Economy

Donald Trump's Hunger Games: More power. More money. More golf. More women.

Remember this number: $3.

That's how much Trump charged the federal government for a glass of water in April of 2018 when he and Japanese Prime Minister Shinzo Abe met at Trump's Mar-a-Lago resort in Florida. According to the Washington Post, Trump's company also charged the government "$13,700 for guest rooms, $16,500 for food and wine and $6,000 for the roses and other floral arrangements," over the two days he held meetings with Abe at the resort. But one day, Trump was scheduled to meet with Abe without aides and advisers, with no meal service or cocktails or any other celebratory nonsense. Just the two leaders, alone in a room, talking. According to the Post, the bill for that day contained a line item reading, "Bilateral meeting. Water. $3.00 each."

Donald Trump has been paid "at least $2.5 million by the U.S. government," since taking office, according to official documents obtained by the Post. Trump has made more than 280 visits to his own hotels and golf clubs over the last four years, and the payments covered costs for "hotel rooms, ballrooms, cottages, rental houses, golf carts, votive candles, floating candles, candelabras, furniture moving, resort fees, decorative palm trees, strip steak, chocolate cake, breakfast buffets, $88 bottles of wine and $1,000 worth of liquor for White House aides." according to the Post.

And water. A total of six bucks for water, no charge being too small to make it onto a bill to the government for a payment going straight into the pocket of the man who owns the Trump Organization and everything it comprises, including his resort in Palm Beach.

It's apparently a good part of what the Trump base likes about him — his appetites, his pure, unadulterated, money-grubbing-right-down-to-$3-for-water greed. Trump has wanted more his entire life. He wants more money, of course. He has spent a lifetime in pursuit of more money, and then some more, and more and more. He borrowed so much money in pursuit of even more money that it drove him into bankruptcy, several bankruptcies in fact. Today, as president, he is said to be in debt for nearly $1 billion to banks and other lenders, a debt that will come due within the next few years, according to the New York Times and other reports.

Trump wants more fame, a drive that started off with mentions in gossip columns like the New York Post's "Page Six," during the years he was coming into his own as a builder in New York City. He used to call gossip columnists and plant items about himself, posing as a PR person, and then he would call the columnists the next day and comment on their mention of him in order to gain yet another column inch or two in the tabloids. Some said he ran for president back in 2016 to "burnish his brand," to achieve even more fame and use it to make even more money. Since he became president, he has been relentless in his pursuit of attention, tweeting at all hours, criticizing cable networks who don't give him enough coverage, calling in to shows like "Fox & Friends" and "Hannity" both to reward them for the coverage they've already given him, and to get more coverage.

He wants more women, from wife No. 1, Ivana, when he was just starting out, to wife No. 2, Marla Maples, after he jettisoned Ivana, and now wife No. 3, Melania, who replaced No. 2 when he determined she had a few too many miles on her. And then there were all the women in between, in and among his marriages, the women he groped on airplanes and at bars and during parties, the women he (allegedly) raped in places like a Bergdorf's dressing room or a hotel room or a bathroom during a party, the women whose mouths he forced his tongue down, the women he pushed up against walls and pressed himself against, the women whose bodies he commented on in offices or across rooms, the women whose skirts he put his hand up at restaurant tables, the women whose breasts he grabbed at tennis tournaments and beauty pageants, the women whose rear ends he grabbed in green rooms before television show tapings, the women he dragged behind curtains at New Year's Eve parties and forcibly kissed and groped. All of those women. Trump wanted their bodies and their mouths and he took them without asking permission because he was Donald Trump, and he took what he wanted.

He wanted more golf, so he played more golf more frequently than any president before him. He wanted so much golf that he went around the world buying and building his own golf courses, and then he played them, because he owned them, and because he owned the golf carts, as president he could charge the government for his own Secret Service agents. He could even charge the government for the hotel rooms the agents stayed in while they protected him. He charged the government $17,000 a month for a cottage at his Bedminster, New Jersey, golf course, which the Secret Service had to rent month after month just in case he had a mind to play a round of golf.

Trump wants more adulation, more love from the "base," and when he feels he isn't getting enough, he tweets. There aren't enough hours in the day for Donald Trump. He was up at 3 a.m. this week, tweeting about the Supreme Court, the court to which he has appointed three arch-conservative justices, yelling at them for their recent decisions allowing mail-in votes to be counted after Election Day, because of course, he wants more votes. He's been up at 3 a.m. tweeting before, taunting a Miss Universe contestant for a "sex tape," taunting CNN as "low rated," bragging about his debate performance, yelling at polls that show him losing.

And now Trump is making his final campaign swing through the "battleground states," feeding the insatiable need of his base for more of himself. "Four more years" has become "12 more years." Somehow Trump is owed more years of the presidency because "they" took two or three years away from him during the Russia investigation, because "they" spied on his 2016 campaign, because "they" don't deserve to win. The red-hat-wearing mobs of un-masked fans at his rallies want more of the America they think Trump is bringing back to them. It's an America that is more white, has more guns, has more churches, more of "us," less of "them."

That's what they like about him. They want it all, the same way he does. That's what opposition to affirmative action has always been. They don't want some of the college admissions, they want them all. That's what Shelby County v. Holder was about, that's what voter IDs and all the restrictive rules about voting by mail are about. They want all the votes.
For the Trump base, making America great again means making America ours again, but he's going to make sure he puts it on their tab, right there with $3 for water and $546 for rooms and $50 for decorative palm trees for table decorations and $1,005.60 for 26 servings of Patron and Don Julio tequila, 22 Chopin vodkas, and six glasses of Woodford Reserve bourbon consumed by White House staffers at the Mar-a-Lago bar. It's going to cost us more than votes to get our country back. We're going to be paying for Trump's insatiable greed long after he's gone. More than 228,000 of us have already paid with our lives. If the Friday totals keep up — 98,500 new cases and more than 900 dead — a half million of us may perish by the time Trump walks out of the White House for the last time.

