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201  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Cognitive Dissonance of the left, Global Warming killing the children on: January 10, 2017, 10:55:02 PM


It's a miracle, drought, flood, you name it.  Here's a big one, the Great Lakes: 

https://thinkprogress.org/the-great-lakes-go-dry-how-one-fifth-of-the-worlds-fresh-water-is-dwindling-away-e9efe2c72891#.mu9j15ecq
Jan 2014:  For the past 15 years, islanders have watched Lake Michigan slowly disappear. Last January, the lake hit a record low, 29 inches below the long-term average as measured since 1918... Increasingly, scientists believe that climate change is driving the warming waters and setting up a new regime in the Great Lakes that may lead to lower lake levels and a permanently altered shoreline.

https://weather.com/science/environment/news/great-lakes-water-levels-fastest-recovery-history
Dec 2014:  Great Lakes Water Levels Recover Faster Than Ever Before
"ice cover that stuck around from several harsh winters prevented some of the usual evaporation from occurring."

Unusual ice cover accelerated the rise.  Who knew that the side effects of warming would be harsh winters and increased ice coverage?

Climate change, formerly known as weather, is amazing.  You only have to believe.

202  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Sen. Bernie Sanders, CNN, hasn't learned a thing on: January 10, 2017, 07:35:42 PM
From almost becoming our worst President ever, Bernis Sandsers has fallen to run-of-the-mill leftist, like Shumer, Warren, et al.

I followed a link to his insights today from real clear politics:  23 Questions for America  - Sen. Bernie Sanders, CNN

No, he hasn't learned a thing.  He lost the nomination to Hillary because of cheating, corruption and collusion in his own party.  No one is running for party chair to clean that up.  All they have is denial, even from Sanders.

One of many bold, FALSE statements:  [The US today has] the highest rate of childhood poverty of almost any major country on earth.

Oh really?  What a crock.  He cites this UNICEF study:  https://www.unicef-irc.org/publications/pdf/rc10_eng.pdf  They compare countries by comparing the percentage of
children living in relative poverty, defined as living in a household whose income, when adjusted for family size and composition, is less than 50% of the median income for the country in which they live.  He cites inequality, based on false data, not counting the income of the poor, and he calls it poverty.  Good grief.  Maybe he makes up for it with charisma?

Our poor are often richer than their rich, but we have the highest rate of children living in relative poverty? Without counting their income and relative to the median of the wealthiest country in history.  If the questions or ideas stand on their own, why fill it with deception?

So much for addressing real problems.

http://www.cnn.com/2017/01/09/opinions/serious-questions-bernie-sanders-opinion/index.html

Bernie Sanders: We need serious talk on serious issues
By Bernie Sanders
Updated 4:19 PM ET, Mon January 9, 2017

(CNN)In my view, the media spends too much time treating politics like a baseball game, a personality contest or a soap opera. We need to focus less on polls, fundraisers, gaffes and who's running for president in four years, and more on the very serious problems facing the American people -- problems which get relatively little discussion. I hope that's what our town meeting on CNN tonight will accomplish.  [So far, so good.]

There are a lot of important questions to talk about, including:
How do we stop the movement toward oligarchy in our country in which the economic and political life of the United States is increasingly controlled by a handful of billionaires?  [Stop it by getting those who aren't to particpate in the productive economy.  Instead we pay and contract with them to stay poor. cf. SSI]

Are we content with the grotesque level of income and wealth inequality that we are experiencing? [If it's important, stop measuring and reporting it falsely]  Should the top one-tenth of 1 percent own almost as much wealth as the bottom 90 percent? Should one family in this country, the Waltons of the Walmart retail chain, own as much as the bottom 40 percent of our people? [The bottom 40% mostly don't have savings.  Don't double down on the failed policies that caused that. Increase the wealth of the bottom 40% if that is the goal and stop making meaningless comparisons. Should 52 percent of all new income be going into the pockets of the top 1 percent?  [The results of the Sanders, Obama plan.  Also see Venezuela's decline and collapse since leaving a free market economy.]

While the very rich become much richer, are we satisfied with having the highest rate of childhood poverty of almost any major country on earth? [Already proven patently false, see above.] Can a worker really survive on the current federal minimum wage of $7.25 an hour? [By sharing household expenses with family and friends.  Instead household sizes keep getting smaller for the poorest among us.] How can a working-class family afford $15,000 a year for childcare? [What did that used to cost?] How can a senior citizen or a disabled veteran get by on $13,000 a year from Social Security?

What can be done about a political system in which the very rich are able to spend unlimited sums of money to elect candidates who represent their interests? [The winner spent the least.  Stubborn facts.] Is that really what democracy is about? Why, in the year 2017, do we still have state governments trying to suppress the vote and make it harder for poor people, young people and people of color to participate in the political process? [Checking ID is not suppression and saying it's harder for 'poor people, young people and people of color' is degrading.]

Why is the richest country in the history of the world the only major country not to provide health care to all as a right [Lie, lie, lie, no one is denied healthcare] despite spending much more per capita? Why are we one of the very few countries on earth not to provide paid family and medical leave? [What does paying more people to not work have to do with serious questions?] With the five major drug companies making over $50 billion in profits last year [.0025 portion of the economy, how much should they make on risk capital to try to develop cures for our ailments?] why do we end up paying, by far, the highest prices in the world for prescription drugs?  [Enforce the anti-dumping laws already on the books or negotiate best price contracts, like successful companies do, see Walmart above.]

How do we succeed in a competitive global economy if we do not have the best educated workforce in the world? And how can we have that quality workforce if so many of our young people are unable to afford higher education or leave school deeply in debt? Not so many years ago, we had the highest percentage of college graduates in the world. Now we don't even rank in the top ten. What can we do to make sure that every American, regardless of income, gets all of the education he or she needs? [Public school education in Democrat-run big cities is a disgrace.  School choice is the Republican and inner city black preference.]

Meanwhile, on climate change, the debate is over. [More like you quit listening to it.] The scientific community is virtually unanimous in telling us that climate change is real, is caused by human activity and is already doing devastating harm to our country and the entire world. [Patently false as written.] How do we transform our energy system away from fossil fuel and into energy efficiency and sustainable energy while protecting those workers who might lose their jobs as a result of the transition? [Stop opposing carbon-free nuclear energy.] This is no small issue. The future of the planet is at stake.

We are now spending $80 billion a year to imprison 2.2 million Americans, who are disproportionately African-American, Latino and Native American. [The victims are disproportionately minority too.  The culture of crime is breeding in Democrat-run cities.  Check it out.] We have more people in jail than any other country on earth, including China, which is home to four times as many people. How do we reform a broken criminal justice system? How do we create jobs and educational opportunity for young people, not more jails and incarceration? [Stop jails or stop crime?]

We must create a path for the 11 million undocumented [unlawful] people in our country to become lawful permanent residents and eventually citizens. [Why?] How can we move our nation toward common sense, humane and comprehensive immigration reform and by doing that help reverse the decline of our middle class and better prepare the United States to compete in the global economy?  [Enforce the border and the law.]

Our nation's infrastructure is collapsing and the American people know it. At a time when our roads, bridges, water systems, rail and airports, levees, dams, schools and housing stock are decaying, the most effective way to rapidly create meaningful jobs is to rebuild our crumbling infrastructure. How can we work together to make that happen? [Read the Republican plan.]

These are the issues that need to be talked about all over the country. I thank CNN for allowing us to have a serious discussion about serious issues.  [Bernie, your disingenuity is killing us.  Luckily the voters went a different direction.]
203  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Ted Cruz Snubs China, Meets with Taiwan President Tsai Ing-wen on: January 09, 2017, 08:32:10 PM
https://pjmedia.com/trending/2017/01/09/ted-cruz-snubs-china-meets-with-taiwan-president-tsai-ing-wen/

A one China policy could mean we only recognize the Republic of China, not the PRC. Although that really could lead to war.

It could lead to war, but why?  They haven't shown any sign of caring what we think on anything else.

[And why is Ted Cruz re-starting his campaign.  Someone appoint him to the Supreme Court!]
204  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Cognitive Dissonance of the left, Global Warming killing the children on: January 09, 2017, 08:27:51 PM
It's causing flooding in Nevada and California right now. Is there anything Climate Change can't do?

Right, a lot like the dogs saying the Russians pooped in the hallway.


If you live on an island in a global economy more than 2000 years after the invention of desalination and die of a drought, your cause of death is poverty, not someone else's prosperity.
205  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Cognitive Dissonance of the left, Global Warming killing the children on: January 09, 2017, 07:57:07 PM
NY Times, surely you jest! 

http://www.nytimes.com/2017/01/06/opinion/sunday/as-donald-trump-denies-climate-change-these-kids-die-of-it.html?emc=eta1&_r=0

Global warming caused the drought in Madagascar.

Let's back track.  Burning fossil fuels is causing global warming aka climate change because carbon dioxide emitted in combustion is a trace element greenhouse gas.  See the octane combustion equation:

2 C8H18 + 25 O2 = 16 CO2 + 18 H2O

More water vapor is emitted than CO2. 

Adding water vapor to the atmosphere (in the US) is causing droughts worldwide.  Good f'g grief.
206  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: The Cognitive Dissonance of the left on: January 09, 2017, 07:48:36 PM
This is why I believe Keith Ellison will be made the next DNC head.  Precisely because he is black and muslim..  Anybody who criticizes him for reason whatsoever will be trolled with the lib attack lines:

racist
islamophobe

http://www.breitbart.com/video/2017/01/07/joy-reid-being-black-and-muslim-puts-you-in-the-crosshairs-of-trumpworld/

That decision will come up shortly.  You are partly right IMHO.  His rise to power and fame, like Barack Obama, is the combination of looking different and slick delivery.  Ellison is a (fake?) Muslim who loves gays, Jews, peace on earth, etc.  Good for him, as Elizabeth Warren might say.

I can't believe he'll be picked, but we'll find out soon enough.  He is perfect for the part of the party that wants to double down on all the current, failed policies.  Just like the Presidential race, not running is the alternative who has visited the heartland, is experienced, moderate and would help them to reach out to the voters they are losing.

Those voting for leadership I assume will be all the people in party power who think the policies pursued over the last, failed ten years were perfect.

So we get someone all calm and articulate in a suit and tie who pioneered the movement of assassinate cops to lead a major political party.

"We don't get no justice, you don't get no peace."   

Let's see how that sells in Heartland America and how he holds up to national scrutiny tougher than the Red Star and Sickle, the monopoly media here.

207  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Young socialist hardliner will lead Venezuela's economy TO UTTER RUIN on: January 09, 2017, 07:33:35 PM
My heart goes out to all in Venezuela, especially to those who did not vote for this mess.  But that said, my fascination with their failed policies has to do with calling out liberals here in the US for their support for failed poolicies for us.  It's all Cognitive Dissonance of the Left, to me, wherever they live.

Venezuela boosts minimum wage by 50 percent
AFP   AFPJanuary 8, 2017
https://www.yahoo.com/news/venezuela-boosts-minimum-wage-50-percent-235730192.html

Wealth through legislation and mandate.  With more than a little sarcasm, that ought to fix it! 
208  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Big WSJ article on Tillerson on: January 09, 2017, 06:46:45 PM
I didn't know anything about Tillerson before this.  Don't know yet if I will agree with him on policy.  The appearance of having an Exxon (or the Goldman Sachs) guy is lousy.   Suddenly, personally knowing Putin is a big negative.  All the negatives make me think he is quite an impressive guy. 

Like with Cheney and Haliburton, people think he will put loyalties to old friends and old business ahead of the interests of the nation.  It's possible but I don't think that way.  Not everyone is a Clinton.

I don't see him as any kind of pushover; Trump wanted the best negotiators and Sec of State is the highest one.  But even if he is too nice of a guy, we have the Defense Secretary to play the role of bad cop with some of these characters on the world stage.

Acts as small as the Taiwan phone call or not flinching during negotiations send a message to leaders of countries more than just the one currently at the table.

209  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: WSJ: Tariffs can backfire on: January 09, 2017, 02:13:34 PM

Yes.They.Can.


The Great Depression, bringing some data forward:
Smoot Hawley Tariff Act:  raised tariffs on 20,000 items by 6.3% to 19.8%.
Effective‎: ‎March 13, 1930   
Imports: fell 66%
Exports: fell 61%  
GDP: fell over 25%
The "trade deficit" "improved".
We are FAR more reliant on both imports and exports today.

Make America Great Again.  Don't screw it up.
210  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Media, Ministry: Kaine the tie-breaking vote in the Senate as VP, 78% chance on: January 09, 2017, 02:08:15 PM
Media and The Left are overlapping threads.  Looking back at this from the Huffington Post never gets old.   )


http://www.huffingtonpost.com/entry/democrats-78-percent-chance-50-senate-seats_us_57b8a525e4b0b51733a3cda0

Republicans Set To Lose Senate Control
Democrats have a 78 percent chance of getting 50-plus seats in November, the HuffPost Senate model shows.

Most models give the Democratic ticket of Hillary Clinton and Sen. Tim Kaine (D-Va.) at least an 80 percent chance of winning the presidency. That would make Kaine the tie-breaking vote in the Senate as the vice president, shifting Democrats back into the majority by a 51-50 split.
--------------------------------------------------------

Tim Kaine is becoming the trivia question no one can answer and Mike Pence the 46th President of the United States, with 80% certainty, lol.
211  Politics, Religion, Science, Culture and Humanities / Science, Culture, & Humanities / Re: Economics on: January 09, 2017, 01:08:20 PM
Thanks Crafty.  What I mean by required reading, income inequality is the heart of the 'progressive' economic view, like opposing the law of gravity.  If you aren't ready to answer and challenge them on it, you have lost the argument.

A short snippet from a long piece, "is the acceptable level [of income inequality] that of Swedish equality in 1995 or 2016? Now there’s a conversation stopper for you."

From a liberal point of view, what they're doing in Sweden isn't working either.

People who are invested in the economy are always more likely to benefit from its upturns than people that aren't.  Therefore we should oppose significant economic growth?
----------------------------------

Nice piece by BW.  The last election will be good for our Wesbury discussions.  Watching his optimism under Obama was painful, even if he was right that big equities did well in that slow growth environment and no big crash came during that time.  Now we can all realistically discuss good policy choices instead of guessing how resilient our economy will be to bad policies.
212  Politics, Religion, Science, Culture and Humanities / Science, Culture, & Humanities / Re: Economics- American Interest, Income inequality on: January 09, 2017, 01:10:31 AM
When our host and moderator says this needs to be posted on both the science and political threads on economics, I believe that makes it REQUIRED READING.   )

Good to see more experts weigh in on this.  Piketty debunked (again).  Inequality is the ladder there for everyone to climb.  It isn't a bad thing that people in different careers, at different points in their careers, with different effort levels and different talents get different pay.  It's how our most scarce resource, our time, gets allocated best.  But it gets measured wrong and then hyped for political and economic folly.  I suppose this debate has been going on since Adam and Eve but it restarted in the Bush years as a way of saying a good and growing economy was bad.  Mis-measure the differences and then sound the alarm.  The point of the deception was to foster dissatisfaction with economic growth and gain support for greater redistribution.  

John F Kennedy said a rising tide lifts all boats.  He didn't say all boats have to be the same size and travel at the same speed, now matter how small or slow or how vulnerable they would have to be to the next wave.
-----------------------------------------------------------------------------------------------

http://www.the-american-interest.com/2017/01/03/the-inequality-hype/

The Inequality Hype
NEIL GILBERT
The great devil of progressives turns out to be mainly a figment of accounting. Better data gives us a more heartening picture of American well-being.

For most of the 20th century, poverty represented the root of all evil to Americans—sprouting criminality, violence, hunger, disease, stunted achievement, and premature death. With the tremendous growth of both the economy and the welfare state over the past sixty years, the political campaign against poverty has almost vanished from the public square. Today, many see economic inequality as the root cause of most, if not all, of our social ills. President Obama described it as the defining challenge of our time—one that threatens “the very essence of who we are as a people.”

It should go without saying that poverty and inequality are not the same. However, it’s worth repeating, because over time a conflation of the two has taken root in common perceptions. The evils once associated with poverty have been transferred lock, stock, and barrel to inequality, whether justifiably or not.

Although political efforts to reduce income (and wealth) inequality do not carry the moral force of religious edicts (leaving aside those for whom Das Kapital has assumed biblical status), they have an intuitive moral appeal not dramatically different from appeals to reduce true poverty—again, since both are seen as causing the same cluster of social evils. Long before any exposure to ideas of social justice one typically hears young children yelling “that’s unfair!” when a pie is divided unequally among them; the quickest to complain are invariably those handed the smallest slices.

And why shouldn’t they? All else equal, there seems to be little ethical justification for one child to get a bigger slice of the pie. As adults we usually make peace with reality by recognizing that it is rarely if ever the case that all else is equal. Karl Marx got around this problem by arguing that the secret expression of value, namely that all kinds of human labor are equal and equivalent, because in so far as they are human, labor in general cannot be deciphered until the notion of human equality has acquired the fixity of a popular prejudice.

For Marx, in other words, all human labor has the same value because we are all equal in what he deems people’s most important characteristic—their humanity. This tautological formulation skirts the issue of how, or even whether, to adjust for merit (and of course it famously leaves out every other factor of production in an economy, but never mind about that for now).

Since classical antiquity the balance between merit and equality has animated philosophical debate about what constitutes a just distribution of material goods. Aristotle believed that a fair and just distribution could not ignore merit, which, once taken into consideration, made a fair distribution essentially an unequal one. He qualified the idea that “equal” is just by differentiating between numerical and proportional equality. The former dictates that everyone gets exactly the same basket of goods, while latter prescribes that the amount of goods received by different people be relative to the amount of effort each contributed to their production. With this deft distinction, Gregory Vlastos observes, “the meritarian view of justice paid reluctant homage to the equalitarian view by using the vocabulary of equality to assert the justice of inequality.”1

Still, the case for reducing inequality made in the political arena appeals to the intuitive sense that fair means equal. All that is being asked is that millionaires and billionaires pay their fair share. This leaves aside the meritarian question of whether they legitimately deserve to possess such vast wealth in the first place. For the most part, proposals to advance equality by taxing tycoons evoke little public opposition. Whether or not targeting this group is really just, many argue that the millionaires can easily afford it. Others question how lawfully the super-rich came by their wealth in the first place, and still others, law aside, assert that all wealth distribution systems are based ultimately on coercion, made necessary by the original sin of private property. The merely progressive as opposed to radical case for income redistribution gains added support from the prevailing assumption that economic inequality is inherently bad because it causes stress, low self-esteem, and a whole raft of dubiously medicalized effects. This assumption reflects the growing tendency to conflate the equality of material outcomes with the incontestable fair-mindedness of equal opportunity.

Champions of increasing economic equality have an emotionally compelling argument that ensures the moral high ground for those making the case. It is not an argument that any sensible politician (or aspiring academician, as opposed to a professional gadfly like the Princeton philosophy professor Harry Frankfurt) wants to enter on the other side.2 Thus in contemporary Western political discourse equality is so thoroughly vested as an abstract good that questions are rarely raised about exactly how much economic inequality is unacceptable, how much is fair, or even how much really exists. The next time someone lectures you about the need to increase equality, you might try asking: How much should we have? As much as Sweden, is one likely response. But inequality has been on the rise in Sweden as in most other industrialized countries, so is the acceptable level that of Swedish equality in 1995 or 2016? Now there’s a conversation stopper for you.

Income inequality is at once a palpable and amorphous condition. That some people have more money than others is a tangible reality. But most people have no idea about the actual distribution of income and their position in the population. An analysis of several surveys of ordinary citizens in nearly forty countries reveals widespread misperceptions about the degree of inequality, how it is changing and where they fit in their country’s income distribution. For example, in the countries surveyed an average of 7 percent of respondents owned a car and a second home, yet on average 57 percent of this group thought they belonged in the bottom half of the income distribution. Among low-income respondents receiving public assistance, a majority placed themselves above the bottom 20 percent of their income distribution. These findings raise serious doubts about the extent to which the median voter knows how much she might lose or gain from redistribution. More important, it means that discontent with economic trends has a lot less to do with perceptions of material inequality than it does with a whole host of other factors that are, as it happens, a lot harder to quantify and therefore much less well appreciated by elites.

