In poorer parts of the United States, women are living shorter lives than their mothers

by Tom Streithorst / 2106 November 26

“Hillary Clinton lost to Donald Trump because she did not provide a solution to the grave economic problems facing the American middle and working class. Hillary pretended the economy was getting better, and of course in some ways it was. Unemployment is considerably lower than it was when Bush left office and in 2015 wages finally went up. But after 35 years of stagnant wages the American people are no longer trusting in elite optimism. Personal experience tells them otherwise. The median male inflation adjusted wage is lower today than it was in 1973. For a while, wives entering the workforce allowed household income to rise but that ended with the last millennium. Typical household income peaked when Bill Clinton left office.

Trump won because he acknowledged the decline of the American middle class and promised a cure. Hillary Clinton and the neoliberal Democrat establishment pretended things were fine, and a huge swath of Americans resented their sanguine attitude. Unfortunately, Trump’s solutions won’t work. Tax cuts directed to the top .01% certainly won’t help most Americans and tariffs on Chinese goods will not bring industrial jobs back to the Rust Belt. All protectionism will accomplish is higher prices at Wal-Mart. Automation, as much as globalization is responsible for the disappearance of high paying jobs. Even China is losing manufacturing jobs. Its output is increasing but robots rather than humans are getting the work.

It is tragic that the populist revolt against the neoliberal establishment should have been led by a right wing billionaire reality TV star. The left should learn one lesson from this debacle. Let no longer pretend things are all right. If the Democrats are to regain power, they must provide a solution for the growing insecurity in most working American’s lives. The old strategies no longer work. Technological progress has become a job killer.

Every year, technological progress allows us to make more goods and services with fewer inputs of labor and capital. Stagnant wages tell us we need fewer workers. Infinitesimal interest rates tell us we need less capital. And more jobs are set to disappear. The most common job in most American states is truck driver. With self-driving cars only a few years away from mass production, those jobs too will soon evaporate.

There is a solution: Universal Basic Income, a cash payment to every adult citizen. Everyone gets it, the poor, the rich, the middle class, the deserving and the undeserving alike. You, me, Rupert Murdoch, Beyonce, and the homeless man sleeping in the gutter get exactly the same cash payment. It is nothing if not equitable and fair. UBI is not a new idea. It was mentioned in the Bible, proposed by Tom Paine, almost enacted into law by Richard Nixon in 1969. The Bible advocated it because small Neolithic communities always took care of their own. Tom Paine favored it because it reflected the value of the land that he considered the heritage of every citizen. Richard Nixon almost made it real (how different it would have made our world, how amazing that Richard Nixon in 1969 was to the left of Barack Obama in 2016) because he wanted to provide a safety net for every American without creating a large bureaucracy.

Universal Basic Income will:

  1. Reduce inequality.
  2. Help the poorest among us, by giving them what they really need, money in their pocket.
  3. Provide a safety net for all Americans that will allow entrepreneurs to take more risks, the young to attend university, workers to tell unreasonable bosses to “take this job and shove it”.

All good things but not why I expect it will, sooner rather than later, be enacted into law. UBI solves the fundamental problem of modern capitalism, lack of demand. We have, to an extent unimaginable to our grandparents, solved the problem of supply. We eat better, dress better, entertain ourselves more extravagantly and more cheaply than they would have dreamed possible. But they had job security and more and more of us don’t.

If things keep going the way they are, our society will divide into a small elite who own the technology and a huge army of the unemployed living in squalor. A robot can make an iPhone but it cannot purchase one. If we want to maintain demand, we must put money into people’s pockets. A Universal Basic Income stimulates demand far more effectively than any tax cut.

The problem with UBI, the reason it is not yet within the Overton window is it sounds too good to be true. How can we afford it? How can we pay people without demanding work in return? Fortunately, Donald Trump is giving us an opening. President-elect Donald Trump is planning to propose a tax cut. Over the next decade, it is expected to cost $6.2 trillion, or $620 billion a year. The Republican Congress, deficit hawks whenever a Democrat is in office will most likely approve his giveaway to the very rich. They will argue, quite correctly, that a tax cut will be stimulative and that it will help spur economic growth.