The Fed saved the economy -- but is threatening trillions of dollars worth of middle-class retirement

The Federal Reserve, which these days seems to be the only major part of the federal government capable of operating drama-free, has done a lot to help keep our economy afloat. It has cut interest rates to unprecedented low levels, bought billions of dollars of corporate IOUs, helped stabilize the debt markets and helped rescue a stock market that had begun falling sharply in mid-February when the COVID-19 recession started and that seemed headed for a crash.

In the process, the Fed has indirectly provided support to house prices and to the vital home construction business by forcing down mortgage interest rates to all-time lows of about 3%. Given that home equity is a major asset for many middle-class Americans, supporting home prices is especially important. As is supporting the home construction industry, which is a major source of blue-collar jobs.

But if you dig deeper, you'll see that the Fed is unintentionally worsening economic inequality by providing the most help to Americans who are least in need of it. And it's also putting stress on the middle class' most important asset: retirement benefits.

Higher stock prices are great for people (including me) who own a lot of stocks, but those people are primarily the top 10% of the country, in terms of wealth. According to Fed statistics, more than half of stocks — 52% — are owned by the wealthiest 1% of Americans, and 88% are owned by the top 10%.

To show you a different aspect of helping the upper class but not the working class, the Fed's securities purchases include buying debt issued by firms that are laying off workers while paying substantial dividends to shareholders. And for some imprudent or troubled corporate borrowers, the Fed's moves have been hugely helpful.

But those moves are hurting prudent savers of modest means by greatly reducing the income they can earn on Treasury securities and other no-risk investments such as bank certificates of deposit. That tends to drive people seeking income into the stock market, where their capital is at risk. By contrast, if you buy a Treasury security, you're sure of getting your money back when the security comes due, even though the security's market value will fluctuate both up and down while you hold it.

Interest rates are so low that they've largely erased the key benefit — income — Treasury bonds are theoretically supposed to provide over stocks. If you own a low-cost Standard & Poor's 500 index fund, you're getting much more income from dividends than the interest you'd earn having the same amount invested in a 10-year Treasury note. For example, the dividend yield (a year's worth of dividends divided by the current market price) on Admiral shares of Vanguard's S&P 500 fund is more than double the interest yield of a 10-year Treasury. It's even higher than the yield on a 30-year Treasury bond, something that you rarely see.

The yield on the Vanguard fund was 1.65% as of Sept. 30, the most recent available date. As I write this, the yield on a 10-year Treasury, the security it generally makes the most sense for a retail investor to buy and hold to maturity, was 0.76%. The yield on the 30-year Treasury was 1.56%.

Despite its good intentions, the Fed is setting the stage for huge problems down the road for pension funds and, therefore, for potential pension recipients. There are also going to be problems for insurance companies and for other firms onto which many corporate employers have offloaded their pension obligations in order to clean up their balance sheets and minimize their future financial risks.

The firms that have assumed the responsibility for paying these pensions typically own bond-heavy portfolios. And while bond prices have risen because interest rates have fallen — I'll explain how that works some other day — rates seem much more likely to rise from their current low levels in the future than to fall even lower. And when rates rise, it will decrease the market value of the bonds held by the firms that have assumed responsibility for paying pensions.

What it all adds up to: The Fed is trying to salvage the present by pumping trillions of dollars into the U.S. and world financial systems but in the process is putting our economic future at risk. “We're bailing out the present and making the future pay for it," said Gene Steuerle, a co-founder of the Tax Policy Center.

Please note that I'm not blaming the Fed for what it's doing. It's trying to fulfill its mandate to keep employment high, inflation relatively low, the dollar reasonably stable and interest rates at what it considers an appropriate level. The Fed's job, which is already difficult in strange and uncertain economic times like these, is being made much harder by the lack of new economic stimulus packages from Congress and the White House. These packages, as we saw when they were in effect earlier this year, not only help individuals but also stimulate the economy when recipients spend the money they've gotten.

The Fed, by contrast, can help the financial markets and the economy but can't directly help individual people.

Now, let me show you how the Fed's near-zero rates, the culmination of a dozen years of ultralow rates and which Fed Chair Jerome Powell says will continue indefinitely, are undermining the long-range future of the U.S. retirement system. This matters — a lot — because Fed statistics show that retirement benefits (not including Social Security) are hugely important to the middle class.

Prof. Edward Wolff of New York University, who specializes in studying income and wealth inequality, told me that Fed statistics show that pension wealth accounts for 70.3% of the net worth of the middle class, which he defines as people ranking in the 20^th^ through 80^th^ percentiles in terms of wealth. By contrast, he said, retirement benefits are only 2.2% of the upper class' wealth.

This makes the middle class particularly vulnerable to rising rates in the future. Let's take this piece by piece.

For starters, near-zero rates are making the financial problems of the already-stressed Social Security system worse than they would otherwise be by sharply reducing the interest that Social Security can earn on its $2.9 trillion trust fund. That trust fund consists entirely of Treasury securities and is legally barred from owning stocks. That means that the fund's interest yield is falling and it's not benefiting from the 50% rise in stock prices since the market bottomed on March 23.

The near-zero rates also affect private pensions. David Zion of Zion Research estimates that the pension funds of the Standard & Poor's 500 companies, which he says were underfunded by a total of $279 billion at the end of 2019, were underfunded by $407 billion as of June 30. “The main driver of the increase is lower interest rates," he said. (I'll explain the math behind lower rates raising pensions' underfunding in a bit.)