Metrics of Inequality and Material Well-Being

In contrast to the normative moral appeals and vague calibrations of fairness in political discourse, the quantitative metrics of social science lend a certain precision to estimates of income inequality. However, these empirical estimates and especially what they signify rest on loose soil that offers fertile diggings for economists and philosophers less interested in facts than in changing facts. To really grasp the essential meaning of economic inequality requires examining how income is measured in relation to demographic changes, geographic differences, and shifting fortunes over the life course. But if that interferes with the propagation of a certain ideological position, then these requirements go unrequited. Let’s look more closely at the facts before we deign to tamper with them.

Income inequality in the United States is generally perceived to have increased over the past thirty years. However, the degree and implications of this trend remain in dispute. The disagreement reflects, in part, differences in the way economists measure inequality, which are rarely aired outside of technical publications. Even when the different measures are reported, what they signify is difficult to discern beyond whether the numbers are going up or down.

The most common measures of inequality include the Gini index and a comparison of income quintiles. They vary in convenience and transparency. The Gini index provides an expedient summary ranging from 0 to 1; zero denotes perfect equality of income and 1 represents a distribution in which one member possesses all the society’s income. Among the advanced industrialized countries Gini coefficients range from .250 to .500. By summarizing the dispersion of income in one number, Gini coefficients are useful for comparative purposes. They clearly show whether economic inequality is increasing or decreasing over time and is higher or lower among countries.

However, the numerical precision veils the existential reality of inequality, particularly in a country as large as the United States. That is, the numbers convey an empirical impression that those with an annual income of $100,000 have a higher standard of living than those with an income of $85,000. If this were not the case, why be concerned about income inequality in the first place?

But in fact it is often not the case. The U.S. Bureau of Economic Analysis documents strikingly large differences in the cost of living throughout the country.3 Thus, for example, when regional price differences are factored in, a $100,000 income in New York State is worth less than an $85,000 income in Montana. Some might argue that it is worth the difference to live in New York. Having come from New York City, like many of my friends I once believed that civilization ended on the east bank of the Hudson. Yet people have different preferences for cultural amenities and natural beauty—and different levels of tolerance for traffic, noise, smog, and cramped apartments. Montanans typically refer to their state as “the last best place,” which may explain the influx of wealthy people over the past few decades. Cost-of-living differences are even more extreme among metropolitan areas. The San Francisco Bay area is almost 40 percent more expensive than Rome, Georgia, a charming locale nestled in the foothills of the Appalachians. Since the cost of living is usually higher in states and metropolitan areas where the average household income is above the U.S. median, the Gini coefficient tends to exaggerate differences in the levels of material comfort and well-being implied by economic inequality.

Moreover, despite the suitability of Gini coefficients for comparing levels of income inequality over time and among countries, the findings expressed by these comparisons can obscure their implications for economic well-being. For example, the .378 Gini coefficient for the United States represents a much higher degree of income inequality than the .257 computed for the Slovak Republic. As for economic well-being, a look at how much money is actually available reveals that the Slovak Republic’s median disposable household income amounts to 29 percent of that of the United States.4 Its middle-class would be on welfare here.

Finally, the Gini coefficient lends numerical precision to the assumption that increasing economic equality is a social improvement. Yet during a recession economic equality as measured by the Gini index may well increase in a country where everyone is getting poorer. Earnings fall for people in both the upper and lower income brackets, but the decline is steeper for those at the higher end who have more to lose in the first place. By the same token, a country could experience rising inequality according to its Gini index when everyone is becoming better off. The rich are getting richer as the poor are also getting richer, just not as much. Rising inequality, however, can also signal that the rich are getting absolutely more and the poor are getting absolutely less. But the Gini coefficient metric by itself is powerless to tell you which is which.

So, are the rich getting richer and the poor getting poorer? A 2012 Pew Research Center survey found 76 percent of the public answered “yes,” which was about the same as the 74 percent who held this view in 1987.5 In contrast to the Gini coefficient, which cannot answer the question, the analysis of income quintiles entails a direct examination of how money is distributed among the different groups, revealing the extent to which their incomes are rising or falling. Calculating the financial resources of five groups that range from the top to the bottom 20 percent of the income distribution, this approach illuminates the economic well-being of families and how they fare over time. But here, too, the results vary according to the alternative definitions of income.

Thomas Piketty and Emmanuel Saez’s well-known study of income inequality in the United States, for example, was based on the market income of tax filers.6 According to this definition, from 1979 to 2007 there was a 33 percent decline in the mean income of those in the bottom quintile in contrast to a 33 percent increase among those in the top 20 percent of tax units. Thus, left entirely to its own devices, the market allocation of income generated a pattern of increasing inequality wherein the rich got noticeably richer and the poor got poorer—a bleak testimony, supposedly, to the distributional problem of capitalism.

However as Richard Burkhauser pointed out in his presidential address to the Association for Public Policy Analysis and Management, the market income of a tax unit is a poor indicator of how much money families actually have to live on.7 A more inclusive measure of the income that remains in households after subtracting what they must pay in taxes and adding the money they receive through government transfers transmits a different image of the American experience. Applying these criteria, instead of a decline we see a 32 percent increase in the mean income of the poorest fifth between 1979 and 2007. (Table 1) Overall, this broader measure still reveals a rise in inequality during that period as the mean income of those in the top bracket climbs by 54 percent.8 But it, too, is incomplete.



Source: * Philip Armour, Richard V. Burkhauser, and Jeff Larrimore, “Deconstructing Income and Income Inequality Measures: A Crosswalk from Market Income to Comprehensive Income” American Economic Review (May, 2013). ** Congressional Budget Office, “The Distribution of Household Income and Federal Taxes, 2010” (Government Printing Office, 2013).

Along with taxes and transfers, the most authoritative and extensive measure of income also incorporates capital gains. Along with Burkhauser and his colleagues, the nonpartisan Congressional Budget Office (CBO) agrees that a comprehensive definition involves the sum of market income adjusted for taxes, household size, cash and in-kind transfers, and capital gains.9 However, the consensus unravels over the issue of exactly how to value capital gains. The basic choice is whether to focus on the total taxable gains realized in the year capital assets are sold or the annual change in value of capital assets whether or not they are sold. This is not just a matter of bookkeeping. The choice to include either realized or accrued capital gains in the calculation of annual income has a considerable impact on the rates of inequality.

The CBO favors the use of realized capital gains that are reported on tax returns. After factoring in the impact of taxes, capital gains, and government transfers the CBO data reveal a sharp decline in inequality compared to when it is measured solely by market income. According to these figures, between 1979 and 2010 the household income in the bottom quintile increased by 49 percent, the income in the middle three quintiles increased on average by 40 percent, and those in the highest bracket increased by 71 percent.10 While incomes increased across the board, the largest gains registered on the two ends of the income distribution. These findings temper progressive arguments that focus on the increasing inequality of market incomes to demonstrate the need for greater social welfare spending.

The income measures cited above all indicate a rising level of inequality that varies only in the rate at which it seems to have increased over the past three decades. In contrast, a different picture emerges if accrued capital gains, which include housing, are substituted for realized taxable gains. This approach yields a reversal of income trends between 1989 and 2007, which shows a decline in inequality as the household income in the bottom quintile climbed at a rate considerably higher than the increase experienced in the top quintile, which was hit much harder by the housing market crash in 2007. Needless to say, the choice between these methods of valuing capital gains is highly contested.

Every pertinent measure of income quintiles, especially the widely acknowledged comprehensive assessment by the CBO, dispels the notion that within the United States over the past three decades the rich have been getting richer as the poor have gotten poorer. The CBO measure reveals that from the highest to the lowest quintile, the mean household income of every group was lifted, even amid a rising tide of inequality. Among the bottom fifth the mean income increased by 49 percent. That’s not peanuts, particularly when we recognize what else is happening.

Another Dimension: Looking Within the Groups

Although the analyses of change since 1979 illustrate the extent to which household incomes climbed while the gap between the bottom and top fifths widened, it’s a one-dimensional picture that discounts what was happening within these economic bands. This image conveys a static impression that the same households within each quintile were experiencing these changes over time. In truth, a lot more was going on among the households within these five divisions, the particulars of which lend depth to the one-dimensional story of increasing economic inequality.

To grasp the full implication of rising inequality in household income, it is important to recognize that during the period in question young workers were continually entering the labor force as the older generation retired and died. A 25 year old who began working in 1979 while living on his own with an income in the bottom 20 percent would very likely reach a higher bracket by the time he was 53 years old in 2007. So not only did entry-level income rise between 1979 and 2007, but over the course of time many of those who started out at the bottom climbed toward the top. In just the period from 1996 to 2005, for example, the U.S. Treasury Department estimates that about half of the taxpayers starting in the bottom 20 percent moved into a higher income bracket.11 Of course, we do not know how many members of this upwardly mobile group were young scions spending their first year out of Princeton as shipping clerks in their fathers’ factory, serving Teach for America in a poor rural area or lolling lazily on the Left Bank—a reminder that numbers can impose a surface on patterns that shields us from the underlying reality.

There is even more to this story. As time passed, the 25 year old got married and had two children. Thus, what started in 1979 as a single-person household in the bottom fifth of the income distribution had morphed into a middle-income household with four people by 2007. This change illustrates an important characteristic of the income quintiles. Although they represent five groups with an equal number of households, the average number of persons per household within these groups varies as do other characteristics such as family structure and employment. The top fifth of households contain 82 percent more people than the bottom fifth. The proportion of married couples in each group ranges from 17 percent in the lowest income quintile to 78 percent in the highest. At the same time, single men and women living alone account for 56 percent of the households in the bottom fifth, but only 7 percent among the top group. And no one was employed in more than 60 percent of the households in the bottom quintile; while 75 percent of the households in the top quintile had two or more earners.

Taking account of the household characteristics within each quintile reveals that to some extent the increasing level of income inequality since 1979 coincides with the changing demographics of family life, particularly the smaller number of persons per household, the decreasing rate at which couples form and maintain stable marriages, and the increasing number of two-earner households. On that score, W. Bradford Wilcox and Robert I. Lerman estimate that 32 percent of the growth in family income inequality since 1979 is linked to the retreat from marriage and the decline of stable family life.12 The point, again, is that economic data are not self-interpreting, and that without a relevant sociological filter they can be made to mean almost anything except what they actually mean.

Concentrating on advances within just the top quintile offers a different perspective, which sharpens our understanding of what is behind the rising level of economic inequality in recent years. Two prominent findings based on the CBO’s all-inclusive measure of income tell the story: From 1979 to 2010 the after-tax income of the top 1 percent increased by 201 percent (compared to the 49 percent increase for households in the bottom quintile and the 65 percent increase for those in the 81st to 99th quintile).13 Research focused on the pre-tax market income of the top 1 percent generates an even higher level of inequality than the CBO findings.

Thus, a disproportionate degree of the increasing level of inequality was due to significant financial gains made by those at the apex of the income pyramid. As for the rest, a careful analysis matching data from the U.S. Census Bureau and Internal Revenue Service demonstrates that after 1993 there was no palpable increase of inequality among the bottom 99 percent of the population. Since the pre-tax incomes of the top 1 percent started at $388,905 in 2011, many of these families would not be considered the super-rich. It’s around the top one-tenth of 1 percent, where pre-tax incomes start at $1,717,675, that we begin to cross the line between relatively well-off and truly affluent.

As soon as the conversation on inequality begins to concentrate on the wealthiest households, the question increasingly comes to mind: What do these people do to deserve such immense rewards? A 2013 study commissioned by the New York Times discloses a median executive pay of $13.9 million among the CEOs of 100 major firms, described by one journalist as a “new class of aristocrat.”14 Although not terribly harsh, this description connotes a privileged class renowned more for its leisure pursuits than its productive labor. But it does suggest how easily personalizing the numbers can transform a dispassionate report on the top 1 percent into bitter accounts of debauchery and corporate corruption. The likes of Bernie Madoff, Tyco’s Dennis Kozlowski, and Ken Lay of Enron supply no shortage of infamy on which to justify a denial of merit. But then there are the brilliant hard-working multi-millionaires who created Apple, Google, and Microsoft, not to mention our favorite movie stars and athletes. Even here some might question why grown men should receive immense sums of money to stand around a few afternoons a week waiting for a chance to hit a ball with a big stick. Major League baseball players were paid on average $3.39 million in 2013. In contrast, for the same activity most minor league players earned between $2,500 and $7,000 for a five-month season—talk about inequality!

Like it or not, in a capitalist system the criterion for reward is ultimately associated with what the market will bear. Of course, many people doubt just how well this standard works in practice. They wonder, for example, how difficult it might be to replace a CEO earning $20 million a year with an equally qualified executive who would accept half that salary. Also, market demand is no guarantee of social value or cultural enlightenment. A writer’s worth varies by the number of readers willing to plunk down the price of a book, regardless of how crass or meaningless the content. Alas, Fifty Shades of Gray has earned millions, while my publishers will be fortunate to clear the all-too-modest advance awarded for Never Enough: Capitalism and the Progressive Spirit. What the market will bear is certainly an imperfect calibration, but most people still think it preferable to having the standard set by bureaucratic quotas or political bargains, though both are often in play, as well.

How Has the Middle Class Really Fared?

Politicians on both sides of the aisle contend that the middle class is being crushed by inequality and diminishing income. But with household incomes increasing amid rising inequality, what do the facts tell us about the real material state of the middle class? There are several ways to answer this question, depending on how the middle class is defined and the benchmarks against which its progress and well-being are measured. The historical absence of an aristocracy has bred a fluid sense of social class and a democratic ethos that instills a degree of reluctance in Americans to identify as “upper class.” Thus, the middle class is a well-regarded, if ill-defined, status to which most Americans subscribe. It is typically associated with one’s income, education, and occupation. Numerous polls capture the propensity of Americans to identify themselves as somewhere along the spectrum of lower-middle to upper-middle class.

When policymakers and the media talk about the middle class, however, it is usually defined by economic divisions. Estimates vary regarding the range of income that delineates the middle class, as well as the interpretation of how the economic fortunes of this group have changed over time. Thus, reviewing the same Census Bureau data the New York Times decries, “Middle Class Shrinks Further as More Fall Out Instead of Climbing Up,” while ten days later the Pew Research Center announces, “America’s ‘Middle’ Holds Its Ground After the Great Recession.”15 Both of these captions are correct and neither highlights the larger story in the data, which only underscores how those who write the headlines may parse the numbers to express the points they wish to publicize. The economic definitions of the middle class in these reports differ: $35,000-$100,000 in the New York Times and $40,667-$122,000 in the Pew study. But the findings are very similar. Both show a substantial contraction of about 10 percent in the size of the middle class, which started shrinking around 1970. Though it sounds ominous, this decline is not necessarily a distressing trend. It depends on where those who were squeezed out of the middle class ended up. If they all moved into the upper income brackets, everyone’s better off.

So where did they go? The answer hinges on the years in question. The New York Times headline focused on the period from 2000 to 2013, the decade of the Great Recession during which the middle class declined by around 2 percent, the upper-income group also declined by about 3 percent, and the lower-income group increased. The Pew caption referred to the period from 2010 to 2013, just after the Great Recession. Over this interval the size of the middle class remained stable, and there was even a small uptick in the upper-income group and a slight decline in the lower-income group.

Despite the fluctuation of a few percentage points during the Great Recession, the larger story in the New York Times report is that between 1967 and 2013 both the lower-income and the middle-income groups contracted while the size of the upper-income group expanded by 15 percent. From this perspective the shrinking of the middle class (and of those in the lower-income bracket) is directly connected to a significant advance in economic well-being as the combined size of the middle- and upper-income groups grew by 5 percent.

Thus, while the New York Times headline evoked a disheartening picture of middle-class decline, the data easily yield a more promising interpretation of the middle-class experience since 1970. The Pew findings offer a somewhat different conclusion, in part because the middle-class definition was pegged at a higher level of income. Although the middle-income group fell by 10 percent, about 6 percent of those who left had climbed into the upper-income category. What a way to go.

Of course, there are other benchmarks against which to evaluate the economic progress and status of the U.S. middle class. Certainly, those concerned about inequality would judge that the middle class has not fared very well in comparison to the income gains realized by the country’s top 1 percent. True; but consider everyone else on the planet. The U.S. middle class boasts among the highest disposable household incomes in the world. The average U.S. family has 38 percent more disposable household income than a family in Italy, 25 percent more than a family in France, and 20 percent more than a household in Germany, when adjusted for differences in purchasing power. (Of course, that doesn’t take fully into account the more efficient provision of many services in Western Europe via the public route: think health care, for example. Which only confirms the point that numbers alone cannot really tell us very much.)

Although some academics invest considerable intellectual energy in debating how to quantify inequality and the significance of change in measures such as the Gini coefficient, most members of the middle class have no idea whether this index is going up or down unless they read about it in the news. And even then the average middle-class citizen is more interested in how much money remains for her family to live on after the give and take of government taxes and transfers than whether or not the Gini index rose or fell by three-tenths of a point.

Could We Ask for More?

Several issues have so far been raised about the divergent approaches to the measurement of inequality, the disparate characteristics of those in different income brackets, the absence of cost-of-living adjustments, the plight of the middle class, the soaring 1 percent, and the sobering revelation of international comparisons. On the whole these issues enable us not so much to dismiss concerns about rising economic inequality as to calm public apprehensions about its rate, degree, and implications. The disparities related to the changing distribution of income in the United States look a lot more acute before taxes and benefits are taken into account, for example—are you listening, Dr. Piketty? As such it can be said that the capitalist market generates and the welfare state mitigates inequality.

Recounted in its most auspicious light, the story of this interaction over the past three decades reveals that while inequality increased, so did household incomes at every level. Measured by disposable household income the U.S. standard of living is among the highest of all the advanced industrial democracies, not to mention the rest of the world. Indeed, reflecting on the rest of the world, Tyler Cowen urges us to preface all discussions of inequality with a reminder that although economic inequality has been increasing in advanced industrialized nations, over the past two decades global inequality has been falling.16 And given global economic patterns, this is not a coincidence but a relationship.

Of course, in an ideal world everyone would have been even better off if the top 1 percent had taken home less than 13 percent of all the income and the bottom 20 percent had gained more—even while the economy grew at the same overall rate. Not to promote the best as an enemy of the good, there is nevertheless a convincing case to be made for social reforms that would to some degree shift the distribution of income away from the top. Progressives and conservatives generally agree on the need to rein in government transfers received by wealthy citizens, particularly the special benefits derived from the favorable tax treatment afforded to homeowners. These benefits, known as “tax expenditures,” allow home owners to deduct the interest paid on mortgages and to net up to $500,000 of capital gains tax-free on the sale of their homes.

The amounts are not trivial. The CBO estimates that the tax expenditures for mortgage-interest deductions amount to $70 billion, almost 73 percent of which goes to households in the top 20 percent of the income distribution, while those in bottom 20 percent receive no benefit. Although there would be some downside for the home-building industry, limiting tax subsidies to wealthy homeowners could lower the level of inequality without seriously adverse consequences for the rate of homeownership.

Yet even if these adjustments were made, much income inequality would still remain, which takes us back to the question: Could we ask for still more? Obviously, there are many ways for government to appropriate additional money from those in the upper-income brackets and deliver more to those on the bottom. Raising income taxes, lifting the ceiling on taxable income for Social Security, increasing the Earned Income Tax Credit and eliminating its marriage penalties, boosting the minimum wage, means-testing Social Security benefits, and taxing the fringe benefits of employment are among the evident alternatives. Then there are the less well-recognized but hardly trivial proposals to tax some classes of advertising and to eliminate the corporate income tax altogether in the context of comprehensive tax reform. Progressives and conservatives argue about whether any and all such measures would kill jobs or boost the economy, discourage work or stimulate activity, generate class conflict or enhance social solidarity, and advance social justice or deny the just deserts of individual merit. A vast literature on these issues has generated mixed findings about the implications of various measures.

