ECONOMICS

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Economic Data, an interesting collection

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Collected from various sources (SFFR is the San Francisco Federal Reserve).  A reminder of some of the UNNECESSARY costs of our political-economic system.
 
 

Economics is called the dismal profession; read below and find out

 

Stats on corporate crime, Citizen works, Ralph Nader:

Health care, $100 billion, estimate from Government Accounting Office.

 

Trade violations $250 billion annually, Prof. Francis Cullen, U. of Cincinnati, Criminal Justice Dept.

 

Burglary, larceny, motor vehicle, & arson, under $18 billion, FBI for 2002.

 

66,971 job-related injury and occupational disease deaths (doesn’t include deaths of non-employees due to pollution, tainted foods, and like), 1992, Professor J. Paul Leigh.

 

Enron Corporation fraud and bankruptcy cost investors, pensioners, and employees $60 billion.

 

STATS ON DEFICIT FINANCING & CHANGES IN US ECONOMY:

 

Trade deficit for 4/04, $48.3 billion,

 

Manpower  output up 3% per year from 95-03—SFFR

 

Foreign investors hold 43% of all U.S. Treasury debt, 25% of corporate paper, 12% U.S. equities—SFFR

 

U.S. consumer, business, government savings after allowances for depreciation of existing  investment is 1-2% of GDP for 03-4; average for 1960-1999 was 7.5%--SFFR

 

Current Account Deficit (what foreigners earn on U.S. investments minus what U.S. garners from foreign investments) is $660B, or nearly 6% of the GDP, thus consuming 80% of the world’s saving surplus annually.  (A 5% reading is normally enough to trigger an IMF intervention.—SFFR

 

In 2003 deficit of $2.7T; in 1980 a surplus of $360B.—SFFR

 

To finance this widening deficit, the U.S. has had to borrow massively from foreigners, resulting in large net financial inflows. Many have pointed to these inflows as the main reason for the rising net U.S. indebtedness to foreigners; in 1992, U.S. net indebtedness was 7% of GDP, and at the end of 2003 it was over 24% of GDP--SFFR.

 

The U.S. current account deficit has been growing for several years, as the country has been importing increasingly more than it has been exporting. In 1992, the current account deficit was 0.8% of GDP, and by the end of 2003, it had soared to an unprecedented 4.8% of GDP--SFFR.  {US is adding to its indebtedness at the rate of 4.8%/per year}

 

Future signs:

Drop in capacity-enhancing spending, down 60% from the 00 high compared to 03.  This entail a slowing of expansion and thus investment here are less attractive for foreign countries. 

The $150 billion for corporate subsidies and tax benefits eclipses the annual budget deficit of $130 billion. It's more than the $145 billion paid out annually for the core programs of the social welfare state: Aid to Families with Dependent Children (AFDC), student aid, housing, food and nutrition, and all direct public assistance (excluding Social Security and medical care)."


"After World War II, the nation's tax bill was roughly split between corporations and individuals. But after years of changes in the federal tax code and international economy, the corporate share of taxes has declined to a fourth the amount individuals pay, according to the US Office of Management and Budget." --Boston Globe series on Corporate Welfare, 1996

 

$521 billion federal deficit, estimate Common Cause, Vol. IX, No. 21, May 28, 2004.

 

Social Security is a fairly simple system to administer, both for the government and for employers.  Social Security spends less than 2 cents of every dollar on administrative costs.  A system of privatized accounts, however, would be quite different.  Privatized accounts would place massive burdens on employers and the government – and they could never be administered successfully.  The fees on the accounts, meanwhile, could soak up 40% of the value of the investment, reducing benefits while providing a huge wind to Wall Street.

http://ourfuture.org/issues_and_campaigns/socialsecurity/index.cfm

 

Every day corporations and other wealthy special interests pump another $2 million into the coffers of our elected officials in Washington and their party’s committees. For their money they get an estimated $160 billion a year in tax breaks, subsidies, and other sweet deals. That’s $160 billion lifted from taxpayers’ pockets—or about $1500 per taxpayer per year.

http://www.publicampaign.org/publications/index.htm

 

During the second quarter of 2003, when the war in Iraq was in full swing, some 60 per cent of the 3.3 per cent GDP growth rate was attributable to military spending.

The Bush deficit has not yet reached Reaganesque proportions (it stands at roughly 4.5 per cent of GDP). But Professor Pollin, for one, predicts that the resulting debt burden could rapidly rise to the levels seen in the 1980s, with interest repayments eating up as much as 18-19 per cent of the overall federal budget.

American businesses file four times as many lawsuits as do individuals represented by trial attorneys, and they are penalized by judges much more often for pursuing frivolous litigation/  Moreover there are 40 times as many citizens as there are business (281 million to 7 million businesses)--Public Citizen.

 

From 1989-2002, the U.S. lost over 2.3 million jobs as a result of NAFTA and increased trade with China, according to a study reviewing U.S. government trade and employment data conducted by the Economic Policy Institute, a non-partisan Washington, D.C. think tank—Public Citizen. News release of 3/16/05

 

After 11 years of NAFTA, a $1.7 billion dollar U.S. surplus with Mexico exploded into a $45 billion deficit.  Over 1.8 million U.S. workers qualified for NAFTA Trade Adjustment Assistance (TAA), a narrow program providing benefits to certain categories of workers who can prove that they lost their jobs due to increased imports or plant relocations--Public Citizen, News release of 3/16/05.
 
Using an archaic system of 3 times the cost of a core diet, the US government calculates the average poverty threshold for a family of four in 2004 was an annual income of $19,307. It was $15,067 for a family of three; $12,334 for a family of two; and $9,645 for individuals. 

