Tag Archives: Wealth Distribution

Pew report: 84 percent of world population subsists on under $20 per day

By Andre Damon
July 11, 2015
World Socialist Web Site

 

Despite significant advances in communications, agriculture and bio-technology over the past 15 years, the overwhelming majority of the world population continues to live in economic privation, according to a report on global incomes published this week by the Pew Research Center.

The report, entitled “A Global Middle Class is More Promise than Reality,” classifies 71 percent of the world population as either poor or low-income, subsisting on less than $10 per day. The report concludes that 84 percent lives on less than $20 per day, or $7,300 per year, an income level associated with “deep poverty” in developed countries.

Only seven percent of the world population lives on what the report calls a “high” income level of more than $50 per day, or $18,000 per year. The great majority of these people live in Europe or America.

In the years following the turn of the millennium, and especially before the 2008 financial crash, the supposed emergence of a new “global middle class,” particularly in developing countries, was touted by the political establishment as proof that the capitalist system was capable of bringing economic prosperity to people living in poverty in Asia, Latin America and Africa.

The Pew report pours cold water on such claims. “The global middle class is smaller than we think, it is less well off than we think, and it is more regionally concentrated than we think,” Rakesh Kochhar, the study’s lead author, told the Financial Times .

The report finds that even countries that “sharply” reduced the worst forms of poverty “experienced little change in the share of middle-income populations.” While the report notes that there has been a reduction in the number of people living on less than $2 per day, it points out that those who have ascended from the lowest depths have for the most part landed in the “low-income” category of $2-10 per day—a level that would classify them as living in extreme poverty by US standards.

The report uses the latest purchasing power parity data to analyze and compare the distribution of incomes throughout the world. It covers 111 countries, which account for 88 percent of the world’s population, and spans the years 2001 through 2011.

Over that period, the share of the world’s population classified as “upper-middle income,” making between $20 and $50 per day, grew from 7 percent to 9 percent. This was significantly less than the growth of the share of the population making between $10 and $20 per day, which increased from 7 percent to 13 percent between 2001 and 2011.

The great majority of the increase in “middle income” people occurred in China and other high-growth countries in the Pacific whose economies have rapidly expanded over this period.

The report notes, “Home to more than 1.3 billion people, or nearly 20 percent of the world’s population, China alone accounted for more than one in two additions to the global middle-income population from 2001 to 2011.”

The story was much different for other “developing” countries, with next to no increase in the number of “middle income” earners in Africa, India, Central America and Southeast Asia.

The report states, “In contrast to China, most other Asian countries had relatively little growth in their middle classes. India is a case in point. Although the poverty rate in India fell from 35 percent in 2001 to 20 percent in 2011, the share of the Indian population that could be considered middle income increased from 1 percent to just 3 percent. Instead of a burgeoning middle class, India’s ranks of low-income earners swelled.”

Africa fared little better. The report notes that on that continent “most of the movement was from poverty to low-income status.” It says: “Ethiopia, for example, experienced a decline of 27 percentage points in the share of people who could be considered poor. This translated into an increase of 26 percentage points in the country’s share of low-income earners and only a 1-point increase in middle-income earners.”

Similarly, “In Nigeria, one of the region’s most dynamic economies, the share of the poor fell 18 percentage points from 2001 to 2011, resulting in a 17 percentage point increase in low-income earners and just a 1-point boost in the share of the population that could be considered middle income.”

Despite the significant social and economic changes that have taken place since 2001, the great majority of high-income people continued to reside in the developed countries in North America and Europe. In 2011, 87 percent of “high-income” people—those subsisting on at least $50 per day, or $18,250 per year—lived in these countries.

Despite modest improvements in living standards in some parts of the world, incomes dropped in the United States. As the report states, “The US economy stumbled through the decade from 2001 to 2011, growing at less than 1 percent annually on average. Even these slight gains did not make their way to American families, whose median income actually decreased from 2001 to 2011.”

Amid falling incomes in the United States and continued mass poverty in the rest of the world, the wealth of the global financial oligarchy has continued to soar. Last year, the wealth of the world’s billionaires hit $7 trillion, having more than doubled in the time covered in the Pew report. The astronomical enrichment of this social layer is inseparable from the impoverishment of the world’s workers.

The statistics presented in the Pew report underscore the basic fact that the capitalist system has proven incapable of providing a decent standard of living for the vast majority of the world’s people.

Parasitism and the economic crisis

By Andre Damon
June 2, 2015
World Socialist Web Site

 

The US Commerce Department released figures Friday showing that the US economy contracted sharply, shrinking at an annualized rate of 0.7 percent in the first three months of this year.

Yet despite the disastrous condition of the real economy, all three major US stock indexes reached record highs during the three months covered in the report. In fact, less than 48 hours before the release of the data, the Nasdaq Index closed at an all-time high of 5,107.

While the US real economy has grown by only 13 percent since the depth of the recession in 2009, all three major American stock indices—the Dow Jones Industrial Average, the S&P 500 and the Nasdaq—have more than tripled, each hitting all-time highs.

Far from being mere coincidence, the run-up in stock values and economic slump represent two sides of the same process. They express the extent to which, seven years after the 2008 financial crisis, the whole world economy has become an object for unremitting plunder by the global financial aristocracy, with disastrous social and economic consequences.

This plunder manifests itself in the continual diversion of economic resources into the coffers of billionaire shareholders and corporate executives at the expense of productive activity. This was reflected in the Commerce Department report on the collapse of business investment, which fell at a rate of 2.8 percent in the first quarter of this year.

The sharp fall in investment came despite the fact that US corporations are holding a hoard of some $1.4 trillion in cash and similar assets, the largest such figure on record, amassed as a result of years of record profits amid falling wages and an influx of cheap money from the world’s central banks.

Instead of using this cash to hire workers and build factories, corporations are diverting it to raise dividends, buy back shares, hike executive pay and carry out mergers and acquisitions—all at record levels.

In the aftermath of the 1929 financial meltdown, caused by rampant Wall Street fraud, speculation and parasitism, bankers guilty of many of the greatest crimes that led to the crash were tried and convicted, while new financial regulations, including the Glass-Steagall Act that separated commercial and investment banking, put limits on the size and power of Wall Street. This was the response of the ruling class to immense revolutionary struggles of the time.

As the New York Times recently noted, “In the aftermath of the Great Depression, the nation’s finance industry shrank severely—and remained in a humbled state for most of the next four decades. The economy boomed in this period, with no major financial crises and less income inequality than in recent decades.”

In the aftermath of the 2008 financial crisis, on the other hand, none of the basic causes of the crash, including the enormous size of the global financial sector and its pervasive criminality, have been even remotely addressed. Rather, under the guidance of the Obama administration, the dominant position of Wall Street in economic, social and political life has only been entrenched and expanded.

The growth in financial parasitism is so pervasive that even mainstream economic institutions have been forced to warn of its dangers. Last month the International Monetary Fund, a bastion of the political establishment, declared in a research paper that economic growth “weakens at higher levels of financial development” and called on governments to take measures to rein in the size of the financial sector.

Despite these warnings, governments throughout the world have shown neither the will nor desire to rein in even the most brazen and criminal manifestations of financial parasitism.

In the US, the Obama Justice Department has ensured that the major banks have been given effective legal immunity for the crimes they have committed before, during and after the 2008 crash. This has been evidenced by one scandal after another—from selling fraudulent subprime mortgages, money laundering, and tax evasion, as well as rigging benchmark interest and foreign exchange rates—for which not a single bank executive has been prosecuted.

Meanwhile, led by the US Federal Reserve, the world’s central banks have responded to every sign of renewed weakness in the global economy by either expanding their money printing operations or scaling back their plans to “normalize” monetary policy.

Two interrelated processes find expression in the response to the 2008 crisis: 1) the long-term decline of American capitalism, and 2) the elevation of financial parasitism to the basic mode of operation of the ruling class. Even in the midst of the Great Depression of the 1930s, the United States was still a rising industrial power, which would establish its global hegemonic position following the Second World War.

The past four decades, however, have seen a relentless decay and decline, with entire industries wiped out, facilitated and demanded by the operations of finance capital. The process through which the ruling class acquires and maintains its wealth has become ever more divorced from the actual process of production.

The policies of the Obama administration are ultimately the expression of the domination of the financial oligarchy over all aspects of economic and political life in the US, the center of international finance. This social layer uses its political and economic leverage not only to promote its parasitic activities, but also to further the drive toward war and dictatorship throughout the world.

There exists no solution to the crisis gripping the global economy outside of the expropriation of the ill-gotten wealth of this oligarchy and the reorganization of society on an egalitarian and socialist basis.

