The EU is set to impose new sanctions on Iran / The Myth of the Forbes 400

The European Union is set to increase sanctions on Iran on Monday after failed negotiations over Iran's contested nuclear development program. British Foreign Secretary William Hague said they will continue to increase pressure on Iran until negotiations succeed. EU Foreign Policy head Catherine Ashton said sanctions that were imposed in July are "quite clearly having an effect" and the heightened sanctions are "to persuade Iran to come to the table."

Riots broke out earlier this month due to the dramatic fall of Iran's currency, the rial, which is down by about 80 percent since the beginning of the year. The new sanctions are expected to target Iran's banks, as well as trade and gas imports. Additionally, 30 more companies will be subject to an EU assets freeze.

Meanwhile, the United States and EU are working to close loopholes in sanctions on Iran after discovering that Tehran has been covertly using offshore tax havens in order to maintain crude oil shipments.  The National Iranian Tanker Co. (NITC), Iran's largest oil-vessel operator, has reportedly registered ownership of some of its tankers in Central America.  The NITC claims it is privatized but the United States classifies it as a government entity.

Despite severe sanctions, U.S. exports to Iran have risen by 32 percent this year up to $199.5 million. Exports were comprised primarily of wheat and other grains, dairy products, and medical, dental, and surgical products.  However, some humanitarian goods have declined including medicinal and pharmaceutical products.

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On the homefront:

The Forbes 400 or 400 Richest Americans (first published in 1982) is a list published by Forbes Magazine magazine of the wealthiest 400 Americans, ranked by net worth. The average net worth of a member on the list is a whopping $4.2 million.  Their total net worth rose to $1.7 trillion.  That's about a sixth of the EU's GDP.  

In 2011 the net worth of the Forbes 400 rose $200 billion.  A net worth of $1.1 billion is the minimum to make the list.

Source: 1995-2008: Arthur B. Kennickell, "Ponds and Streams: Wealth and Income in the U.S., 1989 to 2007," Federal Reserve Board Working Paper, January 7, 2009, Table A1, p. 55. 2009-10: Forbes Magazine press release via Business Wire. Adjusted for inflation using CPI-U.

In 2011 the median household income, adjusted for inflation, dropped by 1.5% to $50,054.

Forbes 400 Reinforces Flawed "We Built It" Claims & Misleads About Wealth & Opportunity in the U.S.

Forbes Magazine calls their list of the 400 richest Americans the "definitive scorecard of wealth in America," but a new report asserts the magazine is misleading. Born on Third Base: What the Forbes 400 Really Says About Wealth & Opportunity in America, released this week by Boston-based non-profit United for a Fair Economy, examines the sources of wealth for members of the Forbes 400 and uncovers the role of inheritance and privilege in economic mobility. The report urges Forbes to stop glamorizing the "self-made man" while minimizing the other factors in wealth accumulation, including tax policies, birthright, gender, and race.

The report finds that 40 percent of the Forbes 400 list inherited a sizable asset from a family member or spouse, and over 20 percent inherited sufficient wealth to make the list. In addition, 17 percent of the Forbes 400 have family members on the list.

"Forbes spins a misleading tale of what it takes to become wealthy in the U.S. by understating the overwhelming impact of birthright and privilege," said Shannon Moriarty, co-author of the report. "Economic success should be a function of achievement, not just a guarantee for people lucky enough to be born into wealthy families. The Forbes 400 shows that birthright and family privilege are still very much at play in the American Dream."

The report explains that the net worth of the Forbes 400 grew fifteen-fold between the launch of the list in 1982 and 2011, while wealth stagnated for the average U.S. household. In 1982, the wealth threshold for the Forbes 400 was $75 million; today, every person on the list is a billionaire.

Women accounted for just 10 percent of the list in 2011, and nearly 90 percent of those women inherited their fortunes. The whiteness of the Forbes 400 list also makes clear the racial wealth divide. In the past two years, just one African American made the list. "Instead of asserting that ‘the American dream is very much alive,’ Forbes should acknowledge that the opportunity to become wealthy has never been equally shared," said Moriarty. "The billionaire members of the Forbes 400 are exceptions, not the rule."

