The bashing of the middle class continues

Eons ago, Americans went to work for a company, spent their entire work career with said company, and then was rewarded for that loyalty with a pension to live off when retired.  Those days are gone, long gone.  Now, we have workers who think 10 years with one employer is too long.  Likewise, that lack of loyalty to a single employer disappeared along with the old-school pension for the most part.

Pensions are still around, but not like they used to be.  Pensions usually come with jobs where collective bargaining agreements still exist and unions help negotiate benefits for the workers.

“In 2013 there were 14.5 million members in the U.S., compared with 17.7 million in 1983. In 2013, the percentage of workers belonging to a union was 11.3%, compared to 20.1% in 1983. The rate for the private sector was 6.7%, and for the public sector 35.3%.”–Wikipedia “Labor unions in the United States”

In the current $1 Trillion spending bill that’s floating through Congress, there’s a neat little nugget encapsulated in that legislation that hasn’t been much discussed by the MSM.  If that spending bill passes, one of the riders attached will allow cuts to benefits already promised to workers.  It’s being described as a way to help the funding issues with pensions, which are reportedly vastly underfunded.

The measure ostensibly aims to stave off insolvency for multi-employer plans facing financial problems, largely by allowing them to cut retiree benefits to save money, well in advance of insolvency. Helping these plans survive is a laudable goal — as many as 200 of the 1,400 such plans in existence may face financial problems over the next 20 years.

But as Ken Paff, national organizer of Teamsters for a Democratic Union, asserts: “The process stinks.” The deal was worked out in secret and invested with a bogus urgency: There’s absolutely no reason it needs to be passed this week, much less attached to an omnibus budget bill that has to be enacted before Congress leaves for vacation this week. “To attach this to a budget bill is a dirty trick,” Paff says.

The actual language of the 161-page pension measure wasn’t made public until Tuesday night; at midday Wednesday, pension advocates were still working their way through it. But it’s already clear that some descriptions of the provisions provided to reporters Tuesday by its drafters, Reps. John Kline (R-Minn.) and California’s George Miller (D-Martinez), were flagrantly misleading.–LA Times

The LA Times piece goes on to mention that the “protections” that were supposedly included for retired workers really isn’t much protection at all considering that you have to be 80 years old in order to be fully protected from the cuts.  Those who are at least 75 can still have up to 80% of the maximum allowable amount cut from their pension.

This likely won’t cause much alarm for many people because not many people have their retirements set up in pensions.  Most people have a 401k plan now.

Even those with a 401k plan should pay attention to the cuts being made here as well.  Recently, Radio Shack announced they were ending matching contributions to their employee 401k plans, and I don’t think this will be an isolated case.  Employers are cutting costs to maximize profits, and unfortunately for today’s worker, we’re nothing but a cost on the company’s P&L statement.

I see nothing more but more chipping away at the columns that support the middle class.  Some people like to play the blame game and suggest one party is responsible, but as this legislation shows, they both contribute to the demise of the middle class.


Another day, another bank scandal and fines

(Reuters) – Regulators fined six major banks a total of $4.3 billion for failing to stop traders from trying to manipulate the foreign exchange market, following a yearlong global investigation.

HSBC Holdings Plc, Royal Bank of Scotland Group Plc, JPMorgan Chase & Co, Citigroup Inc, UBS AG and Bank of America Corp all faced penalties resulting from the inquiry, which has put the largely unregulated $5-trillion-a-day market on a tighter leash, accelerated the push to automate trading and ensnared the Bank of England.

Authorities accused dealers of sharing confidential information about client orders and coordinating trades to boost their own profits. The foreign exchange benchmark they allegedly manipulated is used by asset managers and corporate treasurers to value their holdings.

Source: Reuters

The sun rose in the east this morning, and what do we know…  another bank scandal.  It’s getting to be the norm that a scandal is announced, some pittance of a fine is imposed, and the behavior continues on as though nothing happened.

What kind of punishment is a $4.3 Billion fine to a group that can generate that sum within a week?  When are these motherf**kers going to start doing perp walks and doing hard time?

If I go and rob a bank for $20,000 or less, I will get prison time.  If I go and rob Grandma Mary down the street, I’m going to get hard time.  No judge is going to make me pay a $50 fine and walk away.  So, why is it that these people from the banks can do that over and over again?

