The Executive/Financial Class, The Political/Union Class, Generation Greed and the Serfs: Wherever You Look It’s Getting Worse

I think people who read this blog would agree that I follow U.S. public finance issues pretty closely, including those related to taxation.  But I recently found out something I had never heard of before, that was never publicly debated in any news source I follow, that no “progressive” politician has objected to as far as I know, and frankly I’m shocked.

https://www.marketwatch.com/story/heres-the-formula-for-paying-no-federal-income-taxes-on-100000-a-year-2019-11-22

In a country with a median household income of less than $62,000, you can get more than $100,000 a year while not working and pay no federal tax at all, because $80,000 in investment income (dividends and capital gains) is tax exempt!  Even as work income for the less well off is taxed twice, by the payroll tax, and the income tax.   It turns out that for married couples, while other income might be taxable if it is higher, that $80,000 in investment income is fully exempt from taxes even if total income is as high as $184,250 — with other deals up to $200,000.

How could this possibly be thought of as fair?   After all, a working couple with half that income from work would pay $7,500 in payroll taxes (or $15,000 if they were “gig” workers) and federal income taxes – at a higher rate – on top of that.  Why hasn’t a single pundit or politician raised a loud objection?

 

Having investment income taxed at a lower rate than work income started with the administration of Democrat Bill Clinton, the first Baby Boomer President, who wanted to help the Democrats compete for Wall Street and Silicon Valley campaign contributions.  That much I already knew.

https://www.taxpolicycenter.org/taxvox/who-benefits-zero-percent-tax-bracket-capital-gains-and-dividends

The 2003 tax cuts created the zero percent bracket for long-term capital gains and qualified dividend income, which went into effect in 2008. Supporters argued that lowering taxes on capital gains and dividends would boost growth, reduce double taxation, and help middle-class seniors.

That’s the administration of Republican George W. Bush.  Evidently having the same work income taxed under both the federal payroll tax and the federal income tax is not double taxation, but having capital gains and dividend income taxed at all is double taxation.

The 2012 tax bill made the lower rates permanent for most filers.

Democrat Barack Obama was in office, and running for re-election.

Then Donald Trump was elected promising to turn the Republican Party into a workers party, and make rich people like himself pay their fair share. Remember that promise?  But after the Republican congress passed his tax bill, the only thing his administration actually got done, the amount of total income someone could get and still pay zero taxes on the first $80,000 in investment income went up.  And no one talked about it.  Why?

In 2014, 11.1 million returns reported $77.2 billion in gains and dividends that were taxed at zero percent. About four-in-ten of those filers were age 65 or older and most untaxed gains and dividends were reported by filers making under $200,000 in AGI.

Well off seniors. Generation Greed and the Dream Hoarders.

Which sounds like a 1960s rock group named after what the values of the generation that came of age at the time turned out to be.

I guess it’s “progressive” in the same way as a cheap rent stabilized apartment in Manhattan for an older upper middle class household that also has a $1 million home in the Hamptons.  After all, it isn’t like they have a $20 million home in the Hamptons.  I’ll bet a whole lot of people in Bernie Sanders’ orbit benefit personally from this deal — and find a way to rationalize it.

And therefore, this is under Omerta, even as later-born workers face lower incomes, higher taxes, and eventually poverty and ill health in old age, and falling life expectancy.   Even as the Democrats propose increasing Social Security benefits for today’s retired, and paying for it by increasing payroll taxes by 2 percent of later-born generations’ income – in the future, after the last members of Generation Greed are retired and living off tax free investment income.

https://larrylittlefield.wordpress.com/2019/02/17/social-security-the-democrats-join-generation-greeds-theft-of-the-future-from-less-well-off-later-born-generations/

Not only do they demand to take more and more and more, they also demand total silence on what is going on, because they don’t want to feel bad about it.

