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.

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

Who's Government Funded?; More Shared Sacrifice: Students Bear Burden; Jury's out for Professors; Massive Debt? Thank GW Bush; Bluffing out Confessions

It's hard to tell which party represents the average workers and which party receives the average workers' votes. It's a bit mind boggling when a 57 year old disabled veteran on Social Security, receiving Veteran's Insurance, and receiving meals-on-wheels votes republican. That's called voting against one's own self-interest and it happens all of the time especially since many of the folks who benefit from government social programs don't believe that they are receiving government assistance.

Suzanne Mettler of Cornell University found precisely that. In "Reconstituting the Submerged State: The Challenges of Social Policy Reform in the Obama Era" Mettler uncovered that large percentages of people receiving government assistance actually believed it was not government assistance (e.g. the guy with the "Keep Your Government Hands Off My Medicare).  Turns out that's not so rare.

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So we're all in this together.  That's true if "together" has semantically shifted and now means the poor are screwed.  The burden of the sacrifices pushed for in Washington by the tea baggers and republicans are again targeted at a minority class who receive assistance that accounts for a negligible amount of government spending: graduate students.

Even though the Prez wants more access to higher education, he's willing to waive the nominal amounts spent by the fed on interest accrued on graduate student loans as part of the cuts in the recent debt discussions and compromise.  Even though Pres. Obama seemingly fought with little effort, these cuts are purely republican reductions.  Republicans are forced to cut to any social programs that benefit citizens because they are unwilling to raise more revenue or cut military spending.  The cuts to student aid will save the government $18 billion over the next ten years.  And it will mean graduate students will be spending a lot more time at their parents' homes.  Another very good reason why parents of graduate students should be voting against republicans.

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Also in higher education, a new study found that socioeconomic equity in America is but a myth.  The evidence is in the pudding of elite colleges and universities.

For many years the one thing America really had going for it, one advantage over the rest of the world, was the higher education sector.  Poor, rich, minority, majority - the level playing ground was the university setting.  That is quickly evaporating.  The costs associated with higher education are rising making equity in higher education a thing of the past.

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Evidently professors are too liberal to serve as jurors and the Nevada Supreme Court agrees. 

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Thanks to Lori Montgomery for this article devoted to the causes of our current debt crisis.  If there are people you know who think Obama is responsible for the mess we're in, get them a copy of this article; it's more articulate than anything in the Wisconsin State Journal.

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Almost last but not least is this fascinating study on false confessions.  Saul Kassin and Jennifer Perillo of the John Jay College of Criminal Justice instructed a group of university students that they were taking part in a test of their reaction times.  The students were asked to press keys on a keyboard but not to push the ALT key because depressing the ALT key would cause the computer to crash and all of the data to be lost.

The computer, in fact, was designed to crash no matter which keys were pushed.  When this happened, the student was accused of pushing the illicit key.  When prodded to confess, a quarter of the students confessed to pushing the error causing button when in actuality only one student had pushed the ALT button.

"Results suggest that the phenomenology of innocence can lead innocents to confess even in response to relatively benign interrogation tactics."

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Conservatism means more for the wealthy

A few weeks ago Harold Meyerson wrote about corporate America's chokehold on wages .  For Wisconsinites today is the day after the big recall elections.  If you woke up happy this morning, it probably means you're a republican and you support the ever widening gap between the rich and poor.

It's essential to understand that the conservative agenda has been very clearly spelled out.  They represent the wealthy because it is the wealthy who create jobs.  Obviously this is not an outright lie.  But it is not entirely true either.  The majority of large corporations in America are sitting on piles of cash.  They have no interest in hiring.

Apple's cash hoard is well known and the financial maneuvering of GE is also well known.  But less known are the entitlements garnered by Ron Johnson and Herb Kohl.  There is a very good reason why Sen Kohl remained in the Senate for as long as he did.  Likewise, there is a very good reason for Sen. Johnson to run for office.  The reason is simply greed for power and the right to bargain their own clout for business interests.

