The GOP’s Great Depression Tax Plan


Everett Historical / Shutterstock

Critics of this fall’s tax reform spectacle on Capitol Hill never seem to miss an opportunity to contrast the GOP’s rush to judgment today with what they hail as the measured, bipartisan approach to tax reform back in 1986.

Back then, the line goes, legislative statesmen from both sides of the aisle joined and vanquished tax policy’s most ornery sacred cows. They slashed individual tax rates while closing loopholes favored by corporations—without party line votes or deceitful math.

But if we want a historical analogy that illuminates our present political moment, we would do well to ditch 1986 and look back to 1932, a year when America’s political elites made an amazingly brazen tax move to comfort America’s already comfortable. Sound familiar?

At that time, we were in trouble. The Great Depression had left government barely able to function. New revenues, almost everyone agreed, simply had to be raised.

Where to get these revenues? According to the political elites, top Democrats and Republicans alike, only tax breaks for the rich could start the nation down the road to prosperity.

Read the full article on Fortune.

The post The GOP’s Great Depression Tax Plan appeared first on Institute for Policy Studies.


Making Wall Street Loopholes Great Again


(Photo: Flickr/Michael Fleshman)

Wall Street had a bang-up week in Washington.

Two of their own, former Goldman Sachs executives Gary Cohn and Steve Mnuchin, had the honor of unveiling the outlines of President Trump’s tax plan on Wednesday. Cohn now heads up the National Economic Council and Mnuchin is Treasury Secretary.

Not surprisingly, the tax plan is a huge giveaway to the big banks and corporations.

That same day, House Republicans held a hearing on their big Wall Street deregulation bill. The Financial CHOICE Act would roll back many of the 2010 Dodd-Frank provisions aimed at preventing another financial crisis and shielding consumers from abuse. Less than a decade after the worst financial meltdown since the Great Depression, Wall Street is once again riding roughshod over the public interest.

The choice of Cohn and Mnuchin as the faces of Trump’s tax plan really says it all. Their former employer, Goldman Sachs, is already a champion tax dodger.

When Cohn stepped down as the bank’s president to join the administration, Goldman had $ 31 billion in untaxed offshore profits and 987 tax haven subsidiaries, according to the Institute on Taxation and Economic Policy.

If President Trump has his way, banks and corporations will enjoy a deep discount on such offshore funds if they shift them to the United States. While the Cohn-Mnuchin duo declined to say just how deep this discount might be, the plan Trump released during his campaign proposed a 10 percent tax on “repatriated” earnings, less than a third of the current 35 percent corporate tax rate.

That would save Goldman Sachs an estimated $ 4.4 billion on their IRS bill.

Read the full article on The Hill’s website. 


Inequality Was Responsible for the Depth of the Great Recession

Wealth Distribution

(Photo: Takkun / Shutterstock)

Another new study on the devastating impact of the Great Recession — on the middle class — has just come out from the Hudson Institute, a conservative-leaning think tank.

America’s richest 10 percent, this latest analysis shows, lost 7 percent of their wealth between 2007 and 2013. The bottom 90 percent lost 22 percent, over triple the top 10 percent loss.

The Great Recession essentially wiped out virtually every cent of the new wealth middle class households had added between 1983 and 2007.

In the earlier of these two years, the typical American household held, after adjusting for inflation, a modest net worth of $ 80,200. By 2007, this net worth had grown to just under $ 136,000. The Great Recession knocked that total back down to $ 81,400.

Middle-class household income follows this same basic pattern. Typical families, after adjusting for inflation, took home $ 48,000 in 1983, then only about $ 46,000 in 2013.

By any yardstick, the Great Recession dealt households in America’s economic middle a devastating blow. The United States has emerged from it, notes the new Hudson Institute study, “noticeably more unequal,” with the nation’s top 10 percent now holding three-quarters of the nation’s wealth.

