Priorities and substance

Concern for the Poor

To speak of a ‘preferential option for the poor’ is not to speak of an ‘exclusive’ option for the poor, as though God loved only the poor and did not love anybody else, especially the rich…. In responding to the concern that God has for all people, we start toward the fulfillment of that long-range concern by an immediate and initial concern for the poor, working with them and for them. To the degree that the cries of the poor are given priority over the complaints of the rich, there can be movement toward a society that is more, rather than less, just.

Robert McAfee Brown
Source: Saying Yes and Saying No

Life of the 1%

Gap widens. . .unsustainable

Life Purpose?

Will someone please tell me what this means?

I'm not connecting to the images of labor, sacrifice, deeper meaning, danger, giants and even community that take us to an expensive sports car.

Educate me.

Surprising facts. . .

Nine Economic Facts That Will Make Your Head Spin

Wednesday, 20 February 2013 10:07By Lynn Parramore, AlterNet | Report

Half the population of the US has slipped into poverty or is barely making enough to get by.

How much will you need for medical expenses in retirement? What does it cost to keep 2.5 million Americans behind bars? Here are a few facts and figures that might surprise you.

1. Recovery for the rich, recession for the rest.

Economic recovery is in rather limited supply, it seems. Research by economist Emmanuel Saez shows that the top 1 percent has enjoyed income growth of over 11 percent since the official end of the recession. The other 99 percent hasn’t fared so well, seeing a 0.4 percent decline in income.

The top 10 percent of earners hauled in 46.5 percent of all income in 2011, the highest proportion since 1917 – and that doesn’t even include money earned from investments. The wealthy have benefitted from favorable tax status and the rise in stock prices, while the rest have been hit with a continuing unemployment crisis that has kept wages down. Saez believes this trend will continue in 2013.

2. Half of us are poor or barely scraping by.

Click here to read on. . . 

Lucky

Watch Michael Lewis: I Aimed To Give Something Unexpected on PBS. See more from PBS NewsHour.

Attacking the income disparity gap

Here's a fascinating essay comparing how the U. S. handled its income gap between the well-to-do and the bottom early in the 20th Century when William Howard Taft served as President.  The analysis quickly reveals how so much more conservative our nation has become, a trend that appears to be growing. 

Read the article and tell me what you think.


Radical Solutions to Economic Inequality

If only Americans today were as open-minded about leveling the playing field as we were 100 years ago.

By Beverly Gage|Posted Wednesday, Feb. 15, 201

In one of his last acts of office, President William Howard Taft attempted to solve the problem of inequality in America. In August 1912, on the cusp of a brutal third-place finish in the presidential election, he created a Commission on Industrial Relations to investigate “the general condition of labor in the principal industries.” Despite its fusty charge, the commission turned out to be one of the most sensational sideshows of the Progressive Era, a cross-country journey through the wilds of American class conflict. For three years, government commissioners traipsed from city to city asking capitalists, union organizers, and reformers what it was like to work in America, and whether the spoils of industry seemed to be distributed fairly among the rich and poor.

The commission’s answer, released in a 1916 report, speaks volumes about the persistent dilemma of inequality in the United States, and about the intellectual timidity of today’s political responses. “Have the workers received a fair share of the enormous increase in wealth which has taken place in this country…?” the report demanded. “The answer is emphatically—No!”

Their numbers bore this out. According to the commission, the “Rich”—or top 2 percent—owned 60 percent of the nation’s wealth. By contrast, the “Poor”—or bottom 60 percent—owned just 5 percent of the wealth.

Today, after a century of ups and down, we’ve landed back at those extremes, give or take a few percentage points. But what’s striking about the commission’s report, read from a 21^st-century perspective, is how limited our own debate about inequality seems by comparison. For the commission, inequality was a fundamental problem that threatened the entire fabric of American democracy. Today, by contrast, we’re busy debating whether a multimillionaire like Mitt Romney ought to pay a few more percentage points in federal taxes.

To read the entire article click here.

Beverly Gage, a Yale history professor, is the author of The Day Wall Street Exploded.

New study reveals startling picture of Dallas’ financial insecurity Assets & Opportunity Profile

A new report paints a tough, but realistic picture of life in Dallas at the lower levels of the economy.  It turns out that the numbers of people struggling with "asset poverty" are startling. 