Worker’s averages (Greenspan 5/0/5)

One weak spot was a decline in the length of the average workweek, which dipped to 33.7 hours from 33.8 hours in October.  (This entails, when one factors in overtime, that about 1 in 4 jobs is part time.  With part time employment there are no job benefits.--jk)

Average hourly earnings rose 3 cents to $16.32 in November, building on an upwardly revised 10-cent gain in October.  (They must be factoring in the millionaires, for the U.S. ranks 92nd by the UN on income disparity—a median figure would deflect this bias—jk.) .

 

Economic data, various sources

 

It used to be that productivity improvements lifted all boats. But now the historic link between wages and productivity has been shattered. Between 1980 and 2004, productivity increased sixty-eight percent but the wages of the average production worker barely budged. On the other hand, the total value of the stock market rose 793% and CEO pay rose 743%.—A Country that Works, Andy Stern

The median income for non-elderly household fell more than $2,572 from 2000 to 2004, a drop of 4.8 percent.  The cost of medical care, housing, and food have seen double-digit increases from 2001 to 2005. As of September 2005, the total U.S. household debt stood at 121 percent of yearly disposable income. In 2003, for the first time in modern U.S. history, the number of Americans working in retail (14.9 million) was greater than the number working in factories (14.5 million).  By 2010, 25 percent of all jobs are expected to be contingent, meaning that workers who hold those jobs will lack rights of regular employees.  Between 1979 and 2003, the average income of the bottom 20 percent is still stuck in 1979—their average income rose by only 4 percent, a paltry $600 over those 25 years.  Since 1955 union membership has declined from one out of three workers to one out of twelve workers in the private sector.  Guaranteed pension are no more.  The public sector is now following suit.  Michigan’s and Alaska’s newly hired employees are not eligible for their state’s existing defined-benefit plan, and twenty states have introduced legislation to cut or freeze pension contributions, or replaced defined-benefit with 401(k) self-managed direct-contribution plans.  There is no guarantee of employer contribution to employee retirement income. In 1980, 84 percent of workers in large companies enjoyed guaranteed pension plans-- A Country that Works, Andy Stern.

 

During the 1980s, the personal saving rate averaged 9.0%.  During the 90s, the personal saving rate averaged 5.2%.  Since 2000, the personal savings rate has averaged only 1.9% SRBSF, Nov. 10, 2005.

 

 

“A survey by the World Health Organization in 2000 placed America first in terms of total spending on health (at $3,700 per year), but only thirty-seventh in terms of service.

John Micklethwait & Adrian Wooldridge, The Right Nation, 2004, p. 305

 

Unsurprisingly, by most measures, America is the most unequal of the world’s developed countries.  One study by Economic Policy Institute found that the gap between the top 10% percent and the bottom 10 percent in terms of income was bigger in America than in any other country….id. p. 307

 

George W. Bush tax cut in 2003 would have been unthinkable in most other countries.  Its main proposal was to abolish the taxation of the dividends at a personal level.  Half the proceeds from this elimination would flow to the richest 1 percent of taxpayers, another 25 percent to the rest of the top 5 percent, according to Citizens for Tax Justice.  Bush talked about the average American keeping $1,083 of his or her own money, but the average is only a couple of hundred dollars, and anybody in the bottom fifth got next to nothing.  Id. 308. 

 

Military, health, and interest on the debt consume two-thirds of every income tax dollar.

 

 

The median income family in the U.S. paid $4,171 in federal income taxes in 2005. 

Military                              $1,190

Health                                  $843

Interest on military debt               $368

Interest on non-military debt           $411

Income security                         $277

Veteran’s benefits                      $154

Nutrition                               $113

Housing                                  $85

Natural resources                        $59

Job training                             $14

Others                                  $486

 

From http://www.corpwatch.org/index.php

• if corporate taxation keeps receding at the current rate, corporate tax rates will hit 0 per cent by the middle of the century,

• out of the 275 largest corporations in the US, 82 paid no tax in or received a tax refund in at least one of the years between 2001 and 2003,

• Average corporate tax rates in industrialized countries have fallen from 45 per cent to 30 per cent in two decades due to influence peddling through political donations by business. 
• as a share of total taxation, corporate taxes have dropped by 15 per cent in the UK and by 22 per cent in Italy since the 1980s, by 41 per cent in Germany and by 43 per cent in Japan since the 1970s and by 53 per cent in the US since the late 1960s.

Companies as large as Boeing, Halliburton , Morgan Stanley, Pepsi, Citigroup and Xerox are either incorporated in tax havens or have a large number of subsidiaries there. This allows them to under-report their profits for the purposes of paying tax whilst at the same time benefiting from taxpayer money through government contracts.

 

Union membership has fallen in the last 70 years from 35% to 7% of the work force.

 

Stats on corporate crime, Citizen works, Ralph Nader

Health care, $100 billion, estimate from Government Accounting Office.

 

Trade violations $250 billion annually, Prof. Francis Cullen, U. of Cincinnati, Criminal Justice Dept.

 

Burglary, larceny, motor vehicle, & arson, under $18 billion, FBI for 2002.

 

66,971 job-related injury and occupational disease deaths (doesn’t include deaths of non-employees due to pollution, tainted foods, and like), 1992, Professor J. Paul Leigh.

 

Enron Corporation fraud and bankruptcy cost investors, pensioners, and employees $60 billion.

 

The average CEO in the U.S. made 42 times the average workers pay in 1980, 85 times in 1990 and 531 times in 2000-- From http://www.corporations.org/system

 

Of the world's 100 largest economic entities, 51 are now corporations and 49 are countries.

 

The richest 1 percent of Americans own 40 percent of the nation's household wealth (as of 1997).

