|Posted by Jerrald J President on August 21, 2018 at 10:40 AM||comments (0)|
Yet America voted for Donald J Trump. Think about? By JJP
Top CEOs Make 300 Times More than Typical WorkersPay Growth Surpasses Stock Gains and Wage Growth of Top 0.1 Percent
The chief executive officers of America’s largest firms earn three times more than they did 20 years ago and at least 10 times more than 30 years ago, big gains even relative to other very-high-wage earners. These extraordinary pay increases have had spillover effects in pulling up the pay of other executives and managers, who constitute a larger group of workers than is commonly recognized.1 Consequently, the growth of CEO and executive compensation overall was a major factor driving the doubling of the income shares of the top 1 percent and top 0.1 percent of U.S. households from 1979 to 2007 (Bivens and Mishel 2013; Bakija, Cole, and Heim 2012). Since then, income growth has remained unbalanced: as profits have reached record highs and the stock market has boomed, the wages of most workers, stagnant over the last dozen years, including during the prior recovery, have declined during this one (Bivens et al. 2014; Gould 2015) .
In examining trends in CEO compensation to determine how well the top 1 and 0.1 percent are faring through 2014, this paper finds:
Average CEO compensation for the largest firms was $16.3 million in 2014. This estimate uses a comprehensive measure of CEO pay that covers chief executives of the top 350 U.S. firms and includes the value of stock options exercised in a given year. Compensation is up 3.9 percent since 2013 and 54.3 percent since the recovery began in 2009.
From 1978 to 2014, inflation-adjusted CEO compensation increased 997 percent, a rise almost double stock market growth and substantially greater than the painfully slow 10.9 percent growth in a typical worker’s annual compensation over the same period.
The CEO-to-worker compensation ratio, 20-to-1 in 1965, peaked at 376-to-1 in 2000 and was 303-to-1 in 2014, far higher than in the 1960s, 1970s, 1980s, or 1990s.
In examining CEO compensation relative to that of other high earners, we find:
Over the last three decades, compensation for CEOs grew far faster than that of other highly paid workers, i.e., those earning more than 99.9 percent of wage earners. CEO compensation in 2013 (the latest year for data on top wage earners) was 5.84 times greater than wages of the top 0.1 percent of wage earners, a ratio 2.66 points higher than the 3.18 ratio that prevailed over the 1947–1979 period. This wage gain alone is equivalent to the wages of 2.66 very-high-wage earners.
Also over the last three decades, CEO compensation increased more relative to the pay of other very-high-wage earners than the wages of college graduates rose relative to the wages of high school graduates.
That CEO pay grew far faster than pay of the top 0.1 percent of wage earners indicates that CEO compensation growth does not simply reflect the increased value of highly paid professionals in a competitive race for skills (the “market for talent”), but rather reflects the presence of substantial “rents” embedded in executive pay (meaning CEO pay does not reflect greater productivity of executives but rather the power of CEOs to extract concessions). Consequently, if CEOs earned less or were taxed more, there would be no adverse impact on output or employment.
Critics of examining these trends suggest looking at the pay of the average CEO, not CEOs of the largest firms. However, the average firm is very small, employing just 20 workers, and does not represent a useful comparison to the pay of a typical worker who works in a firm with roughly 1,000 workers. Half (52 percent) of employment and 58 percent of total payroll are in firms with more than 500 or more employees. Firms with at least 10,000 workers provide 27.9 percent of all employment and 31.4 percent of all payroll.
CEO compensation trends
Table 1 presents trends in CEO compensation from 1965 to 2014.2 The data measure the compensation of CEOs in the largest firms and incorporate stock options according to how much the CEO realized in that particular year by exercising stock options available. The options-realized measure reflects what CEOs report as their Form W-2 wages for tax reporting purposes and is what they actually earned in a given year. This is the measure most frequently used by economists.3 In addition to stock options, the compensation measure includes salary, bonuses, restricted stock grants, and long-term incentive payouts. Full methodological details for the construction of this CEO compensation measure and benchmarking to other studies can be found in Mishel and Sabadish (2013).
CEO compensation, CEO-to-worker compensation ratio, and stock prices, 1965–2014 (2014 dollars)
CEO annual compensation (thousands)* Worker annual compensation (thousands) Stock market (adjusted to 2014) CEO-to-worker compensation ratio***
Private-sector production/nonsupervisory workers Firms’ industry** S&P 500 Dow Jones
* CEO annual compensation is computed using the "options realized" compensation series, which includes salary, bonus, restricted stock grants, options exercised, and long-term incentive payouts for CEOs at the top 350 U.S. firms ranked by sales.
** Annual compensation of the workers in the key industry of the firms in the sample
*** Based on averaging specific firm ratios and not the ratio of averages of CEO and worker compensation
Source: Authors' analysis of data from Compustat's ExecuComp database, Federal Reserve Economic Data (FRED) from the Federal Reserve Bank of St. Louis, the Current Employment Statistics program, and the Bureau of Economic Analysis NIPA tables
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CEO compensation reported in Table 1, as well as throughout the rest of the report, is the average compensation of the CEOs in the 350 publicly owned U.S. firms (i.e., firms that sell stock on the open market) with the largest revenue each year. Our sample each year will be fewer than 350 firms to the extent that these large firms did not have the same CEO for most of or all of the year or the compensation data are not yet available. For comparison, Table 1 also presents the annual compensation (wages and benefits of a full-time, full-year worker) of a private-sector production/nonsupervisory worker (a group covering more than 80 percent of payroll employment), allowing us to compare CEO compensation with that of a “typical” worker. From 1995 onward, the table identifies the average annual compensation of the production/nonsupervisory workers in the key industries of the firms included in the sample. We take this compensation as a proxy for the pay of typical workers in these particular firms.
The modern history of CEO compensation (starting in the 1960s) is as follows. Even though the stock market, as measured by the Dow Jones Industrial Average and S&P 500 index, and shown in Table 1, fell by roughly half between 1965 and 1978, CEO pay increased by 78.7 percent. Average worker pay saw relatively strong growth over that period (relative to subsequent periods, not relative to CEO pay or pay for others at the top of the wage distribution). Annual worker compensation grew by 19.5 percent from 1965 to 1978, only about a fourth as fast as CEO compensation growth over that period.
CEO compensation grew strongly throughout the 1980s but exploded in the 1990s and peaked in 2000 at around $20 million, an increase of more than 200 percent just from 1995 and 1,271 percent from 1978. This latter increase even exceeded the growth of the booming stock market—513 percent for the S&P 500 and 439 percent for the Dow. In stark contrast to both the stock market and CEO compensation, private-sector worker compensation increased just 1.4 percent over the same period.
The fall in the stock market in the early 2000s led to a substantial paring back of CEO compensation, but by 2007 (when the stock market had mostly recovered) CEO compensation returned close to its 2000 level. Figure A shows how CEO pay fluctuates in tandem with the stock market as measured by the S&P 500 index, confirming that CEOs tend to cash in their options when stock prices are high. The financial crisis in 2008 and the accompanying stock market tumble knocked CEO compensation down 44 percent by 2009. By 2014, the stock market had recouped all of the ground lost in the downturn and, not surprisingly, CEO compensation had also made a strong recovery. In 2014, average CEO compensation was $16.3 million, up 3.9 percent since 2013 and 54.3 percent since 2009. CEO compensation in 2014 remained below the peak earning years of 2000 and 2007 but far above the pay levels of the mid-1990s and much further above CEO compensation in preceding decades.
CEO compensation (in millions of 2014 dollars)S&P 500 Index (adjusted to 2014 dollars)S&P 500 Index (adjusted to 2014 dollars)CEO compensation (in millions of 2014 dollars)19701980199020002010051015202505001,0001,5002,0002,500
The alignment of CEO compensation to the ups and downs of the stock market casts doubt on any explanation of high and rising CEO pay that relies on the rising individual productivity of executives, either because they head larger firms, have adopted new technology, or other reasons. CEO compensation often grows strongly simply when the overall stock market rises and individual firms’ stock values rise along with it (Figure A). This is a marketwide phenomenon and not one of improved performance of individual firms: most CEO pay packages allow pay to rise whenever the firm’s stock value rises and permit CEOs to cash out stock options regardless of whether or not the rise in the firm’s stock value was exceptional relative to comparable firms. Over the entire period from 1978 to 2014, CEO compensation increased about 997 percent, a rise almost double stock market growth and substantially greater than the painfully slow 10.9 percent growth in a typical worker’s compensation over the same period.
It is interesting to note that growth in CEO pay in 2014 was not driven by large increases in pay for just a few executives or just those with the highest pay. Figure B shows the growth in CEO pay when compensation is ranked and computed by CEO compensation fifths. CEO compensation rose across the board, and in fact grew the most in the bottom and second fifth—11.1 and 7.9 percent, respectively—between 2013 and 2014.
Note: CEO annual compensation is computed using the "options realized" compensation series, which includes salary, bonus, restricted stock grants, options exercised, and long-term incentive payouts for CEOs at the top 350 U.S. firms ranked by sales.
The increase in CEO pay over the past few years reflects improving market conditions driven by macroeconomic developments and a general rise in profitability. For most firms, corporate profits continue to improve, and corporate stock prices move accordingly. It seems evident that individual CEOs are not responsible for this broad improvement in profits in the past few years, but they clearly are benefiting from it.
This analysis makes clear that the economy is recovering for some Americans, but not for most. The stock market and corporate profits have rebounded following the Great Recession, but the labor market remains sluggish. Those at the top of the income distribution, including many CEOs, are seeing a strong recovery—compensation up 54.3 percent— while the typical worker is still experiencing the detrimental effects of a stagnant labor market: compensation for private-sector workers in the main industries of the CEOs in our sample has fallen 1.7 percent since 2009.
Trends in the CEO-to-worker compensation ratio
Table 1 also presents the trend in the ratio of CEO-to-worker compensation to illustrate the increased divergence between CEO and worker pay over time. This overall ratio is computed in two steps. The first step is to construct, for each of the largest 350 firms, the ratio of the CEO’s compensation to the annual compensation of workers in the key industry of the firm (data on the pay of workers in any particular firm are not available). The second step is to average that ratio across all the firms. The last column in Table 1 is the resulting ratio in select years. The trends prior to 1995 are based on the changes in average CEO and economywide private-sector production/nonsupervisory worker compensation. The year-by-year trend is presented in Figure C.
Ratio of CEO compensation to top incomes and wages5.842.540.1% wage earners ratio1947–1979 average: 3.180.1% household income ratio1947–1979 average: 1.111960198020000246810
Presumably, CEO relative pay has grown further since 2013. The data in Table 1 show that CEO compensation rose 3.9 percent between 2013 and 2014. (Unfortunately, data on the earnings of top wage earners for 2014 are not yet available for a comparison to CEO compensation trends.) If CEO pay growing far faster than that of other high earners is a test of the presence of rents, as Kaplan has suggested, then we would conclude that today’s executives receive substantial rents, meaning that if they were paid less there would be no loss of productivity or output. The large discrepancy between the pay of CEOs and other very-high-wage earners also casts doubt on the claim that CEOs are being paid these extraordinary amounts because of their special skills and the market for those skills. Is it likely that the skills of CEOs in very large firms are so outsized and disconnected from the skills of others that they propel CEOs past most of their cohorts in the top tenth of a percent? For everyone else the distribution of skills, as reflected in the overall wage distribution, tends to be much more continuous.
What about the average CEO?
A relatively new critique of examining the pay of CEOs in the largest firms, as we do, is that such efforts are misleading. For instance, American Enterprise Institute scholar Mark Perry (2015) says the samples of CEOs examined by the Associated Press, the Wall Street Journal, or our earlier work “aren’t very representative of the average U.S. company or the average U.S. CEO,” because “the samples of 300–350 firms for CEO pay represent only one of about every 21,500 private firms in the U.S., or about 1/200 of 1% of the total number of U.S. firms.” Perry notes, “According to both the BLS and the Census Bureau, there are more than 7 million private firms in the U.S.” Perry considers the pay of the average CEO, $187,000, to be a much more important indicator.
This is a clever but misguided critique. Amazingly, roughly sixteen percent of the CEOs in Perry’s preferred measure are in the public sector. Those in the private sector include CEOs of religious organizations, advocacy groups, and unions. One wonders why Perry is not critical of the Bureau of Labor Statistics’ measure of CEO pay, since BLS reports that there are only 207,660 private-sector CEOs, far short of the 7.4 million there would be if each private firm had one. The shortfall of CEOs in the BLS data is understandable, however, once one recognizes that the average firm has only 20.2 workers (Caruso 2015, Appendix Table 1). The 5.2 million firms with fewer than 19 employees, averaging four employees per firm, probably do not have a CEO, nor probably do 2 million of the 2.4 million firms with more than 19 employees.
The reason to focus on the CEO pay of the largest firms is that they employ a large number of workers, are the leaders of the business community, and set the standards for pay in the executive pay market and probably do so in the nonprofit sector as well (e.g., hospitals, universities). No agency reports how many workers work for very large firms. We do know from Census data (Caruso 2015, Appendix Table 1) that the 18,219 firms in 2012 with at least 500 employees employed 51.6 percent of all employees and their payrolls accounted for 58.1 percent of total payroll (wages times employment). County Business Patterns data provide a breakout of the 964 firms (just 0.017 percent of all firms) with at least 10,000 employees; these large firms provide 27.9 percent of all employment and 31.4 percent of all payroll. In other words, the CEO of the “average U.S. company” about which Perry purports to be interested does not correspond to the CEO of the firm where the “average” or median worker works. This is further confirmed by a new study that reports that the median firm, ranked by employment, has roughly 1,000 workers while the average firm has about 20 (Song et al. 2015).
Executives and managers comprise a large portion of those in the top 1 percent of income and the top 1 percent of wage earners. The analysis of tax returns in Bakija et al. (2012) shows the composition of executives in the households with the highest incomes; our tabulation of American Community Survey data for 2009–2011 shows that 41.2 percent (the largest group) of those heading a household in the top 1 percent of incomes were executives or managers. Thus, we know that highly paid managers are the largest group in the top 1 percent and the top 0.1 percent, measured in terms of either wages or household income, and so there are plenty of good reasons to be interested in the pay of executives of large firms. Moreover, the pay of CEOs in the largest firms has grown multiples faster than the wages of other very high earners and hundreds of times faster than the wages these CEOs provide to their workers.
It is sometimes argued that rising CEO compensation is a symbolic issue with no consequences for the vast majority. However, the escalation of CEO compensation and executive compensation more generally has fueled the growth of top 1 percent incomes. In a study of tax returns from 1979 to 2005, Bakija, Cole, and Heim (2010), studying tax returns from 1979 to 2005, established that the increases in income among the top 1 and 0.1 percent of households were disproportionately driven by households headed by someone who was either a nonfinancial-sector “executive” (including managers and supervisors and hereafter referred to as nonfinance executives) or a financial-sector executive or other worker. Forty-four percent of the growth of the top 0.1 percent’s income share and 36 percent of the top 1 percent’s income share accrued to households headed by a nonfinance executive; another 23 percent for each group accrued to financial-sector households. Together, finance workers and nonfinance executives accounted for 58 percent of the expansion of income for the top 1 percent of households and 67 percent of the income growth of the top 0.1 percent. Relative to others in the top 1 percent, households headed by nonfinance executives had roughly average income growth, those headed by someone in the financial sector had above-average income growth, and the remaining households (nonexecutive, nonfinance) had slower-than-average income growth. These shares may actually understate the role of nonfinance executives and the financial sector since they do not account for the increased spousal income from these sources.7
We have argued above that high CEO pay reflects rents, concessions CEOs can draw from the economy not by virtue of their contribution to economic output but by virtue of their position. Consequently, CEO pay could be reduced and the economy would not suffer any loss of output. Another implication of rising executive pay is that it reflects income that otherwise would have accrued to others: what the executives earned was not available for broader-based wage growth for other workers. (Bivens and Mishel 2013 explore this issue in depth.)
