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Entries since November 2011Page Previous 1 • 2 • 3 • 4 • 5 • 6 Next
November 17, 2011 · By Sam Pizzigati
In today’s astoundingly unequal global economy, banks can go either of two routes — or both — to bag ever bigger returns. They can squeeze the 99 percent with nuisance fees and penalties. Or they can cater to the richest of the rich.
But both routes have bumps. The 99 percent can squeeze back, as they did earlier this month when Americans by the tens of thousands shut down their Bank of America accounts to protest the bank’s $5 debit card greed grab. And the richest of the rich? To cater to these fortunates, you first have to find them.
That can be difficult. Fortunately, financial industry consulting firms have stepped up to help. These firms have started publishing annual global wealth surveys that pinpoint where banks — and luxury retailers and anyone else who wants in on top 1 percent action — can find “high” and “ultra high” net-worth individuals.
Last week, a new global firm — the Singapore-based Wealth-X — entered the global wealth survey fray, joining a crowded field that already includes Capgemini and Merrill Lynch, the Boston Consulting Group, Credit Suisse, and Deloitte LLP.
Each of these firms has tried to carve out a unique market niche. The Wealth-X specialty? The world of the ultra rich, those individuals who can claim at least $30 million in net worth. And the researchers at Wealth-X haven’t just counted these ultras in their first annual global wealth census. They’ve tiered them.
For the entire world — and major nations — Wealth-X teases out subsets of the super rich, from the $30-to-$50 million set to the $1 billion and up. For the first time, thanks to Wealth-X, we can compare the barely ultra with the comfortably ultra and those super ultras who can make the comfortables seem pinched.
“Our report maps exactly where the biggest money is located,” Wealth-X CEO Mykolas Rambus boasted at a Geneva news conference last week, “and just how much there is.”
The Wealth-X research answers “how many” as well. The firm counts 185,795 individuals worldwide with at least $30 million net worth. These ultra high net-worth individuals — UHNWs — hold $25 trillion in combined wealth.
The global economy may be tottering, the new Wealth-X World Ultra Wealth Report 2011 goes on to inform us, but the “lifestyle habits of UHNW individuals have not been severely impacted.“
“Simply put,” the Wealth-X analyst team gushes, “the world’s wealthy elite are in a class of their own.”
In that class, Americans pack a bunch of the rows. Of the near 186,000 global ultra rich, 57,860 — 30 percent — carry U.S. passports. These American ultras hold a combined net worth of $7.6 trillion, an average of $131.4 million each.
That average masks a huge concentration of wealth at America’s summit. The 455 deep-pocketed Americans worth at least $1 billion hold half a trillion more in wealth than the 29,415 Americans in the Wealth-X $30-to-$50 million tier.
These numbers need a bit more context to have any real meaning, and we can take a stab at providing that context by glancing over at the “super committee” deficit-reduction deliberations now underway in Washington, D.C.
The 12 lawmakers on this congressional super committee — six Republicans and six Democrats — are trying to trim $1.2 trillion off federal red ink over the next ten years. On their chopping block: Medicare, Social Security, and assorted other programs essential to the well-being of America’s 99 percent.
The super committee reporting-out deadline comes next week. No one knows how much budget-cutting pain the panel will be recommending. But panel members could actually avoid all that pain — and raise over $1 trillion in new money for investing in America — simply by subjecting all U.S. individual net worth over $30 million to a modest wealth tax.
Our U.S. ultra wealthy, Wealth-X calculates, together hold almost $5.9 trillion over this $30 million threshold. An annual 5 percent wealth tax on this overage would raise over $293 billion a year, or $2.9 trillion over the next decade — more than double the $1.2 trillion the super committee is so desperately looking to find.
The most amazing part of this? America’s ultra rich could easily pay this 5 percent annual wealth tax for the next ten years and remain as rich as ever.
That’s because wealth begets wealth. All those trillions of dollars America’s ultras are currently holding don’t sit under some mattress. The ultra wealthy have those trillions invested in assets that generate short- and long-term returns.
If America’s ultras averaged returns on those investments not that far above 5 percent over the next ten years, they could pay the wealth tax and still end the decade with higher personal net worths than when the decade began.
Back in the 1990s, a public-spirited financial industry superstar — multimillionaire San Francisco money manager Claude Rosenberg — spent a sizeable chunk of his personal fortune campaigning to get a similar message across about the enormous wealth of the wealthy.
Rosenberg’s particular point: America’s fabulously rich could hike their annual contributions to charity by tenfold and still end up with higher personal fortunes. Rosenberg started a research group dedicated to sharing this message and the analysis behind it. He wrote a book and peppered the periodicals that rich people read with op-eds that detailed his group's number crunching.
In the year 2000, Rosenberg’s researchers would document, households with $1 million or more in income could have given $128 billion more to charity than they actually did in fact give, without losing any net worth over the course of the year.
Claude Rosenberg died three years ago at age 80, his message to the super rich essentially totally ignored. The vast increase in charitable giving by the rich he had hoped to inspire never materialized.
