Overnight links for December 13th

A study conducted in New York City to track the fortunes of those about to become homeless is being called cruel by advocates. New York Times writer Cara Buckley describes the study that withholds housing assistance from the "control" group.

A health-care non-profit in Uganda learned a lesson from Avon in how to conduct their business. From Fast Company writer Lisa Katayama talks about how Living Goods gets health-care products out to the people.

The divide between rich and poor in China is growing, and the gap is showing up in other abusive forms. From the Inter Press Service writer Mitch Moxley describes the new abuse of privilege.

Income inequality in Thailand

In Thailand the income inequality gap is the widest in the world, almost double the size of the US and wider than any of it's neighbors.

Thailand has enacted many pro-poor policies and has met the Millennium Development Goal on poverty. However, the inequality has spilled over into organized protests in recent weeks.

From the IPS, writer Marwaan Macan-Markar explains just how wide the gap is.

"The richest Thais earn 14.7 times more than the poorest," said Gwi-Yeop Son, resident representative of the United Nations Development Programme (UNDP), during the launch of the ‘Thailand Human Development Report 2009’. "The bottom 60 percent of the population’s share of the income is only 25 percent."

This rich-poor divide is stark when measured against developed countries that have public policies aimed at reducing the economic inequality ratio between the average income of the top fifth of households and the bottom fifth, the 163-page report noted.

"In societies which value egalitarianism, such as Japan and Scandinavia, the multiple is around 3-4. In the rest of Europe and North America, it is 5-8. Among Thailand’s South-east Asian neighbours, the figure is around 9-11. In Thailand it is around 13-15," the report said.

The country’s income inequality is the result of many divisions. They include the urban-rural divide, one between Bangkok, the major concentration of wealth and power, and the rest of the country, and splits between sections of the economy that have latched on to globalisation and those that have remained detached, states the report.

The spread of the kingdom’s 42-million workforce – where a third is in the formal economy "of salaried jobs and sizeable enterprises" and two-thirds make a living in the informal economy of "family farms, casual labour and petty business" – also mirrors the glaring inequality gap, added the UNDP publication.

"There is growing awareness that inequality lies at the root of several forms of human insecurity, including rising political conflict," it said. "The richest and poorest areas of the country are clearly on opposite sides of a deepening political divide."

Facing the "new" poverty problem in Japan

Japan is finally admitting that it has a relative poverty problem. After keeping poverty measurements secret for years, the government released it's data in 2007 to a huge uproar.

The reason for this secrecy is mostly due to the stigmatization that the poor people face. 80 percent of those who are below the poverty line are the working poor. These people may have enough to eat but may lack in health insurance or some luxuries.

In trying to compete with the many low wage jobs in China, Japan created it's own low wage workforce. Now the nation is trying to come to terms with the income inequality it created.

From the New York Times, writer Martin Fackler gives us some background on Japan's economy.

After years of economic stagnation and widening income disparities, this once proudly egalitarian nation is belatedly waking up to the fact that it has a large and growing number of poor people. The Labor Ministry’s disclosure in October that almost one in six Japanese, or 20 million people, lived in poverty in 2007 stunned the nation and ignited a debate over possible remedies that has raged ever since.

Many Japanese, who cling to the popular myth that their nation is uniformly middle class, were further shocked to see that Japan’s poverty rate, at 15.7 percent, was close to the Organization for Economic Cooperation and Development’s figure of 17.1 percent in the United States, whose glaring social inequalities have long been viewed with scorn and pity here.

But perhaps just as surprising was the government’s admission that it had been keeping poverty statistics secretly since 1998 while denying there was a problem, despite occasional anecdotal evidence to the contrary. That ended when a left-leaning government led by Prime Minister Yukio Hatoyama replaced the long-governing Liberal Democratic Party last summer with a pledge to force Japan’s legendarily secretive bureaucrats to be more open, particularly about social problems, government officials and poverty experts said.

“The government knew about the poverty problem, but was hiding it,” said Makoto Yuasa, head of the nonprofit Antipoverty Network. “It was afraid to face reality.”

Following an internationally recognized formula, the ministry set the poverty line at about $22,000 a year for a family of four, half of Japan’s median household income. Researchers estimate that Japan’s poverty rate has doubled since the nation’s real estate and stock markets collapsed in the early 1990s, ushering in two decades of income stagnation and even decline.

The ministry’s announcement helped expose a problem that social workers say is easily overlooked in relatively homogenous Japan, which does not have the high crime rates, urban decay and stark racial divisions of the United States. Experts and social workers say Japan’s poor can be deceptively hard to spot because they try hard to keep up the appearance of middle class comfort.

Chinese premier pledges to ease income gap

The Chinese premier made his yearly major policy speech yesterday, and made a pledge to shrink China's income inequality. The speech is similar in stature to the U.S. State of the Union or Brittan's Queen speech.

Premier Wen Jiabao pledged to shrink the income gap by spending more on welfare and developing rural areas. The proposed increases in those two areas are at higher percentages than that proposed for China's military.

From The Guardian, writer Tania Branigan has this description of Jiabao's speech.

His annual policy speech set a steady course for the country – with a growth target of 8%, as in previous years – but left the government room for flexibility as he cautioned that the global economic outlook remained uncertain.

China is reining back spending after last year's massive stimulus package, while seeking to maintain confidence at home and abroad. The 11.4% increase will take total spending to 8.45tn yuan (£800bn), but is less than half of last year's 24% rise.

The country is on course to overtake Japan as the world's second-largest economy, after double-digit growth in the final quarter of last year took growth in 2009 to 8.7%, the highest of any major economy.

But addressing the National People's Congress (NPC), China's rubber-stamp parliament, Wen warned: "We must not interpret the economic turnaround as a fundamental improvement in the economic situation.

"There are insufficient internal drivers of economic growth."