Large as it is, the S&P companies' total shortfall is only a fraction of the underfunding afflicting state and local government pension funds. Keith Brainard, director of research for the National Association of State Retirement Administrators, estimates that the 5,332 retirement funds sponsored by state and local governments were $1.96 trillion underwater as of June 30, the most recent available number, up from $1.90 trillion as of year-end 2019. This has happened, he said, even though the funds' assets totaled about $4.65 trillion, an all-time high.

What's more, if you use dispassionate math rather than the generous accounting principles that public pension funds are allowed to use, you see that lower long-term interest rates are doing much more damage to these funds' financial status than the numbers from Brainard's organization suggest. For instance, Steve Church of Piscataqua Research estimates that the shortfalls of the 127 public pension funds that he follows, which have a total of about $4 trillion of assets, are about $7.44 trillion. That's more than quadruple the funds' reported $1.53 trillion shortfall.

This huge difference stems mostly from different assumptions about interest rates and different ways of calculating how much money a fund needs to have on hand today to meet a future obligation. A public pension fund comes up with how much it needs to have on hand today based on the income it expects to earn on its portfolio. Corporate pension funds engage in the same process, but they are required to make far less optimistic assumptions. They have to set aside enough money to meet that obligation if the money were invested at the interest rate on high quality, long-term risk-free bonds.

Let me give you one example of the difference. If a pension fund expects to pay someone $10,000 in 10 years and anticipates it will earn 7% a year, compounded, today's cost of that benefit — what numbers crunchers call its “present value" — shows up on its books as a liability of $5,083. If, however, the fund predicts it will receive 3% per year, which is about the rate that corporate pension funds use these days, the fund would need to set aside $7,441.

All of this is leading private and public pension funds to take on more risk. “When yields are low, you go looking for income somewhere else," Zion told me.

That means putting money into stocks and various aggressive (and high-cost) Wall Street schemes such as private equity and venture capital funds.

In addition, some public pension funds are borrowing money to try to earn what financial types call “spread income" by investing the borrowed money in assets whose returns exceed the funds' borrowing costs. “When the risk-free rate is zero and you need seven, that's what prompts plans to move outside their traditional comfort zones," Steve Foresti, chief investment officer of Wilshire Consulting, said.

Foresti, who advises numerous public pension funds, says that the use of borrowed money, alternative investments and such began getting more popular about a decade ago. That's about when the Fed knocked rates to near zero and has pretty much kept them there.

One prominent example of a fund trying to borrow its way out of trouble is the California Public Employees' Retirement System (CalPERS), the nation's largest government pension fund. It's considering borrowing up to $55 billion more than it has already borrowed, hoping that its return on the assets it will buy with that borrowed money exceeds what it will pay in interest.

The fund, which says it currently has about $25 billion of borrowed money for which it's paying an average interest rate of 0.18%, now has authority to borrow up to 20% of its assets. That's roughly $80 billion. CalPERS says borrowing has helped it because it's been earning more on the assets it bought with the borrowed money than the interest it's paying.

“It's a moderate use of leverage. We will do it opportunistically and gradually," Marcie Frost, CalPERS' chief executive, told me. “We can tie up our capital for a long time. …We are able to be opportunistic." However, as Frost readily acknowledges, “Leverage can exacerbate your losses."

Or let's look at another big fund, the Teacher Retirement System of Texas, which last year lowered the assumed rate of return on its investment portfolio to 7.25% from the previous 8%. Among other things, that lower assumption is indirectly responsible for teachers, school districts and the state of Texas having to increase their future contributions to the pension fund to avoid the fund having to slash future benefits.

Jase Auby, TRS' chief investment officer, says the fund has been borrowing 4% of its assets for about a year. The idea, he said, is “to diversify away from equity risk" — the danger that stock prices will fall — caused by low interest rates. “Equity risk is greater because interest rates are low," he said.

The fund says its borrowing cost is currently about 0.25% a year. TRS says there were no specific assets financed by its borrowings, but it's ahead so far because its total fund return has exceeded its borrowing costs. If, however, the value of the assets bought with the borrowed money goes down, the fund obviously will be worse off than if it hadn't borrowed the money.

By forcing bond yields down sharply and helping drive up stock prices, the Fed's low-interest rate regime has made 401(k) and 403(b) and other individual retirement accounts more valuable — for now — by boosting the market values of both stocks and bonds.

However, these low rates are now exposing those individual accounts to considerably more risk than if stock prices were lower and bond yields higher.

Why do I say this? Because high stock prices can fall — we've had two 50% market drops in the past 20 years — and low-yielding Treasury securities will lose value if interest rates move higher.

How can U.S. Treasury securities lose value, given that the federal government can create as many dollars as it needs in order to redeem its obligations? Let's say that you spend $10,000 to buy a 10-year Treasury note yielding 0.76%, the current rate. You'd collect $76 in interest a year, $760 over the issue's lifetime, before getting your $10,000 back in 2030.

But let's say that a year from now, despite Fed Chair Powell's predictions, the rate on such a security has risen to 1.76%, around where it was for parts of last year. The market value of your now-nine-year security would be only about $9,174, according to my handy-dandy online bond calculator. That $826 decline in value is more than the total interest you stand to collect over the Treasury note's lifetime. You can take your loss directly by selling your security, or you can take it indirectly by collecting $76 of annual interest for 9 years rather than the $176 that holders of market-rate securities would be getting.

I'd love to be able to quote Fed people to give you the Fed's side of all of this. Alas, none of the people I've talked with or approached, some of whom I've known for years, are willing to be quoted by name.

Privately, various Fedniks past and present readily agree that there are serious downsides to what the Fed has been doing since then-chair Ben Bernanke (who declined, through a spokeswoman, to talk with me) first cut rates to near zero in 2008 and successfully ended the stock market meltdown and financial panic.