 

Look elsewhere, to Connecticut, and you see the same thing. A year ago I asked whether newly elected Governor Ned Lamont would be the first to honestly tell his constituents how much of the disadvantages they are facing in the present and future are the result of self-dealing by prior generations, his generation, in the past.

https://larrylittlefield.wordpress.com/2018/11/17/will-connecticuts-ned-lamont-be-the-first-to-tell-the-truth-about-generation-greed/

Later-born generations of state residents are facing a future of ever-rising taxes and service cuts due to past public employee pension underfunding and inadequate infrastructure investment.  As businesses and young residents flee, you’d think that state would want to do something to lure them back. But what do we get in Lamont’s first budget?  More self-dealing by Generation Greed, and it is bi-partisan.

https://www.middletownpress.com/middletown/article/End-of-tax-on-retirement-income-begins-Monday-14064252.php

When the new fiscal year begins on Monday, senior citizens and those closing-in on retirement may start to get a little encouragement to stay in Connecticut. After a couple years of delays, the multi-year phasing-out of income taxes on retirement income will finally begin. 

The issue has been kicking around for several years. In particular, House Democrats made it a part of their 2016 election campaign. But the state’s fiscal challenges, with accompanying multi-billion-dollar budget deficits, precluded its enactment.

Nora Duncan, state director of the AARP, said retaining the benefits was a priority for the group during the recently completed legislative season.

All Social Security income, and other retirement income up to $100,000, will be tax exempt.

Duncan noted that as the state with the seventh-oldest population in the country, the added benefits are crucial for those making decisions on aging in the state. “ I think this bipartisan decision went a long way in preventing more out-migration to less-expensive states,” she said.

I suppose the problem is Connecticut has too few seniors, and too many jobs and working families with children.  So exempt the former, and tax the latter.  And what is the less expensive state?  Perhaps New York where all the retirement income of public employees is fully exempt from state and local income taxes no matter how high it is, while for private sector workers Social Security and the first $20,000 in retirement income is tax exempt.

These are the folks who made Connecticut great.”

Actually, these are the people who pillaged the state’s future.  But they don’t want to hear it.

Jackson said that while about 527,000 state residents receive Social Security, not all will see a benefit because some with lower incomes are already exempt, while others’ income might exceed thresholds.

If seniors are paying no state income taxes because their incomes are low, that means workers with the same incomes would also pay no taxes.  The seniors want a special deal instead.

While many retirees have income levels that might seems comfortable, as they get older, high medical bills and expenses increase the general cost of living here,” said Senate President Pro Tempore Martin M. Looney, D-New Haven.

Those seniors get most of their health care paid for by Medicare, which later born generations are having to pay for.  If the state had merely exempted high health care expenditures from taxation, then not only seniors but also younger people with high health care costs would have benefitted.  So they can’t do that.

“It is infuriating that Gov. Lamont and Democrat lawmakers were actually considering repealing these promises made to Connecticut retirees,” Fasano said. “I am glad that at the end of the day, the tax breaks Republicans fought to include in the bipartisan budget two years ago will remain in place as promised. Repealing these promises should never have even been a question this year.”

 

So what about taxes on workers and businesses?

https://ctmirror.org/2019/06/03/house-begins-debate-on-43-billion-two-year-budget/

Lamont spent considerable political capital resisting any increase in income tax rates, which had been increased in 2009, 2011 and 2015.

They jacked up the tax burden on later born generations when the fiscal situation was bad, and then exempted seniors from paying taxes when it got better.  And then they increased other taxes further.

The sales tax on digital downloads rises from 1 percent to the standard 6.35 percent rate. Sales tax exemptions on parking, dry cleaning, interior design services and safety apparel are eliminated and a 1 percent surcharge on restaurant food and other prepared meals is added.

Grocery store and other retail shoppers will pay a new 10-cents-per-bag tax on plastic bags. This will raise about $27 million per year for the state.

Owners of limited liability corporations and other small and mid-sized businesses that don’t pay the state corporation tax will pay an extra $50 million per year due to the reduction of an income tax credit.

Anyone want to start a business in Connecticut?

The governor also agreed to defer one of his main campaign promises — expanding the largest income tax credit, one that helps low- and middle-income families cover local property taxes. Households without children lost access to that credit, which provides up to $200 per filer with relief.

And on the spending side?

One of the chief methods used to reduce spending — in the short-term — involves Connecticut’s cash-starved pension funds for teachers and for state employees.  Payments into the teachers’ pension would actually drop $150 million over the next two years combined, and then rise — but not as sharply as originally planned, until 2032.  Taxpayers between 2033 and 2049 would have to make up billions of dollars in deferred contributions plus interest.

This was the suggestion made by the Center for Retirement research to increase “generational fairness” — by deferring the pension burden caused by older Connecticut residents getting a better deal in the past until a future when they aren’t around anymore, while covering up the problem so those cashing in and moving to Florida can sell their houses for more.