What made the Great Recession so dreadfully “great”? To start getting at the answer, suggests other recent research, we first have to acknowledge how remarkably unequal America had become just before the Great Recession.

The authors of this other new research — economists Kurt Mitman of Stockholm University, Dirk Krueger of the University of Pennsylvania, and  Fabrizio Perri of the University of Minnesota — have all immersed themselves in that pre-Great Recession inequality. They’ve crunched the data from a national University of Michigan survey of 5,000 American families that’s been ongoing ever since 1968.

This survey’s figures show that American household inequality had, by the eve of the Great Recession, hit a “postwar high.” In 2006, the upper 20 percent of U.S. households held a little under 83 percent of the nation’s wealth. The nation’s poorest 40 percent, all combined, held “no net worth at all.”

And households in America’s middle class? Households in the nation’s middle 20 percent owned just 4.4 percent of the nation’s wealth.

Economists Mitman, Krueger, and Perri hold this deep inequality directly responsible for the crushing depth of the Great Recession. Inequality, their research concludes, “has a significant impact on business cycle fluctuations.” Inequality makes cycles fluctuating downward — recessions — worse. Much worse.

Americans have witnessed 11 recessions since 1945. Most of them came and went quickly, leaving behind no lasting damage. Most of these  economic downturns also came at a time when the United States more equally distributed the nation’s wealth.

Why should the distribution of wealth make any difference on the severity of an economic downturn? Mitman, Krueger, and Perri have an explanation.

In 2006, they point out, the nation’s bottom 40 percent of households may have held no net worth. But the households in this bottom 40 percent did, of course, have income. With this income, they consumed a significant share — close to 25 percent — of the nation’s goods and services.

The low-wealth households of the middle 20 percent consumed another sizeable chunk. Together, the households in the nation’s bottom 60 percent in 2006 accounted for just over 40 percent of the nation’s consumption.

But then the economy experienced a “macro shock.” Unemployment rose precipitously and households started cutting back on their consumption. Nothing particularly unusual there. Households almost always cut back on consumption when an economic downturn hits.

The difference this time? The extent of the cutback.

The deeply unequal America of 2006 had a greater proportion of low-wealth households than the America of earlier postwar decades — and that contrast turns out to really matter.

In an economy with wealth more equally distributed, most households will be able “self-insure” against the calamity of unemployment. They will have enough saved up to weather the loss of a job and income without having to cut back drastically on their consumption.

But in an unequal economy, with so many families with so little in wealth, many households will “have a lesser ability to self-insure.” In this economy, note Mitman, Krueger, and Perri, low-wealth households will start to cut back significantly on their personal consumption once unemployment rates start rising, even if their own family income “has not dropped yet.”

And that’s what happened during the Great Recession. With so many households spending significantly less, the recession that began in 2008 soon became the Great Recession, the worst economic downturn in the United States since the Great Depression of the 1930s.

In other words, as our three economists formally put it, “an economy with a large fraction of low-wealth households will experience a sharper reduction in aggregate consumption expenditures in response to a given macroeconomic shock.”

This trio of researchers can back up that conclusion with a wealth of complex analysis. But we can keep things simple. America’s two worst economic catastrophes of the last century — the Great Depression and the Great Recession — came right after America’s wealth had significantly and ferociously concentrated at the nation’s economic summit.

The post Inequality Was Responsible for the Depth of the Great Recession appeared first on Institute for Policy Studies.

Sam Pizzigati is an associate fellow at the Institute for Policy Studies.


Still Feeling the Great Recession?

(Photo: Sean Ryan/Flickr)

Do you enjoy riding on roller coasters? Do you like rising, screaming, and then suddenly plummeting, never quite knowing exactly what scary sensation lurks around the next bend?

Many folks crave that sort of experience. Many others don’t. And if you fall in the latter category, you don’t have to worry about roller coasters — because you have a choice. You can choose not to ride. You can avoid all the precipitous ups and downs.

