life as war”, “civilized violence” and “a life of killing each other”. If you haven’t seen them, they come highly recommended.

Koyaanisqatsi is an fitting term to describe not only our world in general, but also our economies. They are severely out of balance, and getting more so every day. But economies, like nature, need at least a minimum in balance. If that disappears, this lack of balance will tip them over. It is somewhat strange that this is not being recognized, and not even discussed.

It’s as if people think that when almost all wealth goes to a select very few, an economy can still continue to function. It can’t. The rich getting continually richer means the poor getting poorer (as overall growth is slow or non-existent), until the latter reach a point where they can no longer afford even basic necessities. That’s when parts of an economy will start dying, in the same vein that parts of a living body, an organism, die off when the supply of blood, nutrients and oxygen is cut off.

For an economy to function, it needs money to flow through it the same way a body needs blood to flow. If all the money gets increasingly concentrated in just a small area, the economy stagnates. We measure the flow of money as velocity:

If that graph would describe a human body, it would be in an ambulance on the way to ER. The only times velocity of money have been as low as today was during a Great Depression and a World War.

The ever richer rich cannot spend enough to keep things moving. They can buy stocks and bonds and houses, but they can’t buy all the groceries and clothing that the poor and middle class no longer can. But it’s those things that keep the economy humming along.

An economy as unbalanced as the one we presently have is bound to perish. The rich are killing their own economies by trying to get richer all the time. And they have no idea that’s what happens. It’s sort of baked into their understanding of what capitalism is. Or neo-liberalism if you want.

We should look upon, and handle, our economies and societies as living, and vibrant, systems, but we’re miles away from any such understanding. Our education systems are gross failures when it comes to this, and our media, owned by the rich, support anything that will make them richer. Even though that is suicidal for everyone involved. We are a tragic species in many more ways than one.

This has nothing to do with political views, with socialism or communism or any ism, it’s a simple empirical observation. It’s not about ‘everyone deserves their fair share’, but about if they don’t get their share, no economy will be left to hand out any shares even to the rich. If the rich want to get richer, they will need a functioning economy to get there.

In other words, someone will have to call a halt, or at least a pause, to the pace at which they’re getting richer, or their quest for riches will become self-defeating. Literally every single human being can grasp this, but hardly anyone even considers it. At their peril.

Here’s just a small example from CNBC, there are thousands just like it:

The Top 1% Of Americans Now Control 38% Of The Wealth

America’s top 1% now control 38.6% of the nation’s wealth, a historic high, according to a new Federal Reserve Report. The Federal Reserve’s Surveys of Consumer Finance shows that Americans throughout the income and wealth ladder posted gains between 2013 and 2016. But the wealthy gained the most, driven largely by gains in the stock market and asset values. The top 1% saw their share of wealth rise to 38.6% in 2016 from 36.3% in 2013.

The next highest 9% of families fell slightly, and the share of wealth held by the bottom 90% of Americans has been falling steadily for 25 years, hitting 22.8% in 2016 from 33.2% in 1989. The top income earners also saw the biggest gains. The top 1% saw their share of income rise to a new high of 23.8% from 20.3% in 2013. The income shares of the bottom 90% fell to 49.7% in 2016.

Now, you may think: 38%, how bad is that?, and you may be forgiven for thinking that way. After all, you’re in a majority there. To understand the severity of what’s happening, you need to look at the trends:

This one from the New York Times, annotated by Charles Hugh Smith, is very revealing too. What happens is that just as we find ourselves in a stagnating/shrinking economy, the rich get richer fast. They can do that because central banks are releasing trillions of dollars in QE, but also because the system is geared towards eviscerating the poor, and increasingly the middle class as well:

And this is amplified by the ultra-low rates policies central banks have been pushing over the past decade. They allow for the ever poorer to keep up appearances of wealth by plunging into debt ever deeper, but they don’t allow for their living conditions, their jobs, their savings, their pensions, to recover. They do the exact opposite. As this graph from Mike Lebowitz, one of many to show the same trendline, goes to show:

This is not an American phenomenon, though it’s more pronounced stateside. And Trump’s tax reform plans promise to only make it worse. It looks like Bernie Sanders might be the only politician in the US to stop it, but what are the odds of that? We live in a system that is warranting economic suicide for everyone including its own proponents, and we’re blindly following it like so many lemmings.

The Koyaanisqatsi film doesn’t have a happy Hollywood ending, and it makes no pretense of it. Our Koyaanisqatsi economy will not end with ‘they lived happily ever after’ either. The protagonists wouldn’t know how to achieve that. They don’t understand what makes an economy run, and keeps it running.

And they don’t want to understand, because they think it’ll make them less rich. Nobody gives balance a second’s thought. Presumably because they think the system, like nature, will eventually balance itself. And they’re right in that. They just haven’t considered what that balancing act might mean for them personally.

if you’re rich, good on you. But don’t forget what made it possible for you to gather your riches, or you’ll lose them, and probably a lot more too.

