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ND-Dem's Journal
ND-Dem's Journal
January 26, 2015

Today's Seniors Do Not Have Better Retirement Benefits Than Prior Generations

A NYT article on the dwindling size of the middle class noted that seniors are more likely to be middle class than in the past. It told readers:

"Today’s seniors have better retirement benefits than previous generations. Also, older Americans are increasingly working past traditional retirement age."

In fact, seniors on average almost certainly have worse retirement benefits. The increase in the normal retirement age from 65 to 66 is equiavlent to a 6 percent cut in Social Security benefits.

In addition, changes in the methodology used for calculating the consumer price index reduced the size of the annual cost-of-living (COLA) adjustment by 0.3-0.5 percentage points compared to the increases in the early and mid-1990s. (This means that for the same actual rate of inflation, seniors would see a COLA that is 0.3-0.5 percentage points less than what they would have received in the early and mid-1990s.)

In addition, today's seniors are less likely to have a defined benefit pension, as these are dwindling rapidly. Defined contribution pensions have not come close to making up the loss.

Seniors also are far less likely to have retiree health insurance to cover non-Medicare expenses. Medicare has also become less generous in many respects, although the addition of the Medicare drug benefits (Part D) has been a big help to seniors.

The main reason seniors have more income is that they are working later in life. This is a positive insofar as it is the result of the voluntary decision of people in good health who enjoy their work. However in many cases, this is almost certainly not true. Many older workers are staying in the workforce because they have no other way to make ends meet.


January 26, 2015

Is a Great Grey Exodus from America Starting?

Although there is no shortage of victims of the financial crisis, one group that has generally been missed is the middle aged and elderly. Yes, there are reports of people in their 40s and 50s moving in with their children or other relatives, but for the most part, this cohort does not get much attention.

Yet it isn’t hard to see how grim their prospects are. Many thought they’d be employed at decent jobs through age 65 and are un or underemployed. And those still working full time are often victims of downward mobility, and have lost a well paying job and are now working at a lower pay level. If you don’t have a decent level of earnings, you can’t save much or at all. These pressures come against a backdrop of loss of wealth due to plunges in home prices and to a lesser degree, financial investments. And that’s before we get to pension fund whackage and plans to “reform” Social Security and Medicare.

While people who are under financial stress don’t much in the way of options, I see more and more people of modest and better means planning on becoming expats to make their retirement incomes go further. San Miguel, Mexico, was long a destination for older Californians who wanted to stretch their retirement dollar. A once well off jewelry dealer (the “trade” has been in desperate shape for over a decade) planned to move to Buenos Aires, but his situation decayed too quickly for him to exit. Costa Rica is apparently popular with economic emigrants. And I’ve now heard two mentions of Thailand in the last three weeks. One came a reader who told me how his Abyssinian/Manx cat Precious had been trained to stay on a porch, except when he unwisely tried chasing roadrunners and foxes. His e-mail had this sad postscript:

Without going into a rant … we live in rural Clark County, NV outside Las Vegas, and are in that group of former middle class folks that have lost it all … having invested our life savings in this property (peak month Jul, 2006) we have not been able to sell. To view the place Precious and I were behind the fox, go to the home’s website and see the view from the “Perch” seating area. We gave up selling. We have it for rent with option to buy. We hang on but face BK or foreclosure like so many others. When we leave we are moving out of the country. At 65, unemployed since 2007 in a small town, and with a disabled wife, there is no starting over here. We will be able to save more than half my small government pension/her social security in Chiang Mai, Thailand. I am not bitter, but I no longer believe in capitalism or democracy as I once did; not the way they are being practiced now.

Those who are approaching retirement age and have the time, energy, and financial headroom would do much better to get out of Dodge. America ranks badly on pretty much every social indicator, which means that moving to what is nominally a third world county isn’t just a step up in terms of spending power but often in overall quality of life. Thus we are likely to see another sort of hollowing out take place: the lower income and wealthy elderly will remain here, while more in between who have the resources and energy will depart. We already have the economic-oriented literature depicting retirees as a burden. Imagine what a middle class exodus in this age group will do for the political and economic position of the aged.