Every Keynesian knows tax cuts will stimulate the economy but we also know that tax cuts give the least bang for the deficit buck. That is because tax cuts, like this one, generally go to the richest among us and rich people have a greater propensity to save than the average citizen. The rich can save their bonus, the rest of us spend it, which is what the economy needs. The Trump tax cut gives the top 1% an average windfall of $215,000. The top .1% will save over $1 million. Someone at smack in the middle, on the other hand, will garner less than $1000. Those in the bottom 20% will get $100.  Were we to divide the cost of the tax cut by all adult Americans, we can give each citizen $2600 a year. If we can afford a tax cut that will go disproportionately to the very rich, we can also afford a helicopter drop of cash to every adult citizen.

During the post war Golden Age of the American middle class, the benefits of technological progress were shared equitably, through wage hikes. As technology made workers more productive, their wages went up commensurately. Since Reagan, technology has continued its inexorable progress but wages stopped rising. Assets prices (homes, stocks, bonds) instead absorbed the benefits of productivity increases. The rich got richer, workers didn’t. It would be nice if we could make wages go up but they won’t. Wages, like all prices in a capitalist economy, are set by supply and demand. During the Golden Age, wages rose because firms needed more workers. To hold them, they needed to pay them well. Today, the supply of labor far exceeds its demand. Secure high paying jobs are not likely to come back.

It would be tragic if technological progress immiserates rather than enriches the average citizen. UBI is the solution, a fair and equitable way to share the benefits of growth throughout society. Some advocates of UBI insist the payments be large enough to guarantee every one of us enough money to survive. Ultimately, I think they are right. $2600 a year certainly is not enough for subsistance. But Rome wasn’t built in a day. Let us take advantage of Trump’s deeply inequitable tax cut proposal to experiment with Universal Basic Income.

When the banks went bust, central banks printed billions to bail them out. When the economy did not recover, we printed more billions in the various quantitative easings and again, through bond purchases, gave them to the banks. Trump is proposing to give each of his super rich friends millions. We can do better. When his tax bill comes to Congress, the Democrats have a chance to propose a Universal Basic Income grant to every adult American that won’t raise the deficit any more than his give away to the very rich.

To stimulate the economy, UBI is better than any tax cut. Politically too, it is a winner. The great majority of Americans will prefer a grant of $2600 than the piddling amount they would receive under the Trump tax cut. Trump’s victory has shown Americans are tired of the neoliberal consensus. Let’s take this opportunity to introduce Universal Basic Income to the American people. It can transform our society, stimulate growth, and begin to revitalise the American middle class.”





“During inauguration weekend, a night in largest suite at Trump Townhouse costs $100,000, with a five-night minimum, pricier than rooms at the Four Seasons in Georgetown.”

Donald Trump’s Revival of ‘Honest Graft’
by Yoni Appelbaum  /  11/26/16

“In theory,” Donald Trump told The New York Times on Tuesday, “I could run my business perfectly, and then run the country perfectly.” That particular theory has a pedigree, and a specific name. It was popularized more than a century ago by George Washington Plunkitt, another flamboyant New York businessman and politician. He dubbed it “honest graft.”

I thought of Plunkitt—a leader of New York’s Democratic political machine, Tammany Hall, in the late 19th century—as I read the transcript of Trump’s fascinating, rambling conversation with the Times. Trump seemed not just unconcerned about the potential for conflicts, but actually mystified by the notion that his conduct might be problematic. His questioners seemed equally baffled by his lack of concern. And that disconnect suggests that they’re not just arguing about specific acts, but about two very different theories of government, in ways that recall the politics of Plunkitt’s day.

To its critics, Tammany Hall was a metonym for the rank corruption of urban machine politics, an organization that leveraged ethnic solidarity, racial hostility, street-level violence, and favors for its constituents to win elections, squander public funds—and line the pockets of its leaders. To its defenders, it was a means to ensure that government tended the interests of the white working classes, providing patronage jobs, public services, protection, and patriotic pageantry that sneering elites would have otherwise denied them. Tammany Hall persistently found itself beset by scandal—and persistently won elections, to the chagrin of its critics. In crucial ways, it’s the same split that’s unfolding today. And back then, no defender made his case more memorably than Plunkitt.