The Real Reason Wages Have Stagnated: Our Economy Is Optimized For Financialization

Authored by Charles Hugh Smith via OfTwoMinds blog,

Labor"s share of the national income is in freefall as a direct result of the optimization of financialization.

The Achilles Heel of our socio-economic system is the secular stagnation of earned income, i.e. wages and salaries. Stagnating wages undermine every aspect of our economy: consumption, credit, taxation and perhaps most importantly, the unspoken social contract that the benefits of productivity and increasing wealth will be distributed widely, if not fairly.

This chart shows that labor"s declining share of the national income is not a recent problem, but a 45-year trend: despite occasional counter-trend blips, labor (that is, earnings from labor/ employment) has seen its share of the economy plummet regardless of the political or economic environment.

Given the gravity of the consequences of this trend, mainstream economists have been struggling to explain it, as a means of eventually reversing it. The explanations include automation, globalization/ offshoring, the high cost of housing, a decline of corporate competition (i.e. the dominance of cartels and quasi-monopolies), a failure of our educational complex to keep pace, stagnating gains in productivity, and so on.

Each of these dynamics may well exacerbate the trend, but they all dodge the dominant driver of wage stagnation and rise income-wealth inequality: our economy is optimized for financialization, not labor/earned income.

What does our economy is optimized for financialization mean? It means that capital and profits flow to the scarcities created by asymmetric access to information, leverage and cheap credit--the engines of financialization.

Optimization is a complex overlay of dynamically linked systems: the central bank optimizes the flow of cheap credit to the banking/financial sector, the central state tacitly approves the consolidation of cartels and quasi-monopolies, and gives monstrous tax breaks to corporations even as it jacks up taxes and fees on wage earners and small business.

Financialization funnels the economy"s rewards to those with access to opaque financial processes and information flows, cheap central bank credit and private banking leverage. Together, these enable financiers and corporations to get the borrowed capital needed to acquire and consolidate the productive assets of the economy, and commoditize those productive assets, i.e. turn them into financial instruments that can be bought and sold on the global marketplace.

These commoditized assets include home mortgages, student loans, and specialized labor forces which are "sold" with their employers or arbitraged globally. Once an asset is commoditized, the profits flow to those who process the transactions of packaging and marketing these assets globally.

Take auto loans as an example: the big money isn"t made from collecting the interest on the auto loans; the big money is made by processing and assembling the loans into tranches that can be sold to investors globally.

One way of understanding financialization is to ask: what"s the quickest, easiest way to make $10 million in our economy? Is it building a business based on the labor of employees over a decade or two?

You"re joking, right? The easiest way to make $10 million is to be part of the investment banking team overseeing a $10 billion corporate buyout or merger deal, or investing seed money in a tech company that subsequently goes public.

How about the easiest and quickest way to make $100 million? The answer is the same: working a vein of financial wealth based on commoditized instruments, leverage and credit.

Labor"s share of the national income is in freefall as a direct result of the optimization of financialization. The money flows to those with the capital, credit and expertise to optimize financialized skims. As for selling one"s labor in an economy optimized for capital and the asymmetries of finance--there"s no premium for labor in such an economy, other than technical/managerial skills required by finance to exploit markets.

This is the driver of the rising income-wealth inequality this chart reveals:

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If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com. Check out both of my new books, Inequality and the Collapse of Privilege ($3.95 Kindle, $8.95 print) and Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle, $8.95 print, $5.95 audiobook) For more, please visit the OTM essentials website.

United Nations Issues Rare "Early Warning" - Signals Potential Civil Conflict In America

A United Nations Committee tasked with combating racism on a global scale has issued an ultra rare "early warning" for the United States citing "alarming racism" trends.

As StockBoardAsset.com notes, this rare signal often preludes the potential for civil conflict.

In the past 10-years, the early warning has been issued in Burundi, Iraq, Ivory Coast, Kyrgyzstan and Nigeria.

The United Nations Committee on the Eliminations of Racial Discrimination has called on high-level politicians and public officials of the United States to condemn “racist hate speech and crimes in Charlottesville and through the country”.

Anastasia Crickley, Chairperson of UN Committee on the Elimination of Racial Discrimination (CERD) said:

As per UN News Centre:

In a decision issued under its ‘early warning and urgent action’ procedure, the Committee, which monitors implementation of the International Convention on the Elimination of All Forms of Racial Discrimination, stated “there should be no place in the world for racist white supremacist ideas or any similar ideologies that reject the core human rights principles of human dignity and equality.”

In addition to the criminal investigation of the individual who ploughed his car into a crowd of peaceful protestors killing a woman, the UN experts asked the US authorities to undertake concrete measures “to address the root causes of the proliferation of such racist manifestations.”

Let’s take a moment to gain another perspective from Los Angeles Times writer Jesse Walker asks in an Op-Ed: Are we headed for a second civil war?

Not inconceivable? That’s a low bar. It’s certainly possible to imagine America returning to the violence of the 1960s and ’70s, and beneath the overwrought language, that’s what some - though not all - of these civil war prophets seem to have in mind. But a near-future war with two clear sides and Gettysburg-sized casualty counts is about as likely as a war with the moon.