These Fedniks are also familiar with the risks that ultralow rates pose to the retirement system and the impact these rates have on economic inequality by sharply raising the values of financial assets, which are owned disproportionately by high-net-worth people, while doing relatively little for the less well off.

But they won't talk about it publicly.

Still, the issue needs to be recognized. If we don't do something to offset the damage to our retirement system, today's problems could end up looking like a rounding error compared to what the future holds.

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Millions still haven't gotten their stimulus checks -- including many who need them most

It's been 217 days since Congress instructed the IRS to send $1,200 stimulus checks to every citizen below a certain income threshold. And yet, it's likely as many as 12 million people — including those who most need a financial boost — never got the cash.

The reasons include confusion about how the complex program works, IRS missteps, technical snafus and Treasury Department policy decisions that cut out large groups of people altogether. Those who fell through the cracks have until Nov. 21 to claim the money or risk losing out on any second round of stimulus payments, which Congress has been negotiating for months.

“Out of what should be an incredibly positive story, [the IRS] just kept getting black eye after black eye after black eye," said Nina Olson, who served as the IRS' taxpayer advocate until last year and is now director of the Center for Taxpayer Rights. “And that's coming partly from the IRS just being overwhelmed, but also not doing the planning and strategic thinking that they really should have once it became clear that the pandemic wasn't going to be a 60-day flu."

In a response to detailed questions, the IRS said that it is “deeply committed to getting EIP payments to all who are eligible, including the difficult to reach community of individuals who are not required and do not file tax returns."

“Factors involving time, staffing, IT resources and other components affected our decisions, but there is no question the IRS went to great lengths to deliver this program in record time to help more than 160 million households in need," the agency said.

People who haven't received payments fall into two basic groups: First, those who were entitled to the money but didn't receive it automatically because their income was so low they didn't file tax returns, and they either haven't applied or tried to but failed. Second, those who were left out by intentional policy choices — namely, the spouses and children of undocumented immigrants and approximately 2 million inmates of prisons and jails.

Justifying its decisions to omit these groups, Treasury has said in legal filings that prisoners are not entitled to payments, and that certain categories of people may be excluded in order to meet Congress' desire that money be dispensed as quickly as possible.

While the IRS expeditiously sent payments to more than 160 million households under extremely trying circumstances, taxpayer advocates contend that the agency lost enthusiasm for solving problems as the months dragged on, and that people who couldn't figure out why they had not received payments received little help.

Now, groups representing low-income people, prisoners and immigrants are racing to get as many individuals hooked into the system as possible in advance of the deadline, which has already been moved back as obstacles arose. As recently as September, the IRS said that 9 million people, mostly those who earn too little to file tax returns, had not applied to receive the benefit, and the agency has not disclosed how many of those it has heard from since. At least an additional 3 million people have missed out because they were deliberately excluded.

The federal government also tried to give people money to help them meet basic needs and stimulate the economy during the 2008 recession. In that go-around, Congress instructed the IRS to do almost exactly the same thing — send checks to single people who made less than $75,000 the previous year or couples with income under $150,000, with the amounts tapering off above that.

In some ways, the current round is more generous: The $1,200 payments are twice the amount dispensed in 2008. Congress no longer required that stimulus checks go toward a recipient's outstanding tax debt. Also, payments were sent directly to people who already received government benefits through Social Security and the Department of Veterans Affairs, even if they hadn't filed tax returns.

Back in 2008, however, the IRS had more resources to draw upon. Its budget has shrunk 20% since 2010, limiting its ability to quickly fix problems. While the agency set up a portal for nonfilers in April — built by the tax software company Intuit — its glitches often discouraged users. Getting help requires spending hours on the phone waiting for an IRS agent with the power to correct any issues.

“The IRS simply does not have the resources necessary to make a manual case-by-case adjustment in potentially several million cases," Erin Collins, the sitting national taxpayer advocate, said at a House Oversight hearing in early October.

That's something that Penelope Protheroe, who runs the homelessness outreach nonprofit Angel Resource Connection, has struggled with for months. Her service area covers a four-county area that includes Seattle, and like many such groups around the country, she's worked since the spring to get people signed up through the portal. Absent a large-scale federal public relations campaign, she had to spread the news through word of mouth that homeless people were eligible.

“The main problem is that they didn't even know that they qualified, so why try?" Protheroe said. “They thought the stimulus check was connected with people who pay taxes." (The IRS noted that it worked with thousands of organizations to spread awareness, but that it was limited in its efforts because it does “not have a marketing or advertising budget like some federal agencies.")

Once people know they qualify, they face several obstacles: Many homeless people don't have identification, like driver's licenses, and the offices that issue such IDs have been closed. Homeless people tend not to have permanent addresses, and organizations that might have received checks for them were reluctant to do so because of liability issues. The portal for nonfilers doesn't work on mobile phones, so homeless people must find desktop computers to sign up. In some cases, the places they would normally go to do so, like public libraries, have been closed.

That's why Angel Resource Connection has set up outdoor laptops in four locations at least a dozen times to help homeless people through the process. Each case requires about 20 minutes of one-on-one attention, forcing people to wait in lines for hours until they can get to a volunteer. There are various ways the process can trip up applicants. Leaving a blank field instead of inserting a zero, for example, kicks a user out of the form without explanation.

Protheroe relayed her concerns to the IRS, which fixed many glitches and started sending out debit cards that can be used without a bank account. The money can be transformative, she said. Homeless recipients have used their stimulus checks to buy cars that provide shelter or equipment to start a small business. But as the deadline nears and days grow colder, it's getting harder to find volunteers.

