USA: Rich Plutos, Poor People

The New York Times is waking up, and smelling the roses, Here is an extract of:

http://www.nytimes.com/2014/04/23/upshot/the-american-middle-class-is-no-longer-the-worlds-richest.html?ref=economy,

followed by my further seeing remarks. By the way, before I unleash the New York Times, the numbers the NYT uses about the USA’s median income are way more optimistic than the official ones. Here is the real situation:

This Is Reality. Real, Inflation Indexed Dollars For Median Family Income

This Is Reality. Real, Inflation Indexed Dollars For Median Family Income

The American middle class, long the most affluent in the world, has lost that distinction.

While the wealthiest Americans are outpacing many of their global peers, a New York Times analysis shows that across the lower- and middle-income tiers, citizens of other advanced countries have received considerably larger raises over the last three decades.

After-tax middle-class incomes in Canada — substantially behind in 2000 — now appear to be higher than in the United States. The poor in much of Europe earn more than poor Americans.

The numbers, based on surveys conducted over the past 35 years, offer some of the most detailed publicly available comparisons for different income groups in different countries over time. They suggest that most American families are paying a steep price for high and rising income inequality.”

I sent the following comments, to pursue the New York Times’ education:

***

The reality is way worse: one has to take into account what taxes provide with. In the USA, taxes provide the rich with even more services. In Europe, taxes provide the Non-Rich, with even more basic services.

Some services, such as health care, education, or helping the poor, should be viewed as basic human rights.

Take the case of the French Republic. On the surface, French median income, after tax is significantly lower than in the USA. However, those French taxes pay for crucial services that then come for free, or are heavily subsidized in France. For example in health, education, retirement, etc.

France has the highest taxes, with Denmark, about 56% of GDP. However, those taxes are used for massive redistribution. Thus health care is first class and basically free in France.

Education too is free, in France, all the way to the doctorate.

Preschool is also free, and toddlers can be left, for free, in the care of the specially trained health care providers much of the day, for working moms.

In many European countries, parents get massive support, not just from day one, but from the day of pregnancy (then the care is free and intense; parents get extended parental leave, sometimes years).

***

Plutocracy is a redistribution of wealth, power, income, from We The People to a small minority of controlling parasites. Plutocracy paralyzes the minds with a warped case of inverted decency. Plutocracy is neither optimal for the society, nor the economy.

Plutocracy affects the USA more than Europe, and the minds, even more than the stomachs. The fact that average Americans feel that they are much better of than in the rest of the world reinforce the plutocratization of the USA. Including astounding tolerance for the amazingly corrupt so called Supreme Court (Supremely plutocratic!).

I'm "Black", Mom Was White, & Thus We're In The Black.

I’m “Black”, Mom Was White, & Thus We’re In The Black.

 

***

For more on how plutocracy has corrupted minds, see:

http://panterragolo.wordpress.com/2014/04/22/class-mind-in-the-usa/

Patrice Aymé

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19 Responses to “USA: Rich Plutos, Poor People”

  1. ianmillerblog Says:

    I think the theory is called “Trickle down economics”. It certainly is a trickle going down, and a deluge going up, and one of the sad points is that the rich usually don’t actually do anything of value with their riches. There is a saying that private spending is always more efficient than state spending, but I suppose that depends on how you define efficiency. State funded healthcare usually gives more treated patients per dollar than private, and while the US has the most technically advanced healthcare in the world, it also has a rather high per centage of its population that cannot afford it.

    • Patrice Ayme Says:

      Yes Ian, you are right, it’s very telling they called it “trickle down”.

      I would not agree that the USA has the most TECH advanced healthcare. France, not content with having discovered the drugs to treat nuts in the 1950s, inaugurated many new techs in recent years, from successful gene therapy, to hand and face grafts, to deep brain stimulation (discovered in Grenoble; now all the rage, and not just for Parkinson). Schumacher was kept in artificial coma/hibernation of sorts for more than three months (Grenoble again).

      If anything, my spouse and I, faced with a difficult pregnancy, escaped to France, after spending more time on the phone, for free, with French doctors, and we were astounded by the quality of service (in a PUBLIC hospital, classified as of the lowest category in France… Although the helipad on the roof guaranteed transport to a top category hospital). Within minutes of arrival, the surgeon gave us a clear and precise diagnostic, and scheduled a C section. (He was Italian, BTW. Second most performing large health care system, after France).
      PA

      • ianmillerblog Says:

        I guess I was trying to show one good thing about US healthcare. I recall once I visited a cousin in LA who had had an operation for gall stones. It cost over four times what it would have cost where I live (New Zealand). Anyway, I am glad your wife had good health care.