These “new civil war” stories frequently take a bait-and-switch approach. They invoke the violence at demonstrations like the rally in Charlottesville, Va., last weekend, where a man reportedly sympathetic to Nazism drove his car into a crowd of counter-protesters, killing a woman. In the same breath, they discuss the broad divisions separating “red” America from “blue” America. If you flip quickly between small violent clashes and big political disagreements, those big disagreements will look bloodier.

Conclusion

It’s clear that the United States is being purposely divided. The United Nations is clearly playing into the hype of issuing an early warning that has only been issued for third world countries in the past 10-years. In our opinion, the continued division in America will only be achieved through more events such as Charlottesville that will polarize the sheep into the streets for slaughtering.

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Finally we note that The United Nations dropped this little beauty in their progonstication...

CERD also called on the Government to ensure that the rights to freedom of expression, association and peaceful assembly are not exercised with the aim of destroying or denying the rights and freedoms of others, and also asked it to provide the necessary guarantees so that such rights are not misused to promote racist hate speech and racist crimes.

In other words - speech should be free... as long as it does not hurt my feelings.

Cafe Brags That They Discriminate Against Men

Via The Daily Bell

As a business, if you want to promote equality, the first thing you need to do is make sure you treat your customers unequally based on their gender.

I love when people empower themselves by becoming business owners. Running a business is certainly not easy, but it still frees you from certain constraints. For instance, pay is not decided arbitrarily by a boss, it is based on the services you provide.

Ironically, one business owner in Australia is using her success to promote inequality.

The cafe in Australia touts their discriminatory practices. An article about the cafe on The Mirror reads: Cafe charges men more than women – for a very powerful reason.

Yes, for a powerful reason. Their discrimination is powerful because statistically, women earn 18% less than men in Australia. That is why it is okay to discriminate in hiring as well; the cafe called Handsome Her only hires women. And they also give preferential seating to women. Men must get to the back of the bus–or cafe, whatever.

The 18% “man tax” is technically optional during the one week per month the tax applies, with the proceeds going towards women’s causes. I wonder how many women volunteer to pay the tax, seeing as it is for a cause they presumably agree with.

Also ironic: the fact that it is all women working at the cafe. About 81% of workers in the category, “Hosts and hostesses, restaurant, lounge, and coffee shop,” are women. This gives us a glimpse into the true issue of the pay gap. Sometimes is not actually a pay gap, it is a work choice gap.

But hey, if this cafe owner wants to discriminate against men, I fully support her right to do so. She will probably face legal challenges, and that is too bad in my opinion. I don’t think the government should interfere with businesses. No one is forced to patronize the coffee shop.

Likewise, I wish all proponents of fixing the wage gap would take up the issue in the private sector. But when you start advocating legal repercussions, you are limiting the freedom of others.

The media promotes certain types of discrimination. Discrimination is only okay when it corrects a historical wrong.

One headline from a 2015 Huffington Post article reads: Ethnic Minorities Deserve Safe Spaces Without White People.

“Our” ancestors kept slaves, so affirmative action, all black schools, and white free zones are all now acceptable. Nevermind that my ancestors were in Italy and Scotland in 1865. In fact, likely the majority of white Americans descend from post Civil War immigrants. Not that it should matter anyway; since when are we responsible for the sins of our relatives?

Private organizations should absolutely be allowed to discriminate. I wouldn’t want to force a black tailor to sew the white robes for a KKK outfit. Nor do I wish to force a baker or a florist to provide services for a gay wedding if they don’t want to.

I still don’t understand why a gay couple would want to give their business to a florist or a baker who is anti-gay. Ironically the same people understand that boycotting Chick-Fil-A is the proper response if you don’t like the organizations to which they donate.

I want to know who doesn’t want my money so that I don’t fund the promotion of something with which I disagree. I am glad the cafe is vocal against their anti-man stance. Otherwise, I might accidentally spend my money there.

I want to know about “white free zones.” I will feel much safer staying far away from them.

Of course, we need to stay vigilant about the legal action taken against honest business owners. But the true solution is obviously only supporting businesses which match up with your values.

Another thought; is humor a good way to combat these media driven cultural memes? I think the tv show Portlandia does a pretty good job of that. Check out the video below, and let me know what you think.

The Number Of Young Men Not Working Has Doubled In 15 Years

Authored by Robert Donachie via The Daily Signal,

Young men are working less and playing video games more, according to a National Bureau of Economic Research study published Monday.

Men ages 21 to 30 years old worked 12 percent fewer hours in 2015 than they did in 2000, the economists found. Around 15 percent of young men worked zero weeks in 2015, a rate nearly double that of 2000.

Since 2004, young men have increasingly allocated more of their free time to playing video games and other computer-related activities, according to the study.

Thirty-five percent of young men are living at home with their parents or a close relative, up 12 percent since 2000.

