We are anti subsidy for any corporation / and only for people under emergency.
RINF Alternative News
You might say the chieftains of America’s largest restaurant corporations want it every which way and then some.
Having read the polls supporting a minimum wage hike, they’re skittish about trashing the idea personally. So they pay their DC lobby machine to do their dirty work. And it’s not enough for them to shove the costs of their low-wage model onto Joe Schmo taxpayer. These CEOs are also making the rest of us pay for their own fat paychecks.
How’s that again? Yes, ordinary taxpayers are not only covering the cost of billions of dollars in public assistance for restaurant workers who earn poverty wages. We’re also subsidizing the pay of our nation’s notoriously overpaid CEOs.
Here’s how it works: Under the current tax code, corporations can deduct no more than $1 million for executive pay from their federal income taxes. But there’s a giant loophole that allows unlimited deductions for “performance pay.” So, no surprise, what the big corporations tend to do is put about $1 million of their executive pay packages toward salary and call the rest “performance pay.” That way the more they shovel into their CEO’s pockets, the less they pay Uncle Sam. And the rest of us foot the bill.
Nearly all of the big restaurant corporations are members of the National Restaurant Association, which is leading the charge against minimum wage increases.
In 2012 and 2013, Starbucks CEO Howard Schultz took in $1.5 million per year in salary, which is subject to the $1 million deductibility cap. But that was just the foam on top of a triple venti.
Now we get to the serious money. Schultz cashed in stock options worth $230 million over this two-year period. For good measure, the board tossed him $2 million-plus incentive bonuses each year. Both of these types of compensation fall into the “performance pay” loophole.
So how much does Starbucks get to subtract from its tax bill for the cost of this one guy’s “performance pay”? $82 million.
That’s a lotta lattes.
Like several other big restaurant CEOs, Schultz has taken a soft line on the minimum wage. That is, when asked about it personally. Meanwhile, Starbucks remains a member in good standing of the National Restaurant Association, which is deploying dozens of lobbyists to block a wage increase.
2. Yum! Brands
Next time you’re shelling out for a Gordita Supreme at Taco Bell, keep in mind that you’re also contributing to a grande-sized paycheck for the CEO of the chain’s parent company, Yum! Brands.
Yum! CEO David Novak took $67 million in “performance pay” over the years 2012 and 2013, which lowered the firm’s federal tax bill by about $23 million.
Low-level workers at Taco Bell and Yum!’s other chains (Pizza Hut and KFC) earn less than $8 per hour on average. Since that’s not a living wage anywhere in the United States, it’s no surprise that many Yum! workers must rely on Medicaid or other taxpayer-funded anti-poverty programs to make ends meet. The National Employment Law Project estimates that Yum! employees receive nearly $650 million in public assistance annually.
In addition to the firm’s membership in the NRA, Yum! has also been active with the American Legislative Exchange Council. In 2011, a Yum! official co-led an ALEC task force focused on blocking paid sick leave benefits. Rather than giving sick employees a break, it seems they’d rather have them sneezing on your Gordita.
Chipotle has invested heavily in developing a progressive customer base by projecting the image of a “sustainable” fast food alternative. So it’s not surprising that the firm’s top brass have shied away from speaking out personally against the popular push to raise the minimum wage.
Co-CEO Monty Moran has commented that average wages at Chipotle are already $9 and so the effect of raising the minimum to $10 would be “not too significant.” Like other image-conscious CEOs, Moran appears to prefer to have his Washington lobby shop, the NRA, handle the dirty work on this issue.
Moran is probably also reluctant to draw attention to his own paycheck. The company has an extremely top-heavy pay structure in part because it has two CEOs. In 2012, Moran cashed $55 million in stock options and his co-CEO, Steve Ells, cashed in $47 million. In 2013, both men received more than $20 million in vested performance stock and Ells exercised another $42 million in options. Altogether, their 2012-2013 “performance pay” generated a CEO pay subsidy for Chipotle of $69 million.
4. Dunkin’ Brands
At the helm of Dunkin’ Donuts and Baskin Robbins, CEO Nigel Travis cashed in on more than $20 million in stock options in both 2012 and 2013, generating a performance pay tax subsidy for the company of more than $15 million. For comparison’s sake, that $15 million would be enough to cover the cost of one public assistance program on which many fast food workers rely, the Supplemental Nutrition Assistance Program, for 9,608 households for a year.