 

Wall Street buybacks: Another expression of parasitism

By Nick Beams
May 29, 2015
World Socialist Web Site

 

In the biological world, a parasite lives at the expense of the host, sucking out its nutrients and life forces, and sometimes killing it. Analogies of course have their limits, but nonetheless they can be suggestive. And this is certainly so in the case of the rampant financial parasitism that has become the dominant feature of the American economy and, by extension, the world economy as a whole.

An article published in the Wall Street Journal this week details some of the impact of hedge funds on the operations of major US corporations, and the way in which their insatiable drive for profit through financial manipulations is sucking the lifeblood out of the economy and contributing to its deepening breakdown.

The article is based on a study conducted for the newspaper by S&P Capital IQ. It found that companies in the S&P 500 index had “sharply increased their spending on dividends and [share] buybacks to a median 36 percent of operating cash flow in 2013, from 18 percent in 2003.” The doubling of this rate was accompanied by a fall in spending by those companies on plant and equipment, from 33 percent to 29 percent over the same period.

The study found that in companies targeted by so-called “activist investors”—that is, hedge funds that hold hundreds of millions and sometimes billions of dollars on behalf of their wealthy investors—the figures were even higher. Targeted companies reduced capital spending from 42 per cent to 29 percent of operating cash flow and increased spending on dividends and share buybacks to 37 percent of operating cash flow from 22 percent.

One of the main factors facilitating these operations has been the provision of ultra-cheap money by the US Federal Reserve, which has kept official interest rates at almost zero, leading to historically low interest rates in financial markets. Hedge funds are able to use borrowed money to acquire major share holdings in corporations and then push for share buybacks and the payment of increased dividends. The buybacks, in turn, can be financed through borrowed funds at low interest rates.

The aim is to produce a rise in the share price of the company or generate an increased dividend flow returning large profits for the “activists,” often accompanied by job cuts or the outright closure of parts of the targeted company deemed not to be making a sufficient contribution to “shareholders’ funds.” At the end of the process, vast profits have been pocketed, without a single atom of new wealth being created, while productive capacity has been curtailed.

The consequences of these vampire-like operations are most prominent in major industries. The US energy giants, which have splurged billions on buybacks, dividends and mergers, have refused for decades to invest in infrastructure, leading to a situation where workers are subjected to 16-hour days and increasingly unsafe working conditions. Likewise, the auto industry firms and telecoms are notorious for their resistance to wage increases, while engaging in the same financial manipulation.

The deeper the economic crisis, the more frenzied the speculation. The article noted that since 2010 the number of activist campaigns directed at securing buybacks and increased dividends had risen by 60 percent. Last year there were 348 such campaigns, the most since 2008, and a further 108 in the first quarter of this year. Hedge funds now control $130 billion in assets, more than double the amount they held in 2011. This means that once they leverage these funds through borrowing at ultra-low rates, they can target virtually any corporation.

Would-be reformers of the capitalist economy will no doubt argue that these dangers can be overcome through the development of mechanisms or increased regulations to promote the “good” side of corporate activity—research and development and real investment—while taking action to control the “bad” side—parasitism. But the question remains: Why has it emerged now?

Underlying tendencies at the very center of the capitalist economy are at work. The long-term downward pressure on the rate of profit, which has led to the continuous restructuring of the American and global capitalist economy over the past four decades, is the driving force behind the rise of speculation and parasitism.

Well-known voracious hedge-fund investor Carl Icahn, cited in the Wall Street Journal article, pointed to these trends saying the economy was “being dragged down by too many mediocre CEOs, and it’s dangerous if profitability is going down despite interest rates being at zero.”

However, his resort to a “bad man” theory of economics does not pass even a preliminary examination. The same tendencies are also clearly visible in Europe and throughout the world’s major capitalist economies where, despite ultra-low interest rates, investment remains at historically depressed levels, reflecting a lack of profitable outlets.

Furthermore, any attempt to separate out the “good” and the “bad’ sides of corporations runs up against the fact, as Marx explained at the time of the emergence of joint stock companies in the middle of the 19th century, that the origin of parasitism is lodged in their very structure. The formation of such companies, he wrote, “reproduces a new financial aristocracy, a new kind of parasite in the guise of company promoters, speculators and merely nominal directors: an entire system of swindling and cheating with respect to the promotion of companies, issuing of shares and share dealing.”

For a whole period of capitalist development, notwithstanding swindling and cheating, the corporation or joint-stock company facilitated the development of the productive forces through the aggregation of capital to finance large-scale developments, which sustained the living standards of the mass of the population. Those days have long gone.

The elevation of parasitism to the basic mechanism of profit accumulation is bound up with the objective crisis of capitalism and, connected to this, the absolute stranglehold of the financial aristocracy over every aspect of economic and political life. Swindling, cheating and the destruction of the productive forces—above all through the impoverishment of the most important productive force of all, the working class—is a symptom of the rot and decay of the entire socioeconomic order.

It establishes the unanswerable case for the taking into public ownership of the major corporations, the banks and the entire finance industry as part of the socialist restructuring of economic life. This is the perquisite for establishing a society where the productive forces, created by the labor of the working class, can be used for social advancement.

The Global Elite’s Crimes Against Humanity

The Subversion of Life, Liberty and Happiness

By Colin Todhunter
May 26, 2015
Counter Punch

 

5a57a-obama-the-warmongerFor thousands of years, people have been writing about happiness. The ancient Greek philosopher Aristippus concluded that happiness lies in the pursuit of external pleasure. Others, from Antisthenes to Buddha, have stressed that looking inwards and leading an ascetic life based on virtue, simplicity and inner peace is the route to happiness. And then there are those like Schopenhauer who seem to think that we can only be occasionally happy in what is essentially a miserable world: life only oscillates like a pendulum, back and forth between pain and boredom.

Happiness is, according to the Merriam-Webster dictionary, “a state of well-being and contentment: a pleasurable or satisfying experience.”

For some, happiness runs much deeper than merely being content. Aristotle held that being virtuous was only one aspect of happiness. In the absence of say wealth and intelligence, virtue could only bring about a form of contentment.

But sometimes that’s not enough. Certain people strive to achieve an ongoing state of bliss, of feeling at one with the universe and everything in it. Through years of meditation, self-reflective practice or consciousness development, they can learn to transcend the illusion of existence and live life on a higher reality. A case of ignoring reality while striving to live out an illusion?

However, let’s not get too caught up in cynicism here. Illusion is all around us – both on a personal level and on a wider political level. The type of society we live in has a huge bearing on happiness or well-being.

From Bernays to Albright: ‘their’ happiness, our misery

Virtually every government in the world creates an illusion for its people. Take economic policy. Government policies might hurt us in the short term, but we are all on a one way route to the ‘promised land’ of happiness, or so we are told by the politicians, the corporate media and spokespersons for the ones who make us suffer to ensure they never have to – the privileged elite, the ruling class.

Western governments set out to con ordinary working folk by bringing us war in the name of peace, austerity in order to achieve prosperity and suffering to eventually make us happy. Is there any room for truth? Politicians never like to tell the public the truth. The feel-bad factor is never a vote winner. Best to keep the public in the dark and rely on positive spin. If people knew the truth, they just wouldn’t be happy.

And selling the feel-good factor is all pervasive. In this age of irretrievable materialism, the route to happiness is more goods, better goods, newer goods. A never-ending smorgasbord of commodities to be craved for. In league with private corporations, governments have learnt to play on our desires to create a one-dimensional type of happiness based on consumerism.

In part, Edward Bernays is responsible for this. The father of modern public relations and propaganda, he was expert in manipulating human perceptions of pain and pleasure, misery and happiness. Tap into or shape people’s desires in a certain way, and you can sell virtually any notion of happiness (or reality), regardless of how bogus it may be.

Whether it was whipping up mass fear in the US about the bogeyman of communism or selling the ‘American Dream’ of happiness through consuming goods, Bernays and the advertising industry, which took its cue from him, were able to marry misery and happiness together – if you do not buy into consumer capitalism, the alternative will be misery; if you do not buy this or that product, life will be terrible; if you do not join in the celebration of capitalism, those awful Soviets will take over and impose a fundamentally unhappy system of equality on each and every one of us.

Under US capitalism, the lie was that everyone would all live happily ever after because of, not in spite of, gross inequality, massive privileges and disadvantages and exploitation of labour, which all went under the notion of meritocracy and a fair day’s work for a fair day’s pay.

Bernays’ propaganda techniques set the stage for con-trick of ‘liberal democracy’.

