Warm Southern Breeze

"… there is no such thing as nothing."

Posts Tagged ‘Economic inequality’

Pitchfork in the Road: America’s Economic Future – Poverty & Insurrection, or Abundance & Peace?

Posted by Warm Southern Breeze on Saturday, June 28, 2014

“How much is enough?” is a qood question to ask many folks, especially some among the Wall $treet crowd.

And to be certain, the two principles of “the worker is worthy of their hire,” and “You must not muzzle an ox to keep it from eating as it treads out the grain” are equally compelling ethics.

As those two ethics concern our nation’s economy, we can point to times in history where various nations suffered revolution, and the most common causes of revolution.

In fact, I wrote at length about it in this blog in 2011, and observed in part that, “…it’s not as if uproars have never happened before. They happen with great regularity and frequency. In fact, they’re quite predictable. Yes, predictable. It’s called “history.” The maxim goes something like this: “Those who forget the lessons of history are condemned to repeat them.” And so, any reasonable or prudent person should ask, “What are the lessons of history?””

Just remember this: Food, Clothing, Shelter. If you can’t get them with what you have, you’ll fight, kill, go to war, or civil insurrection, to obtain the basic necessities of life.

The Pitchforks Are Coming… For Us Plutocrats

Nick Hanauer is a Seattle-based entrepreneur.

July/August 2014

Memo: From Nick Hanauer
To: My Fellow Zillionaires

You probably don’t know me, but like you I am one of those .01%ers, a proud and unapologetic capitalist. I have founded, co-founded and funded more than 30 companies across a range of industries—from itsy-bitsy ones like the night club I started in my 20s to giant ones like Amazon.com, for which I was the first nonfamily investor. Then I founded aQuantive, an Internet advertising company that was sold to Microsoft in 2007 for $6.4 billion. In cash. My friends and I own a bank. I tell you all this to demonstrate that in many ways I’m no different from you. Like you, I have a broad perspective on business and capitalism. And also like you, I have been rewarded obscenely for my success, with a life that the other 99.99 percent of Americans can’t even imagine. Multiple homes, my own plane, etc., etc. You know what I’m talking about. In 1992, I was selling pillows made by my family’s business, Pacific Coast Feather Co., to retail stores across the country, and the Internet was a clunky novelty to which one hooked up with a loud squawk at 300 baud. But I saw pretty quickly, even back then, that many of my customers, the big department store chains, were already doomed. I knew that as soon as the Internet became fast and trustworthy enough—and that time wasn’t far off—people were going to shop online like crazy. Goodbye, Caldor. And Filene’s. And Borders. And on and on.

Nick Hanauer

Nick Hanauer
With over 30 years of experience across a broad range of industries including manufacturing, retailing, e-commerce, digital media and advertising, software, aerospace, health care, and finance. Hanauer’s experience and perspective have produced an unusual record of serial successes. Hanauer has managed, founded or financed over 30 companies, creating aggregate market value of tens of billions of dollars. Some notable companies Include Amazon.com, Aquantive Inc., (purchased by Microsoft in 2007 for $6.4 billion), Insitu group (purchased by Boeing for $400 million), Market Leader (purchased by Trulia in 2013 for $350 million). Some other companies include Marchex, Newsvine, Qliance, Seattle Bank and Pacific Coast Feather Company. – Photo by Robbie McClaran

Realizing that, seeing over the horizon a little faster than the next guy, was the strategic part of my success. The lucky part was that I had two friends, both immensely talented, who also saw a lot of potential in the web. One was a guy you’ve probably never heard of named Jeff Tauber, and the other was a fellow named Jeff Bezos. I was so excited by the potential of the web that I told both Jeffs that I wanted to invest in whatever they launched, big time. It just happened that the second Jeff—Bezos—called me back first to take up my investment offer. So I helped underwrite his tiny start-up bookseller. The other Jeff started a web department store called Cybershop, but at a time when trust in Internet sales was still low, it was too early for his high-end online idea; people just weren’t yet ready to buy expensive goods without personally checking them out (unlike a basic commodity like books, which don’t vary in quality—Bezos’ great insight). Cybershop didn’t make it, just another dot-com bust. Amazon did somewhat better. Now I own a very large yacht.

