Author: Patrick Hill Page 11 of 18

Federal Judge Strikes Down Medicaid Work Rule

On July 2, 2018

(Editor Note: Insight Bytes focus on key economic issues and solutions for all of us, on Thursdays we spotlight in more depth Solutions to issues we have identified. Fridays we focus on how to build the Common Good. Please right click on images to see them larger in a separate tab.)

Photo: gcgi.com

Last Friday, a federal judge struck down a policy shift by the state of Kentucky approved by the GOP Administration to require all Medicaid patients to work, or volunteer to receive benefits. Judge James E. Boasberg of Federal District Court for the District of Columbia, an appointee of President Obama, handed down a ruling that the Trump administration’s approval of the plan had been “arbitrary and capricious” because the plan had not provided for state support of medical insurance for all citizens “ a central objective of Medicaid.”

We noted in our blog on the topic last January:

“The White House announced approval of a work requirement for Medicaid recipients, yet most already work. Why? The Kaiser Family Family found in 2016 that 59 % of Medicaid patients already work:

Source: The Kaiser Family Foundation – 2016

So of the 41 % not working who is going to work? The Administration said those that are disabled, ill, in school or caregiving will not be required to work or provide community service. Does that mean that those that are retired will be required to find work? Only 8 % said they could not find work. We view this as the beginning of an effort to cut down the rolls and thus the costs of Medicaid. Instead of being viewed as a welfare program, Medicaid should be viewed as medical insurance. We don’t ask Medicare enrollees to work, and private insurers don’t ask for patients to work.”

We are pleased to see that Judge Boasberg agreed with us that Medicaid should be viewed as medical insurance not a benefit for work program.

The view that if people don’t work they don’t need health insurance is patently false. People need health insurance from the day they are born, whether they are working or not, married or not, being a volunteer or caregiver or not. What happens today is we all pay in increased premiums and health provider pricing for those that do not have insurance when health they use medical services. Often, these uninsured patients are charged an exorbitant price which is not usually what the cost is of he service or test, they patient can’t pay it because they have no insurance, then the hospital writes off the loss. Finally, to recover these unfunded losses the hospital charges more to other patients because the uninsured patient is an overhead cost.

Next Steps

Our recommendation is for a national medical insurance program for all which is inclusive of employer based plans for those that are working. We detailed our plan in our blog – The Free Ride Is Over: Time for Single Payer Insurance. As we noted in our call for a single payer plan:

“The idea of insurance is that we establish a large pool of 360 million people, to spread the costs of the sick along with the well, so that when the well get sick they will have services that don’t cost an unreasonable amount. The health insurers have somehow talked the American public into the idea that they get to cream off the well pool from the sick one (which is more expensive) and then sock it to people that are sick. That is just plan wrong.”

Building An Economy for the Common Good

By Patrick Hill

On June 29, 2018

In Common Good, Corporate Nation State, Corporate Power, Corporate Reform, Economy, Social Responsibility

(Editor Note: Insight Bytes focus on key economic issues and solutions for all of us, on Thursdays we spotlight in more depth Solutions to issues we have identified. Fridays we focus on how to build the Common Good. Please right click on images to see them larger in a separate tab.)

Image: Your Little Planet

In the past week, American Express won a gag order over merchants when the Supreme Court handed down a decision that allowed the huge financial services company to require all their merchants not to tell their consumers other cards had cheaper swipe fees. Amazon announced the acquisition of Pill Pack a mail order pharmacy company, which sent financial shock waves through the drug store industry. So, it goes on, a Corporate Nation State (CNS) like American Express or Amazon have their way limiting consumers choices to reduce costs and to take over the drug marketplace with no fair market rules in place.

Are these two companies focused on building the common good, fair play rules in the marketplace, doing what is right for consumers and taking social responsibility for the impact of their decisions? No. There is no countervailing power when Congress, The Supreme Court and the Executive branch are all doing the bidding of CNS organizations.

Corporations run our federal government by donating hundreds of millions of dollars (they have no campaign donation limits) each year to congressional campaigns through super PACs. Some CNS entities have large lobbying offices in Washington, like Amazon with 94 lobbyists knocking on Representative and Senator doors every day! Do we have an army of lobbyists twisting arms for our interests? No.

