California – The Poster Child for Income Inequality

25 Oct 2018

You don’t need a college degree to recognize this… it’s all out in the open.

Middle class is disappearing in California as wealth gap grows – The Hill, 2018/10/24

Beginning of the article…

California made major news this month, reclaiming a valuable economic marker and surpassing Britain as the fifth largest economy in the world. Its growth after the recession has accelerated under President Trump and even turned a modest surplus. However, the Golden State remains one of the most unequal in the nation. It has both billions of dollars in Silicon Valley and rampant homelessness. Its efforts to eliminate poverty instead accentuates it, and its tax system inadvertently aids those who are already wealthy. With the middle class leaving in droves, California society represents a modern day feudal system of robber barons and the poor. It is an unsustainable mixture.


After factoring for costs of living, California is the poorest state in the union. An average of 14 percent of Americans live below the poverty line by census measures. Compare that with the 19 percent of Californians who live below the poverty line and the situation is clear.

End of the article…

In many ways, California has long been an example for the rest of the nation. But the middle class conservatism that propelled national figures like Richard Nixon and Ronald Reagan is gone. It has been replaced with virtue signaling and policies by the wealthy that hurt struggling families. Both sides of the coin, from technology executives to families unable to pay rent, vote for Democrats that only make the problem worse.

The robber barons and artificially high real estate values in California brought its economy back to the fifth largest in the world. However, for the average person, Sacramento represents systemic political failure.

If you want to understand how income inequality occurs, read everything from the linked article in between what I posted above.

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Government Debt… Is It Revenue or Spending?

16 Oct 2018

Federal Revenues Hit All-Time Highs Under Trump Tax Cuts – Investor’s Business Daily, 2018/10/16

Critics of the Trump tax cuts said they would blow a hole in the deficit. Yet individual income taxes climbed 6% in the just-ended fiscal year 2018, as the economy grew faster and created more jobs than expected.

The Treasury Department reported this week that individual income tax collections for FY 2018 totaled $1.7 trillion. That’s up $14 billion from fiscal 2017, and an all-time high.


Spending, on the other hand, was $127 billion higher in fiscal 2018. As a result, deficits for 2018 climbed $113 billion.

Revenue up $14B… spending up $127B. This is not sustainable. The issue is not who pays the taxes. It’s how the tax money is being spent.


Consumer Confidence at 18 Year High

26 Sep 2018

Consumer confidence hits 138.4 in September, vs. 132 estimate – CNBC, 2018/09/25

The Conference Board’s index rose to 138.4 this month from 134.7 in August. Economists polled by Reuters expected consumer confidence to dip to 132.

“Consumers’ assessment of current conditions remains extremely favorable, bolstered by a strong economy and robust job growth,” said said Lynn Franco, director of economic indicators at the Conference Board. “These historically high confidence levels should continue to support healthy consumer spending, and should be welcome news for retailers as they begin gearing up for the holiday season.”

Franco added September’s index print is near the all-time high of 144.7 reached in 2000.


The Richest Zip Codes

4 Sep 2018

This Is America’s Richest Zip Code – Bloomberg, 2018/04/10

The richest zip code in America is just as exclusive and elite as the people who live there. Fisher Island, located just off the coast of Miami, is accessible only by ferry or water taxi and is a haven for the world’s richest.


The average income in Fisher Island, zip code 33109, was $2.5 million in 2015, according to a Bloomberg analysis of 2015 Internal Revenue Service data. That’s $1 million more than the second-place spot, held by zip code 94027 in Silicon Valley, also known as the City of Atherton on the San Francisco Peninsula.


Who didn’t make the top 20? Any of the zip codes in Manhattan. However, several Manhattan neighborhoods made the top 50, starting with the venerable zip code of 10005 at No. 21 on the list. This one is home to the New York Stock Exchange and sits at the edge of the iconic “Charging Bull” sculpture.

Two other zip codes in Florida — Palm Beach (home of President Trump’s private club) and Naples — made the top 20. Suburbs of Seattle, Philadelphia, Chicago and Boston also landed in the highest spots.


People Quietly Moving Back to Hometowns to Start Businesses

29 Aug 2018

The Great Re-homing: Why people are moving back to their hometowns to start small businesses – The Sociable, 2018/08/23

The most interesting trend I noticed was small business entrepreneurs returning to the communities where they came from. There is an invisible shift happening where people who once wanted to spread their proverbial wings somewhere else are returning to their hometowns to make things happen. This has always been the case to some extent, but I believe that technology is enabling people to be successful in ways that were very difficult or impossible just a decade ago.

Why are people coming home? After all, at some point they left for the allure and glitz of a larger city, a greener pasture, a shinier future, a perceived better career.

The reasons were…

  • A lower cost of living
  • A Sense of Community and Belonging
  • Technology Changes

The Number of Black Owned Businesses Increased 400% in a Year

22 Aug 2018

SURVEY FINDS BLACK BUSINESS OWNERSHIP IN THE U.S. JUMPED 400% IN ONE YEAR – Black Enterprise, 2018/08/15

African American business owners are on the rise. According to the Minority 2018 Small Business Trends survey, the number of black-owned small businesses in the U.S. increased by a staggering 400% in a year-over-year time period from 2017 to 2018.

The new survey, which was conducted by Guidant Financial and LendingClub, interviewed more than 2,600 business owners and aspiring entrepreneurs. It found that 45% of all small business in the country were owned by minority ethnic groups in 2018. This is a dramatic uptick from 2015 when the total percentage of minority business owners was 15%. The largest minority group of respondents were African American at 19%, followed by Hispanic at 14%, Asian at 8%, and Native American at 4%.

Awesome news.  Survey details at the link.


The Perils of Student Debt

5 Jun 2018

Now is the time the high schoolers are graduating, and many are preparing for college. Part of the preparation is figuring out the finances – which includes student loans for many. Beware of the consequences…

A GENERATION BURIED IN STUDENT DEBT – Chicago Sun Times, 2018/06/02

The weight of the roughly $80,000 in debt that Judith Ruiz would leave school with didn’t hit her when she was applying for the student loans that would finance her education at Columbia College Chicago.

Or while she was sitting in lecture halls. Or even as she walked across the stage at graduation.

But six months later, still without a job, with lenders hounding her to pay, her student loans caught up to her, and Ruiz defaulted — for the first time.


Ruiz, now 30 and living with her mother in Oak Park, is working. But she remains in default on her student loans. And that’s eating away at her.


“You think, ‘Oh, hey, I’m just going to take out a loan, and it’ll cover everything, and I’ll just worry about it later,’ like a credit card. But this is so much bigger than that. That may work for a few thousand dollars, but it’s not going to work for $80,000.”

All of this debt delays what in the past was to be expected – you graduate, get a job to support yourself, move out on your own, maybe even get married and start a family.

But with the huge load of debt, it’s too much too overcome and graduates end up back home.

The article details several different accounts of hardship resulting from the load of student debt.