But let’s speak frankly to each other. I’m not the smartest guy you’ve ever met, or the hardest-working. I was a mediocre student. I’m not technical at all—I can’t write a word of code. What sets me apart, I think, is a tolerance for risk and an intuition about what will happen in the future. Seeing where things are headed is the essence of entrepreneurship. And what do I see in our future now?

I see pitchforks.

At the same time that people like you and me are Read the rest of this entry »

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Census Bureau: Household Income Inequality Increases

Posted by Warm Southern Breeze on Sunday, September 16, 2012

Can anyone say “Banksters”?

Highlights From Census Report on Income, Poverty and Health Insurance

September 12, 2012, 11:00 AM, By Ben Casselman

The Census Bureau today released its annual report on income, poverty and health insurance, the most detailed look at Americans’ household income. A few early takeaways:

Real income fell

Real income fell

The lost decade continues. Median household income, adjusted for inflation, fell 1.5% in 2011, to $50,054. That’s 8.1% lower than before the recession and 8.9% lower than in 1999.

Inequality rose. Income inequality, as measured by the Gini index, rose 1.6% in 2011 from 2010, the first annual increase since 1993. Other measures of inequality also increased. The top 5% of earners—those making $186,000 or more—received 22.3% of all income in 2011, up from 21.3% in 2010.

Urban residents took the biggest hit to income. Households in principal cities saw their inflation-adjusted income decline by 3.7% in 2011, versus a 2.2% decline for those living in metropolitan areas (including both cities and suburbs). Incomes for those living outside of metropolitan areas were broadly flat. But Read the rest of this entry »

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It’$ all about the money: Who want$ your$, and who lobby$ to get your taxe$?

Posted by Warm Southern Breeze on Monday, September 10, 2012

If you want to know the political news, read the business pages.

It’s all about the money.

Sure, this is a subsidy, and for those who need it – which, increasingly are many (50/311 Million, or 16% of the American population) – it is a life saver. Eventually however, it is an indirect subsidy upon private enterprise. Again, not that it is bad, per se, but that without regulation to prevent abuse of smaller businesses by large, powerful multi-national corporations and their denizen hordes of attorneys, regulations must be enacted.

Part of the greater problem is – according to the CIA World Factbook – that

“Since 1975, practically all the gains in household income have gone to the top 20% of households. Since 1996, dividends and capital gains have grown faster than wages or any other category of after-tax income. Long-term problems include inadequate investment in deteriorating infrastructure, rapidly rising medical and pension costs of an aging population, sizable current account and budget deficits – including significant budget shortages for state governments – energy shortages, and stagnation of wages for lower-income families.”

As Robert Reich and others observed,

Corporate profits are up. Most companies don’t even know what to do with the profits they’re already making. Not incidentally, much of those profits have come from replacing jobs with computer software or outsourcing them abroad.

“Meanwhile, the wealthy don’t create jobs, and giving them additional tax cuts won’t bring unemployment down. America’s rich are already garnering a bigger share of American income than they have in eighty years. They’re using much of it to speculate in the stock market. All this has done is drive stock prices higher.”

So it seems that the bottom-line question is, and remains: How do we correct & rectify the problem of gross income inequity?

Kraft warns on US food stamp cut plans

September 9, 2012 10:06 pm
By Alan Rappeport in Washington

Proposals to impose deep cuts on the $75bn US food stamp programme could eat into profits Read the rest of this entry »

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The Impact of the Flat Tax Reform on Inequality

Posted by Warm Southern Breeze on Wednesday, January 26, 2011

Some assert that everyone should pay the same rate of taxes, claiming that one “flat rate” would solve many problems.

I beg to differ.

The inequality of the so-called “flat tax” is quite simply, self-evident, because given that the cost of living is indexed similarly, the one whom has more income and wealth does not use as much to live, whereas the less fortunate and less wealthy use a greater percentage of their income to make ends meet.

Put another way, if it costs $500 annually to live, and you make $1000, that’s 50% of your income.

If it costs $500 annually to live and you make $10,000 that’s 5% of your income.

Who, then, does a flat tax benefit? Read the rest of this entry »

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