Where can we look for corporate reform to build the common good? Larry Fink, the CEO of Blackrock, a $6.3 trillion institutional investment corporation, sent a letter to 1000 CEOs of companies they invest in telling them that beyond profits they would be evaluated on how well they are taking care of the environment, responding to climate change, having a diverse workforce, and fairness with their employees. We applaud Mr. Fink’s move, and look to more investors to call upon corporate management to be held accountable for their social responsibilities.

There are corporate accountability frameworks that have been receiving widespread acceptance and government support. In the European Union a group called the Economy for the Common Good (ECG), has over 2400 corporate endorsers and almost 10,000 individuals support their effort to require corporations report on a Common Good Balance Sheet their social responsibility activities. The EU has adopted a non-binding directive requiring companies of 500 employees and ‘public interest’ to report on human rights, diversity, labor rights, the environment, health and anti-corruption measures. The report is not included with the corporate annual report and is therefore not audited.

The Common Good Balance Sheet is divided into four key accountability areas: human dignity, solidarity and social justice, environmental sustainability, and transparency and co-determination:

Source: Economy for the Common Good – 6/29/18

The ECG is now working to make actual changes in corporate behavior by focusing on gaining support for these eight issues:

universal (all values and relevant issues)
legally binding
measurable and comparable (e. g. using points)
externally audited
generally understandable (for the public)
public (on all products, websites, shop doors)
developed in a participatory process
linked to legal incentives (taxes, tariffs, …)

The first phase has been completed of their initiative to gain EU nonbinding support next they look for a binding EU directive by 2020 followed by integration financial reporting.

We need to find corporate leaders in the US that see the vision of an Economy for the Common Good, embrace it and implement its ideas in their day to day operations – while measuring the results to show it is a better way to run a business. A business can build an economy that works for all and still be a thriving profitable enterprise.

Startup Creates Executive Tracks For Women With Innovative Job Definitions

By Patrick Hill

On June 28, 2018

In Jobs, Solution, Woman CEO, Women Careers

Image: vnnc.org

Women often face job flexibility issues in managing their job. Time to be a caregiver, take care of children, or just needing to take care of kids when they get sick and can’t be in daycare. Werk co-founder, Anna Auerbach found in the workplace there was just not enough jobs that offered flexible hours, location or time agility to put women on an executive track. Werk offers products to help companies change their thinking about full time W-2 jobs but with some unique flexible characteristics.

Source: Werk.com

The Werk team has identified 6 different types of flexible work through their research that companies need to be more inclusive, hire more women and accommodate men with flex time needs. The options range from Desk Plus – with different company locations for an employee’s desk, to MicroAgility where the worker can step out of the office for 1 – 3 hours to take care of an emergency. The firm trains their client company executives on how to re frame their jobs and how to recruit for more women and men who need flexible schedules.

We have seen the need for more women executives starting new businesses, in venture capital, angel funding and mature companies. It has been difficult to bring more women into the job market due to the fact their needs for jobs with greater flexibility have not been met by standard HR job definition practices. It is time these practices change to hire more women into management roles and assist men that may have caregiver or family needs.

EPA Abdicates Common Good Responsibility to Ensure Clean Water

By Patrick Hill

On June 27, 2018

In Climate Change, Common Good, Environment, EPA, Health, Pollution

Photo: commonfloor.com

The Wall Street Journal yesterday disclosed that Scott Pruitt, EPA Director, is working to limit the veto power of the agency over large projects impacting water quality. The agency has used the veto power sparingly – only 13 times since it was given the authority in the Clean Water Act of 1972.

Pruit believes the veto authority has gone too far impeding economic development, “I am concerned that the mere potential of EPA’s use of its… authority before or after the permitting process could influence investment decisions and chill economic growth by short-circuiting the permitting process,”, in a 4 page memo to regional staff.

Why is this clean water common good responsibility so hard to execute? If a person dumped all his waste water and sewage in the street in front of his neighbors’ house, the neighbor would be upset and rightfully so. So, why do we treat mines, real estate developments, or port development any differently? Is it because they are trying to make a profit while desecrating the land so it is ok?