Read the entire report on here.

More on this soon.

The amazing rise of the rich

Recently, I ran across Tim Dickinson's essay in Rolling Stone describing the intentional, dramatic and unjust strategy that has been imposed on us all over the past 25 years (see below). The facts of the case make me angry. The ugly truth about our culture, our economy and our political reality would enrage the Hebrew prophets, you know, guys like Amos, Jeremiah, Micah, Isaiah, to say nothing of Jesus and his brother, James.

Please take the time to read the entire report. Then, tell me what you think. I hope some of you who seldom comment will make the special effort to do so on this post. I can anticipate the predictable reactions of some of my regular readers. What I need on this post is a response from you who see the truth here. I'd love a conversation about what we can do. Or, if you disagree with the article, comment on its substance.

How the GOP Became the Party of the Rich
The inside story of how the Republicans abandoned the poor and the middle class to pursue their relentless agenda of tax cuts for the wealthiest one percent

By Tim Dickinson

November 9, 2011 7:00 AM ET

The nation is still recovering from a crushing recession that sent unemployment hovering above nine percent for two straight years. The president, mindful of soaring deficits, is pushing bold action to shore up the nation's balance sheet. Cloaking himself in the language of class warfare, he calls on a hostile Congress to end wasteful tax breaks for the rich. "We're going to close the unproductive tax loopholes that allow some of the truly wealthy to avoid paying their fair share," he thunders to a crowd in Georgia. Such tax loopholes, he adds, "sometimes made it possible for millionaires to pay nothing, while a bus driver was paying 10 percent of his salary – and that's crazy."

Preacher-like, the president draws the crowd into a call-and-response. "Do you think the millionaire ought to pay more in taxes than the bus driver," he demands, "or less?"

The crowd, sounding every bit like the protesters from Occupy Wall Street, roars back: "MORE!"

The year was 1985. The president was Ronald Wilson Reagan.

Read the entire instructive report here.

Banking and the poor

The Underrated Role of Financial Services in Reducing Poverty

Ethan Geiling and Genevieve Melford, Corporation for Enterprise Development - Posted July 11, 2011

Something as simple as a checking account can be the first step in saving, planning for the future, building credit, and climbing the economic ladder. Unfortunately, basic financial services like checking accounts are out of reach for many low-income American families.

If we’re going to help connect these people to genuine opportunity, now is the time to take some simple but important steps to provide better financial products for low-income Americans.

According to the Federal Deposit Insurance Corporation (FDIC), approximately 8 percent of all American households are unbanked, with neither a checking nor a savings account. Another 18 percent are underbanked, meaning they may have an account but they also rely on non-bank financial services like check cashing and high-interest payday loans.

This financially underserved population of over 30 million households is disproportionally low-income and minority. Forty-three percent of households with a yearly income below $30,000 are either unbanked or underbanked. Nationally, 54 percent of black households and 43 percent of Hispanic households are unbanked or underbanked, compared to only 18 percent of white households.

These households spend an enormous amount of money on financial services for which most Americans pay little to nothing. The average full-time worker without a bank account spends $40,000 over the course of his or her lifetime to turn income into cash.

To read this entire, very challenging report click here.

Ethan Geiling is a policy and research associate at the Corporation for Enterprise Development. Genevieve Melford is director of research at the Corporation for Enterprise Development.

Economic fragility...financial stress expands

My friend, Jeremy Gregg, Executive Director of the PLAN Fund here in Dallas, reminded me of a Dallas Morning News report that the "average Dallas poor family" spends $800 annually on check cashing and payday lending.  Based on the report below, I expect many other families are forced to use the incredibly expensive financial services as well.  It was a big win on Wednesday when, thanks to the efforts of CitySquare and our partners, the Dallas City Council approved new zoning regulations as a means of beginning to regulate payday lending operations in Dallas.  Read the report and tell me what you think.

Nearly Half of Americans Are ‘Financially Fragile’
May 23, 2011, 2:22 PM ET

Nearly half of Americans say that they definitely or probably couldn’t come up with $2,000 in 30 days, according to new research, raising concerns about the financial fragility of many households.