Making the case for increased social spending, as he has done in recent years, he added: "We can ensure that there is sustained impetus for economic development, a solid foundation for social progress, and lasting stability for the country only by working hard to ensure and improve people's well-being."

Recession increases US income gap

We talk often of how the global recession has hurt the poorest countries the hardest, but an article we found today examines how the recession has hurt the poorest Americans the hardest. The many job layoffs that took place throughout the recession has hurt low to middle income Americans, while the wealthiest Americans only had reductions in pay or benefits.

The US Census Bureau says that the income gap between the poorest and richest Americans is now at it's widest ever. Income gap from country to country is important to consider because the wider a gap is, the harder it is for the poorest to climb up the income ladder.

From this Associated Press article that we found at the Sun News, writer Hope Yen takes another angle at the Census Bureau numbers.

The wealthiest 10 percent of Americans - those making more than $138,000 each year - earned 11.4 times the roughly $12,000 made by those living near or below the poverty line in 2008, according to newly released census figures. That ratio was an increase from 11.2 in 2007 and the previous high of 11.22 in 2003.

Household income declined across all groups, but at sharper percentage levels for middle-income and poor Americans. Median income fell last year from $52,163 to $50,303, wiping out a decade's worth of gains to hit the lowest level since 1997.

Poverty jumped sharply to 13.2 percent, an 11-year high.

"No one should be surprised at the increased disparity," said Richard Freeman, an economist at Harvard University. "Unemployment hurts normal workers who do not have the golden parachutes the folks at the top have."

Analysts attributed the widening gap to the wave of layoffs in the economic downturn that have devastated household budgets. They said while the richest Americans may be seeing reductions in executive pay, those at the bottom of the income ladder are often unemployed and struggling to get by.

Large cities such as Atlanta, Washington, New York, San Francisco, Miami and Chicago had the most inequality, due largely to years of middle-class flight to the suburbs. Declining industrial cities with pockets of well-off neighborhoods, such as Pittsburgh, Cleveland and Buffalo, N.Y., also had sharp disparities.

Income Inequality is still growing

The Organization for Economic Co-Operation and Development has released a new survey of income inequality in the developed world. The OCED report says that again income inequality has grown even during the global recession.

From the OCED press release is a summary of the key findings of the report. You can download this media fact sheet which also provides a good summary to the report.

Why is the gap between rich and poor growing?

In most countries the gap is growing because rich households have done significantly better than middle-class and poor households. Changes in the structure of the population and in the labour market over the past 20 years have contributed greatly to this rise in inequality.

* Wages have been improving for those people who were already well paid.
* Employment rates have been dropping among less-educated people.
* And, there are more single-adult and single-family households.

Who is most affected?
Statisticians and economists assess poverty in relation to average incomes. Typically, they take the poverty line to be equivalent to one-half of the median income in a given country.

* Since 1980, poverty among the elderly has fallen in OECD countries.
* By contrast, poverty among young adults and families with children has increased.
* On average, one child out of every eight living in an OECD country in 2005 was living in poverty.

What does this mean for future generations?
Social mobility is generally higher in countries where income inequalities are relatively low. In countries with high income inequalities, by contrast, mobility tends to be lower.

* Children living in countries where there is large gap between rich and poor are less likely to improve on the education and income attainments of their parents than children living in countries with low income inequality.
* Countries like Denmark and Australia have higher social mobility, while the United States, United Kingdom and Italy have lower mobility.

What can be done?
In some cases, government policies of taxation and redistribution of income have helped to counteract widening inequalities, but this cannot be their only response. Governments must also improve their policies in other areas.

* Education policies should aim to equip people with the skills they need in today’s labour market.
* Active employment policies are needed to help unemployed people find work.
* Access to paid employment is key to reducing the risk of poverty, but getting a job does not necessarily mean you are in the clear. Growing Unequal? found that over half of all households in poverty have at least some income from work.
* Welfare-in-work policies can help hard-pressed working families to have a decent standard of living by supplementing their incomes.

Ex-World Bank chief says growing global income gap

from Forbes

MANILA (Thomson Financial) - A widening rich-poor gap in countries around the world could lead to a rise in class conflicts, former world bank president James Wolfensohn said here Wednesday.

Despite sharp growth in countries like China and India, the absolute number of poor in the world was still growing, particularly in Africa, he told a public forum in the Philippines capital.

Fifteen years ago, there were about 5 billion poor people in the world -- a number that 'will grow to 8 billion people in the next five years,' he said.

The increasing income disparity between nations and within their borders 'will ensure you will have growing conflicts between the rich and the poor,' he told business and civic leaders.

Unlike in the past, the poor in undeveloped countries were well-informed and knew about the comforts and jobs out of their reach.

'Young people want to get jobs and if they can't get jobs, they will go out and kick you,' he said. 'If you want your kids to live in peace, you cannot ignore this problem.'

Wolfensohn, who is credited with anti-corruption efforts at the World Bank, criticized the weak record of developed countries in channelling aid to the needy.

'Shareholder governments of multilateral institutions have done a terrible job of (using) the money for development,' he said.

Wolfensohn said of the 130 billion dollars supposedly allocated by multilateral institutions for development, only one-third of that amount was used to help the poor while the rest went to overhead and other costs.

'The system is in poor shape and needs a revamp,' he said, suggesting that they should 'get rid of multiple organisations with multiple overheads' that perform the same functions.

Although he praised the Asian Development Bank for its efforts to ensure its funds help the poor, he said the World Bank should 'look at itself as it (looks) at others' when it investigates alleged misuse of aid funds.

Aside from poverty, the other major issue facing the world was the environment, Wolfensohn said, noting businessmen had realised that 'a good environment can have an input on economic growth.'