        • Patrice Ayme Says:

          Well, in the SF Bay Area, nearly everybody we know got problem upon delivery. What’s going on? Probably An obsession with trade, profit, the financial and the legal, have occulted care. Emotional fascism, precedes the intellectual fascism..
          So it is, all over.
          PA

  2. pshakkottai Says:

    State created $ cost ZERO to create unlike bank created $ where you have to pay interest. We are then comparing private healthcare costing insurance + taxes+ interest with govt created $ costing NOTHING!

    • Patrice Ayme Says:

      Agreed, Partha. This arguments are not new: they have been, conveniently forgotten, by the powers that be. President Jackson of the USA knew them. Inca, Roman and Tang emperors knew them. And they are obvious too.

      The economy ought to be in two parts:
      1) the part that is necessary (say the army, police, justice, etc.)
      2) the part that’s fluff, and needs a reward: the for-profit area. By making 2) encroach on 1), plutocracy has invaded democracy.

  3. Dominique Deux Says:

    Winston Churchill once quipped “there are lies, damned lies, and statistics”.

    I never could understand why France’s medical expenses are included in its state spending (making up for a full half of its total amount), opening that country to the accusation – repeated ad nauseam – that it has the highest state spending in the world and thus needs “reform” (code for “spreading wide for Pluto”).

    See an example here.

    http://www.contrepoints.org/2013/09/30/140878-france-championne-du-monde-depenses-sociales

    The bulk of medical expenses are covered by PRIVATE premiums paid by PRIVATE employers and PRIVATE employees. The state provides supervision and arbitration, period, in keeping with its regal role. It is not socialism, but regulated capitalism. Honest market sectarians should praise it to the skies. But there being no honest market sectarians, they keep spreading the lie.

    • Patrice Ayme Says:

      Dear Dominique: OK, list me in the clueless. Could you explain a bit more? OK, so half of French spending is “assurance maladie”, or “securite’ sociale”? In the USA, about HALF of health spending is Medicare/Medicaid.
      PA

  4. Dominique Deux Says:

    Simply said, taxes account for only about 1/3 of health spending, through state hospitals and a subsidy to make up for the Social Security’s deficit.

    The remaining comes from private pockets (premiums) paid by employers and employees, as part of an agreement which harks back to Liberation. Its management is done NOT by State but by a joint committee of employer and employed unions. In fact employer unions, even though they are left-leaning, tend to resist further State support, as it would compromise the principle of employer-employed parity.

    Payment of those premiums is compulsory by law, which is why nitwits and sold economists [pretend to] see them as taxes.

    The distinction is a valid one, which I had to respect in my years as a project economist for the World Bank and the EU. It is akin to, say, a fishing harbour levying dues on landings to pay for its services – a completely private deal. However, when it suits the powers that be, propaganda takes over and French sheep, urged on by their shepherds, bleat that they pay the highest taxes in the world. Never a word about having the highest life expectancy in the world.

    Conventional stats list the whole health budget as State, which leads to the constant whining about State expenses being outlandish. But a lie is a lie, even when institutionalized.

    • Patrice Ayme Says:

      BTW, that sounds pretty much like Obamacare… Ironical…

      • Dominique Deux Says:

        Right (or the reverse) but with less built-in plutocracy. For example most drugs and medical acts have set prices, and reimbursement is on that basis. Preference is given to generic drugs. The patient’s and doctor’s freedom to ignore these limits is total, but at the patient’s expense – hence a growing market for private extra insurance.

        I am not familiar with Obamacare, even less with the ‘usual’ US system of diagnosing your credit or insurance status first, but I would say similar health results are achieved at vastly lower cost, because of these bargaining strengths and built-in disincentives. Which are far from perfect.

        • Patrice Ayme Says:

          Dear Dominique:
          There is no “usual” USA system. Employer contract with private insurers, who (used to) do whatever they want. Obamacare put some order in that, in the sense private insurers cannot refuse to cover “pre-existing conditions” and cannot treat people differently when they pay for one of the “standard color plans”. The whole thing is Byzanthine.
          I had a simpler alternative, Medicare For All, and Obama vaguely proposed it to his cabinet and Pelosi, that is to all the plutophiles around him (there is nothing else) who all rejected it with horror and consternation. That would have been real competition.