The striking thing about this currency manipulation scheme is that it started AFTER regulators began investigating the LIBOR scandal.  I guess you can live and work like the nastyass honey badger when you know there is no punishment for your behavior other than making you keep the millions of dollars you earn in your scheme.

Too big to fail my ass…  More like bought and paid for government.  Notice that this kind of stuff happens in countries with “free markets” and not in countries where people get death sentences for doing this kind of stuff.  Maybe its time for the everyday regular people to grab the pitchforks and start marching.

News can be downright depressing at times

Two stories that I came across today really made me think about how little control we actually have in America.  No matter who we vote for or what they do, the only people who come out ahead are those who throw down the huge dollars to buy their own Congresspeople.

First one…

Of all the crazy things people have said about former AIG chief Maurice “Hank” Greenberg’s lawsuit against the government, the craziest was that he just might win.

It’s sounding less crazy all the time.

The possibility of a Greenberg victory at trial, which began six weeks ago is no longer unthinkable. According to a Bloomberg report, Greenberg has a real shot of winning his argument that the U.S. government bailed out the insurance firm he founded on “unfair” terms. Greenberg and his star lawyer, David Boies, may walk away with a $25 billion judgment in the case.

As Buzzfeed’s Matthew Zeitlin pointed out, $25 billion is twice the value of all housing aid given through TARP, the highly-criticized relief program that was supposed to help out troubled mortgage holders. It’s also equal to the total value of TARP money set aside for housing that remains unspent. The talking points write themselves.

If Greenberg wins, “the howling will start,” says Susan Webber told Bloomberg, who blogs under the pseudonym Yves Smith at Naked Capitalism.

A legal ruling that AIG shareholders were victims of the government bailout that saved those same shareholders’ stake in the company from being worth zero would be galling. If Greenberg walks away with billions, the public outrage will hit 11. No one argues that his firm could have survived without government intervention.

Source: Huffington Post

If that’s not bad enough, Matt Taibbi dropped a doozy as well.

Fleischmann is the central witness in one of the biggest cases of white-collar crime in American history, possessing secrets that JPMorgan Chase CEO Jamie Dimon late last year paid $9 billion (not $13 billion as regularly reported – more on that later) to keep the public from hearing.

Back in 2006, as a deal manager at the gigantic bank, Fleischmann first witnessed, then tried to stop, what she describes as “massive criminal securities fraud” in the bank’s mortgage operations.

Thanks to a confidentiality agreement, she’s kept her mouth shut since then. “My closest family and friends don’t know what I’ve been living with,” she says. “Even my brother will only find out for the first time when he sees this interview.”

Six years after the crisis that cratered the global economy, it’s not exactly news that the country’s biggest banks stole on a grand scale. That’s why the more important part of Fleischmann’s story is in the pains Chase and the Justice Department took to silence her.

Source:  Rolling Stone

The average American doesn’t have a chance.  We think we’re doing something with our houses, cars, and such.  However, many people are living paycheck to paycheck.  That, or we’re only one major sickness away from bankruptcy.  All at the same time, others are fleecing this country dry, and people will defend it as capitalism.  Go figure.

Hopefully tomorrow will bring some happy news.  We’re in need of some because we’re going to see Ferguson light up like a midsummer bonfire before too long.  We may as well try to find some happiness until that time comes.

“Stimulating” the economy

What happens when a state forecloses on a business for not paying taxes?  The state usually seizes the property and auctions off the inventory if the business doesn’t pay up.  Well, that policy has put Kansas in a bit of a predicament.

The state seized the inventory of Bang Lingerie and Gifts after the owner didn’t pay up on a delinquent tax bill in the amount of $163,986 that was owed to the state.  Today, the state will auction off the inventory to recoup the amount.

Kansas tax revenues could get a boost with the sale of remote-control vibrating thongs and other sex toys.

Thousands of adult novelty items, from lingerie to handcuffs, are for sale in an online auction as a result of a failure of a chain of erotic stores to pay state sales, income and withholding taxes.

The items — all new and in the original packaging — will be available for inspection Monday at a warehouse in Kansas City’s West Bottoms.

The merchandise was seized in July by the Kansas Department of Revenue from five adult stores in Kansas City, Kan., Topeka, Wichita and Junction City. The owner, United Outlets LLC, doing business as Bang, owes the state $163,986.

