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The Truth Behind Trump's "Booming" Economy

The 40% of Americans who invest in the stock market are feeling more bouyant since the beginnning of 2019 then they were in December.

Yet the other 60% are not happy, and for good reason: They continue to suffer financial stress caused by decades of flat income.

And every time they make the slightest peep of complaint about a system rigged against them, the rich and powerful tell them to shut up because they should be grateful to the rich who provide them with any jobs at all.

These same 1%-ers  instruct them to work harder, pull themselves up by their bootstraps and stop bellyaching. Or get a second college degree, a second skill, a second job. Send the spouse to work, downsize, take a “staycation” instead of a real vacation. Or don’t take one at all, just work harder and longer.

Yet the barrage of recent scapegoating has resulted in workers believing they somehow deserve censure. And that’s a big part of the reason they’re unhappy. Somehow they ignorantly believe if they could work harder and longer and better, they would get ahead. They “choose” to bear the shame.

They psychologically can’t blame the system: the pro-corporate Supreme Court, the lobby money owned Congress, the "fake economic news" president. What does that say about their underlying American Dream?

And yet, it is the US economic system, the American big lobby money capitalist system, that has covertly conspired to crush them.

According to our government-massaged statistics, unemployment is low and the stock market is high. But a rising stock market primarily benefits only the top 40% of Americans who own almost 100 percent of stocks. And while more people are employed now than during the 2008-2009 recession, the vast majority of Americans haven’t had a real inflation-adjusted pay raise since 1979.

Compared to International Labor Stats

On a global comparison, it’s not so good out there for American workers. Last month, the US ranking dropped for the third year in a row in the World Happiness Report, produced by the Sustainable Development Solutions Network, a UN initiative.

These statistics reinforce those in a report released two years ago by two university professors: Reviewing data from the General Social Survey, administered routinely nationally, the professors found Americans’ assessment of their own happiness and family finances has, unambiguously, declined in recent years.

Americans work really, really hard. A third of Americans work a side hustle, driving an Uber or selling crafts on Etsy. American workers take fewer vacation days compared to other developed nations. They get 14 days but typically can only afford 10 days. 

And highest number of American workers in five years report they don’t expect to take a vacation at all this year. And Americans work longer hours than their counterparts in other countries.

Americans labor 137 more hours per year than Japanese workers, 260 more than Brits, and 499 more than the French - according to the International Labor Organization (ILO).

And the longer hours aren’t because American workers are laggards on the job. In fact they’re very productive. The U.S. Bureau of Labor Statistics calculates that the average American worker’s productivity has increased 400 percent since 1950.

If inflation-adjusted real wages had kept pace with productivity, as it did in the three decades after the end of World War II, American workers would be making 400 percent more. But they’re not. Their wages have flatlined for four decades, adjusting for inflation.

That means much more personal and family stress. Forty percent of workers say they don’t have $400 for an unexpected expense. Twenty percent can’t pay all of their monthly bills. More than a quarter of adults skipped needed medical care last year because they couldn’t afford it. A quarter of adults have no retirement savings.

Yet according to the American Dream promoters, Americans workers only need to work harder. And longer. And better.

Despite attempts to pound that American Dream carrot into Americans’ minds, it’s not the solution. Americans clearly are working harder and longer and better. The solution is to change the way the US capitalist system prioritizes wealth, which is stacked against middle-class workers.

Workers are bearing on their backs tax breaks that benefit almost exclusively the rich and corporations.

They’re bearing overtime pay rules and minimum wage rates that haven’t been updated in more than a decade.

They’re weighted down by on-going U.S. Supreme Court decisions that hobble unionization efforts and kneecapped workers’ rights to file class-action lawsuits.

They’re struggling under U.S. Department of Labor rules defining them as independent contractors instead of staff members.

They live in fear as corporations threaten to offshore their jobs - with the assistance of federal tax breaks.