Considering the uncertainty surrounding these issues, the degree of support for additional measures to spread the nation’s wealth is heavily influenced by one’s answer to the question: How serious is the problem of rising economic inequality amid abundance? The answer rests on competing ideas about the current state of material well-being in the United States, the integrity of free-market capitalism and, above all, the putative consequences of inequality.

Progressives tend to think that inequality is the story and that, as already noted, nearly everything wrong in U.S. society stems from it. But this argument ultimately depends on presumed maladies arising from inequality that more than stretch scientific criteria for medical causality. The evils ascribed to inequality expand roughly at the same rate as the DSM manual, and that is a suspicious thing.

As long as household incomes are increasing at every level (as measured by the CBO), conservatives are less concerned about rising economic inequality than progressives. They accept inequality as the tribute that equality of opportunity grants to merit, productivity, and luck in the free market, recognizing that this transaction is sometimes distorted by discrimination, exploitation, corruption, and outright larceny, which need to be checked by government. With the average family’s disposable household income in the United States among the highest in the world, inequality is perceived less as a source of social friction between the “haves and the have-nots” than as an imbalance between those who have a lot and others who have even more. This, on balance and seen in an historical perspective, ought to be a cause for celebration, not an occasion for mass self-flagellation.

1Vlastos, “Justice and Equality,” in Social Justice, edited by Richard Brandt (Prentice-Hall, 1962), p. 32.

2Frankfurt, On Inequality (Princeton University Press, 2015).

3“Real Personal Income for States and Metropolitan Areas, 2008-2012,” U.S. Bureau of Economic Analysis, April 24, 2014.

4Michael Forster et al., Society at a Glance 2011, (OECD 2011).

5“Partisan Polarization Surges in Bush, Obama Years: Trends in American Values: 1987-2012,” Pew Research Center, June 4, 2012.

6Piketty & Saez, “Income Inequality in the United States,” Quarterly Journal of Economics (February 2003).

7Burkhauser, “Presidential Address Evaluating the Questions that Alternative Policy Success Measures Answer,” Journal of Policy Analysis and Management (Spring 2011).

8Philip Armour, Richard V. Burkhauser, and Jeff Larrimore, “Deconstructing Income and Income Inequality Measures: A Crosswalk from Market Income to Comprehensive Income,” American Economic Review (May 2013). The government transfers included here involve both cash and in-kind benefits, specifically food stamps, housing subsidies, and school lunches, but not the value of employer- and government-provided health insurance. For an analysis of the income growth when cash transfers and health insurance are included, but not in-kind benefits, see Richard Burkhauser, Jeff Larrimore, and Kosali Simon, “A ‘Second Opinion’ on the Economic Health of the American Middle Class,” National Tax Journal (March 2012), pp. 7-32.

9Congressional Budget Office, The Distribution of Household Income and Federal Taxes, 2008 and 2009 (Government Printing Office, 2012). The major components of income included here differ from those recommended by the Canberra Group mainly in regard to capital gains, which the Canberra guidelines exclude from the measure of household income in favor of their treatment as changes in net worth.

10Congressional Budget Office, The Distribution of Household Income and Federal Taxes, 2010 (Government Printing Office, 2013).

11U.S. Treasury Department, Income Mobility in the U.S. from 1996 to 2005 (Government Printing Office, 2007). A similar rate of mobility was reported for those in the bottom quintile from 1986 to 1996. Unlike the CBO measure, these findings are based on pre-tax market income plus cash but not tax-exempt or in-kind transfers. Also, the unit of analysis is not adjusted for household size.

12Wilcox & Lerman, “For richer, for poorer: How Family Structures Economic Success in America,” AEI, October 28, 2014.

13The Distribution of Household Income and Federal Taxes, 2010. In 2010 the top 1 percent netted almost 13 percent of all the after tax income (15 percent before taxes).

14Peter Eavis, “Invasion of the Supersalaries,” New York Times, April 13, 2014.

15Dionne Searcey & Robert Gebeloffjan, “Middle Class Shrinks Further as More Fall Out Instead of Climbing Up,” New York Times, January 25, 2015. Rakesh Kochhar & Richard Fry, “America’s ‘Middle’ Holds Its Ground After the Great Recession,” Pew Research Center, February 4, 2015.

16Cowen, “Income Inequality Is Not Rising Globally. It’s Falling,” New York Times, July 19, 2014.

Neil Gilbert is Chernin Professor of Social Welfare at the University of California, Berkeley. This essay is adapted from his latest book, Never Enough: Capitalism and the Progressive Spirit (Oxford University Press, forthcoming3
213  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Chuck Schumer on: January 09, 2017, 01:06:02 AM
"...worthy of his own thread? "

Run of the mill leftist, on a par with Dick Durbin, Pelosi, Reid and Wasserman-Schultz.  Foes anybody see any more in him than that?

More important (sadly) might be Claire McCaskill, the 8th most centrist Dem in a 52-48 Senate, and other red-state Dem Senators, especially those up for reelection.
214  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Leave the UN on: January 07, 2017, 02:38:41 PM
It needs us (to fund its corruption and globalist financial and political interests as well as those from countries that skim - no not skim milk) more then we need it. 
Andrew McCarthy:
http://www.nationalreview.com/article/443642/us-leave-united-nations.


Repeal and replace, ASAP, s'il vous plaît.

The new organization should have entrance rules so tight that the US doesn't qualify until we pass our own reforms, get5 back some freedoms and balance our budget.  And if we host it, we host it in Peoria or Topeka, not NYC, equal distant between Europe and Asia.

What has the UN done lately about the South China Sea?  How are they doing on Middle East peace?  Did they stop the nuclear program in NK yet?   China and Russia have veto power, are you kidding?  Qaddafi was the head of the Human Rights Commission.  George Orwell couldn't have come up with that.  And the UN has the worst charity record on the planet. 
215  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Corruption, Sleaze, Skullduggery, and Treason on: January 07, 2017, 02:18:33 PM
From media thread, ccp: Media purposely distorts Trumps firing ambassadors.  Obama fired all the Bush ambassadors and I don't remember hearing a single peep about.  These are not lifetime appointments.  Their shift is up.  Go home.  No controversy here.  I don't know how we can defeat the msm CNN ha become the worst of bunch.


Bill Clinton fired all 50 US attorneys as he took offrice just to get at the Arkansas one without making too big a scene.  There were no right wing websites then.  There was one big radio show and the WSJ editorial page.  Otherwise no one screamed and he eventually was reelected - before getting impeached, disbarred, shamed for other crimes.
216  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: WaPo takes on Breitbart on: January 07, 2017, 02:12:39 PM
"I'd vett everything from Brietbart, it's as untrustworthy as the Washington Post."


Or the NY Times.  It's a good comparison.  There was Breitbart the man, deceased, a very aggressive investigative journalist.  Breitbart the website is an agenda driven outlet just as eager as Wash Post and NYT to advance their narrative at the expense of accuracy.  And then there is the double standard.  When NYT or Wash Post gets it wrong they just run a correction - or not.  When Breitbart gets it wrong they are forever deplorable and unworthy of ever citing again even when right.



217  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Political Economics - The Inequality Hype on: January 05, 2017, 12:41:56 PM
Good to see more experts weigh in on this.  Piketty debunked (again).  Inequality is the ladder there for everyone to climb.  It isn't a bad thing that people in different careers, at different points in their careers, with different effort levels and different talents get different pay.  It's how our most scarce resource, our time, gets allocated best.  But it gets measured wrong and then hyped for political and economic folly.  I suppose this debate has been going on since Adam and Eve but it restarted in the Bush years as a way of saying a good and growing economy was bad.  Mis-measure the differences and then sound the alarm.  The point of the deception was to foster dissatisfaction with economic growth and gain support for greater redistribution.  

John F Kennedy said a rising tide lifts all boats.  He didn't say all boats have to be the same size and travel at the same speed, now matter how small or slow or how vulnerable they would have to be to the next wave.
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http://www.the-american-interest.com/2017/01/03/the-inequality-hype/

The Inequality Hype
NEIL GILBERT
The great devil of progressives turns out to be mainly a figment of accounting. Better data gives us a more heartening picture of American well-being.

For most of the 20th century, poverty represented the root of all evil to Americans—sprouting criminality, violence, hunger, disease, stunted achievement, and premature death. With the tremendous growth of both the economy and the welfare state over the past sixty years, the political campaign against poverty has almost vanished from the public square. Today, many see economic inequality as the root cause of most, if not all, of our social ills. President Obama described it as the defining challenge of our time—one that threatens “the very essence of who we are as a people.”

It should go without saying that poverty and inequality are not the same. However, it’s worth repeating, because over time a conflation of the two has taken root in common perceptions. The evils once associated with poverty have been transferred lock, stock, and barrel to inequality, whether justifiably or not.

Although political efforts to reduce income (and wealth) inequality do not carry the moral force of religious edicts (leaving aside those for whom Das Kapital has assumed biblical status), they have an intuitive moral appeal not dramatically different from appeals to reduce true poverty—again, since both are seen as causing the same cluster of social evils. Long before any exposure to ideas of social justice one typically hears young children yelling “that’s unfair!” when a pie is divided unequally among them; the quickest to complain are invariably those handed the smallest slices.

And why shouldn’t they? All else equal, there seems to be little ethical justification for one child to get a bigger slice of the pie. As adults we usually make peace with reality by recognizing that it is rarely if ever the case that all else is equal. Karl Marx got around this problem by arguing that the secret expression of value, namely that all kinds of human labor are equal and equivalent, because in so far as they are human, labor in general cannot be deciphered until the notion of human equality has acquired the fixity of a popular prejudice.

For Marx, in other words, all human labor has the same value because we are all equal in what he deems people’s most important characteristic—their humanity. This tautological formulation skirts the issue of how, or even whether, to adjust for merit (and of course it famously leaves out every other factor of production in an economy, but never mind about that for now).

Since classical antiquity the balance between merit and equality has animated philosophical debate about what constitutes a just distribution of material goods. Aristotle believed that a fair and just distribution could not ignore merit, which, once taken into consideration, made a fair distribution essentially an unequal one. He qualified the idea that “equal” is just by differentiating between numerical and proportional equality. The former dictates that everyone gets exactly the same basket of goods, while latter prescribes that the amount of goods received by different people be relative to the amount of effort each contributed to their production. With this deft distinction, Gregory Vlastos observes, “the meritarian view of justice paid reluctant homage to the equalitarian view by using the vocabulary of equality to assert the justice of inequality.”1

Still, the case for reducing inequality made in the political arena appeals to the intuitive sense that fair means equal. All that is being asked is that millionaires and billionaires pay their fair share. This leaves aside the meritarian question of whether they legitimately deserve to possess such vast wealth in the first place. For the most part, proposals to advance equality by taxing tycoons evoke little public opposition. Whether or not targeting this group is really just, many argue that the millionaires can easily afford it. Others question how lawfully the super-rich came by their wealth in the first place, and still others, law aside, assert that all wealth distribution systems are based ultimately on coercion, made necessary by the original sin of private property. The merely progressive as opposed to radical case for income redistribution gains added support from the prevailing assumption that economic inequality is inherently bad because it causes stress, low self-esteem, and a whole raft of dubiously medicalized effects. This assumption reflects the growing tendency to conflate the equality of material outcomes with the incontestable fair-mindedness of equal opportunity.

Champions of increasing economic equality have an emotionally compelling argument that ensures the moral high ground for those making the case. It is not an argument that any sensible politician (or aspiring academician, as opposed to a professional gadfly like the Princeton philosophy professor Harry Frankfurt) wants to enter on the other side.2 Thus in contemporary Western political discourse equality is so thoroughly vested as an abstract good that questions are rarely raised about exactly how much economic inequality is unacceptable, how much is fair, or even how much really exists. The next time someone lectures you about the need to increase equality, you might try asking: How much should we have? As much as Sweden, is one likely response. But inequality has been on the rise in Sweden as in most other industrialized countries, so is the acceptable level that of Swedish equality in 1995 or 2016? Now there’s a conversation stopper for you.

Income inequality is at once a palpable and amorphous condition. That some people have more money than others is a tangible reality. But most people have no idea about the actual distribution of income and their position in the population. An analysis of several surveys of ordinary citizens in nearly forty countries reveals widespread misperceptions about the degree of inequality, how it is changing and where they fit in their country’s income distribution. For example, in the countries surveyed an average of 7 percent of respondents owned a car and a second home, yet on average 57 percent of this group thought they belonged in the bottom half of the income distribution. Among low-income respondents receiving public assistance, a majority placed themselves above the bottom 20 percent of their income distribution. These findings raise serious doubts about the extent to which the median voter knows how much she might lose or gain from redistribution. More important, it means that discontent with economic trends has a lot less to do with perceptions of material inequality than it does with a whole host of other factors that are, as it happens, a lot harder to quantify and therefore much less well appreciated by elites.

Metrics of Inequality and Material Well-Being

In contrast to the normative moral appeals and vague calibrations of fairness in political discourse, the quantitative metrics of social science lend a certain precision to estimates of income inequality. However, these empirical estimates and especially what they signify rest on loose soil that offers fertile diggings for economists and philosophers less interested in facts than in changing facts. To really grasp the essential meaning of economic inequality requires examining how income is measured in relation to demographic changes, geographic differences, and shifting fortunes over the life course. But if that interferes with the propagation of a certain ideological position, then these requirements go unrequited. Let’s look more closely at the facts before we deign to tamper with them.

Income inequality in the United States is generally perceived to have increased over the past thirty years. However, the degree and implications of this trend remain in dispute. The disagreement reflects, in part, differences in the way economists measure inequality, which are rarely aired outside of technical publications. Even when the different measures are reported, what they signify is difficult to discern beyond whether the numbers are going up or down.

The most common measures of inequality include the Gini index and a comparison of income quintiles. They vary in convenience and transparency. The Gini index provides an expedient summary ranging from 0 to 1; zero denotes perfect equality of income and 1 represents a distribution in which one member possesses all the society’s income. Among the advanced industrialized countries Gini coefficients range from .250 to .500. By summarizing the dispersion of income in one number, Gini coefficients are useful for comparative purposes. They clearly show whether economic inequality is increasing or decreasing over time and is higher or lower among countries.

However, the numerical precision veils the existential reality of inequality, particularly in a country as large as the United States. That is, the numbers convey an empirical impression that those with an annual income of $100,000 have a higher standard of living than those with an income of $85,000. If this were not the case, why be concerned about income inequality in the first place?

But in fact it is often not the case. The U.S. Bureau of Economic Analysis documents strikingly large differences in the cost of living throughout the country.3 Thus, for example, when regional price differences are factored in, a $100,000 income in New York State is worth less than an $85,000 income in Montana. Some might argue that it is worth the difference to live in New York. Having come from New York City, like many of my friends I once believed that civilization ended on the east bank of the Hudson. Yet people have different preferences for cultural amenities and natural beauty—and different levels of tolerance for traffic, noise, smog, and cramped apartments. Montanans typically refer to their state as “the last best place,” which may explain the influx of wealthy people over the past few decades. Cost-of-living differences are even more extreme among metropolitan areas. The San Francisco Bay area is almost 40 percent more expensive than Rome, Georgia, a charming locale nestled in the foothills of the Appalachians. Since the cost of living is usually higher in states and metropolitan areas where the average household income is above the U.S. median, the Gini coefficient tends to exaggerate differences in the levels of material comfort and well-being implied by economic inequality.

Moreover, despite the suitability of Gini coefficients for comparing levels of income inequality over time and among countries, the findings expressed by these comparisons can obscure their implications for economic well-being. For example, the .378 Gini coefficient for the United States represents a much higher degree of income inequality than the .257 computed for the Slovak Republic. As for economic well-being, a look at how much money is actually available reveals that the Slovak Republic’s median disposable household income amounts to 29 percent of that of the United States.4 Its middle-class would be on welfare here.

Finally, the Gini coefficient lends numerical precision to the assumption that increasing economic equality is a social improvement. Yet during a recession economic equality as measured by the Gini index may well increase in a country where everyone is getting poorer. Earnings fall for people in both the upper and lower income brackets, but the decline is steeper for those at the higher end who have more to lose in the first place. By the same token, a country could experience rising inequality according to its Gini index when everyone is becoming better off. The rich are getting richer as the poor are also getting richer, just not as much. Rising inequality, however, can also signal that the rich are getting absolutely more and the poor are getting absolutely less. But the Gini coefficient metric by itself is powerless to tell you which is which.

So, are the rich getting richer and the poor getting poorer? A 2012 Pew Research Center survey found 76 percent of the public answered “yes,” which was about the same as the 74 percent who held this view in 1987.5 In contrast to the Gini coefficient, which cannot answer the question, the analysis of income quintiles entails a direct examination of how money is distributed among the different groups, revealing the extent to which their incomes are rising or falling. Calculating the financial resources of five groups that range from the top to the bottom 20 percent of the income distribution, this approach illuminates the economic well-being of families and how they fare over time. But here, too, the results vary according to the alternative definitions of income.

Thomas Piketty and Emmanuel Saez’s well-known study of income inequality in the United States, for example, was based on the market income of tax filers.6 According to this definition, from 1979 to 2007 there was a 33 percent decline in the mean income of those in the bottom quintile in contrast to a 33 percent increase among those in the top 20 percent of tax units. Thus, left entirely to its own devices, the market allocation of income generated a pattern of increasing inequality wherein the rich got noticeably richer and the poor got poorer—a bleak testimony, supposedly, to the distributional problem of capitalism.

However as Richard Burkhauser pointed out in his presidential address to the Association for Public Policy Analysis and Management, the market income of a tax unit is a poor indicator of how much money families actually have to live on.7 A more inclusive measure of the income that remains in households after subtracting what they must pay in taxes and adding the money they receive through government transfers transmits a different image of the American experience. Applying these criteria, instead of a decline we see a 32 percent increase in the mean income of the poorest fifth between 1979 and 2007. (Table 1) Overall, this broader measure still reveals a rise in inequality during that period as the mean income of those in the top bracket climbs by 54 percent.8 But it, too, is incomplete.



Source: * Philip Armour, Richard V. Burkhauser, and Jeff Larrimore, “Deconstructing Income and Income Inequality Measures: A Crosswalk from Market Income to Comprehensive Income” American Economic Review (May, 2013). ** Congressional Budget Office, “The Distribution of Household Income and Federal Taxes, 2010” (Government Printing Office, 2013).

Along with taxes and transfers, the most authoritative and extensive measure of income also incorporates capital gains. Along with Burkhauser and his colleagues, the nonpartisan Congressional Budget Office (CBO) agrees that a comprehensive definition involves the sum of market income adjusted for taxes, household size, cash and in-kind transfers, and capital gains.9 However, the consensus unravels over the issue of exactly how to value capital gains. The basic choice is whether to focus on the total taxable gains realized in the year capital assets are sold or the annual change in value of capital assets whether or not they are sold. This is not just a matter of bookkeeping. The choice to include either realized or accrued capital gains in the calculation of annual income has a considerable impact on the rates of inequality.

The CBO favors the use of realized capital gains that are reported on tax returns. After factoring in the impact of taxes, capital gains, and government transfers the CBO data reveal a sharp decline in inequality compared to when it is measured solely by market income. According to these figures, between 1979 and 2010 the household income in the bottom quintile increased by 49 percent, the income in the middle three quintiles increased on average by 40 percent, and those in the highest bracket increased by 71 percent.10 While incomes increased across the board, the largest gains registered on the two ends of the income distribution. These findings temper progressive arguments that focus on the increasing inequality of market incomes to demonstrate the need for greater social welfare spending.

The income measures cited above all indicate a rising level of inequality that varies only in the rate at which it seems to have increased over the past three decades. In contrast, a different picture emerges if accrued capital gains, which include housing, are substituted for realized taxable gains. This approach yields a reversal of income trends between 1989 and 2007, which shows a decline in inequality as the household income in the bottom quintile climbed at a rate considerably higher than the increase experienced in the top quintile, which was hit much harder by the housing market crash in 2007. Needless to say, the choice between these methods of valuing capital gains is highly contested.