January 26, 2015

More homeless camps are appearing beyond downtown L.A.'s skid row

Evicted four months ago from their Highland Park apartment, Louis Morales and his 18-year-old stepson, Arthur Valenzuela, live half-hidden by brush along the nearby Arroyo Seco riverbed.

Morales, 49, keeps a framed bible verse and a stuffed monkey in his tent. Water hauled by bike from a park heats up on the camp stove.

Next door, their friend Johnny Salazar fixes bikes and shattered computer screens on the cheap for people who live in the neighborhood. A brother and sister Morales has known for years live up the river, and three couples stay down by the bridge.

"Everybody here is from Highland Park," Valenzuela said. "We don't allow other people."

Over the last two years, street encampments have jumped their historic boundaries in downtown Los Angeles, lining freeways and filling underpasses from Echo Park to South Los Angeles. The Los Angeles Homeless Services Authority, a city-county agency, received 767 calls about street encampments in 2014, up 60% from the 479 in 2013...

Whether homeless people are more numerous or simply more visible could be answered by the biennial tally taking place this week.

As many as 6,000 volunteers will go out Tuesday through Thursday searching for homeless people living in alleys, riverbeds, cars and RVs. For the first time, homeless people will be asked about their gender identity, domestic violence and prison histories, and years of military service - information that could better track where they came from and why.


January 25, 2015

Wealthiest majority-black county losing wealth

African Americans for decades flocked to Prince George’s County to be part of a phenomenon that has been rare in American history: a community that grew more upscale as it became more black.

The county became a national symbol of the American Dream with a black twist. Families moved into expansive new homes, with rolling lawns, nearby golf courses and, most of all, neighbors who looked like them. In the early 2000s, home prices soared — some well beyond $1?million — allowing many African Americans to build the kind of wealth their elders could only imagine.

But today, the nation’s highest-income majority-black county stands out for a different reason: Its residents have lost far more wealth than families in neighboring, majority-white suburbs. And while every one of these surrounding counties is enjoying a strong rebound in housing prices and their economies, Prince George’s is lagging far behind, and local economists say a full recovery appears unlikely anytime soon.

The same reversal of fortune is playing out across the country as black families who worked painstakingly to climb into the middle class are seeing their financial foundation for future generations collapse. Although African Americans have made once-unthinkable political and social gains since the civil rights era, the severe and continuing damage wrought by the downturn — an entire generation of wealth was wiped out — has raised a vexing question: Why don’t black middle-class families enjoy the same level of economic security as their white counterparts?

The impact of the financial devastation of the past several years is hardly visible along the quiet, well-tended streets of many Prince George’s neighborhoods. The county has the highest foreclosure rate in the District region, yet few houses appear to be abandoned.

Instead, the slow-motion crisis operates mostly in private, limiting people’s options, constricting their vision and forcing a seemingly endless series of hard choices. Having your wealth vanish means making pivotal life decisions — about where to send your children to school, saving for college, making home improvements and setting aside something for retirement — knowing you have no financial leeway...

The recession and tepid recovery have erased two decades of African American wealth gains. Nationally, the net worth of the typical African American family declined by one-third between 2010 and 2013, according to a Washington Post analysis of the Federal Reserve’s Survey of Consumer Finances, a drop far greater than that of whites or Hispanics.

The top half of African American families — the core of the middle class — is left with less than half of the typical wealth they possessed in 2007. The wealth of similarly situated whites declined by just 14?percent.

Overall, the survey found, the typical African American family was left with about eight cents for every dollar of wealth held by whites.

Not only is African American wealth down, but the chances of a quick comeback seem bleak. Just over a decade ago, homeownership — the single biggest engine of wealth creation for most Americans — reached a historic high for African Americans, nearly 50?percent. Now the black homeownership rate has dipped under 43?percent, and the homeownership gap separating blacks and whites is at levels not seen in a century, according to Boston University researcher Robert A. Margo...