Born On Third Base takes Forbes to task for their misuse of the loaded term "self-made" and the undervaluing of privilege and social capital in financial success. "We disagree with Forbes claim that 70 percent of the list made their fortunes entirely from scratch," said Brian Miller, executive director of United for a Fair Economy and co-author of the book The Self-Made Myth.

"The 'self-made' and 'I built this' narratives wrongly present the opportunity to become rich as equally attainable by all people in today's highly stratified society. Forbes’ story also ignores the important contributions of others and the role of government in the success of the wealthiest Americans."

"Tax policies have for decades been tilted in favor of the very wealthy," said Tim Sullivan, federal policy coordinator at United for a Fair Economy. "Tax rates on capital gains have been slashed to historic lows, which is of particular benefit to the likes of the Forbes 400." The report explains that the wealthiest 0.1 percent (including those on the list) receive half of all net increases in capital gains. "Drastic cuts to the federal estate tax made under George W. Bush and extended with the 2010 Obama tax deal have made it easier for wealthy families to keep and amass even greater fortunes," said Sullivan.

"As was once said of President George W. Bush, many of those on the Forbes 400 were ‘born on third base’ but claim to have ‘hit a triple,’ and the Forbes 400 list perpetuates this falsehood," said Moriarty.
United for a Fair Economy is launching a petition to coincide with the release of the Forbes 400 and the Born on Third Base report, asking Forbes to tell the whole story of wealth and opportunity in the U.S. Download the report and see the petition at www.faireconomy.org/BornOnThirdBase2012.

Throw Out the Money Changers

http://www.truthdig.com

By Chris Hedges
These are remarks Chris Hedges made in Union Square in New York City last Friday during a protest outside a branch office of the Bank of America.

We stand today before the gates of one of our temples of finance. It is a temple where greed and profit are the highest good, where self-worth is determined by the ability to amass wealth and power at the expense of others, where laws are manipulated, rewritten and broken, where the endless treadmill of consumption defines human progress, where fraud and crimes are the tools of business.

The two most destructive forces of human nature—greed and envy—drive the financiers, the bankers, the corporate mandarins and the leaders of our two major political parties, all of whom profit from this system. They place themselves at the center of creation. They disdain or ignore the cries of those below them. They take from us our rights, our dignity and thwart our capacity for resistance. They seek to make us prisoners in our own land. They view human beings and the natural world as mere commodities to exploit until exhaustion or collapse. Human suffering, wars, climate change, poverty, it is all the price of business.

Nothing is sacred. The Lord of Profit is the Lord of Death.

The pharisees of high finance who can see us this morning from their cubicles and corner officers mock virtue. Life for them is solely about self-gain. The suffering of the poor is not their concern. The 6 million families thrown out of their homes are not their concern. The tens of millions of pensioners whose retirement savings were wiped out because of the fraud and dishonesty of Wall Street are not their concern. The failure to halt carbon emissions is not their concern. Justice is not their concern. Truth is not their concern. A hungry child is not their concern.

Fyodor Dostoyevsky in "Crime and Punishment" understood the radical evil behind the human yearning not to be ordinary but to be extraordinary, the desire that allows men and women to serve systems of self-glorification and naked greed. Raskolnikov in the novel believes—like those in this temple—that humankind can be divided into two groups. The first is composed of ordinary people. These ordinary people are meek and submissive. They do little more than reproduce other human beings in their own likeness, grow old and die. And Raskolnikov is dismissive of these lesser forms of human life.

The second group, he believes, is extraordinary. These are, according to Raskolnikov, the Napoleons of the world, those who flout law and custom, those who shred conventions and traditions to create a finer, more glorious future. Raskolnikov argues that, although we live in the world, we can free ourselves from the consequences of living with others, consequences that will not always be in our favor. The Raskolnikovs of the world place unbridled and total faith in the human intellect. They disdain the attributes of compassion, empathy, beauty, justice and truth. And this demented vision of human existence leads Raskolnikov to murder a pawnbroker and steal her money.