Chromium-6 a known carcinogen made famous in the movie ‘Erin Brockovich’ has been found in the drinking water of millions of Americans. The non-profit Environmental Working Group has been monitoring the status of chromium-6 found in 2017 the substance in the drinking water of over 200 million people. So, there are dangerous substances that still need to be monitoring in our drinking water.

The EPA has not taken in its public stewardship responsibility to the level of other countries, there are thousands of chemicals that can cause pollution and possible health hazards – none have been added to the pollutants list since 2000. The list is small only 90 are covered in the Clean Water Act out of about ten thousand. In the European Union they closely track over 2,500 different chemicals.

While the EPA is not as diligent as it needs to be, President Trump a year ago weakened the Clean Water Act requirement that mining companies ensure that water dumped into streams be cleaned to safe water standards. The policy shift impacts the drinking water of over 117 million people.

Source: Scientific American, – 3/10/17

The GOP Administration continues to undermine protections in place for 40 years to ensure clean water is available to all citizens. The lead levels found in Flint, Michigan water show that in some areas around the country the job is not getting done. Weakening the Clean Water Act in regard to mining dross and limiting the use of EPA veto on projects are just two examples of an indifferent and dangerous attitude by the agency.

Next steps:

In a Gallup poll 57 % of the people said they favor ensuring environmental quality over economic growth when a decision needs to be made.

Source: Gallup – 4/2/18

When are we going to get a government that represents the will of the people on issues of our very survival like the environment? The EPA Director worked as attorney general in Oklahoma relaxing environmental laws and now he is plowing ahead not protecting the public and not steadfastly defending the common good. Congress needs to act to update the Clean Water Act from updates in the 1980s, give the EPA a clear message that protecting the public is the first priority over economic costs.

Supreme Court Empowers American Express To Gag Merchants

By Patrick Hill

On June 26, 2018

In Corporate Nation State, Corporate Power, Restraint of Trade, Supreme Court

Photo: consumerist.com

Supreme Court Justice, Clarence Thomas, wrote in the majority opinion released yesterday, “two-sided platforms, differ from traditional markets in important ways. Since card companies deal with both merchants and consumers.” He continued “people challenging actions as anticompetitive must take account of the effect on both sets of market participants.” The majority did not see the restraint in trade by American Express requiring merchants to only offer their card, and not tell customers that Visa and Mastercard had cheaper swipe fees.

The majority was by only one vote 5-4, with Justice Stephen J. Breyer reading his minority opinion summary, an unusual step, when he said, “I particularly fear the interpretive impact of the majority’s discussion of what it calls ‘two-sided platforms,’ in an era when that term might be thought to apply to many internet-related goods and services that are becoming ever more important.”

The bottom line is this: American Express can gag its merchants legally from telling their customers that American Express fees are higher than other cards and they will have to raise prices as a result. Plus, the implication is that other cards are not available for customers to pay for their purchases.

American Express has a huge market share in credit card networks:

Source: valuepenguin.com – 2017

Yes, that’s right Amex did .695 trillion dollars in transactions in 2016! While Visa does have a larger share, American Express is essentially gaging its merchants about the costs of transactions and restraining trade.

Next Steps:

We are frustrated and disappointed that SCOTUS has sided with a Corporate Nation State, American Express, to support continuing to build their financial empire at the cost of retailers optimally running their businesses. Think of retailer’s position – caught in an Amazon competitive whirl wind, Internet global access to products and constantly trying to gain the attention of shoppers to come into their store.

The American Express ‘steering clause’ is clearly a restraint of trade, we need court decisions focused on creating a level playing field for all companies to do business. Congress needs to pass a law making it clear that these ‘two sided’ platforms are just another form of distribution so a product or services provider cannot restrain the distributor from exercising his business rights and doing what is right for their customer.

15 Million Retiring Americans Face A Declining Standard of Living

By Patrick Hill

On June 25, 2018

In Consumer Squeeze, Low Income Finance, Retirement, Standard of Living

Photo: pbs.org

The grand plan by financial services companies thirty years ago was to have Baby Boomers invest in 401k matching plans offered by their employer to build a secure retirement nest egg. The 401k plan funds would be invested in the stock market. Companies would eliminate their defined benefit pension plans thereby reducing their retiree costs and transfer the savings responsibility onto the worker. The reality is that worker saving just never happened. Since 1970, 90 % of pensions have been replaced by 401k or IRA plans. Unfortunately, many Americans raided these plans to pay for living expenses during the Great Recession

A Wall Street Journal analysis showed that 40 % of all households headed by people aged 59 -70 lack sufficient financial resources to maintain their standard of living during retirement. The situation is due in part to lack of saving in 401k plans and general savings.