Every pertinent measure of income quintiles, especially the widely acknowledged comprehensive assessment by the CBO, dispels the notion that within the United States over the past three decades the rich have been getting richer as the poor have gotten poorer. The CBO measure reveals that from the highest to the lowest quintile, the mean household income of every group was lifted, even amid a rising tide of inequality. Among the bottom fifth the mean income increased by 49 percent. That’s not peanuts, particularly when we recognize what else is happening.

Another Dimension: Looking Within the Groups

Although the analyses of change since 1979 illustrate the extent to which household incomes climbed while the gap between the bottom and top fifths widened, it’s a one-dimensional picture that discounts what was happening within these economic bands. This image conveys a static impression that the same households within each quintile were experiencing these changes over time. In truth, a lot more was going on among the households within these five divisions, the particulars of which lend depth to the one-dimensional story of increasing economic inequality.

To grasp the full implication of rising inequality in household income, it is important to recognize that during the period in question young workers were continually entering the labor force as the older generation retired and died. A 25 year old who began working in 1979 while living on his own with an income in the bottom 20 percent would very likely reach a higher bracket by the time he was 53 years old in 2007. So not only did entry-level income rise between 1979 and 2007, but over the course of time many of those who started out at the bottom climbed toward the top. In just the period from 1996 to 2005, for example, the U.S. Treasury Department estimates that about half of the taxpayers starting in the bottom 20 percent moved into a higher income bracket.11 Of course, we do not know how many members of this upwardly mobile group were young scions spending their first year out of Princeton as shipping clerks in their fathers’ factory, serving Teach for America in a poor rural area or lolling lazily on the Left Bank—a reminder that numbers can impose a surface on patterns that shields us from the underlying reality.

There is even more to this story. As time passed, the 25 year old got married and had two children. Thus, what started in 1979 as a single-person household in the bottom fifth of the income distribution had morphed into a middle-income household with four people by 2007. This change illustrates an important characteristic of the income quintiles. Although they represent five groups with an equal number of households, the average number of persons per household within these groups varies as do other characteristics such as family structure and employment. The top fifth of households contain 82 percent more people than the bottom fifth. The proportion of married couples in each group ranges from 17 percent in the lowest income quintile to 78 percent in the highest. At the same time, single men and women living alone account for 56 percent of the households in the bottom fifth, but only 7 percent among the top group. And no one was employed in more than 60 percent of the households in the bottom quintile; while 75 percent of the households in the top quintile had two or more earners.

Taking account of the household characteristics within each quintile reveals that to some extent the increasing level of income inequality since 1979 coincides with the changing demographics of family life, particularly the smaller number of persons per household, the decreasing rate at which couples form and maintain stable marriages, and the increasing number of two-earner households. On that score, W. Bradford Wilcox and Robert I. Lerman estimate that 32 percent of the growth in family income inequality since 1979 is linked to the retreat from marriage and the decline of stable family life.12 The point, again, is that economic data are not self-interpreting, and that without a relevant sociological filter they can be made to mean almost anything except what they actually mean.

Concentrating on advances within just the top quintile offers a different perspective, which sharpens our understanding of what is behind the rising level of economic inequality in recent years. Two prominent findings based on the CBO’s all-inclusive measure of income tell the story: From 1979 to 2010 the after-tax income of the top 1 percent increased by 201 percent (compared to the 49 percent increase for households in the bottom quintile and the 65 percent increase for those in the 81st to 99th quintile).13 Research focused on the pre-tax market income of the top 1 percent generates an even higher level of inequality than the CBO findings.

Thus, a disproportionate degree of the increasing level of inequality was due to significant financial gains made by those at the apex of the income pyramid. As for the rest, a careful analysis matching data from the U.S. Census Bureau and Internal Revenue Service demonstrates that after 1993 there was no palpable increase of inequality among the bottom 99 percent of the population. Since the pre-tax incomes of the top 1 percent started at $388,905 in 2011, many of these families would not be considered the super-rich. It’s around the top one-tenth of 1 percent, where pre-tax incomes start at $1,717,675, that we begin to cross the line between relatively well-off and truly affluent.

As soon as the conversation on inequality begins to concentrate on the wealthiest households, the question increasingly comes to mind: What do these people do to deserve such immense rewards? A 2013 study commissioned by the New York Times discloses a median executive pay of $13.9 million among the CEOs of 100 major firms, described by one journalist as a “new class of aristocrat.”14 Although not terribly harsh, this description connotes a privileged class renowned more for its leisure pursuits than its productive labor. But it does suggest how easily personalizing the numbers can transform a dispassionate report on the top 1 percent into bitter accounts of debauchery and corporate corruption. The likes of Bernie Madoff, Tyco’s Dennis Kozlowski, and Ken Lay of Enron supply no shortage of infamy on which to justify a denial of merit. But then there are the brilliant hard-working multi-millionaires who created Apple, Google, and Microsoft, not to mention our favorite movie stars and athletes. Even here some might question why grown men should receive immense sums of money to stand around a few afternoons a week waiting for a chance to hit a ball with a big stick. Major League baseball players were paid on average $3.39 million in 2013. In contrast, for the same activity most minor league players earned between $2,500 and $7,000 for a five-month season—talk about inequality!

Like it or not, in a capitalist system the criterion for reward is ultimately associated with what the market will bear. Of course, many people doubt just how well this standard works in practice. They wonder, for example, how difficult it might be to replace a CEO earning $20 million a year with an equally qualified executive who would accept half that salary. Also, market demand is no guarantee of social value or cultural enlightenment. A writer’s worth varies by the number of readers willing to plunk down the price of a book, regardless of how crass or meaningless the content. Alas, Fifty Shades of Gray has earned millions, while my publishers will be fortunate to clear the all-too-modest advance awarded for Never Enough: Capitalism and the Progressive Spirit. What the market will bear is certainly an imperfect calibration, but most people still think it preferable to having the standard set by bureaucratic quotas or political bargains, though both are often in play, as well.

How Has the Middle Class Really Fared?

Politicians on both sides of the aisle contend that the middle class is being crushed by inequality and diminishing income. But with household incomes increasing amid rising inequality, what do the facts tell us about the real material state of the middle class? There are several ways to answer this question, depending on how the middle class is defined and the benchmarks against which its progress and well-being are measured. The historical absence of an aristocracy has bred a fluid sense of social class and a democratic ethos that instills a degree of reluctance in Americans to identify as “upper class.” Thus, the middle class is a well-regarded, if ill-defined, status to which most Americans subscribe. It is typically associated with one’s income, education, and occupation. Numerous polls capture the propensity of Americans to identify themselves as somewhere along the spectrum of lower-middle to upper-middle class.

When policymakers and the media talk about the middle class, however, it is usually defined by economic divisions. Estimates vary regarding the range of income that delineates the middle class, as well as the interpretation of how the economic fortunes of this group have changed over time. Thus, reviewing the same Census Bureau data the New York Times decries, “Middle Class Shrinks Further as More Fall Out Instead of Climbing Up,” while ten days later the Pew Research Center announces, “America’s ‘Middle’ Holds Its Ground After the Great Recession.”15 Both of these captions are correct and neither highlights the larger story in the data, which only underscores how those who write the headlines may parse the numbers to express the points they wish to publicize. The economic definitions of the middle class in these reports differ: $35,000-$100,000 in the New York Times and $40,667-$122,000 in the Pew study. But the findings are very similar. Both show a substantial contraction of about 10 percent in the size of the middle class, which started shrinking around 1970. Though it sounds ominous, this decline is not necessarily a distressing trend. It depends on where those who were squeezed out of the middle class ended up. If they all moved into the upper income brackets, everyone’s better off.

So where did they go? The answer hinges on the years in question. The New York Times headline focused on the period from 2000 to 2013, the decade of the Great Recession during which the middle class declined by around 2 percent, the upper-income group also declined by about 3 percent, and the lower-income group increased. The Pew caption referred to the period from 2010 to 2013, just after the Great Recession. Over this interval the size of the middle class remained stable, and there was even a small uptick in the upper-income group and a slight decline in the lower-income group.

Despite the fluctuation of a few percentage points during the Great Recession, the larger story in the New York Times report is that between 1967 and 2013 both the lower-income and the middle-income groups contracted while the size of the upper-income group expanded by 15 percent. From this perspective the shrinking of the middle class (and of those in the lower-income bracket) is directly connected to a significant advance in economic well-being as the combined size of the middle- and upper-income groups grew by 5 percent.

Thus, while the New York Times headline evoked a disheartening picture of middle-class decline, the data easily yield a more promising interpretation of the middle-class experience since 1970. The Pew findings offer a somewhat different conclusion, in part because the middle-class definition was pegged at a higher level of income. Although the middle-income group fell by 10 percent, about 6 percent of those who left had climbed into the upper-income category. What a way to go.

Of course, there are other benchmarks against which to evaluate the economic progress and status of the U.S. middle class. Certainly, those concerned about inequality would judge that the middle class has not fared very well in comparison to the income gains realized by the country’s top 1 percent. True; but consider everyone else on the planet. The U.S. middle class boasts among the highest disposable household incomes in the world. The average U.S. family has 38 percent more disposable household income than a family in Italy, 25 percent more than a family in France, and 20 percent more than a household in Germany, when adjusted for differences in purchasing power. (Of course, that doesn’t take fully into account the more efficient provision of many services in Western Europe via the public route: think health care, for example. Which only confirms the point that numbers alone cannot really tell us very much.)

Although some academics invest considerable intellectual energy in debating how to quantify inequality and the significance of change in measures such as the Gini coefficient, most members of the middle class have no idea whether this index is going up or down unless they read about it in the news. And even then the average middle-class citizen is more interested in how much money remains for her family to live on after the give and take of government taxes and transfers than whether or not the Gini index rose or fell by three-tenths of a point.

Could We Ask for More?

Several issues have so far been raised about the divergent approaches to the measurement of inequality, the disparate characteristics of those in different income brackets, the absence of cost-of-living adjustments, the plight of the middle class, the soaring 1 percent, and the sobering revelation of international comparisons. On the whole these issues enable us not so much to dismiss concerns about rising economic inequality as to calm public apprehensions about its rate, degree, and implications. The disparities related to the changing distribution of income in the United States look a lot more acute before taxes and benefits are taken into account, for example—are you listening, Dr. Piketty? As such it can be said that the capitalist market generates and the welfare state mitigates inequality.

Recounted in its most auspicious light, the story of this interaction over the past three decades reveals that while inequality increased, so did household incomes at every level. Measured by disposable household income the U.S. standard of living is among the highest of all the advanced industrial democracies, not to mention the rest of the world. Indeed, reflecting on the rest of the world, Tyler Cowen urges us to preface all discussions of inequality with a reminder that although economic inequality has been increasing in advanced industrialized nations, over the past two decades global inequality has been falling.16 And given global economic patterns, this is not a coincidence but a relationship.

Of course, in an ideal world everyone would have been even better off if the top 1 percent had taken home less than 13 percent of all the income and the bottom 20 percent had gained more—even while the economy grew at the same overall rate. Not to promote the best as an enemy of the good, there is nevertheless a convincing case to be made for social reforms that would to some degree shift the distribution of income away from the top. Progressives and conservatives generally agree on the need to rein in government transfers received by wealthy citizens, particularly the special benefits derived from the favorable tax treatment afforded to homeowners. These benefits, known as “tax expenditures,” allow home owners to deduct the interest paid on mortgages and to net up to $500,000 of capital gains tax-free on the sale of their homes.

The amounts are not trivial. The CBO estimates that the tax expenditures for mortgage-interest deductions amount to $70 billion, almost 73 percent of which goes to households in the top 20 percent of the income distribution, while those in bottom 20 percent receive no benefit. Although there would be some downside for the home-building industry, limiting tax subsidies to wealthy homeowners could lower the level of inequality without seriously adverse consequences for the rate of homeownership.

Yet even if these adjustments were made, much income inequality would still remain, which takes us back to the question: Could we ask for still more? Obviously, there are many ways for government to appropriate additional money from those in the upper-income brackets and deliver more to those on the bottom. Raising income taxes, lifting the ceiling on taxable income for Social Security, increasing the Earned Income Tax Credit and eliminating its marriage penalties, boosting the minimum wage, means-testing Social Security benefits, and taxing the fringe benefits of employment are among the evident alternatives. Then there are the less well-recognized but hardly trivial proposals to tax some classes of advertising and to eliminate the corporate income tax altogether in the context of comprehensive tax reform. Progressives and conservatives argue about whether any and all such measures would kill jobs or boost the economy, discourage work or stimulate activity, generate class conflict or enhance social solidarity, and advance social justice or deny the just deserts of individual merit. A vast literature on these issues has generated mixed findings about the implications of various measures.

Considering the uncertainty surrounding these issues, the degree of support for additional measures to spread the nation’s wealth is heavily influenced by one’s answer to the question: How serious is the problem of rising economic inequality amid abundance? The answer rests on competing ideas about the current state of material well-being in the United States, the integrity of free-market capitalism and, above all, the putative consequences of inequality.

Progressives tend to think that inequality is the story and that, as already noted, nearly everything wrong in U.S. society stems from it. But this argument ultimately depends on presumed maladies arising from inequality that more than stretch scientific criteria for medical causality. The evils ascribed to inequality expand roughly at the same rate as the DSM manual, and that is a suspicious thing.

As long as household incomes are increasing at every level (as measured by the CBO), conservatives are less concerned about rising economic inequality than progressives. They accept inequality as the tribute that equality of opportunity grants to merit, productivity, and luck in the free market, recognizing that this transaction is sometimes distorted by discrimination, exploitation, corruption, and outright larceny, which need to be checked by government. With the average family’s disposable household income in the United States among the highest in the world, inequality is perceived less as a source of social friction between the “haves and the have-nots” than as an imbalance between those who have a lot and others who have even more. This, on balance and seen in an historical perspective, ought to be a cause for celebration, not an occasion for mass self-flagellation.

1Vlastos, “Justice and Equality,” in Social Justice, edited by Richard Brandt (Prentice-Hall, 1962), p. 32.

2Frankfurt, On Inequality (Princeton University Press, 2015).

3“Real Personal Income for States and Metropolitan Areas, 2008-2012,” U.S. Bureau of Economic Analysis, April 24, 2014.

4Michael Forster et al., Society at a Glance 2011, (OECD 2011).

5“Partisan Polarization Surges in Bush, Obama Years: Trends in American Values: 1987-2012,” Pew Research Center, June 4, 2012.

6Piketty & Saez, “Income Inequality in the United States,” Quarterly Journal of Economics (February 2003).

7Burkhauser, “Presidential Address Evaluating the Questions that Alternative Policy Success Measures Answer,” Journal of Policy Analysis and Management (Spring 2011).

8Philip Armour, Richard V. Burkhauser, and Jeff Larrimore, “Deconstructing Income and Income Inequality Measures: A Crosswalk from Market Income to Comprehensive Income,” American Economic Review (May 2013). The government transfers included here involve both cash and in-kind benefits, specifically food stamps, housing subsidies, and school lunches, but not the value of employer- and government-provided health insurance. For an analysis of the income growth when cash transfers and health insurance are included, but not in-kind benefits, see Richard Burkhauser, Jeff Larrimore, and Kosali Simon, “A ‘Second Opinion’ on the Economic Health of the American Middle Class,” National Tax Journal (March 2012), pp. 7-32.

9Congressional Budget Office, The Distribution of Household Income and Federal Taxes, 2008 and 2009 (Government Printing Office, 2012). The major components of income included here differ from those recommended by the Canberra Group mainly in regard to capital gains, which the Canberra guidelines exclude from the measure of household income in favor of their treatment as changes in net worth.

10Congressional Budget Office, The Distribution of Household Income and Federal Taxes, 2010 (Government Printing Office, 2013).

11U.S. Treasury Department, Income Mobility in the U.S. from 1996 to 2005 (Government Printing Office, 2007). A similar rate of mobility was reported for those in the bottom quintile from 1986 to 1996. Unlike the CBO measure, these findings are based on pre-tax market income plus cash but not tax-exempt or in-kind transfers. Also, the unit of analysis is not adjusted for household size.

12Wilcox & Lerman, “For richer, for poorer: How Family Structures Economic Success in America,” AEI, October 28, 2014.

13The Distribution of Household Income and Federal Taxes, 2010. In 2010 the top 1 percent netted almost 13 percent of all the after tax income (15 percent before taxes).

14Peter Eavis, “Invasion of the Supersalaries,” New York Times, April 13, 2014.

15Dionne Searcey & Robert Gebeloffjan, “Middle Class Shrinks Further as More Fall Out Instead of Climbing Up,” New York Times, January 25, 2015. Rakesh Kochhar & Richard Fry, “America’s ‘Middle’ Holds Its Ground After the Great Recession,” Pew Research Center, February 4, 2015.

16Cowen, “Income Inequality Is Not Rising Globally. It’s Falling,” New York Times, July 19, 2014.

Neil Gilbert is Chernin Professor of Social Welfare at the University of California, Berkeley. This essay is adapted from his latest book, Never Enough: Capitalism and the Progressive Spirit (Oxford University Press, forthcoming
218  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Pravda on the Beach: Ocare working on: January 05, 2017, 11:50:05 AM
How do we answer the charts and attendant assertions herein?

http://www.latimes.com/business/hiltzik/la-fi-hiltzik-obamacare-charts-20170104-story.html

Good question and we can add to this with data but the simple answer is that the piece is deceptive by its omissions.  For example my plan was lost due to Obamacare.  I am switching doctors a second and third time due to Obamacare.  My cost has roughly doubled each year due to Obamacare.  The plan I choose to be on is illegal due to Obamacare.  I went from self-sufficient to subsidized due to Obamacare.  I am a ward of the state and disgusted by the thought of it.  (Yet I pay more than 100% of my take home income in taxes.)  Government subsidized healthcare is a concern and an extremely high marginal tax rate that faces each low to mid-income worker wishing to increase their income.  In other words, it keeps poor people poor, cripples the growth in the economy, and Democrats love that? Converting to subsidy is not lowering the cost.  On their charts I count as 'insured' and presumably satisfied with Obamacare - because I signed up for a lousy policy that has paid none of my actual expenses as opposed to breaking the law and paying penalties in addition to the cost of self-paid, over-priced healthcare.  

The last article published in Harrisburg (the political center of) Pennsylvania on healthcare before the election was that premiums are going up another 33% per year, in addition to all the other increases we had while Obama and Democrats were losing the House, Senate, state Houses and Governorships largely due to government over-reach and Obamacare.  Republicans hadn't carried PA (or MI or WI) in a Presidential election since Reagan's 49 state win in 1984.  Trump carried Pennsylvania by a greater margin, 67,000 votes, than Hillary had in NH, MN, NV and ME.  And it wasn't because of his high approvals!  People hate Obamacare and all it symbolizes in our government-run lives.  Club for Growth Republican Pat Toomey won reelection in (formerly) blue PA, by a wider margin than Trump.  Conservative Marco Rubio won Florida by eight times the margin of Trump, a combined margin of well over 2 million in a swing state over the nearest Democrat in 2 races since Obamacare.  Democrats lost 90% of their Presidential margin in MN in 8 years from 2008 to 2016.

The insurance companies failed and are pulling out of states and markets.  The risk corridors failed.  People are given fewer and fewer choices, less competition.  The system is broken.  It was broken before Obamacare.  Obamacare was sold on lies, rammed down our throats and made things worse.  If the charts don't show that, it's time for new and better charts.
219  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: The Politics of Health Care on: January 05, 2017, 01:11:49 AM
GM:  If I as the seller of a good or service decide to set the price differently for different customers, who is to tell me otherwise?


I believe the criteria for determining legal discrimination is 'rational basis'.  

If the provider can collect sooner or with greater certainty, say with cash or guaranteed payment, the price might be lower.  There still can be prices published, easy to access that can also list available discounts and surcharges.

Yesterday I had the vocation of 'medical coding' explained to me.  CCP likely knows more.  The medical coder goes through the doctor's notes and writes down the codes and from that the computer bills it out - based on the doctor's handwriting!

If the computer knows the codes and all the rates, why can't the consumer?
----------------------------------------------------------------------------------------------------------------

CCP:
We all want world class health care.  And at the same time we want someone else to pay for it.
There appears no way to get around the fact that to pay for pre existing conditions all of us will have to pay.  Hence reason for the "mandate".