 

Of the world's 100 largest economic entities, 51 are now corporations and 49 are countries

 

 

STATS ON DEFICATE FINANCING & CHANGES IN US ECONOMY:

Trade deficit for moth of , 4/04, $48.3 billion,

 

Manpower output up 3% per year from 95-03.

 

Foreign investors hold 43% of all U.S. Treasury debt, 25% of corporate paper, 12% U.S. equities.

 

U.S. consumer, business, government savings after allowances for depreciation of existing investment is 1-2% of GDP for 03-4; average for 1960-1999 was 7.5%.

 

Current Account Deficit (What foreigners earn on U.S. investments minus what U.S. garners from foreign investments is $660B, or nearly 6% of the GDP, thus consuming 80% of the world’s saving surplus annually.  (A 5% reading is normally enough to trigger an IMF intervention.)

 

In 2003 NIIF deficit was $2.7T; in 1980 a surplus of $360B.

 

Current account deficit—which reached a record 6.3% of GDP in the fourth quarter of 2004

Since 2002 {t0 2004} the dollar has depreciated by 25.7%, and import prices have increased by 6.6%.

 

Foreign governments hold in 04 $1.2 trillion of U.S. Treasury securities, almost double the $609 billion held in 2000

 

Total worldwide foreign reserves holdings reached $3 trillion at the end of 2004, up from $2.4 trillion in 2003, of which 70% is in dollar-dominated securities—euro reserves are but 20%. 

 

Congressional Budget office economists, real income of the bottom 90% of taxpayers fell by 7% from the mid-1970s through the Clinton boomlet (largely a bubble), while the income of the top .01% rose 600%

Noam Chomsky at http://blog.zmag.org/ttt/archives/000018.html

 

George W. Bush entered the presidency following three consecutive budget surpluses – a $69.2 billion surplus in fiscal 1998, a $124.4 billion surplus in 1999, and a record $237 billion surplus in fiscal 2000. The forecast at the time was for a federal surplus of $4.6 trillion over the next 10 years. Today, the Congressional Budget Office is projecting a buildup of $2.4 trillion in red-ink spending over the next decade, a $7 trillion switch.

From http://www.lewrockwell.com/orig4/reiland2.html  Ralph R. Reiland is a Pittsburgh Tribune-Review columnist and the B. Kenneth Simon Professor of Free Enterprise at Robert Morris University.

 

Non-defense discretionary spending, for instance, which decreased by 13.5 percent under Reagan, increased by 23 percent in the past three years.—supra.

 

San Francisco Federal Reserve

 

External debt is more than 25% of GDP; 05 budget debt of 3.5%.  In 2000 there was a surplus of 2.5%.  Foreigners bought $900 in long-term treasury bonds.

 

Most U.S. assets abroad are in the Euro.  The value of the U.S. dollar against the EURO has fallen 40% in the last 2 years.

 

Federal budget deficit is at 2.5% of the GDP.

 

Trade deficit for 04 was $656 billion, of which $500 billion was invested in U.S. bonds held by foreign central banks. 

 

The central banks hold $2.5 trillion in dollar reserve (treasury bonds), if their continued purchase drops, there “will be a sharp fall in the dollar and a sharp rise in U.S. interest rates.”

 

“Power flows from debtor to creditor nations.”

Foreign Affairs Magazine, July/August 05, p. 194-99

He came to office looking at a budget surplus of $5.6 trillion over ten years, and converted it into a $2.6 trillion deficit over those ten years.                                    The Atlantic Monthly, July/August 05, p27. [independent forecasts are $7 trillion]

Worker’s averages (Greenspan 5/0/5)

One weak spot was a decline in the length of the average workweek, which dipped to 33.7 hours from 33.8 hours in October.  (This entails, when one factors in overtime, that about 1 in 4 jobs is part time.  With part time employment there are no job benefits.--jk)

Average hourly earnings rose 3 cents to $16.32 in November, building on an upwardly revised 10-cent gain in October.  (They must be factoring in the millionaires, for the U.S. ranks 92nd by the UN on income disparity—a median figure would deflect this bias—jk.) .

 

The Bush deficit has not yet reached Reaganesque proportions (it stands at roughly 4.5 per cent of GDP). But Professor Pollin, for one, predicts that the resulting debt burden could rapidly rise to the levels seen in the 1980s, with interest repayments eating up as much as 18-19 per cent of the overall federal budget.  Thus billions of dollars are spent on interest payment, rather than in publicly useful programs such as universal medical insurance, like those in the other developed countries of the world.

 

Social Security

Retirement assets as of 03 amount to $10 trillion of which $.7 trillion is held in stocks.

The value of the 3 principle stock market exchanges as of 03 was $14.2 trillion.

Corporate pension funds earned an average annual investment return of just 1.3% from 99-03. 

 

 

 

Future signs:

Drop in capacity-enhancing spending, down in 03 60% from the 00 high.  This entail a slowing of expansion and thus a less attractive investment for foreign countries.

  

The $150 billion for corporate subsidies and tax benefits eclipses the annual budget deficit of $130 billion. It's more than the $145 billion paid out annually for the core programs of the social welfare state: Aid to Families with Dependent Children (AFDC), student aid, housing, food and nutrition, and all direct public assistance (excluding Social Security and medical care)."


"After World War II, the nation's tax bill was roughly split between corporations and individuals. But after years of changes in the federal tax code and international economy, the corporate share of taxes has declined to a fourth the amount individuals pay, according to the US Office of Management and Budget."

Boston Globe series on Corporate Welfare, 1996

 

The corporate share of taxes paid has fallen from 33 percent in the 1940's to 15 percent in the 1990's. Individuals' share of taxes has risen from 44 to 73 percent.

 

$521 billion federal deficit, estimate Common Cause, Vol. IX, No. 21, May 28, 2004.