Profit Surge The Empire and Inequality Report No. 10

from ZNet

by Paul Street

Beneath all the welcome popular disgust with George W. Bush, it is easy to forget – and important to remember – that some special interests and individuals have reasons to rejoice at the wonders of life under The Worst President Ever (“He’s the Worst Ever,” Washington Post, 3 December 2006).

REASONS FOR RICH REJOICE AS THE WORLD UNRAVELS: THE HIGHEST PROFITS MARGINS IN HALF A CENTURY

The economic men and women of the New York Stock Exchange (NYSE) were being more than polite when they greeted Bush with spontaneous and prolonged applause last week. They were expressing heartfelt capitalist gratitude. The arch-plutocratic, anti-labor Bush administration has overseen a remarkable transfer of wealth from the American working class to the nation’s ever more grotesquely opulent and privileged few.

Even before George the Second was installed through the Baker-Scalia judicial coup of 12-12-2000 (as dark a day in its own way as 9/11/2001), the U.S. was already by far and away the most unequal and wealth-top-heavy society in the industrialized world. Thanks in no small part to Bush and under the cover of his state-terrorist “war on terror,” the democracy-disabling U.S. wealth gap (see Paul Street, “Capitalism and Democracy ‘Don’t Mix Very Well’: Reflections on Globalization,” Z Magazine [February 2000], pp. 20-24) has reached terrible new levels.

As Jack Rasmus reports in the most recent Z Magazine, “for the first time since the U.S. government began to collect the data in 1947, wages and salaries no longer constitute more than half of total national income. Corporate profits,” Rasmus observes, “are at their highest levels since WWII, having risen double digits every quarter in the last three and a half years alone and 21.3 percent in the most recent year, 2005, according to the Dow-Jones 'Market Watch.' Corporate profit margins are higher than they have been in more than half a century, according to Merril Lynch economist David Rosenburg. After tax profits are now equal to 8.5 percent of the GDP - that's more than a trillion dollars - and the highest percent since the end of World War II in 1945. A June 2006 report by the leading investment bank Goldman Sachs aptly summed it up: 'The most important contribution to the higher profit margins over the past five years has been a decline in Labor's share of national income.'"

We are returning to the highly regressive income wealth distribution of the late 1920s, with the top 1 percent “earning” (taking) nearly 22 percent of the national income. The United States' wealthiest 1 percent now “receives between 19 and 21.5 percent of the [nation's] annual gross domestic product (GDP)...up from 8 percent in 1980.” This “represents a nearly full recovery of the roughly 22 percent share of the national income the top 1 percent received just prior to the stock market crash of 1929, the depression of the 1930s and the great leveling of class incomes that followed. That same 1 percent today also holds more than 35 percent of all assets and wealth of the country - about $ 417 trillion. They own 51 percent of all stocks and 70 percent of all bonds, own homes worth more than $3 million and have a net worth of $6 million. The bottom 50 percent of households, nearly 60 million families - all working class - in comparison own only 2.5 percent of the country's total assets and wealth" (Jack Rasmus, "The Trillion Dollar Income Shift, Part 1," Z Magazine [February 2007]: 44-49).

The top 1 percent – comprising roughly 1.4 million “tax units” (see Peter Singer, “What Should a Billionaire Give?” New York Times Sunday Magazine, December 17, 2006, p.80) owns more than a third of all U.S. wealth. The bottom HALF possesses a FORTIETH of “the world’s richest nation’s” net worth.

During the last three years, Rasmus notes, the “earnings” of the top hundredth have resumed their long-term expansion since the late 1970s, which was briefly interrupted by the dot.com bust and economic downturn of 2001. By “stark contrast,” the nation’s 90 million working class families “never recovered from the 2001 recession” and have “fallen steadily behind. This dark fact,” Rasmus notes, “is the defining economic characteristic and legacy of the George W. Bush presidency.” By Rasmus’ calculations, United States capitalism – recently hailed by Barack Obama as “our greatest asset” and “a system that for generations has encouraged constant innovation, individual initiative and efficient allocation of resources” (B.O., The Audacity of Hope [New York, 2006], pp. 149-50) – transfers “well over $1 in income” annually from the nation’s working class to “corporations and the wealthiest non-working class households” Rasmus, “Trillion Dollar Income Shift”).

HOW RICH IS OUR BOURGEOISIE?

How rich is the United States bourgeoisie in this age of ever-more imminent catastrophe? Putting aside wealth and focusing just on income (and thereby leaving out much of the full inequality story), economists Thomas Piketty (Ecole Normale Superieure, Paris-Jourdan) and Emmanuel Saez (University of California-Berkeley), report that the top 0.01 percent (the top ten-thousandth) comprised 14,400 U.S. “tax units” in 2004. Minus capital gains (a substantial portion of income for the very rich), these 14,400 taxpaying entities received an average income of $12,775 million, making for total “earnings” of $184 billion in 2004.

That astonishing total was $63 billion greater than the total cost – estimated by the eminent “development economist” Jeffrey Sachs at $121 billion – of meeting the United Nations’ Millennium Goals for 2006 (Singer, “What Should a Billionaire Give?). Those frequently cited goals include: reducing by half the share of the world’s population that experiences hunger; halving the share of people who live in “extreme poverty” (defined as living on less than one U.S. dollar per day); reducing by half the proportion of people without access to safe drinking water; halting and beginning to reduce the spread of HIV and AIDS; halting and beginning to reduce malaria and other diseases; guaranteeing that all children are able to access a full course of primary schooling.

Taxing the United States top 0.01 percent’s 2004 income (minus capital gains) at two-thirds (67 percent) would garner enough wealth to meet these important goals.

Conventional “capitalist” wisdom requires “realistic” and “responsible” Americans to dismiss the notion of such “expropriatory” levels of public levy. It is interesting to note, however, that the minimum annual income in 2004’s top 0.01 percent was $4 million. Taxing the top ten-thousandth at two-thirds would have required no household in that elite bracket to live on less than $1.66 million.

