Beans Rice and Gold

Congress could cut another $8.7 billion in food stamp benefits

2014-01-10T10:00:00.001-05:00

Just two months after America’s 47 million food stamp recipients got hit with an automatic $5 billion benefits reduction, Congress is getting ready to cut even more out of the nutrition program. Lawmakers are currently hammering out the details on a finalized 2013 Farm Bill which is likely to reduce food stamp benefits by $8.7 billion over the next decade.

Unlike the $5 billion “hunger cliff,” the Farm Bill proposal would not cut benefits for all food stamp recipients across the board. Instead, it would affect approximately 850,000 households spread across 15 states. The affected households would lose an average $90 per month in benefits, according to a 2013 report from the Congressional Research Service.

“It does seem like that $8 billion number is the number that is being cemented into reality here,” said Massachusett’s Democrat Rep. Jim McGovern, a member of the Farm Bill conference committee. The language currently being finalized represents a compromise between House legislation that would have slashed food stamps by $39 billion and a Senate bill that proposed only $4 billion in benefit cuts.

The proposed compromise measure would save $8.7 billion by restricting so-called “Heat and Eat” policies on the state level. The District of Columbia, New York, California, and 13 other states currently use the policy as a way to reduce paperwork and claim additional food stamp benefits for low-income citizens. Read more >>

23 Reasons to Be Bullish on Gold

2014-01-09T07:39:00.001-05:00

It's been one of the worst years for gold in a generation. A flood of outflows from gold ETFs, endless tax increases on gold imports in India, and the mirage (albeit a convincing one in the eyes of many) of a supposedly improving economy in the US have all contributed to the constant hammering gold took in 2013.

Perhaps worse has been the onslaught of negative press our favorite metal has suffered. It's felt overwhelming at times and has pushed even some die-hard goldbugs to question their beliefs… not a bad thing, by the way.

To me, a lot of it felt like piling on, especially as the negative rhetoric ratcheted up. Last year's winner was probably Goldman Sachs, calling gold a "slam-dunk sale" for 2014 (this, of course, after it's already fallen by nearly a third over a period of more than two and a half years—how daring they are).

This is why it's important to balance the one-sided message typically heard in the mainstream media with other views. Here are some of those contrarian voices, all of which have put their money where their mouth is…

Marc Faber is quick to stand up to the gold bears. "We have a lot of bearish sentiment, [and] a lot of bearish commentaries about gold, but the fact is that some countries are actually accumulating gold, notably China. They will buy this year at a rate of something like 2,600 tons, which is more than the annual production of gold. So I think that prices are probably in the process of bottoming out here, and that we will see again higher prices in the future."

Brent Johnson, CEO of Santiago Capital, told CNBC viewers to "buy gold if they believe in math… Longer term, I think gold goes to $5,000 over a number of years. If they continue to print money at the current rate, I think it could be multiples of that. I see a slow steady rise punctuated with some sharp upward moves."

Jim Rogers, billionaire and cofounder of the Soros Quantum Fund, publicly stated in November that he has never sold any gold and can't imagine ever selling gold in his life because he sees it as an insurance policy. "With all this staggering amount of currency debasement, gold has got to be a good place to be down the road once we get through this correction."

George Soros seems to be getting back into the gold miners: he recently acquired a substantial stake in the large-cap Market Vectors Gold Miners ETF (GDX) and kept his calls on Barrick Gold (ABX).

One In Three Americans Lived In Poverty For At Least Two Months In Recent Years

2014-01-07T17:30:00.003-05:00

The bad news: in the period from 2009 to 2011, 31.6% of Americans were in poverty for at least two months, "a 4.5 percentage point increase over the prerecession period of 2005 to 2007. What one assumes is the good news, is that poverty was a temporary state for most people. Still 3.5% of Americans were in poverty for the entire three-year period."

It is not exactly clear how that small number foots with the nearly 50 million Americans on foodstamps (whose benefits were just cut by a substantial percentage).

Then again, one needs to read further in the report to realize that even the good news is not all that good: "poverty was a persistent condition for many; among the 37.6 million people who were poor at the start of the period — January and February 2009 — 26.4 percent remained poor throughout the next 34 months." And once again there are good and bad news:

The many people escaped poverty: 12.6 million, or 35.4 percent, who were poor in 2009 were not in poverty in 2011. That's the good.

As some moved out of poverty, others moved into it. About 13.5 million people, or 5.4 percent, who were not in poverty in 2009 slipped into poverty by 2011. That's the bad.