 

Social Security is a fairly simple system to administer, both for the government and for employers.  Social Security spends less than 2 cents of every dollar on administrative costs.  A system of privatized accounts, however, would be quite different.  Privatized accounts would place massive burdens on employers and the government – and they could never be administered successfully.  The fees on the accounts, meanwhile, could soak up 40% of the value of the investment, reducing benefits while providing a huge wind to Wall Street.,

http://ourfuture.org/issues_and_campaigns/socialsecurity/index.cfm

 

Every day corporations and other wealthy special interests pump another $2 million into the coffers of our elected officials in Washington ad their party committees. For their money they get an estimated $160 billion a year in tax breaks, subsidies, and other sweet deals. That’s $160 billion lifted from taxpayers’ pockets—or about $1,500 per taxpayer per year.

http://www.publicampaign.org/publications/index.htm

 

During the second quarter of 2003, when the war in Iraq was in full swing, some 60 per cent of the 3.3 per cent GDP growth rate was attributable to military spending.

 

IMMIGRATION:  since 1965, 27 million legal and 10.3 illegal immigrants.  There is 11.3% of populace foreign born (34.2 million). 

Sc. Am. June 05

 

Average income (includes benefits) for working amounts to $16.32 per hour, and the average hours per week work are 33.7.

Reuters News Service, article Job Growth Rebounds After Storm, 12/2/05. 

The Bush deficit has not yet reached Reaganesque proportions (it stands at roughly 4.5 per cent of GDP). But Professor Pollin, for one, predicts that the resulting debt burden could rapidly rise to the levels seen in the 1980s, with interest repayments eating up as much as 18-19 per cent of the overall federal budget.

The American poor are actually locked into their status: 54 per cent of those in the bottom 20 per cent in the 1960s were still there in the 1990s, and only 1 per cent had migrated to the top 20 per cent. The US has the lowest share of workers moving from the bottom fifth into the second fifth, the lowest share moving into the top 60 per cent and the highest share of workers unable to sustain full-time employment. And Americans are way overworked compared to their European counterparts.

 

NAFTA

From 1989-2002, the U.S. lost over 2.3 million jobs as a result of NAFTA and increased trade with China, according to a study reviewing U.S. government trade and employment data conducted by the Economic Policy Institute, a non-partisan Washington, D.C. think tank.

 

After 11 years of NAFTA, a $1.7 billion dollar U.S. surplus with Mexico exploded into a $45 billion deficit.  Over 1.8 million U.S. workers qualified for NAFTA Trade Adjustment Assistance (TAA), a narrow program providing benefits to certain categories of workers who can prove that they lost their jobs due to increased imports or plant relocations.

Public Citizen, News release of 3/16/05

 

Predictions for 05, a survey of 60 forecasters in Business Week Magazine:

 

What they predict:

1.  GDP growth of 3.5%

2.  Profits grow by 6.7%

3.  Oil to slip to $39/barrel by year’s end

4.    Fed Reserve to raise fed fund rates from 2.25% to 3.5%

5.   10-yearTreasury bonds will increase form 4.3% to 5.1%

6.  Dollar lose about 10% value against major currencies

 

Economic Downturn 05, Likely Causes

 

FIVE NEGATIVE ITEMS THAT COULD THROW THEIR PREDICTIONS OFF

Their list:

A.  Dollar collapse: growing concern for US ability to attract foreign capital to finance both private and public investments.  The effect of high budget deficit subtracts from domestic savings (and thus investing) and the huge trade deficit also adds to financing needs.  This dependence on foreign financing reducing confidence in the US economy (in 85-87 the dollar fell 49% against major currencies, Treasury bonds increased 2%, and stock prices fell 30%.   A falling dollar would especially effect US corporate bonds (held 50% by foreign investors).

B.  Oil rise would slow consumer demand, and this would under mine business and consumer confidence. 

C.  Inflation, both rising oil and falling dollar make consumer goods more expensive (inflation). China would thus revaluate their currency higher, thus increasing inflation.  High inflation makes existing bonds unattractive and new one must be offered at a higher rate.

D.  Housing bubble:  higher interest rates of 2% could bust the housing bubble, and deflating price deflates household wealth, and so on. 

E.  Global economy:  Euro is weighed down by currency appreciation, and both Euro and Japan are experiencing a slow down of economic growth and increasing Arab violence would erode business and consumer confidence. 

 

 

There is an inherent instability in the capitalist system.  Almost every year there is a crash with a government defaulting on its payments.  In the last decade, Mexico, Argentina (Nov. 02, $805M), Russia, Ivory Coast (June 04 on $700M), and several Asian nations in 98.   What follows are predictions for 05, followed by 5 economic wild cards that could bring on a recession or worse.  Vital also to such understanding is the economic stats that follow.  Capitalism is inherently unstable and exploitative.--jk 

 

 

 

Gasoline taxes average 43/gal

US consumer 25% of the world’s supply, though it is 5% of the population, about 3 gals/person/day. 

Production is of 1970’s. 

North Sea, North Slope of Alaska are in decline.

 

Consumption 02 (millions of barrels:  US 7,191, Japan 1,935, China 1935, Russia 985, Germany 949

3.2% increase 04, predicted 1.7 for 05

China added 2M cars in 03, up 70% from 02,

US consumption 80B barrels, of which 2/3 is for fuel. 

Business SUV deduction of up to $10,000 {actually 25% of cost for pickup or SUV}

In 1981 oil was above $70/barrel in 2004 dollars, by the mid 80s it dropped to less than $25/barrel. 

The new deep-water Gulf field has an estimated 25B barrels, another almost as large field is in the Artic National Wildlife Refuge in Alaska.

  Canadian shale oil cover 15,000 sq miles, equals 1.6 trillion barrels, but yields only 1 barrel for every two tons of deposit. 