African Americans were disproportionately targeted for predatory loans, which only intensified the financial damage caused by the downturn. Now the old housing market dynamics have returned, with relatively few blacks getting home loans, trimming housing demand in African American communities and putting a clamp on prices. That has harmed even the most responsible home buyers...


January 25, 2015

Syriza Victory in Greece Could Be a “Historic Turning Point” for Eurozone Economic Policy

Washington, D.C.-

Left-wing party Syriza’s strong victory in Greece’s elections today marks a “historic turning point” for countries attempting to emerge from sluggish economic growth, high unemployment and other poor indicators more than six years after the Global Recession began, Center for Economic and Policy Research (CEPR) Co-Director Mark Weisbrot said today.

Syriza has promised to enact alternative policy measures to the spending cuts and other regressive measures that the European authorities have imposed on Greece. Eurozone policies have left Greece with extremely high unemployment -- currently at 25.5 percent, with youth unemployment at 49.6 percent – depression levels of output (down by about 26 percent from pre-recession levels), and a very weak and precarious recovery, as noted in a new CEPR paper. The IMF has projected that Greek unemployment will still be at nearly 16 percent in 2018, and almost all of their projections since 2010 have been over-optimistic.

“This is a great example for the rest of the eurozone,” Weisbrot said. “Voters have rejected prolonged mass unemployment and elected a new government with a mandate to negotiate a better deal. And this new government will have bargaining power. A government that is willing to stand up to the European authorities can really help Europe move away from economic policies that have been a miserable failure.”

As of 4:00 p.m. EST, media outlets were reporting that Syriza had won 36.5 percent of the vote, according to official projections. Syriza has vowed to enact a stimulus, including through boosting public investment; to seek renegotiation of Greece’s debt; to clamp down on tax evasion; and to take advantage of the new quantitative easing (QE) program announced by the European Central Bank (ECB) last week. The party has expressed opposition to the current government’s stated intention to cut the salaries and pensions of public employees even further, as Syriza leader Alex Tsipras explained in a January 20 op-ed in the Financial Times.

The CEPR paper noted that “The amounts of money needed to guarantee a robust Greek recovery are extremely small for the European authorities, especially given the size of the ECB’s announced 60 billion euro per month QE.” Since the beginnings of the Global Recession, CEPR has criticized the austerity policies that European authorities have promoted in the eurozone.

Weisbrot noted in a recent op-ed in U.S. News and World Report that the German government and other proponents of eurozone austerity have hyped up fear that Syriza would lead Greece to exit the euro, despite the party’s statements to the contrary. Weisbrot suggested that these European authorities may fear the possibility of successful exit, however: “The fear is not what will happen to financial markets [but] that Greece would, after an initial crisis, recover so much faster than the rest of the eurozone that other countries will also want to exit.”

Tsipras and other Syriza politicians were joined in the final days of campaigning by the leader of the Spanish anti-austerity political party Podemos, Pablo Iglesias.

“If Syriza succeeds in bolstering recovery, bringing back economic growth and putting people back to work, then voters in Spain might take notice,” Weisbrot said. Elections will be held in Spain later this year.


January 25, 2015

Is the Gates Foundation Still Investing in Private Prisons? They won't say.

One year after Mother Jones reported on multi-million-dollar investments made on behalf of the Bill & Melinda Gates Foundation that appeared to contradict the foundation's mission, the philanthropy's trust will not say if one of its most controversial holdings is still on its books.

In its 2012 tax filing, the Gates Foundation Trust, which manages the foundation's endowment, reported a $2.2 million investment in the GEO Group, a Florida-based prison company. In its most recent tax forms, the Gates Foundation Trust listed an investment in the GEO Group worth more than $2 million.

In recent years, the GEO Group has faced accusations of detainee abuse and substandard care in multiple states. In 2012, Immigration and Customs Enforcement's Office of Detention Oversight reported that GEO Group's Adelanto facility near Los Angeles had committed "several egregious errors" in administering medical care to detainees. (GEO Group has repeatedly dismissed allegations of mistreatment.) More recently, a group of former immigrant detainees in Colorado sued the company for making them work around the prison for minimal pay, sometimes under the threat of solitary confinement. (The GEO Group said detainees were working under a "volunteer work program" and that its $1-per-day wages met federal standards.) The Gates Foundation Trust did not respond to requests for comment directed through a foundation spokesperson.