It is a sickness that turns people into dollar signs and government into a business.  We are living in the age of sickness that is being spread by the hordes of religious fundamentalists (conservatives).  It is a dangerous combination that mixes religion (vehemence) and politics (aggression).   Examples of the results of the wickedness of people who have mixed politics and religion are myriad (think Inquisition, Iran, Saudi Arabia, KKK).  It is precisely why the authors of the Constitution and Declaration of Independence argued for the separation of church and state.

GW Bush offered us an eight-year look at what a religious government might look like (two wars, special ops spread throughout the world).  Another religious lunatic in office could prove fatal.  It is not overly dramatic to envision a wacko christian (Texas' Perry, M. Bachmann) leading us headlong into WWIII on religious conviction alone.  (Lest we forget that Mr. Bush often spoke with god.  Anyone holding conversations with internal voices might find him/herself in a sanitarium.  But he/she would be quickly released as soon as the voice was identified as "God".)

It seems that there are very good indications that the religious right have matured to a refined state of insanity.  While they preach the word of god, they covet only for their self worth.

Yesterday was a perfect example.  The Darling - Pasch race was decided by the results in Washington, Ozaukee, and Waukesha counties.  The commonality is obvious.  Money.  They voted overwhelmingly for Darling for one reason.  The people of those communities believe they should pay less in taxes.

It is the finest commentary on the avarice running rampant in a broken capitalist society.  The people of Wisconsin have appointed selfish egomaniacs as representatives with the dire hope that these representatives will provide less services for the least among us.

Everything that has happened in Wisconsin this year indicates that we are moving toward a more privatized individualistic society built on paranoia and fear and designed to punish those born, by utter chance, into poverty.  On a personal level, it boils down to greed.  On macro level, it is sheer wickedness.

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Another indicator of our completely mucked up system is the health insurance costs that the average worker faces.  In one local company, 90% of the employee's cost is covered.  Dependents are not included.  United Health Care provides coverage.  Family coverage (the employee, spouse, child(ren)) costs $500 per pay period.  There are 26 pay periods in the year.  So, with only health coverage, not including dental, or co-pays, or the deductible, family coverage costs $13,000.  Add to that $50 per pay period for dental coverage ($14,300), and a $3000 deductible, which means that for a year's worth of family coverage would cost the employee $17,300.  Does that seem sane?  It's insane to think that this is what we have to pay for health coverage while Stephen Hemsley earns $20M a year.  

But for republicans and conservatives, Hemsley needs that money to create jobs.  Hemsley needs that money to buy a yacht and vacation in the Bahamas.  That's sick.

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Evidently any juror can be removed from a jury based on his/her profession.  Inside Higher Times reported that a professor in Nevada was removed from the jury by the DA because he was a professor and professors are liberal.

"Professors are notoriously liberal," the prosecutor said, according to the Supreme Court ruling, adding that "I just don’t like them on my juries, period."

Not surprisingly in these conservative times the Nevada Supreme Court upheld the appellate court's ruling that no unfair treatment was committed.

The precipice that Tony Judt writes about in "Ill Fares the Land" right before us and we are heading in.

Ill fares the land, to hastening ills a prey,
Where wealth accumulates, and men decay.
                                                   Oliver Goldsmith, The Deserted Village (1770)

Judt's introduction is mindbogglingly brilliant:

Something is wrong with the way we live today.  For thirty years we have made a virtue out of the pursuit of material self-interest: indeed, this very pursuit now constitutes whatever remains of our sense of collective purpose.  We know what things cost but have no idea what they are worth.  We no longer ask of a judicial ruling or a legislative act: is it good?  Is it fair?  Is it just?  Is it right?  Will it bring about a better society or a better world?  Those used to be the  political questions, even if they invited no easy answers.  We must learn once again to pose them.

And so here it is 2011 and the US dangles in the air suspended between the obstinate tea party and conspicuous consumption, while the bottom plunges deeper under.  Conservatives offer no solutions except privatization.  Liberals have no answers to the fundamentalist claims of ineptitude in big government.  As America careens into oblivion, shamed by China over our debt debate, look toward Canada, Germany, Finland, Norway, etc. as they recover from the global recession and we flounder in political deadlock.