 

Gasoline costs $1.57/ gal

.43 tax,

.75 crude oil,

.24 refining,

.15 distribution & marketing. 

 

Additional costs $2.24/gal

.80 traffic congestion (time and wasted fuel),

.40 pollution (effects upon respiratory health),

.12 leaky oil from refineries & distribution centers. 

.80 traffic accidents.

.12 effects of disruption in supply on economy

[Missing is the cost of insurance, service and repairs]

Total costs $4.01

National Geographic, The End of Cheap Oil, 6/04, p. 97.         

 

(Consider how much more surplus money would be in the pockets of each citizen of this country--and the world--how much cleaner the air would be, and how much more steel and petroleum there would be if mass transit was fully developed and utilized.)

 

. In 2005, federal revenues were just 17.5 percent of GDP, 1 percent less than the previous 50-year average. By contrast, the Feb. 12, 2005 Economist reported that in 2004, after-tax corporate profits reached their highest level as a proportion of GDP in 75 years.  indebtedness of U.S. households has risen nearly 36 percent over the last four years. As a result, the gulf between the “haves” and “have nots” is reaching crisis proportions.    Americans in poverty grew slightly in 2004 (the most recent year for which data is available) to 12.7 percent from the 12.5 percent recorded the previous year, representing about 37 million Americans.  . Since 2000, the number of people living in official poverty has increased by 5.4 million. But according to experts, that number vastly underestimates the real total.  Less conservative estimates have put the numbers of poor at 25 percent, or more than 70 million Americans.  [Poverty] level of income for a family of four at $3100 in 1963.  a family of four in 2004 was an annual income of $19,307. It was $15,067 for a family of three; $12,334 for a family of two; and $9,645 for individuals. —In These Times, 2/27/06, Christopher Moraff. 

 

Annual additional cost for an obese worker can reach $2,500. $1,524 for men with a BMI greater than 40. For overweight women, these costs ranged from $474 to $1,302. When the team factored in the cost of lost work days for obese employees, they calculated that the per capita cost of obesity amounts to between $460 and $2,485 annually.  Taking the frequency of obesity into account, as well as the overall gender makeup of the workforce, the authors argue that for a firm with 1,000 employees, obesity would cost about $285,000 a year.  Scientific American, 9/14/05, internet at http://www.sciam.com. 

 

HEALTH CARE:  According to the WHO in 2005,  the U.S. rates 37th among nations as to the overall quality of health care, while at the same time having the most expensive system.  According to Rueters (March of 06), an American couple that retires at the age of 65 will on the average need $200,000 in retirement to cover out-of-pocket medical costs.  That amounts to the biggest single expense for mot people in retirement. 

 

Today’s news (June 05) the last year job increased in San Diego County by 15,000 and for the state of California by 43,000.  Actually unemployment must have increased for more than 43,000 people who had been gainfully employed had moved to California.  And what of the gain from those finishing their schooling?  This is biased reporting in the local newspaper—making shit look good.

 

American businesses file four times as many lawsuits as do individuals represented by trial attorneys, and they are penalized by judges much more often for pursuing frivolous litigation.  Moreover there are 40 times as many citizens as there are business (281 million to 7 million businesses). 

Public Citizen

 

 

PIGGISH SYSTEM
 

In 1983, 50 corporations controlled the vast majority of all news media in the U.S. At the time, Ben Bagdikian was called "alarmist" for pointing this out in his book, The Media Monopoly. In his 4th edition, published in 1992, he wrote "in the U.S., fewer than two dozen of these extraordinary creatures own and operate 90% of the mass media" -- controlling almost all of America's newspapers, magazines, TV and radio stations, books, records, movies, videos, wire services and photo agencies. He predicted then that eventually this number would fall to about half a dozen companies. This was greeted with skepticism at the time. When the 6th edition of The Media Monopoly was published in 2000, the number had fallen to six. Since then, there have been more mergers and the scope has expanded to include new media like the Internet market. More than 1 in 4 Internet users in the U.S. now log in with AOL Time-Warner, the world's largest media corporation.

 

In 2004, Bagdikian's revised and expanded book, The New Media Monopoly, shows that only 5 huge corporations -- Time Warner, Disney, Murdoch's News Corporation, Bertelsmann of Germany, and Viacom (formerly CBS) -- now control most of the media industry in the U.S. General Electric's NBC is a close sixth.

 

"The $150 billion for corporate subsidies and tax benefits eclipses the annual budget deficit of $130 billion. It's more than the $145 billion paid out annually for the core programs of the social welfare state: Aid to Families with Dependent Children (AFDC), student aid, housing, food and nutrition, and all direct public assistance (excluding Social Security and medical care)."

 

"After World War II, the nation's tax bill was roughly split between corporations and individuals. But after years of changes in the federal tax code and international economy, the corporate share of taxes has declined to a fourth the amount individuals pay, according to the US Office of Management and Budget." --Boston Globe series on Corporate Welfare

 

 

 

PIGGISH SYSTEM

 

Eldridge Cleaver said, “show me a capitalist, and I’ll show you a pig.”  Or as I prefer, “Capitalism is a piggish system,” because not all capitalist will do major harm for the sake of profits.  However, once they operate as a group, it is the rare exception when profits do not come first.  Thus the tobacco industry fights for their right to kill 450,000 people a year.  But each industry when there is a like conflict behaves similarly.  We read of how the utilities want to undo EPA regulations on airborne mercury from their coal burning plants, and how drug companies design the legislation which passed in 1992 which reduced funding for the FDA to follow drugs after they have been approved.  This is mass murder.  The pain medication Vioxx which in 5 years resulted in an estimated 140,000 heart attacks resulting in 55,000 premature deaths.  Both the FDA and Merck had reason to follow up on evidence of Vioxx causing heart attack when it was approved in 1999, but such follow up was beyond the funding of the FDA and not in the financial interest of Merck.  Moreover, Merck actively worked to silence the 7 clinicians who had gone public over the then suspected premature deaths.  Vioxx was withdrawn until 2004, and by that time Merck had made billions. 