Equally relevant is Nobel Prize winning economist Herbert Simon’s determination that “social capital” accounts for “at least 90 percent” of what people “earn” in collectively rich industrialized nations like England, Japan, Germany and the United States. Simon’s definition of “social capital” includes natural resources, “good government,” and the presence of advanced technology and organizational skills. Simon says that a moral argument can be made for mandating a flat income tax rate of 90 percent on the wealthy.

There is no moral or social-scientific basis for the opulent minority’s claim that it “deserves” every dollar it “earns.” No less an expert on – and beneficiary of – American wealth inequality than U.S. mega-billionaire Warren Buffet acknowledges that he owes most of his personal fortune to "social capital" (Singer, “What Should a Billionaire Give?”).

The rest of the top one thousandth (comprising 129,000 tax units with an average income of $2 million) could exceed the Millennium Goals by $9 billion if its income were taxed at 50 percent, an imposition that would require nobody in the top 0.1 percent to live at less than $550,000. The rest of the top 0.5 percent (575,000 units with an average income of $623,000) could exceed the Millennium Goals by $21 billion if it contributed 40 percent, requiring no households in the top two-hundredth to live on less than $162,800 – a comparatively aristocratic sum in a “planet of slums” (see Mike Davis’s horrifying book Planet of Slums [Verso, 2006]) where more than 2 billion people live on less than a dollar a day.

Taxing the top two-hundredth on the sliding scale applied above – 67 percent for the top 0.01 percent, 50 percent for the top 0.1 percent and 40 percent for the top 0.5 percent – would yield $397 billion, equivalent to more than three times the Millennium Goals’ cost for 2006. That’s without even touching recently remarkable capital gains, which flow especially to the top 1 percent that owns more than half the nation’s stocks and more then two-thirds of its bonds.

My fellow (United-States-of) Americans, “our” rich are very rich indeed.

DEEP HOMELAND POVERTY

How poor is the United States' lower-class? The standard federal data tells us that 37 million Americans were officially poor in 2005, giving the U.S. a poverty rate of 12.6. It tells us that that rate has consistently grown through most of the Bush administration and that the number of officially poor Americans rose by more than five million between 2000 and 2005 (consistent with Rasmus’ notion of an ongoing upward transferal of income). It tells us that the 2005 black poverty rate was 24.9, three times the measure for non-Hispanic whites (8.3).

But this understates matters. The official U.S. poverty measure is an open travesty in the eyes of serious poverty and policy researchers. Based on an archaic (1950s) formula that multiplies a minimal food budget times three (see John E. Schwarz, Illusions of Opportunity: the American Dream in Question [New York: W.W. Norton, 1997, pp. 61-62), it drastically underestimates health, housing, transportation and other expenses. It fails to differentiate basic family expenditures by region and metropolitan area. It does not come close to capturing the real cost of being poor in the U.S.

According to 2006 federal (Department of Health and Human Services) guidelines, a family of three was officially poor last year only if it receives $16,600 or less. As the Economic Policy Institute EPI) shows in a detailed cost-of-living analysis applied to every major metropolitan area in the U.S., however, the real no-frills cost of a minimally decent “basic family budget” (BFB) for a family of three in Chicago in 2005 was $38,628, more than 230 percent of the poverty measure. For New York City, the equivalent cost was $52,776, more than three times the official poverty level. Even in relatively low-cost Casper, Wyoming, where the BFB for a family of three was $24, 948, the official measure comes up woefully short (EPI’s “Basic Family Budget Calculator” [can be accessed online at] www.epinet.org/content.cfm/datazone_fambud_budget; Sylvia Alegretto, “Basic Family Budgets, http://www.epi.org/content.cfm/bp165).

Another thing that is rarely noted in “mainstream” (dominant and corporate) reporting on domestic misery is the depth of deprivation within the nation’s under-measured poverty population. As the United States Conference of Catholic Bishops reported last year, 15.6 million or 42 percent of the nation’s officially poor people lived in what researchers now call “deep poverty” in 2005 – at half or less than half the nation’s notoriously inadequate poverty level. The number of Americans living at or below that terrible measure is currently the highest recorded since the federal government began making available the data required to calculate deep poverty (USCB, “Poverty USA,” available at www.usccb.org/cchd/povertyusa/povfacts.shtml).

In a research project I conducted for the Chicago Urban League in 2004, for what it’s worth, .I found 14 Chicago neighborhoods where a quarter or more of the children were living in deep poverty. I discovered six neighborhoods where more than 40 percent of the kids were growing up in such extreme deprivation in the United States – once described by U.S. Senator Kay Bailey Hutchinson (R-Texas) as “the beacon to the world of the way life should be” (Street, Still Separate, Unequal: Race, Place, Policy and the State of Black Chicago [2005], pp. 48-51).

This data come from the end of the long Clinton economic boom, of the 1990s, when the “poverty gap” – “the amount of money needed to bring all poor people exactly up to the official poverty line” – increased even as overall U.S. poverty fell somewhat (see Robert Pollin, Contours of Descent: U.S. Economic Fractures and the Landscape of Global Austerity [London: Verso, 2003], p. 45).

“THE BIGGEST PROFIT EVER”

Some specific and strategically placed capitalist interests have special reason to rejoice at their good fortune under the new King George. Look, for example, at the following story off the Associated Press Wire, reporting that Exxon-Mobil scored the single largest annual corporate profit ever enjoyed by a United States corporation in 2006:

“Oil Giant Exxon Posts Record Earnings”

“$39.5 Billion for 2006 Was Biggest Profit for a U.S. Company”

The Associated Press

4:01 p.m. CT Feb 1, 2007

“HOUSTON - Oil giant Exxon Mobil Corp. on Thursday posted the largest annual profit by a U.S. company — $39.5 billion — even as earnings for the last quarter of 2006 declined 4 percent.”