As John Donne wrote,

No man is an island,
Entire of itself.
Each is a piece of the continent,
A part of the main.
If a clod be washed away by the sea,
Europe is the less.
As well as if a promontory were.
As well as if a manor of thine own
Or of thine friend's were.
Each man's death diminishes me,
For I am involved in mankind.
Therefore, send not to know
For whom the bell tolls,

It tolls for thee.

Are religious fundamentalists damaging public education?

In 1989, Wisconsin passed Wisconsin Act 336 that established the Milwaukee Parental Choice Program (MPCP).  Wisconsin was the first state to offer parents a choice of either staying at a public school or taking a voucher in order to pay for private education.  The program had its participation capped at 15% of the population of Milwaukee Public Schools (MPS). The legislation set up a voucher program for low income families at 175% the national poverty level or below to attend non-sectarian private schools.  In the 2010-2011 school year, 20,996 students (based solely on 3rd Friday head count) were enrolled in 102 participating schools that were predominantly religious. 

Studies have indicated that voucher programs do not achieve statistically better results than their public school competitors.  According to the Department of Public Instruction, the WSAS results are worse than MPS's. At the same time, they are sapping needed money away from MPS.  At best the research and current literature are inconclusive about consistent results.  And data does not track students from the time they enroll to the time they leave.     

Funding
Every year, funding for the next year is based on the 3rd Friday head count.  Private schools collect their vouchers based on this count.  Invariably, teachers in MPS prepared for the 4th, 5th, and 6th weeks of the school year because then there would be a sudden surge in enrollment.  This practice takes place every year in every MPS school.

The students that arrive later in the year are welcomed to secular public classrooms that cost them no additional money.  At the same time, if the student had been kicked out of a private voucher school, the school keeps the $6,700 that the MPCP had paid as part of the 3rd Friday count.  The best data would trace the student from the beginning of the year until the end of the year regardless of mobility.     

This funding structure leads to a plethora of problems for MPS.  In my eight years as an elementary and middle school teacher at two different schools, it was rare to have a text book for each child.  We made do; we learned to share.  In order to ensure there was paper in the classroom, teachers asked parents to make  donations, still teachers paid out of pocket for most supplies, even in the high-achieving, effectively run schools.  As the population of voucher students rises each year this funding scenario grows worse for MPS.

The funding for many of the institutions that receive vouchers is also much higher because they charge tuition and have wealthy contributors.  The type of investment that the billionaires in the religious right have made on private schools is the type of investment that should be made in every school for every child.  Private voucher schools have intensified income inequality in education.  Conservative fundamentalists are pushing the voucher agenda all over the country selling it as reform that works.  In Milwaukee, the lobbying by religious groups swayed the debate and by 1998 private religious schools were added to the list of participating private schools.  Now rather than tax dollars designated for public education, the money goes to religious education.

Parental Involvement
When Howard Fuller became a strong advocate for MPCP, he leaned hard on the idea that it was a way to get parents involved with their children's education.  The main message to parents was and is that they should have a choice.  One of the lead cheerleaders for MPCP in Wisconsin is Leah Vukmir.  "The voucher program has caused dramatic improvement in the public schools," Vukmir explained. "As a result of choice and competition, there are more opportunities for students."  The biggest problem with this idea is that the programs provide opportunities for a small percentage of the student population whose parent(s) were already highly involved in the child's life.  In many cases these are students who would perform equally well had they attended their local neighborhood school.  Thus, the voucher program removes high achieving students from public schools.  As a result test scores at MPS schools drop and achievement overall drops because high achieving students often act as the role models at the school.

Special Education Needs (SEN)
Private institutions are under no mandate to provide individual education programs (IEP) for students with special needs (SEN).  Because of this many students do not receive the services they would had they attended a public school.  What does happen is that, for example, speech therapists by law are required to provide services.  A student who is not registered at the MPS school where a speech therapist works, but is instead enrolled at a private institution, may still receive services from that speech therapist.  When the therapist could be spending time with students that are actually enrolled in his/her school, the therapist m,ust attend to the needs of the private school student.  Not only is this a disservice to the members of the public school, but it also means that taxpayers are paying for services in addition to the voucher.