An unfinished Trump Tower in Buneos Aires, Argentina

“Nobody thinks of drawin’ the distinction between honest graft and dishonest graft,” Plunkitt said. “There’s all the difference in the world between the two.” He had no patience, of course, for dishonest graft—the embezzlement of public funds, the abuse of power for blackmail—which pitted politicians against the interests of the people.

But that, he insisted, was the opposite of the honest graft he practiced, which helped guarantee of good government and the smooth functioning of American democracy. A politician who is loyal to his friends, serves the public, and profits from his service as a result? His interests, Plunkitt argued, are perfectly aligned—unlike those of politicians who advance only their own self-interest, or are loyal to lofty ideals, with little regard for others.

Plunkitt wasn’t an abstract political theorist—he was an applied practitioner. He argued that when reformers railed against politicians enriching their friends and family, they fundamentally misunderstood the electorate and its views. “Now, let me tell you that’s never goin’ to hurt Tammany with the people,” he said. “Every good man looks after his friends, and any man who doesn’t isn’t likely to be popular. If I have a good thing to hand out in private life, I give it to a friend—Why shouldn’t I do the same in public life?

In Trump’s interview with the Times, the president-elect was careful to say, repeatedly, that even though he believes he has the latitude to continue running his businesses, he doesn’t “want there to be a conflict of interest, anyway.” And his aides have downplayed the various reports of his blurring the line between public interest and private business.

But as he meandered, he kept returning to some very Plunkitt-like ideas. Had he encouraged the British politician Nigel Farage and his associates to oppose a wind farm that would ruin the views of his Scottish golf course? “I might have brought it up,” Trump allowed. “But not having to do with me, just I mean, the wind is a very deceiving thing.” Why did he meet with his Indian business partners, and pose for a photo? “Number one, a job like that builds great relationships with the people of India, so it’s all good. But I have to say, the partners come in … they said, ‘Would it be possible to have a picture?’ … So I can say to them … ‘I don’t want to have a picture,’ or, I can take a picture.” Or, as he clarified a little later, “You have to, you know, on a human basis, you take pictures.”

“Trump currently has five luxury projects in India including a Trump Tower, a 46-apartment block with Panchshil Realty in Pune, and an under-construction 300-apartment project in Mumbai’s Lower Parel with the Lodha Group. These are not equity joint ventures. Trump has lent his name to the projects in return for payment.”

It’s difficult not to form the impression that if Trump is unconcerned with the criticism that he faces conflicts, it’s because he simply doesn’t see these interests as conflicting. If his experience in Scotland convinced him of the dangers of wind farms, wouldn’t it be wrong not to apply that lesson more broadly? If his businesses thrive in India, doesn’t that strengthen his reputation and relationships with a key ally? If he’s polite to his partners, and loyal to his friends, isn’t that what Americans expect of their leaders? Isn’t everyone better off, when the incentives all align?

Then there was Trump’s discussion of his new hotel just down the street from the White House. “They’ll say I have a conflict because we just opened a beautiful hotel on Pennsylvania Avenue,” he complained, “so every time somebody stays at that hotel, if they stay because I’m president, I guess you could say it’s a conflict of interest.” But for Trump, who insisted that he won’t be running the business anyway, such critiques are beside the point. “The brand is certainly a hotter brand than it was before,” he said, “I can’t help that, but I don’t care … Because it doesn’t matter. The only thing that matters to me is running our country.”

He’s pursuing the public interest; if he does it well, his brand will be a hotter brand than it was before. And if his hotel has hired a director of diplomatic sales, and if foreign governments are booking rooms to curry favor, how can he help that? George Washington Plunkitt would’ve approved. Plunkitt was a district leader, a state assemblyman, and a state senator—but first, and always, a political boss. His political career made him rich; his businesses profited from his political career. And, from Plunkitt’s point of view, he ran both perfectly. His thoughts on politics were recorded by the journalist William Riordan, with a little embellishment, and popularized as Plunkitt of Tammany Hall. It’s still in print. When I assigned it in college courses, students were frequently horrified—but then they struggled to explain just why he was wrong. It’s a challenge Trump may now pose to those Americans who disapprove of his approach to potential conflicts of interest. But Plunkitt’s political success, like Trump’s, is also a reminder that many other Americans have always found this brand of politics compelling.

