Wednesday, April 2, 2014

Today's Links

1---Inequality gap between super rich and poor continues to widen, RT

According to the investment group’s recent findings, the top one percent of wage-earning households in the US were reaping in around $1,264,065 in 2012 — or around 41-times as much as the average income for all wage-earners, who pulled in a comparable meager mean income of $30,997 that year.

The greatest demonstration of inequality is most evident in the income generated by not the top one percent, though, but by the sliver of the US population that makes more than 99.9 percent of the country. According to the firm’s research, the top 0.1 percent of Americans earned around $6,373,782 during that same 12-month span — or around 206 times what the average family in the US earned.
The ‘top one percent’ might be the primary target of the masses' ire and envy, but it's actually the top 0.1 percent who are grabbing a bigger slice of wealth,” Matt Krantz wrote for USA Today this week.

2---Forget the '1%:' Super-rich 0.1% pull ahead even more, USA Today

The "top 1%" might be the primary target of the masses' ire and envy, but it's actually the top 0.1% who are grabbing a bigger slice of wealth.
The average household in the top 1% pulled in earnings of $1,264,065 in 2012, according to a just-released analysis by investment firm Sadoff Investment Research. That's 41 times greater than the $30,997 average income of Americans.

But even the top 1% can't keep up with the top 0.1%, which posted average earnings of $6,373,782, or 206 times the average families' income, Sadoff found.
Nearly a quarter of these uber-weathy work in the financial industry. And 40% are executives, managers and supervisors, Sadoff says. A vast majority of the 0.1% live in New York, Los Angeles, San Francisco, Chicago, Washington D.C. or Houston

3---Wealth Inequality Is Now As Bad As It Was During The 1920s, TP

While wealth inequality today looks a lot like it did in the 1920s, the factors driving it are slightly different. Between 1913 and 1929, the economists note, the rich saved more and also got higher returns on their wealth, which led to “explosive inequality dynamics.” Then
after the crash until 1986, the Great Depression and then highly progressive capital taxes kept inequality at bay. But since then, wealth concentration has been rising thanks mostly to a difference in savings rates between the rich and poor. The bottom 90 percent were basically unable to put anything away in the years before the financial crisis, while the richest had a high savings rate.
Screen Shot 2014-03-31 at 12.03.38 PM
CREDIT: Emmanuel Saez and Gabriel Zucman
This is a problem that my continue to worsen, as fewer Americans say they’re able to put money away than before the crisis. About one in three isn’t setting anything aside at all. It also diverges based on income: those with incomes over $50,000 fare better at saving. This problem, coupled with stagnant wages for most of us alongside soaring profits and wages for those at the top, will continue to mean that the 1 percent accumulate more and more income and wealth

4--Americans Are Saving Less Now Than Right After The Recession, TP

5--REPORT: American Workers Have Seen A ‘Lost Decade’ In Wage Growth, TP

6--Corporate Profits Hit A New Record High Last Year, TP

7--Study: CEO Pay Increased 127 Times Faster Than Worker Pay Over Last 30 Years, TP

8---Citigroup CEO Named To “Key Administration Post, Baseline Scenario

9--Auto Sales and Weather, House of Debt

10---What's the Primary Cause of Wealth Inequality? Financialization , of two minds

What is the primary driver of this era's widening wealth inequality? Thomas Piketty's new book Capital in the Twenty-First Century provides an answer: financialization. While definitions vary, mine is:

Financialization is the mass commodification of debt and debt-based financial instruments collaterized by previously low-risk assets, a pyramiding of risk and speculative gains that is only possible in a massive expansion of low-cost credit and leverage.

Another way to describe the same dynamics is: financialization results when leverage and information asymmetry replace innovation and productive investment as the source of wealth creation....

Coming out of the Great Recession in 2009, inequality increased dramatically, the opposite of what happened when the Great Depression ended nearly eight decades earlier. Why?
The short answer: When investment returns exceed economic growth, the rich get richer, increasing inequality. 
When an economy grows at 1 percent annually but investment returns are 5 percent, the already wealthy need to reinvest only a fifth of their gains for their fortunes to grow at the same rate as the overall economy. The rest can be spent on a sumptuous lifestyle. 
Since by definition the very rich do not need to consume 80 percent of their incomes — the portion by which investment returns exceed the growth of the economy in Piketty’s model — they can reinvest most of their annual gains in the market. Over time this accumulating capital will snowball. 

11--US intelligence director confirms that NSA runs warrantless searches of Americans’ communications, wsws

12---The real purpose of CIA torture? wsws

The terms utilized by the Washington Post in its article—“brutal” torture methods, “excruciating” pain, “sprawling” black sites—gives an indication of the chilling and deeply criminal character of a torture operation directed by the highest levels of the CIA as a matter of official state policy. The original crimes and their subsequent coverup, by both the Bush and Obama administrations, are all impeachable and prosecutable offenses....

The material leaked to the Post also makes clear that the inhumane treatment of prisoners did not lead to a significant increase in the amount of “intelligence information” gathered by the CIA. Such a revelation contradicts the chorus of lies used by the Bush administrations to justify the programs, and by the Obama administration to cover up for their blatant unconstitutionality....