As the voucher cap increases, the results will be that MPS will become the school district for all of the challenging kids that get kicked out of the private schools.  Eventually the population in MPS will be entirely of those students who can't afford private schools, don't have parents who are involved in the decision making, or don't function well in the traditional educational setting.   

Focus of Teaching
Additionally, the focus at schools is increasingly about competition.  The competition is only comparable in data - test scores.  So, everyone is preparing for testing, all year long.  The authentic learning experience will no longer exist if education becomes driven by the capitalist notion that competition leads to improvement.  This is an obvious obfuscation but regardless, in education competition leads nowhere.  Students need to learn how to work together in order to solve problems rather than vying against each other.  Cooperation and collaboration ought to become far more important skills than competition.

While all of the finagling over money and cap limits is taking place, sectarian schools are quietly taking tax dollars and teaching children biblical myths; some go so far as to to teach that the bible is the word of god, that the earth is 6,000 years old, and that evolution is not science-based but only a hypothetical theory.  To many forward-minded people, the idea that our tax dollars are funding children to be proselytized would be hard to accept and unfathomable in a developed country, after all this is not Saudi Arabia.  But the religious right have successfully focused the attention on the failing public school system not on the content or learning provided by the private religious schools.

The religious right have dominated the debate and are succeeding in forcing their agenda on parents, especially in urban districts.  The cost of all of this is that public education is being damaged irrevocably.  The gap in educational attainment between the poor and the wealthy is increasing and vouchers contribute to that crisis. 

What do you think?  Are religious fundamentalists damaging public education?

                                     ==============================================
Read more about it and decide for yourself:
http://dpi.wi.gov/sms/choice.html

http://dpi.wi.gov/oea/mpcp/results.html

http://www.newcoalition.org/Article.cfm?artId=18915

http://www.eric.ed.gov/PDFS/ED462502.pdf

http://www.inthesetimes.com/working/entry/5512/as_milwaukees_economy_fails_how_can_public_schools_succeed/        

http://www.scsba.org/voices/Milwaukee%20Voucher%20Program%20Info.pdf

http://www.progressive.org/rc032911.html

http://thirdcoastdigest.com/2011/05/walkers-expansion-of-school-choice-moves-forward/

Spassibo - the Capitalist Effect in Russia

Back in 2009, TIME magazine declared that capitalism had taken root in Russia.  This dramatic conclusion was based on the fact that Premier Putin earned 11% more than President Medvedev.

Back in 2005, the New York Times insinuated that the Russia had finally broken through the transitional doldrums and earned its Capitalist wings as the World Bank declared poverty lessening in the former Soviet Union and income equality growing.   

As one person sitting behind a computer I officially declare the dawn of CAPITALISM on Russia.  This story comes directly from Moscow where the Capitalist Effect has settled in to a stark and harsh new reality.  In the past eight years, the homeless population has risen by 8%.  According to Gazeta.ru, multitudes of people are being evicted from their homes by court order, reported ombudsman Aleksander Muzikantcki (омбудсмен Александр Музыкантский).  "Citizens are being completely denied the right to housing, although they committed no culpable action."

According to the story, people who have been living in and paying for homes for years are losing them because the law allows property to be seized by the legal owner.  The other reason is that changes in housing legislation has negated some spaces for living that are currently being occupied as residential property.  So people are being kicked out of their homes and not provided any other means of accommodation.  As a result of these policies, the streets of Moscow are slowly flooding with vagrants.  The homeless rate has been steadily climbing.

If this situation in Russia sounds eerily familiar, it should.  For the past year, the journal sentinel has reported on Central States Mortgage Co. and the deceptive practices of its founder Richard Jungen.  Central States was back in the news this week because it failed to properly handle the refinancing of a Milwaukee resident.  This Milwaukee resident actually had his house sold at a Sheriff's auction even though he was perfectly compliant with what he thought was his only loan.  Unfortunately what he thought was one mortgage being refinanced with a lower interest rate, it was essentially two loans.  The second loan was intended to buy out the first mortgage.  However, Central States and their affiliate Interim Funding LLC failed to buyout the previous loan, instead paying off other debts.