“Everybody thinks, 'OK, we did it,'" Protheroe said. “You don't have the people power to sign people up. So if you have a table, with just a couple volunteers now, you still have a tremendous line."

Perhaps the most important improvement made by the IRS was automatically distributing money to people already receiving benefits through Social Security or the VA. But the rollout was rocky, and the IRS only fixed some problems after being sued.

After automatically sending payments to federal beneficiaries, the IRS realized that it hadn't factored in dependent children, for whom beneficiaries are supposed to receive an additional $500. In April, the IRS issued a press release notifying Social Security recipients that they had all of two days to file to receive money for their dependents, which almost no one likely acted upon.

“It just seemed like they made the wrong decision there, and it really wasn't feasible for people to comply," said Christine Speidel, who runs a tax clinic at Villanova University that helps low-income taxpayers. In mid-August, after she partnered with Community Legal Services of Philadelphia to file a lawsuit charging that the IRS' decision discriminated against the disabled, the IRS granted beneficiaries an additional 45 days to add their dependents.

Still, problems abound. The IRS has refused to make stimulus payments based on amended tax returns, which people can file to correct errors in their initial filings. It hasn't taken into account 2019 tax returns filed after the original April 15 deadline — but before the new deadline of July 15 — that might have shown income low enough to qualify for a stimulus check, although taxpayers can claim a credit if they qualify while filing their 2020 taxes. And the agency is still trying to reissue checks to people whose payments were mistakenly redirected to pay child support owed by their spouses.

All of this, Speidel said, would be easier to navigate if the IRS offered better support for people having trouble. Instead, its phone lines have been overburdened and are generally unhelpful, since the stimulus payment task was contracted out to customer service agents who have no access to individual accounts. Also, even after the IRS started re-opening its physical taxpayer assistance centers in June, it still isn't accepting paper returns there, cutting off another support avenue for people who have trouble navigating computers.

“The IRS has got to put resources back into the local offices if this is going to be equitable," Speidel said.

ProPublica has received messages from hundreds of people who haven't been able to navigate the portal and were given no explanation for why their attempt did not work.

Take Josee Davis, a 23-year-old house cleaner who rents a trailer with her fiance in Heidelberg, Mississippi. She lost work during the pandemic, since most of her clients are elderly and do not want to risk infection. She was never able to receive unemployment benefits, despite the fact that independent contractors were supposed to have been included in the extra assistance provided by the CARES Act. She didn't make enough money in 2019 to file taxes, but when she tried to apply for a stimulus payment, it did not go through.

After hours on the phone trying to reach the IRS, an agent told that her application showed that she had checked the wrong box — saying she could be claimed as a dependent, which would disqualify her. She doesn't remember checking the box.

“They had no way to fix it, is what they told me," Davis said. Now she's filling out job applications because her fiance's income as a truck mechanic barely covers the bills. “I feel as though every day is a breaking point, but you keep on going," she said.

One step that might have helped the IRS find more eligible people like Davis would have been to also automatically distribute payments to those who receive benefits through state-administered programs, like food stamps and Medicaid. But so far the agency has not done so.

All of those complications just arose in the course of reaching people whom the IRS wants to reach. The agency thinks that millions more aren't entitled to its help.

One group entirely excluded from the stimulus program was the approximately 2 million inmates of prisons and jails. Incarcerated people were included in the 2008 stimulus payments, and the CARES Act didn't carve them out, so initially the IRS issued their checks. But in early May, the Treasury Department reversed the decision and said prisoners shouldn't get payments after all. The IRS then moved to pull back the 85,000 payments that had already gone out.

It took until August for prisoners and their families to link up with lawyers from the San Francisco-based firm Lieff Cabraser Heimann & Bernstein, and put together a class-action lawsuit. Treasury's lawyers argued in a filing that the CARES Act doesn't entitle any particular individual to a stimulus payment, and prisoners are “more insulated from the economic effects of the pandemic than many others because their basic needs such as food, shelter, and health care are already being provided for by the state and paid for by taxpayers."

But the coalition of groups involved in the lawsuit argued that isn't the case: Prisoners must pay for a wide range of daily needs, from hygienic items to education, entertainment, internet usage and phone calls. Generally they're supported by their families, who are disproportionately low-income people of color — a demographic that has been hit hard by the pandemic's economic fallout.

At the end of September, a circuit court judge in the Northern District of California ruled in favor of inmates and later ordered the IRS to move back its deadline for filing paper returns to Nov. 4. The agency must also send paper forms out to every state and federal prisoner in the country and post notices in prisons about the payments.

Julie Anderson is the outreach director at Restore Justice, an Illinois nonprofit that works with the families of prisoners. She runs a support group for mothers of inmates, and her son, Eric, is serving a 30-year sentence for a double homicide he was involved in at age 15. He told her about the mood in the prison when the news circulated that they would be getting $1,200 stimulus payments — more money than many had seen in years. After months of lockdowns and no outside visits to control the coronavirus, it was a breath of relief.

“They still have families, so the stimulus check might mean that they're able to send the money so their kids could get Christmas gifts," Anderson said. Those who are getting out soon could use the money to get back on their feet, perhaps reducing the likelihood that they'll reoffend and end up back in jail. “I'm overwhelmed just thinking about the difference it's going to make in people's lives."

But the IRS is appealing, and the agency's guidance about what is required has changed several times. Currently, it's unclear how widespread awareness is among prisoners that they're supposed to get stimulus payments.

On Oct. 8, Robert Hastings, an inmate at Fort Dix federal correctional institution in New Jersey, asked a judge to extend the deadline because so few prisoners knew they needed to file. He said he only found out about the order through a family member, and that at first his unit supervisor refused to give him the forms. Some inmates can't read or write, and they would need help to complete them.