Plunkitt boasted that Tammany kept some “bookworms and college professors” around “for ornaments on parade days,” but that its leaders were just “plain American citizens, of the people and near to the people.” Despite his wealth and power, he insisted, he remained equally at home among the common people as he was among elites. “When I go among them, I don’t try to show off my grammar, or talk about the Constitution, or how many volts there is in electricity or make it appear in any way that I am better educated than they are. They wouldn’t stand for that sort of thing. No; I drop all monkeyshines.”

His critics saw a chameleon and a hypocrite, but Plunkitt insisted they were paying attention to the wrong things. “I’ve got to be several sorts of a man in a single day, a lightnin’ change artist, so to speak,” he forthrightly confessed. “But I am one sort of man always in one respect: I stick to my friends high and low, do them a good turn whenever I get a chance.” Loyalty and results, he argued, were a better measure of a politician than ideological consistency or lofty rhetoric.

Trump, of course, is not Plunkitt. He’s not boasting of using inside information to profit his businesses, or of rigging government auctions, or even of using his power to do “good turns” for friends—all things Plunkitt actually did. In fact, Trump has insisted that he won’t pursue Plunkitt-like honest graft, even as he explains why, in theory, he could, or seems to confess having done so. And perhaps Donald Trump will take the advice of ethics lawyers, and move to disentangle entirely his public and private interests, even though he insists that he doesn’t actually need to. “In theory I don’t have to do anything,” he said. “But I would like to do something. I would like to try and formalize something, because I don’t care about my business.”

George Washington Plunkitt, seated, considered himself a man of the people. “There’s an honest graft,” he wrote on the subject of payoffs, “and I’m an example of how it works.”

But to the extent that Plunkitt provides an illuminating precedent, it’s precisely because his own conflicts were so much more blatant—and voters, instead of shunning him, reelected him again and again. Plunkitt convinced a majority of voters that it was better to put in power a man whose private interests and public policies were aligned, than to vote for reform-minded candidates serving abstract ideals; that it was preferable to trust a man who shares their resentment of elites, than to trust elites to share their values; that a politician who sticks by his friends will stick by them, while those politicians who take their cues from bookworms and professors will not. In fact, Plunkitt proved, many voters will admire such a man—so long as they remain convinced that he’s fighting for them, as well as for himself. If he’s a crook, he’s their crook. Instead of resenting his having profited from his office, they’ll respect him for it.

It’s how Plunkitt ended his talk on honest graft: “Now, in conclusion, I want to say that I don’t own a dishonest dollar. If my worst enemy was given the job of writin’ my epitaph when I’m gone, he couldn’t do more than write: “George W. Plunkitt. He Seen His Opportunities, and He Took ‘Em.” Donald Trump couldn’t have tweeted it any better.”



by Jesse Byrnes / 05/09/16

“Donald Trump declared Monday that the United States never has to default on its debt because it has the ability to print money.  “People said I want to go and buy debt and default on debt — these people are crazy. This is the United States government. First of all, you never have to default because you print the money, I hate to tell you, OK? So there’s never a default,” Trump said on CNN’s “New Day.” The presumptive Republican presidential nominee echoed that sentiment during an interview on Fox Business, saying, “A lot of the papers said, ‘Donald Trump wants to go and start negotiating with creditors.’ First of all, you don’t have to think about this, but we print the money.”

Trump pushed back on coverage of his remarks from outlets including The New York Times, which reported that Trump was suggesting he might reduce the national debt by persuading creditors to accept less than full payment. The newspaper called such remarks unprecedented among modern candidates.  The reports were based on remarks in a CNBC interview last week when, asked if the U.S. should pay its debt in full or possibly negotiate a partial repayment, Trump said, “I would borrow, knowing that if the economy crashed, you could make a deal.”