The priests in these corporate temples, in the name of profit, kill with even more ruthlessness, finesse and cunning than Raskolnikov. Corporations let 50,000 people die last year because they could not pay them for proper medical care. They have killed hundreds of thousands of Iraqis and Afghanis, Palestinians and Pakistanis, and gleefully watched as the stock price of weapons contractors quadrupled. They have turned cancer into an epidemic in the coal fields of West Virginia where families breathe polluted air, drink poisoned water and watch the Appalachian Mountains blasted into a desolate wasteland while coal companies can make billions. And after looting the U.S. treasury these corporations demand, in the name of austerity, that we abolish food programs for children, heating assistance and medical care for our elderly, and good public education. They demand that we tolerate a permanent underclass that will leave one in six workers without jobs, that condemns tens of millions of Americans to poverty and tosses our mentally ill onto heating grates. Those without power, those whom these corporations deem to be ordinary, are cast aside like human refuse. It is what the god of the market demands.

When Dante enters the “city of woes” in the Inferno he hears the cries of “those whose lives earned neither honor nor bad fame,” those rejected by Heaven and Hell, those who dedicated their lives solely to the pursuit of happiness. These are all the “good” people, the ones who never made a fuss, who filled their lives with vain and empty pursuits, harmless perhaps, to amuse themselves, who never took a stand for anything, never risked anything, who went along. They never looked hard at their lives, never felt the need, never wanted to look.

Those who chase the glittering rainbows of the consumer society, who buy into the perverted ideology of consumer culture, become, as Dante knew, moral cowards. They are indoctrinated by our corporate systems of information and remain passive as our legislative, executive and judicial branches of government—tools of the corporate state—strip us of the capacity to resist. Democrat or Republican. Liberal or conservative. It makes no difference. Barack Obama serves corporate interests as assiduously as did George W. Bush. And to place our faith in any party or established institution as a mechanism for reform is to be entranced by the celluloid shadows on the wall of Plato’s cave.

We must defy the cant of consumer culture and recover the primacy in our lives of mercy and justice. And this requires courage, not just physical courage but the harder moral courage of listening to our conscience. If we are to save our country, and our planet, we must turn from exalting the self, to subsuming of the self for our neighbor. Self-sacrifice defies the sickness of corporate ideology. Self-sacrifice mocks opportunities for advancement, money and power. Self-sacrifice smashes the idols of greed and envy. Self-sacrifice demands that we rise up against the abuse, injury and injustice forced upon us by the mandarins of corporate power. There is a profound truth in the biblical admonition "He who loves his life will lose it."

Life is not only about us. We can never have justice until our neighbor has justice. And we can never recover our freedom until we are willing to sacrifice our comfort for open rebellion. The president has failed us. The Congress has failed us. The courts have failed us. The press has failed us. The universities have failed us. Our process of electoral democracy has failed us. There are no structures or institutions left that have not been contaminated or destroyed by corporations. And this means it is up to us. Civil disobedience, which will entail hardship and suffering, which will be long and difficult, which at its core means self-sacrifice, is the only mechanism left.

The bankers and hedge fund managers, the corporate and governmental elites, are the modern version of the misguided Israelites who prostrated themselves before the golden calf. The sparkle of wealth glitters before them, spurring them faster and faster on the treadmill towards destruction. And they seek to make us worship at their altar. As long as greed inspires us, greed keeps us complicit and silent. But once we defy the religion of unfettered capitalism, once we demand that a society serve the needs of citizens and the ecosystem that sustains life, rather than the needs of the marketplace, once we learn to speak with a new humility and live with a new simplicity, once we love our neighbor as ourself, we break our chains and make hope visible.

Chris Hedges is a senior fellow at The Nation Institute and a weekly columnist for Truthdig. His latest books are "Death of the Liberal Class" and "The World as It Is: Dispatches on the Myth of Human Progress."

Income Inequality and Who Represents Whom?

"Your health is precious. You are rich, respected, admired, beloved; you are happy as once I was. You are a man to be missed. For me it is no matter."
- E.A. Poe, Cask of Amontillado

There is one complicated and diverse idea expressed in two simple words that people should be deeply concerned about and debating at much greater length in this country: income inequality. It is at the heart of nearly every issue the American people face.  The wealthiest 5% have no real stake in job creation; they have no real concerns for someone who has no health insurance.  The wealthiest among us are not even among us.  They meander the halls of the Hermitage and vacation at Necker Island; they hold banquets and fund raisers; they serve as board members and they hold seats in Congress. The newest members of the 112th Congress are among the wealthiest elected in recent years.

