Friday, August 31, 2018

Profits up, wages down, and big money wields its power against Arizona initiatives

Leading this morning’s inequality watch is this item from the 538 significant digits email.

1.8 million federal workers
President Trump is canceling pay raises for nearly 2 million federal workers, pointing to the U.S.’s “fiscal situation.” Most of these workers were scheduled to receive a 2.1 percent bump in salary next year. The Senate had backed a 1.9 percent raise but House Republicans approved a plan that endorsed the White House’s decision. [Politico]

Just in case you missed that last part, let me flag it for your attention House Republicans approved a plan that endorsed the White House’s decision. It is critical, come November, to flip the House.

Politico reports Trump cancels pay raises for almost 2 million federal workers. ‘In light of our nation’s fiscal situation, federal employee pay must be performance-based,’ the president wrote in a Thursday letter to congressional leaders.

"We must maintain efforts to put our nation on a fiscally sustainable course, and federal agency budgets cannot sustain such increases,” the president wrote in a letter to congressional leaders.

Under Trump’s policy, roughly 1.8 million people wouldn’t get an automatic pay boost next year, including Border Patrol and ICE agents.

That stance puts vulnerable GOP lawmakers representing northern Virginia — home to tens of thousands of federal workers — in the political crosshairs. And it sets up an all-but-certain funding fight with Congress next month, as party leaders attempt to reach a sweeping agreement to keep the government open before the start of the next fiscal year on Oct. 1.

Sure, Donnie. You have the brass to defend shafting a few more workers after signing off on a tax cut that benefitted corporations and wealthy Americans and increased our national debt?

Not only that …

Considering the larger picture of inequality, Judd Legum at reveals America’s dysfunctional economy, in one chart.

What was the impact of Trump’s tax cut?

Real wages for workers are declining. But corporate profits, according to new Commerce Department data released Wednesday, are booming.

In the second quarter of 2018, “after-tax profits across the U.S. rose 16.1%” compared to last year. Tax payments, largely as a result of the new tax bill, “were down 33%.”

Here is how corporate profits look compared to wages during the Trump presidency in one chart.

Profits vs wages
Profits up, wages down

Ballooning corporate profits and stagnant wages were cheered by the administration’s economic leadership. “The economy is strong…[inflation] is near our 2% objective, and most people who want a job are finding one,” Federal Reserve Chairman Jerome Powell said last week.

Trump, however, did not campaign as a champion of corporations but of the “forgotten man and woman.”

“We’ll get your salaries and your wages up, up, up,” Trump said at a September 2016 rally.

But under his leadership, “[o]nce the impact of inflation is included, ordinary Americans’ hourly earnings are lower than they were a year ago.”

It’s hard to fool Americans, who get a reality check from their paychecks each week. “A majority of voters believes their personal financial situation has remained the same or gotten worse over the past two years,” according to a recent poll from Quinnipiac.

In recent speeches, Trump has “falsely claimed that wages are going up for the first time in 18 years, 19 years, 20 years, 21 years and 22 years."

Consequences of inequality: Wealth = Power

Tim Steller at the Daily Star ( reports on how Court rulings show wealth decides which initiatives AZ voters may consider. Snippets follow. (Emphases and subtitles added.)

Let’s hear a long, slow clap for big money interests.

They showed again this week who really runs Arizona.

They do.

That became clear Wednesday as the Arizona Supreme Court handed down rulings on what initiatives will and won’t appear on state ballots this November. The legal challenges to the proposed ballot issues all had their own individual sets of reasons. But the outcomes in every case were that big money won.

Big money hates taxes, dislikes public education

The Invest In Ed initiative would have raised the income tax rates on individuals making more than $250,000 per year or couples making more than $500,000 per year. The authors estimated $690 million in new money would go to the K–12 education system as a result.

But the Arizona Chamber of Commerce and Industry, which often doubles as a political defense group for the wealthy, opposed the initiative. It noted how the initiative’s language referred to the increases in tax rates as “percent” increases, when they really should have been called “percentage point” increases, or the percentages should have been much bigger. It was a bad mistake by the initiative’s authors, and the upshot was that about 270,000 people who signed petitions lost. The Arizona Chamber, and those who might have paid higher taxes, won.

Big money likes Dirty Money

The Outlaw Dirty Money initiative was especially offensive to wealthy interests because it would have forced them to disclose the political spending they use to maintain control in Arizona politics. Three dark-money groups challenged the initiative. Of course they did — it challenged their reason for being. Their attorneys issued subpoenas to 15 petition circulators who gathered signatures for the initiative. When those circulators didn’t show up, a 2014 law required that the signatures they collected be invalidated.

The Supreme Court’s decision Wednesday affirmed the constitutionality of this law, which was designed to make it harder for citizens to get initiatives on the ballot. So, as a result, the signatures of 285,786 Arizona voters have been thrown aside, and the wealthy get to plow their money in our elections without the inconvenience of having to acknowledge it.

Some big money likes clean energy. Other big money hates clean energy.

In the Clean Energy initiative case, big money would have won no matter which way the court turned, because big money both backed and opposed the initiative. This initiative would require Arizona utilities to get 50 percent of their energy from renewable sources by 2030. Arizona Public Service used its monopoly power and money to oppose the measure, and California billionaire Tom Steyer used his piles of cash to support it.

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