Over recent years, in the United States, we’ve lived the angst of this reality. In fact, we still haven’t fully recovered from the Great Recession.  In our modern market economies, we have no such choice. Ups and downs — booms and busts — come with the territory.

Why not? A global team of economists recently took the time to ponder that question. And their answer revolves around a key choice that — even in a market economy — we can make. We can choose to be more equal. The more equal an economy, the less severe and long-lasting economic downturns will be.

How does inequality make downturns worse? The Great Recession offers a telling case study, and the new research from Stockholm University’s Kurt Mitman, the University of Pennsylvania’s Dirk Krueger, and the University of Minnesota’s Fabrizio Perri walks us through it.

In 2007, the year the Great Recession officially began, the United States was experiencing its highest level of household economic inequality since the 1930s. America’s poorest 40 percent of households had more debts than assets. Taken together, these households essentially held 0 percent of the nation’s wealth.

The richest 20 percent of households, by contrast, held 82.7 percent of America’s wealth.

Household income figures told that same basic inequality story. The bottom two fifths of households were taking in 19.9 percent of national income. The top one fifth was pulling down over double that share, 41.2 percent.

But the story changes a bit when we look at consumption. The richest fifth may have had over 80 percent of the nation’s wealth. But their personal spending made up only 37.2 percent of what the nation consumed.

The poorest two fifths of households, on the other hand, may have had zero wealth. But they did have income, and they were spending almost all that income, month after month, on the goods and services they needed to get by. Their personal spending accounted for nearly a quarter of the nation’s total consumption, 23.7 percent.

All these consumption numbers matter. In an economic downturn, consumption levels determine how rapidly and how well an economy will recover. If people aren’t spending, businesses aren’t going to be hiring.

So what happened after the Great Recession hit? People with little or no wealth started spending less. Households in the bottom fifth decreased their spending at twice the rate of households in the top fifth.

In their new research, economists Mitman, Krueger, and Perri take pains to emphasize why exactly poorer people spend less when an economy goes south. The reason that at first glance might appear to be the most obvious — that poorer households in hard times simply have less income to spend — turns out not to be the key driver.

Yes, low-wealth households that have lost jobs and paychecks will spend less when hard times hit. But low-wealth households that have not lost jobs and paychecks will also spend less. They’ll spend less because they don’t have the resources, as Mitman, Krueger, and Perri put it, “to self-insure against idiosyncratic risk.”

In other words, low-wealth households don’t have enough cash available to tide them over if they lose a paycheck. So these households, once hard times arrive, “drastically reduce their expenditure rates, even if their income has not dropped yet.”

The more low-wealth households in a society, the more devastating the impact of these spending reductions on the economy as a whole, the longer downturns linger.

If, on the other hand, we had a more equal distribution of wealth in the United States, more households would be able to keep spending at the onset of a downturn. The rough times would end sooner.

So what should we do? Short-term, we ought to be doing our best to give poor households more income security. Our woefully inadequate system of unemployment insurance needs a total makeover. Families need to see that the loss of a job will not mean a devastating loss of income.

And in the longer term? We simply need to become more equal. We need a total makeover of the policy decisions — on everything from taxes and trade to labor rights and business regulation — that have left the distribution of household wealth in the United States so incredibly top-heavy.

The post Still Feeling the Great Recession? appeared first on Institute for Policy Studies.

Sam Pizzigati is an associate fellow at the Institute for Policy Studies.


In Southernmost Greece, One of the Last Great Undiscovered Corners of Europe – Travel+Leisure

In Southernmost Greece, One of the Last Great Undiscovered Corners of Europe
The Mani, in southernmost Greece, is a land where myths were born, gods once roamed, and the people are as proud and rugged as the mountains they call home. Jim Yardley gets lost in one of the last great undiscovered corners of Europe. Somewhere in …


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By 2010, just as export markets began to return to pre-BSE levels, major droughts in the Midwest, Texas and Oklahoma forced tens of thousands of U.S. ranchers to cut their herd numbers or exit the industry altogether. By 2013, total U.S. herd numbers

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Time to look back at a great year!