The STF covers the debt payments on the $700 million-to-$800 million Connecticut borrows annually — and then combines with about $700 million in federal grants — to pay for highway, bridge and rail line upgrades.  Legislators approved a plan two years ago to dedicate an increasing share of sales tax receipts to the STF in the coming years.  Even given that initiative, Department of Transportation officials have warned that dozens of planned projects could fall into limbo over the next five years unless a new major funding source is established. The next budget captures most of the additional sales tax receipts earmarked for transportation, $172 million over the next two years combined, and keeps them in the General Fund.

Same policy, different state, eh?

“This budget invests,” House Majority Leader Matt Ritter, D-Hartford said…despite the challenges of a multi-billion-dollar deficit forecast and a spending cap. “We found a way to invest in our nursing homes,” Ritter said.

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While the increasing predation of the political/union class and Generation Greed remain under Omerta, one can find discussions in the business and financial press about the ways the executive/financial class is pillaging the future of the United States.  By having the top executives who sit on each other’s boards use stock buybacks and grants to transfer the ownership of American business from the general public to themselves.

https://www.marketwatch.com/story/heres-how-share-buybacks-get-used-to-transfer-billions-of-dollars-to-senior-management-under-the-guise-of-returning-cash-to-shareholders-2019-10-30?mod=home-page

Financialization is profit margin growth without labor productivity growth.  Financialization is the zero-sum game aspect of capitalism, where profit margin growth is both pulled forward from future real growth and pulled away from current economic risk-taking.  Financialization is the story of using share buybacks to mortgage the future of public companies over and over and over again for the primary benefit of today’s management shareholders.  Texas Instruments recently caught my eye. And while I decided to dig into its story, what happened isn’t unique to this company. Texas Instruments is, in fact, a poster child for financialization. And there’s nothing illegal or incompetent about it.

I figure the company generated about $25 billion in truly free cash flow over this 5-year span. What is management going to spend this treasure chest on?

Not capital expenditures, which were less than the amount the company’s existing capital stock depreciated.

Well, if you didn’t spend your money on property, plant and equipment, then surely you spent a healthy sum in M&A, right?  Nope.  I guess you were paying down debt, then. Deleveraging up a storm, right?  Nope.

Some of the money did go to shareholders in the form of dividends.

But it’s just a warm-up to the main event: $15.4 billion in buying back stock from 2014 through 2018.

Now here’s the kicker.  What sort of share-count reduction would you think that this $15.4 billion in buybacks gets you? I mean, that is the logic here, that investing $15.4 billion in the company’s own stock is the best possible capital allocation that the company can make.

From 2014 through 2018, Texas Instruments bought back 228.6 million shares for $15.4 billion. That works out to an average purchase price of $67.37.  Over that same span, Texas Instruments sold 90.8 million shares to management and board members as they exercised options and restricted stock grants, for a total of $2.5 billion. That works out to an average sale price of $27.51. The difference in average purchase price and average sale price, multiplied by the number of shares so affected, is $3.6 billion.  In other words, 40% of Texas Instrument’s stock buybacks over this five-year period were used to sterilize stock issuance to senior management and the board of directors, who received $3.6 billion in direct value from these buybacks.

For the past five years, Texas Instruments has been nothing more than a tracking stock for a passive semiconductor index. And for this privilege, shareholders have rewarded management and directors with $6.2 billion in stock, plus a couple of billion in cash compensation. That’s why it’s never been a better time in the history of the world to be a senior manager of a publicly traded company.

 

So why don’t the shareholders revolt, vote out the board, and demand that all the company profits be either reinvested in its future or paid to themselves?  The executive/financial class is ordering its federal government to make that impossible.

https://www.reuters.com/article/us-usa-sec-proxyadvisers-idUSKBN1XF1YN

Wall Street’s top regulator on Tuesday proposed a pair of long-awaited rules that would set new limits on shareholders’ ability to call for corporate changes on thorny issues like climate change disclosures and executive compensation.

In one of the biggest wins for the corporate lobby under President Donald Trump, the U.S. Securities and Exchange Commission voted 3-2 along partisan lines to raise the re-submission thresholds for motions that shareholders file on company ballots and to put new requirements on firms guiding investors how to vote in corporate elections.