Trump said Monday his plan would center on buying back debt if interest rates went up. “I said if we can buy back government debt as a discount — in other words, if interest rates go up and we can buy bonds back as a discount — if we are liquid enough as a country we should do that. In other words, we can buy back debt as a discount,” Trump said on CNN. The self-described “king of debt” explained, “I know how to deal with debt very well — I love debt — but, you know, debt is tricky, and it’s dangerous, and you have to be careful, and you have to know what you’re doing.”

by Ellen Brown  /  November 17, 2016

“In Donald Trump’s victory speech after the presidential election, he vowed: “We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals. We’re going to rebuild our infrastructure, which will become, by the way, second to none. And we will put millions of our people to work as we rebuild it.” It sounds great; but as usual, the devil is in the details. Both parties in Congress agree that infrastructure is desperately needed. The roadblock is in where to find the money. Raising taxes and going further into debt are both evidently off the table. The Trump solution is touted as avoiding those options, but according to his economic advisors, it does this by privatizing public goods, imposing high user fees on the citizenry for assets that should have been public utilities.

Raise taxes, add to the federal debt, privatize – there is nothing new here. The president-elect  needs another alternative; and there is one, something he is evidently open to. In May 2016, when challenged over the risk of default from the mounting federal debt, he said, “You never have to default, because you print the money.” The Federal Reserve has already created trillions of dollars for the 1% by just printing the money. The new president could create another trillion for the majority of the 99% who elected him. The infrastructure plan of the Trump team was detailed in a report released by his economic advisors Wilbur Ross and Peter Navarro in October 2016. It calls for $1 trillion of spending over 10 years, funded largely by private sources. The authors say the report is straightforward, but this writer found it hard to follow, so here the focus will be on secondary sources. According to Jordan Weismann on Slate:

“Under Trump’s plan … the federal government would offer tax credits to private investors interested in funding large infrastructure projects, who would put down some of their own money up front, then borrow the rest on the private bond markets. They would eventually earn their profits on the back end from usage fees, such as highway and bridge tolls (if they built a highway or bridge) or higher water rates (if they fixed up some water mains). So instead of paying for their new roads at tax time, Americans would pay for them during their daily commute. And of course, all these private developers would earn a nice return at the end of the day. The federal government already offers credit programs designed to help states and cities team up with private-sector investors to finance new infrastructure. Trump’s plan is unusual because, as written, it seems to be targeted at fully private projects, which are less common.”


David Dayen, writing in The New Republican , interprets the plan to mean the government’s public assets will be “passed off in a privatization firesale.” He writes:

“It’s the common justification for privatization, and it’s been a disaster virtually everywhere it’s been tried. First of all, this specifically ties infrastructure—designed for the common good—to a grab for profits. Private operators will only undertake projects if they promise a revenue stream. … So the only way to entice private-sector actors into rebuilding Flint, Michigan’s water system, for example, is to give them a cut of the profits in perpetuity. That’s what Chicago did when it sold off 36,000 parking meters to a Wall Street-led investor group. Users now pay exorbitant fees to park in Chicago, and city government is helpless to alter the rates. You also end up with contractors skimping on costs to maximize profits.”

That is the plan as set forth by Trump’s economic policy advisors; but he has also talked about the very low interest rates at which the government could borrow to fund infrastructure today, so perhaps he is open to other options. Since financing is estimated to be 50% of the cost of infrastructure, funding infrastructure through a publicly-owned bank could cut costs nearly in half, as shown here.

Better yet, however, might be an option that is gaining traction in Europe: simply issue the money. Alternatively, borrow it from a central bank that issues it, which amounts to the same thing as long as the bank holds the bonds to maturity. Economists call this “helicopter money” – money issued by the central bank and dropped directly into the economy. As observed in The Economist in May 2016:

“Advocates of helicopter money . . . argue for fiscal stimulus—in the form of government spending, tax cuts or direct payments to citizens—financed with newly printed money rather than through borrowing or taxation. Quantitative easing (QE) qualifies, so long as the central bank buying the government bonds promises to hold them to maturity, with interest payments and principal remitted back to the government like most central-bank profits.”


Helicopter money is a new and rather pejorative term for an old and venerable solution. The American colonies asserted their independence from the Motherland by issuing their own money; and Abraham Lincoln, our first Republican president, boldly revived that system during the Civil War. To avoid locking the government into debt with exorbitant interest rates, he instructed the Treasury to print $450 million in US Notes or “greenbacks.” In 2016 dollars, that sum would be equivalent to about $10 billion, yet runaway inflation did not result. Lincoln’s greenbacks were the key to funding not only the North’s victory in the war but an array of pivotal infrastructure projects, including a transcontinental railway system; and GDP reached heights never before seen, jumping from $1 billion in 1830 to about $10 billion in 1865.