The Post cites one US official who said, “The CIA described [its program] repeatedly both to the Department of Justice and eventually to Congress as getting unique, otherwise unobtainable intelligence that helped disrupt terrorist plots and save thousands of lives. Was that actually true? The answer is no.” ....

But the recent revelations raise another question: If torture does not lead to intelligence gathering, as the CIA previously claimed, then what purpose does the program serve and why did it continue? The reality that is beginning to emerge is that the barbaric torture regime initiated and legitimized by the state under the auspices of the events of September 11 is aimed not simply or even primarily at perceived challenges from “terrorists” abroad, but at developing methods of fear and state oppression that will be directed at all opposition to the policies of the ruling class, abroad and at home.

13---The Wall Street settlements and the new aristocracy, wsws

The agreement adds to the more than $100 billion in fines that have been levied by US regulators on major American and global banks since the financial crisis, more than half of which has been imposed over the past year.
The record size of the settlements points to the pervasiveness and scale of the criminality of the banks and their top officials. And yet, not a single leading bank executive has been criminally charged.
This is not for lack of evidence. The 2011 reports by the Senate Permanent Subcommittee on Investigations and the Financial Crisis Inquiry Commission document in considerable detail the fact that the 2008 crash was triggered by criminal wrongdoing by bank executives. Carl Levin, the chairman of the Senate Permanent Subcommittee on Investigations said that the committee had found “a financial snake pit rife with greed, conflicts of interest and wrongdoing.”
The most egregious crimes by Wall Street and international banks that have led to financial settlements with US regulators include the following:
  •  Goldman Sachs, Deutsche Bank, JPMorgan Chase and other banks sold mortgage-backed securities they knew to be virtually worthless, helping to trigger the 2008 crash. Even as the banks were selling these securities to investors, they were making huge profits by betting against the same securities, without telling those to whom they were palming off the securities.
  •  Major US banks, including Citigroup, Wells Fargo and Bank of America, illegally processed and even forged home mortgage documents in order to more quickly foreclose on the homes of families that had fallen behind on their mortgage payments. The number of people illegally foreclosed on will never be known because the Obama administration put a stop to the tally, but the figure is likely in the millions.
  •  Nearly all of the major US and international banks manipulated the London Interbank Offered Rate (Libor), the benchmark global interest rate used to set rates on some $350 trillion in financial assets, including mortgages, credit cards, student loans and bonds. By falsely reporting the interest they paid for loans from other banks, these institutions concealed their losses and increased their profits—at the expense of individual retirees, home and car owners, pension funds and municipalities all over the world.
  •  Major banks, including JPMorgan and UBS, were key partners in the $65 billion Ponzi scheme operated by Bernard Madoff. Earlier this year, JPMorgan, Madoff’s main banker, agreed to pay $2 billion to settle charges that it knowingly profited from Madoff’s scam. The deal shielded JPMorgan and its CEO, Jamie Dimon, from criminal charges through a “deferred prosecution” provision.
The settlements themselves were worked out between the banks and their regulators so as to have the maximum public relations effect, creating the appearance that the banks were being held accountable while minimizing the financial impact on the companies. The banks write off the fines—many of which are tax deductible—as part of the “cost of doing business.”....

Democracy in America and around the world is collapsing under the weight of immense and ever-growing levels of social inequality, bound up with the domination of a financial mafia that uses its political power to enrich itself at the expense of society. Congress, the White House, the courts, the regulators, the Democrats and Republicans are all subservient to this financial aristocracy

14---Wells Fargo, U.S. Bank to end deposit advance loans, citing tougher regulation, WA Post

15--"Release Pollard At the Nation's Peril" by former past directors of Naval Intelligence, William Studeman, Sumner Shapiro, John L. Butts and Thomas Brooks, Washington Post, December 12, 1998
"Jonathan Pollard is serving a life sentence for stealing massive amounts of highly classified and extremely sensitive U.S. national security information. In terms of sheer volume of sensitive information betrayed, Jonathan Pollard rivals any of the traitors who have plagued this nation in recent times. Nobody is clamoring for the release of traitors like Aldrich Ames, John Walker or Jerry Whitworth, but Pollard, by manipulating his supporters and conducting a clever public relations campaign both here and in Israel, has managed to generate a small but vocal movement advocating that he be released and allowed to emigrate to Israel, where he expects to be something of a national hero.

We, who are painfully familiar with the case, feel obligated to go on record with the facts regarding Pollard in order to dispel the myths that have arisen from this clever public relations campaign aimed at transforming Pollard from greedy, arrogant betrayer of the American national trust into Pollard, committed Israeli patriot.

Pollard pleaded guilty and therefore never was publicly tried. Thus, the American people never came to know that he offered classified information to three other countries before working for the Israelis and that he offered his services to a fourth country while he was spying for Israel. They also never came to understand that he was being very highly paid for his services -- including an impressive nest egg currently in foreign banks -- and was negotiating with his Israeli handlers for a raise as he was caught. So much for Jonathan Pollard, ideologue!"

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