Reclaiming the Community We Always Wanted

I remember my father telling me that when he was growing up, his family—that had emigrated en masse from Hungary—grew a lot of their own food on their small lot on Washington Street in Boonton, New Jersey. They had fruit trees, they had trellises of grapes from which they made their own wine and they grew vegetables and herbs. Some of their neighbors had chickens. They kept pigeons, which apparently were good eating. They also had a root cellar for storing some of their crops for the winter. And it was a big day when the outhouse was replaced by indoor plumbing.

Dad's old homestead courtesy of Google Maps Street View.

My father said that he and his friends once got in trouble because they were caught overturning outhouses on Mischief Night before Halloween. There was no television, so people in the community used to get together for dances and socialize. He said that everyone truly wished the best for everyone else because getting by was so hard. I used to think that all of his tales of life before and during the Depression were all so strange and old-fashioned. Not anymore.

When I was very young, my father, like most people, walked every day to his local job. When the car became the norm, people ceased walking and drove to their jobs and everywhere else. They no longer needed a community. Or so they thought. Now I don’t want to upset anyone with predictions of doom. Things are happening in this country, but gradually, so there is plenty of time to make adjustments if you should choose to do so. Here are a few things you may want to consider.

“This world of ours... must avoid becoming a community of dreadful fear and hate, and be, instead, a proud confederation of mutual trust and respect.”–Dwight D. Eisenhower

Food

If you follow the news, you may have noticed a corn drought in the U.S. Corn is an essential staple in our country because it is used for animal feed. The prices of corn have skyrocketed since there is so little of it, so farmers who would normally grow other crops, such as wheat and soybeans, are switching to corn to make more money, thus causing shortages of other crops. Frankly, I have no use for corn, whether it is for human consumption or fed to the livestock we eat, because most of it in this country is genetically engineered (GMO), but that is another blog altogether [click here to read about that]. The point is, that due to that drought, produce and livestock food prices will be going up.

Energy

I can only remember one or two blackouts all the years I was growing up. It was a rare event. In the past few years, power outages have occurred with disturbing frequency. When the power goes out, so does the heat, hot water, light and cable internet/television/telephone. You can sit in the cold dark and twiddle your thumbs. Last October, when it was 50 degrees, our power was out for a week. Not cold enough to freeze to death, but not all that comfortable either and a lot of our freezer/fridge food went bad.

Jobs

Like so many Americans, my husband and I have jobs where there are no vacation days or holidays. I am a freelance writer and he works as a retail manager for a locally owned business. If we get sick or otherwise can’t work, we don’t get paid. So how do we afford things when our budget gets lean?

Finding Alternative Ways to Live

Our garden features high deer fence, foot-deep groundhog deterrent.

So with food and energy sources being threatened, and jobs being moved overseas, what can the average person do? Well, it’s not easy to find affordable alternatives, but a few of them are out there.

We buy most of our produce from a local organic community-supported farm. To find one in your area, go to https://www.biodynamics.com/csa.html. In exchange for buying a share of the farm in installments, we get whatever the farmer produces that year. So no matter how scarce food may be in the parched Midwest or how high transport costs are for food grown overseas, we have a supply of produce throughout the year from a local source. We also built a critter-proof (we hope) garden in our backyard this year where we will try to grow as much food as we can using non-GMO heritage seeds. We also plan to learn canning although, sorry Grandma, that may have to wait for next year. We can only handle so much transition at a time.

Meet our alternative to expensive oil heat.

“The way you get meaning into your life is to devote yourself to loving others, devote yourself to your community around you, and devote yourself to creating something that gives you purpose and meaning.”—Mitch Albom

We cannot afford solar or wind energy. Right now, they are not priced for the average person. We decided, instead, to get a wood-burning stove to provide us with heat when the power inevitably goes out and to lower our insane oil bills. We chose a wood-burning stove over a pellet stove because pellet stoves require electricity to work. We chose cast-iron over steel because most reviews I read by users favored it for radiant heat that was not too overpowering. You can also put a tea kettle on top of it for hot water. I hope we can learn to properly use the damned thing so that our house doesn’t fill up with smoke or burn down. Wish us luck.