Like the CEOs of Starbucks and Chipotle, Travis has taken a soft line on the minimum wage when speaking out personally. In one recent interview, he said, “We believe the minimum wage will go up. So there’s no point fighting that.” Maybe there’s no point for Travis. He’s got the NRA to do that job.
In his first six months as CEO in 2012, CEO Donald Thompson took in more than $10 million in “performance pay,” which translates into a $3.5 million subsidy for the company. Last year, Thompson’s haul was more modest because he opted not to cash in any of his hundreds of thousands of exercisable “in-the-money” stock options.
Faced with a wave of worker protest actions, he may have decided to hold off on a big payout until the spotlight on the fast food giant is not quite so bright. On top of growing demands for living wages, the company has also faced a spate of wage theft charges. In 2013, the company settled a New York case for $500,000 and workers in two additional states recently filed similar suits. Due to the company’s notoriously low wages, McDonald’s workers rely on an estimated $1.2 billion in public assistance per year, according to the National Employment Law Project.
Among full-service restaurant chains, Darden has enjoyed the largest CEO pay subsidy. The owner of Olive Garden, Red Lobster, LongHorn Steakhouse, Bahama Breeze, and Capital Grille, Darden is the world’s largest full-service restaurant company. In 2012 and 2013, CEO Clarence Otis received nearly $9 million in fully deductible “performance pay,” which works out to a more than $3 million taxpayer subsidy for the company.
Darden pays at least 20 percent of its U.S. employees only the federal minimum wage for tipped workers, which has remained at $2.13 an hour for more than 20 years. Together with the NRA, they’re lobbying hard to keep it that way.
The NRA will be among the targets of a demonstration organized by several grassroots organizations on April 28 under the theme of “kicking corporate cash out of Congress.”
Restaurant Opportunities Centers United, which has built a network of thousands of restaurant workers and high-road employers to improve industry standards, is partnering with the National Domestic Workers Alliance and National People’s Action to urge elected officials to put the interests of regular people first. The following day, members of the NRA will converge in Washington for a major lobby push against increasing the minimum wage.
It’s time the big restaurant CEOs were called out on their paycheck hypocrisy. For too long they’ve been sticking taxpayers with the bill for their bad pay practices —at both the bottom and the top ends of the corporate ladder.
Read MORE here
Sarah Anderson directs the Global Economy Project at the Institute for Policy Studies and is a co-author of the Institute’s 20th anniversary Executive Excess report, “Bailed Out, Booted, and Busted.”
Because it IS Extortion to extract money or TRIBUTES, from individuals or groups; using FORCE as the penalty for non compliance!
Steve Miller, former Director of the Internal Revenue Service (IRS), admitted at a Congressional hearing that the taxes collected by the IRS are not mandatory — but voluntary.
When questioned at the House Ways and Means Committee (WMC) hearing last week, Miller told House Representative Devin Nunes that “America’s tax system is ‘voluntary’”. When Nunes remarked for clarification that the US tax code is a “voluntary system”, Miller said, “Agreed.”
House Representative Xavier Becerra commented that the ruse of the IRS is kept as a public confidence in the system scheme to keep Americans paying money to the IRS.
Miller confirmed this is so.
The shuffle at the IRS has landed Danny Werfel as the new acting director.
Dear We The People: MOST CITIZENS ARE NOT REQUIRED TO FILE AN INCOME TAX RETURN THE 16TH (“INCOME TAX”) AMENDMENT TO THE CONSTITUTION IS A FRAUD IF YOU FILE, YOU WAIVE YOUR 5th AMENDMENT RIGHTS
These are the major points expressed in a Remonstrance, that was hand delivered to leaders of the three branches of the federal government on April 13, 2000, by a group of citizen-delegates representing all 50 states. These grievances concern alleged illegal operations of the federal income tax system and the IRS.
The Remonstrance was signed by thousands of citizens, and was delivered as part of an event sponsored by We The People Foundation for Constitutional Education, a not-for-profit corporation dedicated to research and education in matters of taxation & governance.