Whether the picture is of Russian homemakers kicked out into the street or working class people in Milwaukee whose locks get changed while at work, the resulting loss of shelter is a Capitalist Effect.  People have grown utterly devoid of compassion and driven by one thing, profit.

The real problem with the drive to accumulate wealth is in the sacrifice of everything else.  The republican State legislature is bent on building a surplus in the state of Wisconsin.  Most people like the idea of a surplus.  But the idea of building a surplus at the expense of the citizens is not right.  Wisconsinites should not accept it.  Gov. Walker can bandy about his ideas about a surplus but what he should be honest about is that his use of the word surplus is an euphemism for what really amounts to harsh losses for working families.

Just as in Russia where average citizens are being thrown into the street because there is no plan for them once they are out of their homes, Walker has no plan for the future.  How will the State government address the need for health insurance when the hundreds of thousands lose the coverage currently provided by Badger Care and Badger Care Plus?

How will the republicans accept the repercussions that will inevitably be attached to allowing the largest public school district in the State to effectively operate without being fully funded?

This new breed of republicanism spurred on by the zealous tea partyers has no intention on reneging their promise to bring in spending and cut costs all at the expense of the citizens.  Losing teachers and cutting funding for schools will not be felt immediately but will be felt eventually.  The effect of improperly investing in education is revealed a few years down the road as students move through the system with the new changes in place.  What will be the effects on a school like the Milwaukee German Immersion School, which is consistently placed in the upper bracket of successful Wisconsin schools?  According to the Principal, the German Immersion School will lose six people the Phy Ed, Music, and Art teachers, a classroom teacher and two aides because of the cuts in Gov. Walker's budget.  There is no way these cuts won't be damaging.

What Wisconsinites should demand to know is this: how are we all tightening our belts? Is the prestigious Brookfield Academy losing teachers?

The Capitalist Effect creates gaping holes not only in the class structure but in reason.  It allows one group of people to profit while a larger group suffers.  It allows decision to be made on the sole grounds of how much money can be earned.  Russia is waking up to the reality that capitalism is no better than communism and in some ways it is far worse.  There is no space in capitalism for welfare unless the government demands it through  intervention, i.e. regulation.  Whereas the Soviet Union did function as a welfare state, the Russian Federation functions more like a business.  The world is watching our government now as capitalism could see another casualty unless the US can get its house in order.  We could very easily end up like Portugal.

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According to the World Factbook, the CIA ranks Russia 52 of 136 countries for distribution of family incomes, the Gini index.  The higher the Gini index, the higher the income disparity in the country.  Russia's Gini index is 42.2.  The US Gini index is 45.0.  The 136th country - the country with the lowest Gini index is Sweden.  Its Gini index is 23.0.

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Read about Market Reform in Russia: http://users.polisci.wisc.edu/hendley/PS%20633/Lecture%20PPTs/April%205,%202011.pdf
Read more about Russia's rural poor: http://www.ucis.pitt.edu/nceeer/2003-816-14g-5-Wegren.pdf
The "New" Poverty of Russia: http://www.soclabo.org/UserFiles/Journal/2010.02/Art_pdf/11_eng.pdf
Read Sergei Shelin: http://www.gazeta.ru/column/shelin/3589305.shtml
Politics of anti-poverty policy: http://www.psa.ac.uk/journals/pdf/5/2008/Mussorov.pdf
Globalisation and the Development of Capitalism in Russia

A Fear of the Known: The Link Between Debt and Taxes

By E. JAW LESSONS

What seems to be the matter in the United States today?  It is likely many things, depending on whom you ask.  Most agree that a particularly urgent challenge is our dangerous and potentially crippling debt.  We seem poised between Scylla and Charybdis, yet this is no myth: without continuing credit, we stand to lose the way of life we’ve come to expect; but by amassing ever more debt, we move away from independence and closer to insolvency---or worse.

How might we begin to address this problem?  What direction should we take, and what role should the government play, if any?  Quite often, those with an opinion invoke the Constitution, and this is a sensible place to start.  In political debate today we often hear the refrain, “It is time to return to constitutional principles.”  So what does our Constitution say about debt?