According to the Gates Foundation, Bill and Melinda Gates—the only members of the trust's board—have defined areas that the trust will not invest in, "such as companies whose profit model is centrally tied to corporate activity that [Bill and Melinda Gates] find egregious." Tobacco companies fall into that category.

The trust's last reported investment in the GEO Group took the form of a $2,148,790 bank loan. (The Gates Foundation Trust did not issue the loan itself. The term "bank loan" refers to a type of corporate debt that companies with low credit ratings occasionally sell through a conventional bank to get extra cash.) The asset was reported in a tax form filed with the Internal Revenue Service this October, but is accurate only through October 2013.

Bank loans can yield higher returns for investors than stocks or bonds, but their ownership is harder to trace independently.


Interesting business model: drain local governments for the cost of private prisons you profit from, send the cash overseas.

January 25, 2015

"Hate is going on in this world and it has to stop"

old story, but I just ran across it...

After a lifetime of bitter prejudice that drove him to kill innocent strangers, Mark Stroman died with a message of peace.

Stroman, 41, was executed by the state of Texas on Wednesday night by lethal injection, punishment for a shooting rampage in the aftermath of the 9/11 attacks that left two South Asian convenience store workers dead and another seriously injured.

Before his trial in 2002, Stroman, an avowed white supremacist, dubbed himself the "Arab slayer" and called the shootings "patriotic" retribution for the terror attacks.

But by the time prison authorities at the Texas death chamber in Huntsville strapped Stroman to a gurney and prepared to execute him, he had undergone a remarkable shift in perspective.

"Hate is going on in this world and it has to stop," Stroman said in his final moments. "Hate causes a lifetime of pain."

A key inspiration for Stroman's radically altered point of view was the extraordinary effort made to spare his life by one of his victims: Rais Bhuiyan, a Muslim immigrant from Bangladesh who was shot in the face by Stroman while working as a cashier at a Dallas convenience store. Bhuiyan survived the attack, but was blinded in one eye.

Late last year, after undertaking a pilgrimage to Mecca, Bhuiyan realized that his devout Muslim faith called on him to not only forgive Stroman for the attack, but to attempt to spare him from execution.

After conferring with the families of the other victims, Bhuiyan began an online petition asking Texas authorities to commute Stroman's sentence to life in prison without parole. When that effort went nowhere, he attempted to delay Stroman's execution by arguing that his right as a victim to participate in a reconciliation process with his attacker had been unjustly denied.

In an interview with HuffPost last week, Bhuiyan said that although the he had never met Stroman in person since the attack, the two had exchanged letters and he had recently received a video message from Stroman telling him to continue to spread his message of peace and forgiveness.

"His eyes were full of tears," Bhuiyan said.

"In the free world, I was free but I was locked in a prison inside myself because of the hate I carried in my heart," Stroman said in the interview. "It is due to Rais' message of forgiveness that I am more content now than I have ever been."

In his final words before death, Stroman bid goodbye to his family, and the world.

"I love you, all of you," he said. "Goodnight."

January 23, 2015

Selma: Black History According to Oprah

Like all historical dramatic films, Selma is a political work, reflecting the political views of the producers. Oprah Winfrey is one of those producers, in addition to playing one of the characters in this version of the Selma story. Her handwriting – that is, her conservative Black political worldview – is all over the film, which demands and deserves a political response.

Number One: the film is a crude insult to SNCC, the Student Non-Violent Coordinating Committee workers who, along with a small minority of Black preachers like Dr. Martin Luther King, comprised the infrastructure of the civil rights movement in the Deep South.