“The 2006 profit topped Exxon Mobil’s own previous record of $36.13 billion set in 2005.”

“Revenue at the world’s largest publicly traded oil company rose to $377.64 billion for the year,

“Exxon Mobil’s record annual earnings followed a year of extraordinarily high energy prices as crude oil topped $78 a barrel in the summer — driving up average gasoline prices in the United States to more than $3 a gallon. Prices retreated later in the year.”

“Results for the October-December period mimicked those of U.S. competitor ConocoPhillips, which last week said its fourth-quarter profit fell 13 percent — also primarily because of lower natural gas prices and refining margins. But hefty earnings earlier in the year helped Houston-based ConocoPhillips record it’s most profitable year on record, earning $15.55 billion.”

“ConocoPhillips is the nation’s third-largest integrated oil company behind Exxon Mobil and Chevron Corp., which is scheduled to report 2006 results Friday.”

“Also Thursday, Royal Dutch Shell PLC reported a 21 percent rise in fourth-quarter earnings, buoyed in part by high energy prices and the sale of some operations. Net profit came to $5.28 billion, up from $4.37 billion….”

“At Exxon Mobil, profit for the fourth quarter of 2006 declined to $10.25 billion from the $10.71 billion Exxon earned in the 2005 quarter — a record quarterly profit for any U.S. public company. That best-ever profit came when the price of both natural gas and crude oil skyrocketed in the wake of hurricanes Katrina and Rita, which damaged wells, pipelines and refineries in the key energy-producing Gulf of Mexico...”(www.msnbc.msn.com/id/16922298)

BAD MESSAGES: REVEALING DELETIONS AT GENERAL ELECTRIC TELEVISION

Isn’t capitalism marvelous? The Ninth Ward and Mississippi Delta’s tragedy is a windfall for top managers and shareholders at Exxon-Mobil, ConocoPhillips and Royal Dutch Shell, where CEOs “earn” salaries equivalent to more than 500 times the average working-class wage in the U.S.

On Thursday, February 1st, NBC (owned by leading “defense” contractor General Electric) Evening News’s lead anchor Brian Williams and an analyst from CNBC smiled with irony as they discussed Exxon’s historic earnings. They observed that Exxon Mobil is an especially backwards firm when it comes to the development of “alternative fuels.” Williams wondered on air about “what kind of message these record profits send to the energy industry.” It was as if he thought capitalism was about human social needs and maintaining a sustainable ecology.

Later in the same broadcast, Williams referred to some reports suggesting that global warming “might be caused by human beings,” something that mainstream science has been insisting for many years. The very next day the Intergovernmental Panel on Climate Change issued a high-profile report giving yet more “unequivocal” evidence that global warming is (anti-) socially produced (E. Rosenthal and A. Revkin, “Science Panel Says Global Warming is Unequivocal,” New York Times, 3 February 2007, A1).

Neither Williams nor his CNBC colleague saw fit to observe that Katrina and Rita – those great profit bonanzas for Exxon – were likely related to the global warming to which Exxon, ConocoPhillips, Royal Dutch Shell and other leading members of the petro-industrial complex have richly contributed.

They also failed to mention that Exxon-Mobil has spent many millions of dollars “funding a network of groups to challenge the existence of global warming” (see Chris Mooney, “Some Like it Hot,” Mother Jones [May-June, 2005] ;

“ExxonMobil Spends Millions Funding Global Warming Skeptics,” [Democracy Now, April 22, 2005, available online at www.democracynow.org/article.pl?sid =05/04/22/1338256]).

The General Electric media operatives naturally had nothing about the key role that the Bush administration’s brazenly imperialist Operation Iraqi Liberation (O.I.L.) and related, surging U.S. threats to Iran have played in boosting oil prices and helping Exxon’s profits surge to unprecedented heights.

NBC viewers heard nothing, of course, course, about Exxon-Mobil’s efforts to enhance its ecocidal bottom line by accessing Mesopotamian petroleum won for them (they certainly hope) by that marvelous “oil protection service” (Michael Klare, Blood and Oil [New York: Metropolitan, 2004]) called the U.S. Armed Forces.

“RECORD SALES” FOR NOTED “LIFE-SAVER” BOEING

Another company with special cause to exult in the age of Bush II is the Chicago-based Boeing Corporation. A short article in the business section of last Thursday’s Chicago Tribune is titled “Boeing’s Outlook Points Up.” The company “tallied record sales of $61.53 billion last year,” noted Tribune business reporter Julie Johnson, “up 15 percent from 2005, as the company’s commercial aviation and defense business posted strong results. Boeing expects 2007 and 2008 to be even better,” Johnson observed. “Raising its forecasts Wednesday,” Johnson added, “the Chicago-based company predicts sales will top $64.5 billion this year and $71 billion next year as major U.S. airlines replenish aging fleets and the U.S. Air Force replaces its antiquated tankers.”

Johnson quoted a leading aerospace market research analyst to chilling effect: “This is the first simultaneous civil aviation and military upturn in decades. Boeing is the only U.S. [firm] primed to take advantage of both markets” (Julie Johnson, “Boeing’s Outlook Points Up,” Chicago Tribune, February 1, 2007, sec.3, p.1).

Boeing’s leading managers and stockholders are “primed” to reap a continuing windfall from human tragedy, international crime, petro-imperialist racism and ecological destruction within the beyond the Middle East.

Master of War

Chicago’s friendly local Boeing Corporation is of a powerful, heavily subsidized Master of War. With operative revenues of more than $55 billion, it was by 2001 the nation's second largest weapons manufacturer, exceeded in that wonderful field only by Lockheed Martin.

It is responsible for such fine products of the "free enterprise system" as the Ground-Based Interceptor missile, X-Band Radar, Battle Management, Command, Control and Communications (BMC3), Upgraded Early Warning Radars, and the Airborne Laser.