“We have to depend on prison staff to provide us with our legal help," Hastings wrote in neat handwriting. “If they do not help us there is nothing we can do except what I am doing now."

Alan Mills, the director of the Uptown People's Law Center in Chicago, facilitated the distribution of tax forms to state prisons in Illinois. When his organization picked them up, thousands were missing. He thinks that might be partly because prisoners don't have their Social Security numbers handy, and would have to ask corrections officers for help in locating them.

Texas Department of Criminal Justice spokesman Jeremy Desel said that prison staff is distributing forms to inmates who request them. But he said that the handful of checks received so far are being held pending further IRS guidance. Helping approximately 121,000 prisoners across 101 compounds get their payments is also not something the agency wants to spend much time on.

“In the midst of a global pandemic," Desel said, “ultimately this is not the highest priority of this agency."

With prisons focused on following the IRS' directions, the logistical task of helping millions of prisoners sign up for stimulus payments has fallen largely to prison outreach groups, which are unevenly distributed throughout the country. Institutions near urban areas — like San Quentin in San Francisco — have more outside programming.

“My guess is that they're acting faster not because of the IRS, but because there are vigilant volunteers that care about Individuals inside those institutions," said Sonja Tonneson-Casalegno, deputy director of programs at Root and Rebound, a California nonprofit that works with the families of incarcerated people and runs a legal hotline for inmates. “In other prisons, people are still like, 'nobody knows about this, can you tell us about this.'"

As awareness has spread, the court has been flooded with letters from prisoners asking for assistance. On Thursday, in response to reports that some prisons had been hesitant to distribute the forms, Judge Phyllis Hamilton ordered that the IRS send prisons another notice directing them to do so.

The second major group to be excluded from the stimulus program are U.S. citizens married to undocumented immigrants, at least 1.2 million people.

The CARES Act forbids payments to people filing with Individual Taxpayer Identification Numbers, used by people without Social Security numbers to pay taxes. As a consequence, it also excludes spouses who have filed jointly with such people — which is considered an important factor in evaluating eligibility for green cards and eventual naturalization, putting these couples in a Catch-22.

That was the confusing situation facing Round Rock, Texas resident Ron Hash, whose Peruvian wife, Julissa, earned money doing household work and babysitting. In 2018, they filed using his Social Security number and her ITIN. She obtained her permanent residency in 2019 and the couple filed jointly using her new Social Security number, but they never received their stimulus payment, which they otherwise would have gotten automatically. Since Julissa lost most of her income during the pandemic, getting by on Hash's salary as an IT director has meant cutting down on discretionary spending for their family of four.

“No vacations, no date nights," Hash said. “Compared to a number of people we're better off, because I was able to keep my job, but we've had to tighten our belts."

This was also the case in the 2008 round of payments. But the sharpness of this recession — and its disproportionate impact on the Latinx community, which includes the majority of couples with mixed immigration status — sparked a class-action lawsuit alleging that excluding citizens from the stimulus program on the basis of their marriages is unconstitutional.

There are currently at least five cases making their way through various courts around the country. In the furthest along, in the Central District of California, a judge sided with the government. The plaintiffs have appealed and anticipate taking the matter to the Supreme Court.

The last group excluded by the IRS — people who died before the stimulus payment reached them — may not seem sympathetic. But they were included in the 2008 stimulus if they had filed taxes the previous year, and the IRS decided to err on the side of sympathy for surviving spouses.

“We know that surviving spouses have a really hard time," said Olson, the former National Taxpayer Advocate. “And you have the income cutoff anyway, so it's not like it's rich dead people. It's people who are struggling."

This time, according to a June Government Accountability Office report, IRS started out doing the same thing. But after reporters and members of Congress questioned why payments were going to decedents, the Treasury Department decided that they were illegitimate and posted on its frequently asked questions page that people who received checks that were for deceased relatives should return them.

To Gabriel Zucker, a public interest technology fellow at the New America Foundation who has studied the rollout of the stimulus payments, getting money to people who need it during an emergency depends on commitment and the resources necessary to fix problems as they inevitably arise.

“After that first round, I started to get the sense that they felt they had done a lot, which they had, and then wanted to move on with their lives," Zucker said. “That meant that if they did something that accidentally screwed something else up, there wasn't a ton of willingness to correct for it."

Longer term, however, Zucker thinks that improving stimulus programs may require bringing more people into the tax system — whether or not they owe taxes. The earned income tax credit program, a subsidy for people who don't make enough to pay income taxes, could be expanded to make it worth it for more people to file a return. That would allow the IRS to connect with more Americans automatically, rather than having to hunt them down whenever Congress decides to get cash in peoples' hands quickly.

Ultimately, it's a change in the IRS' mission toward redistribution, not just raising revenue. To facilitate easier transfers of cash, others have proposed connecting more people to the financial system through using post offices as public banks, skipping the IRS entirely.

“The IRS doesn't see its job as giving money to people," Zucker said. “It sees it as taking money from people."

The stock market is not the economy

Whatever happens to the economy – jobs, wages, the hardships so many are facing – the stock market seems to be in a world of its own. Why?

The primary answer is simple. Stock values roughly reflect profits, especially anticipated profits. When profits are expected to rise, stock prices trend upward.

But that only raises a deeper question: How can profits be trending upward when jobs and wages are doing so badly?

Because of a disconnect in the American economy that began way before the pandemic – about 30 years ago.

Before the 1980s, the main driver of profits and the stock market was economic growth. When the economy grew, profits and the stock market rose in tandem. It was a virtuous cycle: Demand for goods and services generated more jobs and higher wages, which in turn stoked demand for more goods and services.

But since the late 1980s, the main way corporations get profits and stock prices up has been to keep payrolls down. Corporations have done whatever they can to increase profits by cutting jobs and wages. They've busted unions, moved to "right-to-work" states, outsourced abroad, reclassified workers as independent contractors, and turned to labor-saving automation.

