No Sustainable Recovery - US Household Income and Income Inequality - The Men Who Saved Sold the World

“In progressive societies the concentration [of wealth] may reach a point where the strength of number in the many poor rivals the strength of ability in the few rich; then the unstable equilibrium generates a critical situation, which history has diversely met by legislation redistributing wealth or by revolution distributing poverty.”

Will and Ariel Durant, The Lessons of History


"People of privilege will always risk their complete destruction rather than surrender any material part of their advantage. Intellectual myopia, often called stupidity, is no doubt a reason. But the privileged also feel that their privileges, however egregious they may seem to others, are a solemn, basic, God-given right. The sensitivity of the poor to injustice is a trivial thing compared with that of the rich."

John Kenneth Galbraith


"The world is ours, we are its lords, and ours it shall remain. As for the host of labor, it has been in the dirt since history began, and I read history aright. And in the dirt it shall remain so long as I and mine and those that come after us have the power.

There is the word. It is the king of words— Power. Not God, not Mammon, but Power. Pour it over your tongue till it tingles with it. Power.”

Jack London, The Iron Heel


Tsar Nicholas II: I know what will make them happy. They're children, and they need a Tsar! They need tradition. Not this! They're the victims of agitators. A Duma would make them bewildered and discontented. And don't tell me about London and Berlin. God save us from the mess they're in!

Count Witte: I see. So they talk, pray, march, plead, petition and what do they get? Cossacks, prison, flogging, police, spies, and now, after today, they will be shot.   Is this God's will?   Are these His methods?   Make war on your own people?   How long do you think they're going to stand there and let you shoot them?   YOU ask ME who's responsible?  YOU ask?

The US is indicated in red.   It is surprisingly low in disposable household income and rather high in income inequality.

It is not two much of a stretch to say that the US is now divided into two nations, not entirely separate but increasingly unequal.

Not only will there be no sustainable recovery until more of the income is given to the labor of production and the locus of consumption, but the badly strained social fabric may not hold together.

Financialization and Healthcare, which includes Big Pharma, have been taking an increasing share of the profits from the real economy from already historic highs.

And they do so with the effect of distributing the bulk of their profits to the one percent through ownership and dividends.

Real household net disposable income is defined as the sum of household final consumption expenditure and savings, minus the change in net equity of households in pension funds. This indicator also corresponds to the sum of wages and salaries, mixed income, net property income, net current transfers and social benefits other than social transfers in kind, less taxes on income and wealth and social security contributions paid by employees, the self-employed and the unemployed. Household gross adjusted disposable income additionally reallocates "income" from government and non-profit institutions serving households (NPISHs) to households to reflect social transfers in kind.

Income is defined as household disposable income in a particular year. It consists of earnings, self-employment and capital income and public cash transfers; income taxes and social security contributions paid by households are deducted. The income of the household is attributed to each of its members, with an adjustment to reflect differences in needs for households of different sizes.

Income inequality among individuals is measured here by five indicators. The Gini coefficient is based on the comparison of cumulative proportions of the population against cumulative proportions of income they receive, and it ranges between 0 in the case of perfect equality and 1 in the case of perfect inequality. S80/S20 is the ratio of the average income of the 20% richest to the 20% poorest; P90/P10 is the ratio of the upper bound value of the ninth decile (i.e. the 10% of people with highest income) to that of the first decile; P90/P50 of the upper bound value of the ninth decile to the median income; and P50/P10 of median income to the upper bound value of the first decile. The Palma ratio is the share of all income received by the 10% people with highest disposable income divided by the share of all income received by the 40% people with the lowest disposable income.

US Tax Receipts By Category - God Bless the Child

The notion that the corporations are going to use their windfalls for productive expansion and higher wages for workers is utter fantasy.

They have not done so for over twenty years, and they are hardly urged to change that, and certainly not by anything in this latest change in tax policy.  Its purpose is to put more money in the pockets of the powerful and fortunate, pure and simple.

Increased taxes on consumption and consumables, including imports and sales taxes, are generally regressive taxes, falling most heavily as a percentage of income on the broader public.