There are policy options for curtailing escalating executive pay and broadening wage growth. Some involve taxes. Implementing higher marginal income tax rates at the very top would limit rent-seeking behavior and reduce the incentives for executives to push for such high pay. Legislation has also been proposed that would remove the tax break for executive performance pay that was established early in the Clinton administration; by allowing the deductibility of performance pay, this tax change helped fuel the growth of stock options and other forms of such compensation. Another option is to set corporate tax rates higher for firms that have higher ratios of CEO-to-worker compensation. Other policies that can potentially limit executive pay growth are changes in corporate governance, such as greater use of “say on pay,” which allows a firm’s shareholders to vote on top executives’ compensation.
|Posted by Jerrald J President on August 21, 2018 at 10:30 AM||comments (0)|
Do you really think this was intended for "Working Class People=White Blue Collar Workers)? Think about. By JJP
The racial redlining in Michigan’s Medicaid work requirements
There are a lot of problems with work requirements for Medicaid.
They aren’t necessary because the majority of people who can work, work already; they would increase the ranks of the uninsured; and despite what supporters think, they wouldn’t actually pull people out of poverty but could further hurl them into it.
But there’s also another big issue: Medicaid work requirements could increase racial disparities in health care.
Last week, the Michigan Senate passed legislation that instructs the state to apply for a federal waiver for Medicaid, so that Michigan can require people work 30 hours a week before before receiving heath insurance. But as Detroit Free Press Nancy Kaffer first reported, some people will be exempt from the requirements.
If someone lives in a county where unemployment is over 8.5 percent, they don’t have to prove they’re working to get medical help. While on its surface, this doesn’t seem like a horrible idea, the threshold actually ends up exempting counties that are rural and predominantly white, while counties with large Black communities still have to meet the requirements.
Most of the 17 counties with unemployment exceeding 8.5 percent also happen to be represented by Republicans — including a bill co-sponsor, state Sen. Wayne Schmidt, according to Great Lakes Beacon’s Danielle Emerson. ThinkProgress reached out to Schmidt’s office for comment but they did not immediately respond.
People living in cities with large Black populations — many of which also have large unemployment rates among Black communities — still have to meet the requirements, like Detroit and Flint.
“Detroiters living in poverty, with a dysfunctional transit system that makes it harder to reach good-paying jobs, won’t qualify for that exemption,” writes Kaffer. “The same is true in Flint and the state’s other struggling cities.”
This is especially damning for Flint, a city still recovering from a public health crisis that left residents with poisonous levels of lead in their tap water. And that crisis was a result of the state government disregarding the health of poor, Black residents.
Gov. Rick Synder (R) opposes work requirements and will likely veto the bill should the House pass it. But this situation isn’t limited to Michigan.
In a Washington Post op-ed, Centers for Medicare and Medicaid (CMS) administrator Seema Verma advocated for exemptions for Medicaid work requirements, noting that states should account for “local economic conditions that may impact an individual’s ability to find work.”
This could mean similar racial redlining happens in other states.
Certain populations, and in this case along racial lines, could be required to work while others are exempt — and not only from work or job training but burdens associated like paperwork. “Because of the demographics, you could have situations where the populations required to work are disproportionately African American,” George Washington University professor Sara Rosenbaum told Vox earlier this year.
We’ve already seen something similar happen in Kentucky with its Medicaid work requirements. The state’s 80-hours-per-month work rules goes into effect in July, but it does not apply to eight rural, majority white counties: Bell, Clay, Harlan, Knox, Leslie, Letcher, Perry, and Whitley counties.
A Kentucky government spokesperson told ThinkProgress in January they are exempting these areas from the “community engagement” requirement, so as not to influence the outcomes of an existing food assistance program these counties are participating in. These counties are exempt until 2019. Meanwhile, the work requirement is slated to first roll out in northern Kentucky, which includes Jefferson County where a larger share of Black Kentuckians live.
Intended or not, these are the risks associated with work requirements — and it’s important to consider as a lot of states are implementing this rule in state Medicaid programs. As people drop health insurance, existing health care disparities are further entrenched.
|Posted by Jerrald J President on August 21, 2018 at 10:10 AM||comments (0)|
Yes , f your part of the PLUTOCRACY; but if your not your screwed. By JJP
Are Stock Buybacks Starving the Economy?
A new report finds that big companies could have given their workers thousands of dollars’ worth of raises with the money they spent on their own shares.
Stock buybacks are eating the world. The once illegal practice of companies purchasing their own shares is pulling money away from employee compensation, research and development, and other corporate priorities—with potentially sweeping effects on business dynamism, income and wealth inequality, working-class economic stagnation, and the country’s growth rate. Evidence for that conclusion comes from a new report by Irene Tung of the National Employment Law Project (NELP) and Katy Milani of the Roosevelt Institute, who looked at share buybacks in the restaurant, retail, and food industries from 2015 to 2017.
Their new paper contributes to a growing body of research that might help explain why economic growth is so sluggish, productivity so low, and increases in worker compensation so piddling, even as the stock market is surging and corporate profits are at historical highs. Companies are working overtime to make their owners richer in the short term, more so than to improve their longer-term competitiveness or to invest in their workers.
Can a corporation have a soul?
Buybacks occur when a company takes profits, cash reserves, or borrowed money to purchase its own shares on the public markets, a practice barred until the Ronald Reagan administration. (The regulatory argument against allowing the practice is that it is a way for companies to manipulate the markets; the regulatory argument for it is that companies should be able to spend money how they see fit.) In recent years, with corporate profits high, American firms have bought their own stocks with extraordinary zeal. Federal Reserve data show that buybacks are now equivalent to 4 percent of annual economic output, up from zero percent in the 1990s. Companies spent roughly $7 trillion on their own shares from 2004 to 2014, and have spent hundreds of billions of dollars on buybacks in the past six months alone.
The new Roosevelt Institute and NELP research examines public firms in three major but notoriously low-wage industries— food production, retail, and restaurants—weighing buybacks against worker compensation. Unsurprisingly, Tung and Milani found that companies were aggressive in purchasing their own shares. The restaurant industry spent 140 percent of its profits on buybacks from 2015 to 2017, meaning that it borrowed or dipped into its cash allowances to purchase the shares. The retail industry spent nearly 80 percent of its profits on buybacks, and food-manufacturing firms nearly 60 percent. All in all, public companies across the American economy spent roughly three-fifths of their profits on buybacks in the years studied. “The amount corporations are spending on buybacks is staggering,” Milani said. “Then, to look a little deeper and see how this could impact workers in terms of compensation, was staggering.”
How much might workers have benefited if companies had devoted their financial resources to them rather than to shareholders? Lowe’s, CVS, and Home Depot could have provided each of their workers a raise of $18,000 a year, the report found. Starbucks could have given each of its employees $7,000 a year, and McDonald’s could have given $4,000 to each of its nearly 2 million employees.
“Workers around the country have been pushing for higher wages, but the answer is always, ‘We can’t afford it. We’d have to do layoffs or raise prices,’” Tung said. “That is just not true. The money is there. It’s just getting siphoned out of the company instead of reinvested into it.”
The report examines the period just before President Donald Trump’s $1.5 trillion tax cut came into effect, leading to an even greater surge of buybacks and thus an even greater surge of new wealth for the owners of capital, as wages have continued to stagnate. The tax legislation cut both the top marginal corporate tax rate from 35 to 21 percent—dropping the estimated effective tax rate on profitable businesses to just 9 percent, well below the effective tax rate for households—and encouraged firms to bring money back from overseas.
Trump’s trickle-down mythmaking begins
What did publicly traded corporations do with that money? Buy back shares and issue dividends, mostly. There was strong anecdotal evidence that that would be true even before the law passed. At a Wall Street Journal CEO confab held last fall, the former Trump economic adviser Gary Cohn asked a room of executives, “If the tax-reform bill goes through, do you plan to increase your company’s capital investment? Show of hands.” Most participants sat still, prompting Cohn to ask, “Why aren’t the other hands up?” Surveys showed that corporations were planning to shunt money to shareholders, rather than putting it into research, mergers and acquisitions, equipment upgrades, training programs, or workers’ salaries.
Since then, analyses from investment banks and researchers have estimated that 40 to 60 percent of the savings from the tax cut are being plowed into buybacks. One analysis of companies on the Russell 1000 Index—which consists of big firms, much like the Standard & Poor’s 500 does—found that companies directed 10 times as much money to buybacks as to workers. As such, Milani and Tung said they expect the math on corporate spending on shareholders versus workers to become even more exaggerated in the coming years.
Not all economic and financial analysts see buybacks as problematic. “Far from being starved of resources, S&P 500 companies are at near-peak levels of investment and have huge stockpiles of cash available for even more,” argue Jesse M. Fried and Charles C. Y. Wang in the Harvard Business Review. “The proportion of income available for investment that went to shareholders of the 500 over the past 10 years was a modest 41.5 percent—less than half the amount claimed by critics.” Plus, if buybacks merely transferred money from businesses to investors who then reallocated that money to other, more dynamic businesses, the overall effect on the economy might be muted.
But more and more analysts disagree. Larry Fink, who runs BlackRock, a huge money-management firm, has argued that buybacks are bad for companies and even bad for democracy. “Society is demanding that companies, both public and private, serve a social purpose,” he wrote in an open letter. “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.”
Analysts argue that buybacks hurt corporate America, American workers, and American growth in a few ways. For one, buybacks are a sign of short-termism among executives, the argument goes, boosting shareholder value without boosting the underlying value, profitability, or ingenuity of a given firm. Companies do not get better because of buybacks; it is just that shareholders get richer. In an exhaustive financial analysis of buybacks, the consultancy McKinsey found that companies would generally be better off issuing dividends or increasing investment instead. Buybacks also might distort earnings-per-share calculations and other measures of profitability and value.
A related issue is that buybacks draw money away from investment; a dollar spent repurchasing a share is a dollar that cannot be spent on new machinery, an acquisition, entry into a new market, or anything else. Researchers at Deloitte point out that buybacks and dividends have soared as a share of GDP, whereas investment in equipment and infrastructure has remained unchanged. And new research by Germán Gutiérrez and Thomas Philippon of New York University suggests growing business concentration, a lack of competition, and short-term thinking on the part of investors have all contributed to firms “spend[ing] a disproportionate amount of free cash flows buying back their shares,” fostering an environment of “investment-less growth.”
Then there is the effect on workers. Chief executive officers are the workers who benefit the most from buybacks, Milani and Tung argue, given that they are often primarily compensated with stock. On the other hand, salaried, hourly wage, and contract employees generally get nothing when companies buy their own shares. With the purchasing power of the minimum wage low, unions all but defunct in the private sector, and less and less competition among employers, workers have no recourse to demand more money, even if there is plenty to be distributed to them. Buybacks have perhaps thus helped stoke the extraordinary levels of income and wealth inequality the country has seen in the past 30 years, and particularly since the Great Recession. (Milani and Tung are careful not to draw a causal relationship between stagnant worker pay and rising buybacks, but other analysts have.)
Corporate executives are making way more money than anybody reports
Both by increasing inequality and reducing corporate investment, and thus productivity gains, buybacks might be bad for the overall economy, too. A high-inequality economy is one with less consumer spending and demand across the board, thus one with a lower GDP. A low-investment economy is a more sclerotic and less innovative one, and thus one with a lower GDP.
The growth of buybacks and growing research on the perils they pose has increased interest in regulatory or legal action to bar or limit them. Tung and Milani argue that companies should be required, as they were before the 1982 rule change, to provide dividends rather than purchase shares with their cash. “Issuing cash dividends (regular or special) has a less predictable and manipulative impact on a company’s stock price—and thus is less prone to gaming by executives or activist investors for their own gain,” they write. “Dividends also do not have the same potential as buybacks to mask the market and balance sheet impacts of increasing executives’ stock-based compensation.”
Democratic Senators Elizabeth Warren of Massachusetts, Tammy Baldwin of Wisconsin, Cory Booker of New Jersey, and Chris Van Hollen of Maryland, among other legislators, have also put forward legislation targeting the practice, raising the prospect that the rules could change if and when Democrats take back power. “The surge in corporate buybacks is driving wealth inequality and wage stagnation in our country by hurting long-term economic growth and shared prosperity for workers,” Baldwin said in a release. “We need to rewrite the rules of our economy so it works better for workers and not just those at the top.”
In the meantime, corporate boards are poised to spend hundreds of billions more on their own shares, benefiting executives along with the mostly wealthy Americans who own stock. Just this week, Caterpillar, for instance, said it plans to spend $1 billion buying back shares in the latter half of this year, before kicking off a new $10 billion round on buybacks starting in January. It is also in the midst of laying off hundreds of workers.
|Posted by Jerrald J President on August 10, 2018 at 7:45 PM||comments (0)|
This means Grandma and Grandpa's Medicaid/Social Security Check and all other social programs they paid into gets the AX. By JJP
Why America’s return to $1 trillion deficits is a big problem for you
The federal government is on track to have a $1 trillion deficit in 2020 — and to continue running yawning deficits for years to come, the nonpartisan Congressional Budget Office predicted Monday.
It’s a report that should make Americans concerned, especially younger ones.
On a basic level, this means the U.S. government is spending way more money than it brings in. This is not a new problem. The United States has been running a deficit every year since 2002, but the situation is about to get really ugly. The country has never run this high of a deficit during good economic times. If spending keeps up at this pace (and there is every indication that it will), President Trump and his successors are going to have less flexibility to pump up the economy during a downturn or even a crisis.
“This is unprecedented,” said Justin Bogie, senior policy analyst on fiscal affairs at the conservative Heritage Foundation.
It doesn’t mean the economy or stock market will crash tomorrow. The United States is able to run such high deficits because the U.S. Treasury turns around and sells U.S. debt to investors around the world. Right now, a lot of people want to buy U.S. government bonds, even though America already has $15 trillion in debt owned by the public. But the problem is no one knows when people might say enough is enough and stop buying U.S. debt — or demand much higher rates of return.
Even if the nightmare scenario doesn’t materialize, deficits are a drag on the economy. Investors opt to buy government debt instead of making the type of private investments that create jobs or raise wages, economists warn.
The White House's spending priorities for 2018 renege on President Trump's many promises to lower the deficit and keep Medicare and Medicaid spending without cuts. (Jenny Starrs/The Washington Post)
Didn’t Obama run a $1 trillion deficit? Some may recall that the U.S. government ran trillion-dollar deficits each year from 2009 to 2012, but that was during a terrible economic period when America (and much of the world) was trying to climb back from the global financial crisis and ensuing recession. The government spent heavily to try to revive the economy.
Now growth is healthy, unemployment is extremely low (4.1 percent) and confidence is strong. In times like these, the U.S. government has almost always narrowed the budget deficit — or even runs a surplus, as it did from 1998 to 2001, the end of the dot-com boom. But instead of improving the government’s budget situation, Congress is going the opposite direction and adding to it.
“We are running up the national credit card when everything is going our way economically,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. “It shows Congress has lost any will to make hard choices to fix near-record debt levels we’re already facing.”
What it means for you. To underscore how large the debt is getting, the CBO notes that by 2028, the debt held by the public will be at the highest level (as a percent of the U.S. economy) since World War II.
A day of reckoning is likely to come at some point where the United States will have to raise taxes or cut benefits and programs that many people have come to rely on — or some combination of both.
Many Americans under 50 are likely to face some pain from this, and the under-35 population will likely be especially hard-pressed to pay more to the government while getting back far less than their parents and grandparents did. Spending on everything from Social Security to roads, research and schools could potentially decline.
How worried should I be? The U.S. government hasn’t tested that level of debt — where debt held by the public equals the entire size of the U.S. economy — in the modern era. That’s why so many economists, from the left and right, have been warning Congress and the White House to act now before it gets that bad.
“The bigger the debt, the bigger the chances of a fiscal crisis,” CBO Director Keith Hall said Monday. “When do you start to fix a thing like this? The longer you wait, the more draconian the measures have to be to fix the problem. That’s the biggest warning.”
One of the places the U.S. government typically looks at first to cut back on is so-called “discretionary spending,” which means spending on education, housing for the poor, veterans benefits, scientific research, roads and bridges and other infrastructure, etc. The problem is that the CBO forecasts that, a decade from now, America’s interest payments alone will exceed discretionary spending on all nonmilitary items combined. That means it’s going to be harder and harder to find money in the budget to cut because the government can’t stop paying interest (unless it wants to default, which would likely trigger even worse economic consequences).