In contrast there is you.  You're taking night classes, studying hard, working during the day, raising kids, and hoping that a job will be waiting for you when you graduate with a degree.  You see yourself working hard at that job and advancing in your career.  You may see yourself rising out of the life you currently lead and finding more material wealth - your own home, a new car, health insurance, a never ending expense account, biannual dentist visits.

Unfortunately the likelihood of any of that happening, or of any of us moving up to the east side, is dwindling with each passing year that our elected officials continue to work for the wealthy.  What once was the American dream is quickly becoming a nightmare and the Tea Party ain't helping nobody.  The reason social mobility is becoming less reliable is that more and more of the income (wealth) is being controlled by fewer people. The repercussions and consequences of this bunching up at the top can be felt through increases in a variety of societal problems.

Western Europe exhibits far greater income equality and far greater social mobility.  They are also recovering for the global session far more rapidly than the U.S.



Anyone running for office preaching the greatness of the American society, harping on how anyone can become someone in America, and how all of us our equal, is purporting to believe in a myth.  If you haven't honed your skills of sniffing out a con just remember one simple truth: Life is pain. Anyone who says differently is selling something.  The pain in America's arse is that there simply has never been equality in this country and there is nothing like it today.  America is a country run and operating for the benefit of the wealthy. 

All of our domestic policies, foreign policies, and strategic policies are based on the interests of the wealthy.  And there's no end in sight.

As a result of the disparity in income, the populace is less represented.  Additionally, the larger the income inequality, the more other sectors of society suffer.

The most commonly used method of measuring income disparity is the Gini index.  The Gini index measures the degree of inequality in the distribution of family income in a country.  The higher the number, the greater the level of income disparity.  On this scale the U.S. ranks 39th of 136 countries with a Gini index of 45 (2007).  Sweden has the lowest, 23, while Namibia has the highest, ~70.  America has the highest Gini index of any other OECD country.  Ever heard any effectual or effective discussion on how to best address the income inequality in America by today's politicians?  Likely not, nor is it likely to occur any time soon.  Here's a snapshot of what happened in congress today.

Who represents the wealthy?  Who represents the poor?  Who represents the people?

Republicans are counting on citizens to vote against their own interests and elect Conservatives to ensure that cuts in spending are made.  And they count on some of the wealthiest for donations.  For example, Ron Johnson collected over $25,000 from Koch Industries.  Fundraising personifies who Ron Johnson represents.  Can anyone reasonably think that Sen. Johnson represents the people of Wisconsin?

At a time when people are struggling to find jobs, finding themselves kicked out of their homes, our elected officials are raking in millions of bucks in donations.  But Republicans aren't the only ones reaping the monetary harvest.  Among the 25 wealthiest congress members, 13 are Democrats.

While John Kerry's net worth is around $230 million, he's collected over $9 million in donations, $76,000 alone from Bain Capital, a private equity, venture capital group based in Boston.   Just who the hell are all these people who can donate tens of thousands of dollars to bloody politicians?  It's a freaking sickness, holy shmit.

So, if you're looking for millionaires, don't bother with Monaco or the Caribbean, just go to Washington.  There's hundreds of 'em there and we the people sent 'em there.  Who do you suppose they represent?