The US government quickly learned that angels and demons could be manufactured out of thin air and, from Guatemala, Congo and Vietnam to Iraq wars and destabilisations could be built on packs of lies – lies about evil-doers about to kick down the door, lies about the impending misery they would inflict on the US and on far away countries and lies about the government delivering us from impending doom.

Of course, it is best to arm ourselves to the teeth with nuclear weapons to ensure no one imposes their miserable regimes or awful ways of life on us. And to prevent us all shuddering with the fear of the threat of nuclear Armageddon on a daily basis, it’s a case of don’t worry, be happy, forget about it and watch TV. Even the very real danger of near-instant annihilation of the species is shoved to one side for the sake of a feel-good culture.

And the best way to instill that feeling is to have us endlessly treading around a wheel in a cage. Millions are locked into the pursuit of the Bernay’s model of happiness. They are locked into addiction. Addicted to the pursuit of acquisition, of hedonism, of chasing the dream. Addicted to the belief that there is a point to it all, where happiness is achieved by acquisitive materialism.

But, to paraphrase a sentiment from Buddhism: someone, somewhere, may well be suffering on our behalf for this happiness, this hedonism. There is no ‘may be’ about it.

So much blood has been spilled by those unfortunate enough to have been born in certain parts of the world on behalf of people in other parts of the world who deem the need to possess resources to be more worthy than the lives destroyed in order to grab them. Recall Madelaine Albright saying the deaths of 500,000 Iraqi children was a price worth paying for furthering the geo-political interests of US corporations. And yes, a drone attack here, some ‘collateral damage’ there, and those boys in the US control centres are happy with a hard days killing.

In the US Declaration of Independence, there is the phrase “Life, liberty and the pursuit of happiness.” Freedom and happiness (or the pursuit of it) is central, albeit built on the misery of others.

‘Life’, ‘liberty’ and ‘happiness’ have become debased. Fed to the masses, happiness has been confused with excessive individualism and the never-ending pursuit of material goods. It became hijacked by the likes of Bernays. With his knowledge of psycho-analysis (Sigmund Freud was his uncle), he knew it was relatively easy to manipulate desires and get people hooked on indulging in certain behaviour, even if ultimately they don’t really want or need those consumer products, those ‘false needs’, they strive to acquire. Getting them hooked is what really counts.

You have no time to think about the disillusionment because you are all too busy buying the next quick-fix for happiness product. It’s called retail ‘therapy’ for good reason. A therapy that has no long-term benefit. It’s a feel-bad, feel-good then feel bad again spiral.

But who needs this form of ‘happiness’, this type of ‘liberty’, ultimately underpinned by an Albright-esque view of life and death? No one. Yet the masses are encouraged to swallow the lies. The propaganda is pervasive.

Look no further than all those feel-good Hollywood trash films, passed off as ‘blockbusters’, that gloss over or usually ignore all the mundane, miserable aspects of life in working class ‘America’. Little wonder half the world seems to want to live in the US. The need to portray a bogus notion of happiness has served to kick reality into touch. The Hollywood propaganda machine has seen to that.

The ‘wealth creators’ and their crimes against humanity

The great ‘American Dream’ was built on craving and propaganda. It was built on stripping the environment bare, on the unsustainable raping of nature to fuel profits, perpetual war and misery and suffering. The sociologist C.Wright Mills noted the existence of a post-war power elite in the US back in 1956. An integrated power elite of big corporations, the military and the political establishment. Fast forward 57 years and it is responsible for a body count of ten million dead and counting, a statistic, a dirty secret that Hollywood will never tell. Ten million slaughtered in US-backed wars and by death squads, covert ops and destabilisations (see this). Drug-running and the exporting of terror and murder, glorified by countless Hollywood icons, commentators and politicians under the banner of championing freedom and democracy.

The system in place exists to benefit not the majority, but small a minority of just 6,000 to 7,000 people, according to David Rothkopf. These are the extremely wealthy of the world who have cemented their position on the back of their ancestors and hundreds of years of capitalism. These are the people setting the globalisation and war agendas at the G8, G20, NATO, the World Bank, and the WTO. They are from the highest levels of finance capital and transnational corporations. These billionaires, this transnational capitalist class, dictate global economic policies and decide on who lives and who dies and which wars are fought and inflicted on which people. Although they are having a bit of difficulty in kick-starting it right now, with their see-through lies and hypocrisy, Syria is a case in point.

Their crimes against humanity are never mentioned as such. Instead, these people are called ‘wealth creators’. They are the self-anointed role models and captains of industry. The high flyers who have stolen ordinary people’s wealth, who have stashed it away in tax havens, who have bankrupted economies because of their reckless gambling and greed and who have imposed a form of globalisation that results in devastating destruction and war for those who attempt to remain independent from them, or structurally adjusted violence via privatisation and economic neo-liberalism for millions in countries that have acquiesced.

Little wonder then that attempts to redress the balance, to snatch control away from this criminal class, have been brutally suppressed over the decades. From democratic leftist organisations to any government pursuing a socialist alternative, this class has used intelligence agencies or military might to attempt to subvert or annihilate any opposition.

From El Salvador and Chile to Egypt and India’s tribal belt, ordinary folk across the world have been subjected to policies that have resulted in oppression, poverty and conflict. But this is all passed off by politicians and the corrupt mainstream media as the way things must be. And anyone who stands up to this lie is ridiculed at best or spied upon, tortured and killed at worst in order to prevent the truth from emerging. And that truth is that many of us know what ‘happiness’ really is, the type of society necessary to establish it – based on communality and economic equality – and that the immensely wealthy people who stand in its way do all things necessary to prevent us from having it. Socialism is not a dirty word.

Various well-being surveys indicate that happier societies invest heavily in health, welfare and education, are more equal and live within the limits imposed by the environment. Many less wealthy countries (and wealthy) do well in such surveys because cultural priority is placed on family and friends, on social capital rather than financial capital, on social equity rather than corporate power. It’s no coincidence that people in places like Britain and the US appear to be less happy than they were 40 years ago.

Karl Marx knew that self-actualisation was to be truly achieved in a society that makes it possible for someone to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as he has a mind. Being ‘happy’ is state of being, a state of worthwhile endeavour freely chosen and not imposed. It is not achieved through the pursuit of an ultimate unattainable elusive goal on a never ending treadmill of drudgery, a never ending treadmill of control. Not a fixed end point to be achieved by possessing a hundred latest, cutting edge consumer gadgets and indulging in the individualised competition of conspicuous consumption that proclaims ‘look at me, I’m better than you, I’m elevated from the crowd’. And by elevating oneself in such a way, the gregarious human animal is cut off from the wider group and may ultimately become rather unhappy.

And yet it is ordinary working class men (and women) who sign up to join the military and support this system on behalf of these immensely wealthy people. Such people have however always been adept in manipulating the masses to rally around flag and nation, evoking an emotive misplaced sense of patriotism to pursue their militarism or justify their exploitation.

In his book ‘A People’s History of England’, The Marxist academic AL Morton documented how ordinary people, over many hundreds of years, set out to challenge these rulers and often paid with their lives. Nothing ever came for free and ordinary working people fought tooth and nail for any rights that they managed to obtain

Such a travesty then, that today, ordinary people are denied economic opportunities because this class has sold their jobs to the lowest bidder in India, China or elsewhere. This class and its ‘think tanks’ were determined to shatter the post-war Keynesian consensus based on a robust welfare state and government intervention in the economy to help secure full employment. Any notions of ‘fairness’ and the benefits to be derived from the welfare state were to be substituted for positive notions about the free market and individual responsibility in order to justify the real intention of shifting the balance of power towards elite interests.

With workers’ wages having been depressed over a period of decades, demand having thus been propped up by debt and bankers demanding to be bailed out, how convenient that the lie of ‘austerity’ is being used as a battering ram to finish off what the likes of Reagan and Thatcher did in the 80s with their pro-big business, pro-privatisation, anti-union, anti-welfare policies.

And we are supposed to thank ‘them’ for this? To vote for ‘their’ politicians, to join in a media circus to celebrate the birth of another royal parasite, to support their killing in Syria, in Libya, in Afghanistan, in Iraq and elsewhere?

Yes, we are supposed to back them and take in the poisonous lie that ‘we are all in it together’. And ordinary young men (and women) are supposed to sign up to fight their wars.

The working classes, the great, great grandchildren of the cannon-fodder ‘heroes’ sacrificed en masse on the blood-soaked battlefields of countless other wars that have gone before can now join up to fight again. For what? Austerity, powerlessness, imperialism, propping up the US dollar. For whom? Monsanto, Occidental Petroleum, BP, JP Morgan, Black Rock, Boeing and the rest.