The results of the economists’ research are interesting, considering there are 10 million American men ages 24 to 64 that have completely dropped out of the workforce. The U.S. Bureau of Labor Statistics reported in June that there were nearly 6 million jobs waiting to be filled. The U.S. job market has consistently posted gains around or above 200,000 new jobs per month in 2017.

The results of Monday’s study could suggest that, instead of actively seeking work in an economy with millions of open jobs, young men are choosing to stay at home and play video games.

Which might explain the soaring popularity of socialist politicians around the world...

Who Cares About the “Wealth Gap” if Everyone is Richer?

Via The Daily Bell

How many successful people can there be? It seems like, after every article you read these days, the author bio talks about a book they have written, an invention they created, a prestigious award or some other indicator of great success. Yet I’ve never really heard of most of them.

I used to get pings of jealousy when I would see descriptions like that of successful people; it almost felt like there were a limited number of “success” spots on planet earth, and if they were taking one up, it made it that much less likely for me to get one.

But it’s not true. There is no limit to the number of successful people that can exist, especially since everyone has a slightly different idea of success.

And in the same vein, there is no limit to how many wealthy people there can be. Wealth is not a zero-sum game, there is not some amount of wealth out there that once it is grabbed, is gone. Anyone can create wealth. Growing a garden is a great place to start creating the necessities to live and giving yourself a little food shortage insurance plan.

When people say the rich get richer and the poor get poorer, that is a huge misrepresentation of what is really happening, even if the rich have far more compared to the poor.

For example, let’s use the amount of healthy food that can be purchased as an indicator of wealth. If a “poor” person could once only afford 10 pounds of healthy food per week, and a “rich” person could afford 100 pounds, the rich person is ten times richer than the poor person. But now suppose a poor person can afford 100 pounds of healthy food per week, and a rich person can afford 2,000 pounds.

True, the wealth gap has doubled from 1-10 to 1-20, yet the poor person is living as richly as only the wealthy could in years past.

This is the true nature of the wealth gap. Almost everyone is better off these days. The gap doesn’t matter as much as the minimum standard of living.

The classic example which always comes to mind for me is of President Calvin Coolidge who lived in the White House fewer than 100 years ago. One of the most powerful people on Earth watched helplessly as his son died of an infected blister from playing tennis.

In that sense, everyone living in America today has a higher standard of living than the President and his family had 90 years ago. Advancements in medicine, technology, information, and production have risen the standard of living for everyone.

This chart shows the exponential nature in which people are being lifted out of poverty.

Poverty has not yet been entirely eradicated, but at this pace, as long as those in power don’t thrust the world back into the dark ages, it is only a matter of time until Earth is basically free from poverty.

And at that point, when all needs are being met, what does it matter if the richest person has 10, 50, or a thousand times more wealth than the poorest?

Options and a Backup Plan = Freedom

There was a time when the options for a person to create enough wealth to live were very few.

Do you want to live in a one room dusty, dirty, festering farmhouse and work the fields for 14 hours a day to scrape by in grinding poverty? Or do you want to live in a crowded apartment, and work in a dingy, smoky, stuffy factory for 14 hours a day and scrape by in regular poverty?

Not a great choice to have to make. Today that conundrum is disappearing from almost all lives on Earth. If the trend of eradicating poverty continues, it shouldn’t be long until everyone on earth has a better option to create wealth.

But unfortunately, governments and their crony deals with corporations are standing in the way of the quickest progress. They keep destroying the wealth in wars and misallocation of resources that would otherwise be spread through the ranks of the people.

A great place to start would be to actually allow people to keep the products of their own labor, instead of taxing it away, or writing laws and regulations which make it all but impossible to survive without bowing down to the corporate overlords.

This, of course, means respecting the honestly acquired wealth of the richest as well as the poorest. You can’t support the poor being freed to get ahead while simultaneously calling on the rich to be robbed to even things out.

Governments and corporations have indeed set up the world to make it hard to get ahead, and true justice would involve them paying damages to those they have wronged. But don’t believe that government power can be used to solve the problem that they created.

There Will Be More...

Authored by Eric Peters via EricPetersAutos.com,

Violence is, unfortunately, fungible.

As this society becomes more and more officially violent, it is probable that unofficial violence will also increase. In fact, it is almost a mathematical axiom. It is also one not comprehended by those most responsible for initiating the process.

Police and politicians seem baffled by the growing disenchantment with their class. They seem to expect people to behave toward them with respect and deference no matter what they do – by dint of the fact that what they do is Official and Legal.

Why are politicians – left and right – increasingly despised by reasonable people? Could it have anything to do with the fact that they will not leave people alone? That all they do – at great expense (to us) and with great pomposity – is decree how we will be allowed to live, what we must do and what we may not do? Most of these things being precisely none of their business to so order?

But they believe that it – that everything – is their business, which endows them with an effrontery so great they’ve lost all of the normal restraints that bind ordinary people. We have arrived at a point in our history that absolutely nothing is off the table, beyond the grasping control of these professional grifters – which is what they are. These are not people who earn an honest living by free exchange of value for value, as most of the rest of us do. These are people who take vast sums of money and then dispose of vast sums of money – none of it theirs by right.