 

Phenolpropanolamine (PPA), an over-the-counter diet drug has been available since the 1970’s, and since then there were reasons to question its safety.  Finally, at the behest of the FDA, a study funded by the trade association contracted Yale University School of Medicine to do an epidemiological study of PPA.   In 1999 it confirmed that PPA caused hemorrhagic stroke.  Instead of withdrawing the drug with $500 million annual sales, the manufactures hired Weinberg Group, a product-defense consulting firm based in Washington D.C. to attack that study.   A year later the FDA advised the industry to withdraw PPA.  Extrapolated from the study is the estimate that PPA caused 200-500 stokes per year among 18 to 49-year old people.[i] 

 

This is unwillingness to confirm adverse consequences coupled with active resistance to regulations is similar to the response of the cigarette industry.  Given how this pattern of maximization of profits, there is a dire need to make public well being an integral part of the rules for corporate success.  This can be accomplished in four fundamental ways:  regulations, oversight, punishment, and rewards.  EPA regulations are an example of regulations, OSHA inspections an example of oversight, law suits and finds are examples of punishment, and government contracts are example of reward.

 

Is it desirable to have advertising influence the selection of drugs by clinicians?  First such information, coming from the supplier, is always slanted.  The impact of advertising is to create confusion, to make much more likely the less than ideal choices, to increase the cost of drugs, and to divert funds from new research, by making the dollar barrier that much higher for releasing a return on a new drug sufficient to cover all expenses including the numerous dead-ends. 

 

 

 



[i]  Source, Doubt is Their Product, David Michaels,  Scientific American, June 2005, p.98.

The below data is found in an article by economist Kim Scipes, in zmag.org Feb 07:

Between 2000-2005, entry-level wages for male college graduates fell by 7.3% (to $19.72/hr).

 

Entry-level wages for female college graduates fell by 3.5% (to $17.08).

 

Entry-level wages for male high school graduates fell by 3.3% (to $10.93)

 

Entry-level wages for female high school graduates fell by 4.9% (to $9.08)

 

A 2004 story in Business Week found that 24 percent—one of every four—of all working Americans received wages below the poverty line.

 

A 2006 story in Business Week found that US job growth between 2001-2006 was really based on one industry:  health care.  Over this five-year period, the health-care sector has added 1.7 million jobs, while the rest of the private sector has been stagnant. 

Over 3.4 million manufacturing jobs have been lost since 1998, and 2.9 million have been lost since 2001

 

The AFL-CIO details the American job loss by manufacturing sector in the 2001-05 period:

 

Computer and electronics:  543,000 workers or 29.2 percent

 

Semiconductor and electronic components: 260,100 or 36.7 percent

 

Electrical equipment and appliances:  152,500 or 26 percent

 

Vehicle parts: 153,400 or 18.6 percent

 

Machinery: 289,400 or 19.9 percent

 

Fabricated metal products: 235,200 or 13.3 percent

 

Primary metals:  144,800 or 23.5 percent

 

Transportation equipment: 246,300 or 12.1 percent

 

Furniture products: 58,500 or 13.4 percent

 

Textile mills: 158,500 or 43.1 percent

 

Apparel 220,000 or 46.6 percent

 

Leather products: 24,700 or 38.3 percent

 

Printing: 159,300 or 19.9 percent

 

Paper products: 122,600 or 20.4 percent

 

Plastics and rubber products: 141,400 or 15 percent

 

Chemicals: 94,900 or 9.7 percent

 

Aerospace: 46,900 or 9.1 percent

 

Textiles and apparel declined by 870,000 jobs 1994-2006, a decline of 65.4 percent.[i][8] 

 

As of June 2006, there were only 14.259 million manufacturing workers, down from 19.426 million at the high point in 1979.  This means that only 9.86 % of all US employment was in manufacturing—down from 21.6 % in 1979.

At the end of 2005, only 13% of all manufacturing workers were in unions.

The minimum wage level has been unchanged for the past nine years.  The US minimum wage has remained at $5.15 an hour since September 1, 1997.  Since the last increase, the cost of living has risen 26 percent.  After adjusting for inflation, this is the lowest level of the minimum wage since 1955 [not figured in is the dramatic drop in job benefits]. 

In 1979, two-thirds of all high school graduates got health care coverage in entry-level jobs, while only one-third do today

Figures provided by Stephen Franklin—obtained from the US Bureau of Statistics, and presented in 1982 dollars—show that a production worker in January 1973 earned $9.08 an hour—and $8.19 an hour in December 2005 [Thus while production per worker has risen over 40%, their rewards have dropped including benefits]

In 2004, total US household debt was $10.276 trillion, with home mortgage debt being $7.568 trillion and non-mortgage debt $2.141 trillion.

Between 1973 and 2001, the wage and salary income of Americans at the 90th percentile of the income distribution rose only 34 percent, or about 1 percent per year.

 

But income at the 99th percentile rose 87 percent; income at the 99.9th percentile rose 181 percent; and income at the 99.99th percentile rose 497 percent {plus their taxes have been cut}. 