Prior to 1989, economic growth accounted for most of the stock market's gains. Since then, most of the gains have come from money that would otherwise have gone into the pockets of workers.

Meanwhile, corporations have used their profits and also gone deep into debt to buy back shares of their own stock, thereby pumping up share prices and creating an artificial sugar-high for the stock market.

All this has made the rich even richer. The richest 1 percent of American households own 50 percent of the value of stocks held by American households. The richest 10 percent own 92 percent.

But it's had the opposite effect for everyone else. More and more of the total economy is going into profits and high stock prices benefiting those at the top, while less and less is going into worker wages and salaries.

America's CEOs and billionaires are happy as ever, because more and more of their earnings come from capital gains – increases in the prices of their stock portfolios.

Meanwhile, the Fed has taken on the debts many corporations generated when they borrowed in order to buy back their shares of stock – in effect bailing them out, even as millions of Americans continue to struggle.

So the next time you hear someone say the stock market is a reflection of the economy, tell them that's rubbish! The real economy is jobs and wages.


'Banking for the People': Tlaib and Ocasio-Cortez unveil bill to foster creation of public banks across US

"It's long past time to open doors for people who have been systematically shut out and provide a better option for those grappling with the costs of simply trying to participate in an economy they have every right to—but has been rigged against them."

That's according to Rep. Rashida Tlaib (D-Mich.), who along with Rep. Alexandria Ocasio-Cortez (D-N.Y.) and a handful of other progressives in Congress introduced legislation on Friday they say "would provide a much-needed financial lifeline to states and municipalities, as well as unbanked and underbanked residents, that have been left in dire straits by the Covid-19 pandemic."

Specifically, as a joint statement from the congresswomen explains, the Public Banking Act (pdf) would enable "the creation of state and locally administered public banks by establishing the Public Bank Grant program administered by the secretary of the Treasury and the Federal Reserve Board which would provide grants for the formation, chartering, and capitalization of public banks."

"We spent $30 trillion in the global crisis from 2007-2009 propping up financial institutions that held the country hostage for their reckless behavior. Only $8 trillion dollars has been committed thus far in the Covid-19 pandemic," Tlaib noted. "These banks have been, are, and will continue to depend on the public dollar. It is time for this relationship to be reciprocated and have the banks work for the people and not solely privatized profits wreaking havoc on communities of color."

In addition to allowing the Treasury secretary and the Fed's board to give grants to public banks for "bank formation, capitalization, developing financial market infrastructure, supporter operations, covering unexpected losses, and more without the requirement to provide matching funds," the bill:

  • Allows the Federal Reserve to charter and grant membership to public banks, and in conjunction with the appropriate federal agencies, establish a separate regulatory scheme with respect to these.
  • Establishes public banking incubator program to provide technical assistance to public member banks to develop technologies, practices, and data that promote public welfare.
  • Establishes new liquidity and credit facilities at the Federal Reserve to provide direct federal support to state and local public banks and their communities;
  • Prohibits investment in fossil fuel projects.

Tlaib and Ocasio-Cortez argue that public banks not only would benefit city and state governments and aspiring entrepreneurs due to lower interest rates and fees, but also could result in broader community benefits by, for example, funding public infrastructure projects. Ocasio-Cortez called their legislation "monumental."

"Public banks are uniquely able to address the economic inequality and structural racism exacerbated by the banking industry's discriminatory policies and predatory practices," she said. "The creation of public banks will also facilitate the use of public resources to construct a myriad of public goods including affordable housing and local renewable energy projects. Public banks empower states and municipalities to establish new channels of public investment to help solve systemic crises."

The other half of the Squad—Congresswomen Ayanna Pressley (D-Mass.) and Ilhan Omar (D-Minn.)—and Reps. Jesús G. "Chuy" García (D-Ill.), Pramila Jayapal (D-Wash.), Al Green (D-Texas), Bennie G. Thompson (D-Miss.), Earl Blumenauer (D-Ore.), Barbara Lee (D-Calif.), and Jan Schakowsky (D-Ill.) are backing the bill, as are 29 outside groups.

Organizations supporting the measure include the California Public Banking Alliance (CBPA), Take on Wall Street, Americans for Financial Reform, Beneficial State Foundation, Communications Workers of America, Friends of the Earth, Food & Water Action, Americans for Financial Reform, California Reinvestment Coalition, Center for Popular Democracy, Community Change, Farm Aid, Institute for Policy Studies, Jobs With Justice, NJ Citizen Action, Oil Change International, Oil Change International, People's Action, Strong Economy for All, UNITE HERE, Working Families Party, Democracy Collaborative, ACRE, and Public Citizen.

Climate Justice Alliance policy coordinator Anthony Rogers-Wright expressed excitement that "our values regarding the need for a rapid Fossil Fuel phaseout" are represented in the bill, highlighting evidence that economically, "Big Oil is in big trouble and the people don't want the money they keep in their banks utilized to bailout or finance an industry that's killing people and planet."

Take on Wall Street campaign director Porter McConnell explained that her group supports the Public Banking Act "because public banks can create jobs and boost the local economy, save cities and states money, and lend counter-cyclically to blunt the impact of Wall Street booms and busts."

"As we learned recently from the Paycheck Protection Program, when you pay big Wall Street banks to provide public goods, they inevitably reward themselves and their friends at the expense of white, Black, and brown working families," McConnell said, referencing the business loan program established in March by Congress' last Covid-19 relief measure. "We deserve a financial system for working families, not the big banks."

How Trump gets away without paying taxes

To understand how Donald Trump got away with paying little to no income taxes for many years, even after he forged at least one income tax return, it helps to first understand the risks wealthy Americans face for cheating.