Netting the "churn", nearly 1 million Americans dipped into poverty more than they dipped out of it. Along the lines of what one would expect in a New Normal "recovery." Read more >>

Jobless workers enter free fall

2014-01-06T09:37:00.001-05:00

The pickup truck will probably be the first thing to go.

It’s the first new car that Jeremy Botta has ever bought, using his savings from working for more than 14 years at the same auto repair shop. “I bent over backwards—I worked almost a 100 hours a week on my salary to turn that store around,” said Botta, 37, who was laid off in April after the shop changed owners.

Unemployment insurance has allowed Botta to keep up with his car and mortgage payments. But on Dec. 28, he became one of the 1.3 million unemployed Americans to lose their emergency federal benefits when Congress declined to extend the program.

Democrats and a few Republicans have vowed to revisit the issue when the Senate returns on Monday with a vote scheduled for a three-month extension. President Obama will also urge a benefit extension last week.

In the meantime, unemployed workers like Botta are already making contingency plans to get by without the jobless aid. And economists warn that the loss of aid will discourage some to stop looking for work altogether.

“If it comes down to it, I’ll have to sell the house,” says Botta, who bought the place in Bend, Ore., just months before he suddenly lost his job, which netted him as much as $60,000 in a good year. Having already raided his retirement savings, Botta thinks he’ll need to take three or four part-time jobs, working 60 to 70 hours a week just to get by without the unemployment checks. Read more >>

The richest people on the planet got even richer in 2013

2014-01-03T10:53:00.002-05:00

The richest people on the planet got even richer in 2013, adding $524 billion to their collective net worth, according to the Bloomberg Billionaires Index, a daily ranking of the world’s 300 wealthiest individuals.

The aggregate net worth of the world’s top billionaires stood at $3.7 trillion at the market close on Dec. 31, according to the ranking. The biggest gains came in the technology industry, which soared 28 percent during the year. Of the 300 people who appeared on the final ranking of 2013, only 70 registered a net loss for the 12-month period.

“The rich will keep getting richer in 2014,” John Catsimatidis, the billionaire founder of real estate and energy conglomerate Red Apple Group Inc., said in a telephone interview from his New York office. “Interest rates will remain low, equity markets will keep rising, and the economy will grow at less than 2 percent.”

Bill Gates, the founder and chairman of Redmond, Washington-based Microsoft Corp., was the year’s biggest gainer. The 58-year-old tycoon’s fortune increased by $15.8 billion to $78.5 billion, according to the index, as shares of Microsoft, the world’s largest software maker, rose 40 percent.

Gates recaptured the title of world’s richest person on May 16 from Mexican investor Carlos Slim. Gates’s fortune has also benefited from a rally in stock holdings that include the Canadian National Railway Co. and sanitizing-products maker Ecolab Inc., which rose 34 percent and 45 percent respectively. Read more >>

How Pharmaceuticals Came To Be The 4th Leading Cause Of Death In America

2014-01-02T03:20:00.001-05:00

Prescription drugs are the 4th leading cause of death in America. (1) People know this to be true, they know it to be appalling, but it’s still seen as incomprehensible and absurd. How could medicine hurt so many people?

We all know that side-effects happen, but they are thought to be rare. They must be rare, right? We all know some good, kind, generous, thoughtful doctors who want nothing more for their patients than health and happiness, so they certainly aren’t giving their patients drugs that hurt them, are they?

We know that the FDA is a federal bureaucracy, so it must be too restrictive of the pharmaceutical industry, right? And the FDA is supposed to protect consumers, so we’re as safe as we can be, right? And people can sue, so the legal system must be keeping the bad aspects of the medical system in check, right?

All of these questions, and many more, bring up some cognitive dissonance for people when they’re faced with the fact that prescription drugs, used as prescribed, kill an inordinate a number of people. It brings up the questions. Read more >>

Health law may hit midsize businesses hardest

2013-12-31T08:32:00.001-05:00

The new year will bring tough new health care decisions for many businesses, especially those that are too small to easily absorb new costs and too big to think about dropping coverage, experts say.

These midsize businesses, particularly those with 50 to 200 workers, are having the toughest time affording escalating health care costs, says Nancy Taylor, a health care lawyer with Greenberg Traurig.

"I'm most worried about them," she says.

Federal regulators define small businesses for the purposes of the Affordable Care Act as those with 50 or fewer employees, so a midsize company by some definitions could be one 51 or 1,000 or more workers. A mandate for businesses with 50 or more employees to provide insurance to all full-time employees was delayed for a year. But businesses are already bracing for 2015.