 

US National Debt.  Between 1789 and1980—from Presidents Washington through Carter—the accumulated US National Debt was $909 billion or, to put it another way, $.909 trillion.  During Ronald Reagan’s presidency (1981-89), the National Debt tripled, from $.9 trillion to $2.868 trillion.  As of the end of 2005, 16 years later and after a four-year period of Clinton surpluses where the debt was somewhat reduced, National Debt (or Gross Federal Debt) was $7.905 trillion.  In April 2006, one investor reported that “the US Treasury has a hair under $8.4 trillion in outstanding debt.  the US economy, the most productive in the world, had a Gross Domestic Product (GDP) of $11.7 trillion in 2004, but the National Debt was $7.9 trillion, or 67.5% of GDP—and growing.  At the end of 2005, the total value of outstanding Treasuries—to all investors, not just other countries—was $8.170 trillion.  It turns out that at in December 2004, foreigners owned approximately 61% of all privately-held outstanding US Treasuries.  Of that, 7% was held by China; these were valued at $223 billion.

 

Reserve has raised interest rates 15 out of their last 18 meetings—and will probably resume raising them shortly.  And, as known, the higher the interest rate, the more costly it is to borrow money domestically, which means increasingly likelihood of recession—if not worse.  {Two things are done to make T bills more attractive, one is to raise the return, viz., higher rates, and secondly to make the foreign dollar buy more by having the U.S. currency fall.  All interest rates rise (with very brief exception when T bills rise.  And all over sea commodities (oil, copper, coffee, etc.) and manufactured goods) rise since it takes more dollars for the importers to buy them.  The U.S. dollar has fallen about 35% in the last 2 years—jk.}

 

The US international balance of trade is in the red and is worsening:  -$723.6 billion in 2005.  In 1991, it was -$31 billion.  Since 1998, the US trade balance has set a new record for being in the hole every year, except 2001, and then breaking the all time high the very next year!  -$165 B in 1998; -$263 B in 1999; -$378 B in 2000; only -$362 B in 2001; -$421 B in 2002; -$494 B in 2003; -$617 B in 2004; and - $723 B in 2005.  The bottom line is that a current account deficit of this unparalleled magnitude is unsustainable and there is no hope of it being painlessly resolved through higher exports alone,” according to one analyst.

According to Stockholm International Peace Research Institute, in 2004, the US “defense” spending was equivalent to 46.7% of all military spending in the world, meaning that almost more money is provided for the US military in one year than is spent by the militaries of all the other countries in the world combined.  And it doesn’t include the $500 B spent so far, approximately, on wars in Afghanistan and Iraq.

 

In short, not only have things gotten worse for American working people since 1973—and especially after 1982, with the imposition of neo-liberal economic policies by institutions of the US Government—but on-going Federal budget deficits, the escalating National Debt, the need to attract foreign money into US Treasuries, as well as the massive amounts of money being channeled to continue the Empire, all suggest that not only will intensifying social problems not be addressed, but will get worse for the foreseeable future. 

 

 

End of stats in Kim Scipes’ article


 

HEALTH CARE:  According to the WHO in 2005,  the U.S. rates 37th among nations as to the overall quality of health care, while at the same time having the most expensive system.  According to Rueters (March of 06), an American couple that retires at the age of 65 will on the average need $200,000 in retirement to cover out-of-pocket medical costs.  That amounts to the biggest single expense for mot people in retirement. 

 

Union membership dropped to 12% of U.S. workers last year, extending a steady decline from the 1950s when more than a third belonged to unions.  After membership had held steady at 12.5% in 2005, it declined anew last year, a decrease of more than 325,000 workers, the Bureau of Labor Statistics said.

Membership had been 20.1% in 1983, when the bureau first provided comparable numbers. About 35% of American workers were union members in the mid-1950s.

LA times, Jan 26, 2007, from Associated Press. 


The below data is found in an article by economist Kim Scipes, in zmag.org Feb 07:

Between 2000-2005, entry-level wages for male college graduates fell by 7.3% (to $19.72/hr).

 

Entry-level wages for female college graduates fell by 3.5% (to $17.08).

 

Entry-level wages for male high school graduates fell by 3.3% (to $10.93)

 

Entry-level wages for female high school graduates fell by 4.9% (to $9.08)

 

A 2004 story in Business Week found that 24 percent—one of every four—of all working Americans received wages below the poverty line.

 

A 2006 story in Business Week found that US job growth between 2001-2006 was really based on one industry:  health care.  Over this five-year period, the health-care sector has added 1.7 million jobs, while the rest of the private sector has been stagnant. 

Over 3.4 million manufacturing jobs have been lost since 1998, and 2.9 million have been lost since 2001

 

The AFL-CIO details the American job loss by manufacturing sector in the 2001-05 period:

 

Computer and electronics:  543,000 workers or 29.2 percent

 

Semiconductor and electronic components: 260,100 or 36.7 percent

 

Electrical equipment and appliances:  152,500 or 26 percent

 

Vehicle parts: 153,400 or 18.6 percent

 

Machinery: 289,400 or 19.9 percent

 

Fabricated metal products: 235,200 or 13.3 percent

 

Primary metals:  144,800 or 23.5 percent

 

Transportation equipment: 246,300 or 12.1 percent

 

Furniture products: 58,500 or 13.4 percent

 

Textile mills: 158,500 or 43.1 percent

 

Apparel 220,000 or 46.6 percent

 

Leather products: 24,700 or 38.3 percent

 

Printing: 159,300 or 19.9 percent

 

Paper products: 122,600 or 20.4 percent

 

Plastics and rubber products: 141,400 or 15 percent

 

Chemicals: 94,900 or 9.7 percent

 

Aerospace: 46,900 or 9.1 percent

 

Textiles and apparel declined by 870,000 jobs 1994-2006, a decline of 65.4 percent.[i][8] 

 

As of June 2006, there were only 14.259 million manufacturing workers, down from 19.426 million at the high point in 1979.  This means that only 9.86 % of all US employment was in manufacturing—down from 21.6 % in 1979.

At the end of 2005, only 13% of all manufacturing workers were in unions.