As 2015 is almost at its end, at Fairfood we are looking back at what we have achieved and we would love to share some of these highlights with you!

Report about exploitation and poverty wages behind production Asian shrimp sold in European supermarkets
In April we published the report Caught in a Trap revealing that the shrimp sold in European supermarkets are peeled and processed by exploited Asian shrimp workers who earn poverty wages. We also revealed that Lidl is one of the supermarkets that source these shrimp from Asia.

Petition Lidl signed by over 165,000 people
Together with SumOfUs we started a campaign to convince Lidl to tackle the poverty wages in all of its supply chains. The petition has been signed by over 165,000 people. Lidl promised to get back to us with a concrete plan to start working on the implementation of living wages in its supply chains, but never did so.

Therefore, this Christmas, we are surprising Lidl with Facebook posts and tweets asking them to implement living wages in its supply chain. You can help us out.

What’s on your plate? The story of your food
Have you watch our animation video yet? Learn more about how the global food supply chain works and find out what all of us can do to create a fair food supply chain.

Report about the bitter consequences of poor working conditions in the Central American sugarcane industry
In July, together with the Dutch trade union federation CNV Internationaal and the Central American Institute for Social Studies (ICAES), we published the report Give them a break about the harsh working conditions in the sugarcane industry in Central America. Over the last decade, thousands of sugarcane workers in Central America have died from Chronic Kidney Disease of non-Traditional causes (CKDnT), which is related to the harsh working conditions. The report also revealed that Bacardi is one of the companies that sources sugar products for its rum from Central America.

Following the report, our friends from CNV Internationaal are currently calling upon Bacardi to improve the working conditions on the sugarcane plantations. You can join them here: (in Dutch).

Workshop on entrepreneurial skills in Madagascar
In September, together with CNV Internationaal, we provided a workshop to vanilla farmers in the Sava region in Madagascar to raise farmers’ awareness about the global vanilla value chain, to discuss what a fair price would be according to the farmers present and to discuss ways of changing the current situation of Malagasy vanilla farmers.

51 year old vanilla farmer Zafisoa attended the workshop: “A workshop like this has never happened before. It was very special and I’m very grateful that I could attend. It is important to discuss our problems and learn more about the vanilla value chain.” Read more on our vanilla project here.

Global Food Week
This year Fairfood launched its first Global Food Week, around Global Food Day on Friday 16 October. During this week we highlighted some of the most challenging issues in our global food chain and emphasized that we all have an important role to play in creating a system that is fair and inclusive for farmers and food workers all over the world.

In light of Global Food Week, famous Dutch food blogger ChicksLoveFood and consumer Daisy Scholte – winner of the Roving Report contest – travelled to Morocco to meet the women that pick our tomatoes. You can read about their experiences in their blogs.

MOR trip 3MOR trip 2MOR trip 1

Kicked off Living Wage lab with supermarkets and experts
Together with Hivos we kicked off a Living Wage lab in which we are – together with supermarkets and living wage experts – looking for practical ways to implement living wages. We will have more sessions in 2016 in which we hope to find out together what works best.

Thank you
We would like to thank all of you who helped us last year on our journey towards fair food supply chains! With a special thanks to the food brands and retailers who are starting to take steps forward towards fair labour conditions for all workers in their supply chains, and a special thanks to our amazing partners and other organisations without whom we would not have been able to work on these delicate issues:

Andy Hall, CNV Internationaal, Fédération Nationale du Secteur Agricole (FNSA), FNV Bondgenoten, Ford Foundation, Hivos, Instituto CentroAmericano de Estudios Sociales (ICAES), La Isla Foundation, Migrant Worker Rights Network (MWRN), Nationale Postcode Loterij (NPL), Oxfam, State Enterprises Workers’ Relations Confederation (SERC), Solidaridad, Solidarity Center, SumOfUs and many other organisations.