Three ways midsize employers are feeling it:

•Taxes and fees.

Most of the largest employers are self-insured, which means the companies cover employees' claims, while insurance companies help administer the plans. Starting in 2014, businesses that are fully insured -- as opposed to self-insured -- will be hit with an $8 billion tax that is estimated to add 2%-3% to premiums for each covered employee.

This tax is expected to increase every year for the next several years. By 2018, It's expected to be about 4%. A so-called reinsurance fee of $63 for every person covered by a plan also kicks in for the new year. Read more >>

Unemployment Benefits Lapse Severs Lifeline for Longtime Jobless

2013-12-30T08:33:00.003-05:00

Laura Walker, a 63-year-old paralegal, has been looking for work since January, when she was laid off from a California law firm. Until today, she could count on $450 a week in federal unemployment benefits for help.

Now, those checks will disappear, just as they will for 1.3 million other Americans whose emergency aid ran out Dec. 28.

“Not all of us have savings and a lot of us have to take care of family because of what happened in the economy,” said Walker, of Santa Clarita, who said she has applied for at least three jobs a week and shares an apartment with her unemployed son, his wife and two children. “It’s going to put my family and me out on the streets.”

The program, started during the recession, was intended to help jobless people after they exhausted state benefits, typically lasting six months. House Republicans resisted continuing the benefits without budget cuts elsewhere to cover the cost. Keeping it running another year would cost $25 billion and spur the economy enough to create about 200,000 jobs, the Congressional Budget Office estimated.

“It lacks compassion for the victims of the recession and, economically, it’s shooting ourselves in the foot,” said Lawrence Mishel, the president of the Economic Policy Institute in Washington, which backs policies that help low-income workers. “The timing is very premature. The evidence is that people who want work can’t find it.” Read more >>

Rise of the $2,000 designer sweater

2013-12-27T09:42:00.002-05:00

Designer sweaters that creep towards $2,000 in price are becoming equally commonplace as four-figure handbags and high-heels. Brands including Christopher Kane, The Row, and Bottega Veneta say that their sweater designs – which are primarily unassuming with simple shapes and colors – boast the kind of quality to justify their price tag.

An unadorned, cream-colored cotton cardigan by Bottega Veneta is currently on offer for $2,200, and similarly pared-down, cashmere-silk look by Donna Karan is being sold for $1,995.

Embellished novelty designs are also ranking high in the sweater category. Mr Kane’s cropped cashmere design with sequin embroidery is priced at $1,510, while another floral piece, by American designer Jason Wu, can be found for $1,995.

If a ‘most expensive sweater’ superlative existed, however, this season’s winner would likely be a $4,490 hand-knitted style by The Row, which is made from an Italian cashmere-wool blend.

The cable knit sweater, which made its much-lauded debut on the label’s fall 2013 runway, costs more than two times the price many of Prada’s classic handbag styles, and nearly four times that of a pair of Manolo Blahniks. Read more >>

Local courts reviving 'debtors' prison' for overdue fines

2013-12-26T03:54:00.002-05:00

As if out of a Charles Dickens novel, people struggling to pay overdue fines and fees associated with court costs for even the simplest traffic infractions are being thrown in jail across the United States.

Critics are calling the practice the new "debtors' prison" -- referring to the jails that flourished in the U.S. and Western Europe over 150 years ago. Before the time of bankruptcy laws and social safety nets, poor folks and ruined business owners were locked up until their debts were paid off.

Reforms eventually outlawed the practice. But groups like the Brennan Center for Justice and the American Civil Liberties Union say it's been reborn in local courts which may not be aware it's against the law to send indigent people to jail over unpaid fines and fees -- or they just haven't been called on it until now.

Advocates are trying to convince courts that aside from the legal questions surrounding the practice, it is disproportionately jailing poor people and doesn't even boost government revenues -- in fact, governments lose money in the process.

"It's a waste of taxpayer resources, and it undermines the integrity of the justice system," Carl Takei, staff attorney for the ACLU's National Prison Project, told FoxNews.com. Read more >>

Thyroid Cancers Surge Among Fukushima Youths

2013-12-24T00:23:00.004-05:00

It seems US sailors aren't the only ones who three short years after the Fukushima disaster are being stricken by cancers and other radiation-induced diseases. For once, the media blackout surrounding the Japanese nuclear power plant tragedy appears to have crumbled, and at least a portion of the truth has been revealed. Hong Kong's SCMP reports that fifty-nine young people in Fukushima prefecture have been diagnosed with or are suspected of having thyroid cancer.