The message to the rest of us from Rosenberg’s noble effort?
The excess wealth our ultra wealthy hold, if put to the public good, could change the trajectory of America’s future. The ultra wealthy don’t seem to be willing to do that putting on their own.
With a few tweaks of our tax code, we could do that putting for them.
November 17, 2011 · By Saul Landau
In the early spring 1982, I accompanied former U.S. Senator Jim Abourezk to Libya. National Geographic had asked him to get Libyan permission to film several sites of Roman ruins.
He met with officials; I walked Tripoli’s streets. At a coffee shop near the hotel, a group of young men stopped playing with their worry beads, brought their jumping knees into upright positions and followed me. Like most of the young men I saw, my followers were well-dressed and looked healthy, maybe a bit overdosed on caffeine.
I tried to ignore them as I wandered into the Suq – the old market – in downtown Tripoli. It was mostly boarded up. President Qaddafi had built new five-story department stores.
Two nights later, Abourezk took me to a new store. I saw large bins, typical of the U.S. Dollar stores, but filled with expensive cuisinearts. On another floor, shoeless men in robes tried on designer suits (on racks). The Pierre Cardin suits came in loud pink, orange and purple. Strange for a city without pimps or visible prostitutes! I watched some of these shoeless try the garments on and actually buy them.
One day, I dropped a post card to my daughter in a street letterbox. My uninvited escorts roared. In English, I demanded: “Why are you laughing?”
“No one pick up letters from that box,” one replied amidst giggles.
“Why are you all following me?”
The same man young man explained. “We members of secret police.”
“All Libyans are members of Secret Police,” he clarified.
The group invited me for coffee. They had no jobs, and like most Libyans lived on subsidies. Foreigners did most of the non-government work. At the hotel, Philippino men served as porters, Egyptians manned the front desk, Nubians waited on us in the coffee shop. After coffee and questions about America, they walked “our brother” back to the hotel.
In my neighborhood walks I noticed day care centers, schools, and hospitals. Qaddafi had indeed distributed oil wealth to the more than two million people who made up 1982 Libya.
Not all Libyans agreed. A waiter in a coffee shop on the road to the Roman ruins at Sabratha hated Qaddafi, “a man from a traitorous tribe.” Together with a National Geographic photographer, I explored the remains of Roman streets and architecture. Awesome, but we met no tourists.
In the early 21st Century, Qaddafi shifted his political stance. He had abandoned the terrorist support path and dropped his nuclear weapons program. In response, Western leaders welcomed the Libyan ruler – Berlusconi kissed his hand. Then, in 2011, after the Arab Spring, the elected pinnacles of democracy in NATO capitals charged him with threatening the lives of his own people – as if that would bother colonial powers who had routinely slaughtered Africans and still back ruthless repressive regimes in Saudi Arabia and Bahrain. The NATO elite convinced a bare majority vote of the Arab League, and maneuvered a UN supporting mandate. Then, NATO launched an eight-month blitz on Libya – to protect its people.
With still uncounted thousands dead, NATO leaders beamed: their air power had finally worked – as it had not in Vietnam or Korea – to destroy a “rogue” government. They forgot that the previous years they had feted Qaddafi; and the Libyan strongman had helped them in the war against terror. For abandoning his nuclear option, Qaddafi learned (briefly): no good deed goes unpunished or remembered.
NATO flew 26,000 sorties, many with bombs and missiles, but only against “military targets” – not the Roman ruins. They issued no reports of Libyan deaths. But news footage showed dead bodies and destroyed homes. NATO’s spin: “Hurrah, the world is rid of the evil Qaddafi.”
Anyway, the dead were bad guys; otherwise, good NATO pilots wouldn’t have killed them because their mission was to protect innocent civilians.
In 2010, the NATO government encouraged their arms merchants to supply Qaddafi with “a seemingly limitless supply of weapons.” Indeed, “at an arms fair in Tripoli; only a few days before the NATO operations started, French and Italian companies were busily upgrading Libyan air-force and army equipment.” .
NATO and its entourage located and destroyed many of the European-supplied weapons. When the new government cohered, would the same weapons dealers replace the stock NATO forces had destroyed?
NATO recognized the victorious democratic Libyan rebels. These NATO “democrats” had committed numerous human-rights abuses according to Human Rights Watch monitors. In Sirte, investigators discovered 53 corpses were found in an abandoned hotel – all pro-Qaddafi people.
In Tawarghaby, victorious insurgents took brutal reprisals against pro-Gaddafi residents. Secretary of State Clinton chortled (“We came, we saw, he died”) while reporters noted some rebel units refused to disarm; others looted and abused their captives.
Not important. NATO’s adventure was a successful humanitarian intervention. It saved lives and upheld democracy. NATO withdrew. Who’s next?
P.S. Every day I spent in Libya I saw Qaddafi. At 5 p.m. the TV screen showed desert, with a small black spot in the middle. A very slow zoom began. By 5:05 a back shape emerged, which, by 5:07 appeared to be a man praying. You guessed it. By 5:10 Qaddafi bent his head to the ground and brought it up again in prayer. I won’t miss him – even on TV. But the postcard I mailed at the supposedly dead letterbox arrived in Washington – nine months later.
