Posts © 2011-2012 by Gerald G. Day

Wednesday, December 28, 2011

December 28, 2011
It used to be possible, with only a modest amount of hypocrisy or ignorance, to watch A Christmas Carol and feel relief that the conditions Dickens described and Scrooge mocked or ignored had passed into the dustbin of history, banished by progress, material and moral. No longer.
Scrooge was a piker. In 2007 (apparently the most data available) the cumulative wealth of the Forbes 400 was roughly the same amount of wealth held by the entire bottom fifty percent of American families. Six members of the Walton family had a combined worth equal to the total wealth of the entire bottom thirty percent.104
According to the Congressional Budget Office,
• For the 20 percent of the population with the lowest income, average real after-tax household income was about 18 percent higher in 2007 than it had been in 1979.
• For the 60 percent of the population in the middle of the income scale (the 21st through 80th percentiles), the growth in average real after-tax household income was just under 40 percent.
• For those just below the top, the 81st through 99th percentiles, average real after-tax household income grew by 65 percent.

• For the 1 percent of the population with the highest income, average real after-tax household income grew by 275 percent between 1979 and 2007.• Between 2005 and 2007, the after-tax income received by the top one percent exceeded the after-tax income of the remaining 80 percent.105
From another report:
• The share of the nation’s income flowing to the top 1 percent of households increased from 16.9 percent in 2002 to 23.5 percent in 2007, a larger share than at any point since 1928.
• Income gains have been even more pronounced among those at the very top. The incomes of the top one-tenth of 1 percent of U.S. households have grown by 94 percent, $3.5 million per household, 2002 to 2007 (and more than 400 percent over the period from 1979 to 2005).
• The share of the nation’s income flowing to the top one-tenth of 1 percent of households is at the highest level since 1913, surpassing even the previous peak in 1928. 106
The average Bush tax cut in 2011 for a taxpayer in the richest one percent is greater than the average income of the other 99 percent.107
Not only do our numbers look awful absolutely, they do so relatively. The GINI index measures income inequality; the higher the number, the more unequal the distribution. The U.S., at 45, has the worst rating among developed nations. Scrooge’s United Kingdom is at 34, Canada at 32.1; the European Union average is 30.6, almost exactly that of Australia.108
An additional 2.6 million people fell into poverty in the United States last year, and the number below the official poverty line, 46.2 million people, is the highest in the 52 years the statistic has been kept. The poverty rate was 15.1% in 2010, the highest level since 1993. About 6.7 percent of the population, 20.5 million people, fell into deep poverty, defined by an income less than half the official poverty line. The number of uninsured Americans increased by 900,000 to 49.9 million.109
Bah, humbug
As the problems resemble those of Dickens’ era, so do the responses of the insufficiently frightened rich:
Home Depot Co-founder Bernie Marcus, referring to Occupy protesters: “Who gives a crap about some imbecile? Are you kidding me?”
Home Depot Co-founder Ken Langone: “I am a fat cat, I’m not ashamed . . . If you mean by fat cat that I’ve succeeded, yeah, then I’m a fat cat. I stand guilty of being a fat cat.”
Former BB&T Bank CEO John Allison: “Instead of an attack on the 1 percent, let’s call it an attack on the very productive. This attack is destructive.”
Paychecx Inc. Founder Tom Golisano: “If I hear a politician use the term ‘paying your fair share’ one more time, I’m going to vomit."110
Visitation by ghosts won’t budge this lot.


106. ;

Monday, December 12, 2011

December 12, 2011

It is difficult to find a national television news broadcast with which I do not feel compelled to carry on a critical, irritated conversation. I went through PBS, ABC and CBS over a period of years and eventually settled on NBC.
My current complaint has to do with the treatment of weather-disaster news by NBC. Because TV news dwells on such events, large segments of broadcasts have been devoted to them. Some of the stories, including one on Saturday night, have included comments about the large number of major disasters, but I do not recall hearing any reference to global warming, let alone man-made climate change. Perhaps there has been a statement I missed, but certainly there has not been any meaningful discussion.
Why not? The network cannot be unaware of the issue. Does it really think that the science is uncertain? Is it so intimidated by the right that it daren’t broach the subject?
Next-day reruns of The Daily Show have moved to 6 p.m., opposite NBC News, and we’ve switched to watching those. Faux news at least addresses issues, and for real news, I can read the papers.


Tonight, NBC News managed to report on the mid-summer temperatures across much of the nation without any reference to the banned subjects or any sort of explanation, even though it tried (unsuccessfully) to explain why The Godfather became (did it?) an iconic movie.

Sunday, December 11, 2011

December 11, 2011

Usury, according to Black’s Law Dictionary, is
1. Historically, the lending of money with interest.
2. Today, the charging of an illegal rate of interest.
3. An illegally high rate of interest.

However, the second and third definitions virtually have fallen into the first, becoming relics of the past. That occurred in part because many state laws on maximum rates of interest have been superseded by federal law, which is friendly to banks. However, some state laws, including ours, set few limits; Washington’s law essentially is a comprehensive list of exceptions to the nominal limit of 12%.102 Therefore, between them they have made the definition of usury law —“A law that prohibits moneylenders from charging illegally high interest rates” — equally quaint. The result is to burden ordinary folk with oppressively high interest expenses.
The national average for credit cards is 14.43%; many, obviously, are far worse. Mortgage and auto loans, which are secured, are available at lower rates — the local average for the former is 4.25%, for the latter 5.87% — but there still is a huge spread between interest paid and interest charged. According to a list in the Sunday Seattle Times, the best money market fund yields 0.28%, with the average at about 0.02%. The national average for a 0ne-year CD is 0.35%; the average savings account pays about .2%.
The rates credit cards charge for cash advances, in other words loans, typically are even higher than the purchase rates. Discover recently sent me several checks, inviting me to use them for “cash when you need it” at the jaw-dropping rate of 23.99%, its “standard APR for cash advances.” Even that “will vary with the market based on the Prime Rate.” The prime rate is 3.25%, the lowest it has been since August, 1955, so the Discover rate has nowhere to go but up.
Pay day loans are far worse. They are short-term loans carrying nominal interest rates which sound high but not outrageous, until one notes that the rate is for a very short time period. Washington allows 15% on a fourteen-day loan, an annual rate of 390%.103 Other states allow higher rates.
Savings rates presumably will rise whenever the economy recovers, narrowing the gap if interest charges don’t also rise. Still, it’s time for Congress and the legislatures to resurrect the concept of usury and impose rational limits on the cost of consumer credit. Not likely, though.


102. See
103. See , a Consumer Reports site. The rate actually is 391.07% (15% ÷ 14 x 365)