Notably, all of newly diagnosed were younger than 18 at the time of the nuclear meltdown in the area in March 2011. They were identified in tests by the prefectural government, which covered 239,000 people by the end of September.

And while it is not rocket surgery to put two and two together, now that the data is in the public domain, here come the experts to explain it away.

On one hand, there are those who seemingly have not been bribed by the Abe government to "bend" reality just a bit in the name of confidence. People such as Toshihide Tsuda, a professor of epidemiology at Okayama University who has called upon the government to prepare for a possible increase in cases in the future.

"The rate at which children in Fukushima prefecture have developed thyroid cancer can be called frequent, because it is several times to several tens of times higher," Japan's Asahi Shimbun quoted him as saying.

He compared the figures in Fukushima with cancer registration statistics throughout Japan from 1975 to 2008 that showed an annual average of five to 11 people in their late teens to early 20s developing cancer for every 1 million people.

And then come those who probably would still be touting the great job Tepco is doing in containing the worst nuclear catastrophe in history, even though Tepco itself has now admitted the exploded nuclear power plant is out of control. Read more >>

Atlantic City and Las Vegas facing catastrophic collapse

2013-12-23T04:27:00.001-05:00

With the closure of the recent Atlantic Club Casino Hotel, rumors of the bankrupt Revel being sold to Hard Rock, more than half of the mortgages in Las Vegas under water, casinos opening up all around the country and online gambling legislation underway in various states, it seems as if the reasons for the very existence of Atlantic City and Las Vegas are in serious jeopardy.

In Las Vegas alone, more than half of properties with mortgages are still underwater, or worth less than the loans against them, according to Zillow Inc., a real estate data firm.

Trendy hotels like SLS Las Vegas are set to open in 2014, in an effort to reinvent the city as purely an entertainment paradise.

One local said “The reality is, people just won’t fly to the middle of a desert to play some slots, watch shows and sit down for some blackjack when they can drive right near their town or city, or play legally online.”

And now it looks like the feds may soon allow online gambling across the United States.

Last May, the American Gaming Association called on Congress to enact federal legislation that would allow states to license and regulate online poker so Americans who play can do so safely using responsible, law-abiding operators.

The Department of Justice made a decision that the Federal Wire Act only prohibits the transmission of communications relative to bets or wagers on sporting events or contests. It also clarifies that intrastate lottery tickets sold online are legal, so long as the lottery games do not involve sport wagering, even if the transmission crosses state lines.

Officials say this has opened up the possibility that online gambling may get approved on a federal level.

New Jersey is the third state in the U.S. to have authorized internet gambling. However, these online casinos are owned and controlled by Atlantic City casinos in an effort to boost profits in the face of fierce competition. Read more >>

GOVT Giving More Housing Aid to Rich Than Poor

2013-12-20T16:03:00.000-05:00

The Center for Budget Policy Priorities released a number of charts today that shows how much the federal government favors high-income households over low-income ones in housing benefits.

This largely results from the fact that homeowners receive significantly more aid than renters and high-income Americans are much more likely to be homeowners.

In 2012, the federal government gave out $240 billion in housing aid. Income data is not available for all of it, but of what is available, more than half went to those with incomes greater than $100,000 ($81.6 billion). Only $40 billion went to those with incomes less than $50,000.

Overall, high income households receive four times as much in housing aid as low-income ones.

The main reason for this is the majority of federal housing aid flows to homeowners, not renters. The mortgage interest deduction is the most well-known program that subsidizes homeownership. That deduction alone is larger than all federal rental aid combined.

The federal government gave out about $60 billion in housing benefits to renters in 2012. It gave out more than three times that much to homeowners. Low-income households receive the vast majority of that rental aid, but the opposite is true of aid to homeowners. That flows primarily to high-income households. Read more >>

Dolphins Suffering From Lung Disease Due to Gulf Oil Spill

2013-12-20T15:39:00.002-05:00

Deepwater Horizon Oil Spill Site
(Photo credit: Green Fire Productions)

Dolphins in an area hard hit by the Gulf of Mexico oil spill in 2010 are suffering from lung diseases and other abnormalities that are consistent with toxic exposure to oil, according to a study backed by the federal government and released on Wednesday.