The US economy has been hollowed out. Much of manufacturing has been shipped abroad. For those who benefitted, the US can go to hell in a handbasket, and it has. Meanwhile, for them, record profits ensue. It’s the ability to maximise profit by shifting capital around the world that matters to them, whether on the back of distorted free trade agreements which open the gates for plunder, or through coercion and militarism which merely tear them down.

In places like India, it cuts both ways. ‘Free’ trade and a state enforced militarism that both result in countless deaths and the forced removals of hundreds of thousands of the nation’s poorest folk from their lands and villages for the benefit of powerful corporations and a bogus notion of development. “I love my India” well-off ordinary urban dwellers often say. Patriotism has always been a distraction, a tool to be ignited by the oppressors at will among the masses.

As societies become hollowed out, with empty echoes of patriotism ringing out, they increasingly resemble boxes. The only thing inside however is a giant, brutal mechanical hand. There is nothing else apart from it. And it’s only function is to pull the lid shut if anyone ever dares to tear it open and shed light into the box. If successful, they will see the immorality, the lies, the hypocrisies. The social control based on the subversion of life, liberty and happiness.

Colin Todhunter is an extensively published independent writer and former social policy researcher based in the UK and India.

 

US CEO pay hits record high

By Nick Barrickman
May 25, 2015
World Socialist Web Site

 

money-greedy1A new study released by executive pay research firm Equilar and published earlier this month by the New York Times shows that compensation for chief executive officers for the largest US companies hit a new record in 2014.

The top 200 highest-paid US CEOs each made an average of $22.6 million in compensation, including salaries as well as stocks, options, bonuses and other forms of pay.

This represented a significant increase over 2013’s average of $20.7 million. This figure was more than double that recorded by the firm in 2006, when it first began publishing numbers on executive compensation.

Together, the top 15 highest-paid chief executives took home over $1.1 billion in pay last year. Ranking highest on the list is David M. Zaslav of Discovery Communications, which the Times refers to as “the cable group behind Shark Week and shows like ‘Cake Boss.’” Last year saw Zaslav’s pay shoot up 368 percent to over $156,000,000, making him the highest-paid CEO on Equilar’s list since Tim Cook of Apple was awarded a package of over $378 million in 2011.

Nicholas Woodman, chief executive officer and founder of camera maker GoPro, saw his compensation package shoot up more than 4,000 percent in a single year, to over $77,400,000 after his company’s initial public offering last year, making him the fifth-highest-paid CEO.

Satya Nadella of Microsoft, who declared earlier this year that he would carry out a broad “restructuring plan” resulting in the layoff of 18,000 people—14 percent of its total workforce—raked in over $84,300,000 in 2014, making him the fourth highest-paid CEO.

Margaret C. Whitman of Hewlett-Packard saw her income climb by 11 percent to $19,612,164 last year after announcing over 50,000 job cuts since taking over as CEO. Similarly, Virginia M. Rometty of IBM saw a growth in pay of 28 percent to $17,942,400, even as her company carried out thousands of layoffs over the course of 2014.

Last year, the typical top-200 CEO pay package was roughly 339 times greater than the $51,939 median household income of a family in the United States. By comparison, the ratio in pay between a CEO and a worker in 1978 stood at about 30-to-1. According to the Economic Policy Institute (EPI), the growth in CEO pay outstripped even the growth of the stock market throughout this period.

As lavish as the pay for the top CEOs was, their total compensation paled in comparison to hedge fund chiefs. According to another study released earlier this month by Institutional Investor’s Alpha magazine, the top 25 highest-paid hedge fund managers made nearly $11.62 billion for themselves in the past year, amounting to roughly $500 million apiece.

The growth in CEO pay comes as companies sit atop the largest cash hoard in history, with US corporations alone holding $1.4 trillion on their balance sheets. Instead of using this money to invest, hire workers or raise wages, companies are using it to buy back shares, increase dividends and engage in an orgy of mergers and acquisitions. US corporations recently spent over $500 billion buying back their own stock, according to a report in the Financial Times.

The growth of CEO pay has continued despite claims by Democratic politicians and federal regulators that they have taken measures to restrain massive payouts for executives. The New York Times noted in a piece earlier this month (“For the Highest-Paid C.E.O.s, the Party Goes On”) that the Dodd-Frank bill of 2010, the main “financial reform” passed in the wake of the 2007-2008 economic crisis, was underpinned by “a belief that more transparency would lead to some much needed belt-tightening” in terms of CEO pay. The Times bluntly declares that “it hasn’t worked.”

“It’s a common story. Chummy boardrooms, easily achieved performance targets and large discretionary bonuses—these are the hallmarks of executive compensation today,” the Times concludes that “there is little chance that the feeding frenzy will end anytime soon.”

While the financial elite continues to rake in obscene amounts of wealth, conditions of poverty and social inequality prevail for the vast majority of the population. A report released on Thursday by the Organization for Economic Co-operation and Development (OECD), found that levels of international social inequality were the highest on record since the organization began recording statistics. Significantly, in the United States, the total wealth of the bottom fifth of the population fell by 26 percent between the years 2007-2013.

Far from being the outcome of impersonal economic forces, the enormous enrichment of the corporate/financial elite has been the product of conscious efforts by both Democratic and Republican administrations to enact a massive transfer of wealth from the bottom to the top of society, facilitated through the pumping of trillions of dollars into the financial system by the Federal Reserve and other central banks. Rather than leading to productive investment and job creation, the influx of cash has largely been pocketed by the corporate and financial elite in the form of executive pay, increased dividends, and soaring stock prices.

World’s Richest 80 People Own Same Amount as World’s Bottom 50%

By Eric Zuesse
May 9, 2015
Washington’s Blog

 

money-greedy1Oxfam’s recent report, “WEALTH: HAVING IT ALL AND WANTING MORE” contains shocking figures that the press haven’t sufficiently publicized; so, the findings and the reliability of their sources will be discussed here. The results will then be related to the central political debate now going on in the U.S. Presidential contests for 2016, which is about equality and inequality.

First, the findings:

1. The richest 80 individuals own as much as do all of the poorest half of humanity.

2. During 2009-2014, the wealth of the 80 richest people doubled, yet the wealth of the bottom 50% declined slightly.

Now, the sources:

These data are calculated from Forbes magazine, regarding the world’s richest individuals, and from the Credit Suisse Global Wealth Databook 2014, regarding the global wealth-distribution.

The source on the richest 80:

The Forbes list is one of two such lists, the other being Bloomberg. The two are generally in rather close agreement, but sometimes disagree enormously. For example, as of 8 May 2015, Bloomberg shows Sweden’s Ingvar Kamprad, the owner of Ikea, as #8 owning $43.1B, but Forbes shows him as #497 owning $3.5B.

Furthermore, Newsweek on March 2nd headlined “Why Putin Isn’t on ‘Forbes’ Billionaires List,” and reported that, “Forbes excludes members of royal families and ‘dictators who derive their fortunes entirely as a result of their position of power.’ Although it details this caveat, the magazine offered limited insight into the exact reason Putin was left off. When asked about Putin, a spokeswoman for Forbes told Newsweek: ‘Vladimir Putin is not on the list because we have not been able to verify his ownership of assets worth $1 billion or more’ and cited the methodology. The spokeswoman and [Assistant Managing Editor Kerry] Dolan did not comment directly as to whether the magazine considered Putin a dictator, and thus exempted him from the list by this classification. A reporter who worked on the list did not reply to a request for comment.” So: royals, and “dictators,” are both left off the list. Also: Dolan said that the magazine attempts to obtain the cooperation of listees but that “some cooperate; others don’t.”

Forbes itself says that, “We do not include royal family members or dictators who derive their fortunes entirely as a result of their position of power, nor do we include royalty who, often with large families, control the riches in trust for their nation. This means the wealthy royal families of the United Arab Emirates, Saudi Arabia and other Gulf countries are not eligible for our global wealth ranking. (These monarchs, like Khalifa bin Zayed Al-Nahyan and Saudi King Abdullah bin Abdul Aziz Al Saud, land on our list of The World’s Most Powerful People.)”

Consequently, the Forbes ranking is quite unreliable; and, on top of that, it is methodologically opaque. Leaving royalty off of their list is automatically excluding the royalty in England, Saudi Arabia, and other countries, where those people might well be the richest ones in their nation, if not the richest people in the entire world.