Many Americans aren’t able to cope with an unexpected bill.  In a paper published by the National Bureau of Economic Research, Annamaria Lusardi of the George Washington School of Business, Daniel J. Schneider of Princeton University and Peter Tufano of Harvard Business School used data from the 2009 TNS Global Economic Crisis survey to document widespread financial weakness in the U.S. and other countries.

The survey asked a simple question, “If you were to face a $2,000 unexpected expense in the next month, how would you get the funds you need?” In the U.S., 24.9% of respondents reported being certainly able, 25.1% probably able, 22.2% probably unable and 27.9% certainly unable. The $2,000 figure “reflects the order of magnitude of the cost of an unanticipated major car repair, a large copayment on a medical expense, legal expenses, or a home repair,” the authors write. On a more concrete basis, the authors cite $2,000 as the cost of an auto transmission replacement and research that reported low-income families claim to need about $1500 in savings for emergencies.

Financial fragility isn’t limited to low-income groups. “Households with socioeconomic markers of vulnerability (income, wealth, wealth losses, education, women, families with children) are more likely to be financially fragile, and substantially more so,” the authors write. “The more surprising finding is that a material fraction of seemingly ‘middle class’ Americans also judge themselves to be financially fragile, reflecting either a substantially weaker financial position than one would expect, or a very high level of anxiety or pessimism. Both are important in terms of behavior and for public policy.”

Lusardi, Schneider and Tufano also looked at the ways in which people coped with an unexpected expense. Most would use multiple methods ranging from dipping into savings, asking for help from family and friends, using loans or credits cards, taking out payday loans or selling possessions. “Taken together with those who would pawn their possessions, sell their home, or take out a payday loan, 25.7% of respondents who were asked about coping methods (equal to 18.6% of all respondents) would come up with the funds for an emergency by resorting to what might be seen as extreme measures,” the authors write. “Along with the 27.9% of respondents who report that they could certainly not cope with an emergency, this suggests that approximately 46.5% of all respondents are living very close to the financial edge.”

Meanwhile, Lusardi, Schneider and Tufano also looked at how different countries compare. They consulted with local partners to set the number used in local currency at a comparable level. “Perceived capacity to cope with an emergency is lowest in the U.S., U.K. and Germany, all countries in which 50% of households or more would probably or certainly be unable to come up with the emergency funds,” the authors wrote. “France and Portugal occupy an intermediate position; 46% of respondents in Portugal would certainly or probably be unable to come up with the funds as would 37% of those in France. The highest levels of coping capacity are found in Canada (28% certainly or probably unable), Netherlands (27.9%), and Italy (20%).”

Income gap. . .

A report from "The Lookout," a Yahoo news blog: a problem possibly more toublesome than the national debt. . .

Wed Feb 23, 5:13 pm ET

Separate but unequal: Charts show growing rich-poor gap
By Zachary Roth

The Great Recession and the slump that followed have triggered a jobs crisis that's been making headlines since before President Obama was in office, and that will likely be with us for years. But the American economy is also plagued by a less-noted, but just as serious, problem: Simply put, over the last 30 years, the gap between rich and poor has widened into a chasm.

Gradual developments like this don't typically lend themselves to news coverage. But Mother Jones magazine has crunched the data on inequality, and put together a group of stunning new charts. Taken together, they offer a dramatic visual illustration of who's doing well and who's doing badly in modern America.

Here are three samples:

This chart shows that the poorest 90 percent of Americans make an average of $31,244 a year, while the top 1 percent make over $1.1 million:

According to this chart, most income groups have barely grown richer since 1979. But the top 1 percent has seen its income nearly quadruple:

And this chart suggests most Americans have little idea of just how unequal income distribution is. And that they'd like things to be divvied up a lot more equitably:

To see the rest of these fascinating charts, click on over to Mother Jones.

[Is it just me, or is this socially unsustainable?  LJ]

Creating wealth for the wealthy

This report appeared in the Philanthropy News Digest and suggest that the wealthy in the U. S. receive numerous hidden benefits, many obvious and some not so obvious to the uninformed.  Certainly, the source of the report is well-respected and the basis of the information grounded in solid research and investigation.  Not something we're likely to hear about on the Sunday morning talk shows this week.  Have you noticed, no one seems to talk about "the poor,"  those folks who live in and struggle with poverty. 