Why do we have this problem? The United States, like many advanced economies, has an aging population (the share of people over age 65 is double what it was half a century ago). That means more spending on programs for the elderly, such as Social Security, Medicare and Medicaid. It also means fewer workers with jobs who are paying taxes to support all the older Americans. That’s a major driver of the deficits, but on the campaign trail, Trump said he would not touch Social Security or Medicare.
House Speaker Paul D. Ryan (R-Wis.) made a name for himself as a deficit hawk, but now has supported a tax plan and a spending bill that are ballooning the national debt. (Jenny Starrs/The Washington Post)
The government’s other major expenditure is on defense, part of maintaining its military supremacy. The Trump administration has pushed for large increases to military spending, seeking to build it up again after modest declines at the end of the Obama administration.
While Trump campaigned on reducing the debt, he and the GOP-led Congress have made the deficit worse in the past year, according to the CBO calculations. The massive tax cut, especially for corporations, is expected to cut government revenue by $1.3 trillion over the next decade, the CBO says. After taking into account rising interest rates, the tax bill passed in December will cost the country $1.9 trillion over that time period.
Then there’s the budget bill Congress just passed. It increased spending by about 10 percent for both the military (a GOP priority) and domestic programs (a Democratic priority).
The CBO added it up: What Trump and Congress have done since June is “estimated to make deficits $2.7 trillion larger than previously projected” in the next decade, the CBO wrote in its report.
What can be done about it? Various bipartisan coalitions over the years, most notably the Simpson-Bowles panel in 2010, laid out a path to address the debt that was attractive to many centrists: Make most Americans wait longer before they can collect Social Security. Raise taxes a bit (this could be anything from raising the Social Security or Medicare tax to imposing a tax on carbon or a special millionaires tax), and look for ways to trim Medicare and Medicaid spending by striking harder deals with providers and/or limiting some types of treatments.
These are not popular changes. But neither is getting into an economic crisis because the U.S. government has overspent so much for so long. Or facing a situation where millennials and younger generations have to pay off the debts of their parents and grandparents.
The Social Security Trust Fund for older Americans is projected to run out of money in 13 years, according to the latest CBO estimates. After that, the Social Security program will still have some money coming in, but not enough to pay full benefits for everyone. The Highway Trust Fund is expected to go broke by 2022, and the Social Security disability insurance program fund would be insolvent by fiscal year 2025, the CBO says, unless Congress takes action.
Some conservatives have argued for steeper cuts to social programs, while progressives tend to eye big cuts to military spending.
Congress and the Obama administration agreed in 2013 to what was known as “budget sequestration.” The idea was to impose mandatory caps on both social and defense spending that would go in place unless both parties came together on a long-term budget deal. The two sides never reached a deal, and so the caps went into place, driving down deficits during the final years of the Obama era.
Balanced-budget amendment? Another solution that has been floated is a balanced-budget amendment. Republicans in Congress plan to vote on it this week, although almost no one expects it to pass. It’s likely a symbolic vote for some lawmakers who want to try to show they are doing something to rein in the debt.
Many states have these, and there are calls to see if it’s possible to do one at the federal level, although it would require a change to the U.S. Constitution, a difficult process. It would also eliminate some aid to the economy in times of crisis. During and after the Great Recession, many states had to pull back spending sharply, cutting money for schools and, in some cases, having to lay off workers at a time when so many Americans were already struggling to find work. This situation can exacerbate downturns.
While many agree something needs to be done to get America’s budget back to a healthier level, even the so-called “budget hawks” look at the vote this week and shake their heads.
“Every person who supports the balanced budget amendment should be required to actually put forward a budget that balances,” said MacGuineas. “Congress certainly made terrible policy choices in past couple of months, starting with the gallingly irresponsible tax cut.”
|Posted by Jerrald J President on August 10, 2018 at 7:30 PM||comments (0)|
The American people are finally waking up to this corporate scheme to undermine wages. Right to work means, less money PERIOD! By JJP
Missouri Blocks Right-To-Work Law
Voters in Missouri have overwhelmingly rejected a right-to-work law passed by the state's Republican-controlled Legislature that would have banned compulsory union fees — a resounding victory for organized labor that spent millions of dollars to defeat the measure.
With about 98 percent of the precincts reporting, the "no" vote on Missouri's Proposition A, which supported the law, was running about 67 percent, with nearly 33 percent voting "yes."
In 2017, the right-to-work law passed Missouri's Republican Legislature and was signed by then-Gov. Eric Greitens. However, union organizers gathered enough signatures to keep it from going into effect pending the results of a statewide referendum. The rejection of Proposition A effectively kills the law.
"It's a truly historic moment," said Mike Louis, president of the Missouri AFL-CIO. "Tonight we celebrate, but tomorrow we're getting back to work. We're going to take this energy and momentum and build more power for working people across Missouri."
Currently, 27 states and Guam have laws allowing employees in private-sector unionized workplaces to opt out of union membership and union fees.
(In a case involving public-service employees, the U.S. Supreme Court ruled in June that unions cannot require workers to pay union dues or fees.)
As The Associated Press notes, "At issue are so-called fair-share fees, which are less than full dues but are intended to cover unions' nonpolitical costs such as collective bargaining. Unions say it's fair for people to pay the fees, because federal law requires them to represent even those employees who don't join. But supporters of right-to-work laws counter that people should have the right to accept a job without being required to pay a union."
The St. Louis Post-Dispatch reports:
"Voters in rural and urban areas all showed strong support for scrapping the law. In St. Louis City, with 100 percent of precincts reporting, 88 percent of voters landed on the 'no' side.
"Labor-friendly parts of southeast Missouri also showed strong opposition to the law, with more than three-fourths of voters in Iron, Reynolds, St. Francois and Ste. Genevieve counties voting to shoot down right to work."
The Post-Dispatch reports that even deep-red St. Charles County saw nearly 72 percent of voters rejecting the measure.
Missouri went heavily for Donald Trump in the 2016 presidential election and the rejection of right to work — a core Republican aim — could have wider political implications.
According to the AP, "unions powered an opposition effort that had spent more than $15 million as of late July, well over three times as much as various groups that support right-to-work. Advertisements generally have focused on economics, with supporters claiming right-to-work would lead to more jobs and opponents claiming it would drive down wages."
|Posted by Jerrald J President on August 10, 2018 at 7:20 PM||comments (0)|
This list is why America is hated globally. By JJP
Overthrowing other people’s governments: The Master List By William Blum
Instances of the United States overthrowing, or attempting to overthrow, a foreign government since the Second World War.
(* indicates successful ouster of a government)
China 1949 to early 1960s
East Germany 1950s
Iran 1953 *
Guatemala 1954 *
Costa Rica mid-1950s
British Guiana 1953-64 *
Iraq 1963 *
North Vietnam 1945-73
Cambodia 1955-70 *
Laos 1958 *, 1959 *, 1960 *
Ecuador 1960-63 *
Congo 1960 *
Brazil 1962-64 *
Dominican Republic 1963 *
Cuba 1959 to present
Bolivia 1964 *
Indonesia 1965 *
Ghana 1966 *
Chile 1964-73 *
Greece 1967 *
Costa Rica 1970-71
Bolivia 1971 *
Australia 1973-75 *
Angola 1975, 1980s
Portugal 1974-76 *
Jamaica 1976-80 *
Chad 1981-82 *
Grenada 1983 *
South Yemen 1982-84
Fiji 1987 *
Nicaragua 1981-90 *
Panama 1989 *
Bulgaria 1990 *
Albania 1991 *
Afghanistan 1980s *
Yugoslavia 1999-2000 *
Ecuador 2000 *
Afghanistan 2001 *
Venezuela 2002 *
Iraq 2003 *
Haiti 2004 *
Somalia 2007 to present
Honduras 2009 *
Libya 2011 *
Ukraine 2014 *
|Posted by Jerrald J President on August 10, 2018 at 7:15 PM||comments (0)|
Those tax cuts are working just fine America aren't they? By JJP
6 in 10 Americans don't have $500 in savings
If you were suddenly hit with a $500 unexpected bill, would you be able to cover it?
If the answer is no, you're not alone.
Nearly six in 10 Americans don't have enough savings to cover a $500 or $1,000 unplanned expense, according to a new report from Bankrate.
Only 41% of adults reported having enough in their savings account to cover a surprise bill of this magnitude. A little more than 20% said they would put it on a credit card, the report said, while 20% would cut their spending and 11% would turn to friends and family for financial assistance.
"This is a persistent American problem of how you should handle your finances and spending," said Jill Cornfield, retirement analyst for Bankrate.
But at least the number has improved. Last year, only 37% of Americans reported having enough savings to cover an expense of $500 or more.
Millennials were the most financially prepared to handle monetary headwinds with 47% of those aged 18-29 saying they could dip into savings to cover an unplanned expense, a substantial increase from 33% in 2014.
Personal finance experts tend to stress the importance of having an emergency fund to cover unanticipated expenses to avoid long-term financial damage.
"If you aren't set up to tap cash for something, it can derail you financially if you put it on credit card," said Cornfield. "The original expense can bloom because of interest."
Almost half of the 1,003 adults surveyed reported they or a family member faced a major financial expenditure in the past year.
"If you are human, have a pet, kids, a house or a place to live, something is going to happen that will cost you money," said Cornfield.
Creating a cash cushion can seem like an unrealistic task, especially for those living paycheck to paycheck. But Cornfield said there's usually some wiggle room in a budget to cut back.
"There are ways to track your spending and look where your money is going and find the holes and gaps," she said. "There are places you can cut back: daily coffee, alcohol, vacations, some people take several vacations, maybe cut back on one," said Cornfield.
|Posted by Jerrald J President on August 10, 2018 at 7:10 PM||comments (0)|
But when you turn on your idiot box(Television) your told the economy is doing GREAT. By JJP
Only 39% of Americans have enough savings to cover a $1,000 emergency
Whether it's a broken water heater, an unexpected medical bill or a car wreck, emergencies happen to everyone. But a startling number of Americans are unprepared to cope with them, money-wise.
According to Bankrate's latest financial security index survey, 34 percent of American households experienced a major unexpected expense over the past year. However, only 39 percent of survey respondents said they would be able to cover a $1,000 setback using their savings.
"While tapping savings to pay off an emergency was the most common response, more than a third of Americans would sink into one type of debt or another, potentially harming their financial security," Bankrate says in the report.
Using a credit card was the second most popular answer, with 19 percent of respondents saying they'd deal with an emergency with plastic and pay it off over time.
The numbers aligned with respondents' annual incomes. "Lower wage earners, those making less than $30,000 a year, were twice as likely to use some form of borrowing than savings, while households making more than $50,000 were more apt to use cash," Bankrate says.
A similar 2016 GOBankingRates survey found that 69 percent of Americans had less than $1,000 in total savings and 34 percent had no savings at all.
The simple solution to keep an unexpected expense from bankrupting you or putting you into debt is to build an emergency fund. But that doesn't always take precedence as Americans focus on staying on top of bills, paying off debt and working toward other financial goals.
However, even if you're in the red, it's still smart to put some money away. Personal finance expert Dave Ramsey says building a $1,000 emergency fund is the first "baby step" toward getting free from debt, because something is always bound to go wrong, no matter how careful you are.
"Car blows up. Transmission goes out. You bury a loved one. Grown kids move home again. Life happens, so be ready," Ramsey writes in "The Total Money Makeover." "This is not a surprise."
Building a solid emergency fund first is crucial because it prevents a twist in the track from completely derailing the journey, Ramsey explains.
"I discovered that people would stop their whole Total Money Makeover because of an emergency — they felt guilty that they had to stop debt reducing to survive," he writes. "If you use debt after swearing off it, you lose the momentum to keep going."
Although the $1,000 cushion is a good start, most experts recommend socking away at least three to six months' worth of living expenses in a fully funded rainy day account.
And Suze Orman, financial expert and former CNBC host, pushes for even more. Orman recommends putting away between eight and 12 months worth of living expenses to feel truly secure.
"Go back to 2007… You lost your job, you lost everything, you were working on this tech thing and all the startups went down," she said at the eMerge Americas conference in 2017. "Nobody had any money to invest, nobody wanted to touch anything, nobody wanted to IPO because the markets were going down and you couldn't find anything to do. Think it took you just three months to find another job? Think it took you six months to find another job?"
She goes on: "It's not just about the economy. What if you get sick? What if you're hit by a car? What if something happens crazy in this world? We live in the craziest world I've ever seen in my life right now. And the only way you can take craziness out of that if for you to make yourself secure."
|Posted by Jerrald J President on August 10, 2018 at 6:55 PM||comments (0)|
The Chickens are Coming Home Too Roost! By JJP
‘Too Little Too Late’: Bankruptcy Booms Among Older Americans
For a rapidly growing share of older Americans, traditional ideas about life in retirement are being upended by a dismal reality: bankruptcy.
The signs of potential trouble — vanishing pensions, soaring medical expenses, inadequate savings — have been building for years. Now, new research sheds light on the scope of the problem: The rate of people 65 and older filing for bankruptcy is three times what it was in 1991, the study found, and the same group accounts for a far greater share of all filers.
Driving the surge, the study suggests, is a three-decade shift of financial risk from government and employers to individuals, who are bearing an ever-greater responsibility for their own financial well-being as the social safety net shrinks.
The transfer has come in the form of, among other things, longer waits for full Social Security benefits, the replacement of employer-provided pensions with 401(k) savings plans and more out-of-pocket spending on health care. Declining incomes, whether in retirement or leading up to it, compound the challenge.
Cheryl Mcleod of Las Vegas filed for bankruptcy in January after struggling to keep up with her mortgage payments and other expenses. “I am 70, and I am working for less money than I ever did in my life,” she said. “This life stuff happens.”
As the study, from the Consumer Bankruptcy Project, explains, older people whose finances are precarious have few places to turn. “When the costs of aging are off-loaded onto a population that simply does not have access to adequate resources, something has to give,” the study says, “and older Americans turn to what little is left of the social safety net — bankruptcy court.”
“You can manage O.K. until there is a little stumble,” said Deborah Thorne, an associate professor of sociology at the University of Idaho and an author of the study. “It doesn’t even take a big thing.”
The forces at work affect many Americans, but older people are often less able to weather them, according to Professor Thorne and her colleagues in the study. Finding, and keeping, one job is hard enough for an older person. Taking on another to pay unexpected bills is almost unfathomable.
Bankruptcy can offer a fresh start for people who need one, but for older Americans it “is too little too late,” the study says. “By the time they file, their wealth has vanished and they simply do not have enough years to get back on their feet.”
The Gift of Menopause
The data gathered by the researchers is stark. From February 2013 to November 2016, there were 3.6 bankruptcy filers per 1,000 people 65 to 74; in 1991, there were 1.2.
Bankruptcy filings per 1,000 people, by age
Source: The Federal Reserve’s survey of consumer finances, via the Consumer Bankruptcy Project
Not only are more older people seeking relief through bankruptcy, but they also represent a widening slice of all filers: 12.2 percent of filers are now 65 or older, up from 2.1 percent in 1991
The jump is so pronounced, the study says, that the aging of the baby boom generation cannot explain it.
Although the actual number of older people filing for bankruptcy was relatively small — about 100,000 a year during the period in question — the researchers said it signaled that there were many more people in financial distress.
“The people who show up in bankruptcy are always the tip of the iceberg,” said Robert M. Lawless, a law professor at the University of Illinois and another author of the study.
The next generation nearing retirement age is also filing for bankruptcy in greater numbers, and the average age of filers is rising, the study found.
Given the rate of increase, Professor Thorne said, “the only explanation that makes any sense are structural shifts.”
Ms. Mcleod said she had managed to get by for a while after separating from her husband several years ago. Eventually, though, she struggled to make ends meet on her income alone, and she fell behind on her mortgage payments.
She collects a small Social Security check and works at an adult day care center for people with intellectual disabilities and mental health problems. For $8.75 an hour, she makes sure clients participate in daily activities, calms them when they are irritated and tries to understand what they need when they have trouble expressing themselves.