The congressional millionaires' club: By the numbers

How rich is Congress? Well, the class of freshmen members is alone worth more than $500 million

posted on March 14, 2011, at 3:04 PM
The Week

Sen. Richard Blumenthal (D-Conn.) has an estimated
personal wealth of $95 million, making him the
wealthiest Senate freshman in the 112th Congress.
Photo: Getty SEE ALL 13 PHOTOS

Although this year's House freshmen are sharply divided by ideology, they are united by one striking measure: Many of them are filthy rich. The Center for Responsive Politics found that 60 percent of Senate freshmen and 40 percent of House freshmen were worth $1 million or more. The statistics prove that Congress is populated "overwhelmingly with millionaires and near-millionaires who often own multiple homes," says Dan Eggen at The Washington Post. Here, a look at the numbers behind the congressional millionaires' club:

96
Number of new House members in the 112th Congress

40 percent
Approximate share of House freshmen who are millionaires
16
Number of new senators in the 112th Congress

60 percent

Share of Senate freshmen who are millionaires

1 percent

Approximate share of ordinary Americans who are millionaires

$3.96 million
Median estimated wealth of a Senate freshman

$570,418
Median estimated wealth of a House freshman

$25,149
Median estimated wealth of an American over the age of 18 (2005)

$533.1 million
The estimated combined worth of the full freshman class of the 112th Congress

$95 million
Estimated personal wealth of Sen. Richard Blumenthal (D-Conn.), the richest freshman. His wealth comes mainly from his wife's family, whose real estate holdings reportedly include the Empire State Building.

-$317,498
Estimated net worth of the poorest freshman lawmaker, Rep. Joe Walsh (R-Ill.). Walsh, who lost his condo to foreclosure in 2009, is the only freshman in the red. He calls this a "badge of honor."

17
Number of freshmen who own stock in General Electric. Eleven invest in Bank of America, while 9 freshmen each invested in AT&T, Cisco, Johnson & Johnson, Microsoft, and Procter & Gamble.

Between $1 million and $5 million
Amount of money collectively invested in Citibank by freshman lawmakers

261
Number of millionaires in the last Congress, out of a total of 535 members

$911,510
Median wealth of all members in the last Congress

$303.5 million
Estimated wealth of the richest member of Congress, Rep. Darrell Issa (R-Calif.), in 2009

Sources: OpenSecrets.org (2), Washington Post, CNBC, Politico, U.S. Census

Sources:

http://www.insidehighered.com/news/2011/08/04/study_compares_tuition_charges_for_international_students

http://www.insidehighered.com/news/2011/08/04/study_looks_at_debt_to_degree_ratio_across_sectors

http://www.insidehighered.com/news/2011/08/05/georgetown_study_links_college_degree_attainment_to_lifetime_earning_power

http://www.insidehighered.com/news/2011/08/11/study_says_low_income_students_can_t_outpace_wealthy_peers_at_selective_colleges

Gini index: https://www.cia.gov/library/publications/the-world-factbook/rankorder/2172rank.html

http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/0,,pagePK:180619~theSitePK:136917,00.html

Social Mobility and Education solutions: http://www.economist.com/node/15911314

http://www.equalitytrust.org.uk/why/evidence

Social Mobility myth: http://www.economist.com/node/15908469

Income inequality and the Great Recession

Back in December when congress was debating whether to extend the Bush tax cuts for the wealthiest 10%, Bernie Sanders (I) of Vermont gave what ought to be remembered as an historic speech on the floor.  He argued for eight hours that extending the tax cuts made no sense what so ever.  He wasn't alone in his criticisms.

The Joint Economic Committee had issued a report analyzing income inequality, the poverty gap, in the time of the Great Recession.  Here is an excerpt of their findings (italics indicate my comments):

• Income inequality has skyrocketed.  Economists concur that income inequality has risen dramatically over the past three decades.  (In fact, according to the U.S. Census Bureau statistics, the average yearly income after taxes for the top five percent has risen over 75% since 1970.  In contrast, the average yearly income for the bottom 50% has risen about 10.5% since 1970, cf chart below).

• Middle-class incomes stagnated under President Bush.  During the recovery of the 1990s under President Clinton, middle-class incomes grew at a healthy pace.  However, during the jobless recovery of the 2000s under President Bush, that trend reversed course.  Middle-class incomes continued to fall well into the recovery, and never regained their 2001 high.  The first year of the Great Recession dealt a sharp blow to middle-class families, who had not yet recovered from the pain of the last recession.

• High levels of income inequality may precipitate economic crises.  Peaks in income preceded both thee Great Depression and the Great Recession, suggesting that high levels of income inequality may destabilize the economy as a whole.