This question seems to be stumping everyone.  It seems to me that to qualify for the pre-existing conditions benefit you have to do a few things, sign up for coverage, pay extra, keep coverage as long as you have income, etc.  If it is subsidized, that subsidy should come out of general revenues and not drive up the rates for others making healthcare costs further out of reach for more and more people.

The federal budget already spends 1 trillion a year on healthcare.  We don't need to instantly or ever hit a zero number.  We can subsidize some healthcare and some people will still get healthcare for free.  The point of reform is to get more and more people, hundreds of millions of them, to be choosing and paying for their own private sector healthcare and for the government to be paying for less and less of it, at least as a proportion of the economy.  Within that privatization movement, the government can require better and better disclosure on services and prices, IMHO.
220  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: California on: January 04, 2017, 10:51:40 PM
I am available to adopt any California prohibited firearms and magazines!  grin

In the event of an emergency, coup, war, insurgency, nuclear fallout, terror attack or tsunami, can we all agree to meet at GM's place?   )
221  Politics, Religion, Science, Culture and Humanities / Science, Culture, & Humanities / LGBTQIAGNC on: January 04, 2017, 09:45:16 PM
LGBTQIAGNC stands for ‘Lesbian, gay, bisexual, trans, queer, intersex, asexual and gender-non-conforming’.

Let's get up to speed on this.    )

Whatever became of private staying private?  Now it's got to be a billboard and a parade.

http://www.powerlineblog.com/archives/2017/01/the-trans-train-trolls-on.php
222  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Middle East War, the loving families of Jihad, 7yo suicide bomber on: January 03, 2017, 03:08:06 PM
Coming to a theater near you, this is the last story I read this morning before showing a rental to a peaceful, recent immigrant family, unvetted from that region.

http://www.dailymail.co.uk/news/article-4054312/Jihadi-parents-teach-young-daughters-suicide-bombers-kiss-goodbye-startling-footage-shortly-seven-year-old-walked-Damascus-police-station-blown-remote-detonator.html

What does the seven year old daughter - suicide bomber - do with the hundred virgins waiting, play dolls?

Am I reading this wrong, is this an unreliable source, they have it on video. As Larry Elder says about his microphone, is this thing on?  Do they cover this kind of thing in American media? 
223  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: The Cognitive Dissonance of the left, Paul Krugman, visionary on: December 31, 2016, 06:20:54 AM
By 2005 or so, it will become clear that the Internet's impact on the economy has been no greater than the fax machine's.  - Paul Krugman, 1998

http://web.archive.org/web/19980610100009/www.redherring.com/mag/issue55/economics.html
224  Politics, Religion, Science, Culture and Humanities / Politics & Religion / 15 percent surge in illegal immigration on: December 31, 2016, 06:09:42 AM
U.S. officials are grappling with a 15 percent surge in illegal immigration, reflecting continued failures by the Obama administration to deter illegal immigration along the country’s southwestern border.

https://www.washingtonpost.com/world/national-security/central-americans-continue-to-surge-across-us-border-new-dhs-figures-show/2016/12/30/ed28c0aa-cec7-11e6-b8a2-8c2a61b0436f_story.html?utm_term=.c3a6f0fe9c25

Same newspaper as Jen Rubin.  Illegals come and go as they choose - up until January 20th
225  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Mexican man charged with rape had 19 deportations, removals on: December 30, 2016, 10:37:57 PM
Do we have a revolving door, or what?

What sayeth wash Post's Jen Rubin, how many of these types coming here is too many, one?

http://www.kansas.com/news/nation-world/article123768739.html
226  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: the right lies and everything she writes in the Wash compost is the truth on: December 29, 2016, 12:16:05 PM
She is supposed to be the Wash Post's conservative writer!

"more people are leaving the United States to cross the border to Mexico than are coming the other way"

Because of bad job opportunities here.  That is still sign of a revolving door, an unsecured border with weapons, drugs and terrorists crossing it.

Pew Research" blah blah.  Didn't the polling companies just get everything wrong.

Speaking of that...   Poll:  13% of illegals admit they vote
http://www.capoliticalreview.com/capoliticalnewsandviews/poll-13-of-illegal-aliens-admit-they-vote/

28% of Hispanics in America are illegal.  17% of the US population is Hispanic.

No one said illegals are all rapists.  No one said they all vote.  What was said is that WE get to decide who comes in.  The extreme position in the debate was taken by Hillary who made no claim she would disallow anyone.

Even if we need more immigrants, who gets to choose whom we take in?  Why don't we take in the best and the brightest, the most ambitious.  Even for the lowest skill, lowest wage jobs, why don't we take in the ones with the best character and work ethic, clean background.  Maybe we already do.  No one knows with a wide open border.

If they all come from one or two places, live in enclaves and keep intact their culture and language of origin, and we chase them politically as separate groups, do we still have e pluribus unum, out of many, one?
227  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Not so efficient Germans, Islam in Europe on: December 29, 2016, 11:50:09 AM
Just reporting what I heard, "Germany's second worst leader ever."

Oddly, she was elected as a conservative and turned into a reckless, open borders liberal.
228  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Lurch to the left on: December 29, 2016, 11:32:54 AM

What a picture, really shows ashamed of his country as he so falsely reported his facts.  The man hasn't changed.  How is it that out of hundreds of millions of people, this is what rises up to nearly the top?
229  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: The Cognitive Dissonance of His Glibness on: December 29, 2016, 11:28:30 AM
IF Trump did not have such high negatives I think he would have blown Brock and Hillary out of the water.
OTOH if Hillary did also not have such high negs then who knows.
Everything considered I think there was a slight mandate to get rid of Brock and company at least or now.   


Right, the defects and negatives of the two of them were the stories of the campaign but underlying that was that America very typically changes course after two failed terms.  Because Obama approval polls above 50%, his failure was hard to measure, but plenty of other measures tell us America was unimpressed by his Presidency.


"I wrote a piece for Pat's site called skip the endzone dance that didn't go over very well"
Where was this?  I would like to see.


It looked a lot like this:  http://dogbrothers.com/phpBB2/index.php?topic=1736.msg99707#msg99707
http://www.spartareport.com/2016/11/way-forward-no-end-zone-dance-just-work/?yop_poll_tr_id=&yop-poll-nonce-23_yp582dd683773d4=a7b3ba56cc

It got some scathing comments but I stand by every word of it.  Like when we took the House, took the Senate, change is possible and might or might not happen.  So far none of it has happened.  That isn't a slam on anybody, just a reality check on where we are.  Surviving the repeal and replace of Obamacare is a big deal.  Tax reform.  Getting a great nominee on the Supreme Court is a big deal, hasn't happened yet.  Staying in power to do a second and third pick is a big deal.  We haven't begun...

My previous submissions,  they were all posted here first in the proper threads:    )
http://www.spartareport.com/2016/06/janet-yellen-fed-banking-monetary-policy/
http://www.spartareport.com/2016/09/fact-checking-hillary/
230  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: The Cognitive Dissonance of His Glibness, Obama's 'accomplishments' on: December 29, 2016, 11:01:12 AM
Revise and extend President Obama's accomplishments in decimating the liberal agenda with more big accomplishments:

Obama presided over the sale of 100 million guns in to private citizens in America - by continually threatening to ban them.

Pres. Obama had a hand in reelecting Israeli Prime Minister Benjamin Netanyahu, advancing peace through strength, by openly opposing his reelection.

Electing Donald Trump, couldn't have done it without him.  We will get a wall, a fence and some immigration sanity for the explicit reason that President Obama refused to do it and showed us the ocnsequences.

VP Joe Biden said President Obama's biggest accomplishment was ending the war in Iraq.  Surrender equals victory is the name of this thread, cognitive dissonance of the glibness.  Maybe our future readiness against ISIS and Islamic extremism will be Obama's biggest achievement, for bringing it out where we can see it.
231  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: The Cognitive Dissonance of His Glibness on: December 29, 2016, 08:05:01 AM
"his party is smaller, weaker and ricketier than it has been since at least the 1940s."

HI Doug.  I wish I could be so celebratory.

These control freaks are not going away.  They still have the media, they still have the minorities, academia, hollywood, California most immigrants and foreign born and there endless coalitions of any interest group  they can bribe with taxpayer money.

And I am worried about what can happen with Trump.  There are twenty ways for disasters and no matter what he will get the blame.

CCP,  I agree.  I added a couple of Link sources to that post. The point was to show some evidence that Barack Obama might not have defeated Donald Trump in 2016, since he did manage to lose almost everything else for them including Hillary's race. 

I wrote a piece for Pat's site called skip the endzone dance that didn't go over very well. My point was, we have accomplished nothing so far. We haven't repealed a single tax, law, program or regulation. We haven't even a plan to to change their 90 plus percent advantage in schools, colleges and media. If we nominate and confirm a Supreme Court Justice that is brilliant, conservative and perfect, it only takes us back to where we were before scalia died, a divided court..

I, too, am worried.  This was a pendulum swing, not a conservative shift. If we want a conservative shift, we will have to enact conservative policies and see great results, and even that is not enough.  We are still terrible at messaging.

Trump will have to double the growth rate and that is just starting point and a talking point against all that will be thrown at him that allegedly went wrong, like if the rich get richer.
232  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Media, it was Megan McArdle, not Nate silver, with forecasting accuracy in 20017 on: December 28, 2016, 11:10:20 PM
3 years ago:

Why I Think the GOP Will Have Control in 2017

http://meganmcardle.com/2013/07/12/why-i-think-the-gop-will-have-control-in-2017/amp/

"Getting a third term in the White House just seems to be really difficult.  And Barack Obama is not going to finish with a ground-shaking economic boom.
...
if the GOP takes the White House, I think the chances that they also take the House approach 100%."


Logic had it right.  Polling had it wrong.
233  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: The electoral college ended slavery on: December 28, 2016, 10:39:49 PM
Stick this in the NYT editorial pipe and smoke it.   )

it was the electoral college that made it possible to end slavery, since Abraham Lincoln earned only 39 percent of the popular vote in the election of 1860, but won a crushing victory in the electoral college.

https://www.washingtonpost.com/posteverything/wp/2016/11/15/in-defense-of-the-electoral-college/?utm_term=.195822a37f30
234  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Dem seats lost under Glibness on: December 28, 2016, 10:14:33 PM
As President Obama concludes his reign of error, his party is smaller, weaker and ricketier than it has been since at least the 1940s. Behold the tremendous power that Democrats have frittered away -- from January 2009 through the aftermath of Election Day -- thanks to Obama and his ideas:
Democrats surrendered the White House to political neophyte Donald J. Trump.
US Senate seats slipped from 55 to 46, down 16 percent.
US House seats fell from 256 to 194, down 24 percent.
Democrats ran the Senate and House in 2009. Next year, they will control neither.
Governorships slid from 28 to 16, down 43 percent.
State legislatures (both chambers) plunged from 27 to 14, down 48 percent
Trifectas (states with Democrat governors and both legislative chambers) cratered from 17 to 6, down 65 percent.
http://nypost.com/2016/12/25/obamas-legacy-is-a-devastated-democratic-party/
http://www.americanthinker.com/articles/2016/12/trump_would_have_beaten_delusional_obama.html
235  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Israel, UN Security Council, George Friedman on: December 28, 2016, 12:32:11 PM
http://www.realclearworld.com/articles/2016/12/27/a_meaningless_un_security_council_resolution_112154.html

Neither the United Nations resolution nor Trump’s shift is of great significance. Over the years, throughout the world, UNSC resolutions have been met with indifference. It does not matter what the UNSC says. It matters what the permanent members of the UNSC do. In the case of Israel and Palestine, no one on either side can do very much of significance. As for public opinion, that is fairly well locked into place. There are four camps: those who are pro-Israeli, those who are pro-Palestinian, those who wring their hand and express pieties and those who couldn’t care less. Nothing that happened at the U.N. will change anyone’s mind.
236  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Israel, and its neighbors on: December 28, 2016, 09:35:34 AM
Pre-answering John Kerry's speech today, an old proverb describes the Kerry dilemma perfectly and I want to be first to put this out there.

Better to remain silent and be thought a fool than to speak and remove all doubt.

We will help Israel attain peace by taking away the only thing they have to offer in exchange for peace.  Makes sense if you have absolutely no awareness of history, reality or strategy.
237  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Haaretz supports Obama and the resolution on: December 28, 2016, 09:19:59 AM

The liberal left is alive and well in Israel too, temporarily defeated by a great leader, Netanyahu.
238  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Thomas Sowell retiring on: December 28, 2016, 08:45:51 AM

Yes.  Thomas Sowell is synonymous with wisdom.  We may need a Conservative Wisdom, Thomas Sowell thread to bring out as much as we can of his previous work.  

A tribute from Michells Malkin:
http://www.realclearpolitics.com/articles/2016/12/28/thank_you_professor_sowell_132656.html

Sowell's academic work digs into civilizations and cultures across the world and throughout history, not just current headlines.  His past as a Marxist and his journey from Harlem High School to Harvard Law School grad and Univ of Chicago PhD in economics give him an authenticity on many topics that no one can match.

Some time ago I gave Thomas Sowell's great book Basic Economics with a $50 bill in it as a graduation gift to a young friend.  I hope he read far enough into it to find the money.
239  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Glick: Obama's play has just begun on: December 28, 2016, 08:19:55 AM
Caroline Glick
Here is what I think is a reasonable assessment of Obama's likely timeline for action against Israel.
Today, December 27, 2016: John Kerry is scheduled to address the UN Security Council and lay out his blueprint for the establishment of a Palestinian state in Jerusalem, Judea, Samaria and Gaza.
January 15, 2017: Kerry participates in French President Hollande's summit along with other leaders of the so called Quartet. The Quartet produces a document ratifying Kerry's speech as a unanimous position.
January 16, 2017: Obama makes a speech for Martin Luther King Jr.'s Birthday. In his speech he merges Palestinian statehood with the civil rights movement and announces it is time for Palestine to be formally recognized.
January 17, 2017: The Security Council convenes to ratify the Quartet's blueprint for Palestine as a Security Council resolution. The resolution will probably only speak of a process of bringing Palestine in as a full member in order to prevent automatic US defunding of the UN in accordance with standing US law requiring a funding cut-off in response to any UN recognition of Palestine.
January 20, 2017: Donald Trump is inaugurated and presented with Obama's fait accompli.
Obama has without a doubt been lobbying the incoming members of the Security Council to support this program, just as he lobbied the current members to support last Friday's resolution.

The only person who can derail this operation is Donald Trump.

Jan 21, President Trump suspends US financial support for the United Nations of terror and kleptocracy, proposes US embassy move to Jerusalem.
240  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: The Trump Transition/Administration on: December 24, 2016, 04:11:45 PM
The author does have a point .  Trump is not the President.  He is the President elect.  He should wait till 1/20 to conduct foreign policy.

And vice a versa. President Obama should not be taking actions pretending to govern this country after the inauguration,  Lame weasel.  Good riddance.
241  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Obama's Tantrum on: December 24, 2016, 12:12:00 PM
https://pjmedia.com/instapundit/252744/

The most instructive thing about Obama’s Security Council abstention is he didn’t have the guts to do it earlier, when he stood to lose something by doing it. Only after he calculated there was nothing more to squeeze from that particular quarter did he run up the Jolly Roger. Had it cost him it would have meant something, even as a gesture.

But even more interesting was his willingness to damage the Democratic party who he’s leaving with political bill, not to mention the fact that the policy his abstention represents makes little sense.

Israel is likely to emerge as a linchpin in the region, after Obama’s power vacuum bomb reduces the nearby countries to waste. If Turkey and Iran fall apart, which is not inconceivable, then Obama will have antagonized the last man standing.

It was bad timing and pointless, like a punch thrown by a fighter lying on the canvas — at the referee. That would leave his legacy a consistently dysfunctional whole: conceived in delusion, executed in incompetence and spite.
242  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: The electoral process, NYT Electoral College continued on: December 22, 2016, 07:53:09 PM
NYT:  "This page opposed the Electoral College in 1936, and in more recent years as well."

Whoops.  They were against it, before they were for it, before they were against it:

NYT Correction: December 20, 2016
An earlier version of this editorial incorrectly stated that the editorial board has been opposed to the Electoral College going back 80 years. It failed to note an exception: in 2000, the board defended the college after the election of George W. Bush.

The 2000 editorial was titled, “The Case for the Electoral College” and the editors argued that, “The Electoral College was first and foremost a compact among states, large and small, designed to ensure that one state or one region did not dominate the others.”  [Isn't that about what I said?]   )

The Times ended the editorial with:
The system has survived earlier instances in which the winner of the popular vote was denied the presidency. Wise voters and legislators will want to make sure that it survives this one as well.

http://www.nytimes.com/2000/12/19/opinion/the-case-for-the-electoral-college.html

243  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: US Economics, the stock market , and other investment/savings strategies on: December 22, 2016, 04:41:30 PM
"Real GDP growth in Q3 was revised to a 3.5% annual rate from a prior estimate of 3.2%, beating the consensus expected 3.3%."

I must admit I was wrong when I predicted the growth estimate would be revised downward after the election.  Still, this and the current quarter will conclude 8 years of lethargic, pathetic and ARTIFICIAL growth.

Nominal growth is 3% and our inflation target is 2%.  The difference is a rounding error; we aren't better off.

What would the real growth rate be without 10 trillion in new fiscal deficit stimulative spending?  What would it be without quantitative easing, asset re-purchases and 8 years of near zero interest rate policy?  Zero growth or worse, I suspect.

Easy money when it shouldn't be was a major cause of the last financial meltdown:  https://economicsone.com/2016/12/09/unconventional-monetary-policy-normalization-and-reform/
Have we learned anything?

What would the growth rate be if we didn't tax corporations at the highest rate in the world?  If we didn't pour two dozen new tax increases on the economy with Obamacare, or if we didn't add tens of thousands of new pages of regulations onto what used to be a relatively free economy?  If we hadn't dropped out of the top ten freest countries in the world in the Heritage Freedom Index?

Stay tuned.  Maybe we will find out.
244  Politics, Religion, Science, Culture and Humanities / Politics & Religion / US-Russia, Curious World of Donald Trump’s Private Russian Connections on: December 22, 2016, 03:46:47 PM
Long, worthwhile read from Trump thread, linked below.  I posted text in its entirety there because of registration issues at the site.  American interest, home of Walter Russell Mead, is a good site for foreign policy analysis, IMO.

"The rest of that post deserves notice in US-Russia thread.  What a human tragedy it was the way post-communist Russians sold out their country and the way that the world including our Clinton administration enabled it."  Disgraceful.  They were basking in Reagan's peace dividend while the old Soviet machine was gearing back to totalitarianism and to AGAIN become our largest geo-political threat.

http://dogbrothers.com/phpBB2/index.php?topic=2551.msg100622#msg100622
245  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Donald Trump on: December 22, 2016, 03:35:04 PM
We search for Truth around here, no matter where it may lead.

He dealt with shady characters.  I don't know what that means.  Just posting it in the spirit so well expressed above.

A professor who predicted before the election Trump would win also predicted he would be impeached.
https://www.youtube.com/watch?v=VNhz6a1PKWY&feature=youtu.be
American University professor Allan Lichtman has a system of predicting U.S. presidential election winners that accurately foresaw Donald Trump's victory. He joins CBSN to explain his prediction, and why he now thinks it's likely Trump will be impeached.

The argument was that he had shady and corrupt business practices before and a tiger never changes his stripes.

I doubted that when I heard it earlier; don't know of overt wrongdoing in his past and I think people underestimate his determination and discipline.  It's easy to do that when you see him speak or tweet undisciplined messages.

This piece posted earlier today does not allege illegal activities on the part of Trump or even known wrongdoings.  It just gives us a heads up and context if or when allegations come up from past dealings or future events.

If he commits impeachable offenses, I believe the R's (and Dems obviously) will turn on him quickly.  I predict he won't, but keeping the promise for the Trump business to do no new deals is a big part of that.