I joined a nearby time bank where you can exchange your skills or talents for other people’s services to save money on, say, home repairs or pet sitting or learning how to can food. See timebanks.org for one in your area. Also, we ask our family, friends and neighbors for help when we need it, something we were too proud to do in the past (not sure why). We intend to help them as well if they ask for anything. That's what community is all about.

I used to think that survivalists were crackpots. Not any more. Our government is corrupt and our economy has been hijacked by crooks in the financial industry and by the multinational corporate mafia. People like the Koch brothers (Google them) call the shots in Washington and elsewhere. They are not great humanitarians.

One of my old high school friends who migrated to California posted a manifesto on Facebook with advice (see poster above). It may not be all that far off.

I don’t know what the future holds, but I think if the average person bands together with their family, friends and neighbors—as they did when my father was young—we can definitely learn from each other, survive quite well and rekindle the sense of community that has long been lost from our society. Maybe, in the long run, our world could end up being a better place.

The Hoarding of America—Part II

In my last blog, we learned about how 20% of the richest Americans own 85% of this country’s wealth, leaving 15% for the remaining 80% of average workers in this country. In 2007, CEOs in the United States took home an average of $10.5 million, 344 times the take-home for typical American workers.

In this blog, we’ll discuss how all this wealth concentrated into the hands of such a small group of people. In short, it has to do with tax dodges, inheritance bypasses and general ignorance on the part of the average American. As for the latter, I do not exclude myself. I am no wizard of finances. The media are not covering this to any noticeable extent, and it is difficult for the average person to sort through, but let’s give it a try.

According to a report entitled Executive Excess 2008: How Average Taxpayers Subsidize Runaway Pay:

• The federal government, through the tax code, is actually rewarding companies that overpay their top executives.
• Average Americans are unaware that their tax dollars are helping the country’s top business executives become phenomenally wealthy. Congress is not directly involved; it has never taken an explicit, up-or-down floor vote on any of the major tax code loopholes that enrich our current titans of industry and finance. These loopholes, instead, owe their existence to obscure bureaucratic rulings that well-paid corporate lawyers and lobbyists have stretched and distorted far beyond their original intentions.
• The five most popular tax loopholes, which I admittedly don’t understand since I am not math- or finance-inclined, are: 

                      1. Preferential capital gains treatment of carried interest
                      2. Unlimited deferred compensation
                      3. Offshore deferred compensation
                      4. Unlimited tax deductibility of executive pay
                      5. Stock option accounting double standard

• Ignoring the details of what the above loopholes are, know that, combined, they cost the rest of us $20 billion a year in lost tax revenues, but the wealthy do not stop there.

• Actually, $20 billion may understate the true extent of the current taxpayer subsidy for executive excess. These loopholes only speak directly to executive pay. We, the taxpayers, offer many additional perks—everything from economic development grants to accelerated depreciation allowances—that inflate corporate quarterly bottom lines and share prices and, in the process, generate windfall rewards for executives who have their pay pegged to the “performance” of their companies.

What all that means is that the rich have enough money and power to influence tax regulations so that they can continue to accrue even more wealth than they currently have at the expense of the average person. Let’s take a closer look at what that means:

You can see from the above information that the rich in this country are really raking it in. To put it into perspective, the $20 billion being scooped up by America’s most powerful is more than double what the federal government spent last year on educating America’s most vulnerable—children with disabilities. Personally, I find that disturbing. I mean, just how much money does anyone really need?