They do so with an entitled insolence that is insufferable to those from whom the funds are mulcted. The worst part of it being that the mulcted are rendered legally defenseless against these outrages. A law is passed, an order given – and they must “stand and deliver,” as the old saying goes.

If one had a neighbor who behaved this way, one would bar the neighbor from one’s property and – if there was no alternative – defend oneself against such a violent busybody.

But what defense is there against the political class?

The Vote?

That is like trying to plug a leaky roof with sheets of copy paper. At best, the rivulets will temporarily lessen. The rain won’t let up.

Instead of protecting our rights, politicians spend their time gutting them, turning them into conditional privileges at best – to be further conditioned (or rescinded) at their pleasure. Nothing of ours is safe. Not our money, not our property, not our freedom to act and live as we see fit. There is no line over which these professional disposers of other people’s lives and property and liberties will not step as they are held back neither by ordinary human decency or legal restriction.

They have become a ruling caste, as entitled and arrogant as their feudal analogs.

The glib violence which inheres in their every act and statement has become so much a given that they hardly notice it anymore. When a new “plan” or other such is presented, the fact that what is being suggested involves more compulsion and violence, that people will have no choice, is never even mentioned. The discussion is increasingly centered only on the supposed merits of the “plan” – and alternatives to the “plan.” That is to say, other “plans.”

Resentment grows.

The average honest wage-earner in the productive economy now “owes” his Lord(s) more than a Medieval serf owed his Lord. The typical tax exaction – when one includes the income tax, the Social Security taxes (15 percent off the top for the self-employed), the taxes on their property and so on – approaches half of every dollar they earn. The burden has become so extreme that most people must now earn two incomes to support one family and work until they are too old to continue working. The oasis of financial security recedes ever farther into the distance, never to be reached.

The productive class would like to be left alone – would like for the mulching to cease. Meanwhile, the client class (their ranks swelling with Millennial Marxists) demands ever-more-mulcting for their unearned benefit, which the politicians are happy to oblige as they receive payment for their services in the form of ever-increasing power.

Social resentment swells.

As it does, more overt violence becomes necessary to keep the pressure cooker’s lid clamped in place.

Enter the Praetorians. Or what is styled law enforcement.

It is no accident that this term – which is brutally honest – has become the preferred one. Nor that these enforcers of the law wax brutal. Behave toward the citizenry as occupying soldiers, barking orders and expecting – demanding – immediate submission.

Resentment of this bullying is also increasing.

Which has the effect of justifying a kind of doubling-down by the enforcers – whose mental state is becoming exactly like that of an occupying army dealing with threatening partisans. A soldier of the Werhmacht and veteran of the drang nach Osten would understand completely the fearful bleat of “officer safety” eructed by the enforcers of the law.

More distrust. Dislike morphing into hatred, barely suppressed. On both sides.

It is none of it good.

And it is going to get worse.

Because violence is fungible.

"It's Not Just Wages" - Workers Without College Degrees Face "More Instability"

If you believe San Francisco Fed President John Williams, the US labor market has almost never been ore robust than it is today. Of course, middle- and working-class Americans who are struggling with levels of financial uncertainty that would be unfamiliar to their parents’ generation don’t necessarily care that the official unemployment rate is 4.4%. They’re too busy struggling to make ends meet when real wages have been stagnant for decades and economic growth is expected to slouch along at 2% for the foreseeable future.

While researching their new book “The Financial Diaries,” Jonathan Morduch and Rachel Schneider followed more than 200 working and middle-class families around for a year and tracked “every dollar of their financial lives." They found that millions of workers without college degrees, especially those who are paid hourly, or who are paid by commission, experience what they call call income variability - when their pay fluctuates by 25% above or below their average. One of Murdoch and Schneider"s subjects, a truck mechanic named Jeremy, even quit his job to take a lower paying job with a steady salary.

They discussed their findings during an episode of Bloomberg"s "Benchmark" podcast.

“When we first met him, his weekly paychecks were very variable. And he was bearing all that risk. At the end of the year, he quit his job for another job with lower pay that was more steady. ”

“On average, we’re seeing households spend about five months of the year where their income was 25% above their average or 25% below their average. So income insecurity wasn’t about ‘am I going to lose my job,’ it’s about ‘how am I going to navigate the ups and downs in my given job.’”

The pair also found that existing financial services don"t adequately serve the needs of workers struggling with income variability. Schneider discussed how one subject whom she called Jane intentionally placed obstacles to withdrawing money from her savings account.

“Often the strategies they were using to make that money stretch show gaps in how financial services are or are not serving them. For example, we tell the story in the book of a woman called Janice who has a savings account and a checking account but she cut up her checkbook for her checking account and she cut up her ATM card. She has those accounts in different institutions and the savings account is an hour’s drive from her home.”