Source: The Kansas City Star

I guess you can say this is a way to stimulate the economy in more ways than one.  The state itself will not conduct the auction.  Instead, they have contracted out to a private company to do the auction for them.  Take a look at the auction site and see if you can figure out which auction will consist of Bang’s inventory.

'Equip-bid_com - Kansas Auctions

The auction is being conducted by Equip Bid Auctions, and you have to register even just to look at the inventory that’s up for auction. I have seen no word yet on whether Westboro Baptist Church will be protesting the auction.

How much more comedy can be written into a story involving a state with a governor named Brownback that is auctioning off sex toys that are being housed in a warehouse in West Bottoms?

Socioeconomic segregation

Last week, America celebrated the 50th Anniversary of the signing of the Civil Rights Act of 1964.  This is the event that ended government sanctioned segregation.  Although the government no longer explicitly endorses it, the spectre of segregation still lingers in America today in the form of economic segregation.

A report in the Washington Post last week caught my attention, but not for what it said.  Titled The economy’s troubling double standard for black men, I was intrigued that someone actually took the time to study our society and saw that the old saying that “Blacks have to work twice as hard to compete” isn’t just some old wives’ tale.

A black man with an associates degree has the same chances — about 88 percent– of finding a job as a white high school graduate, according to a recent analysis of employment rates and education for whites and minorities by Young Invincibles, a nonprofit group focusing on the economic issues impacting millennials. Getting a bachelor’s degree ups those chances to 93 percent for a black man, the same as a white man who dropped out of college.  “In a lot of ways that proves the saying that black people need to work twice as hard to compete in this country as white people,” says Tom Allison, policy and research manager for Young Invincibles and author of the report.

In the year 2013, we were basically told that racism is over by the Supreme Court.  We don’t need the full protection of the Voting Rights Act anymore as we are living in a post-racial America now.  Nevermind the fact that a spate of voter laws followed that decision in an attempt to help Republicans keep their grips on power.  Schools were legally desegregated long ago, although the school systems of today can resemble those of yesteryear.  Even the violence in Chicago, a favorite whipping post for some ideologues, doesn’t leave the perimeter of the neighborhoods where many people are locked in economically.

As the chart at the top partially shows, Black unemployment has consistently been twice the national average for as long as it’s been measured.  Changing segregation laws didn’t change the segregationist mindset.  When Blacks are less likely to get hired, what other avenues do they have to resort to in order to survive here?  Less earning power means less money to be able to fully integrate into American society.  As a result, this country today still economically resembles America circa 1950.

The black middle class, measured by the number of families earning at least $100,000 a year, has grown fivefold in the past 50 years. Now, about one in 10 black households is in that income category. The percentage of blacks older than 25 with high school diplomas has more than tripled. The number of blacks who are college graduates has grown by a factor of 10. Overall, blacks’ buying power is estimated to be nearing $1 trillion, while an increasing number of African Americans serve as company chief executives.

Yet, racial economic disparities are mostly unchanged and in some cases are growing. In 1963, blacks families earned 55 cents for every dollar earned by whites. In 2011, blacks earned 66 cents for every dollar earned by whites. The black unemployment rate averaged 11.6 percent between 1963 and 2012, more than double the white jobless rate over that time.

Source: Washington Post

When you have to be twice as good to earn two-thirds as much, it’s hard to claim that we’re a completely integrated society.  Some people will make claims about education and work ethic, but look at how politicians have been steadily dismantling the public education system in favor of trying to bolster private schools.  Who get’s left behind in that scenario?  The lower-income people, which ultimately affects all races and not just Blacks.  There are the exceptions like Oprah Winfrey, Magic Johnson, and Robert Johnson, but people fail to forget that there was once a “Black Wall Street” in Tulsa, Oklahoma in the early 1900s that was full of successful and wealthy Black Americans.

Nobody’s asking for freebies or giveaways.  What people want is an honest and fair shot at making it on their own.  Before passing judgment on someone because of where they live or what they do, consider the circumstances they’re in.  They may not have any other choice beyond their current situation because of the ingrained economic philosophy that has driven America since its inception.  A while back, Ta-Nehesi Coates wrote a thought-provoking column in the Atlantic, The Case for Reparations.  As he eloquently put it, “Until we reckon with our compounding moral debts, America will never be whole.”