• Beyond that initial $20 billion they earn from deferring or not paying taxes, there are many billions more taxpayer dollars that indirectly encourage excessive executive pay. That includes everything from government contracts for goods and services to corporate bailouts. More than 85% of the public companies on the federal government’s top 100 contractors list paid their CEOs over 100 times the pay of average U.S. workers. That’s right, our government supplies the paychecks, from our taxes, that pays these guys.
• Legislation that would plug executive-friendly tax loopholes is already pending in Congress. But this legislation has stalled due to current Congressional voting dynamics—or should we say lack of dynamics?
• Excessive executive pay and the tax code loopholes that enable this excess reflect the absence of checks and balances on America’s economic landscape. Historically, trade unions have operated as the most important of these checks and balances. They could play that role again if lawmakers passed the languishing Employee Free Choice Act, legislation that would help workers realize their right to organize into unions and bargain collectively with their employers.
• A half-century ago, over one-third of American private-sector workers belonged to unions. Bargaining between these workers and their employers set wage patterns throughout the U.S. economy, in both organized and unorganized workplaces, and served to restrain executive rewards at the top of the corporate ladder. Unions were also largely responsible for the development of a middle class in America.
• Today, according to the latest Bureau of Labor Statistics survey data, only 7.4 % of private-sector workers belong to unions. Top executives, at the vast majority of America’s workplaces, face no institutional challenge from their workers. The absence of that challenge leaves executives free to pocket rewards at levels that would have seemed recklessly greedy only a generation ago. It also signals the death knell for the middle classes in America.

Why is the ratio of executive pay to average-worker pay important? Well, we all are taking our pay from the same corporate pie. Recent academic research has demonstrated the executive/worker pay difference that a union presence can make. In one survey, released last year, researchers found that CEOs at nonunion companies take home nearly 20% more than their fellow executives in unionized firms. Workers in union companies, meanwhile, make $200 more a week than their counterparts in nonunion firms—$863 a week for union employees versus $663 weekly for their nonunion counterparts.

Even death does not diminish the tight grasp of the wealthy. There may be inheritance taxes, but they easily dodge them, thanks to their friends, the banks.

First, let’s examine how many people should be concerned about inheritance taxes. According to a study published by the Federal Reserve Bank of Cleveland:

• 1.6% of Americans receive $100,000 or more in inheritance
• 1.1% receive $50,000 to $100,000
• 91.9% of Americans receive nothing

Thus, the attempt by conservatives to eliminate inheritance taxes, more popularly known as “death taxes,” would cost taxpayers an estimated $1 trillion between 2012 and 2022 for the benefit of the heirs of 0.6% of Americans, according to Citizens for Tax Justice. Not surprisingly, a study in 2006 found that the financial support flowing in to anti-government activists for eliminating inheritance taxes came from 18 super-rich families. Not to worry. Inheritance tax laws may be moot, anyway.

The rich already have a new way to avoid inheritance taxes, forever, thanks to bankers. After Congress passed a reform in 1986 making it impossible for a "trust" to skip a generation before paying inheritance taxes, bankers convinced legislatures in many states to eliminate their "rules against perpetuities," which means that trust funds set up in those states can exist forever, thereby allowing the trust funds to own new businesses, houses, and much else for descendants of rich people, and even to allow the beneficiaries to avoid payments to creditors when in personal debt or sued for causing accidents and injuries. Gift tax for these transfers of wealth would be 0%, according to a December 2010 article in Forbes online. About $100 billion in trust funds has flowed into those states so far.

Why are the ultra rich getting away with not paying taxes and fair wages at the expense of everyone else? Well, basic ignorance is a factor. A 2010 study by Norton & Ariely found that Americans from all walks of life have no idea that the top 20% of households in the U.S. hold 85% of the country’s wealth. They also didn’t know that the bottom 40% of households hold a shockingly low 0.3% of the wealth.

Is it hopeless? No. The average worker can try to regain some of the wealth that is being hoarded by the greedy 1% of our population. This isn’t the first time this has happened. Education is the key. We cannot rely on the news media, because they are owned by the same entities that benefit from the inequity that is draining our economy. The only way to defend our incomes is at a grassroots level.

One option: Go to United for a Fair Economy to learn about wealth inequity and the need to support legislative movements to close tax loopholes for the rich. The IRS is not giving you or me a break; why should the super wealthy get special treatment? For a complete list of tax fairness organizations, listed by state, go to http://www.faireconomy.org/tfoc_members. This site also offers speakers who can come out and talk to groups about wealth inequity and how we can become activists for our own incomes.