Boeing has been the main contractor for the Pentagon's dangerous, destabilizing, and costly Star Wars System, a key part of the United States' plan to extend its total domination of the planet through the militarization of outer space.

Beyond working to wreak havoc from the stars, Boeing has contributed to the killing and maiming of countless Arabs, Pashtuns, Persians and other world citizens with such high-tech tools of death and destruction as the notorious Apache AH-64A helicopter, the F-15 and the F/A-18 Hornet fighter jets. Its famous B-52, the longtime "backbone of the manned-strategic bomber forces in the United States," (according to Boeing's web-site), includes among its most recent accomplishments the "anti-terrorist" bombing of Afghanistan, conducted from heights guaranteed to produce significant deadly civilian "collateral damage."

The F-15 was featured in the 11-year bombing campaign against Iraq in the enforcement of the lethal illegally imposed "no fly zone." It has played a lethal role in the current and ongoing occupation.

The F-22, produced in cooperation with Boeing's "arch-rival" Lockheed Martin is an "air superiority fighter" with what Boeing's web site calls "first look, first-shot, and first-kill capability."

Boeing's B-2 Stealth Bomber is one of the most horrifying human creations to date. It is a monument to the Dark Side of Star Wars (the movie) fame - a "multi-role bomber, capable of delivering both nuclear and conventional munitions" to, in Boeing's words, "strike targets all over the world from bases in the United States." It is perfectly matched to the White House's plans for permanent US military supremacy and unlimited global offensive capacity.

One of Boeing's most interesting products is the Unmanned Combat Air Vehicle (UCAV), dedicated to the proposition that "the only way to completely protect the person flying a combat mission is to have them fly it from somewhere else." Boeing has taken the appropriate imperial lesson from Vietnam, loaded with cowardice and consistent with the (Colin) "Powell Doctrine": massive death and destruction for Evil Others but a minimum of risk for agents of murderous imperial mayhem.

"We build UCAV and other innovative defense products," wrote the Orwellian content providers of Boeing's web site in 2002, "because they do one thing and do it very well - they save lives." War is Peace, Love is Hate, and Death is Life. Boeing is also a major world arms dealer, with its products widely used in deadly conflicts and by repressive regimes around the world.

As Kevin Martin noted in late 2001, Boeing’s “Apache AH-64A has been sold to Egypt, Greece, Israel, Saudi Arabia, and United Arab Emirates. Israel has used the helicopter in raids against the Palestinians. Boeing's F-15 Eagle has been sold to Israel, Japan, and Saudi Arabia, and its F/A-18 Hornet has been sold to Australia, Canada, Finland, Kuwait, Malaysia, Spain, and Switzerland."

Boeing capitalizes on its overseas sales to drive demand at home. "In a perverse manifestation of the pursuit of its interests above national or international security concerns," Martin observed, "Boeing uses its weapons exports to help perpetuate demand for its future planes. New weapons...developed for the U.S. military...are sold to allies around the world. (Often, the potential export market is factored into and helps justify research and development costs.) These weapons exports, in turn, fuel the push for higher and more expensive technology to be developed by U.S. weaponeers to maintain our military superiority." (Kevin Martin, Tim Nafziger, Jeremy Shenk, and Mark Swier, "The Boeing Corporation," Z Magazine, November 2001).

“Sweet Home Chicago”

Along the path to its position at the commanding heights of the military-industrial complex, Boeing has developed strong reputations for slashing labor costs by outsourcing union jobs, poisoning the environment, discriminating against African-American employees, receiving colossal corporate welfare and other state-capitalist subsidies, and making massive investments in the American political and policy process. Boeing spent $8.2 million on lobbying in 1995 and more than $1.75 million on campaign contributions in 1999-2000, a profitably small sum in comparison to the billions of public dollars it receives.

In agreeing to move its headquarters from Seattle to Chicago in 2001, Boeing managed to extract from the city and the state of Illinois a taxpayer-financed incentive package estimated to be worth $64 million over the next 20 years.

In a recent special survey of the great “Success Story” that is (supposedly) Chicago (for a different perspective read my forthcoming book Racial Oppression in the Global Metropolis: A Living Black History [June 2007]), the neoliberal Anglo-American weekly magazine The Economist mentioned an interesting reason for Boeing’s migration to Chicago: “Boeing’s decision to move from Seattle was at least partly prompted by the thought that it was time to cut its (expensive) Washington state workforce in favor of production abroad, and that would be easier politically if the headquarters were several states away” (“A Success Story: A Survey of Chicago,” The Economist, March 18 2006).

“Move on or We’ll Call the Police”

On the day that the occupation of Iraq was launched, I happened, purely by chance (I had a meeting nearby) to be walking in the Loop (as Chicago’s downtown is called) and realized that I was passing Boeing’s riverside headquarters. I stopped in my tracks and glanced at the lobby. I gazed at the BOEING logo at the top of the skyscraper. Before I knew it, I was asking hundreds of commuters rushing west from Union Station: “do you know who this is and what they make? Do you know what they do? These bastards,” I added, “are going to make billions off this war.”

One fellow stopped, oddly transfixed. We spoke briefly. Somebody in the lobby noticed us and came out, telling us to leave or they would “call the police.” I was late for a meeting; it wasn’t time to get arrested yet.

Two nights later thousands marched against the war past the gloomy, glittering towers of global corporate doom in downtown Chicago. I positioned myself briefly in front of the Boeing building and read off a list of some of their finer products. The people protesting the war seemed to have no idea that their central city hosted the headquarters of a leading player in the military industrial complex.

The business-dominated (post-) civil rights agency for which I worked at the time (The Chicago Urban League) had recently been trying to recruit a Boeing executive to its board of directors.