THE MAIN PROPOSITIONS OF THE REMONSTRANCE ARE:
1) The 16th amendment to the U.S. Constitution (the “income tax amendment”) was fraudulently and illegally proclaimed to be ratified in 1913. Exhaustive legal research from both state and national archives documented conclusively that the amendment did not even come close to being legally approved by the required number of states.
The Courts have refused to hear this issue.
“[Defendant] Stahl’s claim that ratification of the 16th Amendment was fraudulently certified constitutes a political question because we could not undertake independent resolution of this issue without expressing lack of respect due coordinate branches of government….”
U.S. v Stahl (1986), 792 F2d 1438
2) Filing a federal income tax return is, in fact, voluntary, because there is no statute or regulation that requires the vast majority of U.S. citizens to file and pay income taxes — or to have taxes withheld from the money they earn.
Neither the IRS nor the Congress can cite an authorizing law or regulation.
3) Citizens cannot “voluntarily” file a federal income tax return without surrendering their 5th amendment right not to bear witness against themselves.
You can be criminally prosecuted for your “voluntary” return.
Former gun-carrying, IRS Criminal Investigation Division (CID) Special Agent exposes how the IRS is robbing you! He quits his $80,000/yr. Job because the IRS failed to show him that filing & paying Income Tax is mandatory. He will tell his story and his latest efforts for restoring honesty in government.
Buffett’s BH Hedgefund owned “Fruit of the Loom” to close Jamestown plant, lay off all 600 workers (Moves to Honduras)
Tax Breaks, No Pesky environmentalists to cry about polluted water, and Slave Labor! — Kindly old man – (ahem) – Monopolist WARren Buffett has billion$ upon billion$, and is always rolled out as “The Nice, Sensible Plutocrat”. In order to add a few more millimeters onto his massive mountain of money, Buffett is shutting down his Kentucky underwear factory and moving it to Honduras, gutting the community that has manufactured Made In The USA tighty whities for decades.
In a sane universe, Americans would a.) rally ’round and stop buying ANY Fruit Of The Loom or Berkshire Hathaway products, and b.) roll decrepit Warren Buffett up in a carpet after tarring and feathering him; and ship his greedy, old, carpet bagging bones off to spend the rest of his days in Honduras… Which BTW has the highest homicide rate in the world.
JAMESTOWN — Clothing company Fruit of the Loom announced Thursday that it will permanently close its plant in Jamestown and lay off all 600 employees by the end of the year.
The Jamestown plant is the last Fruit of the Loom plant in a state where the company had once been a manufacturing titan second only to General Electric (JP Morgan).
State Rep. Jeff Hoover, R-Jamestown, confirmed the plant manager called him Thursday afternoon with the news.
“Terrible sad day for people in Russell County,” Hoover said. There was no warning of the plant closing, he said.
Layoffs will begin in June.
The company, owned by Warren Buffett’s Berkshire Hathaway but headquartered in Bowling Green, said the move is “part of the company’s ongoing efforts to align its global supply chain” and will allow the company to better use its existing investments to provide products cheaper and faster.
The company said it is moving the plant’s textile operations to Honduras to save money.
The company plans to close the plant in phases from June 8 through Dec. 31.
“This decision is in no way a reflection on the dedication and efforts of the employees in our Jamestown facility, but is a result of a competitive global business environment,” Tony Pelaski, executive vice president and chief operating officer, said in a news release.
“It is very devastating,” Hoover said. “Some of the worst news we could possibly hear as a community, not just the 600 jobs but the effect it has on city government, the county government, the school system and local business.”
Hoover said the city of Jamestown gets more than $200,000 a year from occupational tax from plant employees.
He said Fruit of the Loom pays the city $1.6 million a year for the wastewater treatment plant, which was upgraded a few years ago at the request of Fruit of the Loom. “I don’t know how they make the bond payment once Fruit of the Loom leaves,” Hoover said. (So the City will default and lose ownership of land and resources?)
State Sen. Sara Beth Gregory said in a statement: “The Fruit of the Loom closure in Jamestown is devastating news not just for Russell County but for the entire region. My prayers are with the families who are impacted by the loss of 600 jobs.”