The promises of great growth, investment, and trickle down prosperity are the same old canards and misdirection, put forward by the moneyed interests' flim flam men and their carnies.

Related:  What Trump Is Doing About Spending On Crumbling US Infrastructure 

Stocks and Precious Metals Charts - Standing Firm In Times of Madness

"You are no longer foreigners and strangers, but fellow citizens with God’s people and also members of his household, built on the foundation of the apostles and prophets, with Christ Jesus himself as the chief cornerstone. In him the whole building is joined together and rises to become a holy temple in the Lord. And in him you too are being built together to become a dwelling in which God lives by his Spirit."

Ephesians 2:19-22


“We who used to value the acquisition of wealth and possessions more than anything else now bring what we can into a common fund and share it with anyone who needs it. We used to hate and destroy one another, and refused to associate with people of another race or country. Now, because of Christ, we live together with such people and pray for our enemies.”

Justin Martyr


“In the Incarnation the whole human race recovers the dignity of the image of God. Thereafter, any attack, even on the least of men, is an attack on Christ, who took on the form of man, and in His own Person restored the image of God in all.

Through our relationship with the Incarnation we recover our true humanity, and at the same time are delivered from that perverse individualism which is the consequence of sin, and recover our familiality with all mankind.

Judging others makes us blind, whereas love is illuminating. By judging others we blind ourselves to our own evil, and to the grace which others are just as entitled to as we are... Silence in the face of evil is itself evil: God will not hold us guiltless. Not to speak is to speak. Not to act is to act."

Dietrich Bonhoeffer

Today was a sleepy half day of trading ahead of the 4th of July Holiday.

US markets will be closed tomorrow.

Stocks sold off into the close.

The precious metals gained ground on a weaker dollar and a deeply oversold short term condition.

There will be a Non-Farm payrolls report on Friday.

As I had forecasted some time ago, we are now in a period of hysteria, wherein people will be saying, and most likely doing, some crazy and reprehensible things.   The propaganda is so blatant on some internet sites that it is almost amazing. 

If they are full of hatred, and race baiting, antisemitism, slanders, lies, and scorn for the weak and the other, shun them.  It is a good thing to step back from the emotional exchanges and looks objectively at what is being said and done, all in the name of winning.

Be careful of what you put into your own minds, as you would be of tainted and unhealthy foods. 

Do not cast aside your faithfulness, that you may be left vulnerable, and without the ability to stand in the world but not of its madness, until the end     For we are being tested, and will be even moreso before this page in history turns.

Have a pleasant evening.

Stocks and Precious Metals Charts - Heat Wave - Stocks Bounce Back In Holiday Shortened Week

“How far that little candle throws his beams!
So shines a good deed in a weary world.”

William Shakespeare


Is there a darkness over the earth?
It glimmers like a candle in the night.
The darkness of our hardened hearts,
Casts images and shadows in the light.

Stocks were flashing 'risk off' signals based on the simmering trade wars early this morning.

But there is little conviction in this holiday market, and the wiseguys were able to walk the major indices back up, and trigger some short covering to take them into the green.

Gold and silver were hit again. The drain of physical gold continues.

These lower prices for the metal are freeing up some physical gold, or at least nominal claims on pooled gold, out of some of the major funds like GLD.

There will be a Non-Farm Payrolls report on Friday.

The weather is hot and humid here. I feel sorry for those whose A/C has failed in it. These extremes tend to test the fitness of our systems. I keep a couple of window A/C units in the shed that we have accumulated over time, and will use them for backup in a hot minute if required.

The only things hot in this house were the spicy crab and corn chowder and the Anasazi bean gumbo.   No worries here unless the supply of gin, tonic water and limes gets too low.  Must not risk malaria you know.  The bugs out there are ferocious.

Dolly and I are cool.  She just snorted her approval in her sleep.  We'll go for a walk much later when the sun goes down.   My left knee is still knackered and so walking is not yet enjoyable— but more doable. 

The financial systems in the US will be tested, and not on paper with make believe risks like the Fed performs. And I suspect that once again they will not have been able to see it coming. As for the reasons why they never do, I think you know the answer.

Need little, wants less, love more. For those who abide in love abide in God, and God in them.

Have a pleasant evening.