246  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Curious World of Donald Trump’s Private Russian Connections on: December 22, 2016, 09:57:29 AM
Now linked in the US Russia thread.  I don't buy the idea that his loyalties are other than to his new job, but at this point it is good to know all we can about where he comes from.  American Interest as a reliable site. This piece, as it says, raises more questions than answers.

http://www.the-american-interest.com/2016/12/19/the-curious-world-of-donald-trumps-private-russian-connections/

The American Interest
Published on: December 19, 2016
RUSSIA & THE WEST
The Curious World of Donald Trump’s Private Russian Connections
JAMES S. HENRY
Did the American people really know they were putting such a “well-connected” guy in the White House?

Throughout Donald Trump’s presidential campaign he expressed glowing admiration for Russian leader Vladimir Putin. Many of Trump’s adoring comments were utterly gratuitous. After his Electoral College victory, Trump continued praising the former head of the KGB while dismissing the findings of all 17 American national security agencies that Putin directed Russian government interference to help Trump in the 2016 American presidential election.

As veteran investigative economist and journalist Jim Henry shows below, a robust public record helps explain the fealty of Trump and his family to this murderous autocrat and the network of Russian oligarchs. Putin and his billionaire friends have plundered the wealth of their own people. They have also run numerous schemes to defraud governments and investors in the United States and Europe. From public records, using his renowned analytical skills, Henry shows what the mainstream news media in the United States have failed to report in any meaningful way: For three decades Donald Trump has profited from his connections to the Russian oligarchs, whose own fortunes depend on their continued fealty to Putin.

We don’t know the full relationship between Donald Trump, the Trump family and their enterprises with the network of world-class criminals known as the Russian oligarchs. Henry acknowledges that his article poses more questions than answers, establishes more connections than full explanations. But what Henry does show should prompt every American to rise up in defense of their country to demand a thorough, out-in-the-open congressional investigation with no holds barred. The national security of the United States of America and of peace around the world, especially in Europe, may well depend on how thoroughly we understand the rich network of relationships between the 45th President and the Russian oligarchy. When Donald Trump chooses to exercise, or not exercise, his power to restrain Putin’s drive to invade independent countries and seize their wealth, as well as loot countries beyond his control, Americans need to know in whose interest the President is acting or looking the other way.
—David Cay Johnston,

Pulitzer Prize-winning author of The Making of Donald Trump
 
“Tell me who you walk with and I’ll tell you who you are.”
—Cervantes

“I’ve always been blessed with a kind of intuition about people that allows me to sense who the sleazy guys are, and I stay far away.”
—Donald Trump, Surviving at the Top

Even before the November 8 election, many leading Democrats were vociferously demanding that the FBI disclose the fruits of its investigations into Putin-backed Russian hackers. Instead FBI Director Comey decided to temporarily revive his zombie-like investigation of Hillary’s emails. That decision may well have had an important impact on the election, but it did nothing to resolve the allegations about Putin. Even now, after the CIA has disclosed an abstract of its own still-secret investigation, it is fair to say that we still lack the cyberspace equivalent of a smoking gun.

Fortunately, however, for those of us who are curious about Trump’s Russian connections, there is another readily accessible body of material that has so far received surprisingly little attention. This suggests that whatever the nature of President-elect Donald Trump’s relationship with President Putin, he has certainly managed to accumulate direct and indirect connections with a far-flung private Russian/FSU network of outright mobsters, oligarchs, fraudsters, and kleptocrats.

Any one of these connections might have occurred at random. But the overall pattern is a veritable Star Wars bar scene of unsavory characters, with Donald Trump seated right in the middle. The analytical challenge is to map this network—a task that most journalists and law enforcement agencies, focused on individual cases, have failed to do.

Of course, to label this network “private” may be a stretch, given that in Putin’s Russia, even the toughest mobsters learn the hard way to maintain a respectful relationship with the “New Tsar.” But here the central question pertains to our new Tsar. Did the American people really know they were putting such a “well-connected” guy in the White House?

The Big Picture: Kleptocracy and Capital Flight
A few of Donald Trump’s connections to oligarchs and assorted thugs have already received sporadic press attention—for example, former Trump campaign manager Paul Manafort’s reported relationship with exiled Ukrainian oligarch Dmytro Firtash. But no one has pulled the connections together, used them to identify still more relationships, and developed an image of the overall patterns.
Nor has anyone related these cases to one of the most central facts about modern Russia: its emergence since the 1990s as a world-class kleptocracy, second only to China as a source of illicit capital and criminal loot, with more than $1.3 trillion of net offshore “flight wealth” as of 2016.1
This tidal wave of illicit capital is hardly just Putin’s doing. It is in fact a symptom of one of the most epic failures in modern political economy—one for which the West bears a great deal of responsibility. This is the failure, in the wake of the Soviet Union’s collapse in the late 1980s, to ensure that Russia acquires the kind of strong, middle-class-centric economic and political base that is required for democratic capitalism, the rule of law, and stable, peaceful relationships with its neighbors.

CapFlight-1Instead, from 1992 to the Russian debt crisis of August 1998, the West in general—and the U.S. Treasury, USAID, the State Department, the IMF/World Bank, the EBRD, and many leading economists in particular—actively promoted and, indeed, helped to finance one of the most massive transfers of public wealth into private hands that the world has ever seen.

For example, Russia’s 1992 “voucher privatization” program permitted a tiny elite of former state-owned company managers and party apparatchiks to acquire control over a vast number of public enterprises, often with the help of outright mobsters. A majority of Gazprom, the state energy company that controlled a third of the world’s gas reserves, was sold for $230 million; Russia’s entire national electric grid was privatized for $630 million; ZIL, Russia’s largest auto company, went for about $4 million; ports, ships, oil, iron and steel, aluminum, much of the high-tech arms and airlines industries, the world’s largest diamond mines, and most of Russia’s banking system also went for a song.

In 1994–96, under the infamous “loans-for-shares” program, Russia privatized 150 state-owned companies for just $12 billion, most of which was loaned to a handful of well-connected buyers by the state—and indirectly by the World Bank and the IMF. The principal beneficiaries of this “privatization”—actually, cartelization—were initially just 25 or so budding oligarchs with the insider connections to buy these properties and the muscle to hold them.2 The happy few who made personal fortunes from this feeding frenzy—in a sense, the very first of the new kleptocrats—not only included numerous Russian officials, but also leading gringo investors/advisers, Harvard professors, USAID advisers, and bankers at Credit Suisse First Boston and other Wall Street investment banks. As the renowned development economist Alex Gerschenkron, an authority on Russian development, once said, “If we were in Vienna, we would have said, ‘We wish we could play it on the piano!'”

For the vast majority of ordinary Russian citizens, this extreme re-concentration of wealth coincided with nothing less than a full-scale 1930s-type depression, a “shock therapy”-induced rise in domestic price levels that wiped out the private savings of millions, rampant lawlessness, a public health crisis, and a sharp decline in life expectancy and birth rates.

Sadly, this neoliberal “market reform” policy package that was introduced at a Stalin-like pace from 1992 to late 1998 was not only condoned but partly designed and financed by senior Clinton Administration officials, neoliberal economists, and innumerable USAID, World Bank, and IMF officials. The few dissenting voices included some of the West’s best economic brains—Nobel laureates like James Tobin, Kenneth Arrow, Lawrence Klein, and Joseph Stiglitz. They also included Moscow University’s Sergei Glaziev, who now serves as President Putin’s chief economic advisor.3 Unfortunately, they were no match for the folks with the cash.

There was also an important intervention in Russian politics. In January 1996 a secret team of professional U.S. political consultants arrived in Moscow to discover that, as CNN put it back then, “The only thing voters like less than Boris Yeltsin is the prospect of upheaval.” The experts’ solution was one of earliest “Our brand is crisis” campaign strategies, in which Yeltsin was “spun” as the only alternative to “chaos.” To support him, in March 1996 the IMF also pitched in with $10.1 billion of new loans, on top of $17.3 billion of IMF/World Bank loans that had already been made.

With all this outside help, plus ample contributions from Russia’s new elite, Yeltsin went from just 8 percent approval in the January 1996 polls to a 54-41 percent victory over the Communist Party candidate, Gennady Zyuganov, in the second round of the July 1996 election. At the time, mainstream media like Time and the New York Times were delighted. Very few outside Russia questioned the wisdom of this blatant intervention in post-Soviet Russia’s first democratic election, or the West’s right to do it in order to protect itself.

By the late 1990s the actual chaos that resulted from Yeltsin’s warped policies had laid the foundations for a strong counterrevolution, including the rise of ex-KGB officer Putin and a massive outpouring of oligarchic flight capital that has continued virtually up to the present. For ordinary Russians, as noted, this was disastrous. But for many banks, private bankers, hedge funds, law firms, and accounting firms, for leading oil companies like ExxonMobil and BP, as well as for needy borrowers like the Trump Organization, the opportunity to feed on post-Soviet spoils was a godsend. This was vulture capitalism at its worst.
The nine-lived Trump, in particular, had just suffered a string of six successive bankruptcies. So the massive illicit outflows from Russia and oil-rich FSU members like Kazahkstan and Azerbaijan from the mid-1990s provided precisely the kind of undiscriminating investors that he needed. These outflows arrived at just the right time to fund several of Trump’s post-2000 high-risk real estate and casino ventures—most of which failed. As Donald Trump, Jr., executive vice president of development and acquisitions for the Trump Organization, told the “Bridging U.S. and Emerging Markets Real Estate” conference in Manhattan in September 2008 (on the basis, he said, of his own “half dozen trips to Russia in 18 months”):
In terms of high-end product influx into the United States, Russians make up a pretty disproportionate cross-section of a lot of our assets; say in Dubai, and certainly with our project in SoHo and anywhere in New York. We see a lot of money pouring in from Russia.

All this helps to explain one of the most intriguing puzzles about Donald Trump’s long, turbulent business career: how he managed to keep financing it, despite a dismal track record of failed projects.4

According to the “official story,” this was simply due to a combination of brilliant deal-making, Trump’s gold-plated brand, and raw animal spirits—with $916 million of creative tax dodging as a kicker. But this official story is hokum. The truth is that, since the late 1990s, Trump was also greatly assisted by these abundant new sources of global finance, especially from “submerging markets” like Russia
This suggests that neither Trump nor Putin is an “uncaused cause.” They are not evil twins, exactly, but they are both byproducts of the same neoliberal policy scams that were peddled to Russia’s struggling new democracy.

A Guided Tour of Trump’s Russian/FSU Connections
The following roundup of Trump’s Russo-Soviet business connections is based on published sources, interviews with former law enforcement staff and other experts in the United States, the United Kingdom, and Iceland, searches of online corporate registries,5 and a detailed analysis of offshore company data from the Panama Papers.6 Given the sheer scope of Trump’s activities, there are undoubtedly other worthy cases, but our interest is in overall patterns.
Note that none of the activities and business connections related here necessarily involved criminal conduct. While several key players do have criminal records, few of their prolific business dealings have been thoroughly investigated, and of course they all deserve the presumption of innocence. Furthermore, several of these players reside in countries where activities like bribery, tax dodging, and other financial chicanery are either not illegal or are rarely prosecuted. As former British Chancellor of the Exchequer Denis Healey once said, the difference between “legal” and “illegal” is often just “the width of a prison wall.”

So why spend time collecting and reviewing material that either doesn’t point to anything illegal or in some cases may even be impossible to verify? Because, we submit, the mere fact that such assertions are widely made is of legitimate public interest in its own right. In other words, when it comes to evaluating the probity of senior public officials, the public has the right to know about any material allegations—true, false, or, most commonly, unprovable—about their business partners and associates, so long as this information is clearly labeled as unverified.

Furthermore, the individual case-based approach to investigations employed by most investigative journalists and law enforcement often misses the big picture: the global networks of influence and finance, licit and illicit, that exist among business people, investors, kleptocrats, organized criminals, and politicians, as well as the “enablers”—banks, accounting firms, law firms, and havens. Any particular component of these networks might easily disappear without making any difference. But the networks live on. It is these shadowy transnational networks that really deserve scrutiny.

Bayrock Group LLC—Kazakhstan and Tevfik Arif
We’ll begin our tour of Trump’s Russian/FSU connections with several business relationships that evolved out of the curious case of Bayrock Group LLC, a spectacularly unsuccessful New York real estate development company that surfaced in the early 2000s and, by 2014, had all but disappeared except for a few lawsuits. As of 2007, Bayrock and its partners reportedly had more than $2 billion of Trump-branded deals in the works. But most of these either never materialized or were miserable failures, for reasons that will soon become obvious.

Bayrock’s “white elephants” included the 46-story Trump SoHo condo-hotel on Spring Street in New York City, for which the principle developer was a partnership formed by Bayrock and FL Group, an Icelandic investment company. Completed in 2010, the SoHo soon became the subject of prolonged civil litigation by disgruntled condo buyers. The building was foreclosed by creditors and resold in 2014 after more than $3 million of customer down payments had to be refunded. Similarly, Bayrock’s Trump International Hotel & Tower in Fort Lauderdale was foreclosed and resold in 2012, while at least three other Trump-branded properties in the United States, plus many other “project concepts” that Bayrock had contemplated, from Istanbul and Kiev to Moscow and Warsaw, also never happened.

Carelessness about due diligence with respect to potential partners and associates is one of Donald Trump’s more predictable qualities. Acting on the seat of the pants, he had hooked up with Bayrock rather quickly in 2005, becoming an 18 percent minority equity partner in the Trump SoHo, and agreeing to license his brand and manage the building.7

Exhibit A in the panoply of former Trump business partners is Bayrock’s former Chairman, Tevfik Arif (aka Arifov), an émigré from Kazakhstan who reportedly took up residence in Brooklyn in the 1990s. Trump also had extensive contacts with another key Bayrock Russian-American from Brooklyn, Felix Sater (aka Satter), discussed below.8 Trump has lately had some difficulty recalling very much about either Arif or Sater. But this is hardly surprising, given what we now know about them. Trump described his introduction to Bayrock in a 2013 deposition for a lawsuit that was brought by investors in the Fort Lauderdale project, one of Trump’s first with Bayrock: “Well, we had a tenant in … Trump Tower called Bayrock, and Bayrock was interested in getting us into deals.”9
According to several reports, Tevfik Arif was originally from Kazakhstan, a Soviet republic until 1992. Born in 1950, Arif worked for 17 years in the Soviet Ministry of Commerce and Trade, serving as Deputy Director of Hotel Management by the time of the Soviet Union’s collapse.10 In the early 1990s he relocated to Turkey, where he reportedly helped to develop properties for the Rixos Hotel chain. Not long thereafter he relocated to Brooklyn, founded Bayrock, opened an office in the Trump Tower, and started to pursue projects with Trump and other investors.11

Tevfik Arif was not Bayrock’s only connection to Kazakhstan. A 2007 Bayrock investor presentation refers to Alexander Mashevich’s “Eurasia Group” as a strategic partner for Bayrock’s equity finance. Together with two other prominent Kazakh billionaires, Patokh Chodiev (aka “Shodiyev”) and Alijan Ibragimov, Mashkevich reportedly ran the “Eurasian Natural Resources Cooperation.” In Kazakhstan these three are sometimes referred to as “the Trio.”12
The Trio has apparently worked together ever since Gorbachev’s late 1980s perestroika in metals and other natural resources. It was during this period that they first acquired a significant degree of control over Kazakhstan’s vast mineral and gas reserves. Naturally they found it useful to become friends with Nursultan Nazarbayev, Kazakhstan’s long-time ruler. Indeed, State Department cables leaked by Wikileaks in November 2010 describe a close relationship between “the Trio” and the seemingly-perpetual Nazarbayev kleptocracy.
In any case, the Trio has recently attracted the attention of many other investigators and news outlets, including the September 11 Commission Report, the Guardian, Forbes, and the Wall Street Journal. In addition to resource grabbing, the litany of the Trio’s alleged activities include money laundering, bribery, and racketeering.13 In 2005, according to U.S. State Department cables released by Wikileaks, Chodiev (referred to in a State Department cable as “Fatokh Shodiyev”) was recorded on video attending the birthday of reputed Uzbek mob boss Salim Abduvaliyeva and presenting him with a $10,000 “gift” or “tribute.”

According to the Belgian newspaper Le Soir, Chodiev and Mashkevich also became close associates of a curious Russian-Canadian businessman, Boris J. Birshtein. who happens to have been the father-in-law of another key Russian-Canadian business associate of Donald Trump in Toronto. We will return to Birshtein below.

The Trio also turn up in the April 2016 Panama Papers database as the apparent beneficial owners of a Cook Islands company, “International Financial Limited.”14 The Belgian newspapers Het Laatste Nieuws, Le Soir, and La Libre Belgique have reported that Chodiev paid €23 million to obtain a “Class B” banking license for this same company, permitting it to make international currency trades. In the words of a leading Belgian financial regulator, that would “make all money laundering undetectable.”

The Panama Papers also indicate that some of Arif’s connections at the Rixos Hotel Group may have ties to Kazakhstan. For example, one offshore company listed in the Panama Papers database, “Group Rixos Hotel,” reportedly acts as an intermediary for four BVI offshore companies.15 Rixos Hotel’s CEO, Fettah Tamince, is listed as having been a shareholder for two of these companies, while a shareholder in another—“Hazara Asset Management”—had the same name as the son of a recent Kazakhstan Minister for Sports and Tourism. As of 2012, this Kazakh official was described as the third-most influential deputy in the country’s Mazhilis (the lower house of Parliament), in a Forbes-Kazakhstan article.

According to a 2015 lawsuit against Bayrock by Jody Kriss, one of its former employees, Bayrock started to receive millions of dollars in equity contributions in 2004, supposedly by way of Arif’s brother in Russia, who allegedly “had access to cash accounts at a chromium refinery in Kazakhstan.”

This as-yet unproven allegation might well just be an attempt by the plaintiff to extract a more attractive settlement from Bayrock and its original principals. But it is also consistent with fact that chromium is indeed one of the Kazakh natural resources that is reportedly controlled by the Trio.

As for Arif, his most recent visible brush with the law came in 2010, when he and other members of Bayrock’s Eurasian Trio were arrested together in Turkey during a police raid on a suspected prostitution ring, according to the Israeli daily Yediot Ahronot.

At the time, Turkish investigators reportedly asserted that Arif might be the head of a criminal organization that was trafficking in Russian and Ukrainian escorts, allegedly including some as young as 13.16 According to these assertions, big-ticket clients were making their selections by way of a modeling agency website, with Arif allegedly handling the logistics. Especially galling to Turkish authorities, the preferred venue was reportedly a yacht that had once belonged to the widely-revered Turkish leader Atatürk. It was also alleged that Arif may have also provided lodging for young women at Rixos Group hotels.17
According to Russian media, two senior Kazakh officials were also arrested during this incident, although the Turkish Foreign Ministry quickly dismissed this allegation as “groundless.” In the end, all the charges against Arif resulting from this incident were dismissed in 2012 by Turkish courts, and his spokespeople have subsequently denied all involvement.

Finally, despite Bayrock’s demise and these other legal entanglements, Arif has apparently remained active. For example, Bloomberg reports that, as of 2013, he, his son, and Rixos Hotels’ CEO Fettah Tamince had partnered to pursue the rather controversial business of advancing funds to cash-strapped high-profile soccer players in exchange for a share of their future marketing revenues and team transfer fees. In the case of Arif and his partners, this new-wave form of indentured servitude was reportedly implemented by way of a UK- and Malta-based hedge fund, Doyen Capital LLP. Because this practice is subject to innumerable potential abuses, including the possibility of subjecting athletes or clubs to undue pressure to sign over valuable rights and fees, UEFA, Europe’s governing soccer body, wants to ban it. But FIFA, the notorious global football regulator, has been customarily slow to act. To date, Doyen Capital LLP has reportedly taken financial gambles on several well-known players, including the Brazilian star Neymar.