“A bank might say she’s not using those products right, she’s paying check cashers and fees on money orders to pay her bills she’s using it wrong. But I look at it the other way she actually wants some wall between herself and her spending or savings. She cut up the check book because she doesn’t want temptation to take out payday loans which she’s had trouble with in the past.”

Regardless of race, workers without degrees are stuggling "in a lot of ways."

“One of the things that we see is that today workers without college degrees are struggling in a lot of ways. We see that in the labor market in terms of wages and what our data and related data are showing is it’s not just average wages they also are facing much more instability than other workers."

"The economic backlash is being felt by lower class workers, regardless of race, because the system isn’t working for the poor.Black workers have a hard time and white worker as well are living very precarious lives. Even though they have jobs there’s economic anxiety in America even for people with jobs. And that’s the big puzzle in America. That people are trying to sort out what the big answer is but you spend time and follow people month to month you see exactly why there’s so much anxiety in a sense because the system really isn’t working for them.”
 

New Theory Behind Stalled Economy: Retirees Are Hoarding Too Much Cash

For years we"ve written about the fact that Americans, young to old, are lousy savers (see "Retirement Crisis Looms As Average U.S. Household Has Saved $2,500 For Retirement"). Of course, they have to be because how else can a mature economy continue to grow unless every single person levers every asset they own to the maximum extent possible and then spends all of that money?  Anything less would mean that all of Janet Yellen"s efforts have been a colossal waste. Meanwhile, this inherent inability to save is awful news for a nation that faces a massive wave of baby boomer retirements over the next 20 years. 

All that said, we were somewhat shocked to come across a report from money manager United Income which effectively argues that American retirees are saving too much money rather than too little.  To summarize the thesis, United Income argues that retirees become more conservative as they grow older which causes them to save more and allocate less to equities...which is, of course, a somewhat self-serving conclusion but never mind that.

Innovations in medicine and technology have extended human life by over 30 years since 1900. This has helped to double the amount of time the average adult now spends in retirement compared to several decades ago. But, the benefits of longer lives and retirement may be limited if older households curb their consumption or investment in preventive health measures because they are overly pessimistic about their future financial health. Overly negative viewpoints toward the future may also create self-fulfilling economic problems if it leads to an overly aggressive fixed-income portfolio. To assess these possibilities, we analyze consumer sentiment and spending data from the University of Michigan that was commissioned by the Social Security Administration and U.S. Commerce Department, among other federal agencies.

The only problem with the theory is that, intentional or otherwise, it"s based on a complete misinterpretation of data.  Per the chart below, United Income referenced the growth in "Mean Net Wealth" as evidence that retirees are hoarding too much cash. 

Unfortunately, when combined with the fact that "Median Net Wealth" is actually shrinking, it"s easy to deduce that while the majority of American retirees are actually spending their retirement income (and then some), there is a group of super wealthy old folks who simply can"t spend enough money to offset annual investment income growth....which speaks more to the growing wealth gap than to some economic fear that is causing retirees to hoard cash.

In this context, it"s not too difficult to understand why aggregate YoY spending trends collapse as old folks get older.  The most wealthy retirees can only find so many ways to burn their massive nest eggs which means that, at least for these folks, YoY spending doesn"t grow but retirement balances do...

...while the overwhelming majority of people simply run out of cash and have to cut every corner possible to survive....

But we"re sure the report from United Income, as misleading as it may be, will undoubtedly convince more retirees to allocate more money to equities...all of which will inflate this ETF-induced equity bubble even more, all while adding to United"s fee income...It"s one of those "win-win" deals.

Harvard To Hold Blacks-Only Graduation Ceremony As Progressives Embrace Segregation

Apparently racial segregation is now an enlightened, progressive policy...just ask the elitist administrators of Harvard University who, in their infinite wisdom, have decided to hold a "Blacks Only" graduation ceremony this spring. 

According to BET, the ceremony is intended to recognize the indisputable fact that graduating from Harvard is simply harder for black students than white students because the "outer pressures of society make the already challenging coursework even more difficult."

Getting a diploma from Harvard is one of the biggest accomplishments a person can achieve, but for some, it can come as a bigger task than for others.

Aside from studying and taking grueling tests, if you’re a minority, the outer pressures of society make the already challenging coursework even more difficult. Knowing this, Black members of the class of 2017 decided to form an individual ceremony. It’s the first of its kind at the school in recent memory and took nearly a year to plan.

The separate graduation is an effort to highlight the aforementioned struggles and resilience it takes to get through those.

Oh yeah, and it"s also supposed to build a sense of "community"...because the first step in breaking down racial barriers and building an integrated "community" is self-segregation.

“This is an opportunity to celebrate Harvard’s Black excellence and Black brilliance,” Michael Huggins, a soon-to-become Masters graduate from Harvard’s Kennedy School, told The Root. “It’s an event where we can see each other and our parents and family can see us as a collective, whole group. A community.”

But don"t worry because a graduate student from Harvard confirmed that this segregated ceremony is "not about segregation."