The first mention of debt in the Constitution is in Article I, Section 8, which enumerates most of the powers of Congress.  It provides, inter alia, that “The Congress shall have Power To lay and collect Taxes . . . to pay the Debts . . . of the United States.”  In all, the Constitution identifies three reasons for taxation: the common defense, the general welfare, and the payment of debt.

Notably, the Articles of Confederation did not provide any central authority for taxation.  The natural conclusion is that it was deliberately added to the Constitution to cure a defect in the Articles, as revealed by our experience during the ten years following 1777.  By 1787, a clear power to tax was built into our founding document and specifically coupled with the issue of debt.

Taxes are a constitutionally provided means of dealing with debt; but who is responsible for paying?  To be fair, anyone reasonably able should contribute.  Currently, some wealthier members of society pay less in taxes than others, either in absolute or proportional terms, due to favorable rates (e.g., capital gains) and other loopholes.  A recent article from the Associated Press observes, “The super rich pay a lot less taxes than they did a couple of decades ago, and nearly half of U.S. households pay no income taxes at all.”

It is now fashionable, again, to justify this special treatment with a theory called supply-side economics: reduce taxes on the rich and they will, as if by instinct, use the surplus to create new jobs and businesses.  The theory's cheerleaders maintain that doing otherwise is un-American: it is un-American to raise taxes, and it is the same to oppose tax cuts, particularly when they benefit the well to do.

But this is not necessarily consistent with the intellectual origins of the United States.  Take, for instance, a thinker like Adam Smith, the eighteenth century social philosopher and author of The Theory of Moral Sentiments (1759) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776).  In Book V, Chapter I, of The Wealth of Nations---on the costs of defense and supporting the sovereign---Smith states, “It is reasonable, therefore, that [these expenses] should be defrayed by the general contribution of the whole society, all the different members contributing, as nearly as possible, in proportion to their respective abilities” (emphasis added).  That is, those who have more should pay more, particularly with respect to the costs of defense.

A bit later, in a section entitled Of Taxes (Book V, Chapter II), Smith writes: "The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.  The expence of government to the individuals of a great nation is like the expence of management to the joint tenants of a great estate, who are all obliged to contribute in proportion to their respective interests in the estate" (emphasis added).  Those who benefit most from society are responsible---indeed “obliged,” in Smith’s words---to contribute to the commonwealth in an amount corresponding to what they enjoy.  In short, the price of civilization is taxation.

Taxation alone will not solve our problems; we must also substantially cut and control spending, in many areas of the budget (including defense and subsidies).  But the most effective way to address our debt is to attack it from both sides: by reducing spending and paying more towards it.  Cutting spending is a necessary but insufficient approach to our debt; tax revenues, as provided in the Constitution, must be a significant part of the solution.

The idea here is not to punish the wealthy or necessarily have them pay a greater proportion than others in taxes.  Rather, the point is that we should not endeavor to lower taxes on the wealthy while we are deep in debt, and we ought not use tax policy to unfairly privilege those types of wealth traditionally held by the elite (e.g., estates and capital gains).  This is not a case of “us against them.”  To the contrary, it is about all of us shouldering our financial responsibilities under the debt.  To argue that taxation is off the table in the budget debate is to shirk our obligations as citizens---and lawmakers---and conveniently ignore a significant part of the Constitution.

Tax cuts to the wealthy

This is a bit long but very interesting.

Eight things to know if you want to be wealthy

The tips in this entry come from an article written on financial-advice-for-beginners.com. Although it is contrary to many statistical facts, it is nonetheless interesting. Unfortunately, as Robert Frank answers when asked whether everyday investors can make more money by copying the behaviors of the wealthy, "The answer is: not really." The rich can afford to invest differently than the other 90% because they can afford to lose more. Naturally they also can gain more.



1. How to Get Wealthy Step 1 - Pay Yourself First
Wealthy people always pay themselves first. When that cheque shows up in your mailbox or drops into your bank account, what should you do first? Most people go out and buy some new stuff, then pay some bills, buy some groceries, then see what's left over. If there is anything left (usually there isn't), they might consider putting some of that money aside in investments.

Wealthy people do not follow this approach. Wealthy people always put money aside for investments right off the top of any money they receive. They know that their investments are more important than any creditor, or any new stuff that they might want. By putting money aside for their investments first, wealthy people are ensuring that their wealth will continue to grow.