Indeed, this “radical” solution is what the Founding Fathers evidently intended for their new government. The Constitution provides, “Congress shall have the power to coin money [and] regulate the value thereof.” The Constitution was written at a time when coins were the only recognized legal tender; so the Constitutional Congress effectively gave Congress the power to create the national money supply, taking that role over from the colonies (now the states). Outside the Civil War period, however, Congress failed to exercise its dominion over paper money, and private banks stepped in to fill the breach. First the banks printed their own banknotes, multiplied on the “fractional reserve” system. When those notes were heavily taxed, they resorted to creating money simply by writing it into deposit accounts. As the Bank of England acknowledged in its spring 2014 quarterly report, banks create deposits whenever they make loans; and this is the source of 97% of the UK money supply today. Contrary to popular belief, money is not a commodity like gold that is in fixed supply and must be borrowed before it can be lent. Money is being created and destroyed all day every day by banks across the country. By reclaiming the power to issue money, the federal government would simply be returning to the publicly-issued money of our forebears, a system they fought the British to preserve.

The invariable objection to this solution is that it would cause runaway price inflation; but that monetarist theory is flawed, for several reasons. First, there is the multiplier effect: one dollar invested in infrastructure increases gross domestic product by at least two dollars. The Confederation of British Industry has calculated that every £1 of such expenditure would increase GDP by £2.80. And that means an increase in tax revenue. According to the New York Fed, in 2012 total tax revenue as a percentage of GDP was 24.3%. Thus one new dollar of GDP results in about 24 cents in increased tax revenue; and $2 in GDP increases tax revenue by about fifty cents. One dollar out pulls fifty cents or more back in the form of taxes. The remainder can be recovered from the income stream from those infrastructure projects that generate user fees: trains, buses, airports, bridges, toll roads, hospitals, and the like.

Further, adding money to the economy does not drive up prices until demand exceeds supply; and we’re a long way from that now. The US output gap – the difference between actual output and potential output – is estimated at close to $1 trillion today. That means the money supply could be increased by close to $1 trillion annually without driving up prices. Before that, increasing demand will trigger a corresponding increase in supply, so that both rise together and prices remain stable. In any case, today we are in a deflationary spiral. The economy needs an injection of new money just to bring it to former levels.

In July 2010, the New York Fed posted a staff report showing that the money supply had shrunk by about $3 trillion since 2008, due to the collapse of the shadow banking system. The goal of the Federal Reserve’s quantitative easing was to return inflation to target levels by increasing private sector borrowing. But rather than taking out new loans, individuals and businesses are paying off old loans, shrinking the money supply. They are doing this although credit is very cheap, because they need to rectify their debt-ridden balance sheets just to stay afloat. They are also hoarding money, taking it out of the circulating money supply. Economist Richard Koo calls it a “balance sheet recession.”

The Federal Reserve has already bought $3.6 trillion in assets simply by “printing the money” through QE. When that program was initiated, critics called it recklessly hyperinflationary; but it did not create even the modest 2% inflation the Fed was aiming for. Combined with ZIRP – zero interest rates for banks – it encouraged borrowing for speculation, driving up the stock market and real estate; but the Consumer Price Index, productivity and wages barely budged. As noted on CNBC in February:

“Central banks have been pumping money into the global economy without a whole lot to show for it . . . . Growth remains anemic, and worries are escalating that the U.S. and the rest of the world are on the brink of a recession, despite bargain-basement interest rates and trillions in liquidity.”

In a January 2015 op-ed in the UK Guardian, Tony Pugh observed:

“Quantitative easing, as practised by the Bank of England and the US Federal Reserve, merely flooded the financial sector with money to the benefit of bondholders. This did not create a so-called wealth affect, with a trickle-down to the real producing economy. … If the EU were bold enough, it could fund infrastructure or renewables projects directly through the electronic creation of money, without having to borrow. Our government has that authority, but lacks the political will.”

In 1933, President Franklin Roosevelt boldly solved the problem of a chronic shortage of gold by taking the dollar off the gold standard domestically. President-elect Trump, who is nothing if not bold, can solve the nation’s funding problems by tapping the sovereign right of government to issue money for its infrastructure needs.”