Forecast for 2016
In 2016 we will continue working on achieving a food system in which people live and work in dignity, the environment is respected and there is social and economic value for all. We will do this by:
• Inspiring business and communities,
• Influencing policies and practices,
• Connecting ideas and people,
• Sharing knowledge and solutions.

Keep on following us to see how you can help. Let’s all work together to make 2016 a good and fair food year!


The Great Pumpkin Shortage Is Coming

Pumpkin fever is back.

The latest bout of this seasonal disorder has infected Hostess Twinkies and moved Starbucks to put a smidge of real pumpkin in its pumpkin spice lattes. Previously, the ubiquitous coffee purveyor used a common ploy: It evoked agrarian and holiday nostalgia with artificial food coloring, a cloying mix of spices, and loads of sugar.

Whether you’re hooked on making your own pumpkin coffee with a blob of the canned stuff or just want to avoid a last-minute scramble before baking a Thanksgiving pie or two, you better stock up now.

The Libby’s canned food company says that overly wet weather near its Morton, Illinois factory halved this year’s harvest. The quintessentially American brand — in reality a division of Nestle SA, a sprawling Switzerland-based food conglomerate — produces the bulk of our nation’s pumpkin puree. And it buys all of its pumpkins from dozens of family farms located near its only packing plant.

In fact, the imminent pumpkin shortage is only the latest example of how changing weather patterns are endangering some of our favorite foods and drinks. Thanks for nothing, global warming. If this is news to you, try this sampler plate:

According to The Guardian, a “coffee catastrophe beckons as climate change threatens [the] Arabica plant” from Brazil to Burundi.

Salon has declared that “climate change could mean the end of chocolate” due to drier weather in Ghana and Cote d’Ivoire.

And the click-baiting Upworthy has warned that “climate change has crossed the line. It’s ruining beer now,” by endangering the hops supply.

Despite the vulnerability seen from time to time in Illinois — Libby’s ran into the same problem in 2009 — pumpkin is more versatile and less imperiled than those other specialty crops required for treats and libations.

What we call pumpkins are just varieties of winter squashes. Native to the Americas, they were among the first plants cultivated in this hemisphere. Originating in Mexico at least 7,000 years ago, this nutritious staple was widely cultivated by indigenous people long before English settlers landed at Jamestown.

Yet the machines smashing pumpkins in Libby’s sole factory can only accommodate a single kind of squash not grown elsewhere. Hauling different ones from other areas to cook, peel, seed, mash, and can wouldn’t work without planning ahead.

If the Libby’s label disappears from your grocer’s shelves before Thanksgiving, why not make a pumpkin pie from scratch? Choose a hard-skinned squash that wouldn’t make a good jack-o-lantern, because those big carving pumpkins are usually stringy and inedible. Small orange “sugar” or “pie” pumpkins taste better, as do blue hubbards and many other kinds you’ll find at farmers’ markets this time of year.

Even the Dickinson variety that Libby’s stuffs into that can you probably rely on to make your mother’s pumpkin pie recipe looks nothing like what you probably picture. Oblong with pale peach-toned skins, it’s more akin to butternut squash.

There are some alternatives to Libby’s that will help meet any excess demand created by the bad Illinois harvest. Trader Joe’s sources its house-branded puree from Oregon family farmers who have a bumper crop on their orange-stained hands this year. That may help the grocer meet its customers’ demands for the pumpkin dog treats, crackers, cheese, and body butter it sells.

“OK, we really have a thing for pumpkins,” the offbeat chain confessed in the October edition of its Fearless Flyer newsletter. “It’s true, we’ll add pumpkin to anything.”

The post The Great Pumpkin Shortage Is Coming appeared first on Institute for Policy Studies.

Emily Schwartz Greco is the managing editor of OtherWords, a project of the Institute for Policy Studies.


‘Great tragedy’: 43 die in French bus, truck crash – CNN

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