Bob Lord

Posted by Bob Lord

Bill Gross, co-founder of the investment firm Pimco and one of the wealthiest men in the world, spoke out today on inequality and the need to tax the top 1%. This was not Warren Buffet's platitudes about how he should not have a lower tax rate than his secretary, or how hard he is trying to cajole fellow billionaires into signing the "giving pledge," where they promise to leave half their wealth to a foundation, controlled by their descendants, that dribbles out contributions to charities of their choice while paying themselves generous salaries.

No, this was straight talk about how lucky the super-rich are and how outrageous and immoral their unwillingness to pay more in tax is. Gross' letter is not long, and well worth the read. Here are the high points, starting with Gross' courageous confession of guilt:

Having benefited enormously via the leveraging of capital since the beginning of my career and having shared a decreasing percentage of my income thanks to Presidents Reagan and Bush 43 via lower government taxes, I now find my intellectual leanings shifting to the plight of labor. I often tell my wife Sue it’s probably a Kennedy-esque type of phenomenon. Having gotten rich at the expense of labor, the guilt sets in and I begin to feel sorry for the less well-off, writing very public Investment Outlooks that “dis” the success that provided me the soapbox in the first place. 

It gets better. Here's Gross talking straight to his fellow plutocrats, with candor that is as refreshing as it is brilliant:

Posted by Bob Lord Want a glimpse of our unequal future in America? Check out The Most Unequal Place in America, by John Sutter of CNN. Sutter writes about Lake Providence, Louisiana. Things are more unequal in Lake Providence than they are in any country in the world. But wait, America could get reach that … Read more

Posted by Bob Lord

Are minds much greater than mine looking to answer my oft-repeated question: How much wealth and how much income can we cram into the top 1% before the bottom 90% explodes? 

Quite possibly, yes. My sampling methods are admittedly unscientific, but opinion writers seem more willing to contemplate rebellion openly these days. I follow Chris Hedges, who has dedicated his two most recent columns to the subject. In Our Invisible Revolution, Hedges explains why his preference, a nonviolent movement that removes the current power structure, may not succeed and may give way to a more violent uprising:

By the time ruling elites are openly defied, there has already been a nearly total loss of faith in the ideas—in our case free market capitalism and globalization—that sustain the structures of the ruling elites. And once enough people get it, a process that can take years, “the slow, quiet, and peaceful social evolution becomes quick, militant, and violent,” as Berkman wrote. “Evolution becomes revolution.”

Posted by Bob Lord

[Hat tip to my friend John Gallagher for inspiring this post with his thought provoking Facebook links]

Those of us who read beyond the headlines on climate change understand the concept of a feedback loop. It occurs when a phenomenon feeds on itself. For example, as the planet warms, ice melts, causing the earth to reflect less sunlight and absorb more, thereby causing…..more warming. 

Do feedback loops occur in economic policy making by politicians? Quite clearly, yes. Indeed, these political-economic feedback loops may be the gravest threat to our way of life. For a few examples, follow me after the jump.

Posted by Bob Lord

Remember Andrei Cherny? Contrary to popular belief, he didn't vanish. He may have failed in his quest for elected office, but he's continued his work as a writer, and on that front he's no slouch. His op-ed piece in Friday's Washington Post, ALICE Americans, Slipping Out of the Middle Class, is worth the read.

"ALICE," Cherny explains, stands for Asset Limited, Income Constrained and Employed. The ALICE Americans are the group lodged between the bottom 20% of Americans (the poor) and the middle 20% of Americans (the middle class). The ALICE Americans are the group that has felt the brunt of our difficulties over the past decade.

For most of the past 50 years, the income growth lines for the middle 20 percent of Americans and the 20 percent right below them tracked one another. A unified middle class rose and fell together. But increasingly over the past decade, these lines have diverged and a new income gap has grown. While the financial situation for both the bottom 20 percent and the middle of the middle class has stabilized over the past couple of years, the income of the 20 percent in between has continued to fall at such a rate that, as of 2012, their total income growth since 1967 is roughly 60 percent of those below or above them.

Cherny then focuses on ALICE Americans as a demographic group which he believes is up for grabs in the next election.

Beyond the scope of Cherny's piece (op-ed word limits are stingy) is what the plight of ALICE Americans signifies in terms of the bigger picture.