The Forbes ranking is thus untrustworthy, because it automatically excludes entire groups of people which might include many who are wealthier than any who are on their list. However, all that this means is that many people might exist who are even wealthier than the ones that show up as being among the top 80 on the Forbes list. Consequently, the Forbes list systematically under-states the wealth of the people who are actually the world’s 80 richest. The richest 80 could conceivably even be an entirely different list. Therefore, perhaps the richest 80 own far more than do the poor half of Mankind. But they almost certainly don’t own less than do the poor half of Mankind. In any case, they own at least as much as do the lower half.

The source on the global wealth-distribution:

The source that’s used to calculate the amount of personal wealth in the entire world and its nation-by-nation distribution, Credit Suisse, is overwhelmingly regarded as the most thorough that exists on this subject. Its research-team was selected by Anthony Shorrocks, who had long headed the UN’s World Institute for Development Economic Research, which is the leading research institute on global wealth-distribution.

However, yet again, the available data exclude a lot at the very top. For example, since the Saudi and other royals and dictators are disappeared from even the pretense of being calculated for possible inclusion into world’s-richest lists, the wealth-distributions for many Arabic and other totalitarian countries — and for constitutional monarchies such as in Norway, Netherlands, UK, Morocco, and Jordan — are necessarily based on much guesswork. Consequently, global wealth-inequality is being systematically underestimated, even in the best available source. Yet, even so, what can be publicly determined about global wealth-inequality is staggering:

The Credit Suisse Global Wealth Databook 2014 presents on its page 98, a global wealth pyramid, which indicates that the world’s richest 0.7% (35 million people) own $115.9 trillion, while the poorest 99.3% (4,665 million people) own $147.3 trillion. It also shows that the richest 8.6% own $224.5T (trillion), while the poorest 91.4% own only $38.7T. (Or, in other words: the richest 8.6% own 5.8 times as much as do the poorest 91.4%.)

Consequently, if the transfer of wealth from the many to the few is to continue, then the main way for that to happen will need to be by the super-rich receiving their added wealth from the lesser-rich, because the percentage of wealth that exists amongst the non-rich — the lower 91.4% — is only 17% of the globe’s total wealth, which isn’t much; and, even if all of that were to go to the richest 8.6%, it still would increase their current $224.5T to $263.2T, a 17% rise. However, from 2009 to now, the wealth of the richest 80 humans has actually more than doubled; so, even a 17% rise would be far less than the 80 richest are accustomed to — especially over such a multi-year time-period as was 2009-2014. Those 80 people would then be feeling shortchanged.

This is why the richest 80 people will need to be getting their increases, in the future, mainly from the richest 8.6%. Wall Street and other major financial centers are perhaps in the best position to achieve that.

The Credit Suisse Global Wealth Databook 2014 presents, on page 124, its categorization of countries according to equality-inequality, and they apply for this purpose a methodology that minimizes the distortive influences such as have been mentioned here. Here is their resultant listing:

Screen Shot 2015-05-08 at 11.07.48 AM

As is clear there, the United States is listed in the highest-inequality category; and, so, no reasonable question exists that inequality is even more extreme here than it is in most of the world’s countries.

The way that U.S. President Barack Obama and his economic advisors have dealt with this is to say that what needs fixing in the U.S. isn’t economic inequality itself but instead inequality of economic opportunity — as if the latter doesn’t depend upon the former. It’s impossible to increase equality of economic opportunity unless economic equality is increased. America’s politicians lie through their teeth, because they’re financed — in both Parties — by the super-rich. The only difference between the two Parties is that the Republicans lie by saying that America’s extreme economic inequality is okay and that government action to reduce it merely increases inequality of economic opportunity — something that presupposes what it pretends to be concluding, which is that government has no constructive role to play in this matter. They’re all hoaxters. But the American public senses this, even if only vaguely. They sense that the problem is real, but they don’t know that the Democratic Party’s approach to the problem since the time when Bill Clinton became President in 1993 is itself fraudulent and a sell-out to the super-rich.

The resultant political debate in the U.S.:

On May 4th, Gallup headlined “Americans Continue to Say U.S. Wealth Distribution Is Unfair,” and reported that, in response to the question, “Do you feel that the distribution of money and wealth in this country today is fair?” 63% say no, and in 1985 it was 60% saying no to that question. The highest percentage saying no was 68% right before the 2008 crash, and the lowest was 58% immediately after that crash. By 56% to 34%, Republicans right now are saying that the wealth-distribution is fair. By 86% to 12%, Democrats say that it’s not. (Among the overall population, 63% say it’s unfair, and 31% say it’s fair. That’s a two-to-one margin.) The poorer a person was in Gallup’s study, the likelier he or she was to say it’s “unfair.” The richer he was, the likelier to say “fair.” In other words: only at the very financial top is the belief commonly held that the existing wealth-distribution is “fair.” However, Republicans, of any amount of wealth, think that it’s “fair”: virtually all Republicans agree with the very rich about the fairness of the wealth-distribution, and virtually all non-Republicans don’t agree with that. (The only problem for non-Republicans is how to solve it.)

The only U.S. Presidential candidate who focuses, and stands clearly, on the side of this issue that says it’s “unfair” (which, as was just pointed out, Gallup finds to be by two-to-one, the norm) is Bernie Sanders, who is running in the Democratic Party. Unlike Obama and the Clintons, he acknowledges that it’s the basic problem, and that shunting it off onto “equality of economic opportunity” is essentially fraudulent. All of the other candidates are raising their campaign-funds from the top 1% of America’s wealth-pyramid, who are the very people the likeliest to believe that the present wealth-distribution is fair. Those candidates are raising their campaign-funds from the few people who own almost everything that there is to own, and these are also the people who have the most to lose. Senator Sanders is raising his campaign-funds from the many people who own almost nothing. While other candidates need to serve the rich, Sanders needs to run an authentically grass-roots campaign, which can defeat far-better-financed opponents, or he otherwise stands no real chance of winning.

This situation is called ‘democracy’ in the United States, but other terms are used for it in other countries. The only scientific study that has been done of the question of whether the U.S. is a democracy has found that it definitely is not. In order to make it one, profound change would be required. However, America’s richest need to convince America’s public that the nation already is a democracy, because, otherwise, America’s public won’t continue to accept rule by the super-rich — the people who finance almost all major politicians and who benefit from the current dictatorship. And that would cause the public to vote against any candidate who is receiving most of his financial support from the super-rich, which is almost all candidates. So: the only possible way to overcome any such tendency of the public to vote against the interests of the rich is to distract the public from that entire issue, onto personalities and other such distractions.

Consequently, it is to be expected that, in the 2016 contests, the best-financed candidates will be promoted by advertisements and issues that distract and deceive, instead of inform or educate, the public. That will be a contest between well-financed lies, and poorly financed truths. Perhaps by Election Day, the poorly financed truths will have been totally drowned-out. That way would lead to hellish future for the United States.

The 2016 contests will be of major historical importance: if the movement into democracy doesn’t win in 2016, then its likelihood of succeeding in the future will be virtually nil (since the current direction is toward increased dictatorship by the super-rich). The 2016 elections will be do-or-die for future democracy in the U.S. If for no other reason than this, the 2016 Presidential contests will be hugely important. If the poor come out in record numbers in the Democratic primaries and then, if Sanders wins the nomination, in the final election, then economic inequality in the U.S. will be reduced and equality of economic opportunity in the U.S. will increase, and so the future for the United States will be improvement. Otherwise, America’s future will be grim, no matter how well America’s top 0.1% will be living.

America has a huge problem; and, if it’s ignored in 2016, as it has been ignored ever since Ronald Reagan won the White House in 1980, then America will, virtually certainly, spiral down into hell.

The problem is real; it has to be grappled-with, now, or else. It’s now, or it’s never. That’s the 2016 choice, for Americans — and, then, perhaps, for the rest of the world, and for all of the human future. That’s what is at stake, in the 2016 U.S. elections. The data make this clear.

———-

Investigative historian Eric Zuesse is the author, most recently, of  They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of CHRIST’S VENTRILOQUISTS: The Event that Created Christianity, and of Feudalism, Fascism, Libertarianism and Economics.

UN Lawyer Calls TTP & TTIP ‘a dystopian future in which corporations and not democratically elected governments call the shots’

By Eric Zuesse
May 6, 2015
Washington’s Blog

 

The Obama-proposed international-trade deals, if passed into law, will lead to “a dystopian future in which corporations and not democratically elected governments call the shots,” says Alfred De Zayas, the UN’s Special Rapporteur on Promotion of a Democratic and Equitable International Order.

