The Great Wealth Robbery

[freefalldolphin 0]

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Two important events took place this week. One was President Obama’s call for a higher minimum wage, which got a lot of attention. The other was a new report which showed just how much of our nation’s wealth continues to be hijacked by the wealthiest among us.

An updated report from economist Emmanuel Saez details the loss of income suffered by 99 percent of Americans, and the parallel gains made by the wealthiest among us. Its most startling finding may be this: The top 1 percent has captured 121 percent of the increases in income since the worst of the financial crisis, while the rest of the country has continued to fall behind.

If you thought the rich recovered from the crisis just fine but everybody else got the short end of the stick, relax: You’re not crazy. And since the financial crisis was caused by members of the 1 percent – not all of them, of course, just the ones we spent so much to rescue – it’s understandable if the injustice still rankles you.

You rescued them. Now they’re drinking your milkshake.

http://www.commondreams.org/view/2013/02/16-7

[1969912 0]

http://i.imgur.com/Hkq3c.gif

"Once we got to the point where twenty/something's needed a place on the corner that changed the oil in their cars we were doomed . . ."
-NickDG

[normiss 642]

[StreetScooby 5]

LOL... Just saved that one to disk.

We are all engines of karma

[champu 1]

...to disk!

[lawrocket 3]

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The top 1 percent has captured 121 percent of the increases in income since the worst of the financial crisis, while the rest of the country has continued to fall behind.

And yet the people responsible for this were re-elected. How about that?

My wife is hotter than your wife.

[jakee 1,279]

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The top 1 percent has captured 121 percent of the increases in income since the worst of the financial crisis, while the rest of the country has continued to fall behind.

WTF does that mean?

Do you want to have an ideagasm?

[freefalldolphin 0]

It means the 1% are laughing all the way to the banks we bailed out.

[kallend 1,679]

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The top 1 percent has captured 121 percent of the increases in income since the worst of the financial crisis, while the rest of the country has continued to fall behind.

And yet the people responsible for this were re-elected. How about that?

The other candidates were worse, the districts were gerrymandered, or both.

...

The only sure way to survive a canopy collision is not to have one.

[Gravitymaster 0]

http://www.huffingtonpost.com/2013/02/15/elizabeth-warren-wall-street_n_2695212.html

[OHCHUTE 0]

And the funny thing about it is: the one percent can't spend wide enough to fuel the economy.
Before you know it, a few guys will own every public firm in the US.

[Gravitymaster 0]

I'd like very little more than to watch these criminals frog walked into a jail cell. Don't hold your breath waiting for Obama's DOJ to file charges.

[Arvoitus 1]

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I'd like very little more than to watch these criminals frog walked into a jail cell. Don't hold your breath waiting for Obama's DOJ to file charges.

All politicians are paid by these people. No one will ever do that.

Your rights end where my feelings begin.

[mirage62 0]

The true robbery is from the hard working people who saved for retirement who now can get a great 1% return on CD's. they are being forced into the market for returns or there savings a being eaten by inflation. By the government keeping rates so low we are barely keeping our economy going while we steal money from the elders that saved for there retirement.

Kevin Keenan is my hero, a double FUP, he does so much with so little

[freefalldolphin 0]

Do we agree that the 1% are the robbers?

[DiverMike 5]

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The top 1 percent has captured 121 percent of the increases in income . . .

Can someone help me out here? Given that the increase in income is some defined dollar amount, how can any group capture more than 100% of that increase? How is this statistic calculated?

For the same reason I jump off a perfectly good diving board.

[brenthutch 388]

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Do we agree that the 1% are the robbers?

Absolutely, Bill Gates broke into my house the other day and sole my daughters piggy bank.

[Gravitymaster 0]

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Do we agree that the 1% are the robbers?

We can agree that some of the 1% are robbers. Just as we can agree that some of the 99% are robbers.

[kallend 1,679]

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The top 1 percent has captured 121 percent of the increases in income . . .

Can someone help me out here? Given that the increase in income is some defined dollar amount, how can any group capture more than 100% of that increase? How is this statistic calculated?

Why reply to me? I didn't write that.

...

The only sure way to survive a canopy collision is not to have one.

[freefalldolphin 0]

People getting robbed and the 1% somehow ending up with piles of money. mmmmmmm.......

[DiverMike 5]

I didn't mean to single you out. I just grabbed the most recent post that quoted the statistic. Do you understand it? I don't.

For the same reason I jump off a perfectly good diving board.

[freefalldolphin 0]

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Do we agree that the 1% are the robbers?

We can agree that some of the 1% are robbers. Just as we can agree that some of the 99% are robbers.

People are robbed and the 1% somehow end up with piles of unexplained cash. Mmmmm....