“WALL STREET HAS EMBRACED DEFENSE STOCKS”

Reading about Boeing’s good fortune last Thursday (I am writing on Tuesday, February 6, 2007), I was reminded of a story that appeared on CNN-Money in the spring of 2005. The story was titled "Wall Street Has Embraced Defense Stocks” (CNN-Money, April 26, 2005). It reported that military equities had become a shining jewel in the U.S. stock market. "The reason," CNN-Money pointed out, is "fairly simple:" "the ongoing military operations in Iraq and Afghanistan, not to mention an increased focus on homeland security."

"Shares of the twenty U.S.-based defense companies with a market value of at least $1 billion are up 30 percent," CNN-Money noted, " compared to just a 2 percent gain in the S&P 500." In a broadly challenging investment climate, CNN reported, "one sector has held up quite well. And it's helping to prove that one of the most overused clichés of professional sports is actually applicable to investing: You can't win without a good defense. Shares of the ten defense and aerospace companies in the S&P 500 are up an average of 5 percent this year while the broader market has sunk 4 percent, according to Thomson/Baseline. Boeing (Research), up 15 percent year to date, is the second best performing stock in the Dow this year. Meanwhile Goodrich (Research) and Rockwell Collins (Research) have both SURGED [emphasis added – P.S.] nearly 20 percent."

CNN-Money quoted a leading funds manager whose firm owns shares of leading military contractors Lockheed Martin, Northrop Grumman and United Technologies. "In spite of clear budgetary constraints," this manager explained, "there hasn't been any attempt to reign in defense spending.

(http://money.cnn.com/2005/04/26/markets/defense/index.htm)

EMPIRE ABROAD, INEQUALITY AT HOME: “THE PROFITS REVERT TO A FEW WITHIN”

Reviewing that CNN-Money piece and more recent business reports, I am reminded of Martin Luther King, Jr.’s observation that "something is [morally] wrong with capitalism” and his claim that “a nation that continues year after year to spend more money on military defense than on programs of social uplift is approaching spiritual death” (King, “A Time to Break the Silence,” speech to the Riverside Church, New York City, April 4, 1967).

Boeing, Lockheed Martin, Raytheon and the rest of the nation’s imperial “defense” contractors profit enormously from the fact that the United States government accounts for nearly half the military spending in the world and spends $28.50 on the military for: every $1.40 its spends on environmental protection, every $2.00 it spends on housing, every $2.70 it spends on nutrition, every $4.10 it spends on education and every $6.60 it spends on income security (see the National Priorities Project’s interactive tax chart at www.nationalpriorities.org/auxiliary/interactivetax chart/taxchart.html).

I’m also reminded of something that Noam Chomsky wrote two years after the assassination of the King:

“Perhaps a word might be added with regard to the commonly heard argument that the costs of the Vietnam War prove that United States has no imperial motives…The costs, of course, are profits for selected segments of the American economy, in large measure. It is senseless to describe government expenditures for petroleum, jet planes, cluster bombs or computers for the automated air war simply as ‘costs of intervention.’ There are, to be sure, costs of empire that benefit no one: 50,000 American corpses or the deterioration of the strength of the United States economy relative to its industrial rivals. The costs of empire to the imperial society as a whole may be considerable. These costs, however, are social costs, whereas, say, the profits from overseas investment guaranteed by military success are again highly concentrated in certain special segments of society. The costs of empire are in general distributed over the society as a whole, while its profits revert to a few within. In this respect, the empire serves as a device for internal consolidation of power and privilege, and it is quite irrelevant to observe that its social costs are often great or that as costs rise, differences may also emerge among those who are in positions of power and influence” (Chomsky, For Reasons of State [New York: New Press, 1970], p.47).

Much the same could be said in regard to the current and very different U.S. assault on the Middle East. It’s not enough to say (as some liberals and others dare to do today) that most United States citizens (or even just the rich) are not expected to “sacrifice” for Bush II’s so-called “war on terror,” described by The Decider as the great “ideological struggle of our age.” The bigger and deeper truth is that many super-wealthy Americans harvest remarkable profits from an imperialist system that imposes its greatest costs on lower- and working-class Americans while simultaneously reflecting and exacerbating the unjust and hierarchical socioeconomic and racial structure and repressive and authoritarian tendencies of the imperial homeland.

* Empire and Inequality Reports to date:

“Victory Without Vision,” Issue 1 (November 11, 2006), read at www.zmag.org/content/showarticle.cfm?ItemID=11386;

“Neanderthal Continuities of a Bipartisan Nature,” Issue 2 (November 20, 2006), read at www.zmag.org/content/showarticle.cfm?ItemID=11444;

“ ‘You Just Don’t Like George,’” Issue 3 (November 30, 2006), read at www.zmag.org/content/showarticle.cfm?ItemID=11511;

“ ‘ Nobody’s Leaving’: Never Mind Democracy and Imperial Fiasco,” Issue 4 (December 10, 2006), read at www.zmag.org/content/showarticle.cfm?ItemID=11598;

“Missions Accomplished,” Issue 5 (December 25, 2006), read at

http://www.zmag.org/content/showarticle.cfm?ItemID=11705;

“Happy Imperial New Year,” Issue 6 (January 6, 2007), read at www.zmag.org/content/showarticle.cfm?ItemID=11789;

“We’ve Done More Than Talk,” Issue 7 (January 19, 2009), read at http://www.zmag.org/content/showarticle.cfm?ItemID=11895;

“The Imperial Lexicon,” Issue 8 (January 26, 2007), read at http://www.zmag.org/content/showarticle.cfm?ItemID=11960;

“What is a Democracy?” Issue 9 (February 3, 2007), read at http://www.zmag.org/content/showarticle.cfm?SectionID=72&ItemID=12033;

Veteran radical historian, journalist, and activist Paul Street (paulstreet99@yahoo.com) is an anti-centrist political commentator located in Iowa City, IA, U.S. Street is the author of Empire and Inequality: America and the World Since 9/11 (Boulder, CO: Paradigm, 2004), Segregated Schools: Educational Apartheid in the Post-Civil Rights Era (New York, NY: Routledge, 2005), and Still Separate, Unequal: Race, Place, and Policy in Chicago (Chicago, 2005) and The Empire and Inequality Report.* Street’s next book is Racial Oppression in the Global Metropolis: A Living Black Chicago History (New York, 2007) will be released next June.