Both shareholder proposals and proxy advisory firms are cornerstones of corporate governance and how investors hold management accountable….

Industry groups, like the U.S. Chamber of Commerce and the National Association of Manufacturers, both of which lobbied aggressively for the proposals, praised the SEC’s moves.

 

And the investment boom that The Donald promised would result from once again slashing taxes on corporations and the rich?  It has not happened.

https://www.economist.com/united-states/2019/10/30/americas-economy-is-resisting-the-pull-of-recession

“Four, five, and maybe even six percent” growth was what President Donald Trump promised in December 2017. Even within the relatively sober pages of the budget proposal released by the administration in March this year, Mr Trump’s team forecast economic growth rates of 3% or more right through 2024—which would be the last full year of a second Trump term, were one to occur. Instead, the American economy, which just missed the 3% growth target in 2018 despite the boost from the president’s budget-busting tax bill, continues to lose steam. In the third quarter of this year GDP, adjusted for inflation, rose at an annualised rate of 1.9%, down from 2% in the previous three months.

Back to the “new normal” of the Obama Administration, which is better than Japan, for now.

Anxiety among bosses is affecting investment: the boost to third-quarter GDP from investment in housing was more than offset by a hefty drop in investment in non-residential building and equipment. Weak investment figures are particularly irksome to economists in the Trump administration, who argued that the president’s tax reform would encourage a boom in business spending.

Irksome? The whole idea was upward income redistribution, not investment and growth.  And that’s what we got.  Although it seems possible that the Administration will start falsifying the economic data, making the whole thing seem better than it actually is.

 

So that’s what the C-suite executives are paying to each other.  What about what they are paying to the rest of us?  It turns out that their union, the most powerful and rapacious in the country, is using its monopoly power to cut everyone else’s pay.

https://www.marketwatch.com/story/the-no-1-reason-you-should-not-sign-your-employers-non-compete-clause-2019-12-10

At least one quarter of all private sector workers are under non-compete clauses that can close off job prospects and stifle business competition, a trend that’s intensified in the past several years. The researchers surveyed a nationally representative sample of businesses and concluded anywhere from 27.8% and 46.5% of all private sector workers have signed non-compete clauses.  A 2015 study estimated 18.1% of workers had signed the non-compete clauses, which can bar workers from decamping for similar work at a competitor during a certain period of time.

‘Your employer knows you have no outside options.’ —Heidi Shierholz, the Economic Policy Institute’s senior economist.  Businesses might also prohibit workers, like those in sales, from working for competitors or starting their own business in certain geographic areas.

Non-compete paperwork is often included in a mound of other new-hire documents, said the study, which used 2017 responses from more than 600 companies.

The new study said the clauses usually applied to higher paying jobs, but many lower-wage workers still signed non-compete documents. Almost one third (29%) of businesses with an average hourly wage of less than $13 had all their workers sign non-compete clauses.

“I think perhaps there’s room to debate whether non-competes at useful tools for executives and other high level workers. People can debate that, I imagine, to some extent,” Rubio said.

“But the broad harm that non-competes have caused American working families is, in my view, beyond dispute,” he added.

 

And when those workers, facing monopolization in the labor market, go to spend that shrinking amount of money?  They find increasing monopolization in the consumer market too.

https://www.theatlantic.com/ideas/archive/2019/10/europe-not-america-home-free-market/600859/

When I arrived in the United States from France in 1999, I felt like I was entering the land of free markets. Nearly everything—from laptops to internet service to plane tickets—was cheaper here than in Europe.

Twenty years later, this is no longer the case. Internet service, cellphone plans, and plane tickets are now much cheaper in Europe and Asia than in the United States, and the price differences are staggering.

None of this has happened by chance. In 1999, the United States had free and competitive markets in many industries that, in Europe, were dominated by oligopolies. Today the opposite is true. French households can typically choose among five or more internet-service providers; American households are lucky if they have a choice between two, and many have only one. The American airline industry has become fully oligopolistic; profits per passenger mile are now about twice as high as in Europe, where low-cost airlines compete aggressively with incumbents.  This is in part because the rest of the world was inspired by the United States and caught up, and in part because the United States became complacent and fell behind.