Last year, the Republican corporate majority on the U.S. Supreme Court handed a win to corporatists trying to obliterate workers’ right to organize and collectively bargain for better wages and conditions. The court ruled that public sector workers who choose not to join unions don’t have to pay a small fee to cover the cost of services that federal law requires the unions provide to them. This bankrupts labor unions. And there’s no doubt that Republican right-wingers are gunning for private sector unions next.

This kind of relentless attack on labor unions since 1945 has withered membership. As it shrank, wages for both union and nonunion workers did too.

Also last year, the Supreme Court ruled that corporations can deny workers access to class-action arbitration. This compels workers, whom corporations forced to sign agreements to arbitrate rather than litigate, into individual arbitration cases, for which each worker must hire his or her own lawyer. Then, just last week, the right-wing majority on the court further curtailed workers’ rights to class-action suits.

In a minority opinion, Justice Ruth Bader Ginsburg wrote that the court in recent years has routinely deployed the law to deny to employees and consumers “effective relief against powerful economic entities.”

No matter how hard Americans work, the Republican mindset majority on the Supreme Court has hobbled them in an already lopsided contest in favor of gigantic corporations.

Trump's administrative branch is no better. Just last week, the Trump Labor Department issued an advisory that workers for a gig-economy company are independent contractors, not employees. As a result, the workers, who clean homes after getting assignments on an app, will not qualify for federal minimum wage (low as it is) or overtime pay. Also, the corporation will not have to pay Social Security taxes for them. Though the decision was specific to one company, experts say it will affect the designation for other gig workers, such as drivers for Uber and Lyft.

Also, Trump's Labor Department has proposed a stingy increase in the overtime pay threshold—that is, the salary amount under which corporations must pay workers time and a half for overtime. The current threshold of $23,660 has not been raised since 2004. The Obama administration had proposed doubling it to $47,476. But now, the Trump Labor Department has cut that back to $35,308. That means 8.2 million workers who would have benefited from the larger salary cap now will not be eligible for mandatory overtime pay.

It doesn’t matter how hard they work; they aren’t going to get the time-and-a-half pay they deserve.

Just like the administration and the Supreme Court, Republican tax bill from the 2017 Congress grovel before corporations and the rich. Look at the tax break they gave one percenters in 2017. Corporations got the biggest cut in history, their rate sledgehammered down from 35% to 21%. The rich reap by far the largest benefit from those tax cuts through 2027, according to an analysis by the Tax Policy Center. And by then, 53 percent of Americans—that is, workers, not rich people—will pay more than they did in 2017 because tax breaks for workers expire.

By comparison, middle class Americans pay a 22% tax on taxable income over $78,000 a year, while Apple pays 21% on their billions of dollars of net profit. The 22% tax bracket moves down to $45,000 of taxable income for single individuals.

Lies My President Never Told Me

Trump's White House Council of Economic Advisers predicted the corporate tax cut would put an extra $4,000 in every worker’s pocket. They swore that corporations would use some of their tax cut money to hand out raises and bonuses to workers. That never happened.

Middle class Americans got the equivalent of 6% of corporation tax savings. In the first quarter after the tax cut took effect, many American workers on average received a "fake news" raisein their consecutive paychecks, but they ended up owing taxes when they filed their 2018 tax returns. Talk about "bait and switch" tax benefits!

Yet corporations spent most of their tax break savings on stock buybacks, a record $1 trillion worth, which raised stock prices, and put more money in the pockets of rich CEOs and primary shareholders.

That’s continuing this year. Workers are not going to see that $4,000 the 2017 Trump / Republican tax reform legislation promised.

No wonder they’re unhappy. The system is, again, working against them.

Leo Gerard / Independent Media Institute

The Electric Car Revolution is Accelerating

Electric cars will outsell fossil-fuel powered vehicles within two decades as battery prices plunge, turning the global auto industry upside down and signaling economic turmoil for oil-exporting countries, according to an important Bloomberg New Energy Finance (BNEF) study.