Russell County Judge-Executive Gary Robertson said he first heard of the pending layoffs on Thursday afternoon. He said that not only was Fruit of the Loom a big employer for Russell County, but for surrounding counties in the Lake Cumberland region as well.
“We have about 2,000 manufacturing jobs in Russell County, and this is going to be about a third of them,” he said. “It’s going to be devastating to our local economy. Everybody’s going to be involved. We in the county will lose revenues. … We’ve got a lot of local banks where people who work there have house payments and car payments. It’s going to affect everybody in our county and in counties around us.”
Lisa Gosser, president of the Russell County chamber of commerce and an employee of the Lake Cumberland development district, said that Fruit of the Loom is the county’s biggest employer, so its loss is harsh on the community.
“We’re doing everything we can to be proactive,” she said, pointing to several automotive-related plants that are now operating in the county.
Fruit of the Loom, which has a history dating to 1851, opened its first Kentucky plant in Frankfort in 1932 with about 100 employees. Other plants followed in 1941 in Bowling Green and in 1947 in Campbellsville. The Frankfort operation was moved to a new, larger building in 1965, and the Jamestown plant opened in 1981, designed to be expanded.
The Frankfort plant, which closed in 2000, employed 280 workers.
The Jamestown plant reached peak employment of 3,247 in 1990.
In 1998, the company closed its 812-worker plant in Campbellsville, devastating the economy of the south-central Kentucky town; the company offered jobs at the Jamestown factory to 100 of the laid-off workers in Campbellsville.
At one time, Fruit of the Loom had more than 11,000 manufacturing and corporate employees at its plants in Jamestown, Frankfort, Campbellsville, Franklin, Greensburg, Princeton and Bowling Green and at its Bowling Green corporate headquarters.
Kentucky once had a major apparel-manufacturing sector before jobs withered away as companies moved production to places with cheaper labor.
Fruit of the Loom’s Jamestown plant lasted longer than most in part because of a pipeline to send salt-laden, treated waste from the factory’s bleaching and dyeing operations into nearby Lake Cumberland.
The pipeline caused protest and years of litigation, pitting concerns that the waste would damage the lake and the tourism industry against fears that what was then the area’s largest employer would close or cut back without it.
The pipeline finally won state approval in 1993.
With the plant closing, only the corporate headquarters and a distribution center, also in Bowling Green, are left in Kentucky, according to company spokesman John Shivel. Both “shall remain,” Shivel said.
The 1987 Kentucky Directory of Manufacturers listed Fruit of the Loom as the second-largest manufacturing employer in Kentucky, behind General Electric.
In testimony to Congress last week, military leaders told Congress that military personnel are understanding as to why they must take pay cuts. The officials told Congress that troops are ready and willing to sacrifice their pay. The officials said that pay cuts must come first over making cuts to equipment and training, and that the troops understand this best.
Senior Pentagon officials told Congress on Tuesday that troops are willing to sacrifice portions of their pay and benefits if it means keeping and improving the training and equipment needed to do their jobs.
Vice Adm. William F. Moran, chief of naval personnel and deputy chief of naval operations, told lawmakers that sailors he has met with over the past six months have spoken more about “the quality of the service” they’re able to do than anything other topic.
The view was shared by other officials, including Sheryl E. Murray, assistant deputy commandant for manpower and reserve affairs for the Marine Corps.
“I would emphasize our Marines do enjoy a good quality of life. Our Marines love being in the Marine Corps family,” she said. “Most of all, they want the right equipment. … They want to be trained, and they want to be ready. That is the overriding desire.”
Just a nail Gun Suicide…. Nothing to see here (ahem)
Just a few short weeks ago we reported on the unusual suicide, due to self-inflicted nail-gun wounds, of Richard Talley, CEO of Denver-based American Title Services. The death of the 57-year-old banker was accompanied by the fact that his firm was under investigation by the insurance regulators, and now, as The Denver Post reports, state prosecutors launched a criminal investigation and a grand jury over more than $2 million missing from escrow accounts. As part of that inquiry, investigators have seized about 100 boxes of documents and about 60 computers as records suggest the seemingly successful title business had serious financial problems. Talley’s wife, Cheryl, who owns the other 60% of the firm has not commented.