The peer-reviewed paper, which was disputed by BP BP.LN +1.07% PLC, was published in the journal Environmental Science & Technology. The paper makes the strongest connection to date between the BP spill and dolphin deaths, which jumped in the Gulf of Mexico after the spill.

"It is related to oil," said Lori Schwacke, the study's lead author and a wildlife epidemiologist at the National Oceanic and Atmospheric Administration. "The weight of evidence is there."

BP, which paid for the study, disputes that it shows a clear link between the spill and dolphin illnesses. NOAA "still hasn't provided BP with any data demonstrating that the alleged poor health of any dolphins was caused by oil exposure," said BP spokesman Jason Ryan in an email.

The study was released the same morning a federal jury in New Orleans convicted an engineer who worked for BP in 2010 of destroying evidence about the oil spill. Prosecutors argued that the engineer, Kurt Mix, deleted hundreds of text messages to try to hide evidence that the company knew more oil was leaking than it had revealed publicly. Read more >>

Facebook can see what users type even if status is not posted

2013-12-18T09:17:00.000-05:00

Facebook has said that it is within its terms of service to see what users are typing even when the status or comment is never posted on the social network.

The Menlo Park, Calif., company confirmed that it can track users' unpublished posts after two Facebook researchers disclosed that they had tracked the activity of about 5 million random Facebook users in the U.S. and England.

The researchers' study looked at how often these users censored themselves while typing posts and comments on Facebook. If users typed more than five characters, the content was tracked. It was considered to be self-censored if it was not published within 10 minutes of being typed.

Facebook said the study did not track the exact words and letters that users typed, but whether or not they typed something. The methodology for the study also kept the tracked users anonymous, Facebook said.

“This is something we looked at to understand to what extent people self censor,” Facebook spokesman Matt Steinfeld told The Times.

Facebook said it was no longer tracking any users when it comes to unpublished posts. It also has no plans to track the unpublished words and letters that users type.

But Facebook said the study was conducted in accordance to the terms of service that every user agrees to when they sign up for the social network.

So where in Facebook's terms of service is this justified? The company said this is covered in its Data Use Policy. Read more >>

Price of Ground Beef Hits All-Time High

2013-12-18T08:28:00.005-05:00

The average price for a pound of ground beef hit its all-time in the United States in November, according to data released today by the Bureau of Labor Statistics.

In January 1980, when BLS started tracking the average price of 100-percent beef ground chuck, a pound cost $1.82. By this November, the same pound of ground beef cost $3.61 per pound. That was up from $3.49 per pound in October.

A decade ago, in November 2003, a pound of ground chuck cost $2.49. Since then, the price has gone up 45 percent. Read more >>

Camden, New Jersey: One Of Hundreds Of U.S. Cities That Are Turning Into Rotting, Decaying Hellholes

2013-12-17T01:36:00.001-05:00

All over America, formerly prosperous communities are being transformed into crime-infested wastelands of poverty and despair. Of course the most famous example of this is Detroit. At one time, Detroit was the greatest manufacturing city that the world had ever seen and it had the highest per capita income in the entire country. But now it has become a rotting, decaying hellhole that the rest of the planet laughs at.

And of course Detroit is far from alone. There are hundreds of other U.S. cities that are suffering a similar fate. In this article, the focus is going to be on Camden, New Jersey, but the truth is that there are lots of other "Detroits" and "Camdens" all over the nation. Jobs and businesses are leaving our cities at a staggering rate, and what is being left behind is poverty, crime and extreme desperation.

Earlier this month, Rolling Stone published an article that took a hard look at the nightmare conditions that exist in Camden. A city that once made Campbell's soup and some of this nation's most famous warships is now a national disgrace. The following are six of the best quotes out of that article...

-"In September, its last supermarket closed, and the city has been declared a "food desert" by the USDA. The place is literally dying, its population having plummeted from above 120,000 in the Fifties to less than 80,000 today."

-"Their home is a city with thousands of abandoned houses but no money to demolish them, leaving whole blocks full of Ninth Ward-style wreckage to gather waste and rats." Read more >>

The number of children taking powerful antipsychotic drugs has nearly tripled

2013-12-16T07:49:00.000-05:00

The number of children taking powerful antipsychotic drugs has nearly tripled over the last 10 to 15 years, according to recent research. The increase comes not because of an epidemic of schizophrenia or other forms of serious mental illness in children, but because doctors are increasingly prescribing the drugs to treat behavior problems, a use not approved by the Food and Drug Administration (FDA). And a disproportionate number of those prescriptions are written for poor and minority children, some as young as age 2.