The minimum wage level has been unchanged for the past nine years.  The US minimum wage has remained at $5.15 an hour since September 1, 1997.  Since the last increase, the cost of living has risen 26 percent.  After adjusting for inflation, this is the lowest level of the minimum wage since 1955 [not figured in is the dramatic drop in job benefits]. 

In 1979, two-thirds of all high school graduates got health care coverage in entry-level jobs, while only one-third do today

Figures provided by Stephen Franklin—obtained from the US Bureau of Statistics, and presented in 1982 dollars—show that a production worker in January 1973 earned $9.08 an hour—and $8.19 an hour in December 2005 [Thus while production per worker has risen over 40%, their rewards have dropped including benefits]

In 2004, total US household debt was $10.276 trillion, with home mortgage debt being $7.568 trillion and non-mortgage debt $2.141 trillion.

Between 1973 and 2001, the wage and salary income of Americans at the 90th percentile of the income distribution rose only 34 percent, or about 1 percent per year.

 

But income at the 99th percentile rose 87 percent; income at the 99.9th percentile rose 181 percent; and income at the 99.99th percentile rose 497 percent {plus their taxes have been cut}. 

 

US National Debt.  Between 1789 and1980—from Presidents Washington through Carter—the accumulated US National Debt was $909 billion or, to put it another way, $.909 trillion.  During Ronald Reagan’s presidency (1981-89), the National Debt tripled, from $.9 trillion to $2.868 trillion.  As of the end of 2005, 16 years later and after a four-year period of Clinton surpluses where the debt was somewhat reduced, National Debt (or Gross Federal Debt) was $7.905 trillion.  In April 2006, one investor reported that “the US Treasury has a hair under $8.4 trillion in outstanding debt.  the US economy, the most productive in the world, had a Gross Domestic Product (GDP) of $11.7 trillion in 2004, but the National Debt was $7.9 trillion, or 67.5% of GDP—and growing.  At the end of 2005, the total value of outstanding Treasuries—to all investors, not just other countries—was $8.170 trillion.  It turns out that at in December 2004, foreigners owned approximately 61% of all privately-held outstanding US Treasuries.  Of that, 7% was held by China; these were valued at $223 billion.

 

Reserve has raised interest rates 15 out of their last 18 meetings—and will probably resume raising them shortly.  And, as known, the higher the interest rate, the more costly it is to borrow money domestically, which means increasingly likelihood of recession—if not worse.  {Two things are done to make T bills more attractive, one is to raise the return, viz., higher rates, and secondly to make the foreign dollar buy more by having the U.S. currency fall.  All interest rates rise (with very brief exception when T bills rise.  And all over sea commodities (oil, copper, coffee, etc.) and manufactured goods) rise since it takes more dollars for the importers to buy them.  The U.S. dollar has fallen about 35% in the last 2 years—jk.}

 

The US international balance of trade is in the red and is worsening:  -$723.6 billion in 2005.  In 1991, it was -$31 billion.  Since 1998, the US trade balance has set a new record for being in the hole every year, except 2001, and then breaking the all time high the very next year!  -$165 B in 1998; -$263 B in 1999; -$378 B in 2000; only -$362 B in 2001; -$421 B in 2002; -$494 B in 2003; -$617 B in 2004; and - $723 B in 2005.  The bottom line is that a current account deficit of this unparalleled magnitude is unsustainable and there is no hope of it being painlessly resolved through higher exports alone,” according to one analyst.

According to Stockholm International Peace Research Institute, in 2004, the US “defense” spending was equivalent to 46.7% of all military spending in the world, meaning that almost more money is provided for the US military in one year than is spent by the militaries of all the other countries in the world combined.  And it doesn’t include the $500 B spent so far, approximately, on wars in Afghanistan and Iraq.

 

In short, not only have things gotten worse for American working people since 1973—and especially after 1982, with the imposition of neo-liberal economic policies by institutions of the US Government—but on-going Federal budget deficits, the escalating National Debt, the need to attract foreign money into US Treasuries, as well as the massive amounts of money being channeled to continue the Empire, all suggest that not only will intensifying social problems not be addressed, but will get worse for the foreseeable future. 

 

 

End of stats in Kim Scipes’ article

 

 

 

BOTTLENECK

There is a bottleneck in the capitalist system, for instead of opening up everything within a country to the people based upon need, resources, and capacity to produce; production is tied to the market place.  The combination cash in hand and credit of a person determines what he can purchase.  Once deductions are made for essential and near essential items (housing, clothing, transportation, telecommunication, health care, and food), what is less is termed surplus cash.  Since there is only so much surplus cash left for a better car, computer, better housing, etc.  For about half the population there is very little surplus cash.  This creates a bottleneck, for factories have greater capacity, yet it remains unused for the lack of surplus cash.  Resources for housing exist and the labor is ready to built, but for the lack of funds among a large segment of the population due to low pay and under employment, the housing is not built.  An ideal planned economy would get around this bottleneck, for production would be determined by needs, manpower, and resources.   

    

THE PIED PIPER

     A fundamental change in the power structure has packed our two party system with those who support the corporations system.  Like a theocracy or the rule of the nobility, the rights of a particular group are favored at the expense of the masses.  With this understanding of the position of our elected officials (look to their actions not to their rhetoric).  They listen to such groups as the Economic Roundtable and lobbyists because they share the same faith.  What follows below is their example of doing the corporate bidding as to environmental protection.

For the best account of the Federal Reserve  (http://www.freedocumentaries.org/film.php?id=214).  One cannot understand U.S. politics, U.S. foreign policy, or the world-wide economic crisis unless one understands the role of the Federal Reserve Bank and its role in the financialization phenomena.  The same sort of national-banking relationships as in our country also exists in Japan and most of Europe.