These two mammoth trade-pacts, one (TTIP) for Atlantic nations, and the other (TPP) for Pacific nations excluding China (since Obama is against China), would transfer regulations of corporations to corporations themselves, and away from democratically elected governments. Regulation of working conditions and of the environment, as well as of product-safety including toxic foods and poisonous air and other consumer issues, would be placed into the hands of panels whose members will be appointed by large international corporations. Their decisions will remove the power of democratically elected governments to control these things. “Red tape” that’s imposed by elected national governments would be eliminated — replaced by the international mega-corporate version.

De Zayas was quoted in Britain’s Guardian on May 4th as saying also that, “The bottom line is that these agreements must be revised, modified or terminated,” because they would vastly harm publics everywhere, even though they would enormously benefit the top executives of corporations by giving them control as a sort of corporate-imposed world government, answerable to the people who control those corporations.

Obama is pushing for international cartels to replace important functions of today’s national governments, and De Zayas is saying that, “We don’t want an international order akin to post-democracy or post-law.” 

De Zayas told the Guardian that the panels that are proposed to be at the very center of these trade-pacts “constitute an attempt to escape the jurisdiction of national courts and bypass the obligation of all states to ensure that all legal cases are tried before independent tribunals that are public, transparent, accountable and appealable.”

That is, in fact, the motivation behind these deals. Costs get transferred from corporations onto consumers, workers, and the environment, while profits are increased for the corporation’s investors, and CEO pay will soar. In fact, the EU’s own study of the economic impact of the TTIP with America, calculated “economic gains as a whole for the EU (€119 billion a year) and US (€95 billion a year). This translates to an extra €545 in disposable income each year for a family of 4 in the EU, on average, and €655 per family in the US. … Income gains are a result of increased trade. EU exports to the US would go up by 28%, equivalent to an additional €187 billion worth of exports of EU goods and services. Overall, total exports would increase 6% in the EU and 8% in the US.” According to the analysis, no one would lose anything. For example, tariffs would be reduced but income taxes and other taxes that the public pays wouldn’t be increased in order to make up for that loss of income to the state from reduced tariffs. Not at all. Instead: “As much as 80% of the total potential gains come from cutting costs imposed by bureaucracy and regulations, as well as from liberalising trade in services and public procurement.” 

In other words: government regulations of product-safety and the environment and workers’ rights are a terrible waste, which would be eliminated and handled more efficiently by letting international corporations themselves handle those things, according to the EU’s study. And “liberalising trade in services and public procurement” would cut “red tape” that has prevented government officials who are the purchasers in “public procurement” from getting high-paid corporate directorships, etc. under the existing regulatory structures in democratic nations where the public, the voters, can hold their own government accountable for such corruption. If these functions become the domain of the international corporations themselves, then existing regulations and the government employees who enforce them can be eliminated. Accountability, in other words, is such a waste, for the inside investors in large corporations. They don’t need it; they fight against it. They are fighting against it. They don’t even want accountability to their own outside investors, who might want them removed from corporate management.

The EU simply doesn’t mention the downsides. And they also don’t mention that, “Obama’s TTIP Trade Deal w. Europe Would Be Disastrous for Europe, Says the First Independent Study.” That study wasn’t paid for by the EU, so they just ignore it. (They even ignore that it found that America’s international corporations would benefit even more from the deal than would Europe’s international corporations, which is the exact opposite result than the EU’s own study calculated. President Obama performs brilliantly for America’s billionaires, even though most of them are Republicans.) The economist who did that study wasn’t paid by anybody to do it. Occasionally, a study like that is performed by an economist. However, paid-for studies get far more publicity, because the findings are then heavily promoted by the sponsoring organization — after all, it’s propaganda.

On 23 January 2015, Britain’s Financial Times bannered, “Davos 2015: Businesses rally support for transatlantic trade deal.” Attendees there would pop the champagne corks if these deals pass.

David Korten at YES! magazine, headlined on 15 April 2015, “A Trade Rule that Makes It Illegal to Favor Local Business? Newest Leak Shows TPP Would Do That And More.” He stated, in common language, a recently-leaked (from wikileaks) chapter of the TPP, the treaty’s Investment chapter. Key provisions of it are:

Favoring local ownership is prohibited. …

Corporations must be paid to stop polluting. [Yes: Obama demands that corporations possess an actual right to pollute! It’s in the contract!! Ignore his mere rhetoric.]

Three [corporate] lawyers will decide who’s right in secret tribunals. …

Speculative money must remain free [of governmental regulation]

Corporate interests come before national ones. …

Then, there’s a sixth basic provision: to “prohibit governments from requiring that a foreign investor be under any obligation to serve the host country’s people or national interest.”

And that’s just one chapter of the proposed document. No wonder, then, why the billionaires at Davos are eager for Obama to ram this secret treaty through Congress. (Their people were in on the drafting of this proposed treaty, so Davosians didn’t need Julian Assange’s organization for them to know what the treaty contains. Only we do. And so now we understand why Obama wants to imprison or execute Assange.)

In the United States, congressional Republicans are almost unanimously in support of Obama’s trade-deals, but most congressional Democrats are opposed to these deals. President Obama doesn’t even enforce the workers’ rights provisions in the existing NAFTA and other existing trade-deals. Murders of labor union officials are prohibited under NAFTA but the Obama Administration ignores them. On April 22nd, Huffington Post bannered, “AFL-CIO’s Trumka: USTR Told Us Murder Isn’t A Violation Under U.S. Trade Deals” and quoted an AFL-CIO official, “‘The question is whether USTR [Obama’s U.S. Trade Representative, the same man who is negotiating both the TPP and the TTIP] considers murder to be a violation of the labor chapter. That is the question,’ she said. ‘The point is that USTR has informed us that labor-related violence does not constitute an actionable violation of the labor provisions [of NAFTA]’.” Obama relies almost entirely upon congressional Republicans for support of his proposed trade-deals, and of his existing trade-policies (such as non-enforcement of NAFTA). The only real question is whether congressional Democrats will be able to block his deals. When American voters in 2014 elected Republicans to majorities in both houses, the result was to ease the way for passage of Obama’s proposed international-trade deals. Harry Reid controlled the Senate and blocked them, but he was now replaced by the Republican Mitch McConnell, who is trying to win Senate approval for the TTIP. Reid, now as the Minority Leader, is still doing the best he can to block that; he just doesn’t have the power he did when he was Majority Leader.

Within the general American public, however, there seems to be more support for the TTIP among Democrats than among Republicans. On 9 April 2014, Pew Research Center issued a poll that was sponsored by the pro-deal Bertlelsmann Foundation, headlined “Support in Principle for U.S.-EU Trade Pact,” and the poll’s key question was: “Q3 As you may know, the U.S. and the EU are negotiating a free trade agreement called the Transatlantic Trade and Investment Partnership, or TTIP. Do you think this trade agreement will be a good thing for our country or a bad thing?” In the United States, 53% of respondents marked “Good thing,” 20% marked “Bad thing,” and 14% marked “Haven’t heard enough.” (Most of the others marked “Don’t know.”) Whereas 53% of all respondents said “Good thing,” 60% of Democratic respondents did, but only 44% of Republican ones did. That’s a 16% difference — substantial. Thus, apparently, at least as of a year ago, when a member of the public heard “TTIP,” the person mainly thought that it came from Obama (which it does), and that Obama is a Democrat (which he isn’t, except in rhetoric, but members of Congress are different; they know that he’s not, even if the public don’t); and, so, Republican voters were far less supportive of TTIP than were Democratic voters. The general public judged the deal by the nominal party of the person who initiated and is negotiating it. This is why, whereas in Congress, Republicans almost unanimously want TTIP to pass, and most Democrats want it to fail, the situation among the voting public is in the exact opposite direction: overwhelmingly favorable to the deal among Democrats, but only slightly favorable to the deal among Republicans. On the other hand, all Republican U.S. Presidential candidates support Obama’s trade-deals in principle and they only want him to speed up his getting other nations’ leaders to sign onto to them — as if he even has the power to do that.

If the TTIP and the TPP pass and become law, then historians will almost certainly remember Obama far more for those international trade-deals than for Obamacare or anything else, because of the enormous global political change they will bring. And Obama will then probably be generally regarded as the worst President in U.S. history, because he will then have done more to bring back dictatorship as the global norm and ended democracy, than any other nation’s leader, in all of history, ever did.

The evidence strongly supports Alfred De Zayas’s statement, that these trade-deals would produce “a dystopian future in which corporations and not democratically elected governments call the shots.” His statement was alarming, but not at all alarmist.