          I still don’t get it. In the 56% of the French GDP that is state spending (“etat” + regions + communes), how much is health? French health spending is about 12% GDP, USA, 18%. Are you saying that some of the 18% in the USA are labeled as “state” in France? Or that much of the 12% health in France is categorized as “state”, but ought to be viewed as private, as the “state” just overviews what are private transactions?

          It’s true something like that could be done for education. Education is a big part of the French (“Federal”) budget…. But only 1% of the USA Fed budget. Although that just means the population is submitted to the exactions of a plutocratic educational system (it’s going to cost more than 30,000 dollars for the nine months education of a four year old I am very familiar with, next year)…
          PA

  5. Dominique Deux Says:

    “Or that much of the 12% health in France is categorized as “state”, but ought to be viewed as private, as the “state” just overviews what are private transactions?”
    That is indeed my point.

    • Patrice Ayme Says:

      I meant the 12% of GDP that are classified as health spending. Well, understood, however, CHUs for example, are definitively public, as the universities are supposed to be.

      In general an overlooked problem in economics may be: what does “public” mean, what does “private” mean?

      It seems to be what you are saying. Or, at least, I certainly ponder this.

      NEW YORK (CNNMoney) — As he helped orchestrate the Wall Street bailouts, William Dudley — now president of the New York Fed — owned more than $100,000 stock in AIG and General Electric, two firms that received government assistance.

      GE Capital, the company’s finance firm, qualified for assistance through the Temporary Liquidity Guarantee Program, due to its ownership of a modest savings and loan in Utah, The Washington Post reported Monday.
      The government has guaranteed $340 billion in debt through the program with a quarter of that issued by GE Capital.
      Read more: http://www.upi.com/Business_News/2009/06/29/GE-is-quiet-bailout-recipient/UPI-11291246282301/#ixzz306APUxMr

      [These are extracts from 2009; people paid by GE have cleaned the Internet of easy revelations on the GE government “bail-out”… they don’t call it a bail-out, BTW…

      In general (!) banks I do not view as private, as they could not leverage themselves as they do, for a second, without government back-up.
      All of this ought to be meditated as GE tries to swallow Alstom. Fundamentally, it’s not about economics, but politics. Although Siemens is not clean (see its entanglement with Putin), it’s from next door, not Mars…
      PA

  6. Paul Handover Says:

    Reading this with interest. Interest generated by this new American resident needing to see a doctor but having to make my first objective understanding my health insurance!

    So Monday morning sees me with our agent endeavouring to see why my comprehensive insurance ($387/month) doesn’t cover the costs of seeing my alternative care doctor on Wednesday!

    Funny old world.

    • Paul Handover Says:

      Forgot to add that France is a remarkable country. Jean lived there with her late husband for 2 years and I taught business studies at a French college (ISUGA) for some time. If it weren’t for our many animals, a final move from Oregon to France might not be ruled out!

      • Patrice Ayme Says:

        Well, about 235 years later, the revolutionaries of 1789 (including to some extent the king Louis XVI!), have won, in the sense that all of (Western) Europe has followed them in accomplishing what they wanted. Even Germany is instituting a minimum wage (after relinquishing in the last ten years its nationality resting in blood, and adopting the French nationality code… that was adopted by the USA in the meantime, somewhere in the 1960s…).

        Some of these things were very old: slavery was outlawed in France around 655 CE, homosexuality repression around 1580 CE (the great king Henri III was a notoriously flaunting celebrity homosexual, so he made sure of that in his Civil Code)…

        We also intent to retire in France, or thereabout (there are lots of pseudo-Frances around France, such as Suisse and Italy… Or Belgium… But Belgium climate is not for me… although it’s going to warm up… ;-))
        PA

    • Patrice Ayme Says:

      It’s all about those making all the money taking all the decisions. And it’s only getting worse. The oligo-plutocrats protect their conspiracies with immensely complicated systems (it was the same in France before 1789: too much complexity to change anything; in England the situation was a bit clearer as the brute force of the aristocracy was more in command…)

      (One of) My objection to Obamacare was precisely that it would make the mess messier, and it has. They have introduced that notion of “network”, as I expected, and are milking it for whatever it’s worth.

      Once again, “representative democracy” is not democracy, it’s just tyranny masquerading as democracy.

  7. I just want to throw up! | Learning from Dogs Says:

    […] I went back to re-read an essay from Patrice Ayme that came out on the 22nd called USA: Rich Plutos, Poor People.  Here’s a snippet from […]

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