Doctors are prescribing antipsychotics even though there’s minimal evidence that the drugs help kids for approved uses, much less the unapproved ones, such as behavioral problems. And to make matters worse, the little research there is suggests the drugs can cause troubling side effects, including weight gain, high cholesterol, and an increased risk of type-2 diabetes.

Doctors can legally—and commonly do—write prescriptions for any medication they see fit to treat a condition. (See here for more details on off-label prescribing)

But overuse of antipsychotic drugs has become worrisome enough that the American Psychiatric Association recently announced that doctors should not routinely prescribe the drugs as first-line treatment to children and adolescents for any reason other than psychotic disorders such as schizophrenia or severe tic disorders. The association is so concerned that it chose to include this issue as part of Choosing Wisely, an initiative in which Consumer Reports has jointed the ABIM Foundation and national medical societies to identify tests and treatments to question. Read more >>

Soaring rents force Londoners to live in shipping containers

2013-12-12T11:27:00.003-05:00

A London charity has imported steel containers from China and converted them into bargain basement homes, as part of a novel solution to try and solve homelessness amid soaring rents in the British capital.

A hostel in east London has come up with the ingenious idea of converting a shipping container from China into a tiny low cost home for hard up and desperate Londoners.

Although it’s only a steel box, they are calling it mYpad, as notwithstanding how small it is, it’s a compact home with a tiny kitchen, bathroom and living quarters complete with a flat screen TV and a single bed.

Lying on your bed, you could almost imagine you were in a bunk on a ship, perhaps the one on which the containers were transported.

But as rents in London continue to soar, putting most flats and houses out of reach of many people on low incomes or benefits, these may be part of the solution.

A mYpad costs just £75 a week. While in some parts of the UK this is cheap but not a giveaway, in London it’s unheard of. In the British capital the average rent, even in a distant borough where oligarchs wouldn’t venture, alive or dead, is around £300 a week. Read more >>

New H7N9 bird flu resists drugs without losing ability to spread

2013-12-11T07:03:00.002-05:00

Scientists have found that a mutation in a new strain of bird flu infecting people in China can render it resistant to a key first-line treatment drug without limiting its ability to spread in mammals.

The discovery means that unlike seasonal flu strains, which often become less transmissible when they develop resistance to drugs like Roche's Tamiflu, the new H7N9 bird flu does not lose any of its spreading potential with drug resistance.

While this does not make H7N9 any more likely to develop into a human pandemic, researchers said it means doctors should be prudent in their use of anti-viral medicines to treat H7N9 cases, and consider using drugs other than Tamiflu, such as GlaxoSmithKline's Relenza, where possible.

"It's important to emphasize that these H7N9 viruses seem to transmit fairly inefficiently overall," said Nicole Bouvier, who led the H7N9 study which was published in the journal Nature Communications on Tuesday.

"But what was surprising about our study was that the drug-resistant virus was no less efficient than the drug-sensitive one. Usually what we see with influenza, is that resistance...also confers a fitness disadvantage on the virus." Read more >>

200,000 people apply to be first to live on Mars

2013-12-11T06:54:00.000-05:00

If you have ambitions of being one of the first people on Mars, listen up: A Dutch company says it is moving along with its plan to send four lucky Earthlings to colonize the Red Planet. The catch: They won’t ever come back.

The Mars One foundation announced Tuesday that it has secured lead suppliers for an unmanned mission launching in 2018, which involves a robotic lander and a communications satellite. Lockheed Martin has been contracted to study building the lander, and Surrey Satellite Technology Ltd. will develop a concept study for the satellite, Mars One said.

This first mission will demonstrate technology that would be involved in a permanent human settlement on Mars. If all goes well — and that’s still very much an “if” — the first pioneers could land on Mars in 2025.

Enthusiasm has been growing since the project’s first big announcement in April. More than 200,000 people have signed up to be prospective astronauts, Mars One CEO Bas Lansdorp said in Washington on Tuesday.

Apparently, they’re OK with living out the rest of their lives on Mars. The technology for a return flight doesn’t exist — there’s no Kennedy Space Center launch pad over there! — and having a one-way trip greatly reduces costs, the company has said.