Via The Denver Post,
Talley, 56, owned 40 percent of the company he founded with his wife, Cheryl, who owns the other 60 percent, according to bankruptcy records.
Cheryl Talley did not respond to efforts by The Denver Post to reach her.
The Arapahoe County coroner’s office said Talley shot himself in the chest seven times with 2½ -inch finish nails from a nail gun before firing a fatal nail into his head. Police found him dressed for work, sitting in his car in the garage and with the motor running.
Records show Title Resources was to confront Talley about the missing escrow funds the morning he died.
State prosecutors launched a criminal investigation and a grand jury into bankrupt American Title Services just days after its CEO killed himself with a nail gun, according to federal court records.
Meanwhile, the title insurance company for which American Title was writing policies said more than $2 million is missing from escrow accounts the Greenwood Village company maintained on real estate closings.
In its lawsuit, Title Resources said it first uncovered discrepancies in ledgers kept by American Title and America’s Home Title, a related company, in late January. The ledgers “appeared to be altered to create the facade of balanced trust accounts.”
Title companies handle large amounts of money in closing real estate transactions, keeping funds in trust or escrow and then paying them to the appropriate party.
Dallas-based Title Resources said in its lawsuit that American Title’s controller, Bill Krieg, has admitted that money was misappropriated from the escrow accounts, but the extent of the alleged embezzlement is unclear.
Title Resources said it was forced to pay about $2 million in missing escrow funds — money set aside in real estate transactions to cover costs such as utilities, taxes and property liens such as mortgages — and that affected consumers will not be impacted.
Krieg has not responded to efforts to reach him.
American Title’s bankruptcy showed it owed about $40,000 in back rent to the owners of the Greenwood Village office tower that housed its headquarters, and about $36,000 in rent to other landlords of its branch offices.
This does not come entirely as a shock… as we noted previously,
A checkered past?
Before coming to Colorado, Talley was a former regional financial officer at Drexel Burnham Lambert in Chicago, where he met his wife, Cheryl, a vice president at the company. The two married in 1989.
Talley had formed a number of companies, some now defunct, according to the Colorado secretary of state’s office. Among them: American Escrow, Clear Title, Clear Creek Financial Holdings, Swift Basin, Sumar, American Real Estate Services, and the American Alliance of Real Estate Professionals.
It would appear, unfortunately, that Mr. Talley was not an entirely honest man…
Talley’s 1989 wedding announcement in the Chicago Tribune noted he was “a member of the 1980 U.S. Olympic swimming team.”
A spokeswoman for USA Swimming on Thursday said Talley was not on the team.
Sorry… The West (Oceania) has been belligerently destabilizing the region otherwise known as Russia’s backyard, and all places planet earth…. Maybe they should be kicked out of the Rothschild Club of 8? Oh… The USA and “allies” are just asking for an all out counter alliance here.
THE HAGUE — The United States and its closest allies on Monday cast Russia out of the Group of 8 industrialized democracies, their most exclusive club, to punish President Vladimir V. Putin for his lightning annexation of Crimea, while threatening tougher sanctions if he escalates aggression against Ukraine.
President Obama and the leaders of Canada, Japan and Europe’s four strongest economies gathered for the first time since the Ukraine crisis erupted last month, using a closed two-hour meeting on the sidelines of a summit meeting about nuclear security to project a united front against Moscow.
But they stopped short, at least for now, of imposing sanctions against what a senior Obama administration official called vital sectors of the Russian economy: energy, banking and finance, engineering and the arms industry. Only further aggression by Mr. Putin — like rolling his forces into the Ukrainian mainland — would prompt that much-harsher punishment, the countries indicated in their joint statement, called the Hague Declaration.
“The biggest hammer that can drop is sectoral sanctions, and the clearest trigger for those is eastern and southern Ukraine,” the senior administration official said.
Some critics of the administration said the suspension of Russia from the G-8, which administration officials acknowledged was largely symbolic, showed a lack of resolve among the allies to take tougher steps to undo Mr. Putin’s annexation of Crimea.