These hundreds of heroic young people, who had been organizing communities in Mississippi and Georgia and, yes, Lowndes County, Alabama for years, and who invited Dr. King to come to Selma, are personified in the film by one confused sounding, infantile behaving youth who we are supposed to believe is James Forman, the SNCC executive secretary who was, in real life, a Korean War veteran and former teacher and ground-breaking organizer about the same age as Dr. King. In the film, the James Forman character comes across as petty-minded, while Dr. King is made to seem like the only adult in town. Veterans of SNCC have a right to be hurt at being consigned to the dustbin of history by the likes of Oprah Winfrey.

Some people are missing from the film that absolutely should be in there. No, I’m not talking about Stokely Carmichael, although yes, he is quite relevant to the story. I mean the Kennedy brothers, John and Bobby, who were the ones who authorized the bugging of Dr. King’s phones and office and hotel rooms. But Oprah loves the Kennedys, and so the movie leads the audience to believe that J. Edgar Hoover and President Lyndon Johnson set out to surveil and destroy King because of his push for voting rights. But Attorney General Robert Kennedy signed the order, while his brother, who was then president, was still alive. Oprah insults Black SNCC civil rights heroes, but she protects the white, rich Kennedys.

Finally, near the end of the film, Dr. King is depicted as yearning for an end to mass protests, so that Black people could achieve real political power – quite clearly meaning the election of more Black people to office. As if that’s what the mass movement was all about, in King’s mind. We know that’s not true, because Dr. King said the opposite in countless sermons, speeches, books and essays; that he was seeking social transformation, a new system of living. Three years after Selma, King died, still seeking to revive the mass movement.


I haven't seen the film, but I thought this was interesting. Comments from those who have?

January 23, 2015

Bill and Melinda Gates have a plan for income inequality

Bill and Melinda Gates, the undisputed heavyweights of philanthropy and ranked the wealthiest in the world, sat down with Yahoo Global News Anchor, Katie Couric, and addressed income inequality and other prevalent issues impacting people globally.

In response to Oxfam International's finding that “the richest one percent of people will own half of the world’s wealth by 2016,” Bill shared that he believes “philanthropy is part of how we deal with those inequities.” Melinda adds that “philanthropy can point the light on an issue that maybe isn’t being funded, or... take a risk that others won't take.” Using the example of philanthropists driving the charter school movement, Bill makes the point that often with less money than the public school nearby, they are having incredible success getting students into four-year colleges.

Bill and Melinda were visiting New York to release their 2015 Gates Annual Letter,which predicts “The lives of people in poor countries will improve faster in the next 15 years than at any other time in history.” The Gates Foundation, which was founded in 2000, has provided more than $30 billion in funding toward research and innovation in science, education, health, and technology and believes that breakthroughs in these areas will make a dramatic impact globally in the years to come. In addition to eliminating contaminated water and food, which claims 1.5 million children’s lives per year, Bill and Melinda promise unprecedented opportunities from the innovation in online education, mobile banking, vaccinations for diseases such as diarrhea and pneumonia, and farming techniques.


I wonder why, despite Bill and Melinda's stated intention to give away all their wealth, it just keeps growing?

January 23, 2015

Big profits (along with) big layoffs: eBay, AmEx to cut jobs

Big layoffs are coming for some big companies. eBay (EBAY) announced that it will layoff 2,400 people, about 7% of its workforce before April. This, after reporting a 10% increase in profits last quarter. American Express (AXP) also says it will cut 4,000 jobs, or 6% of its work force, despite an 11% rise in fourth quarter profits.

Yahoo Finance Senior Columnist Mike Santoli says the layoffs are a result of shareholder pressure to maintain growth and revenue. “American Express and eBay are in a situation where they're basically not fast growth businesses but rather ones that investors are demanding keep the profit margin up.”

Even with unemployment dropping and new jobs being created, wages remain stagnant, struggling to keep pace with inflation. Thousands of layoffs may also put downward pressure on wage growth.

Santoli doesn't see a sudden spike in wages coming anytime soon. “This vigil for wage inflation to really catch fire is probably going to go on. It’s not really going to happen. The whole corporate psychology is built to keep it this way.”


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