Taking back YOUR money from CEOs, Wall Street and the leisure rich will not be easy, because they have all the power and strongly influence the news media and our government. But it can be done. If our great-grandparents and grandparents could fight for workers’ rights, then so can we!

NOTE: I am in no way affiliated with any of the sources in this blog. I am just attempting to understand this mess our country is in. If you think that any of this information is incorrect or distorted, please feel free to comment. It would be good to learn more.

The Hoarding of America—Part I

Wealth, income and power belong to an elite group of people in this country—basically, just 1% of the population—and the general public does not seem aware of this. If they were, they would know that the media rants against immigrants, unions, socialists and other relatively powerless groups are nothing more than a distraction to keep us from noticing what is really going on.

This is the first of a two-part blog. Part I is about who owns this country and how much they own. Part II discusses how they have ensured that they can keep their disproportionate piece of the American pie without sharing with anybody. My kindergarten teacher, Mrs. Fowler, might have made this greedy segment of our population stand in the corner for this type of behavior. The U.S. government and general public seem to be far more tolerant.

I have never been math inclined, so attempting to understand financial information is a challenge for me. I’m a writer, not a mathematician. However, on the positive side, if I can interpret the following information so that I can understand it, then anyone should be able to grasp what’s going on. So here goes.

The gap between the rich and the poor in this country has widened, according to www.faireconomy.com. The concentration of privately held wealth is at its highest peak since 1929, the year the stock market crashed and ushered in the Great Depression.

The average American today is working longer, harder and smarter than a generation ago, but taking home, after adjusting for inflation, less in wages than workers in the early 1970s, according to the 15th annual report, Executive Excess 2008: How Average Taxpayers Subsidize Runaway Pay, co-authored by the Institute for Policy Studies and United for a Fair Economy. At the same time, the report adds, wealthy Americans are earning much more. In 2007, CEOs in the United States took home an average of $10.5 million, 344 times the take-home for typical American workers. Thirty years ago, CEOs averaged only 30 to 40 times the average American-worker paycheck.

So while the average person is earning less and less, the wealthy are earning more and more. And they are amassing that wealth with less actual work. According to an article in the July 24, 2010 New York Times, for the rich, most income does not come from working. In 2008, only 19% of the income reported by 13,480 individuals or families making over $10 million came from income.

So what percentage of our population falls into the category of, well, let’s use the unofficial term of Filthy Rich? According to an article by G. William Domhoff on the University of California at Santa Cruz website, in 2007:

• The top 1% of households owned 34.6% of all privately held wealth. (Wealth is defined as every asset you own minus your debt.)
• The next 19% of households (managerial, professional and small business level) owned 50.5% of all privately held wealth.
• That means that 20% of the people in this country own 85% of the wealth, leaving 15% for the bottom 80% of the population—the average Joe or Jane who works for a living.
• If you consider another term, “financial wealth,”—which is the value of everything you own minus your home—the top 1% of households actually had a 42.7% share of this country’s wealth. (see charts below)

Charts are based on data published by E. N. Wolff for the 

Levy Economics Institute of Bard College in 2004, 2007 and 2010.

Based on the above statistics, we can conclude that most of the wealth in this country is held by a very small group of people. Domhoff went into even more detail, defining what the top-10% households own by types of financial wealth:

• The top 1% of households own 38.3% of all privately held stock, 60.6% of financial securities and 62.4% of business equity.
• The top 10% own 80% to 90% of stocks, bonds, trust funds, and business equity, and over 75% of non-home real estate.
• Since "financial wealth" controls income-producing assets, we can say that just 10% of this nation's citizens own the United States of America—and the odds are against you being one of them.

So what can we conclude from all this information? The top 20% of our population is doing quite well, while the rest of us are worried about finding or keeping jobs, and if we will ever be able to retire. In the meantime, Congress and the states are cutting the safety net programs—that would benefit most of us—to balance their budgets, while ignoring the more equitable source of income: closing the tax and legal loopholes that benefit the bloated rich.

In Part II of this blog, I will explain how this concentration of wealth came into being and what we can do to get some of our fair share of it back again.