Sources: Center for Retirement Research at Boston College, The Wall Street Journal – 6/22/18

Adding to the savings challenge, over the past 10 years incomes have stagnated making it extremely difficult for workers to put away more money into their 401k or savings plans.

Sources: Urban Institute analysis of Census Bureau data, The Wall Street Journal – 6/22/18

Consumer debt has soared for auto and student loans, further squeezing their ability to save. The combination of being left on their own to manage their retirement savings, limited matching from corporations not matching pension income streams and debt means that households are not saving enough to maintain their standard of living.

Sources: Center for Retirement Research at Boston College, The Wall Street Journal – 6/22/18

The situation defaults to retirees relying on government sources completely for retirement income, working longer than they had planned or gaining assistance from children. While, funding help from children may work for temporary bridge loans, ongoing assistance will hurt their children’s ability to save as well, causing a snowballing effect on future saving.

Next Steps:

From our previous analysis on the retirement crisis:

“Our politicians have designed a failure prone retirement system allowing corporations off the hook providing full defined benefit pension programs with professional management. Instead, 401k employee and employer match defined contribution programs were created where the individual is responsible for investing retirement funds safely. The present retirement program is a patchwork of 401ks, IRAs, Roth IRAs and SEP programs for small business. “

We continue to see many retirees at or below the poverty level:

“Today, Social Security only provides a $12,000 a year benefit to the average retiree. Yet, Social Security provides 80 % of the benefits that 40 % all retired people depend on. A Retirement Savings Account would have as a core principle that the combination of Social Security and worker’s savings provide at least a guaranteed income at the poverty level at age 65.”

Social Security income is particularly difficult for women who made less income working. In 2014 women received on average $4,500 less per year than men in retirement.

Our recommendation is for a single Retirement Savings Account:

“Funds deposited by workers into their Retirement Savings Account would be tax deferred up to $40,000 per year until age 65 similar to a traditional 401k today. Most workers will see a lower tax rate at retirement as this provision allows for lowering the cost of saving for retirement during high salary tax years. Corporations contributing to a workers’ Retirement Savings Account would be allowed up to a 50 % corporate tax deduction on the matching dollar amount to incent companies to contribute.

There would be no cap on total funds added to the Retirement Account by a worker. Workers would be allowed to obtain a medical or education loan with their retirement account as collateral but only up to 10 % of the value, which if defaulted and not paid back, would be paid back on a pro-rated basis by a Social Security deduction beginning at age 65.

This Retirement Savings Account proposal meets 12 core principle requirements by the Retirement USA, a Washington D.C retirement advocacy group including: universal coverage, secure retirement, adequate income, shared responsibility, required contributions, pooled assets, payouts at retirement, lifetime payouts, portable benefits, voluntary savings, efficient and transparent administration and effective oversight.”

The crisis for our retirees continues to worsen as Congress does nothing to look at the root causes of the income challenge. We need to develop innovative solutions to make the golden years for our senior citizens secure now.

Amazon’s Growing Corporate Power In Washington – Threat to Capitalist Democracy

By Patrick Hill

On June 20, 2018

In Anti Trust, Corporate Nation State, Corporate Power, Corporate Reform, Executive Compensation, Stock Buybacks

Source: e-brand.biz

An oligarchy is defined by Wikipedia as, “a form of power structure in which power rests with a small number of people”. One of the Elite is corporate tycoon Jeff Bezos, Amazon founder, who is thought to be the wealthiest person in the world with net worth estimated at $141 billion. He wields great corporate power leading an innovative company, pioneering e-retailing when many said it couldn’t be done building a $177 billion empire in e-Commerce, web services, grocery, and just about everything you can buy in a store you can get from Amazon. Amazon owns 43 % of the e-Commerce market, and has been responsible for a complete transformation of brick-n-mortar retailing causing the loss of thousands of jobs. The company name is synonymous with going out of business as some store owners declare they have been ‘Amazoned’.