Saul Landau’s WILL THE REAL TERRORIST PLEASE STAND UP plays Dec 3 at 5:30 and 7:30 at the Tishman Auditorium, New School for Social Research, 66 Fifth Avenue.
November 14, 2011 · By Karen Dolan
Who’s crying wolf and pulling the wool over our eyes when they should be hiring us to shear the sheep and make some wool hats for the young Occupyers facing a cold winter while fighting for the 99% of us? Is it the TEA Party? Is it the Republican Party? Is it the Democratic Party? Is it President Obama? Is it the Media?
Collectively, let’s stand with the Occupiers in at least 1400 communities nation-wide and make a few things clear to those who seek to mislead us:
There is no Deficit Crisis.
There is a Jobs Crisis.
There is no Budget Crisis.
There is a Priorities Crisis.
There is no Domestic Needs Spending Crisis.
There is a Defense and War Spending Crisis.
There is no Taxed Enough Already TEA Party Crisis.
There is a Corporate and Super-Rich barely-taxed-at-all Revenue Crisis.
There is no regulation crisis. There is a climate crisis.
Finally--There is no lack of federal funds.
There is a lack of political will to spend the funds on those things which matter most to the well-being of 99% of us.
These remarks and others were made at a recent Fund Our Communities Town Hall. Fund Our Communities is a growing coalition of community groups and concerned citizens who would like to see a reduction in military spending and a reprioritizing of federal dollars to our communities so that we may have good jobs and adequate access to vital human needs, such as quality healthcare, education, nutrition and transportation. IPS Fellow Karen Dolan and IPS Newman Fellow, Matias Ramos were speakers at a Fund Our Communities Town Hall in Prince George's County Maryland this month. Also joining them on the panel were: Congresswoman Donna Edwards (D-MD), Prince George's County Executive, Rushern Baker, MD State Senator Paul Pinksy, former MD State Senator David Harrington, MD State Delegate, Aisha Braveboy, and Fund Our Communities organizer Alex Welsch.
Matias' remarks focused on the Occupy Movement and the MD DREAM Act. Please listen to him here.
Karen's remarks are centered on the aforementioned. Click here to hear her full presentation and please comment and engage in dialogue below.
November 14, 2011 · By Salvatore Babones
The Census Bureau recently released a highly-anticipated report suggesting ways to improve the measurement of poverty in America. It found that adjusting for medical expenses, the value of benefits payments, regional differences in the cost of living, and other technical factors raised the poverty rate to 16 percent, up from the official count of 15.1 percent.
Needless to say, the new numbers are controversial. Advocacy groups tend to push for measurement changes that make more families eligible for benefits, while conservative organizations like the Heritage Foundation argue aggressively that the poverty line is already set too high.
The truth is that even the 16 percent revised figure is way too low.
The poverty line we use today — official or recently revised — was fixed in 1969. Economists and social statisticians can debate whether or not it is a good measure of poverty, but good or bad it represents more or less what people in 1969 considered the minimum decent standard of living. Since 1969, the poverty line has been updated every year for changes in the cost of living (inflation).
It has not been updated for changes in the standard of living.
As a result, when we say that a family lives in poverty today, what we really mean is that that family lives in what was considered to be poverty in 1969. The standard of living represented by the poverty line hasn't changed. According to the Census Bureau, 46.2 million (official definition) or 49.1 million (revised definition) Americans live in what was considered poverty in 1969.
The official poverty line for a family of four is $22,350. Updating that figure for growth in U.S. national income per capita since 1969 would yield a 2011 poverty line of $46,651. By that standard, about 28 percent of American families of four are now living in poverty, almost twice the official poverty rate. If that sounds high, it's only because we are much more stingy today than our grandparents were in 1969.
This year is 2011, not 1969. The tortured technical debate over poverty measurement misses the point. However we measure it, our standard of what constitutes a decent standard of income should be higher in 2011 than it was in 1969. Our accepted poverty line is now 42 years out of date.
How long will it take before we accept that a 1969 poverty standard is just too old? It's already too old. Human dignity requires that people today live better than people lived in 1969. Even poor people.
Salvatore Babones, an Institute for Policy Studies associate fellow, is a senior lecturer in Sociology & Social Policy at the University of Sydney.
November 14, 2011 · By Emily Schwartz Greco
In this week's OtherWords editorial package, Tom Israel provides a roundup of progressive electoral victories at the ballot box that could serve as a "signpost" for the 2012 elections. Get all this and more in your inbox by subscribing to our weekly newsletter. If you haven't signed up yet, please do.
- Lost Causes Can Win / Tim Butterworth
- Luck Matters / Betsy Malcolm
- Nuclear Turkeys / Kingston Reif
- Buyer's Remorse / Tom Israel
- The OMG Congress / Donald Kaul
- Big Corporation, Tiny Heart / Jim Hightower
- The Class War is So Over / William A. Collins
- A Missile in Every Pot / Khalil Bendib