The Case of Bayrock LLC—Felix Sater
Our second exhibit is Felix Sater, the senior Bayrock executive introduced earlier. This is the fellow who worked at Bayrock from 2002 to 2008 and negotiated several important deals with the Trump Organization and other investors. When Trump was asked who at Bayrock had brought him the Fort Lauderdale project in the 2013 deposition cited above, he replied: “It could have been Felix Sater, it could have been—I really don’t know who it might have been, but somebody from Bayrock.”18
SaterBizCardAlthough Sater left Bayrock in 2008, by 2010 he was reportedly back in Trump Tower as a “senior advisor” to the Trump Organization—at least on his business card—with his own office in the building.
Sater has also testified under oath that he had escorted Donald Trump, Jr. and Ivanka Trump around Moscow in 2006, had met frequently with Donald over several years, and had once flown with him to Colorado. And although this might easily have been staged, he is also reported to have visited Trump Tower in July 2016 and made a personal $5,400 contribution to Trump’s campaign.
Whatever Felix Sater has been up to recently, the key point is that by 2002, at the latest,19 Tevfik Arif decided to hire him as Bayrock’s COO and managing director. This was despite the fact that by then Felix had already compiled an astonishing track record as a professional criminal, with multiple felony pleas and convictions, extensive connections to organized crime, and—the ultimate prize—a virtual “get out of jail free card,” based on an informant relationship with the FBI and the CIA that is vaguely reminiscent of Whitey Bulger.20
Sater, a Brooklyn resident like Arif, was born in Russia in 1966. He reportedly emigrated with his family to the United States in the mid-1970s and settled in “Little Odessa.” It seems that his father, Mikhael Sheferovsky (aka Michael Sater), may have been engaged in Russian mob activity before he arrived in the United States. According to a certified U.S. Supreme Court petition, Felix Sater’s FBI handler stated that he “was well familiar with the crimes of Sater and his (Sater’s) father, a (Semion) Mogilevich crime syndicate boss.”21 A 1998 FBI report reportedly said Mogilevich’s organization had “approximately 250 members,” and was involved in trafficking nuclear materials, weapons, and more, as well as money laundering. (See below.)

But Michael Sater may have been less ambitious than his son. His only reported U.S. criminal conviction came in 2000, when he pled guilty to two felony counts for extorting Brooklyn restaurants, grocery stores, and clinics. He was released with three years’ probation. Interestingly, the U.S. Attorney for the Eastern District of New York who handled that case at the time was Loretta Lynch, who succeeded Eric Holder as U.S. Attorney General in 2014. Back in 2000, she was also overseeing a budding informant relationship and a plea bargain with Michael’s son Felix, which may help to explain the father’s sentence.
By then young Felix Sater was already well on his way to a career as a prototypical Russian-American mobster. In 1991 he stabbed a commodity trader in the face with a margarita glass stem in a Manhattan bar, severing a nerve. He was convicted of a felony and sent to prison. As Trump tells it, Sater simply “got into a barroom fight, which a lot of people do.” The sentence for this felony conviction could not have been very long, because, by 1993, 27-year-old Felix was already a trader in a brand new Brooklyn-based commodity firm called “White Rock Partners,” an innovative joint venture among four New York crime families and the Russian mob aimed at bringing state-of-the art financial fraud to Wall Street.

Five years later, in 1998, Felix Sater pled guilty to stock racketeering, as one of 19 U.S.-and Russian mob-connected traders who participated in a $40 million “pump and dump” securities fraud scheme. Facing twenty years in Federal prison, Sater and Gennady Klotsman, a fellow Russian-American who’d been with him on the night of the Manhattan bar fight, turned “snitch” and helped the Department of Justice prosecute their co-conspirators.22 Reportedly, so did Salvatore Lauria, another “trader” involved in the scheme. According to the Jody Kriss lawsuit, Lauria later joined Bayrock as an off-the-books paid “consultant.” Initially their cooperation, which lasted from 1998 until at least late 2001, was kept secret, until it was inadvertently revealed in a March 2000 press release by U.S. Attorney Lynch.

Unfortunately for Sater, about the same time the NYPD also reportedly discovered that he had been running a money-laundering scheme and illicit gun sales out of a Manhattan storage locker. He and Klotsman fled to Russia. However, according to the New York Times, which cited Klotsman and Lauria, soon after the events of September 11, 2001, the ever-creative Sater succeeded in brokering information about the black market for Stinger anti-aircraft missiles to the CIA and the FBI. According to Klotsman, this strategy “bought Felix his freedom,” allowing him to return to Brooklyn. It is still not clear precisely what information Sater actually provided, but in 2015 U.S. Attorney General Loretta Lynch publicly commended him for sharing information that she described as “crucial to national security.”

Meanwhile, Sater’s sentence for his financial crimes continued to be deferred even after his official cooperation in that case ceased in late 2001. His files remained sealed, and he managed to avoid any sentencing for those crimes at all until October 23, 2009. When he finally appeared before the Eastern District’s Judge I. Leo Glasser, Felix received a $25,000 fine, no jail time, and no probation in a quiet proceeding that attracted no press attention. Some compared this sentence to Judge Glasser’s earlier sentence of Mafia hit man “Sammy the Bull” Gravano to 4.5 years for 19 murders, in exchange for “cooperating against John Gotti.”

In any case, between 2002 and 2008, when Felix Sater finally left Bayrock LLC, and well beyond, his ability to avoid jail and conceal his criminal roots enabled him to enjoy a lucrative new career as Bayrock’s chief operating officer. In that position, he was in charge of negotiating aggressive property deals all over the planet, even while—according to lawsuits by former Bayrock investors—engaging in still more financial fraud. The only apparent difference was that he changed his name from “Sater” to “Satter.”23

In the 2013 deposition cited earlier, Trump went on to say “I don’t see Felix as being a member of the Mafia.” Asked if he had any evidence for this claim, Trump conceded “I have none.”24

As for Sater’s pal Klotsman, the past few years have not been kind. As of December 2016 he is in a Russian penal colony, working off a ten-year sentence for a failed $2.8 million Moscow diamond heist in August 2010. In 2016 Klotsman was reportedly placed on a “top-ten list” of Americans that the Russians were willing to exchange for high-value Russian prisoners in U.S. custody, like the infamous arms dealer Viktor Bout. So far there have been no takers. But with Donald Trump as President, who knows?

The Case of Iceland’s FL Group
One of the most serious frauds alleged in the recent Bayrock lawsuit involves FL Group, an Icelandic private investment fund that is really a saga all its own.
Iceland is not usually thought of as a major offshore financial center. It is a small snowy island in the North Atlantic, closer to Greenland than to the UK or Europe, with only 330,000 citizens and a total GDP of just $17 billion. Twenty years ago, its main exports were cod and aluminum—with the imported bauxite smelted there to take advantage of the island’s low electricity costs.

But in the 1990s Iceland’s tiny neoliberal political elite had what they all told themselves was a brilliant idea: “Let’s privatize our state-owned banks, deregulate capital markets, and turn them loose on the world!” By the time all three of the resulting privatized banks, as well as FL Group, failed in 2008, the combined bank loan portfolio amounted to more than 12.5 times Iceland’s GDP—the highest country debt ratio in the entire world.

For purposes of our story, the most interesting thing about Iceland is that, long before this crisis hit and utterly bankrupted FL Group, our two key Russian/FSU/Brooklyn mobster-mavens, Arif and Sater, had somehow stumbled on this obscure Iceland fund. Indeed, in early 2007 they persuaded FL Group to invest $50 million in a project to build the Trump SoHo in mid-town Manhattan.
According to the Kriss lawsuit, at the same time, FL Group and Bayrock’s Felix Sater also agreed in principle to pursue up to an additional $2 billion in other Trump-related deals. The Kriss lawsuit further alleges that FL Group (FLG) also agreed to work with Bayrock to facilitate outright tax fraud on more than $250 million of potential earnings. In particular, it alleges that FLG agreed to provide the $50 million in exchange for a 62 percent stake in the four Bayrock Trump projects, but Bayrock would structure the contract as a “loan.” This meant that Bayrock would not have to pay taxes on the initial proceeds, while FLG’s anticipated $250 million of dividends would be channeled through a Delaware company and characterized as “interest payments,” allowing Bayrock to avoid up to $100 million in taxes. For tax purposes, Bayrock would pretend that their actual partner was a Delaware partnership that it had formed with FLG, “FLG Property I LLC,” rather than FLG itself.

The Trump Organization has denied any involvement with FLG. However, as an equity partner in the Trump SoHo, with a significant 18 percent equity stake in this one deal alone, Donald Trump himself had to sign off on the Bayrock-FLG deal.

This raises many questions. Most of these will have to await the outcome of the Kriss litigation, which might well take years, especially now that Trump is President. But several of these questions just leap off the page.
First, how much did President-elect Trump know about the partners and the inner workings of this deal? After all, he had a significant equity stake in it, unlike many of his “brand-name only” deals, and it was also supposed to finance several of his most important East Coast properties.

Second, how did the FL Group and Bayrock come together to do this dodgy deal in the first place? One former FL Group manager alleges that the deal arrived by accident, a “relatively small deal” was nothing special on either side.25 The Kriss lawsuit, on the other hand, alleges that FLG was a well-known source of easy money from dodgy sources like Kazakhstan and Russia, and that other Bayrock players with criminal histories—like Salvatore Lauria, for example—were involved in making the introductions.

At this stage the evidence with respect to this second question is incomplete. But there are already some interesting indications that FL Group’s willingness to generously finance Bayrock’s peculiar Russian/FSU/Brooklyn team, its rather poorly-conceived Trump projects, and its purported tax dodging were not simply due to Icelandic backwardness. There is much more for us to know about Iceland’s “special” relationship with Russian finance. In this regard, there are several puzzles to be resolved.

First, it turns out that FL Group, Iceland’s largest private investment fund until it crashed in 2008, had several owners/investors with deep Russian business connections, including several key investors in all three top Iceland banks.
Second, it turns out that FL Group had constructed an incredible maze of cross-shareholding, lending, and cross-derivatives relationships with all these major banks, as illustrated by the following snapshot of cross-shareholding among Iceland’s financial institutions and companies as of 2008.26

Cross-shareholding Relationships, FLG and Other Leading Icelandic Financial Institutions, 2008
Cross-shareholding Relationships, FLG and Other Leading Icelandic Financial Institutions, 2008

This thicket of cross-dealing made it almost impossible to regulate “control fraud,” where insiders at leading financial institutions went on a self-serving binge, borrowing and lending to finance risky investments of all kinds. It became difficult to determine which institutions were net borrowers or investors, as the concentration of ownership and self-dealing in the financial system just soared.

Third, FL Group make a variety of peculiar loans to Russian-connected oligarchs as well as to Bayrock. For example, as discussed below, Alex Shnaider, the Russian-Canadian billionaire who later became Donald Trump’s Toronto business partner, secured a €45.8 million loan to buy a yacht from Kaupthing Bank during the same period, while a company belonging to another Russian billionaire who reportedly owns an important vodka franchise got an even larger loan.27

Fourth, Iceland’s largest banks also made a series of extraordinary loans to Russian interests during the run-up to the 2008 crisis. For example, one of Russia’s wealthiest oligarchs, a close friend of President Putin, nearly managed to secure at least €400 million (or, some say, up to four times that much) from Kaupthing, Iceland’s largest bank, in late September 2008, just as the financial crisis was breaking wide open. This bank also had important direct and indirect investments in FL Group. Indeed, until December 2006, it is reported to have employed the FL Group private equity manager who allegedly negotiated Felix Sater’s $50 million deal in early 2007.28

Fifth, there are unconfirmed accounts of a secret U.S. Federal Reserve report that unnamed Iceland banks were being used for Russian money laundering.29 Furthermore, Kaupthing Bank’s repeated requests to open a New York branch in 2007-08 were rejected by the Fed. Similar unconfirmed rumors repeatedly appeared in Danish and German publications, as did allegations about the supposed Kazakh origins of FLG’s cash to be “laundered” in the Kriss lawsuit.
Sixth, there is the peculiar fact that, when Iceland’s banks went belly-up in October 2008, their private banking subsidiaries in Luxembourg, which were managing at least €8 billion of private assets, were suddenly seized by Luxembourg banking authorities and transferred to a new bank, Banque Havilland. This happened so fast that Iceland’s Central Bank was prevented from learning anything about the identities or portfolio sizes of the Iceland banks’ private offshore clients. But again, there were rumors of some important Russian names.

Finally, there is the rather odd phone call that Russia’s Ambassador to Iceland made to Iceland’s Prime Minister at 6:45 a.m. on October 7, 2008, the day after the financial crisis hit Iceland. According to the PM’s own account, the Russian Ambassador informed him that then-Prime Minister Putin was willing to consider offering Iceland a €4 billion Russian bailout.

Of course this alleged Putin offer was modified not long thereafter into a willingness to entertain an Icelandic negotiating team in Moscow. By the time the Iceland team got to Moscow later that year, Russia’s desire to lend had cooled, and Iceland ended up accepting a $2.1 billion IMF “stabilization package” instead. But according to a member of the negotiating team, the reasons for the reversal are still a mystery. Perhaps Putin had reconsidered because he simply decided that Russia had to worry about its own considerable financial problems. Or perhaps he had discovered that Iceland’s banks had indeed been very generous to Russian interests on the lending side, while—given Luxembourg’s actions—any Russian private wealth invested in Icelandic banks was already safe.

On the other hand, there may be a simpler explanation for Iceland’s peculiar generosity to sketchy partners like Bayrock. After all, right up to the last minute before the October 2008 meltdown, the whole world had awarded Iceland AAA ratings: Depositors queued up in London to open high-yield Iceland bank accounts, its bank stocks were booming, and the compensation paid to its financiers was off the charts. So why would anyone worry about making a few more dubious deals?

Overall, therefore, with respect to these odd “Russia-Iceland” connections, the proverbial jury is still out. But all these Icelandic puzzles are intriguing and bear further investigation.

The Case of the Trump Toronto Tower and Hotel—Alex Shnaider
Our fourth case study of Trump’s business associates concerns the 48-year-old Russian-Canadian billionaire Alex Shnaider, who co-financed the seventy-story Trump Tower and Hotel, Canada’s tallest building. It opened in Toronto in 2012. Unfortunately, like so many of Trump’s other Russia/FSU-financed projects, this massive Toronto condo-hotel project went belly-up this November and has now entered foreclosure.

According to an online profile of Shnaider by a Ukrainian news agency, Alex Shnaider was born in Leningrad in 1968, the son of “Евсей Шнайдер,” or “Evsei Shnaider” in Russian.30 A recent Forbes article says that he and his family emigrated to Israel from Russia when he was four and then relocated to Toronto when he was 13-14. The Ukrainian news agency says that Alex’s familly soon established “one of the most successful stories in Toronto’s Russian quarter, “ and that young Alex, with “an entrepreneurial streak,” “helped his father Evsei Shnaider in the business, placing goods on the shelves and wiping floors.”
Eventually that proved to be a great decision—Shnaider prospered in the New World. Much of this was no doubt due to raw talent. But it also appears that for a time he got significant helping hand from his (now reportedly ex-) father-in-law, another colorful Russian-Canadian, Boris J. Birshtein.

Originally from Lithuania, Birshtein, now about 69, has been a Canadian citizen since at least 1982.31 He resided in Zurich for a time in the early 1990s, but then returned to Toronto and New York.32 One of his key companies was called Seabeco SA, a “trading” company that was registered in Zurich in December 1982.33 By the early 1990s Birshtein and his partners had started many other Seabeco-related companies in a wide variety of locations, inclding Antwerp,34 Toronto,35 Winnipeg,36 Moscow, Delaware,37 Panama,38 and Zurich.39 Several of these are still active.40 He often staffed them with directors and officers from a far-flung network of Russians, emissaries from other FSU countries like Kyrgyzstan and Moldova, and recent Russia/FSU emigres to Canada.41
According to the Financial Times and the FBI, in addition to running Seabeco, Birshtein was a close business associate of Sergei Mikhaylov, the reputed head of Solntsevskaya Bratva, the Russian mob’s largest branch, and the world’s highest-grossing organized crime group as of 2014, according to Fortune.42 A 1996 FBI intelligence report cited by the FT claims that Birshtein hosted a meeting in his Tel Aviv office for Mikhaylov, the Ukrainian-born Semion Mogilevich, and several other leaders of the Russo/FSU mafia, in order to discuss “sharing interests in Ukraine.”43 A subsequent 1998 FBI Intelligence report on the “Semion Mogilevich Organization” repeated the same charge,44 and described Mogilevich’s successful attempts at gaining control over Ukraine privatization assets. The FT article also described how Birshtein and his associates had acquired extraordinary influence with key Ukraine officials, including President Leonid Kuchma, with the help of up to $5 million of payoffs.45 Citing Swiss and Belgian investigators, the FT also claimed that Birshtein and Mikhaylov jointly controlled a Belgian company called MAB International in the early 1990s.46 During that period, those same investigators reportedly observed transfers worth millions of dollars between accounts held by Mikhaylov, Birshtein, and Alexander Volkov, Seabeco’s representative in Ukraine.

In 1993, the Yeltsin government reportedly accused Birshtein of illegally exporting seven million tons of Russian oil and laundering the proceeds.47 Dmytro Iakoubovski, a former associate of Birshtein’s who had also moved to Toronto, was said to be cooperating with the Russian investigation. One night a gunman fired three shots into Iakoubovski’s home, leaving a note warning him to cease his cooperation, according to a New York Times article published that year. As noted above, according to the Belgian newspaper Le Soir, two members of Bayrock’s Eurasian Trio were also involved in Seabeco during this period as well—Patokh Chodiev and Alexander Mashkevich. Chodiev reportedly first met Birshtein through the Soviet Foreign Ministry, and then went on to run Seabeco’s Moscow office before joining its Belgium office in 1991. Le Soir further claims that Mashkevich worked for Seabeco too, and that this was actually how he and Chodiev had first met.

All this is fascinating, but what about the connections between Birshtein and Trump’s Toronto business associate, Alex Shnaider? Again, the leads we have are tantalizing.The Toronto Globe and Mail reported that in 1991, while enrolled in law school, young Alex Shnaider started working for Birshtein at Seabeco’s Zurich headquarters, where he was reportedly introduced to steel trading. Evidently this was much more than just a job; the Zurich company registry lists “Alex Shnaider” as a director of “Seabeco Metals AG” from March 1993 to January 1994.48

In 1994, according to this account, he reportedly left Seabeco in January 1994 to start his own trading company in Antwerp, in partnership with a Belgian trader-partner. Curiously, Le Soir also says that Mikhaylov and Birshtein co-founded MAB International in Antwerp in January 1994. Is it far-fetched to suspect that Alex Shnaider and mob boss Mikhaylov might have crossed paths, since they were both in the same city and they were both close to Shnaider’s father-in-law?
According to Forbes, soon after Shnaider moved to Antwerp, he started visiting the factories of his steel trading partners in Ukraine.49 His favorite client was the Zaporizhstal steel mill, Ukraine’s fourth largest. At the Zaporizhstal mill he reportedly met Eduard Shifrin (aka Shyfrin), a metals trader with a doctorate in metallurgical engineering. Together they founded Midland Resource Holdings Ltd. in 1994.50

As the Forbes piece argues, with privatization sweeping Eastern Europe, private investors were jockeying to buy up the government’s shares in Zaprozhstal. But most traders lacked the financial backing and political connectons to accumulate large risky positions. Shnaider and Shifrin, in contrast, started buying up shares without limit, as if their pockets and connections were very deep. By 2001 they had purchased 93 percent of the plant for about $70 million, a stake that would be worth much more just five years later, when Shnaider reportedly turned down a $1.2 billion offer.