Amazon has one of the largest lobbying forces in Washington, 94 strong:

Sources: The Center for Responsible Politics, The Wall Street Journal, 6/20/18

Amazon spent $13 million on lobbying and is one of the top spenders on lobbying along with Google, AT & T and Oracle.

The Amazon corporate power juggernaut keeps rolling. The e-Commerce giant owns 50 % of the book print sales market for publishers, with Barnes and Noble in the teens and independent book sellers about 6 – 8 percent. Ten years ago, independent book stores held a 30 % share of the book print sales market until Amazon drove them out of business, with convenience and not being required to pay sales taxes to states (though the Supreme Court just ruled last week that e-Commerce firms must pay sales taxes). Now, in an ironic twist the firm has 3 brick- n-mortar stores and is opening 5 more in 2017- so Amazon drives the competition out of business, with low cost prices and no taxes then starts opening brick n-mortar-stores. Is that fair? In audio books Amazon owns Audible the No. 1 provider of audio books where last year listener – readers heard over 2 billion hours of programming. The Kindle subscription business holds 14 % of the e-reader market and is the fastest growing segment increasing 4 % in 2016

Amazon is humongous compared to its competitors with brick-n-mortar stores:

Source: visualcapitalist.com – 12/30/16

Amazon is larger than the next 8 competitors and it is killing their businesses by amortizing its cut rate prices with profits from its Business to Business cloud enterprise – Amazon Web Services (AWS).

Source: Geekwire – 10/1/16

Without AWS Amazon would not be able to take profit from the B to B side of the business and fund the cut rate prices driving other stores out of business. While it may seem like this is capitalism ‘creative destruction’ at its best, this condition strikes us as unfair competition. Add a tax cut giveaway to corporations like Amazon, and the juggernaut keeps picking up speed at the expense of workers and democracy.

Next steps:

One Lobbyist Limit – The Company is a citizen according to the Supreme Court in Citizens United, then good it has one lobbyist representative to Congress.
Sunshine Contractor Monitoring – Amazon and the top 100 government contractors would have to contribute to a web site noting their business with the Federal Government, revenue from the contracts, agencies working with, number of government staff working with Amazon, Amazon staff size working on projects, where they are located, and all contacts with Congress, Executive branch staff – date, time, attends, discussion top, money involved, follow up. All these details would be available to the public on a web site 24/7. These disclosure are a ‘annual report’ to the people of the US about what the top 100 contracts are doing for our federal government, and us and how they are contributing to our government and society goals.
Campaign Contribution limits – $2700 per corporation if they are a person, that is all a citizen is allowed to contribute, and the Supreme Court found corporations were citizens, so Amazon has the same limit as a citizen.
Corporate Reform – top 2 corporations in an industry sector must have a minority number of outside board members elected by all the shareholders. Employees can form ‘councils’ along the line of the German worker council models. Salaries for executives would be limited to 50 times the average worker in the firm (consumer discretionary sector the average for CEOs is 350 times, Bloomberg, Feb 1 2018)., Stock buy backs need to end, or be phased out as they are artificially raising the price of stock on major exchanges by 20 – 15 % experts estimate just to line the pockets of executives and major shareholders, the funds are not going to wage increases, productivity investments or job training.
Anti – trust – Amazon needs to be broken up into a corporate web business – Amazon Web Services, and grocery business (Whole Foods never should have been approved) spun off. The e-Commerce business needs to stand on its own, plus we need to look for other ways to create fair- play markets possibly separating services from distribution,

Mississippi Life Expectancy Same as Libya – Why?

By Patrick Hill

On June 19, 2018

In Health, Health insurance, Heartland Economics, Life Expectancy, Trump Trade War

Photo: newsok.com

An insightful analysis in the Journal of the American Medical Association and the World Health Organization shows how far we are behind in Heartland medical care. A comparison of life expectancies in many of our Heartland states are as poor as many war torn or developing countries in pairings like, Mississippi – Libya, Tennessee – Gaza Strip, in a similar range as Libya and Gaza fall Kentucky, West Virginia, Arkansas, Louisiana, and Alabama.