But it signified a firming of Western resolve compared with the early days of the Crimea crisis, when Germany and some other allies said it was premature to consider excluding Russia from the club of industrial democracies. Having Russia as part of that group since 1998 was meant to signal cooperation between East and West, and its exclusion inevitably raises new echoes of Cold War-style rivalry.
Announcing that they would boycott a Group of 8 meeting planned for Sochi — Mr. Putin’s Black Sea showcase for the recent Winter Olympics — the seven countries who met here said they would instead gather by themselves in June in Brussels, headquarters of NATO and the European Union.
Kiev Blamed for Blackout in Capital of Crimea
Aid Package for Ukraine Advances in the Senate
Video: Russians Seize Crimean Base
March 19th, 2014
On Monday the U.S. government took steps to seize the US-based assets of Russian lawmakers and anyone else that the US government deemed complicit in supporting the Crimean secession movement.
We’ve seen the U.S. government do this in countless cases surrounding drug and financial crimes, and sometimes even against foreign leaders like Saddam Hussein and Manuel Noriega.
What makes this particular instance so unprecedented and terrifying is that President Obama went so far as to issue a new Executive Order to give himself the authorization to do so, because the laws of the United States are such that our government is not allowed to simply take someone’s bank assets, home or business without due process.
Here’s the kicker.
The new Executive Order doesn’t just apply to just Russians or foreigners. It gets blanket coverage, so even American citizens could now face asset forfeiture if their actions are deemed to be “contributing to the situation in the Ukraine.”
Be careful what you say. Be careful what you write. President Obama has just given himself the authority to seize your assets.
According to the president’s recent Executive Order, “Blocking Property of Certain Persons Contributing to the Situation in Ukraine” (first reported by WND’s Aaron Klein), the provisions for seizure of property extend to “any United States person.” That means “any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States.”
Like most Executive Orders and government legalese, the definitions for why an individual would have their assets seized under this directive are extremely broad and they could, for all intents and purposes, be used against anyone who supports Russian interests, or simply argues against those of the United States.
You can read the full Executive Order at the White House web site. The key points are noted below:
All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person (including any foreign branch) of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in: any person determined by the Secretary of the Treasury, in consultation with the Secretary of State:
(i) to be responsible for or complicit in, or to have engaged in, directly or indirectly, any of the following:
(A) actions or policies that undermine democratic processes or institutions in Ukraine;
(B) actions or policies that threaten the peace, security, stability, sovereignty, or territorial integrity of Ukraine; or
(C) misappropriation of state assets of Ukraine or of an economically significant entity in Ukraine
This new Executive Order has crossed a very dangerous line. It’s one that turns the notions of property rights and due process upside down by effectively bypassing the U.S. Constitution.
While we’re sure the President and his staff would argue that such a law would never be used against Americans who are protected by free speech, the fact is that the Executive Branch now believes it has the self-manifested authority to target any individual who engages in activities that undermine US interests abroad or at home.
If a President of the United States believes he has the authority to make it illegal for you to provide support to Russia by way of political commentary, charitable donations or other methods, could he also use similar directives to push forward other agendas?
President Obama has already re-authorized an E.O. giving him the ability to seize farms, food, processing plants, energy resources, transportation, and skilled laborers during national emergency.
read the rest @ SHTF
(Via Zero Hedge)
“We never should have painted ourselves so deep in this QE corner in the first place,” chides David Stockman, “because the whole predicate [of Fed policy] is false.” The author of The Great Deformation holds nothing back in this brief 3-minute primer of everything is wrong with the American economic system (and the CNBC anchors definitely did not want to hear). “We are already at peak debt and forcing more into the economy didn’t work,” and won’t work as is merely funds Wall Street’s latest carry trade to nowhere and fiscal irresponsibility in Washington. Simply put, “the private credit channel of monetary transmission is busted,” so the Fed is exploiting the only channel it has left – “the bubble channel.”
“There is a massive bubble inflating on Wall Street”
And here is David on The Keynesian Endgame…
Even the tepid post-2008 recovery has not been what it was cracked up to be, especially with respect to the Wall Street presumption that the American consumer would once again function as the engine of GDP growth. It goes without saying, in fact, that the precarious plight of the Main Street consumer has been obfuscated by the manner in which the state’s unprecedented fiscal and monetary medications have distorted the incoming data and economic narrative.