De Zayas is the chief UN official responsible for “reporting” on proposed international-trade treaties. As the likelihood of Obama’s proposed treaties passing has increased, he has become increasingly vocal about what their implications would be, for the UN’s founding vision of gradual evolution toward a democratic world-government — something comprehensive like what is now being suddenly rammed through, but democratic instead of fascist, and thus more the opposite of Obama’s vision instead of similar to it. On April 23rd, Reuters headlined, “U.N. expert says secret trade deals threaten human rights,” and De Zayas spoke in far more measured terms, not nearly so direct. He said:

“I am concerned about the secrecy surrounding negotiations for trade treaties, which have excluded key stakeholder groups from the process, including labour unions, environmental protection groups, food-safety movements and health professionals”

———-

Investigative historian Eric Zuesse is the author, most recently, of  They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of CHRIST’S VENTRILOQUISTS: The Event that Created Christianity, and of Feudalism, Fascism, Libertarianism and Economics.

Massive payout for US hedge fund chiefs in 2014

By Andre Damon
May 6, 2015
World Socialist Web Site

 

On Tuesday, Institutional Investor’s Alpha magazine revealed that the top-earning 25 hedge fund managers in the United States secured another massive payout last year, totaling $11.62 billion.

The hedge fund managers earned an average of $400 million apiece. This meant that they received some $200,000 per hour, assuming that they worked 40 hours per week. On average, they made more than 10,000 times the median household income in the United States.

In Detroit, the city administration is preparing to shut off water service to 28,000 residents in order to force the collection of $42 million in delinquent water bills. A typical member of the top-earning hedge fund managers could have paid this entire amount nine times over from their income this year.

The highest-earning hedge fund manager was Kenneth Griffin, head of Chicago-based Citadel LLC, who got $1.3 billion last year, bringing his net worth to $6.6 billion. Citadel operates through a combination of speculation in stocks, high-speed computerized trading and the operation of so-called “dark pools”: secretive securities exchanges that function outside of all government regulation.

Securities and Exchange Commission (SEC) records indicate that much of Citadel’s earnings come from old-fashioned securities fraud. The hedge fund has been fined or sanctioned for misconduct 26 times.

Griffin does not skimp on spending the money he procures through financial speculation. A recent divorce filing by Griffin’s wife alleges that his family regularly spends more than $1 million a month, including $300,000 a month for private-jet travel and $160,000 a month for vacation rentals. The family’s staff of servants, assistants, and security personnel is so large that Griffin has founded a company exclusively to employ them, calling it “Griffin Family Services.”

The second highest earner on the list, James Simons of Renaissance Technologies, raked in $1.2 billion last year, bringing his net worth to $14 billion. Next was Raymond Dalio of Bridgewater Associates, who made $1.1 billion.

In 2004 Dalio, whose net worth is now $15.4 billion, infamously summed up the parasitic character of the social layer of which he is part: “The money that’s made from manufacturing stuff is a pittance in comparison to the amount of money made from shuffling money around,” he said.

Hedge funds are largely unregulated financial institutions that pool funds from large investors, charging massive fees: normally 2 percent for assets under management, plus 20 percent of any profits accrued.

They employ a variety of strategies, from old-fashioned speculation and capitalizing on financial bubbles created by central banks, to actively intervening in companies they invest in, forcing them to carry out layoffs and cost cutting. To cite one example, Dow Chemical this week announced that it would lay off nearly 2,000 workers, citing pressure from the hedge fund Third Point.

In other cases, hedge funds simply operate as massive criminal enterprises. In 2013, the Hedge Fund SAC Capital pled guilty to what the SEC called wire and securities fraud “on a scale without known precedent,” resulting in “hundreds of millions” of dollars in gains for the firm. Notably, the hedge fund’s owner, Steven A. Cohen, was not charged and was allowed to keep the more than $9.4 billion he made through the firm’s activities.

The payouts for hedge fund managers are part of a massive enrichment of the financial oligarchy as a whole. The wealth of the Forbes 400 billionaires, which has doubled since 2008, has hit a total of $2.9 trillion.

The billions of dollars diverted into the coffers of hedge fund managers come not through productive activity, but through speculation, backed by a relentless assault on the jobs and living conditions of the working class.

As a result of the massive upward redistribution of wealth over the past decade, the US poverty rate increased from 12.6 percent of the population in 2007 to 14.5 percent in 2013. According to the Census Bureau’s Supplemental Poverty Measure (SPM), 47 percent of Americans have incomes below 200 percent of the official poverty level, making half of the country either poor or near poor.

Social inequality is the defining element of social, economic and political life in America. The vast sums of money available to these Wall Street kingpins makes it possible for them to purchase both politicians and financial regulators. It is noteworthy that Kenneth Griffin, the highest-earning hedge fund manager, was the largest donor to the campaign of Chicago Mayor and former Obama Chief of Staff Rahm Emanuel, to whom he gave over $1 million.

Last month Citadel hired former Federal Reserve Chief Ben Bernanke as a senior adviser, paying him handsomely for the services rendered by the Federal Reserve to Wall Street and the financial oligarchy. During his time as head of the Federal Reserve, Bernanke funneled trillions of dollars in government funds to Wall Street.

The upcoming US presidential elections a year and a half away will be the most expensive in history by far, much of it financed by contributions from hedge fund managers, and beside them the various corporate executives and traders that constitute the American ruling class.

 

Britain’s super-rich have doubled their wealth since 2009

By Robert Stevens
April 30, 2015
World Socialist Web Site

 

Capitalism1The annual Sunday Times Rich List reveals that the UK has more billionaires per head of population than any other country. There are now a record 117 billionaires among the country’s top 1,000 richest people.

The total wealth of just the billionaires on the list is a staggering £325.131 billion. Within the space of a year, the top 1,000, as a whole, have increased their total wealth by 5.4 percent to a record £547.126 billion. Last year, the figure stood at 104 billionaires and £519 billion—one third of the country’s GDP.

The Rich List, first published in 1989, but in its 18th year in its current form, is always an underestimation of the wealth of the super-rich as it includes land, property, assets, and significant shares but excludes cash in bank accounts.

This year’s list reveals the extent to which the global financial elite ensured that the world’s population has been forced to bear the entire burden of the 2008 financial crash. In the years since, the super-rich in the UK have more than doubled their wealth, which stood at £258 billion in 2009 (an increase of 112 percent). The number of billionaires has grown by 12 percent in the last year, by 172 percent since 2009, and, as the Sunday Times notes, they “are far wealthier than many of them dared to hope seven years ago”.

The list, writes the Times, “confirms that Britain is more attractive to the global super-rich than any country except America. There are so many billionaires based here now, they outnumber those in mainland China, whose economy is four times larger than ours.”

It notes, “Mainland China is home to 115 sterling billionaires, who are collectively worth £24bn less.”

It continues, “Although the United States has the highest overall number of sterling billionaires of any country at 384, Britain’s smaller population means it boasts more per head than any other country in the G20 group of the world’s biggest economies—one billionaire for every 547,000 Britons, compared with one for every 833,000 Americans. London, where most of Britain’s billionaires are based, has more than any other city—80—who enjoy a collective wealth of £258bn. The capital’s nearest European rival, Paris, has just 21.”

The Times ’ front page article on the Rich List began “Recession? What recession? Britain’s super-rich have powered through the economic crisis and are now more than twice as rich as they were in 2009 when the economy was on the rocks…”

In the same period workers, pensioners and young people have suffered the impact of brutal austerity, with tens of billions of pounds slashed from public spending. In comparison, the income of the super-rich only fell once during that period (in 2009 when it fell by 37 percent to £258 billion) and their wealth is now growing at a record rate. The Sunday Times notes, “The rise has been greatest in the past 12 months. You need £100m to get on the list this year. That is £45m more than in 2009 and £15m more than last year…”

Vast amounts of the wealth accumulated by the super-rich are the product of speculation and outright criminality, with London being one of the world’s leading centres of financial swindling. The Sunday Times notes, “Most of the billionaires based in London are from abroad, but choose to live or base their businesses in the capital. London is a magnet for the super-rich because of its low taxes (for now)… The rise in the wealth of the top 1,000 is so sharp this year thanks to booming stock markets. Both the FTSE 100 and the Dow Jones Industrial Average have hit record highs in the past 12 months.”

The rapid emergence of this layer is illustrated by the fact that the queen, who was listed as the richest individual in 1989, is now not even among the top 300. The Times notes that although her wealth increased by £10 million this year to £340 million, she represents “old money.”