• Income inequality may be part of the root cause of the Great Recession.  Stagnant incomes for all but the wealthiest Americans meant an increased demand for credit, fueling the growth of an unsustainable credit bubble.  Bank deregulation allowed financial institutions to create new exotic products in which the ever-richer rich could invest.  The result was a bubble-based economy that came crashing down in late 2007.

• Policymakers have a great deal of leverage in mitigating income inequality in order to stabilize the macro‐economy. In the decades following the Great Depression, policy decisions helped keep income inequality low while allowing for continued economic growth. In contrast, policy decisions made during the economic expansion during the Bush administration failed to keep income inequality in check, and may have exacerbated the problem. Policymakers working to rebuild the economy in the wake of the Great Recession should heed these lessons and pay particular attention to policy options that mitigate economic inequality. 

What the report detailed was that while the rich have continued to grow richer, the middle-class have lost ground previously regained during the Clinton years.  The lower-class have not gained.  The lower-class remain the invisible members of society.

Are these numbers indicative of an obstinate allegiance or belief in supply-side, trickle down, economics?  George H.W. Bush referred to supply-side economics as voodoo economics when running against Reagan in 1980 for the republican nomination.  Yet George W. Bush in January of 2006 declared, "by cutting the taxes on the American people, this economy is strong, and the overall tax revenues have hit at record levels."

This promise has not been borne out.  The result of the decrease in tax revenue has been the ever widening poverty gap.

In order to make up for the loss of revenue, congress and states are facing staggering cuts to programs that help the most needy in the country.  Wisconsin is facing record cuts in Education, public assistance, and public transit.  Wisconsin also forfeited the opportunity to create an inter-city high speed rail line.  Compare this lack of forethought to the recent construction of the Beijing–Shanghai High-Speed Railway that allows a traveler who begins in Beijing to reach Shanghai (~800 miles) in about 3 and a half hours.  Chicago to New York City is about 700 miles, so think about traveling from Chicago to NYC in about 3 hours.

Governor Walker and the rest of the republican legislature seem as unwilling to budge as Dick Cheney, who seemingly still believes in voodoo economics, "I became a believer (in voodoo economics). If you fast-forward, in 2003, where we cut the capital gains rate, the rate on interest, did the across-the-board cuts in the income tax, and passed by a single vote. My vote."

Scott Walker's vision for Wisconsin is that the state will be a bastion for supply-side economics.  "We're going to start sending a message, a slow but steady message, that we're lowering the tax burden."  As his 2011-2013 biennial budget reveals, the first step is cutting social programs that aid the needy.  The formation of the WEDC has also been praised in the Journal Sentinel and bipartisan observers.  All it really boils down to is another attempt at patronage.  The appointed advisers of the WEDC are not state employees but have access to state health insurance and the state retirement plan.   

But supply-side economics has been tried and nearly proven to be a failed economic theory.  In an article in The New Yorker (2007), The Tax Evasion: The Great Lie of Supply-Side Economics, economist James Surowiecki argued, "The supply-side argument that, in the United States, tax-rate cuts pay for themselves ... has little or no support within the mainstream economic profession, and no hard empirical data to back it up. Myriad studies have demonstrated that both the Reagan tax cuts of the nineteen-eighties and the tax cuts put through under the current Administration shrank government revenues and led to bigger budget deficits."

In the absence of true empirical data to support supply-side economics, what is the motivating force for the ostensibly ubiquitous notion of applying it across the country in an attempt to create more jobs and guide us to recovery?

It may come down to a simple concept as old as human society.  As a local prominent attorney recently explained, "It comes down to this, greed.  And not just greed for money, most of the people (making the decisions) don't need it, it's greed for power."

In meetings around the country, wealthy power mongers approach cuts to capital gains taxes, estate taxes, and income taxes as beneficial to society, while blind to the society all around them that struggles and withers.  The lower-class are invisible because the wealthy refuse to see them. As Ralph Ellison wrote, "When they approach me they see only my surroundings, themselves, or figments of their imagination--indeed, everything and anything except me."

In every great society there comes a time when Spartacus and the slaves form an uprising, when the populace can no longer stand more pain and despair.

Is that time nigh in America?

Over and out.