In industry after industry in the United States—the country that invented antitrust laws—incumbent companies have increased their market power by acquiring nascent competitors, heavily lobbying regulators, and lavishly spending on campaign contributions. Free markets are supposed to punish private companies that take their customers for granted, but today many American companies have grown so dominant that they can get away with offering bad service, charging high prices, and collecting, exploiting, and inadequately guarding their customers’ private data.

Of course the cost and quality of monopoly public services in places like NY is even worse.  Let alone our health care industry, as I wrote about a year and a half ago.

https://larrylittlefield.wordpress.com/2018/04/15/the-economist-on-the-death-care-industry/

A central argument of the Chicago school of antitrust—whose laissez-faire approach was influential in persuading American regulators to take a more hands-off attitude toward mergers—is that monopoly power is transient because high profits attract new competitors. If profits rise in one industry and fall in another, one would expect more entry of new firms in the former than in the latter. This used to be true—until the late 1990s.

Since about 2000, however, high profits have persisted, rather than attracting new competitors to the American market. This suggests a shift from an economy where entry acted as a fundamental rebalancing mechanism to one where high profits mostly reflect large barriers to entry. The Chicago school took free entry for granted and underestimated the many ways in which large firms can keep new rivals out.

Creeping monopoly power has slowly but surely suffocated the middle class. From 2000 to 2018, the median weekly earnings of full-time workers increased from $575 to $886, an increase of 54 percent, but the Consumer Price Index increased by 46 percent. As a result, the real labor income of the typical worker has grown by less than one-third of 1 percent a year for nearly two decades. This explains in part why much of the middle class distrusts politicians, believes the economic system is rigged, and even rejects capitalism altogether.

What the middle class may not fully understand, however, is that much of its stagnation is due to the money that monopolists and oligopolists can squeeze out of consumers.

 

The situation is so bad that even one hedge fund manager believe the whole thing is heading for a collapse.

https://www.linkedin.com/pulse/world-has-gone-mad-system-broken-ray-dalio/

The World Has Gone Mad and the System Is Broken

I suggest you read the whole thing, about how the future has been sold out from under most Americans in the public and private sectors.   The conclusion?

This set of circumstances is unsustainable and certainly can no longer be pushed as it has been pushed since 2008. That is why I believe that the world is approaching a big paradigm shift.

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And what about the political/union class?  They have figured out that even in pro-government places, in order to keep taking more and more from the serfs they have to lie and say tax increases are going to services, not early retirement on richer terms due to past pension enrichment deals.  They get away with that lie in New York.

But when people become aware of what has actually happened, as in California, they need to order their politicians to take more from the serfs in some other way.

Pension costs feed resistance to higher school taxes in California county, study finds

The unexpected defeat in 2016 of a school parcel tax in wealthy Marin County and the near-defeat of another in the county that same year prompted a trio of authors to look into what had turned many voters against them.

Their conclusion, in a report issued last week by the nonprofit Policy Analysis for California Education, was that the high cost of school employee pensions was very much on voters’ minds — a bad omen for other districts considering parcel taxes to supplement state funding for schools.

Marin County may be “a harbinger of perilous political dynamics around pensions, taxes and education funding for rest of the state.”

Since property taxes are capped, California localities have been raising parcel taxes that take an equal amount from every property regardless of its value, a very unfair and regressive tax.  A poor family in a shack pays as much as a huge office building or mansion.  It’s insane that any place that imposes such a tax could be considered “progressive,” but the meaning of progressive has changed.

Only about 10 percent of students in California are in districts with a parcel tax. Those districts are primarily in the San Francisco Bay Area — and most common in Marin County, one of the state’s wealthiest and most politically liberal counties, where 15 of 18 school districts have had them.

Apparently the meaning of politically liberal has also changed, unless that’s what it meant all along.

The study’s authors found a growing frustration that increasing pension costs were crowding out school districts’ budgets, forcing cuts to programs that parents valued and competing with salary increases for teachers needed to keep pace with fast-rising housing expenses in the Bay Area.

The study projected that from 2011-12 to 2020-21, the cost of benefits — primarily pension contributions and health care — would rise from 18 to 25 percent of county districts’ budgets. Meanwhile, reflecting staff cuts and larger class sizes, teacher salaries would fall from 48 to 45 percent of the budgets.

Of course things are far, far worse than that for NYC, at a far, far higher overall state and local government tax burden.