Today, Midland Resources Holdings Ltd. reportedly generates more than $4 billion a year of revenue and has numerous subsidiaries all across Eastern Europe.51 Shnaider also reportedly owns Talon International Development, the firm that oversaw construction of the Trump hotel-tower in Toronto. All this wealth apparently helped Iceland’s FL Group decide that it could afford to extend a €45.8 million loan to Alex Shnaider in 2008 to buy a yacht.52
As of December 2016, a search of the Panama Papers database found no fewer than 28 offshore companies that have been associated with “Midland Resources Holding Limited.”53 According to the database, “Midland Resources Holding Limited” was a shareholder in at least two of these companies, alongside an individual named “Oleg Sheykhametov.”54 The two companies, Olave Equities Limited and Colley International Marketing SA, were both registered and active in the British Virgin Islands from 2007–10.55 A Russian restaurateur by that same name reportedly runs a business owned by two other alleged Solntsevskaya mob associates, Lev Kvetnoy and Andrei Skoch, both of whom appear with Sergei Mikhaylov. Of course mere inclusion in such a group photo is not evidence of wrongdoing. (See the photo here.) According to Forbes, Kvetnoy is the 55th richest person in Russia and Skoch, now a deputy in the Russian Duma, is the 18th.56

Finally, it is also intriguing to note that Boris Birshtein is also listed as the President of “ME Moldova Enterprises AG,” a Zurich-based company” that was founded in November 1992, transferred to the canton of Schwyz in September 1994, and liquidated and cancelled in January 1999.57 Birshstein was a member of the company’s board of directors from November 1992 to January 1994, when he became its President. At that point he was succeeded as President in June 1994 by one “Evsei Shnaider, Canadian citizen, resident in Zurich,” who was also listed as director of the company in September 1994.58 “Evsei Schnaider” is also listed in the Panama registry as a Treasurer and Director of “The Seabeco Group Inc.,” formed on December 6, 1991,59 and as treasurer and director of Seabeco Security International Inc.,” formed on December 10, 1991. As of December 2016, both companies are still in existence.60 Boris Birshtein is listed as president and director of both companies.61

The Case of Paul Manafort’s Ukrainian Oligarchs
Our fifth Trump associate profile concerns the Russo/Ukrainian connections of Paul Manafort, the former Washington lobbyist who served as Donald Trump’s national campaign director from April 2016 to August 2016. Manafort’s partner, Rick Davis, also served as national campaign manager for Senator John McCain in 2008, so this may not just be a Trump association.

One of Manafort’s biggest clients was the dubious pro-Russian Ukrainian billionaire Dmytro Firtash. By his own admission, Firtash maintains strong ties with a recurrent figure on this scene, the reputed Ukrainian/Russian mob boss Semion Mogilevich. His most important other links are almost certainly to Putin. Otherwise it is difficult to explain how this former used-car salesman could gain a lock on trading goods for gas in Turkmenistan and also become a lynchpin investor in the Swiss company RosUrEnergo, which controls Gazprom’s gas sales to Europe.62

In 2008, Manafort teamed up with a former manager of the Trump Organization to purchase the Drake Hotel in New York for up to $850 million, with Firtash agreeing to invest $112 million. According to a lawsuit brought against Manafort and Firtash, the key point of the deal was not to make a carefully-planned investment in real estate, but to simply launder part of the huge profits that Firtash had skimmed while brokering dodgy natural gas deals between Russia and Ukraine, with Mogilevich acting as a “silent partner.”

Ultimately Firtash pulled out of this Drake Hotel deal. The reasons are unclear—it has been suggested that he needed to focus on the 2015 collapse and nationalization of his Group DF’s Bank Nadra back home in Ukraine.63 But it certainly doesn’t appear to have changed his behavior. Since 2014 there has been a spate of other Firtash-related prosecutions, with the United States trying to extradict from Austria in order to stand trial on allegations that his vast spidernet “Group DF” had bribed Indian officials to secure mining licenses. The Austrian court has required him to put up a record-busting €125 million bail while he awaits a decision.64 And just last month, Spain has also tried to extradite Firtash on a separate money laundering case, involving the laundering of €10 million through Spanish property investments.

After Firtash pulled out of the deal, Manafort reportedly turned to Trump, but he declined to engage. Manafort stepped down as Trump’s campaign manager in August of 2016 in response to press investigations into his ties not only to Firtash, but to Ukraine’s previous pro-Russian Yanukovych government, which had been deposed by a uprising in 2014. However, following the November 8 election, Manafort reportedly returned to advise Trump on staffing his new administration. He got an assist from Putin—on November 30 a spokeswoman for the Russian Foreign Ministry accused Ukraine of leaking stories about Manafort in an effort to hurt Trump.

The Case of “Well-Connected” Russia/FSU Mobsters
Finally, several other interesting Russian/FSU connections have a more residential flavor, but they are a source of very important leads about the Trump network.

Indeed, partly because it has no prying co-op board, Trump Tower in New York has received press attention for including among its many honest residents tax-dodgers, bribers, arms dealers, convicted cocaine traffickers, and corrupt former FIFA officials.65

One typical example involves the alleged Russian mobster Anatoly Golubchik, who went to prison in 2014 for running an illegal gambling ring out of Trump Tower—not only the headquarters of the Trump Organization but also the former headquarters of Bayrock Group LLC. This operation reportedly took up the entire 51st floor. Also reportedly involved in it was the alleged mobster Alimzhan Tokhtakhounov,66 who has the distinction of making the Forbes 2008 list of the World’s Ten Most Wanted Criminals, and whose organization the FBI believes to be tied to Mogilevich’s. Even as this gambling ring was still operating in Trump Tower, Tokhtakhounov reportedly travelled to Moscow to attend Donald Trump’s 2013 Miss Universe contest as a special VIP.

In the Panama Papers database we do find the name “Anatoly Golubchik.” Interestingly, his particular offshore company, “Lytton Ventures Inc.,”67 shares a corporate director, Stanley Williams, with a company that may well be connected to our old friend Semion Mogilevich, the Russian mafia’s alleged “Boss of Bosses” who appeared so frequently in the story above. Thus Lytton Ventures Inc. shares this particular director with another company that is held under the name of “Galina Telesh.”68 According to the Organized Crime and Corruption Reporting Project, multiple offshore companies belonging to Semion Mogilevich have been registered under this same name—which just happens to be that of Mogilevich’s first wife.

A 2003 indictment of Mogilevich also mentions two offshore companies that he is said to have owned, with names that include the terms “Arbat” and “Arigon.” The same corporate director shared by Golubchik and Telesh also happens to be a director of a company called Westix Ltd.,69 which shares its Moscow address with “Arigon Overseas” and “Arbat Capital.”70 And another company with that same director appears to belong to Dariga Nazarbayeva, the eldest daughter of Nursultan Nazarbayev, the long-lived President of Kazakhstan. Dariga is expected to take his place if he ever decides to leave office or proves to be mortal.
Lastly, Dmytro Firtash—the Mogilevich pal and Manafort client that we met earlier—also turns up in the Panama Papers database as part of Galina Telesh’s network neighborhood. A director of Telesh’s “Barlow Investing,” Vasliki Andreou, was also a nominee director of a Cyprus company called “Toromont Ltd.,” while another Toromont Ltd. nominee director, Annex Holdings Ltd., a St. Kitts company, is also listed as a shareholder in Firtash’s Group DF Ltd., along with Firtash himself.71 And Group DF’s CEO, who allegedly worked with Manafort to channel Firtash’s funding into the Drake Hotel venture, is also listed in the Panama Papers database as a Group DF shareholder. Moreover, a 2006 Financial Times investigation identified three other offshore companies that are linked to both Firtash and Telesh.72

Anatoly Golubchik’s Panama Papers Network Neighborhood
Anatoly Golubchik’s Panama Papers Network Neighborhood

Of course, all of these curious relationships may just be meaningless coincidences. After all, the director shared by Telesh and Golubchik is also listed in the same role for more than 200 other companies, and more than a thousand companies besides Arbat Capital and Arigon Overseas share Westix’s corporate address. In the burgeoning land of offshore havens and shell-game corporate citizenship, there is no such thing as overcrowding. The appropriate way to view all this evidence is to regard it as “Socratic:” raising important unanswered questions, not providing definite answers.

In any case, returning to Trump’s relationships through Trump Tower, another odd one involves the 1990s-vintage fraudulent company YBM Magnex International. YBM, ostensibly a world-class manufacturer of industrial magnets, was founded indirectly in Newtown, Bucks County, Pennsylvania in 1995 by the “boss of bosses,” Semion Mogilevich, Moscow’s “brainy Don.”

This is a fellow with an incredible history, even if only half of what has been written about him is true.73 Unfortunately, we have to focus here only on the bits that are most relevant. Born in Kiev, and now a citizen of Israel as well as Ukraine and Russia, Semion, now seventy, is a lifelong criminal. But he boasts an undergraduate economics degree from Lviv University, and is reported to take special pride in designing sophisticated, virtually undetectable financial frauds that take years to put in place. To pull them off, he often relies on the human frailties of top bankers, stock brokers, accountants, business magnates, and key politicians.74

In YBM’s case, for a mere $2.4 million in bribes, Semion and his henchmen spent years in the 1990s launching a product-free, fictitious company on the still-badly under-regulated Toronto Stock Exchange. Along the way they succeeded in securing the support of several leading Toronto business people and a former Ontario Province Premier to win a seat on YBM’s board. They also paid the “Big Four” accounting firm Deloitte Touche very handsomely in exchange for glowing audits. By mid-1998, YBM’s stock price had gone from less than $0.10 to $20, and Semion cashed out at least $18 million—a relatively big fraud for its day—before the FBI raid its YBM’s corporate headquarters. When it did so, it found piles of bogus invoices for magnets, but no magnets.75

In 2003, Mogilevich was indicted in Philadelphia on 45 felony counts for this $150 million stock fraud. But there is no extradition treaty between the United States and Russia, and no chance that Russia will ever extradite Semion voluntarily; he is arguably a national treasure, especially now. Acknowledging these realities, or perhaps for other reasons, the FBI quietly removed Mogilevich from its Top Ten Most Wanted list in 2015, where he had resided for the previous six years.76

For our purposes, one of the most interesting things to note about this YBM Magnex case is that its CEO was a Russian-American named Jacob Bogatin, who was also indicted in the Philadelphia case. His brother David had served in the Soviet Army in a North Vietnamese anti-aircraft unit, helping to shoot down American pilots like Senator John McCain. Since the early 1990s, David Bogatin was considered by the FBI to be one of the key members of Semion Mogilevich’s Russian organized crime family in the United States, with a long string of convictions for big-ticket Mogilevich-type offenses like financial fraud and tax dodging.

At one point, David Bogatin owned five separate condos in Trump Tower that Donald Trump had reportedly sold to him personally.77 And Vyacheslav Ivankov, another key Mogilevich lieutenant in the United States during the 1990s, also resided for a time at Trump Tower, and reportedly had in his personal phone book the private telephone and fax numbers for the Trump Organization’s office in that building.78

So what have we learned from this deep dive into the network of Donald Trump’s Russian/FSU connections?

First, the President-elect really is very “well-connected,” with an extensive network of unsavory global underground connections that may well be unprecedented in White House history. In choosing his associates, evidently Donald Trump only pays cursory attention to questions of background, character, and integrity.

Second, Donald Trump has also literally spent decades cultivating senior relationships of all kinds with Russia and the FSU. And public and private senior Russian figures of all kinds have likewise spent decades cultivating him, not only as a business partner, but as a “useful idiot.”

After all, on September 1, 1987 (!), Trump was already willing to spend a $94,801 on full-page ads in the Boston Globe, the Washington Post, and the New York Times calling for the United States to stop spending money to defend Japan, Europe, and the Persian Gulf, “an area of only marginal significance to the U.S. for its oil supplies, but one upon which Japan and others are almost totally dependent.”79

This is one key reason why just this week, Robert Gates—a registered Republican who served as Secretary of Defense under Presidents Bush and Obama, as well as former Director and Deputy Director of the CIA—criticized the response of Congress and the White House to the alleged Putin-backed hacking as far too “laid back.”80

Third, even beyond questions of illegality, the public clearly has a right to know much more than it already does about the nature of such global connections. As the opening quote from Cervantes suggests, these relationships are probably a pretty good leading indicator of how Presidents will behave once in office.
Unfortunately, for many reasons, this year American voters never really got the chance to decide whether such low connections and entanglements belong at the world’s high peak of official power. In the waning days of the Obama Administration, with the Electoral College about to ratify Trump’s election and Congress in recess, it is too late to establish the kind of bipartisan, 9/11-type commission that would be needed to explore these connections in detail.
Finally, the long-run consequence of careless interventions in other countries is that they often come back to haunt us. In Russia’s case, it just has.
247  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Electoral College is Awesome on: December 21, 2016, 10:59:49 PM
Some similar points here:

http://theweek.com/articles/668508/electoral-college-actually-awesome
The Electoral College is actually awesome

Edward Morrissey
December 21, 2016

...The Times' editorial also highlighted the supposed unfairness of not "using the same basis as every other elected office." The reason for this is that the presidency is not at all "like every other national office" — and it never has been.

Unlike governors, whose state governments have total sovereignty within their borders, the presidency governs over states with their own sovereignty under the Constitution. The role of the presidency is at least somewhat limited to foreign policy and questions that are at least loosely connected to interstate issues and enforcement of other provisions of the Constitution. For that reason, the framers of the Constitution wanted to ensure that the president would have the greatest consensus among the sovereign states themselves, while still including representation based on population.

That is why each state gets the same number of electors as they have seats in the House and the Senate. It reduces the advantage that larger states have, but hardly eliminates it entirely; California has 55 electors while Wyoming has only three, to use the Times' comparison. Rather than being an "antiquated system," as they write, it's an elegant system that helps balance power between sovereign states with national popular intent, and it forces presidential contenders to appeal to a broader range of populations.

The editorial points out that Republican votes in San Francisco are "worthless" under the current system. But that has more to do with the way the states choose to allocate electors than it does the Electoral College. California and 47 other states allocate electors on a winner-take-all basis, which gives their states much more power in presidential elections. States could choose other allocation schemes if they want to prioritize "democracy" and proportional representation over influence, but none of the high-population states do so.

In this case, the nature of the popular-vote lead is instructive on why smaller states won't go along with the Times' demand to end the Electoral College. Clinton won the overall popular vote by nearly 3 million, but won California by 4.3 million and New York by 1.7 million. Donald Trump won 30 of the 50 states. Relying on the popular vote would have voters in the largest states determine the outcome and lock out the majority of the states, as it would have in 2016.

A popular-vote system would change the entire dynamic of presidential campaigns. Rather than spending time in states with smaller populations, candidates would spend their time trying to fight it out in the most populous locations. That might be good news for California, New York, and Texas, but it's bad news for most of the South and Midwest. Had a popular-vote system been in place in 2016, the Trump campaign would have oriented itself toward it and might have competed more in coastal Democratic strongholds, wasting less effort in other states.

Instead, the Electoral College system worked exactly as intended. The candidate who built the best consensus among the states through their popular votes won the presidency. The problem for the Times and others opposed to the outcome is that their candidate didn't beat the winner.
248  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Electoral College on: December 21, 2016, 11:30:53 AM
"We need to know the arguments [against the electoral college] -- e.g. the slave holder argument and how to counter it."

And likewise, the people should be taught the reasons FOR the electoral college.  Three places you're not likely to learn them, the mainstream media, the public schools and liberal-run private schools.  In other words, you might have to visit the right wing blogosphere, or this forum!


"The Electoral College ... is a living symbol of America’s original sin. When slavery was the law of the land, a direct popular vote would have disadvantaged the Southern states, with their large disenfranchised populations. Counting those men and women as three-fifths of a white person, as the Constitution originally did, gave the slave states more electoral votes."


Oh good grief!  Does the NY Times know math any better than that?  How does adding two Senators to the House total for ALL states give you the southern slave count?  If slave compensation was the reason, the math would count a slave as one person or multiply the slave number by 5/3rds.  The biggest colony, Virginia, was a slave state and some of the smallest, Rhode Island Delaware for example, were not.   https://web.viu.ca/davies/h320/population.colonies.htm  
Slavery was not the central point of the constitution, contrary to what is taught in our schools and newspapers.

There were good reasons then and there are good reasons now for the electoral college and as far as I know, they are the same.  Before delving into them, I would ask opponents what other parts of the constitution don't you like?  Article 5 perhaps, amending the constitution?  Note that their elegant solution goes around amending the constitution.  We hear polling on the popularity of the electoral college of randomly or systematically chosen Americans without hearing whether a majority favor abandoning it - in 3/4ths of the state legislatures, the vote that matters!  How does the electoral polling look in the 38 smallest states?  I wonder how Iowa and New Hampshire feel?  And Wyoming, Alaska, North Dakota, South Dakota, Montana, Idaho, West Virginia, Nevada, Mississippi, Utah, Oklahoma, Louisiana, Alabama, Indiana.  Do they want to be ruled by California?  I don't.  It only takes 13 states opposed to defeat repeal of the constitutional electoral college - if constitutional process mattered.

What do we say about liberals who were enthralled with the electoral college as recently as Nov. 6?  Did anyone hear about the big Blue Wall?  Hillary or any Democrat has 242 electoral votes before the vote count begins:
https://en.wikipedia.org/wiki/Blue_wall_(politics)  
States falling behind this blue wall generally included those the Democrats had carried since the 1992 presidential election,[5][6] and included (in order of decreasing population and followed by number of electoral votes): California (55), New York (29), Illinois (20), New Jersey (14), Washington (12), Massachusetts (11), Maryland (10), Minnesota (10), Oregon (7), Connecticut (7), Hawaii (4), Maine (4), Rhode Island (4), Delaware (3), and Vermont (3).  That Donald Trump had a narrow path to victory, narrow path to victory, narrow path to victory, narrow path to victory,  http://www.wsj.com/articles/donald-trumps-path-to-victory-is-narrow-1478480114   https://www.youtube.com/watch?v=JQ7lYRnF1F8

Reasons to keep the electoral college:

1. Requires the winning candidate to have significant trans-regional appeal.  

2. The entire constitution is a protection against tyranny by the majority.  Without it we could just have a popular vote on everything.

3. Certainty if outcome.  Challenges and recounts tend to be limited to a limited number of states, rarely wffecting the outcome.

4. Avoidance of a runoff.  Liberals can say Hillary won the popular vote in an electoral vote contest, but by no count did she win 50% plus one vote as the constitution also requires.  Hillary Clinton received 48% of the popular vote.  So then this goes to the Republican majority House of Representatives or do we change that rule too when it hurts Democrats?  Eliminate that rule and then even more minor party candidates run as spoilers and power brokers instead of the current system that mostly forces two major parties to reach to the middle.  Or should we have purality elections with run-off caused by the Gary Johnsons, Jill Steins and Ralph Naders of the spectrum?  In a runoff election without Ross Perot and more time to consider the consequences while the economy was already coming out of a recession, would incumbent President George H.W. Bush have lost to the Arkansas Governor Bill Clinton, who never did get 50% of the vote?  Maybe, maybe not.

5. Swing States.  The nature of the swing state contest is to force both major candidates toward the middle and toward being seen as more reasonable by the middle view of the country in a range of regions and states, from Nevada to New Hampshire in this most recent case.  Neither side can just throw out red meat to their side and win, in theory.

6.  Big states still have big clout.  California at 55 votes, still has more than one fifth of what is needed to win.

7.  The argument against the electoral college works as an argument against having the Senate, also not proportionally representative.  It is an argument against the House too.  Why are House districts winner take all instead of proportional representation?  Why not abandon Article 1 while were at it, and maybe all of the constitution.  Why protect rights or limit government if majority rule is better by definition?

8. If the first 7 don't persuade you, please consider that the Founding Fathers were much smarter and wiser than you - even if you call yourself "All the News That's Fit to Print”.  A constitution-less country would not have survived this long or prospered this well.  These protections have served their purpose well and the constitution has been sufficiently amendable when needed, proven 27 times over.  Who really believes otherwise?
249  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: The Cognitive Dissonance of His Glibness. Firearms pardons on: December 20, 2016, 09:18:13 AM
He argues for tougher gun laws and issues 49 pardons for firearms offences.  Makes perfect sense.

https://pjmedia.com/trending/2016/12/19/obama-delivers-231-pardons-and-commutations-49-for-firearm-offenses/

A complete ban is a reasonable regulation (DC) and a constitutional right is not an individual right (Heller).

The man we still call Mr. President helped firearms sales more than any other president in US history.
250  Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: The Hillbillary Clintons long, sordid, and often criminal history on: December 20, 2016, 09:07:16 AM
“angry, white men.” caused her loss?  She lost white women by 52 to 42!

At the end, 'drain the swamp' resonated.
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