“When I moved here from Los Angeles, I was wondering why all of these older people were working in convenience stores and fast-food restaurants,” she said. “It’s because they don’t make enough in retirement to support themselves.”
Ms. Mcleod said she hoped that filing for bankruptcy would help her catch up on her mortgage so she could stay in her home. “I am too old to move out of here,” she said. “I am trying to stay stable.”
Income ranges in thousands
For about one in three older people who receive Social Security benefits, their monthly check accounts for 90 percent of their income, according to the Social Security Administration. Spending by those over 65 by income is based on Medicare beneficiaries, most of whom are 65 and over; the remainder are younger and disabled. | Source: Kaiser Family Foundation
The bankruptcy project is a long-running effort now led by Professor Thorne; Professor Lawless; Pamela Foohey, a law professor at Indiana University; and Katherine Porter, a law professor at the University of California, Irvine. The project — which is financed by their universities — collects and analyzes court records on a continuing basis and follows up with written questionnaires.
Their latest study —which was posted online on Sunday and has been submitted to an academic journal for peer review — is based on a sample of personal bankruptcy cases and questionnaires completed by 895 filers ages 19 to 92.
The questionnaire asked filers what led them to seek bankruptcy protection. Much like the broader population, people 65 and older usually cited multiple factors. About three in five said unmanageable medical expenses played a role. A little more than two-thirds cited a drop in income. Nearly three-quarters put some blame on hounding by debt collectors.
[The Times’s guide to retirement savings answers your questions about financing life after you stop working.]
The study does not delve into those underlying factors, but separate data provides some insight. The median household led by someone 65 or older had liquid savings of $60,600 in 2016, according to the Employee Benefit Research Institute, whereas the bottom 25 percent of households had saved at most $3,260.
That doesn’t provide much of a financial cushion for a catastrophic health problem. Older Americans typically turn to Medicare to pay their medical bills. But gaps in coverage, high premiums and requirements that patients shoulder some costs force many lower-income beneficiaries to spend more of their own income on those bills, the Kaiser Family Foundation found.
By 2013, the average Medicare beneficiary’s out-of-pocket spending on health care consumed 41 percent of the average Social Security check, according to Kaiser, which also estimated that the figure would rise.
More people are also entering their later years carrying debt. For many of them, at least some of the debt is a mortgage — roughly 41 percent in 2016, compared with 21 percent in 1989, according to an Urban Institute analysis.
And those who are carrying debt into retirement are carrying more than members of earlier generations, an analysis by the Employee Benefit Research Institute found.
Perhaps not surprisingly, the lowest-income households led by individuals 55 or older carry the highest debt loads relative to their income. More than 13 percent of such households face debt payments that equal more than 40 percent of their income, nearly double the percentage of such families in 1991, the employee benefit institute found.
Older Americans’ finances are also being strained by the needs of those around them.
A little more than a third of the older filers who answered the researchers’ questionnaire said that helping others, like children or older parents, had contributed to their seeking bankruptcy protection. Marc Stern, a bankruptcy lawyer in Seattle, said he had seen the phenomenon again and again.
Some parents, Mr. Stern said, had co-signed loans for $10,000 or $20,000 for adult children and suddenly could no longer afford them. “When you are living on $2,000 a month and that includes Social Security — and you have rent and savings are minuscule — it is extremely difficult to recover from something like that,” he said.
Others had co-signed their children’s student loans. “I never saw parents with student loans 20 or 30 years ago,” Mr. Stern said.
“It is not uncommon to see student loans of $100,000,” he added. “Then, you see parents who have guaranteed some of these loans. They are no longer working, and they have these student loans that are difficult if not impossible to pay or discharge in bankruptcy, and these are the kids’ loans.”
Keith Morris, chief executive of Elder Law of Michigan, which runs a legal hotline for older adults, said the prospect of bankruptcy was a regular topic for his callers.
“They worked all of their lives, and did what they were supposed to do,” he said, “and through circumstances like a late-life divorce or a death of a spouse or having to raise grandkids, have put them in a situation where they are not able to make the bills.”
For Lawrence Sedita, a 74-year-old former carpenter now living in Las Vegas, the problems began when he lost his health insurance about two years ago. He said he had been on disability since 1991, when a double pack of 12-foot drywall fell on his head at work.
After his union, the New York City District Council of Carpenters, changed the eligibility requirements for his medical, dental and prescription drug insurance, he lost his coverage.
Mr. Sedita, who has Parkinson’s disease, said his medical expenses had risen exponentially. (A spokesman for the union declined to comment.)
A medication that helps reduce the shaking — a Parkinson’s symptom — rose to $1,100 every three months from $70, Mr. Sedita said. “I haven’t taken my medicine in three months since I can’t afford it,” he added.
He said he and his wife, who has cancer, filed for bankruptcy in June after living off their credit cards for a time. Their financial difficulty, he said, “has drained everything out of me.”
Doris Burke and Alain Delaquérière contributed research. Graphics by Karl Russell.
|Posted by Jerrald J President on August 8, 2018 at 3:50 PM||comments (0)|
As if you thought they where working on your behalf? By JJP
Federal Reserve policies favor the rich
The Federal Reserve's most recent stimulus is expected to boost home prices and the stock market, but what if you're too poor to invest in either?
The Fed unveiled its third round of stimulus last week. The massive bond-buying initiative, called quantitative easing, aims to prop up the economy through a few key channels -- namely the housing market and the stock market.
Both of those channels skew in favor of Americans who are already in solid financial standing, and it seems the wealthier you are, the more you have to gain.
"Quantitative easing is a blunt tool and cannot really target specific areas of the economy, aside from mortgage rates. Even then, it tends to help the wealthy spectrum of the income distribution," said Sung Won Sohn, economics professor at Cal State Channel Islands.
First, by lowering mortgage rates, the Fed hopes to encourage more home sales and ultimately boost home prices. More home equity and less expensive home loans also put more money in consumers' pockets.
But with banks still skittish about lending, only borrowers with the highest credit scores and large down payments can qualify for the lowest rates. That's limited the effects of lower rates on the housing market.
"Because of ongoing restrictions in the supply of mortgage credit to customers with less than perfect credit records, the impact of lower mortgage rates on housing is probably less powerful than normal," said William Dudley, president of the Federal Reserve Bank of New York, in a speech Tuesday.
Only 67% of Americans own their homes, and the number is heavily skewed toward the wealthy. Among the poorest fifth of American households, most are renters. Only 37% own homes, according to Fed data from 2010.
Second, the Fed's low interest rate policies also tend to encourage investors to search for higher yields in stocks or riskier assets, leading to big gains in the stock market. The S&P 500 rallied 25% in the six months after the Fed's previous stimulus plan was announced
That's been a boon for those who have most of their wealth in investments. But only 50% of Americans have stock holdings. Of those earning less than $20,000 a year, only 13% own stocks.
But the Fed's intention isn't to help the rich get richer. The main goal, according to Fed chief Ben Bernanke, is to help the middle class by creating more jobs.
"This is a Main Street policy because what we are about here is trying to get jobs going," Bernanke said at a press conference last week.
"If people feel that their financial situation is better because their 401(k) looks better for whatever reason, their house is worth more, they are more willing to go out and spend, and that's going to provide the demand that firms need in order to be willing to hire and to invest," he said.
|Posted by Jerrald J President on July 29, 2018 at 8:00 AM||comments (0)|
" The median wealth held by black families with a college degree and student loans by the time the head of household is 65 years old, she said, is about $61,000, versus roughly $422,000 for white families under the same circumstances."
White College Graduates Are Doing Great With Their Parents' Money
Higher education alone can't bridge the wealth gap that separates black Americans from their white peers.
The numbers are staggering: White Americans with a college degree are on average three times as wealthy as black Americans with the same credential, and in families whose head of the household is employed, white families have 10 times the wealth of black ones. One estimate on the conservative end suggested that this wealth gap could take two centuries to close.
And the thing about wealth, says Tatjana Meschede, a researcher at the Institute on Assets and Social Policy at Brandeis University, is that it’s “sticky”: It tends to stay with a family. That has serious repercussions for how much money people accumulate over the course of their lives, regardless of whether they attend college—something that is usually thought to make a significant difference financially.
A forthcoming study from Meschede and Joanna Taylor, also a researcher at Brandeis, in the American Journal of Economics and Sociology, makes the point clearly. Building on a 2017 study of theirs that examined wealth accumulation among college graduates—as well as “intergenerational financial transfers,” like when a parent helps a recent college grad out with rent or, say, gives her $1,000 a month to spend on whatever she pleases—the two looked specifically at how family inheritances, which are usually larger and tend to come all at once, factor into building and maintaining wealth.
The two researchers focused specifically on inheritances among families where at least one parent has a college degree. They looked at families like this in order to test the notion that higher education is a great equalizer.
The differences that they found between black and white families were stark. “Among college-educated black families, about 13 percent get an inheritance of more than $10,000, as opposed to about 41 percent of white, college-educated families,” Taylor said in a release announcing the new research. More specifically, white families that receive such an inheritance receive, on average, more than $150,000 from the previous generation, whereas that figure is less than $40,000 for black families.
Meschede and Taylor focused on inheritances of more than $10,000 because, they say, these qualify as “transformative” assets—meaning, they could significantly alter the course of a life. As Mark Huelsman, a policy analyst at Demos, an advocacy group, tweeted earlier this week after seeing Meschede and Taylor’s study, “the average family inheritance to a white college grad can pay off the average undergrad debt balance”—more than $30,000—“and have enough left over for a 20 percent down [payment] on a $575,000 home.” (And that’s assuming the inheritor has student debt to begin with.)
That head start on wealth provides lifelong momentum, Taylor told me in an interview. The median wealth held by black families with a college degree and student loans by the time the head of household is 65 years old, she said, is about $61,000, versus roughly $422,000 for white families under the same circumstances.
Getting a college degree can, in some cases, help close the income gap—meaning annual earnings—and, as I have written, can do wonders for socioeconomic mobility. But the enduring legacy of slavery, and centuries of de jure and de facto segregation have led to a wealth gap that is practically insurmountable. As my colleague Ta-Nehisi Coates wrote in 2014, the wealth gap “puts a number on something we feel but cannot say—that American prosperity was ill-gotten and selective in its distribution.”
There have been proposals, including systems of reparations such as baby bonds for black families that are scaled to family wealth, to get kids started on an equal level. Those ideas seem to be on the right track—a college degree alone certainly can’t make up the difference.
|Posted by Jerrald J President on July 29, 2018 at 7:55 AM||comments (0)|
I wonder why RICO wasn't used on the privately owned "Banking System"; which robbed American citizens in 2008? I think you know the answer. By JJP
New York Gang Prosecutions Use Conspiracy Charges to Criminalize Whole Communities
Defendants like Carletto Allen are not supposed to go to trial. The 23-year old Bronx man was already in jail on a pending gun charge when hundreds of NYPD officers and federal agents from the Department of Homeland Security, the Drug Enforcement Administration, and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives stormed a public housing project in the neighborhood where he lived with his grandmother and arrested dozens of his friends and neighbors.
The April 2016 raid, which authorities boasted was the “largest gang takedown in New York City history,” ended in 88 arrests and 120 indictments on federal conspiracy charges. The defendants — mostly young black and Latino men in their late teens or early 20s, whom police had surveilled for the better part of a decade — were listed in two separate indictments by their names and a variety of street aliases. Prosecutors said they were affiliated with two rival gangs connected to eight homicides that had occurred in the area since 2009, including that of a 92-year-old woman struck in her home by a stray bullet.
Like Allen, several of the defendants in the case were already behind bars at the time of the raid, some serving time after having been convicted in state court of the same crimes now being pursued by federal prosecutors. As The Intercept reported at the time, the Bronx raid, which followed a similar 2014 raid in Manhattan that led to 103 indictments, marked a shift by police and prosecutors toward mass conspiracy cases that see dozens of arrests and indictments quickly resolve in guilty pleas.
Defendants in these kinds of cases, often from New York City’s poorest neighborhoods, can’t afford to hire attorneys. The conspiracy charges they face — in the Bronx case, under the Racketeer Influenced and Corrupt Organizations Act, or RICO, a federal law passed in 1970 to combat the Mafia — are broad and hard to fight, because proving individuals “conspired” with others accused of crimes is easier for prosecutors than proving they committed that crime. Threatened with draconian sentences, almost all defendants in these situations agree to plea deals — usually getting years rather decades in prison, and scoring prosecutors dozens of easy convictions.
“The government doesn’t have to do a lot of heavy lifting to prove that there was an alleged agreement between two people,” said Anthony Posada, supervising attorney with the Community Justice Unit at Legal Aid Society. “I think it’s very telling of the strategy that’s being used,” he added. “By using a statute that has very severe penalties, you sort of do this thing where you overcharge. … Large amounts of bail are set on people. And when you have bail set on you, you are more likely to take a plea, you are more likely to plead guilty to something, rather than to fight the matter.”
Prosecutors rely on that. Trying every single individual charged in connection with a mass raid would take years and cost the government millions. For the system to run efficiently, defendants can’t go to trial, and most don’t. Nationwide, 94 percent of felony convictions at the state level and 97 percent at the federal level are the result of plea bargains.
“Police and prosecutors know that people don’t go to trial and don’t fight these cases,” said Marne Lenox, an attorney at the NAACP Legal Defense and Educational Fund who worked at the Bronx Defenders at the time of the raid. “And for many of these individuals, the risk is far greater than the reward; once you get into federal court, you are facing mandatory minimums.”
Ninety-seven of the 103 individuals charged after the 2014 Manhattan raid — on state charges — entered guilty pleas. Of the 120 defendants charged following the Bronx raid, 110 have pleaded so far. Some 111 defendants had court-appointed attorneys, according to a recent presentation on the Bronx indictments by Babe Howell, a professor at the CUNY School of Law, and Priscilla Bustamante, a graduate student in critical psychology at CUNY Graduate Center. The U.S. Attorney’s Office for the Southern District of New York, which brought federal charges against those indicted in the Bronx raid, declined to comment.
Eastchester Gardens in the Bronx on June 22, 2016. The public housing complex was raided by an array of local and federal agencies in April 2016.Photo: Elijah Hurwitz for The Intercept
Resisting the Pressure to Plea Out
Despite the pressure to plead guilty, Allen didn’t stick to the script. He is one of only two defendants in the Bronx case who chose to go trial. The second, Donque Tyrell, was tried last month on seven charges, including “aiding and abetting murder in aid of racketeering.” On Wednesday, a jury convicted him on all counts.
As Allen learned, tempting fate — and challenging the system — comes at a premium.
According to John Kenney, one of Allen’s attorneys, at the time of the raid, Allen had been in jail for just over a year after he was caught selling small quantities of marijuana to a police informant — “nickel bags on a corner,” as Kenney told The Intercept. Officers who were watching the transaction pulled Allen out of the car he was sitting in and said they found a gun in his pocket. Allen admitted that he sold marijuana but testified that the gun was in the pocket of a jacket on the car’s back seat, and not his. The officer who testified about the gun had substantiated complaints with the NYPD’s Internal Affairs Bureau and the Civilian Complaint Review Board, and he had been sued at least six times over excessive force, false imprisonment, and malicious prosecution, settling each time — but prosecutors successfully blocked the defense from discussing the officer’s history at trial, on the grounds that it did not impact his “credibility.”
After the raid, Allen was moved to a federal jail downtown and saw his pending state charges balloon into federal counts of racketeering narcotics conspiracy, narcotics possession, and a firearms offense. In the mass indictment, his name was listed among dozens of “members and associates” of the “Big Money Bosses” gang, which prosecutors described as a “criminal organization” responsible for a string of serious crimes, including murder.
As they did following similar raids in other communities, prosecutors held a meeting with residents arguing that all the arrests were justified. “The lead prosecutor on the case would come out with the other detectives that investigated the matter, and they’d speak to community members in a very brief, sort of matter-of-fact way,” said Posada, whose group held forums for communities impacted by the raids. “This is what we did, and we did it in a very surgical way, and we refer to this as precision policing: We are precise in what we do so that we only get the worst and the worst out of the neighborhood.”