By 2020-21, districts’ CalSTRS contributions will have risen from 8.25 percent to 19.1 percent of a teacher’s salaries. Because teachers’ pay is above the state average in most Marin County districts, their state-mandated pension contributions are higher, too.

For NYC it’s 40 percent, but it should probably be 60 percent or more, so we’re going deeper in the hole and it will be worse later. And that isn’t even accounting for the future irrevocable retroactive pension increases the United Federation of Teachers will order its state legislators to pass with no debate or disclosure at some future 3 am.

 

What’s the big picture?  From the Ray Dalio piece, which should, once again, be read in full.

Large government deficits exist and will almost certainly increase substantially, which will require huge amounts of more debt to be sold by governments—amounts that cannot naturally be absorbed without driving up interest rates at a time when an interest rate rise would be devastating for markets and economies because the world is so leveraged long. Where will the money come from to buy these bonds and fund these deficits? It will almost certainly come from central banks, which will buy the debt that is produced with freshly printed money. This whole dynamic in which sound finance is being thrown out the window will continue and probably accelerate, especially in the reserve currency countries and their currencies—i.e., in the US, Europe, and Japan, and in the dollar, euro, and yen.

At the same time, pension and healthcare liability payments will increasingly be coming due while many of those who are obligated to pay them don’t have enough money to meet their obligations. Right now many pension funds that have investments that are intended to meet their pension obligations use assumed returns that are agreed to with their regulators. They are typically much higher (around 7%) than the market returns that are built into the pricing and that are likely to be produced. As a result, many of those who have the obligations to deliver the money to pay these pensions are unlikely to have enough money to meet their obligations. Those who are recipients of these benefits and expecting these commitments to be adhered to are typically teachers and other government employees who are also being squeezed by budget cuts. They are unlikely to quietly accept having their benefits cut.

And demand not to hear that it was unfair for them to have their benefits retroactively increased to MORE THAN they had been promised, while other workers were increasingly impoverished to keep down their cost of living.  Forget Medicare for all – it’s like Trump’s promise of higher taxes on the rich.  The public unions even opposed Obamacare.  The last thing they want is equality.

While pension obligations at least have some funding, most healthcare obligations are funded on a pay-as-you-go basis, and because of the shifting demographics in which fewer earners are having to support a larger population of baby boomers needing healthcare, there isn’t enough money to fund these obligations either.

Since there isn’t enough money to fund these pension and healthcare obligations, there will likely be an ugly battle to determine how much of the gap will be bridged by 1) cutting benefits, 2) raising taxes, and 3) printing money (which would have to be done at the federal level and pass to those at the state level who need it). This will exacerbate the wealth gap battle. While none of these three paths are good, printing money is the easiest path because it is the most hidden way of creating a wealth transfer and it tends to make asset prices rise. After all, debt and other financial obligations that are denominated in the amount of money owed only require the debtors to deliver money; because there are no limitations made on the amounts of money that can be printed or the value of that money, it is the easiest path. The big risk of this path is that it threatens the viability of the three major world reserve currencies as viable storeholds of wealth. At the same time, if policy makers can’t monetize these obligations, then the rich/poor battle over how much expenses should be cut and how much taxes should be raised will be much worse. As a result rich capitalists will increasingly move to places in which the wealth gaps and conflicts are less severe and government officials in those losing these big tax payers will increasingly try to find ways to trap them.

 

Argentina.  Some even say that “Modern Monetary Theory” is inevitable.  MMT is to the Democrats what the Laffer Curve is to the Republicans – a something (for us today) allegedly for nothing (from everyone else, in the future) lie.  Tax cuts for the rich under Reagan, Bush and Trump didn’t cause government deficits to disappear. They caused government – other than entitlements for seniors – to disappear.

May I point out that Social Security is automatically adjusted for inflation, at least for current beneficiaries, and NYC public employees typically get raises in excess of inflation.  But the minimum wage is not indexed for inflation.  The goal is to have most workers become poorer and poorer relative to the rich, retired public employees, and the current rich generation of retirees.  Where will the impoverished workers turn?  Well, we know where they turned after Germany monetized its debts in the 1920s.  Could the U.S. get a Hitler?  Probably not.  But a Mussolini or Peron?  We practically have one already.