Studies have shown that the wealthiest people usually put 20% of their income aside for investments and use the remaining 80% for living expenses.

2. How to Get Wealthy Step 2 - Live Below Your Means

Wealthy people always live below their means. Most of them do not drive expensive luxury cars or wear top of the line clothing. They spend their money frugally and use the money they save to continue growing their wealth.

People with a poor spending habits often go out and buy cars with payments that stretch their monthly income. They also tend to go out and use their credit cards to buy new electronics, clothing and toys that they don't really need.

Let go of the desire to have the latest and best stuff. Make building your wealth a higher priority than status symbols and owning stuff that loses value anyways.

3. How to Get Wealthy Step 3 - Create and Follow a Budget

The best way to make sure that you live below your means is to create and follow a budget. After you have taken out the percentage of money you are allocating for invesments. Allocate the rest of your money using a budget, and make sure you follow it. This will ensure that you don't overspend and end up racking up debt.

4. How To Get Wealthy Step 4 - Learn How To Invest

If you want to become wealthy, you need to learn how to invest your own money. The vast majority of wealthy people handle their own investments. They don't hand their money over to a financial advisor who is really best served by investing their money in whatever earns them the most commissions.

Wealthy people understand that their money is best handled by the people it matters most to - themselves.
It isn't that hard to educate yourself on how to invest. Your local library is sure to have several books available. There is also a lot of information available online. And most bookstores also have a section on investing. Read information from lots of sources and you are sure to find something that will fit well with your goals, resources, and risk tolerance.

5. How to Get Wealthy Step 5 - Learn The Difference Between Active and Passive Income

Wealthy people know the difference between active and passive income. And they also understand that it is of the utmost importance that they build up as much passive income as they can.

Active income is income that comes from exchanging your time for money. For most people this is in the form of a job that you go to that pays you money for each hour that you are there. With this form of income, you can only make as much money as the hours you are able to work. This income can also be cut off very easily if you are fired, get laid off, or become to ill to work. If you can't work, you don't earn any more money.

Passive income is income that is generated no matter what you are doing. This type of income comes from various sources including: real esate investments, business income, online incomes, or investment income. These income sources will continue to earn money for you whether you are able to work or not. They continue to earn money even while you sleep. Passive income is critical to building wealth and making sure you always have income coming in no matter what else is going on in your life.

To learn more about passive income, please read "What Everybody Ought To Know About How To Get Rich"

6. How to Get Wealthy Step 6 - Start Young If Possible

The more time you have on your side, the better your chances of becoming wealthy.  With more time, you have more opportunity to take advantage of compounding interest. Compound interest is when the interest you've earned from an investment gets added the principal amount you invested, and that interest earned also begins to earn interest on intself. As this process repeats year after year, the process is called compounding.

An extra ten years of this compounding process can add hundreds of thousands of dollars to your investments depending on how much you've invested and for how long.

7. How to Get Wealthy Step 7 - Set Goals

You need to have a clear idea of where you want to go before you can figure out the route you need to take to get there.  Wealthy people always have goals. They know how much they want to have, and by when. And they have a game plan on how to reach that goal.  You should do the same. If you plan on reaching this goal by investing. Use an investing calculator to figure out how much you need to be putting away and what returns you need to be getting to reach that goal.  Once you have your plan in place. Follow it. Then check and adjust as needed as time goes by.

8. How To Get Wealthy Step 8 - Get a Mentor

The best thing you can do for yourself if you would like to become wealthy is to get a mentor. Try to meet people that are already wealthy and build relationships with them.  Contrary to how the media tends to portray wealthy people, most of them are very giving, extremely nice, and would be more than willing to help you out if you only ask.  Look for local places where you can meet wealthy folks. Country clubs, golf courses, yacht clubs, etc, are all great places to start looking. You could even hang out in the business section of your local bookstore and chat with some people that come through.

If you are really averse to meeting new people, don't lose heart. You can still find mentors through other means. Mainly reading. Books written by wealthy people can offer a treasure trove of advice.

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Over and out.

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.