“The NYPD and the District Attorney’s Office tout these raids and the resulting large-scale indictments as an effective policing tool,” said Lenox. “But in truth, that’s an incredibly sanitized narrative that ignores the substantial harm that these takedowns inflict on communities of color and exaggerates the danger that arrested individuals pose to society.”
“The majority of people who are arrested in these takedowns are actually accused of having committed only low-level offenses and being engaged in low-level conduct,” she added. “But prosecutors rely on these conspiracy statutes to demonize individuals who commit petty offenses by implicating them in violent crime.”
NYPD and the FBI bust an alleged gang-related drug ring following a massive police raid at three public housing developments across East Harlem on April 19, 2016. Large raids of public housing complexes have become a staple of New York City policing.Photo: Marcus Santos/NY Daily News via Getty Images
Residents strongly objected to the narrative painted by prosecutors in the Bronx. Everyone living in a housing project was “associated” to everyone else, they argued, and the indictments accused dozens of people of crimes committed by a handful. “Are you going to lock up every black boy or Spanish boy who lives around here?” the mother of two young men arrested in the raid told The Intercept at the time. Still, with nearly all defendants taking pleas, nobody could challenge prosecutors’ allegations in court.
Like dozens of the men charged with him, Allen was offered a deal that would grant him close to time served — about three years at the time of the offer, according to Kenney. The attorney tried to convince him that taking the plea was in his best interest, but Allen rejected the idea and asked for a new attorney. In court, again over his attorneys’ objections, he insisted on testifying.
But if Allen had hoped trial would give him an opportunity to challenge the premise of a mass gang conspiracy, he was mistaken. “They didn’t try that case,” said Kenney. “They dropped everything except the marijuana and the gun.”
“They said, We’re not going to pursue murder, and all these other things, and narcotics sales except marijuana. We’re not talking about bank robbery; we’re not going to talk about all these things that were part of the conspiracy,” he added. “They just struck it from the indictment, so we never really got to the point.”
“They didn’t even allege he was a member of the gang,” he added, “which means they didn’t have any evidence.”
In their closing remarks, Allen’s attorneys tried to distinguish between the crimes he was accused of and the unproven allegations of a conspiracy, the very existence of which was never tested in court. “There is no evidence that you can rely upon … to suggest that he behaved in any way, shape, or form to promote the activities of that group in whatever shape or form that so-called BMB group existed,” attorneys told the jury, according to court transcripts. “Is it a [crime] to take a photograph that shows up on Facebook with a classmate of yours or a schoolmate of yours? Does that make him a member of a conspiracy?”
In the end, Allen was convicted of racketeering conspiracy, narcotics conspiracy, narcotics distribution, and a firearms offense. He faces up to a decade in prison, with a mandatory minimum of five years.
Allen, who is incarcerated at the Metropolitan Correctional Center in Manhattan while awaiting sentencing, could not be reached for comment. His mother, Martha Allen, declined to talk about the case. “He gets slammed for the audacity of asking for his trial,” said Howell, the CUNY professor, who has studied the case. “If the police brought Carletto Allen all by himself to the federal prosecutor and said, We want to prosecute him for having a gun while selling marijuana in the street, they would look at this and say, That is not a federal case.”
The irony of Allen facing up to a decade in federal prison in connection with an incident stemming from a marijuana sale is that legalization is gaining fast traction in New York state and has become a central issue in the upcoming gubernatorial election. In New York City, where black and brown residents are arrested for marijuana possession at 10 times the rate of white residents, Mayor Bill de Blasio recently ordered police to stop arresting people for smoking marijuana in public. But the “gang” label — which critics say police and prosecutors use indiscriminately and without transparent criteria — precludes sympathy.
“The irony is that some people are taken aback by Trump’s comments about gang members as animals,” Josmar Trujillo, an organizer with the Coalition to End Broken Windows, told The Intercept referring to the president’s comment about members of the MS-13 gang. “In the most progressive city in America, the policies that actually treat people like animals and dehumanize them happen every day.”
“Mayor de Blasio has made gang policing one of his cornerstones of criminal justice reform; he talks about precision policing alongside boasts about the number of stop-and-frisks going down,” Trujillo added. “What he doesn’t mention is that this is exactly the point: He has shifted from low-level street harassment to high-level, complex, federally assisted arrests and prosecutions that actually much more impact and devastate communities of color.”
“I don’t see the point of bringing a RICO case against a guy who’s selling marijuana,” said Kenney, Allen’s attorney, calling his client’s ordeal “a case of massive overcharging.”
Still, he warned of the risks that defendants incur when challenging the system. “The reason people plead guilty is because it makes sense.”
|Posted by Jerrald J President on July 29, 2018 at 7:50 AM||comments (0)|
All around America same ole song, "DEBT"! By JJP
Mortgage, Groupon and card debt: how the bottom half bolsters U.S. economy
By almost every measure, the U.S. economy is booming. But a look behind the headlines of roaring job growth and consumer spending reveals how the boom continues in large part by the poorer half of Americans fleecing their savings and piling up debt.
A Reuters analysis of U.S. household data shows that the bottom 60 percent of income-earners have accounted for most of the rise in spending over the past two years even as the their finances worsened - a break with a decades-old trend where the top 40 percent had primarily fueled consumption growth.
With borrowing costs on the rise, inflation picking up and the effects of President Donald Trump's tax cuts set to wear off, a negative shock - a further rise in gasoline prices or a jump in the cost of goods due to tariffs - could push those most vulnerable over the edge, some economists warn.
That in turn could threaten the second-longest U.S. expansion given consumption makes up 70 percent of the U.S. economy's output.
To be sure, the housing market is far from the dangerous leverage reached in 2007 before the crash. With unemployment near its lowest since 2000 and job openings at record highs, people may also choose to work even more hours or take extra jobs rather than cut back on spending if the money gets tight.
In fact, a growing majority of Americans says they are comfortable financially, according to the Federal Reserve's report on the economic well-being of U.S. households published in May and based on a 2017 survey.
Yet by filtering data on household finances and wages by income brackets, the Reuters analysis reveals growing financial stress among lower-income households even as their contribution to consumption and the broad economy grows.
The data shows the rise in median expenditures has outpaced before-tax income for the lower 40 percent of earners in the five years to mid-2017 while the upper half has increased its financial cushion, deepening income disparities. (Graphic: tmsnrt.rs/2LdUMBa )
It is this recovery's paradox.
A hot job market and other signs of economic health encourage rich and poor alike to spend more, but tepid wage growth for many middle-class and lower-income Americans means they need to dip into their savings and borrow more to do that.
As a result, over the past year signs of financial fragility have been multiplying, with credit card and auto loan delinquencies on the rise and savings plumbing their lowest since 2005.
Myna Whitney, 27, a certified medical assistant at Drexel University's gastroenterology unit in Philadelphia, experienced that firsthand.
Three years ago, confident that a steady full-time job offered enough financial security, she took out loans to buy a Honda Odyssey and a $119,000 house, where she lives with her mother and aunt.
Since then she has learned that making $16.47 an hour - more than about 40 percent of U.S. workers - was not enough.
"I was dipping into my savings account every month to just make all of the payments." Whitney says. With her savings now down to $900 from $10,000 she budgets down to toilet paper and electricity. Cable TV and the occasional $5 Groupon movie outings are her indulgences, she says, but laughs off a question whether she dines out.
"God forbid I get a ticket, or something breaks on the car. Then it's just more to recover from."
Stephen Gallagher, economist at Societe Generale, says stretched finances of those in the middle dimmed the economy's otherwise positive outlook.
"They are taking on debt that they can't repay. A drop in savings and rise in delinquencies means you can't support the (overall) spending," he said. An oil or trade shock could lead to "a rather dramatic scaling back of consumption," he added.
Some economists say that without the $1.5 trillion in tax cuts enacted in January spending, which has grown by around 3 percent a year over the past few years, could already be stalling now.
In the past, rising incomes of the upper 40 percent of earners have driven most of the consumption growth, but since 2016 consumer spending has been primarily fueled by a run-down in savings, mainly by the bottom 60 percent of earners, according to Oxford Economics.
Yet it is the first time in two decades that lower earners made a greater contribution to spending growth for two years in a row.
"It's generally really hard for people to cut back on expenses, or on a certain lifestyle, especially when the context of the economy is actually really positive," said Gregory Daco, Oxford's chief U.S. economist. "It's essentially a weak core that makes the back of the economy a bit more susceptible to strains and potentially to breaking."
JOBS NOT RAISES
While the Fed expects the labor market to get even hotter this year and next, policymakers have been perplexed that wages do not reflect that.
With inflation factored in, average hourly earnings dropped by a penny in May from a year ago for 80 percent of the country's private sector workers, including those in the vast healthcare, fast food and manufacturing industries, Bureau of Labor Statistics figures show.
"It stinks," says Jennifer Delauder, 44, who runs a medical lab at Huttonsville Correctional Center in West Virginia. In seven years her hourly wage has risen by about $2 to $14.
She took on two part-time jobs to help pay rent, utilities and a student loan. But she still sometimes trims her weekly $15 grocery budget to make ends meet, or even gathers broken fans, car parts, and lanterns to sell as scrap metal. A $2,000 hospital bill early this year wiped out her savings.
Even so, Delauder, a grandmother, recently signed papers for a mortgage of up to $150,000 on a house. "I'm paying rent for a house. I might as well pay for a house that I own," she said.
Hourly wages for lower- and middle-income workers rose just over 2 percent in the year to March 2017, compared with about 4 percent for those near the top and bottom, while spending jumped by roughly 8 percent.
That reflects both higher costs of essentials such as rent, prescription drugs and college tuition but also some increased discretionary spending, for example at restaurants.
Economists say one symptom of financial strain was last year's spike in serious delinquencies on U.S. credit card debt, which many poorer households use as a stop-gap measure. The $815-billion market is not big enough to rattle Wall Street, but could be an early sign of stress that might spread to other debt as the Fed continues its gradual policy tightening.
More borrowers have also been falling behind on auto loans, which helped bring leverage on non-mortgage household debt to a record high in the first quarter of this year.
While painting a broadly positive picture, the Fed's well-being survey also noted that one in four adults feared they could not cover an emergency $400 expense and one in five struggled with monthly bills. This month the central bank reported to Congress that rising delinquencies among riskier borrowers represented "pockets of stress."
That many Americans lack any financial safety net remains a concern, New York Fed President John Williams told Reuters in an interview last month. "Even though the overall picture is pretty good, pretty solid, or strong," he said, "this is a problem that continues to hang over half of our country."
|Posted by Jerrald J President on July 29, 2018 at 7:45 AM||comments (0)|
Look in the mirror America, and ask yourself. Did my wages go up? By JJP
Here's why wages in America have been going nowhere
The unemployment rate has fallen below 4%.
But real average real wages of private sector workers saw almost no growth over the last year.
More widespread labor shortages that put upward pressure on wages would be welcome for workers.
Despite an unemployment rate at 4.1 percent or less since last October, wage growth has been anemic. In fact, over the last year, the average real wage of private sector workers saw no growth at all. While the total lack of growth in inflation-adjusted (real) wages over the last year is due in part to an increase in energy prices that is likely temporary, the slow real wage growth we've seen in recent years is mostly driven by nominal wages failing to rise quicklyeven in the face of low unemployment.
Some have posited that our far-less-than-stellar wage growth right now could be due to workers not having the skills employers need. But that idea has the logic backwards. When employers can't find workers with the skills they need at the wages they are offering, they will raise wages in order to attract qualified workers-if employers can't find the workers they need among the unemployed, they will offer higher wages in an attempt to poach needed workers from other firms, who will then raise wages in an attempt to keep their workers, and so on. In other words, if there are skills shortages, we should see signs of faster wage growth for workers with needed skills. This fast wage growth for skilled workers should push up average wages, not weigh them down. Since we continue to see anemic average wage growth, not just slow wage growth for select groups of workers, it's clear that there is not a widespread shortage of the types of workers (i.e., those with the right skills) that employers need.
But we certainly hear widespread employer complaints about not being able to find workers. Why? One reason is monopsony power in the U.S. labor market. There is a lot of evidence that many firms have monopsony power, either because of a limited number of buyers of labor or other sources beyond labor market concentration. When firms have monopsony power, they are able to pay workers less than what their work is "worth," i.e. less than their marginal product. But a key dynamic of monopsony power is that even though monopsonists would like to hire more workers, the low wages they offer mean they can't attract more workers unless they pay more. That is, it is a normal state of affairs for a firm with monopsony power to wish they could hire more workers at the wages they are offering, but to be unable to attract additional workers because their wages are too low. So when a firm with the power to set wages below a workers' marginal product complains about not being able to find workers at the wages they are offering, it's useful to remember that they are choosing to keep wages low in order to increase profits-which remain high as a share of corporate sector income-and could get more workers by simply raising wages. And importantly, when firms with monopsony power complain about not being able to find workers, it is not adequate evidence of a skills shortage.
What would be good evidence of a skills shortage? The footprint of a bona fide shortage of workers with certain skills is a low number of available workers with those skills combined with unusually strong wage growth for workers with those skills. The table below shows real wage growth over the last year by occupation. Legal occupations are the only occupations that come close to potentially hinting at a shortage, with wage growth of 3.7 percent over the last year and an unemployment rate of less than 2 percent. Computer and mathematical science occupations, which require skills that are often mentioned in conversations about skills shortages, do have a relatively low unemployment rate, at 2.3 percent, but have seen abysmal wage growth, at less than 1 percent over the last year. No widespread shortage there. Even construction, where anecdotes of labor shortages have been persistent in journalistic accounts, shows no evidence of widespread shortages-real wage growth in construction actually fell over the last year.
The story doesn't change when looking by geographic area. We broke down the above table of 22 occupation categories by the nine Census divisions-resulting in 198 occupation/division cells (about as small of cells as CPS sample sizes allow). The scatterplot below shows the unemployment rate and wage growth of these occupation/division cells.
To pick arbitrary-but-reasonable cut-offs for potential labor shortages, we singled out (in red) occupation/division cells that had an unemployment rate of less than 2 percent and wage growth greater than 4 percent, and also singled out cells with wage growth of 3 percent or more if their unemployment rate was less than 1.5 percent, and cells with unemployment rates of up to 3 percent if their wage growth was at least 10 percent. There are only 13 cells that fit these definitions, comprising just 4.5 percent of total employment. They include: legal occupations in the West South Central and South Atlantic divisions; management occupations in the East South Central, Mountain, and West North Central divisions; business and financial operations occupations in the East South Central division; protective service occupations in the West North Central division; computer and mathematical science occupations in the Mountain division; community and social service occupations in the West North Central division; healthcare practitioner and technical occupations in the West North Central division; arts, design, entertainment, sports & media occupations in the West North Central and East South Central divisions; and education, training and library occupations in the New England division.
This smattering is what one might expect as a baseline in a system as large and dynamic as the U.S. labor market-there will always be someoccupations in some places where there are not enough workers with the right skills. The key question is whether it is happening at a rate that is cause for thinking that the overall economy really is running hard into labor supply constraints.
Right now it's the opposite situation-and that's a genuine problem. Remember, while labor shortages may be a negative for firms, they are a clear win for workers, since they lead to wage increases. Right now there is scant legitimate evidence of anything but isolated concerns about scarce labor, but in today's environment of unusually weak wage growth, somewhat more widespread labor shortages that put upward pressure on wages would in fact be a welcome development.
|Posted by Jerrald J President on July 29, 2018 at 7:35 AM||comments (0)|
Per President Trump "Don't believe what you see with your own eyes". By JJP
Why is real wage growth anemic? It’s not because of a skills shortage
Despite an unemployment rate at 4.1 percent or less since last October, wage growth has been anemic. In fact, over the last year, the average real wage of private sector workers saw no growth at all. While the total lack of growth in inflation-adjusted (real) wages over the last year is due in part to an increase in energy prices that is likely temporary, the slow real wage growth we’ve seen in recent years is mostly driven by nominal wages failing to rise quickly even in the face of low unemployment.