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When I look at the future of those Americans younger than myself, what concerns me most is not that they will be poor, and highly taxed, and have bad schools, and face ill health, and have to deal with ongoing infrastructure failures and perhaps eventually catastrophic climate change. It is that they could be lonely.

The collapse of the family is perhaps the greatest failure of Generation Greed (or success, based on their own short term self interest), and the greatest example of their values – freedom from responsibility. How many of today’s prominent politicians grew up in stable families with marriages that, however imperfect they might have been, stayed intact for their benefit, but then pursued better deals for themselves in breaking their own marriages up — or not having them to begin with — to the detriment of their own children?

Generation Greed uses its preferred weapon – tribalism – to distract from its collective failure.  Incredibly, it seems the administration of The Donald, of all people, is trying to blame the whole thing on “liberals.”  Even though Trump is THE Man of his generation, and the exemplar of all it represents in business, government and personal life.

 

When Attorney General William Barr warned in a speech at Notre Dame on Oct. 11 that secular liberalism had unleashed “licentiousness — the unbridled pursuit of personal appetites at the expense of the common good,” there was a glaring incongruity.  How could Barr possibly fail to recognize that there is no better example of a man in unbridled pursuit of his own appetites than his boss?

Barr’s hypocrisy aside, his commentary — “the campaign to destroy the traditional moral order has brought with it immense suffering, wreckage and misery. And yet, the forces of secularism, ignoring these tragic results, press on with even greater militancy” — is part of a renewed drive by social conservatives to demonize liberal elites.

This theme underpins the new book by Mary Eberstadt, a senior research fellow at the Faith & Reason Institute, “Primal Screams: How the Sexual Revolution Created Identity Politics.” The alterations of traditional family structure and the social order brought forth by the sexual revolution, Eberstadt writes, “have simultaneously rained down destruction on the natural habitat of the human animal, with radical results we are only beginning to understand.”

The generation that made that happen is, of course, heavily Republican.

In practice, many, if not most, liberals are as deeply disturbed by familial dysfunction as conservatives, but they are not ranting about it. Instead of promoting the kind of anarchy described by Barr and others on the right, scholars on the left now acknowledge that the sexual revolution and the personal autonomy movement had significant costs as well as notable gains.

Those negative consequences include the explosion of divorce, paternal absence and the growing legions of children raised in single parent households.

And then there is the fact that it is the well-educated, often secular liberal elites so detested by social conservatives who are reviving the traditional two-parent family, with declining divorce rates and a commitment to combine forces to invest in their children.

A December 2015 Pew study found that the probability of a first marriage lasting at least 20 years was 78 percent for a college-educated woman, 49 percent for a woman with some college but no degree and 40 percent for a woman with a high school degree or less. In the 1980s, at the height of the divorce revolution, there was virtually no difference in the divorce rates of women and men by level of education.

Now we are in a new social paradigm that has normalized nonmarital childbearing and child rearing among certain segments of the population, and it will take more than economic improvement to restore the stable two-parent family in the communities it which that norm has been steadily eroding.

Otherwise, comparing the behavior of today’s young adults with that of Generation Greed at the same age.

We need to address the underlying premise that there is a rise in social disorder. That claim does not hold up to scrutiny, in both the long and short term. In the United States and many other parts of the world, the last two decades have seen a remarkable decline in many of the most visible signs of social disorder.

The reality is that Barr is not only selling traditional values to conservative voters, some of whom are genuinely starved for them, he is also marketing apocalyptic hogwash because, for his boss to get re-elected, Trump’s supporters must continue to believe that liberals and the Democratic Party are the embodiment of evil, determined to destroy the American way of life.

Because the alternative is to look at the generational, bi-partisan destruction that has occurred.  So we get this:  Donald Trump, the family values candidate.  No doubt he values family more now that he is aging and he might need his children to take care of him rather than the reverse.  The same with many members of his generation.

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I’ve heard all this rationalized 1,000 ways over four decades.  Wages weren’t really falling adjusted for inflation, because inflation was mis-estimated.  Taxes are rising and services are being cut because “Wall Street stole our money,” not because public unions took too much out and past generations of taxpayers didn’t put enough in.  Some got a bailout at the expense of the common future, so others deserve a bailout at the expense of the common future, due to “fairness.”   But “fairness” with regard to later-born generations who will inherit that diminished future? This is never allowed to be thought about.