“This is not about segregation,” He added. “It’s about fellowship and building a community. This is a chance to reaffirm for each other that we enter the work world with a network of supporters standing with us. We are all partners.”

Recently, across America, there have been incidents of racism – both in comments and violence – at college campuses. Hopefully, the ceremony reminds people that minorities have to encounter certain challenges that others don’t.

Martin Luther King Jr. would be so proud of this day

"I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character."

We can"t wait for the day that minority students are graded on different curve, you know, because the "outer pressures of society make the already challenging coursework even more difficult" for them.

Thomas Frank: America In The Age Of Hypocrisy, Hubris, And Greed

Via Jesse"s Cafe Americain blog,

In 2012 I said that such unsustainable social arrangements as we have now are backed by force and fraud. And as the fraud loses its power over time, force must increase, until there is a correction of the system in genuine reform, or an eventual reset.

"The whole world wants to know about what the hell is happening with us. So let"s talk about it. I live in Washington now, and the people I live among have no idea how people live here in the Midwest, not the faintest idea...

The last couple of years here in America have been a time of brisk prosperity according to official measurements, with unemployment down and the stock market up.

For Americans who work for a living however, nothing ever seems to improve. Wages do not grow, median household income is still well below where it was in 2007. Economists have a way of measuring this, they call it the "labor share of the Gross National Product" as opposed to the share taken by stockholders. The labor share of Gross National Product" hit its lowest point since records were started in 2011, and then it stayed there right for the next couple of years.

In the fall of 2014, with the stock market hitting an all time high, a poll showed that nearly 3/4 of the American public believed that the economy was still in recession, because for them it was.

There was time when average Americans could be counted upon to know correctly whether the country was going up or down, because in those days when America prospered, the American people prospered as well. These days things are different.

Let"s look at it in a statistical sense. If you look at it from the middle of the 1930"s (the Depression) up until the year 1980, the lower 90 percent of the population of this country, what you might call the American people, that group took home 70 percent of the growth in the country"s income. If you look at the same numbers from 1997 up until now, from the height of the great Dot Com bubble up to the present, you will find that this same group, the American people, pocketed none of this country"s income growth at all.

Our share of these great good times was zero, folks. The upper ten percent of the population, by which we mean our country"s financiers and managers and professionals, consumed the entire thing. To be a young person in America these days is to understand instinctively the downward slope that so many of us are on."

Thomas Frank, Kansas City Missouri, 6 April 2017

What shall we blame for the manner in which our economic system has gone wrong? Or will any with a public podium even admit it has gone wrong? After all, what is truth?

Is it a problem of "fakes news sites" running contrary opinions to the established narrative?

Is it the failure of working people to rise to the occasion and elevate the "lesser of two evils" to power so that she might further enrich herself and her supporters, whose disappointment and outrage at a missed payday knows no bounds?

Is it the impersonal forces of technology, and trade, and all of the superficially structured but high sounding economic laws that have served to promote almost every abuse of the public good that has been suffered for the past thirty years?

Or perhaps it is time for people of conscience to stop standing idly by while a powerful few are serving themselves the most of our gains, at great cost to others, and to break the silence about where we have gone wrong, and what is needed to be done to correct it.

"And some of us who have already begun to break the silence of the night have found that the calling to speak is often a vocation of agony, but we must speak.  We must speak with all the humility that is appropriate to our limited vision, but we must speak."

-Martin Luther King, 4 April 1967

"The problem of the last three decades is not the "vicissitudes of the marketplace," but rather deliberate actions by the government to redistribute income from the rest of us to the one percent. This pattern of government action shows up in all areas of government policy."

-Dean Baker

"When the modern corporation acquires power over markets, power in the community, power over the state and power over belief, it is a political instrument, different in degree but not in kind from the state itself. To hold otherwise — to deny the political character of the modern corporation — is not merely to avoid the reality. It is to disguise the reality. The victims of that disguise are those we instruct in error."

-John Kenneth Galbraith

A Record 67% Of Low-Income Americans Are Worried "A Great Deal" About Hunger And Homelessness

Something unexpected happened on the road to Obama"s economic "recovery" - according to Gallup, over the past two years, a record two-thirds, or an average of 67% of lower-income U.S. adults, up from 51% from 2010-2011, have worried "a great deal" about the problem of hunger and homelessness in the country. They are not alone: concern has also increased among middle- and upper-income Americans, but they still worry far less than do lower-income Americans.

Some details: since 2001, worry has been highest among those residing in lower-income households, likely because those with limited financial resources are more at risk of going hungry or becoming homeless. A consistent majority of lower-income adults worried about the problem before 2012, but that has only increased in the past five years. Concern among middle-income Americans in 2016-2017 falls just short of the majority level at 47%, while 37% of upper-income Americans are worried.

Rising concern among all income groups could be a result of the political and media attention devoted to U.S. income inequality in recent years. Americans may also worry more about hunger and homelessness when other issues are not dominating the national consciousness, such as the economy and budget deficit were in 2010-2011 and terrorism was in the years after 9/11.

