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posted by janrinok on Thursday June 21 2018, @09:52PM   Printer-friendly
from the all-governments-tell-lies dept.

AlterNet reports

When Republicans in Congress passed a big, fat tax break bill in December, they insisted it meant American workers would be singing "Happy Days Are Here Again" all the way to the bank. The payoff from the tax cut would be raises totaling $4,000 to $9,000, the President's Council of Economic Advisers assured workers. But something bad happened to workers on their way to the repository. They never got that money.

In fact, their real wages declined because of higher inflation. At the same time, the amount workers had to pay in interest on loans for cars and credit cards increased. And, to top it off, Republicans threatened to make workers pay for the tax break with cuts to Social Security, Medicare and Medicaid. So now, workers across America are wondering, "Where's that raise?". It's nowhere to be found.

The U.S. Bureau of Labor Statistics reported this week that wages for production and nonsupervisory workers decreased by 0.1 percent from May 2017 to May 2018 when inflation is factored in. The compensation for all workers together, including supervisors, rose an underwhelming 0.1 percent from April 2018 to May 2018.

That's not what congressional Republicans promised workers. They said corporations, which got the biggest, fattest tax cuts of all, would use that extra money to increase wages. Some workers got one-time bonuses and an even smaller number received raises. But not many. The group Americans for Tax Fairness estimates it's 4.3 percent of all U.S. workers.

The New York Times story about this record breaker describes the phenomena this way: "Companies buy back their shares when they believe they have nothing better to do with their money than to return capital to shareholders." So despite promises from the GOP and the President's Council of Economic Advisers, corporations believed further enriching their own executives and shareholders was a much better way to use the money than increasing workers' wages--wages that have been stagnant for decades.


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  • (Score: 1, Interesting) by Anonymous Coward on Friday June 22 2018, @12:27PM

    by Anonymous Coward on Friday June 22 2018, @12:27PM (#696699)

    No. The stock market is not gambling. By that logic, owning a small business or rental property is gambling. Owning stock is nothing more than owning a portion of a business. Would owning an HVAC repair business or rental house be gambling? Stock price fluctuations often don't reflect the underlying value of the business. The stock owners profit from dividends and an increase in value of assets of the company. If you own WalMart stock, you literally own part of the store down the street from you that is selling cheap crap and has a building and equipment that you could be sold if it became unprofitable.

    Consider shares of most companies can be bought for less than $1000 per share. This allows the common person to be able to afford shares (ownership) in many different companies. Investing is hedging against a loss of employment. When you work for a corporation and have no investments or significant savings you are betting your lively hood that your boss won't fire you, your location won't close down, that they aren't going to go bankrupt, you won't be replaced by a computer sitting in rack, etc. Stock prices are volatile because, frankly, sometimes people are stupid. Even many hedge fund managers and financial advisors. I am stupid sometimes too. Warren Buffet has been stupid.

    Buying bonds are a large risk as well. If the fed increases interest rates, what you would be able to sell your bonds for just decreased because nobody in the right mind would buy a 3% bond for full price when 4% ones are being issued.

    Buying a home is not without risk. Interest rate changes can drive home prices up or down. A higher home value sounds great, but unless you sell it (and likely buy another house with an inflated price) you will just pay more in property taxes, which are now not as worthwhile to deduct on federal taxes thanks to the higher standard deductions. Also consider the local economy. What if you live in manhatten and the NYSE and Nasdaq move shop to the much cheaper Raleigh, NC? The investment banks will follow suit. Suddenly that closet sized apartment you payed 1.5M for is now worth 500k, and you just lost your job because the local economy tanked. The bank doesn't care what your property is worth. They want their 1.2 million you still owe.

    Owning stocks is the sane way to live in a capitalist society. A well run business can adjust to economic and cultural conditions to stay profitable. If you own a dozen well run businesses in different sectors, even a major disruption in one (think electric cars if you own an oil company) won't do a whole lot of damage to your net worth. A market crash is the equivalent of a going out of business sale. It is an opportunity to buy shares at a discount.

    Putting all your eggs in one skill basket is risky too. Sysads and programmers make a fortune now, but that may change. For example, learn some basic carpentry, plumbing, or auto repair skills. Learn about psychology, negotiation, and persuasion (think sales jobs and management). You don't have to be an expert, just good enough to convince someone to hire you for slightly less than average.

    Gambling isn't even gambling, it is entertainment. The games are rigged in favor of the Casino. All games are designed in a way to guarantee that over the long run the casino will take in more than it pays out. Consider a house advantage of 1%. Given a few million iterations, luck is no longer a factor. It is just statistics. "Gambling" is usually nothing more than placing bets that will almost guarantee you will lose in the long run.

    I will continue to buy stocks with any spare cash I get.

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