Some have posited that our far-less-than-stellar wage growth right now could be due to workers not having the skills employers need. But that idea has the logic backwards. When employers can’t find workers with the skills they need at the wages they are offering, they will raise wages in order to attract qualified workers—if employers can’t find the workers they need among the unemployed, they will offer higher wages in an attempt to poach needed workers from other firms, who will then raise wages in an attempt to keep their workers, and so on. In other words, if there are skills shortages, we should see signs of faster wage growth for workers with needed skills. This fast wage growth for skilled workers should push up average wages, not weigh them down. Since we continue to see anemic average wage growth, not just slow wage growth for select groups of workers, it’s clear that there is not a widespread shortage of the types of workers (i.e., those with the right skills) that employers need.
But we certainly hear widespread employer complaints about not being able to find workers. Why? One reason is monopsony power in the U.S. labor market. There is a lot of evidence that many firms have monopsony power, either because of a limited number of buyers of labor or other sources beyond labor market concentration. When firms have monopsony power, they are able to pay workers less than what their work is “worth,” i.e. less than their marginal product. But a key dynamic of monopsony power is that even though monopsonists would like to hire more workers, the low wages they offer mean they can’t attract more workers unless they pay more. That is, it is a normal state of affairs for a firm with monopsony power to wish they could hire more workers at the wages they are offering, but to be unable to attract additional workers because their wages are too low. So when a firm with the power to set wages below a workers’ marginal product complains about not being able to find workers at the wages they are offering, it’s useful to remember that they are choosing to keep wages low in order to increase profits—which remain high as a share of corporate sector income—and could get more workers by simply raising wages. And importantly, when firms with monopsony power complain about not being able to find workers, it is not adequate evidence of a skills shortage.
What would be good evidence of a skills shortage? The footprint of a bona fide shortage of workers with certain skills is a low number of available workers with those skills combined with unusually strong wage growth for workers with those skills. The table below shows real wage growth over the last year by occupation. Legal occupations are the only occupations that come close to potentially hinting at a shortage, with wage growth of 3.7 percent over the last year and an unemployment rate of less than 2 percent. Computer and mathematical science occupations, which require skills that are often mentioned in conversations about skills shortages, do have a relatively low unemployment rate, at 2.3 percent, but have seen abysmal wage growth, at less than 1 percent over the last year. No widespread shortage there. Even construction, where anecdotes of labor shortages have been persistent in journalistic accounts, shows no evidence of widespread shortages—real wage growth in construction actually fell over the last year.
Real wage growth and unemployment rates, by occupation, 2018
Occupation Year-over-year real wage growth Unemployment rate*
All 1.4% 3.7%
Building & grounds cleaning & maintenance occupations 3.8% 5.7%
Legal occupations 3.7% 1.8%
Arts, design, entertainment, sports & media occs 3.7% 3.5%
Farming, fishing and forestry occupations 3.5% 9.6%
Installation, maintenance and repair occupations 2.8% 3.0%
Sales and related occupations 2.2% 4.2%
Office and administrative support occupations 1.9% 3.8%
Management occupations 1.6% 1.8%
Business and financial operations occupations 1.3% 2.6%
Personal care and service occupations 1.1% 4.6%
Food preparation and serving related occupations 0.8% 6.2%
Computer and mathematical science occupations 0.7% 2.3%
Transportation and material moving occupations 0.6% 5.3%
Education, training and library occupations 0.3% 2.9%
Production occupations 0.3% 4.3%
Healthcare practitioner and technical occupations 0.0% 1.5%
Construction and extraction occupations -1.1% 6.6%
Architecture and engineering occupations -1.2% 2.0%
Protective service occupations -1.5% 3.0%
Healthcare support occupations -2.2% 3.8%
Community and social service occupations -2.4% 2.3%
Life, physical and social science occupations -3.4% 2.3%
*The unemployment rate by occupation is only calculated for individuals who have previous work experience, which is why it is lower than the headline unemployment rate.
Note: The year-over-year real wage growth is growth between the average of the 12 months from July 2016-June 2017 and the average of the 12 months from July 2017-June 2018. Note that these are different data and time periods than the wage data described in the first paragraph of this post. The unemployment rate is the average of the 12 months from July 2017-June 2018.
The story doesn’t change when looking by geographic area. We broke down the above table of 22 occupation categories by the nine Census divisions—resulting in 198 occupation/division cells (about as small of cells as CPS sample sizes allow). The scatterplot below shows the unemployment rate and wage growth of these occupation/division cells.
Real wage growth and unemployment rates, by division and occupation, 2018
Division Occupation Unemployment rate Wage growth
East South Central Management occupations 1.4% 10.4%
West North Central Community and social service occupations 1.2% 4.1%
West South Central Legal occupations 1.9% 23.3%
East South Central Business and financial operations occupations 1.5% 8.7%
Mountain Management occupations 1.7% 8.1%
West North Central Protective service occupations 1.5% 6.8%
Mountain Computer and mathematical science occupations 1.7% 6.0%
South Atlantic Legal occupations 1.5% 5.6%
West North Central Healthcare practitioner and technical occupations 0.9% 3.3%
West North Central Management occupations 1.2% 3.1%
West North Central Arts, design, entertainment, sports & media occs 2.4% 21.9%
New England Education, training and library occupations 2.6% 13.7%
East South Central Arts, design, entertainment, sports & media occs 2.5% 10.5%
South Atlantic Management occupations 1.3% 1.0%
West South Central Healthcare practitioner and technical occupations 1.4% 0.8%
East North Central Healthcare practitioner and technical occupations 1.1% 0.3%
New England Healthcare practitioner and technical occupations 1.0% -0.1%
East North Central Legal occupations 1.3% -0.3%
Pacific Computer and mathematical science occupations 1.3% -1.5%
West North Central Architecture and engineering occupations 1.4% -6.7%
East South Central Community and social service occupations 1.3% -7.3%
Middle Atlantic Life, physical and social science occupations 1.4% -13.3%
East South Central Life, physical and social science occupations 0.4% -13.6%
Middle Atlantic Architecture and engineering occupations 1.9% 4.0%
East North Central Management occupations 1.9% 3.7%
Pacific Legal occupations 1.7% 3.1%
East South Central Healthcare practitioner and technical occupations 1.6% 2.6%
South Atlantic Healthcare practitioner and technical occupations 1.5% 1.6%
Middle Atlantic Healthcare practitioner and technical occupations 1.9% 1.2%
New England Protective service occupations 1.6% 1.0%
New England Management occupations 1.8% -0.1%
West North Central Healthcare support occupations 1.8% -0.3%
East North Central Business and financial operations occupations 1.7% -0.5%
East South Central Legal occupations 1.5% -0.6%
West North Central Legal occupations 1.7% -1.7%
South Atlantic Architecture and engineering occupations 1.6% -2.0%
East South Central Protective service occupations 2.0% -2.3%
Middle Atlantic Legal occupations 1.7% -2.4%
West South Central Architecture and engineering occupations 2.0% -3.2%
Pacific Healthcare practitioner and technical occupations 1.7% -3.8%
South Atlantic Computer and mathematical science occupations 1.9% -4.0%
New England Life, physical and social science occupations 1.7% -4.7%
New England Architecture and engineering occupations 1.7% -6.5%
Mountain Life, physical and social science occupations 1.6% -6.7%
Mountain Healthcare practitioner and technical occupations 1.7% -7.2%
Pacific Community and social service occupations 1.5% -18.9%
West North Central Life, physical and social science occupations 2.4% 6.3%
South Atlantic Arts, design, entertainment, sports & media occs 2.6% 5.3%
East South Central Installation, maintenance and repair occupations 2.2% 5.1%
West South Central Community and social service occupations 2.2% 4.5%
New England Community and social service occupations 2.3% 4.2%
West South Central Management occupations 2.1% 4.2%
New England Farming, fishing and forestry occupations 6.8% 48.6%
Middle Atlantic Farming, fishing and forestry occupations 10.7% 22.9%
South Atlantic Farming, fishing and forestry occupations 6.2% 22.8%
East North Central Life, physical and social science occupations 3.4% 16.5%
Pacific Arts, design, entertainment, sports & media occs 3.9% 12.0%
Middle Atlantic Personal care and service occupations 6.0% 11.8%
New England Installation, maintenance and repair occupations 3.3% 10.4%
East South Central Building & grounds cleaning & maintenance occupations 7.8% 9.2%
Middle Atlantic Sales and related occupations 4.8% 8.7%
Middle Atlantic Computer and mathematical science occupations 2.8% 7.9%
East North Central Office and administrative support occupations 3.8% 7.5%
Mountain Building & grounds cleaning & maintenance occupations 5.3% 7.0%
Middle Atlantic Community and social service occupations 3.0% 6.9%
East North Central Protective service occupations 2.9% 6.8%
New England Building & grounds cleaning & maintenance occupations 5.0% 6.7%
Middle Atlantic Food preparation and serving related occupations 6.7% 6.7%
West South Central Installation, maintenance and repair occupations 3.0% 6.5%
East North Central Personal care and service occupations 4.5% 5.5%
East North Central Building & grounds cleaning & maintenance occupations 6.9% 5.5%
West North Central Sales and related occupations 2.7% 5.5%
Middle Atlantic Production occupations 3.9% 4.9%
Pacific Building & grounds cleaning & maintenance occupations 4.9% 4.9%
South Atlantic Building & grounds cleaning & maintenance occupations 4.8% 4.7%
Pacific Business and financial operations occupations 3.0% 4.7%
East South Central Food preparation and serving related occupations 7.0% 4.5%
East South Central Sales and related occupations 4.0% 4.5%
South Atlantic Installation, maintenance and repair occupations 3.2% 4.4%
West North Central Computer and mathematical science occupations 2.7% 4.4%
West South Central Sales and related occupations 4.0% 4.4%
East North Central Installation, maintenance and repair occupations 2.8% 4.2%
Pacific Farming, fishing and forestry occupations 13.8% 4.1%
East North Central Community and social service occupations 2.3% 3.2%
South Atlantic Business and financial operations occupations 2.3% 3.1%
New England Legal occupations 3.3% 3.8%
Middle Atlantic Office and administrative support occupations 3.4% 3.4%
Mountain Legal occupations 3.3% 3.4%
West North Central Construction and extraction occupations 8.6% 3.3%
New England Food preparation and serving related occupations 5.7% 3.2%
East North Central Healthcare support occupations 3.6% 3.1%
Pacific Food preparation and serving related occupations 5.6% 3.1%
East North Central Architecture and engineering occupations 2.3% 2.5%
Mountain Education, training and library occupations 2.5% 2.4%
West North Central Business and financial operations occupations 2.4% 2.4%
West North Central Education, training and library occupations 2.6% 2.2%
West North Central Office and administrative support occupations 2.6% 2.0%
Middle Atlantic Education, training and library occupations 2.6% 1.2%
West North Central Installation, maintenance and repair occupations 2.1% 0.6%
South Atlantic Life, physical and social science occupations 2.1% 0.6%
Pacific Architecture and engineering occupations 2.1% -0.4%
West South Central Education, training and library occupations 2.6% -0.5%
New England Healthcare support occupations 2.3% -0.8%
Middle Atlantic Management occupations 2.2% -1.3%
Pacific Management occupations 2.0% -1.4%
Pacific Installation, maintenance and repair occupations 2.5% -2.3%
East South Central Architecture and engineering occupations 2.1% -3.2%
Mountain Business and financial operations occupations 2.4% -3.7%
West South Central Protective service occupations 2.5% -5.8%
Pacific Life, physical and social science occupations 2.3% -7.2%
Middle Atlantic Transportation and material moving occupations 6.1% 2.9%
Middle Atlantic Installation, maintenance and repair occupations 4.8% 2.6%
Pacific Construction and extraction occupations 6.6% 2.6%
East North Central Computer and mathematical science occupations 3.0% 2.5%
East North Central Arts, design, entertainment, sports & media occs 4.7% 2.5%
East South Central Computer and mathematical science occupations 3.9% 2.4%
South Atlantic Office and administrative support occupations 4.2% 2.1%
East South Central Personal care and service occupations 4.5% 2.1%
West North Central Personal care and service occupations 3.3% 2.0%
Pacific Transportation and material moving occupations 4.9% 2.0%
Mountain Arts, design, entertainment, sports & media occs 2.7% 1.9%
West North Central Farming, fishing and forestry occupations 5.6% 1.8%
West South Central Computer and mathematical science occupations 2.6% 1.8%
Mountain Office and administrative support occupations 3.7% 1.7%
South Atlantic Production occupations 4.9% 1.4%
Pacific Office and administrative support occupations 4.6% 1.4%
Middle Atlantic Business and financial operations occupations 3.5% 1.4%
South Atlantic Personal care and service occupations 4.4% 1.3%
East South Central Office and administrative support occupations 2.9% 1.2%
South Atlantic Transportation and material moving occupations 5.2% 1.1%
Mountain Transportation and material moving occupations 5.9% 1.1%
Middle Atlantic Building & grounds cleaning & maintenance occupations 7.6% 1.1%
West South Central Construction and extraction occupations 6.0% 1.0%
West South Central Transportation and material moving occupations 5.1% 0.9%
Pacific Sales and related occupations 4.4% 0.7%
New England Production occupations 3.6% 0.7%
West North Central Production occupations 3.7% 0.6%
East South Central Transportation and material moving occupations 5.2% 0.5%
Mountain Protective service occupations 6.1% 0.4%
South Atlantic Healthcare support occupations 4.8% 0.4%
South Atlantic Sales and related occupations 4.4% 0.3%
Mountain Sales and related occupations 3.7% 0.3%
Mountain Production occupations 4.0% 0.3%
New England Business and financial operations occupations 2.9% 0.1%
East South Central Production occupations 4.7% 0.1%
West North Central Building & grounds cleaning & maintenance occupations 4.6% -0.2%
East North Central Sales and related occupations 4.4% -0.2%
West South Central Production occupations 4.5% -0.3%
West South Central Healthcare support occupations 4.3% -0.4%
East North Central Food preparation and serving related occupations 6.3% -0.5%
South Atlantic Construction and extraction occupations 5.3% -0.5%
West South Central Personal care and service occupations 4.1% -0.6%
Mountain Healthcare support occupations 2.9% -0.7%
West South Central Building & grounds cleaning & maintenance occupations 5.1% -0.9%
West North Central Food preparation and serving related occupations 5.5% -0.9%
East North Central Production occupations 3.8% -0.9%
East South Central Construction and extraction occupations 5.5% -1.1%
South Atlantic Education, training and library occupations 2.7% -1.2%
East North Central Transportation and material moving occupations 5.7% -1.3%
Mountain Food preparation and serving related occupations 5.7% -1.3%
Pacific Education, training and library occupations 4.2% -1.4%
Middle Atlantic Construction and extraction occupations 8.5% -1.4%
South Atlantic Protective service occupations 2.9% -1.5%
New England Arts, design, entertainment, sports & media occs 3.9% -1.6%
Pacific Production occupations 5.0% -1.6%
New England Office and administrative support occupations 3.5% -1.7%
South Atlantic Food preparation and serving related occupations 6.4% -1.7%
Middle Atlantic Protective service occupations 3.3% -2.1%
Mountain Installation, maintenance and repair occupations 3.0% -2.1%
West South Central Business and financial operations occupations 2.7% -2.2%
West North Central Transportation and material moving occupations 4.2% -2.2%
New England Sales and related occupations 4.0% -2.4%
New England Transportation and material moving occupations 5.6% -2.6%
South Atlantic Community and social service occupations 2.6% -2.7%
West South Central Food preparation and serving related occupations 6.8% -2.8%
West South Central Office and administrative support occupations 3.6% -2.9%
East South Central Healthcare support occupations 4.2% -2.9%
East North Central Education, training and library occupations 3.0% -3.2%
East North Central Construction and extraction occupations 8.6% -3.3%
Mountain Farming, fishing and forestry occupations 7.3% -3.4%
Mountain Architecture and engineering occupations 2.9% -3.6%
East South Central Education, training and library occupations 2.6% -3.7%
Pacific Personal care and service occupations 4.9% -3.7%
East North Central Farming, fishing and forestry occupations 6.5% -4.2%
Mountain Construction and extraction occupations 5.0% -4.2%
Mountain Community and social service occupations 3.2% -4.2%
New England Computer and mathematical science occupations 3.4% -4.2%
West South Central Arts, design, entertainment, sports & media occs 3.1% -4.5%
New England Personal care and service occupations 4.7% -4.5%
East South Central Farming, fishing and forestry occupations 9.1% -4.8%
Middle Atlantic Arts, design, entertainment, sports & media occs 4.0% -5.1%
Mountain Personal care and service occupations 3.7% -6.3%
Middle Atlantic Healthcare support occupations 3.8% -7.6%
Pacific Protective service occupations 3.0% -7.8%
Pacific Healthcare support occupations 4.1% -8.0%
New England Construction and extraction occupations 7.1% -10.0%
West South Central Farming, fishing and forestry occupations 6.5% -13.6%
West South Central Life, physical and social science occupations 4.0% -15.2%
Unemployment rateYear-over-year real wage growth02.557.51012.5-40-200204060%
Note: Observations are occupation/division cells. Year-over-year real wage growth is growth between the average of the 12 months from July 2016-June 2017 and the average of the 12 months from July 2017-June 2018. The unemployment rate is the average of the 12 months from July 2017-June 2018.