[DiverMike 5]

I researched it further, and I guess it makes sense. According to the original article:

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From 2009 to 2011, average real income per family grew modestly by
1.7% (Table 1) but the gains were very uneven. Top 1% incomes grew by
11.2% while bottom 99% incomes shrunk by 0.4%. Hence, the top 1%
captured 121% of the income gains in the first two years of the recovery.
From 2009 to 2010, top 1% grew fast and then stagnated from 2010 to 2011.
Bottom 99% stagnated both from 2009 to 2010 and from 2010 to 2011.

I guess it is a matter of semantics - but it doesn't make mathematic sense to me. If my income goes from $100 to $110 dollars, and 5 other people's income goes from $50 to $49 dollars. Don't I account for 100% of the increase? According to this statistician, I would account for 200% of the increase. (100+50+50+50+50+50) = 350; (110+49+49+49+49+49) = 355. The statistic is based on net increase, not gross increase.

For the same reason I jump off a perfectly good diving board.

[StreetScooby 5]

It's only going to get worse...
From today's Financial Times:
Fears at Fed of rate payouts to banks


Fears at Fed of rate payouts to banks

By Robin Harding in Washington and Tom Braithwaite in New York
US Federal Reserve building©Bloomberg

US Federal Reserve officials fear a backlash from paying billions of dollars to commercial banks when the time comes to raise interest rates.

The growth of the Fed’s balance sheet means it could pay $50bn-$75bn a year in interest on bank reserves at the same time as it makes losses and has to stop sending money to the Treasury.

Officials at the US central bank fear it could create a public-relations nightmare after the Fed was lambasted for rescuing banks during the financial crisis. It is one factor prompting some inside the Fed to reconsider the eventual “exit strategy” from easy monetary policy.

In an interview with the Financial Times, James Bullard, president of the St Louis Fed, said: “If you think of the profitability of the biggest banks, if you’re going to talk about paying them something of the order of $50bn – well that’s more than the entire profits of the largest banks.”

Mr Bullard said that neither interest paid to banks nor possible losses on exit made any difference to the substance of monetary policy.

“I think it’s more just a question of the optics, and how you’re going to play the optics,” he added, referring to the perception of losses by the central bank. “And since it shouldn’t matter in a monetary policy sense you might as well play the optics in a better way than the one we’ve got planned.”

All banks hold reserves at the Fed. The central bank has boosted its balance sheet to more than $3tn as it buys assets to drive down long-term interest rates through its programme of quantitative easing.

It pays for the assets by creating bank reserves, which now amount to more than $1.6tn. The Fed could add another $1tn if it keeps buying assets for another year.

At the moment it only pays 0.25 per cent interest on those reserves. But according to its exit strategy, published in June 2011, the Fed plans to raise interest rates before it sells assets. Interest of 2 per cent on $2.5tn of reserves would run to $50bn a year.

That interest should not turn into profits for the banks. They will have to pass the revenues on by paying more interest to their depositors. But it could still add to a populist backlash in recent years against the Fed and the big banks.

One possible answer to the Fed’s larger balance sheet is to sell assets earlier in the exit process. Mr Bullard said that the Fed could consider creating accounting reserves now for any losses it expects in the future.

The Fed remits all of its earnings to the Treasury and has paid across $291bn in the last four years. But some of those gains will be reversed when it sells assets bought at today’s low interest rates at a time when rates are higher.

One banker argued that was the real danger. “It’s a little bit worrying for the politicians to get addicted to that level of income. The windfall profit has been a stunning number – that will go away over time.”

Bankers also noted that the exit strategy was uncertain and the Fed could increase interest rates on excess reserves more slowly than benchmark rates. They added that more reserves should be shifted out of the Fed and lent out as the economy improves.

Still, the eventual tightening could lead to substantial amounts being transferred to commercial banks from the Fed, given the amounts of cash they have parked there. Wells Fargo has $97.1bn sitting at the Fed, the largest amount of any bank, ahead of JPMorgan Chase at $88.6bn and Goldman Sachs at $58.7bn, according to an FT analysis of SNL data.

Foreign banks also have a striking amount of cash at the Fed, potentially aggravating the Fed’s PR problem. Analysts at Stone & McCarthy noted recently that there had been a steep increase in foreign banks placing reserves at the Fed and suggested that “US banks may have distaste for the opportunistic arbitrage”, between lower market rates and the interest on reserves, whereas overseas institutions “might not feel encumbered in the same fashion”.

Canada’s TD Bank, Germany’s Deutsche Bank and Switzerland’s UBS each have more than $12bn at the Fed.

Copyright The Financial Times Limited 2013.

We are all engines of karma

[OHCHUTE 0]

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The true robbery is from the hard working people who saved for retirement who now can get a great 1% return on CD's. they are being forced into the market for returns or there savings a being eaten by inflation. By the government keeping rates so low we are barely keeping our economy going while we steal money from the elders that saved for there retirement.

But according to DZ posters, we're doing quite well via this poll.

[url]http://www.dropzone.com/cgi-bin/forum/gforum.cgi?post=4440956;page=unread#unread[email]