The application period is now closed, and by the end of this year, the company plans to notify those special folk who made it to Round 2. Read more >>

Now outsourcing even extends to the family cook, maid and nanny

2013-12-10T14:18:00.001-05:00

2013 Fast Food Workers Strike (Photo credit: Stephen D. Melkisethian)

An economy of outsourced servants
David Cay Johnston

Many service jobs used to be performed in homes of the wealthy, with better benefits

At least one class of American workers is having a much harder time today than a decade ago, than during the Great Depression and than a century ago: servants.

The reason for this, surprisingly enough, is outsourcing. Let me explain.

Prosperous American families have adopted the same approach to wages for servants as big successful companies, hiring freelance outside contractors for all sorts of functions from child care and handyman chores to gardening and cleaning work to reduce costs.

Instead of the live-in servants, who were common in the prosperous households of America before World War II, better off families now outsource the family cook, maid and nanny. It is part of a global problem in developed countries that is getting more attention worldwide than in the U.S.

We are falling backwards in America, back to the Gilded Age conditions a century and more ago when a few fortunate souls grew fabulously rich while a quarter of families had to take in paying boarders to make ends meet. Only back then, elites gave their servants a better deal.

Thorstein Veblen, in his classic 1899 book “The Theory of the Leisure Class,” observed that “the need of vicarious leisure, or conspicuous consumption of service, is a dominant incentive to the keeping of servants.” Nowadays, servants are just as important to elites, except that they are conspicuous in their competition to avoid paying servants decent wages.

In the Great Depression year 1930, one in 45 urban American families had live-in servants, economist George Stigler, who later won the Nobel Prize in economics, reported in his 1946 study of servants.

In a prescient line relevant to today’s growing chasm between the richest and the rest of society, Stigler noted that “a society with relatively many families at both ends of the income scale would provide both a large supply of servants and a large demand” for them.

Room and board

That is just what America has today — a top ten percent doing well (the top tenth of one percent exceptionally so), while the bottom third remains desperate for work. But outsourcing has changed the circumstances of those who would do a servant’s work today for the worse.

Consider the family cook. Many family cooks now work at family restaurants and fast food joints. This means that instead of having to meet a weekly payroll, families can hire a cook only as needed.

A household cook typically earned $10 a week in 1910, century-old books on the etiquette of hiring servants show. That is $235 per week in today’s money, while the federal minimum wage for 40 hours now comes to $290 a week.

At first blush that looks like a real raise of $55 a week, or nearly a 25-percent increase in pay. But in fact, the 2013 minimum wage cook is much worse off than the 1910 cook. Here’s why:

The 1910 cook earned tax-free pay, while 2013 cook pays 7.65 percent of his income in Social Security taxes as well as income taxes on more than a third of his pay, assuming full-time work every week of the year. For a single person, that’s about $29 of that $55 raise deducted for taxes.

Unless he can walk to work, today’s outsourced family cook must cover commuting costs. A monthly transit pass costs $75 in Los Angeles, $95 in Atlanta and $122 in New York City, so bus fare alone runs $17 to $25 a week, eating up a third to almost half of the seeming increase in pay, making the apparent raise pretty much vanish.

The 1910 cook got room and board, while the 2013 cook must provide his own living space and food.

More than half of fast food workers are on some form of welfare, labor economists at the University of California, Berkeley and the University of Illinois reported in October after analyzing government economic statistics.

Data on domestic workers is scant because Congress excludes them from both regular data gathering by the Bureau of Labor Statistics and laws giving workers rights to rest periods and collective bargaining.

Nevertheless, what we do know is troubling. These days 60 percent of domestic workers spend half of their income just on housing and a fifth run out of food some time each month.

A German study found that in New York City domestic workers pay ranges broadly, from an illegal $1.43 to $40 an hour, with a quarter of workers earning less than the legal minimum wage. The U.S. median pay for domestic servants was estimated at $10 an hour.

How to tip your dog walker

As the nation’s largest private employer, Walmart exerts a major influence on pay, affecting not just its own workers, but what competitors and businesses seeking workers with similar skills pay. Walmart’s low pay is a major factor in the hardships of outsourced servants like the modern family cook.

Sylvia Allegretto, an economist with the Center on Wage and Employment Dynamics at U.C. Berkeley, used Federal Reserve data to compare the fortunes of the many, to the six richest members of the Walton family, which controls Walmart.

In 2007 the six wealthiest Waltons family enjoyed a net worth equal to that of the poorest 30.5 percent of Americans, Allegretto calculated. Three years later, in 2010, the Walton wealth equaled that of 41.5 percent of Americans as the Waltons grew richer and the vast majority of Americans lost ground during the Great Recession.