The BNEF forecast says adoption of emission-free vehicles will happen more quickly than previously estimated because the cost of building electric cars is falling so fast. The seismic shift from dirty energy to clean energy will see cars with advanced plug-in capability account for a third of the global auto fleet by 2040, displacing about 8 million barrels a day of oil production—more than the 7 million barrels Saudi Arabia exports today. 

“This is free market economics, pure and simple economics,” BNEF’s lead advanced-transportation analyst Colin McKerracher said before forecasts were published on Thursday, July 6, 2017. “Lithium-ion battery prices are going to come down sooner and faster than most other people expect.”

The forecast is BNEF’s most bullish to date and is more aggressive than projections made by the International Energy Agency. Surging investment in lithium-ion batteries, more sophisticated manufacturing capacity at companies including Tesla Inc. and Nissan Motor Co., as well as emerging consumer demand from China to Europe support the BNEF’s projections, which also include:

1) In just eight years, electric cars will be as cheap as gasoline vehicles, pushing the global fleet to 530 million vehicles by 2040

2) Electricity consumption from EVs will grow to 1,800 terawatt-hours in 2040, or 5 percent of global power demand, from 6 terawatt-hours in 2016

3) There's around 90 gigawatt hours of EV lithium-ion battery manufacturing capacity online now, and this is set to rise to 270 gigawatt hours by 2021.

However, charging infrastructure on the road will continue to be an issue with distribution bottlenecks capping growth in key Chinese, U.S. and European markets - emerging in the mid-2030s.

Lithium-ion cell costs have already fallen by 73 percent since 2010 and BNEF predicts innovation of battery manufacturers will accelerate and lead to further steep declines in average prices over the next two decades. While they won’t fall as fast as solar panels, it could still lead to suppliers getting squeezed as they compete for contracts, McKerracher said. “There’s an element of competitive dynamics and a real possibility of oversupply in the lithium ion battery market that will serve to hammer down prices,” he said.

The world will need the equivalent of 35 of the so-called Gigafactories like the one built by Tesla founder Elon Musk in Nevada over the next 13 years to meet the power demands of electric cars, according to BNEF. The global shift toward electric vehicles will create upheaval for the auto industry.

Moreover, the oil industry majors will be harmed by reduced gasoline demand, as well as spark plug and fuel injection manufacturers whose products aren’t needed by plug-in cars. BNEF, which last year forecast as much as 13 million barrels of oil a day was being displaced by electric cars, said its revised 8 million barrel a day figure is “likely understated. ”While traditional car suppliers may be hurt by EV growth, some commodities will get a lift, according to BNEF:

    1. Graphite demand will soar to 852,000 tons a year in 2030 from just 13,000 tons in 2015

    2. Nickel and aluminum demand will see demand rise to 327,000 tons a year from 5,000 tons now

    3. Production of lithium, cobalt and manganese will each increase more than 100-fold

It’s the world’s biggest economies—China, the U.S. and Europe—that will drive demand for battery powered cars over the next 25 years, according to BNEF. These governments which have already been the most advanced in providing subsidies and installing charging points, will reap the benefits sooner than other emerging economies like India. "Electric cars are intrinsically cheaper than gas or oil fuelled cars because they're simpler and their maintenance is a lot easier,” said Enel SpA Chief Executive Officer Francesco Starace said in an interview in Rome. In Europe, almost 67 percent of new cars sold will be electrified in 2040, and 58 percent of sales in the U.S. and 51 percent in China, BNEF said.

Unfortunately, there's some uncertainty in the U.S., where the backwards thinking Donald Trump could disrupt electric vehicle growth by withdrawing support for this essential smart technology in the world’s second biggest car market.

“The next 6 to 8 years become very important,” McKerracher said. “If those volume amounts falter, then some of those cost reductions may not come to pass and that will affect the crossover point and therefore the overall adoption level.”

Jess Shackleman, Bloomberg News, July 7, 2017 

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