Study Finds Federal Asset-Building Programs Reward the Rich, Penalize the Poor
Posted on September 24, 2010

The federal government spent nearly $400 billion in fiscal year 2009 to help people save money and build wealth, but the vast majority of the money went to the nation's richest taxpayers, a new report from the Annie E. Casey Foundation and the Corporation for Enterprise Development finds.

According to the report, Upside Down: America's $400 Billion Federal Asset-Building Budget  (26 pages, PDF), the top 1 percent of families received an average of $95,000 in assistance last year, while families making $100,000 annually received $1,600, and the poorest received less than $5. The inequitable distribution is all but invisible, the report found, because the wealth-building strategies are tucked into the federal tax code — as deductions, credits, and preferential rates — rather than in the government's annual discretionary budget, where they would receive more scrutiny.

By embedding asset-building strategies into the tax code as deductions and exclusions, the federal government naturally favors those who bear the heaviest tax burden. Indeed, the wealthiest 1 percent of taxpayers received 45 percent of the federal asset budget while contributing just 27 percent of total tax revenue. Policies that depend on direct outlays in the annual budget, including the Assets for Independence program, which provides matched-savings accounts for low-income families, have proven successful in encouraging savings, homeownership, and business startups. Yet, because they are visible, such programs often become fodder for partisan political battles.

"If we are serious about cutting the deficit, Congress could start by trimming these upside-down subsidies and creating a more equitable approach," said CFED president Andrea Levere. "As Congress debates whether to extend the Bush-era tax cuts for the wealthy and the president's fiscal commission develops recommendations to balance the federal budget, they should remember that we could shave $1 trillion off the deficit in the next decade simply by capping some of these benefits."

Charity usually misses the most in need of it

The essay below appeared in the July 20, 2010 edition of The Chronicle of Philanthropy.  After you've read it, let me know what you think.

The Gates-Buffett Giving Pledge Won’t Do Much Good Unless It Changes Philanthropy
By Pablo Eisenberg

Most of the nonprofit world seems to be agog over the news that Bill and Melinda Gates, along with their friend Warren Buffett, are joining together to ask fellow billionaires to sign a pledge to give at least one-half of their fortunes to charity.

That could lead to an enormous increase in the amount of money available to nonprofit organizations. Fortune magazine estimates that if the people on the Forbes 400 list of the wealthiest Americans all made the pledge, an additional $600-billion could flow to nonprofit groups—twice the amount Americans gave last year.

When will this money be distributed to charities? Mr. Buffett has said that he plans to give away 99 percent of his fortune while he is alive or at his death, and he has made clear in his gifts to the Gates Foundation that he wants the money to be distributed quickly rather than left to sit in the foundation’s coffers. But will other donors do the same, or will they put their money into foundations that give only a small percentage of their assets every year?

Who will provide the leadership to increase the quality of philanthropy, not just the amount of money given? So much of the giving wealthy donors and foundations now do is lackluster and does not involve risk taking or innovation. Nor does it seek to solve urgent public needs. Will the new pledges mean more of the same?

What steps will be taken to ensure public accountability? Will the funds that are steered into new or existing foundations follow the Gateses’ approach, namely grant-making institutions governed by a very few family members that, in a real sense, are not really publicly accountable? Do we want an explosion of these tax-exempt oligarchic entities with huge assets that can help set public priorities without public discussion or a political process? Would this be a healthy development for democracy? If not, what can be done to mitigate the potential undemocratic nature of these new mega-foundations?

Perhaps the most troubling issues posed by the Gates-Buffett crusade is its potential to intensify the inequities that exist both in the nonprofit world and in the rest of society.

Foundations, corporations, and other forms of institutional philanthropy tend to favor the nation’s most-privileged citizens and neglect the neediest people and organizations. An outsize share of the money from those institutions goes to established colleges, hospitals, and arts and cultural organizations. Only a small amount finds its way to organizations that serve vulnerable children, low-income people, minorities, women, the disabled, and other disadvantaged constituencies. A tiny portion of philanthropic money is channeled to groups that seek to influence public policies.

To read the entire article click here.