New CBO Data Show Income Inequality Continues to Widen

from The Center on Budget and Policy Priorities

Here's is a link to a study from The Center on Budget and Policy Priorities. This analysis finds incomes for the richest 1 percent of Americans rose by 20 percent -- or $146,000 -- in 2004, marking the fastest increase in 15 years. In contrast, incomes for the bottom fifth rose only 1.4 percent.

New CBO Data Show Income Inequality Continues to Widen

New Data Reveal Unprecedented Income Inequality

from The Economic Policy Instutute

A new report from the Economic Policy Institute reports that data from the Bureau of Economic Analysis through the third quarter of 2006 show that a historically high share of corporate income is going into profits and interest (i.e., capital income) rather than employee compensation. And a newly released Congressional
Budget Office (CBO) analysis of household incomes shows that a greater share of this capital income goes to the richest households than at any time since the CBO began tracking such trends.

New Data Reveal Unprecedented Income Inequality

Richest 2 Percent Own Half of World's Wealth

from Yahoo News

The richest 2 percent of adults in the world own more than half the world's wealth, according to a new study released by the Helsinki-based World Institute for Development Economics Research of the United Nations University.

The study's authors say their work is the most comprehensive study of personal wealth ever undertaken. They found the richest 1 percent of adults owned 40 percent of global assets in the year 2000, and that the richest 10 percent of adults accounted for 85 percent of the world's total.

In contrast, the assets of half of the world's adult population account for barely 1 percent of global wealth.

"It reflects the extreme nature of inequality around the world," one of the study's authors, New York University Professor Edward Wolff, told OneWorld. "Yes, we are richer than Africa and Latin America and most of Asia, but how much richer is what hadn't really been established until our study came out," Wolff added.

According to the report, the average American's wealth amounted to $144,000 in the year 2000, more than 100 times higher than the average Indian or Indonesian, whose assets totaled $1,100 and $1,400, respectively.

The study defined wealth as physical and financial assets--like personal savings and home, land, and stock ownership--less debts.

Besides the United States, only Canada, Western Europe, Japan, and Israel showed average personal wealth of more than $50,000.

Pakistan, Vietnam, Cambodia, many former Soviet Republics, and most of sub-Saharan Africa showed average personal wealth of under $2,000.

Conflict-ridden countries like Afghanistan, Iraq, and the Sudan did not report data.

"This is a reminder that most people do not live the way middle class Americans live," David Rauchman of the Washington, DC-based Center for Global Development told OneWorld. "That comes out of two centuries or more of history where North America and Europe have experienced steady and fairly rapid industrial development. Meanwhile, places like Asia and Africa haven't so much."

Rauchman said foreign aid programs and philanthropy would go part of the way toward closing the international wealth gap, but trade and immigration policies are also important.

"If we make it easier for clothing manufacturers and farmers in Bangladesh or Mali to ship their goods to the United States so Americans can buy them, that will help and it will be good for us too," he said. "Same thing for immigration. It's good for Mexico if Mexicans can come to the United States and send money home. If we make it easier for people to come and participate in our economy, it's actually good for economies in the rest of the world."

But unfettered free trade tends to benefit the wealthy at the expense of the poor, says Anuradha Mittal of the California-based Oakland Institute, a think tank that specializes in social, economic, and environmental issues. She says the rise of free trade has increased the wealth gap, both internationally and inside many countries.

Mittal cites as an example the North American Free Trade Agreement (NAFTA) signed in 1992 by the United States, Canada, and Mexico. "Instead of Mexico being able to export its food to the United States, what's really happened is that U.S. corn exports to Mexico have tripled, pushing 2 million Mexican corn farmers out of business. And those are the very people who then migrate [to the United States]."

Those migrants then work for low wages inside the United States, Mittal argues, pushing wages for all workers down.

In addition, says Mittal, "when you talk about the ability to export you're talking about big plantations, which creates further inequities inside of countries. You're not going to be talking about [improving livelihoods for] small farmers in Mexico or Honduras or India."

One solution put forward by the authors of the United Nations University report is expanding access to microcredit--small loans given to poor people who are not able to get traditional lines of credit from regular banks. The loans, which are often used to help establish or improve small businesses, have proved to be quite safe, with many lenders experiencing repayment rates close to 100 percent.

This month, Bangladeshi economist Muhammad Yunus was awarded the Nobel Peace Prize for his pioneering microcredit program. Yunus shared the award with the Grameen Bank, which he founded 30 years ago. The bank gives small, unsecured loans to nearly 7 million impoverished Bangladeshis--almost all of whom are women.

Yunus started by lending 42 people a total of $27.

"The excitement that was created among the people by this action got me further involved in it," he said in his Nobel acceptance speech in Oslo. "If I could make so many people so happy with such a tiny amount of money, why shouldn't I do more of it? That's what I have been trying to do ever since."

"Grameen Bank gives collateral-free income-generating loans, housing loans, student loans, and micro-enterprise loans to poor families and offers a host of attractive savings, pension funds, and insurance products for its members," Yunus added.

But despite its benefits, Mittal notes that microcredit alone is unlikely to put a significant dent in the international wealth gap.

"Research shows that more than 55 percent of borrowers after eight years of borrowing are still using their loans to buy food," she said. "So while microcredit is a good survival strategy, it is not a solution for development."