The richest individual on the list is the Ukrainian-born and Harvard-trained Len Blavatnik, who has investments in industry, music, and media, and is worth £13.17 billion, up £3.17 billion on 2014. Among the firms Blavatnik has investments in is LyondellBasell, one of the oil refinery companies with which workers in the United States were recently involved in a bitter struggle.

In the case of individuals such as Blavatnik, who made his initial fortune by participating in the pillage of the nationalised state assets of the Soviet Union following its dissolution in 1991, the adage of Balzac that “behind every great fortune there is a great crime” was never more apt.

A Forbes article last year noted, “In the history of Wall Street there haven’t been too many moneymaking machines quite like LyondellBasell, which has seen its shares return 500 percent since it emerged from bankruptcy four years ago. And that’s been especially lucrative for Blavatnik, 57, who cobbled the company together, saw it fail and plunge into bankruptcy court, and then doubled down on the same assets, personally investing another $2.37 billion in LyondellBasell the second time around. His investment is now worth more than $10 billion, generating $8 billion in mostly unrealized personal profits.”

The World Socialist Web Site noted, “These vast sums have been made through the brutal exploitation of oil workers facilitated by the [United Steel Workers] and other unions in the global industry.”

Another oligarch, placed at number four on the list, is the Uzbekistan-born Alisher Usmanov, who owns a stake of almost 30 percent in the leading London Premier League team, Arsenal FC. Usmanov is worth £9.8 billion, even though the value of his mining and other interests fell by £850 million over the past year, partly because of the West’s sanctions against Russia and collapse of the rouble.

So rich is this miniscule layer of parasites that servicing their whims is a lucrative industry in itself. The Daily Telegraph commented on Ten Group, “which has two million high-net-worth members worldwide” and “has spent around £36.5m of its clients’ money in the past 12 months.”

Reading the media’s commentary, one is left with the distinct impression that they consider the existence of this fetid, anti-social layer to be so entrenched and “normal” that it is barely worth discussing anymore. The BBC’s article on the list totalled just 270 words.

In its front-page article, the Sunday Times itself refers to a “wealth gap” that “has become a chasm.” But the gap it refers to is the disparity between the number of billionaires in the “capital and the rest of the country”! It commented that “there are only 37 billionaires based outside London and their collective wealth is £67bn—£191bn less than the London total of £258bn.”

The grotesque levels of wealth recorded in the Rich List speak to the enormous gulf between the super-rich and everyone else. But that is no longer considered a subject of journalistic comment.

Economic stagnation, financial parasitism dominate IMF-World Bank meeting

By Nick Beams and Barry Grey
April 18, 2015
World Socialist Web Site

 

The spring meeting of the International Monetary Fund and World Bank being held in Washington this weekend takes place under conditions of continuing stagnation in the real economy, combined with unprecedented levels of financial parasitism and social inequality.

Stock prices in the US, Europe and Asia have hit record highs and global corporations have amassed a cash hoard of some $1.3 trillion, fuelled by cheap credit from central banks and government-corporate attacks on workers’ wages and living standards. Yet the IMF warns in its updated World Economic Outlook published this week that the world economy will remain locked in a pattern of slow growth, high unemployment and high debt for a prolonged period.

In a marked shift from previous economic projections, the IMF acknowledges that there is little prospect of a return to the growth levels that prevailed prior to the 2008 financial crash, despite trillions of dollars in public subsidies to the financial markets. This amounts to a tacit admission that the crisis ushered in by the Wall Street meltdown nearly seven years ago is of a fundamental and historical character, and that the underlying problems in the global capitalist system have not been resolved.

A sample of headlines from articles published in the past week by the Financial Times gives an indication of the deepening malaise. They include: “An economic future that may never brighten,” “IMF warns of long period of lower growth,” “Europe’s debtor paradise will end in tears,” “QE raises fears of euro zone liquidity squeeze,” and “Global property bubble fears mount as prices and yields spike.”

The IMF report focuses on a sharp and persistent decline in private business investment, particularly in the advanced economies of North America, Europe and Asia. It concludes that “potential growth in advanced economies is likely to remain below pre-crisis rates, while it is expected to decrease further in emerging market economies in the medium term.”

It goes on to note, “Unlike previous financial crises, the global financial crisis is associated not only with a reduction in the level of potential output, but also with a reduction in its growth rate… Shortly after the crisis hit in September 2008, economic activity collapsed, and more than six years after the crisis, growth is still weaker than was expected before the crisis.”

This is a stunning confirmation of the analysis of the 2008 crash made by the World Socialist Web Site and the International Committee of the Fourth International. On January 11, 2008, nine months before the Lehman Brothers bankruptcy, the WSWS published a statement that began:

2008 will be characterized by a significant intensification of the economic and political crisis of the world capitalist system. The turbulence in world financial markets is the expression of not merely a conjunctural downturn, but rather a profound systemic disorder which is already destabilizing international politics.

The IMF report adds, “These findings imply that living standards may expand more slowly in the future. In addition, fiscal sustainability will be more difficult to maintain as the tax base will grow more slowly.” The meaning of this euphemistic language is that there is no end in sight to the global assault on the living standards and democratic rights of the working class.

The policies of austerity that have already thrown countless millions into poverty are not temporary. They will continue as long as capitalism continues.

The IMF’s updated Global Financial Stability Report, also released this week, acknowledges that central bank policies of holding interest rates close to zero and pumping trillions of dollars into the banking system by means of “quantitative easing,” i.e., money-printing, are having little impact on the real economy. Rather, they are increasing financial risk. According to the report, financial risks have risen in the six months since the last assessment in October 2014.

The IMF’s World Economic Outlook devotes an entire chapter to the slump in private investment. It notes that private investment in the major capitalist economies—the fundamental driving force of global growth—remains at historic lows. As a percentage of gross domestic product, it is below the level experienced in the aftermath of any recession in the post-war period.

But the report, setting the tone for the discussions this weekend among world finance ministers, central bankers and their myriad economic advisers, skirts the colossal role of financial speculation and parasitism in the investment slump and the crisis as a whole. All over the world, banks and corporations are using their massive profits and cash holdings to increase stock dividends and jack up their share prices by buying back their own stock, rather than investing in production. The speculative frenzy is compounded by near-record levels of corporate buybacks and mergers.

All of these activities are entirely parasitic. They add nothing to man’s productive forces. On the contrary, they divert economic resources from productive activity to further enrich a tiny global aristocracy of bankers, CEOs and speculators.

The IMF-World Bank meeting takes place amidst an exponential growth of financial parasitism, the likes of which has never been seen in the history of the capitalist system. In the past year alone, according to an article published this week in the Financial Times, some $1 trillion has been handed back to shareholders—many of them multi-billion dollar hedge funds and investment houses—in the form of buybacks and increased dividends.

Over the past decade, S&P 500 companies have repurchased some $4 trillion worth of shares. Major companies, including Apple, Intel, IBM and General Electric, play a central role in the ongoing buyback frenzy.

Last week alone, three corporate takeovers totalling over $105 billion were announced, including Royal Dutch Shell’s purchase of Britain’s BG Group. The value of all takeovers announced this year to date is more than $1 trillion, setting the pace for 2015 to be the second biggest year for mergers and acquisitions in history.

The result is massively inflated stock prices, the proceeds from which go overwhelmingly to the rich. Over the past year, the German DAX index has risen by 24 percent, the French CAC has increased 16 percent and Japan’s Nikkei has soared 36 percent.

Bank profits are also up. This week, JPMorgan Chase, Citigroup and Goldman Sachs all beat market expectations, announcing near-record profits for the first quarter of 2015, mainly on the basis of speculative trading activities.

As the real economy is starved of resources, leading to lower wages, declining job opportunities, rising unemployment and the substitution of casual and part-time employment for full-time jobs, fabulous fortunes are being accumulated on the financial heights of society.

The unprecedented degree to which the world economy is wedded to financial parasitism is an expression of the moribund state of the capitalist system.

There is another significant aspect to this weekend’s gathering that points to future developments. For seven decades, the IMF and the World Bank have formed two pillars of the economic hegemony of the United States. But the post-war regime is now cracking.

This week, Chinese authorities announced that some 57 countries—37 from Asia and 20 from the rest of the world—had signed up to the Beijing-backed Asia Infrastructure Investment Bank. The Obama administration bitterly opposed its strategic allies joining the bank, but the floodgates opened after Britain decided to join despite objections from Washington that the bank would undermine US-backed global financial institutions.

The fracturing of the global post-war economic order under conditions of deepening crisis is a sure sign that the major capitalist powers are determined to assert their own economic interests, if necessary against the US. Not only are the economic conditions of the 1930s returning, so are the political and economic divisions that led to world war.