To pick arbitrary-but-reasonable cut-offs for potential labor shortages, we singled out (in red) occupation/division cells that had an unemployment rate of less than 2 percent and wage growth greater than 4 percent, and also singled out cells with wage growth of 3 percent or more if their unemployment rate was less than 1.5 percent, and cells with unemployment rates of up to 3 percent if their wage growth was at least 10 percent. There are only 13 cells that fit these definitions, comprising just 4.5 percent of total employment. They include: legal occupations in the West South Central and South Atlantic divisions; management occupations in the East South Central, Mountain, and West North Central divisions; business and financial operations occupations in the East South Central division; protective service occupations in the West North Central division; computer and mathematical science occupations in the Mountain division; community and social service occupations in the West North Central division; healthcare practitioner and technical occupations in the West North Central division; arts, design, entertainment, sports & media occupations in the West North Central and East South Central divisions; and education, training and library occupations in the New England division.
This smattering is what one might expect as a baseline in a system as large and dynamic as the U.S. labor market—there will always be some occupations in some places where there are not enough workers with the right skills. The key question is whether it is happening at a rate that is cause for thinking that the overall economy really is running hard into labor supply constraints.
Right now it’s the opposite situation—and that’s a genuine problem. Remember, while labor shortages may be a negative for firms, they are a clear win for workers, since they lead to wage increases. Right now there is scant legitimate evidence of anything but isolated concerns about scarce labor, but in today’s environment of unusually weak wage growth, somewhat more widespread labor shortages that put upward pressure on wages would in fact be a welcome development.
|Posted by Jerrald J President on July 20, 2018 at 7:25 AM||comments (0)|
This is what happens when you grant privately owned banking systems to print currency out of thin air. They use that power to enrich themselves and their friends. By JJP
Global mergers and acquisitions reach record high in first quarter
Global mergers and acquisitions (M&A) had their strongest start ever in the first quarter of 2018, totaling $1.2 trillion in value, as U.S. tax reform and faster economic growth in Europe unleashed many companies' dealmaking instincts.
Strong equity and debt markets and swelling corporate cash coffers also helped boost the confidence of chief executives, convincing them that now is as good a time as ever to pursue transformative mergers, dealmakers said.
"The clarity on tax has unclogged some of the M&A activity that was strategically imperative, but companies were waiting for the right financial timing," said Anu Aiyengar, head of North America M&A at JPMorgan Chase & Co (JPM.N).
While the value of M&A deals globally increased 67 percent year-on-year in the first quarter of 2018, the number of deals dropped by 10 percent to 10,338, preliminary Thomson Reuters data show, reflecting how deals on average are getting bigger.
Among the largest deals clinched this quarter were U.S. health insurer Cigna Corp's $67 billion deal to acquire U.S. pharmacy chain Express Scripts Holding Co (ESRX.O) and German utility E.ON SE's (EONGn.DE) $38.5 billion deal to acquire RWE AG's (RWEG.DE) renewable energy business Innogy SE (IGY.DE).
M&A volumes doubled in Europe in the first quarter, while the United States was up 67 percent and Asia was up 11 percent.
"The better macro-economic environment in Europe has created greater confidence to get things done. Deals that have been in the works for a long time are now coming to fruition and some industries like utilities are being completely reshaped by the latest wave of consolidation," said Borja Azpilicueta, head of EMEA Advisory at HSBC Holdings Plc (HSBA.L).
In the United States, the stock market rally was thwarted in the first quarter by U.S. President Donald Trump's announcements on trade tariffs on Chinese imports. Corporate valuations are still elevated, but market volatility has increased.
"Companies have become more aggressive in pursuing deals that make strong strategic sense. But valuations remain high and boards have recently become more cautious on large acquisitions, as it is more difficult to convince their investors of the potential for value creation at such price levels," said Gilberto Pozzi, co-head of global M&A at Goldman Sachs Group Inc (GS.N).
Regulatory risk has also increased. Trump's dramatic intervention that blocked Singapore-based Broadcom Ltd's (AVGO.O) $117 billion hostile bid for U.S. chip maker Qualcomm Inc (QCOM.O) on grounds of national security earlier this month underscored heightened U.S. concerns about losing out to China in the race for new technologies.
"While every auction used to see at least one Chinese participant, now people are questioning their ability to deliver and are conscious of the political pushback that Chinese bidders could face," said Johannes Groeller, a partner at PJT Partners Inc (PJT.N).
On the antitrust front there is also some uncertainty. The U.S. Department of Justice has sued to block U.S. telecommunications company AT&T Inc's (T.N) $85 billion deal to buy media company Time Warner Inc TWX.N over concerns about how the two companies would consolidate their sectors.
"The antitrust environment for M&A transactions seems favorable today though certain deals, which catch the attention of regulators or politicians for one reason or another, can be problematic," said Jack Levy, a partner at Centerview Partners Holdings LP.
"One should resist the temptation to conclude from those specific deals that the antitrust regime has become more difficult," Levy added.
|Posted by Jerrald J President on July 20, 2018 at 7:15 AM||comments (0)|
Follow the money, profits over people has always been the American Way! By JJP
President Trump Signs Bill to Expand Privatization of VA Healthcare
The new law expands the privatization of VA healthcare and build greater investment in community physician systems.
President Trump signed the Veterans Affairs’ Mission Act into law midweek which will provide over $50 billion in federal investments to privatize a portion of the VA’s healthcare system and improve historical inefficiencies.
The VA Mission Act aims to develop a high-performance integrated care network by establishing a new community care program, improving physician payment processes, developing education resources for veterans seeking care, and setting patient safety guidelines for opioid prescriptions.
The bill quickly passed both chambers of Congress with bipartisan support last month. The House voted 347-70 in favor of the bill and the Senate voted 92-5, sending the bill to the White House.
Acting VA Secretary Peter O’Rourke issued a statement praising the actions of the President and lawmakers to pass the bill.
The law sets up a Veteran’s Community Care Program that provides new standards for delivering veterans’ care and allows the VA Secretary to furnish care for veterans from out-of-network providers as well as additional community providers. VA administrators will also have new authority to provide walk-in care for veterans and eliminate administrative burdens for veterans seeking immediate healthcare services.
A recent Government Accountability Office (GAO) report found that the VA Choice Program lacks the data needed coordinate community care for veterans. The report re-affirmed industry criticisms of the Choice Program’s ineffectiveness in providing out-of-network care for veterans, which the VA Mission Act aims to rapidly reform.
In addition, VA will increase information sharing with community providers and provide non-network providers with educational support to treat the unique healthcare needs of veteran patients.
Major provisions of the law also include technology infrastructure investments to streamline electronic payments, provide telemedicine care to veterans, and establish new access to care for veterans within rural communities.
The VA Mission Act falls in line with the VA’s organizational priorities related to health IT investments. Specifically, the VA expressed interest in working with third-party contractors to enhance payment IT and claims processing for community providers.
A sweeping reform of the VA system, that creates new care coordination and health IT improvements, could address some of the problems that have historically plagued the VA and veterans’ access to benefits.
In 2017, GAO found that veteran benefits enrollment and appeals processes are extremely inefficient, which caused veterans to wait months to receive initial health benefits and upwards of three years to complete benefit appeals.
The VA Mission Act could face some early gridlock as federal officials and lawmakers are expected to contend on the best way to finance the law.
Major news outlets including the Washington Post report that the President wants to cut funding from other programs to finance the $50 billion program. However, a Senate committee is expected to advance a separate measure for financing.
|Posted by Jerrald J President on July 20, 2018 at 7:10 AM||comments (0)|
M,A.G.A? If you think your going to be immune from the "21st Century Robber Barons" think again. The hammer will fall. By JJP
House narrowly passes farm bill that includes stricter work requirements for food stamps, a month after failing on first try
A deeply polarizing farm bill narrowly passed the House on Thursday, a month after the legislation went down to stunning defeat after getting ensnared in the toxic politics of immigration.
The legislation, which passed 213 to 211 with 20 Republicans joining Democrats in their unanimous opposition, includes new work rules for most adult food-stamp recipients — provisions that are dead on arrival in the Senate. The massive legislative package overseeing more than $430 billion of food and agriculture programs over five years contains a host of measures aimed at strengthening farm subsidies, expanding foreign trade and bolstering rural development.
[6 things to watch in the House farm bill, from food-stamp work requirements to school lunch]
The bill was championed by a dwindling number of farm-district Republicans who feel duty-bound to deliver farm supports to their rural constituents. On the first go-round last month, this group lost out to an increasingly powerful cohort of conservatives who are more interested in winning political points on changes to welfare and immigration.
The tense divide between the two camps has huge implications for the future of food and farm policy in the United States, as well as the Republican Party itself. Even as the bill advances from the House, political analysts said, the tensions revealed in its lurching, divisive journey are likely to persist.
“People think, ‘Who cares about the Farm Bill? It’s so boring,’ ” said Adam Sheingate, a professor of political science at Johns Hopkins University. “But it’s a window into contemporary politics right now, particularly among Republicans — the struggles they face balancing the responsibility of governing against their ideological commitments.”
The most divisive element of the legislation passed Thursday are new, stricter work rules for most able-bodied adults in the food stamp program, the federal safety net that provides an average of $125 per month in grocery money to 42.3 million Americans. Under the proposal, adults will have to spend 20 hours per week either working or participating in a state-run training program to receive benefits.
Democrats and anti-hunger advocates say most states do not have the capacity to scale up case management or training programs to this extent. As a result, they argue, hundreds of thousands of low-income adults could end up losing benefits.
But Republicans have defended the plan as a bold way to make low-income adults more self-sufficient, and President Donald Trump tweeted on Thursday that he was "so happy" to see work requirements pass.
"The American Idea is so distinct: The condition of your birth should not determine the outcome of your life," said House Speaker Paul Ryan (R-Wis.) in a statement. "With the passage of this bill, we’re moving toward a poverty-fighting system where this kind of upper mobility is attainable for more Americans. This is a big deal."
The legislation also directs the Agriculture Department to reevaluate school lunch nutrition standards adopted under the Obama administration. It proposes to expand who counts as a “farmer” for purposes of subsidies, the compensation USDA distributes when crop prices fall below predetermined references.
It eliminates much of the Conservation Stewardship Program — aimed at encouraging farmers to address soil, air and water quality on their land — and folds it into the Environmental Quality Incentives Program, which is oriented toward compensating farmers for one-off conservation projects. And despite efforts by some lawmakers to end them, it extends federal supports for the U.S. sugar industry through programs that control the amount of foreign and domestic sugar on the U.S. market and guarantee a minimum price for producers if sugar prices drop.
“It is another shameful day in the House," said Rep. Earl Blumenauer (D-Ore.), who has championed liberal food policies, in a statement. "With passage of this bill, Republicans have turned their backs on family farmers and ranchers, vulnerable communities, the health of all Americans, and the environment."
Congress has not historically struggled to pass farm bills — though it has become increasingly difficult over the past 10 years. The farm bill comes up for reauthorization every five years and is generally passed on a bipartisan basis.
That bipartisanship is by design: In theory, the farm bill has something for everyone. It authorizes agricultural programs (such as crop subsidies and conservation incentives, popular in rural Republican districts), and programs that appeal to urban voters (think food stamps and farmers market promotion, both backed by Democrats).
Unlike the more partisan House, the Senate — where Democratic votes will be needed — has taken a bipartisan approach this year. The Agriculture Committee passed a version of the legislation embraced by both parties, and without the controversial food stamp changes in the House version, it's expected on the Senate floor next week. The two competing versions would ultimately have to be merged.
But in the House, while Democrats still vote en bloc to preserve the food stamp program — as they did this year — the Republican vote is splintering. That became evident during debate on the 2012 farm bill, which also initially failed on the House floor, and glaring during May’s farm bill vote. Conservative lawmakers defected to force a separate vote on immigration, embarrassing party leadership.
Earlier Thursday, conservatives got the immigration vote they wanted, but the legislation they championed failed, and a vote on a leadership-backed bill was postponed until Friday as the GOP churns in search of solution and the family separation controversy on the Southern border continues to unfold.
The reasons behind the farm bill fracture in the House are twofold, said Christopher Bosso, a professor of public policy at Northeastern University. First, the number of farm districts in America has shrunk as the rural population has fallen; and second, a wave of Republicans have come to power who value small government, spending cuts and immigration overhauls over the demands of their party’s dwindling farm-state constituents.
“I think the story of the farm bill is the story of the Republican Party,” Bosso said. “It is now split between traditional, rural conservatives — the kind who hold their noses and vote for the farm bill because they want those commodity programs — and the ideologues in the Freedom Caucus who think all spending is bad.”
Political observers say that is likely to make it difficult to pass food and farming legislation over the long term, even if Republicans were able to cobble together a coalition this time around. As the rural vote grows less powerful, farm-district Republicans increasingly need allies in the cities and suburbs.
Without them, the future of programs such as crop subsidies — which have already come under attack by both Democrats and conservative Republicans — looks increasingly uncertain.
“The house is still standing, but termites are eating at the floorboards,” Sheingate said. “Maybe it stands for a few more decades, but eventually the wind blows and it completely falls down. There’s just this constant, gradual erosion of the farm bill’s political basis.”
GOP proposes stricter work requirements for food stamp recipients, a step toward a major overhaul of the social safety net
They’re the think tank pushing for welfare work requirements. Republicans say they're experts. Economists call it ‘junk science.’
|Posted by Jerrald J President on July 20, 2018 at 7:00 AM||comments (0)|
It's not a "Conspiracy Theory"! It's a FACT... By JJP
How the CIA made Google
Inside the secret network behind mass surveillance, endless war, and Skynet—
INSURGE INTELLIGENCE, a new crowd-funded investigative journalism project, breaks the exclusive story of how the United States intelligence community funded, nurtured and incubated Google as part of a drive to dominate the world through control of information. Seed-funded by the NSA and CIA, Google was merely the first among a plethora of private sector start-ups co-opted by US intelligence to retain ‘information superiority.’
The origins of this ingenious strategy trace back to a secret Pentagon-sponsored group, that for the last two decades has functioned as a bridge between the US government and elites across the business, industry, finance, corporate, and media sectors. The group has allowed some of the most powerful special interests in corporate America to systematically circumvent democratic accountability and the rule of law to influence government policies, as well as public opinion in the US and around the world. The results have been catastrophic: NSA mass surveillance, a permanent state of global war, and a new initiative to transform the US military into Skynet.
THIS IS PART ONE. READ PART TWO HERE.
This exclusive is being released for free in the public interest, and was enabled by crowdfunding. I’d like to thank my amazing community of patrons for their support, which gave me the opportunity to work on this in-depth investigation. Please support independent, investigative journalism for the global commons.
In the wake of the Charlie Hebdo attacks in Paris, western governments are moving fast to legitimize expanded powers of mass surveillance and controls on the internet, all in the name of fighting terrorism.