But do you want to argue with death?

https://www.nytimes.com/2019/11/26/health/life-expectancy-rate-usa.html

As the life expectancy of Americans has declined over a period of three years — a drop driven by higher death rates among people in the prime of life — the focus has been on the plight of white Americans in rural areas who were dying from so-called deaths of despair: drug overdoses, alcoholism and suicide.

But a new analysis of more than a half-century of federal mortality data, published on Tuesday in JAMA, found that the increased death rates among people in midlife extended to all racial and ethnic groups, and to suburbs and cities. And while suicides, drug overdoses and alcoholism were the main causes, other medical conditions, including heart disease, strokes and chronic obstructive pulmonary disease, also contributed, the authors reported.

What did I say four years ago, when it was first reported that White people of my generation were dying in increasing numbers, before the trend was big enough to affect the overall U.S. life expectancy figure?

https://larrylittlefield.wordpress.com/2015/11/08/death-is-the-ultimate-statistic-ii-the-most-important-news-in-ten-years/

I predicted this years ago. This is just the tip of the iceberg, and sooner or later people will have to face the fact that what is happening isn’t about gender, or education, or race, or middle age. Those age 45 to 54 today are the first generation of Americans to be worse off economically than prior generations had been at the same age. The generation that was in childhood when the divorceand single parenthood wave hit, and thus the first to be affected by it. The first of a series of generations that have been disadvantaged in public policy. The first of the generations to follow in the wake of Generation Greed.

Returning to the New York Times article:

“The whole country is at a health disadvantage compared to other wealthy nations,” the study’s lead author, Dr. Steven Woolf of Virginia Commonwealth University, said. “We are losing people in the most productive period of their lives. Children are losing parents. Employers have a sicker work force.”

Between 2010 and 2017, death rates for people aged 25 to 64 increased in nearly every The increase in deaths among people in midlife highlighted the lagging health measures in the United States compared with other wealthy nations, despite the fact that the United States has the highest per capita health spending in the world, noted an editorialthat accompanied the study.

Death rates are actually improving among children and older Americans, Dr. Woolf noted, perhaps because they may have more reliable health care — Medicaid for many children and Medicare for older people.

That isn’t all.  Not hardly.  Perhaps the Millennials are being better parents than the Boomers chose to be, helping their children.  How long they will be able to continue to do so remains unclear.

The study leaves unanswered questions, including, Why is there an increased death rate only in the 25-to-64 age group?

Because these are those who were left worse off by Generation Greed. Just wait to see what will happen as these generations hit old age themselves, in a country that will have been left broke.

So what will be said if next month it is found that U.S. life expectancy has fallen for a fourth consecutive year, due to the rising death rate of those generations that followed Generation Greed?  If the executive/financial class, the political/union class, and that generation were honest, they would probably say something like this.

2 thoughts on “The Executive/Financial Class, The Political/Union Class, Generation Greed and the Serfs: Wherever You Look It’s Getting Worse

  1. larrylittlefield Post author

    Here is a thought. What do Elizabeth Warren, Hillary Clinton, Mike Bloomberg and Donald Trump have in common with each other that makes them the opposite of me?

    They have all been members of both the Republican and Democratic parties.

    For specific reasons in each case, I have never been a member of either.

  2. larrylittlefield Post author

    And in France?

    https://www.economist.com/europe/2019/12/12/french-workers-strike-to-keep-their-lavish-pensions

    After months of talks, endless delays and a week of disruptive strikes, the French government finally unveiled on December 11th its long-promised pension reform. The good news is that it has decided to press ahead with its plans, including the abolition of regimes with special privileges, despite the biggest show of union force on the streets since President Emmanuel Macron took office in May 2017. The bad news is that the new system will push the full burden of the changes on to France’s younger generations.

    In a speech that leaned studiously to the left, Edouard Philippe, the centre-right prime minister, described the new universal points-based system as a “fairer” system that will guarantee “social justice”.

    A year after the gilets jaunes (yellow jackets) protests, France remains restless and suspicious. To this has now been added a further division, between the generations. “The baby-boomer generation benefits from the current system, and wants to avoid any pension reform at all costs,” says Maxime Sbaihi of Génération Libre, a liberal think-tank. Those who have already gained the most from France’s generous welfare state look set to keep their rights to enjoy one of the world’s most generous pension systems.

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