Sources: JAMA, WHO, Signal The Wall Street Journal, The Daily Shot – 6/18/18

Many of these states in the South and Midwest have the highest rates of cancer, diabetes, and opioid use in the U.S. As globalization took many factory jobs away from the Heartland, medical service providers, doctors and other health professionals left for cities or the coasts where they had transferable skills and could make a better income. Plus, the number of rural hospital closures has been accelerating in the past 8 years with 120 going out of business since 2005. Researchers at the University of North Carolina who led the study believe the trend in more closings will continue to accelerate as costs go up, people move out and businesses are financially challenged. Good health is often found where there are good incomes and healthy businesses.

We noted in our blog of March 25^th that:

“Personal Income growth rates in heartland regions continue to lag the coasts by 3.8 to 2.0 % comparing income growth from 2016 to 2017. The following chart from the US Bureau of Economic Analysis shows how large the gap is:”

Source: US Bureau of Economic Analysis, The Wall Street Journal, The Daily Shot – 3/26/18

“Core issues for the lack of growth are young people moving out, industrial companies leaving for non-union states or moving factories overseas, automation, poor health, slow Internet speeds and fewer education opportunities. Added to these issues which have trended in these ways over the past 20 years are now tariffs on imports with soybean farmers threatened in the Midwest with a possible loss of $624 million where they already are competing with lower price soybean products from Brazil.”

As the Trump Trade War heats up prices of many Heartland agriculture crops have been falling such as soybeans by 2.20 % and corn by .62 % today alone. As prices and foreign customers find other suppliers Midwest and South farmers will find their customers have moved onto other countries hurting sales.

Other tariffs in steel and aluminum are squeezing Midwest businesses.

“In the advanced manufacturing sector which is based in the Midwest and South will likely see increases in imported aluminum and steel prices of between 10 – 25 % used in their products they resell. These price increases threaten their ability to compete and may have to lay off workers.”

The situation is in a downward spiral, as federal tariff and trade policies don’t help in turning around the economic, health and educational opportunities for these mostly rural regions.

Next Steps:

Our heartland neighbors continue to feel under siege from many different directions. We discuss these issues in our blog – The Hallowing Out of America’s Heartland. We recommend that a major set of investments be made with the federal government providing seed funding for a partnership between non-government organizations, health services providers, universities, corporations and state and local government. To bring focus to the development process we propose that Heartland Development Centers (HDCs) be located in key regions maybe near a major university – land grant universities are good candidates located in rural communities. Experts from across the country in HDCs would join together with local leaders in customizing solutions to build entrepreneurship centers, high quality health services, high speed Internet services, job and career training and other services necessary to renew the economic vitality of these regions.

Tariffs Drive Price Increase of 17 % for Washers – Dryers As Predicted

By Patrick Hill

On June 18, 2018

In Consumer Squeeze, Inflation, Tariffs, Trump Trade War

Photo: wikipedia.org

When the GOP Administration decided to protect the US appliance industry by awarding tariffs of 20 % on imported washers and dryers we predicted that the price of washers and dryers would rise. These appliances are basic to every household, with price rises hurting workers the most as they have seen their wages stagnant since the last recession. The three-month price increased for washing machines and dryers by 17 %. Ouuucch.

Sources: The Wall Street Journal, The Daily Shot – 6/18/18

From our blog on January 24 of this year:

“with a 20 % penalty on the first 1.2 million machines imported and a 50 % rate for any imports above that level. A 50 % tariff was awarded on all washing machine parts imported – all penalties are for a three year period. The administration is protecting Whirlpools’ market share of 43 %. LG responded by announcing price increases up to $50 per machine or more.”

Since January, Whirlpool responded to LG price increases raising their prices as well. We observed then too:

“These tariff actions will hurt consumers by first raising prices on imported machines then Whirlpool will raise prices by virtue of increased market strength with competitors losing share.”

So, what happened, prices have zoomed up by 17 % on all laundry appliances. The highest prices since 2006, actually durable goods prices have been good news on the inflation front declining over the past 10 years since the recession.

Consumer Reports notes that both LG and Samsung are starting up plants in the US to build washers and dryers, with possible volumes to move shipments below the 1.2 million volume level where the tariff kicks in. It remains to be seen how Whirlpool and the industry responds to prices on US built machines or will just keep prices high as long as the tariffs are in place.