US and European politicians have called to protect NSA-style snooping, and to advance the capacity to intrude on internet privacy by outlawing encryption. One idea is to establish a telecoms partnership that would unilaterally delete content deemed to “fuel hatred and violence” in situations considered “appropriate.” Heated discussions are going on at government and parliamentary level to explore cracking down on lawyer-client confidentiality.
What any of this would have done to prevent the Charlie Hebdo attacks remains a mystery, especially given that we already know the terrorists were on the radar of French intelligence for up to a decade.
There is little new in this story. The 9/11 atrocity was the first of many terrorist attacks, each succeeded by the dramatic extension of draconian state powers at the expense of civil liberties, backed up with the projection of military force in regions identified as hotspots harbouring terrorists. Yet there is little indication that this tried and tested formula has done anything to reduce the danger. If anything, we appear to be locked into a deepening cycle of violence with no clear end in sight.
As our governments push to increase their powers, INSURGE INTELLIGENCE can now reveal the vast extent to which the US intelligence community is implicated in nurturing the web platforms we know today, for the precise purpose of utilizing the technology as a mechanism to fight global ‘information war’ — a war to legitimize the power of the few over the rest of us. The lynchpin of this story is the corporation that in many ways defines the 21st century with its unobtrusive omnipresence: Google.
Google styles itself as a friendly, funky, user-friendly tech firm that rose to prominence through a combination of skill, luck, and genuine innovation. This is true. But it is a mere fragment of the story. In reality, Google is a smokescreen behind which lurks the US military-industrial complex.
The inside story of Google’s rise, revealed here for the first time, opens a can of worms that goes far beyond Google, unexpectedly shining a light on the existence of a parasitical network driving the evolution of the US national security apparatus, and profiting obscenely from its operation.
The shadow network
For the last two decades, US foreign and intelligence strategies have resulted in a global ‘war on terror’ consisting of prolonged military invasions in the Muslim world and comprehensive surveillance of civilian populations. These strategies have been incubated, if not dictated, by a secret network inside and beyond the Pentagon.
Established under the Clinton administration, consolidated under Bush, and firmly entrenched under Obama, this bipartisan network of mostly neoconservative ideologues sealed its dominion inside the US Department of Defense (DoD) by the dawn of 2015, through the operation of an obscure corporate entity outside the Pentagon, but run by the Pentagon.
In 1999, the CIA created its own venture capital investment firm, In-Q-Tel, to fund promising start-ups that might create technologies useful for intelligence agencies. But the inspiration for In-Q-Tel came earlier, when the Pentagon set up its own private sector outfit.
Known as the ‘Highlands Forum,’ this private network has operated as a bridge between the Pentagon and powerful American elites outside the military since the mid-1990s. Despite changes in civilian administrations, the network around the Highlands Forum has become increasingly successful in dominating US defense policy.
Giant defense contractors like Booz Allen Hamilton and Science Applications International Corporation are sometimes referred to as the ‘shadow intelligence community’ due to the revolving doors between them and government, and their capacity to simultaneously influence and profit from defense policy. But while these contractors compete for power and money, they also collaborate where it counts. The Highlands Forum has for 20 years provided an off the record space for some of the most prominent members of the shadow intelligence community to convene with senior US government officials, alongside other leaders in relevant industries.
I first stumbled upon the existence of this network in November 2014, when I reported for VICE’s Motherboard that US defense secretary Chuck Hagel’s newly announced ‘Defense Innovation Initiative’ was really about building Skynet — or something like it, essentially to dominate an emerging era of automated robotic warfare.
That story was based on a little-known Pentagon-funded ‘white paper’ published two months earlier by the National Defense University (NDU) in Washington DC, a leading US military-run institution that, among other things, generates research to develop US defense policy at the highest levels. The white paper clarified the thinking behind the new initiative, and the revolutionary scientific and technological developments it hoped to capitalize on.
The Highlands Forum
The co-author of that NDU white paper is Linton Wells, a 51-year veteran US defense official who served in the Bush administration as the Pentagon’s chief information officer, overseeing the National Security Agency (NSA) and other spy agencies. He still holds active top-secret security clearances, and according to a report by Government Executive magazine in 2006 he chaired the ‘Highlands Forum’, founded by the Pentagon in 1994.
Linton Wells II (right) former Pentagon chief information officer and assistant secretary of defense for networks, at a recent Pentagon Highlands Forum session. Rosemary Wenchel, a senior official in the US Department of Homeland Security, is sitting next to him
New Scientist magazine (paywall) has compared the Highlands Forum to elite meetings like “Davos, Ditchley and Aspen,” describing it as “far less well known, yet… arguably just as influential a talking shop.” Regular Forum meetings bring together “innovative people to consider interactions between policy and technology. Its biggest successes have been in the development of high-tech network-based warfare.”
Given Wells’ role in such a Forum, perhaps it was not surprising that his defense transformation white paper was able to have such a profound impact on actual Pentagon policy. But if that was the case, why had no one noticed?
Despite being sponsored by the Pentagon, I could find no official page on the DoD website about the Forum. Active and former US military and intelligence sources had never heard of it, and neither did national security journalists. I was baffled.
The Pentagon’s intellectual capital venture firm
In the prologue to his 2007 book, A Crowd of One: The Future of Individual Identity, John Clippinger, an MIT scientist of the Media Lab Human Dynamics Group, described how he participated in a “Highlands Forum” gathering, an “invitation-only meeting funded by the Department of Defense and chaired by the assistant for networks and information integration.” This was a senior DoD post overseeing operations and policies for the Pentagon’s most powerful spy agencies including the NSA, the Defense Intelligence Agency (DIA), among others. Starting from 2003, the position was transitioned into what is now the undersecretary of defense for intelligence. The Highlands Forum, Clippinger wrote, was founded by a retired US Navy captain named Dick O’Neill. Delegates include senior US military officials across numerous agencies and divisions — “captains, rear admirals, generals, colonels, majors and commanders” as well as “members of the DoD leadership.”
What at first appeared to be the Forum’s main website describes Highlands as “an informal cross-disciplinary network sponsored by Federal Government,” focusing on “information, science and technology.” Explanation is sparse, beyond a single ‘Department of Defense’ logo.
But Highlands also has another website describing itself as an “intellectual capital venture firm” with “extensive experience assisting corporations, organizations, and government leaders.” The firm provides a “wide range of services, including: strategic planning, scenario creation and gaming for expanding global markets,” as well as “working with clients to build strategies for execution.” ‘The Highlands Group Inc.,’ the website says, organizes a whole range of Forums on these issue.
For instance, in addition to the Highlands Forum, since 9/11 the Group runs the ‘Island Forum,’ an international event held in association with Singapore’s Ministry of Defense, which O’Neill oversees as “lead consultant.” The Singapore Ministry of Defense website describes the Island Forum as “patterned after the Highlands Forum organized for the US Department of Defense.” Documents leaked by NSA whistleblower Edward Snowden confirmed that Singapore played a key role in permitting the US and Australia to tap undersea cables to spy on Asian powers like Indonesia and Malaysia.
The Highlands Group website also reveals that Highlands is partnered with one of the most powerful defense contractors in the United States. Highlands is “supported by a network of companies and independent researchers,” including “our Highlands Forum partners for the past ten years at SAIC; and the vast Highlands network of participants in the Highlands Forum.”
SAIC stands for the US defense firm, Science Applications International Corporation, which changed its name to Leidos in 2013, operating SAIC as a subsidiary. SAIC/Leidos is among the top 10 largest defense contractors in the US, and works closely with the US intelligence community, especially the NSA. According to investigative journalist Tim Shorrock, the first to disclose the vast extent of the privatization of US intelligence with his seminal book Spies for Hire, SAIC has a “symbiotic relationship with the NSA: the agency is the company’s largest single customer and SAIC is the NSA’s largest contractor.”
Richard ‘Dick’ Patrick O’Neill, founding president of the Pentagon’s Highlands Forum
The full name of Captain “Dick” O’Neill, the founding president of the Highlands Forum, is Richard Patrick O’Neill, who after his work in the Navy joined the DoD. He served his last post as deputy for strategy and policy in the Office of the Assistant Secretary for Defense for Command, Control, Communications and Intelligence, before setting up Highlands.
The Club of Yoda
But Clippinger also referred to another mysterious individual revered by Forum attendees:
“He sat at the back of the room, expressionless behind thick, black-rimmed glasses. I never heard him utter a word… Andrew (Andy) Marshall is an icon within DoD. Some call him Yoda, indicative of his mythical inscrutable status… He had served many administrations and was widely regarded as above partisan politics. He was a supporter of the Highlands Forum and a regular fixture from its beginning.”
Since 1973, Marshall has headed up one of the Pentagon’s most powerful agencies, the Office of Net Assessment (ONA), the US defense secretary’s internal ‘think tank’ which conducts highly classified research on future planning for defense policy across the US military and intelligence community. The ONA has played a key role in major Pentagon strategy initiatives, including Maritime Strategy, the Strategic Defense Initiative, the Competitive Strategies Initiative, and the Revolution in Military Affairs.
Andrew ‘Yoda’ Marshall, head of the Pentagon’s Office of Net Assessment (ONA) and co-chair of the Highlands Forum, at an early Highlands event in 1996 at the Santa Fe Institute. Marshall is retiring as of January 2015
In a rare 2002 profile in Wired, reporter Douglas McGray described Andrew Marshall, now 93 years old, as “the DoD’s most elusive” but “one of its most influential” officials. McGray added that “Vice President Dick Cheney, Defense Secretary Donald Rumsfeld, and Deputy Secretary Paul Wolfowitz” — widely considered the hawks of the neoconservative movement in American politics — were among Marshall’s “star protégés.”
Speaking at a low-key Harvard University seminar a few months after 9/11, Highlands Forum founding president Richard O’Neill said that Marshall was much more than a “regular fixture” at the Forum. “Andy Marshall is our co-chair, so indirectly everything that we do goes back into Andy’s system,” he told the audience. “Directly, people who are in the Forum meetings may be going back to give briefings to Andy on a variety of topics and to synthesize things.” He also said that the Forum had a third co-chair: the director of the Defense Advanced Research and Projects Agency (DARPA), which at that time was a Rumsfeld appointee, Anthony J. Tether. Before joining DARPA, Tether was vice president of SAIC’s Advanced Technology Sector.
Anthony J. Tether, director of DARPA and co-chair of the Pentagon’s Highlands Forum from June 2001 to February 2009
The Highlands Forum’s influence on US defense policy has thus operated through three main channels: its sponsorship by the Office of the Secretary of Defense (around the middle of last decade this was transitioned specifically to the Office of the Undersecretary of Defense for Intelligence, which is in charge of the main surveillance agencies); its direct link to Andrew ‘Yoda’ Marshall’s ONA; and its direct link to DARPA.
A slide from Richard O’Neill’s presentation at Harvard University in 2001
According to Clippinger in A Crowd of One, “what happens at informal gatherings such as the Highlands Forum could, over time and through unforeseen curious paths of influence, have enormous impact, not just within the DoD but throughout the world.” He wrote that the Forum’s ideas have “moved from being heretical to mainstream. Ideas that were anathema in 1999 had been adopted as policy just three years later.”
Although the Forum does not produce “consensus recommendations,” its impact is deeper than a traditional government advisory committee. “The ideas that emerge from meetings are available for use by decision-makers as well as by people from the think tanks,” according to O’Neill:
“We’ll include people from Booz, SAIC, RAND, or others at our meetings… We welcome that kind of cooperation, because, truthfully, they have the gravitas. They are there for the long haul and are able to influence government policies with real scholarly work… We produce ideas and interaction and networks for these people to take and use as they need them.”
My repeated requests to O’Neill for information on his work at the Highlands Forum were ignored. The Department of Defense also did not respond to multiple requests for information and comment on the Forum.
The Highlands Forum has served as a two-way ‘influence bridge’: on the one hand, for the shadow network of private contractors to influence the formulation of information operations policy across US military intelligence; and on the other, for the Pentagon to influence what is going on in the private sector. There is no clearer evidence of this than the truly instrumental role of the Forum in incubating the idea of mass surveillance as a mechanism to dominate information on a global scale.
In 1989, Richard O’Neill, then a US Navy cryptologist, wrote a paper for the US Naval War College, ‘Toward a methodology for perception management.’ In his book, Future Wars, Col. John Alexander, then a senior officer in the US Army’s Intelligence and Security Command (INSCOM), records that O’Neill’s paper for the first time outlined a strategy for “perception management” as part of information warfare (IW). O’Neill’s proposed strategy identified three categories of targets for IW: adversaries, so they believe they are vulnerable; potential partners, “so they perceive the cause [of war] as just”; and finally, civilian populations and the political leadership so they “perceive the cost as worth the effort.” A secret briefing based on O’Neill’s work “made its way to the top leadership” at DoD. “They acknowledged that O’Neill was right and told him to bury it.
Except the DoD didn’t bury it. Around 1994, the Highlands Group was founded by O’Neill as an official Pentagon project at the appointment of Bill Clinton’s then defense secretary William Perry — who went on to join SAIC’s board of directors after retiring from government in 2003.
In O’Neill’s own words, the group would function as the Pentagon’s ‘ideas lab’. According to Government Executive, military and information technology experts gathered at the first Forum meeting “to consider the impacts of IT and globalization on the United States and on warfare. How would the Internet and other emerging technologies change the world?” The meeting helped plant the idea of “network-centric warfare” in the minds of “the nation’s top military thinkers.”
|Posted by Jerrald J President on July 12, 2018 at 12:55 AM||comments (0)|
Hi welcome to Wal-Mart? It's not an accident why this is happening. By JJP
More older Americans are working, and working more, than they used to
By Drew DeSilver
Greater share of older Americans working now than on eve of Great Recession
More older Americans – those ages 65 and older – are working than at any time since the turn of the century, and today’s older workers are spending more time on the job than did their peers in previous years, according to a new Pew Research Center analysis of employment data from the federal Bureau of Labor Statistics.
In May, 18.8% of Americans ages 65 and older, or nearly 9 million people, reported being employed full- or part-time, continuing a steady increase that dates to at least 2000 (which is as far back as we took our analysis). In May of that year, just 12.8% of 65-and-older Americans, or about 4 million people, said they were working.
We used the employment-population ratio – the employed percentage of a given group’s total population (including those not actively looking for work) – to measure employment among different age groups. The steady increase in the share of working older Americans contrasts with the adult population as a whole, whose employment-population ratio fell sharply during the Great Recession and has yet to recover to pre-slump levels. In May 2000, according to the BLS’ seasonally unadjusted data, 64.4% of all adults had jobs, a figure that had drifted down to 62.5% by May 2008 as the recession took hold. The ratio bottomed out at 57.6% in January 2011, and as of last month stood at 59.9%.
Share of older Americans on the job has risen since 2000, even as overall employment has fallen
The relatively strong presence of 65-and-older workers is found across age brackets: 65- to 69-year-olds, 70- to 74-year-olds, and those 75 and older. All are working at higher rates than they did in May 2008, the only age groups about which that can be said.
Though we took the current analysis only back to 2000, an earlier Center report noted that the labor force participation rate (that is, workers and those actively seeking employment as a share of a group’s total population) among older adults began rising in the mid-1980s, after declining for more than three decades.
Not only are more older Americans working, more of them are working full-time. In May 2000, 46.1% of workers ages 65 and older were working fewer than 35 hours a week (the BLS’ cutoff for full-time status). The part-time share has fallen steadily, so that by last month only 36.1% of 65-and-older workers were part-time.
The share of both older men and older women who are working has grown over time, but working during what are commonly thought of as retirement years remains a largely male phenomenon: Although less than 45% of the total 65-and-older population are men, they represent more than 55% of older workers. Older Asians (20.2%) and whites (19%) are somewhat more likely to be working than older blacks (16.7%).
What jobs older U.S. workers are more or less likely to perform
Older Americans work in the various sectors of the U.S. economy in broadly similar patterns as the workforce as a whole, with a few notable exceptions. For instance, they’re less likely to work in the accommodations/food service sector (only 3.4% did so last year, versus 7.1% of all workers). And older workers are more likely to be in management, legal and community/social service occupations than the overall workforce, and less likely to be in computer and mathematical, food preparation, and construction-related occupations.