These distortions implicate all rungs of the economic ladder, but are especially egregious with respect to the prosperous classes. In fact, a wealth-effects driven mini-boom in upper-end consumption has contributed immensely to the impression that average consumers are clawing their way back to pre-crisis spending habits. This is not remotely true.
Five years after the top of the second Greenspan bubble (2007), inflation-adjusted retail sales were still down by about 2 percent. This fact alone is unprecedented. By comparison, five years after the 1981 cycle top real retail sales (excluding restaurants) had risen by 20 percent. Likewise, by early 1996 real retail sales were 17 percent higher than they had been five years earlier. And with a fair amount of help from the great MEW (measurable economic welfare) raid, constant dollar retail sales in mid-2005 where 13 percent higher than they had been five years earlier at the top of the first Greenspan bubble.
So this cycle is very different, and even then the reported five years’ stagnation in real retail sales does not capture the full story of consumer impairment. The divergent performance of Wal-Mart’s domestic stores over the last five years compared to Whole Foods points to another crucial dimension; namely, that the averages are being materially inflated by the upbeat trends among the prosperous classes.
For all practical purposes Wal-Mart is a proxy for Main Street America, so it is not surprising that its sales have stagnated since the end of the Greenspan bubble. Thus, its domestic sales of $226 billion in fiscal 2007 had risen to an inflation-adjusted level of only $235 billion by fiscal 2012, implying real growth of less than 1 percent annually.
By contrast, Whole Foods most surely reflects the prosperous classes given that its customers have an average household income of $80,000, or more than twice the Wal-Mart average. During the same five years, its inflation-adjusted sales rose from $6.5 billion to $10.5 billion, or at a 10 percent annual real rate. Not surprisingly, Whole Foods’ stock price has doubled since the second Greenspan bubble, contributing to the Wall Street mantra about consumer resilience.
To be sure, the 10-to-1 growth difference between the two companies involves factors such as the healthy food fad, that go beyond where their respective customers reside on the income ladder. Yet this same sharply contrasting pattern is also evident in the official data on retail sales.
* * *
That the consumption party is highly skewed to the top is born out even more dramatically in the sales trends of publicly traded retailers. Their results make it crystal clear that Wall Street’s myopic view of the so-called consumer recovery is based on the Fed’s gifts to the prosperous classes, not any spending resurgence by the Main Street masses.
The latter do their shopping overwhelmingly at the six remaining discounters and mid-market department store chains—Wal-Mart, Target, Sears, J. C. Penney, Kohl’s, and Macy’s. This group posted $405 billion in sales in 2007, but by 2012 inflation-adjusted sales had declined by nearly 3 percent to $392 billion. The abrupt change of direction here is remarkable: during the twenty-five years ending in 2007 most of these chains had grown at double-digit rates year in and year out.
After a brief stumble in late 2008 and early 2009, sales at the luxury and high-end retailers continued to power upward, tracking almost perfectly the Bernanke Fed’s reflation of the stock market and risk assets. Accordingly, sales at Tiffany, Saks, Ralph Lauren, Coach, lululemon, Michael Kors, and Nordstrom grew by 30 percent after inflation during the five-year period.
The evident contrast between the two retailer groups, however, was not just in their merchandise price points. The more important comparison was in their girth: combined real sales of the luxury and high-end retailers in 2012 were just $33 billion, or 8 percent of the $393 billion turnover reported by the discounters and mid-market chains.
This tale of two retailer groups is laden with implications. It not only shows that the so-called recovery is tenuous and highly skewed to a small slice of the population at the top of the economic ladder, but also that statist economic intervention has now become wildly dysfunctional. Largely based on opulence at the top, Wall Street brays that economic recovery is under way even as the Main Street economy flounders. But when this wobbly foundation periodically reveals itself, Wall Street petulantly insists that the state unleash unlimited resources in the form of tax cuts, spending stimulus, and money printing to keep the simulacrum of recovery alive.