Next Steps:

The Administration has had its time to perform an economic experiment on the American consumer, maybe it worked forcing Samsung and LG to startup plants in the US. However, it may just act as a catalyst for all manufacturers to keep prices high while the tariffs are in place. It’s time to examine in depth, understanding why US manufacturers are concerned about imports to answer the question if Whirlpool has 43 % market share why is it doing poorly? Economic analysis is required by experts, not shoot from the hip policies to satisfy a minority political segment that will actually get hurt hardest when the layoffs in the Midwest start happening as sales fall. The basic economic principle is that when prices rise demand falls – eventually. This administration can’t defy this principle all it tries. Let’s understand what is really happening and develop a win-win plan for consumers, manufacturers and importers.

The Rich View Our Government as A Trusted Rule Keeper, The Common Man Not So Much

By Patrick Hill

On June 15, 2018

In Common Good, Corporate Nation State, Environment, Executive Compensation, Labor, Stock Buybacks, Student Debt, Worker Wages

Image: Your Little Planet

Thomas Jefferson and James Madison saw the need to frame a government such that ‘forced compromises’ would push political leaders to focus on the Common Good. The institutions that maintain our common good include the federal government three estates: The Supreme Court, Congress and The Executive. In addition, the Fourth Estate, a Free Press is crucial for our citizens to have access to fair and impartial reporting about the activity of government officials and their policies. We have spotlighted the key role Education, as the Fifth estate, plays in educating our people to make critical decisions and understand comprehensively the information they receive from a Free Press.

Trust in our federal government has been falling since the presidency of Lyndon Johnson in 1965.

Source: Pew Research Center – 12/14/17

We noted in our first post on the Common Good that there were two factors contributing to the decline in trust:

“We see two major factors for the lack of trust. One, is that economic inequality has been increasing over the last 60 years to the point where it is at the worst it has ever been since 1929. Americans expect their government to be the rule keeper of a fair shot at economic opportunity not a bastion for the rich and powerful. As wealthy donors have taken over control of both major parties, the influence of the average citizen has been reduced to nearly nothing except at the ballot box – but not in legislative policy.”

The second major factor is the change in information access and news viewing habits of our society.

“In the 1950s and 1960s families gathered around the television set to watch Walter Cronkite or Huntley and Brinkley bring them the news for the day. These news anchors had teams of trained journalists in how to gather news, provide airing of opposing views and investigation to reveal the facts of the story. As cable news programs became popular people drifted away from central network journalist supported news programs toward popular ‘viewpoint news’ programs like Fox News or CNN. Then, from 1995 until today, the Internet was a catalyst for the growth of blogging, and ‘friend news’ on Facebook which had virtually no formally trained journalists and limited understanding of the difference between facts and opinions. Opinions spread virally through the Internet often with no foundation in formal fact gathering or fact finding investigation techniques. Today, we even have presidential spokespersons talking about ‘alternative facts’ to justify their policies or opinions.”

Trust gaps by income level are increasing around the world with many developed countries showing double digit gaps between the top income quartile and the bottom income quartile and the U.S. with the largest gap:

In the U.S. incomes for the lower 80 % have been largely stagnant for the past three decades since the Reagan years, higher education costs rising to levels never seen before with student loan debt at $1.5 trillion dollars. In short, lower and middle income parents expect their children to have fewer opportunities and to make less money over their lifetime. This growing sense of hopelessness is in part triggering the populist movements we see world-wide. The top quartile trust government institutions the most because they are getting the benefits, tax cuts, relaxed environmental policies to allow their businesses to make as much money as they can, and continued stock buy backs to make even more money instead of increasing worker wages. Workers see their votes not making a difference as Congress is at the beck and call of Corporate Nation States who make multi-million dollar campaign contributions and the Executive Branch now run by billionaires.

Little wonder the Common Good is not embraced by all people, for the rich they are on top of the economic pyramid. The rich get the laws they want and aren’t interested in sharing their wealth or time to build the Common Good.

Here is what will likely happen, in the end the rich will need to see that it is in their interest to build the Common Good, by contributing to our institutions of government and common people or they will lose what they already have and probably a lot more.