The workers of another big employer, McDonald’s, receive $1.2 billion annually in welfare benefits. Despite the struggles they face, the company recently posted advice for its workers on how much to tip their own servants, including dog walkers. The company erased the advisory after CNBC reported on it, but the posting revealed how out of touch executives are with the reality in their restaurants.

The plight of domestic workers in an era of growing inequality and falling incomes for many has been taken up by the United Nation’s International Labor Organization, which has equal representation from workers, employers and governments.

ILO Convention 189 calls for domestic workers to have the same basic rights as other workers, including reasonable hours, rest periods and the right to organize.

So far ten countries have adopted the convention and 13 others are in the process or say they plan do so, but the United States is not among them.

The Thanksgiving week demonstrations outside fast food restaurants and Walmart stores signal a growing popular movement to improve the lot of the servant class in America. The government subsidies to employers who pay less than a living wage are also attracting attention from the anti-tax crowd, though not enough so far to make a clean break with the major employers like the Waltons and the Koch Brothers, who enjoy massive government subsidies both directly and indirectly through benefits that subsidize lower paid workers.

In California, Gov. Jerry Brown vetoed a bill last year requiring overtime pay and breaks for meals and rest, saying it would result in fewer domestic workers. But two months ago he signed a bill that only required overtime, which is difficult to enforce.

It is a start in he right direction, but just getting servants back to the livelihood they earned a century ago remains a distant goal.

David Cay Johnston, an investigative reporter who won a Pulitzer Prize while at The New York Times, is a best-selling author who teaches the business, tax and property law of the ancient world at Syracuse University College of Law.

The myth of the American Dream

2013-12-10T08:35:00.000-05:00

The American Dream is supposed to mean that through hard work and perseverance, even the poorest people can make it to middle class or above. But it's actually harder to move up in America than it is in most other advanced nations.

It's easier to rise above the class you're born into in countries like Japan, Germany, Australia, and the Scandinavian nations, according to research from University of Ottawa economist and current Russell Sage Foundation Fellow Miles Corak.

Among the major developed countries, only in Italy and the United Kingdom is there less economic mobility, according to Corak.

The research measures "intergenerational earnings elasticity" -- a type of economic mobility that measures the correlation between what your parents make and what you make one generation later -- in a number of different countries around the world.

Economists aren't certain exactly why some countries have a greater degree of mobility than others, but they do point to certain similarities.

Greater current inequality: The more unequal a society is currently, the greater the chance that the children will be stuck in the same sphere. This is because wealthy families are able to provide things like tutors and extracurricular activities -- and the time to pursue them -- that poorer families often cannot. Read more >>

Taxpayers lose $10 billion on GM

2013-12-10T08:24:00.001-05:00

The U.S. government sold its last shares of automaker General Motors Co (GM.N) on Monday, marking an end to a historic bailout of one of America's most storied companies. The sale leaves taxpayers short about $10 billion of the funds that the Treasury sank into the automaker in 2009.

"With the final sale of GM stock, this important chapter in our nation's history is now closed," Treasury Secretary Jack Lew said.

Washington came to the rescue of Detroit during the darkest days of the country's 2007-09 financial crisis, as the nation was sinking further into what would become its deepest recession since the Great Depression. The money pumped into the auto industry came from a $700 billion pool of funds Congress had assembled to shore up the banking system and fight a growing panic on Wall Street.

Taxpayers could still turn a profit from the rescue efforts, despite losses on programs to help housing and autos. The government also took a loss of just over $1 billion on its investments in Detroit automaker Chrysler. Taxpayers remain intertwined with GM's former lending arm, Ally Financial Inc.

But the bailout helped Detroit automakers return to profitability, and a study released on Monday by the Center for Automotive Research said it saved 1.5 million U.S. jobs and preserved $105.3 billion in personal and social insurance tax collections.

Still, the crisis humbled one of America's biggest companies and the powerhouse of the country's industrial Midwest region. Read more >>

65 Costa Rican municipalities now have ordinances banning GMO crops

2013-12-09T04:34:00.002-05:00

With the passage of a new ordinance in the Caribbean slope town of Siquirres, 81 percent of Costa Rican municipalities have now banned the growth of genetically modified crops.

Although municipal governments across the country seem eager to jump on the GMO-free bandwagon, without a national ban the ordinances are not enforceable. GMO projects previously approved by the Agriculture and Livestock Ministry will continue, even in municipalities with bans. Read more >>