Overall, 47% of Americans now worry about hunger and homelessness "a great deal," according to Gallup"s March 1-5 survey, tied with 2016 as the high in the trend. Previously, concern had been as low as 35% in 2004 and as high as 45% in 2001, the first year Gallup asked the question.

Concern about hunger and homelessness now ranks as high as, or higher than, concern about most other issues tested in Gallup"s annual Environment survey. The only issue with a significantly higher "worried a great deal" percentage in this year"s poll is the availability and affordability of healthcare, at 57%.

But among lower-income Americans, hunger and homelessness eclipses healthcare, making it the top-ranking issue of the 13 tested in the March 1-5 survey. Among middle- and upper-income Americans, the availability and affordability of healthcare generates the greatest worry, with hunger further down the list.

Crime and violence, as well as healthcare, also are prominent concerns for lower-income Americans. Crime is a prominent concern for middle-income Americans as well, but much less so for upper-income Americans. It does not rank among upper-income Americans" top concerns.

Lower-income Americans do tend to worry more about all of these problems than do those with higher incomes. On average, across the 13 issues, the percentage of lower-income adults who worry a great deal is seven percentage points higher than among middle-income Americans, and 17 points higher than among upper-income Americans.

But differences in concern about hunger and homelessness far exceed those norms. In fact, the 20-point difference in worry about hunger and homelessness between lower-income and middle-income Americans is higher than for any of the other issues. Similarly, the 30-point difference in worry about hunger and homelessness between lower-income and upper-income Americans ties for the highest, along with concern about crime and violence.

What, according to Gallup, are the Implications?

Americans at all income levels are expressing greater concern about hunger and homelessness, and it is the top worry among lower-income Americans, who are most likely to struggle to pay for adequate food and housing.

Curiously Gallup says that "it is unclear why Americans are worrying more about hunger and homelessness now, since it is an ever-present problem" although one can make some educated assumptions.

The polling compny the notes that "at times the issue may fade from public consciousness when other matters dominate the national agenda. It is possible that greater concern will lead to greater public pressure for action on the issue. However, President Donald Trump"s first federal budget has been criticized for deep cuts to federal anti-poverty programs. If Trump"s budget passes largely as it has been outlined, then state and local governments, charitable organizations and private citizens would need to increase their efforts to help reduce poverty and its effects -- or hope that the president"s economic policies expand opportunities for the most financially vulnerable in society."

That, or simply the economic situation for the poorest Americans - those who have virtually no savings to their name - has gotten so bad that they are worried "a great deal" because they believe they may be next...

The Illusion Of Progress

Via Charles Hugh-Smith of OfTwoMinds blog,

This is precisely what you"d expect of a self-serving elite that was desperate to cloak the unhappy reality that the relative few are benefiting immensely at the expense of the many.

The core narrative of politics everywhere is progress, i.e. "moving forward." If progress isn"t being made, politicos and the system are failing.

In the past, "progressive" movements sought to advance both social and economic opportunities for marginalized groups.

For a variety of reasons, social progress has been decoupled from economic progress.

In broadly disintegrative eras such as the present, the stagnation of economic opportunity is masked by redefining progress in purely social terms: progress is defined as the social advance of a marginalized populace into the mainstream.

When the marginalized populace is comprised of many millions of individuals, social progress and economic progress are mutually reinforcing dynamics: opportunities for social advancement in the mainstream created economic opportunities, and vice versa.

Now that social/economic progress has lifted the major marginalized populaces--ethnic and religious minorities, gays--substantially into the mainstream, those remaining marginalized populaces are modest in size. Estimates of the trans-gender populace, for example, are generally less than 1% of the total population.

The marginalized groups" advances that are markers for "proof of progress" have decoupled from economic advances. Few if any social-justice promoters of trans-gender rights, for example, claim any economic gains will accompany this social progress.

The reason why social progress has been effectively decoupled from economic progress is that the woeful lack of economic progress for the bottom 90% proves financial progress is now limited to an elite comprised of Oligarchs, Nomenklatura, the Technocrat Class and a relative handful of entrepreneurs.

Everyone else has been losing ground in wages, wealth and opportunity. If we measure progress in very broad terms such as participation in and ownership of the most productive parts of the current mode of production, then this chart forces us to conclude that movement for the vast majority is now backward, not forward.

To mask this disquieting and politically discordant reality, the status quo of the Corporate Media, academia, state functionaries and technocrats has redefined "progress" to exclude hard financial data that reflects widespread, systemic stagnation for the bottom 90% in favor of "feel-good" social-justice virtue-signaling.

This is precisely what you"d expect of a self-serving elite that is desperate to cloak the potentially explosive reality that the relative few are benefiting immensely at the expense of the many. So please take your social-justice "progress" with a grain of salt the size of the iceberg that sank the Titanic: if we measure progress solely by participation in and ownership of the most productive parts of the current mode of production, a much different snapshot emerges: economic stagnation is not progress.