Accordingly, the central banking branch of the state remains hostage to Wall Street speculators who threaten a hissy fit sell-off unless they are juiced again and again. Monetary policy has thus become an engine of reverse Robin Hood redistribution; it flails about implementing quasi-Keynesian demand–pumping theories that punish Main Street savers, workers, and businessmen while creating endless opportunities, as shown below, for speculative gain in the Wall Street casino.
At the same time, Keynesian economists of both parties urged prompt fiscal action, and the elected politicians obligingly piled on with budget-busting tax cuts and spending initiatives. The United States thus became fiscally ungovernable.
READ THE REST AT Zero Hedge
Immigrants used to have to wait in line, learn about USA, Or join the military… This seems much easier.
President Barack Obama is putting on a full-court press during March Madness to push Obamacare before the March 31 deadline for 2014, and on Tuesday he went on a Spanish-language sports talk radio show to tell Hispanics that the “immigration people” will not deport their family members who may be illegal immigrants if legal Hispanics sign up for Obamacare.
The White House has been emphasizing this point in recent weeks because it believes some Hispanics are not signing up for Obamacare because they are afraid that family members who are in the United States illegally will then get deported if they reveal that information in the application forms.
Obama went on Univision Deportes, a Spanish-language sports radio show, and said that people “should not hold back just because they’re in a mixed-family status,” saying, “You know, you will qualify, you know, regardless of what your family’s status is.”
Read More: http://www.breitbart.com
Before the BIS (Bank of International Settlements or The Central bank’s bank, and the IMF (and other MFs) tighten their grip on your real wealth, and or use negative austerity measures….. We need to invoke POSITIVE Austerity. P.A. – means cutting elite services like Corporate welfare / subsidies, the police state, the MIC, SIC, Fed interest, and bloated bureaucracy etc…
The amount of debt globally has soared more than 40 percent to $100 trillion since the first signs of the financial crisis as governments borrowed to pull their economies out of recession and companies took advantage of record low interest rates, according to the Bank for International Settlements.
The $30 trillion increase from $70 trillion between mid-2007 and mid-2013 compares with a $3.86 trillion decline in the value of equities to $53.8 trillion in the same period, according to data compiled by Bloomberg. The jump in debt as measured by the Basel, Switzerland-based BIS in its quarterly review is almost twice the U.S.’s gross domestic product.
Borrowing has soared as central banks suppress benchmark interest rates to spur growth after the U.S. subprime mortgage market collapsed and Lehman Brothers Holdings Inc.’s bankruptcy sent the world into its worst financial crisis since the Great Depression. Yields on all types of bonds, from governments to corporates and mortgages, average about 2 percent, down from more than 4.8 percent in 2007, according to the Bank of America Merrill Lynch Global Broad Market Index.
“Given the significant expansion in government spending in recent years, governments (including central, state and local governments) have been the largest debt issuers,” according to Branimir Gruic, an analyst, and Andreas Schrimpf, an economist at the BIS. The organization is owned by 60 central banks and hosts the Basel Committee on Banking Supervision, a group of regulators and central bankers that sets global capital standards.
Marketable U.S. government debt outstanding has surged to a record $12 trillion, up from $4.5 trillion at the end of 2007, according to U.S. Treasury data compiled by Bloomberg. Corporate bond sales globally jumped during the period, with issuance totaling more than $21 trillion, Bloomberg data show.
Concerned that high debt loads would cause international investors to avoid their markets, many nations resorted to austerity measures of reduced spending and increased taxes, reining in their economies in the process as they tried to restore the fiscal order they abandoned to fight the worldwide recession.
Adjusting budgets to ignore interest payments, the International Monetary Fund said late last year that the so-called primary deficit in the Group of Seven countries reached an average 5.1 percent in 2010 when also smoothed to ignore large economic swings. The measure will fall to 1.2 percent this year, the IMF predicted.
The unprecedented retrenchments between 2010 and 2013 amounted to 3.5 percent of U.S. gross domestic product and 3.3 percent of euro-area GDP, according to Julian Callow, chief international economist at Barclays Plc in London.
The riskiest to the most-creditworthy bonds have returned more than 31 percent since 2007, according to Bank of America Merrill Lynch index data. Treasury and agency debt handed investors gains of 27 percent in the period, while corporate bonds worldwide returned more than 40 percent, the indexes show.