Let's start with IRS audits of the 23,400 richest American households, average income $30 million each. In 2018 the Trump administration audited seven. You read that right—seven. That's an audit rate of 0.03%.

If American police detected murders at the same rate it would mean that they would become aware of just five of the 16,214 reported homicides that year. Of course, not everyone is a tax cheat, but audits are about detecting taxes due, whether through error or intent.

Under Obama in 2015, America's richest households were 270 times more likely to be audited than under Trump.

It also helps to know that about 1 million rich Americans didn't even bother to file income tax returns during Barack Obama's last years in office. America's tax police, the near toothless Internal Revenue Service, are so short-staffed that the inspector general says they aren't even trying to make the scofflaws pay the estimated $47.5 billion they owe.

There's no question Trump is a tax cheat because he has done it again and again. He cheated on New York City sales taxes in 1983, for which Mayor Ed Koch said Trump should have served 15 days in jail. He went to extreme, even farcical lengths to evade $3 million of payments he owed in lieu of taxes to New York City.

Trump has been tried twice for civil tax fraud. He lost both times, a story I broke four years ago but you may not know about because America's major news organizations have not reported it except for one passing mention in the wedding announcement section of The New York Times. Two years ago, however, that newspaper did an exhaustive report showing years of calculated gift tax cheating by two generations of Trumps. In recent weeks income tax information that newspaper reported revealed many badges of tax fraud.

So why hasn't Donald Trump been brought to justice? After all, everyday radio and television commercials tell us of the power the IRS has to garnish our wages, seize our bank accounts and even take our homes. Surely brazen tax cheats live in fear of arrest and losing their mansions, jets and yachts, right?

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This is the first of four articles examining the failure of our country to adequately tax and police the wealthy, like Donald Trump. Next: The suspected tax cheats our Justice Department does pursue, and why.

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Auditing the Working Poor

Now let's compare the audits of people in Trump's income class with the working poor, defined as households with incomes under $25,000. They were the subject of almost a third of all IRS audits even though average income was just $12,600.

The audit rate for poor families is 0.28%. That's nine times the audit rate for the richest Americans.

This is a dramatic shift from the recent past. Under Obama in 2015, America's richest households were 270 times more likely to be audited than under Trump, my analysis of IRS Data Book tables data shows. That year 8.16% of these households had their tax returns audited, not 0.03%.

These vast disparities are just one aspect of a many-sided story about the myth of the all-powerful IRS and how a particular class of rich Americans, a class that includes Trump, almost always wins when they play what in tax world is called audit roulette.

The cold hard truth is that the richest Americans today face a teensy-weensy risk of being detected if they cheat. The hardest tax cheating to detect involves people in a particular class. It is a class with privileges Donald Trump lobbied for and testified about to Congress. The taxpayers who are by far the hardest to identify as cheats share these characteristics the IRS is ill-equipped to address:

  • Own their enterprises lock, stock and barrel, giving them total control with no independent verification of revenue
  • File tax returns that appear on the surface to be accurate, even clean as a whistle
  • Make use of hundreds and in some cases thousands of separate corporations and partnerships in many different locations, a tax evasion helper that will be explained later in this series
  • Operate domestically and abroad where tax treaties, rules on delaying reporting income on tax returns and mismatches between rules of different governments create opportunities to hide money
  • Own commercial real estate because the gains from selling property are not automatically reported to the IRS, unlike wages and dividends

Trump fits those conditions to a T. Later in this series, we'll explore just how he always benefitted from the ways our Congress has instructed the tax police to operate.

Presidential Powers

Now add to all this Trump's powers as president. He appoints the Treasury secretary and the IRS commissioner, who had been a Beverly Hills specialist in helping suspected tax cheats avoid indictment. Trump also recommends how much money the IRS gets and how it will be allocated among various functions such as processing refunds and collecting unpaid taxes. This and more means Trump exercises enormous power and influence over which potential tax cheats, if any, will be found. Because he also appoints America's attorney general, Trump influences which suspected tax cheats will be prosecuted.

In addition, Trump's administration is violating an anti-corruption law enacted 96 years ago after the Teapot Dome scandal. That law gives certain people in Congress the same right he has to inspect any income tax return. At least three staffers on the Congressional Joint Committee on Taxation work at the IRS just to inspect tax returns, especially those seeking individuals refunds of $2 million or more, for badges of fraud. Trump got a nearly $73 million refund; he recently confirmed the IRS wants it back.

Trump refuses to allow the chairman of the House Ways and Means Committee, which writes our tax laws, to inspect his tax returns. The committee is suing for access. It is the only known case of a tax return being withheld by any president since 1924 when Calvin Coolidge was president. That sentence is qualified only because the IRS is stalling on DCReport's Freedom of Information Act request for a single number – how many times has the IRS refused or declined to turn over a tax return request in writing by the appropriate lawmakers and staff.

Who Gets Audited

That 0.03% audit rate for America's richest families is misleading. It overstates the risks to people in Trump's situation.

Many in that highest income group have very limited opportunities to cheat. About a sixth of these rich Americans are CEOs of publicly traded companies or otherwise employed at huge salaries. Their pay is independently reported to the IRS. This means that they are more like Joe and Joan Sixpack whose taxes are withheld before they get paid.

Opportunities for workers to cheat almost nonexistent, even for those making more than $50 million in salary and bonus as more than 200 workers have each year under Trump.

We cite these facts to give you a lens through which to focus as this DCReport series examines the state of Trump's taxes and the capacity of the Internal Revenue Service, our national tax police department, to enforce the tax laws.

DCReport's investigation into how Trump and others like him enjoy robust opportunities to cheat on their taxes with little risk of detection shows how for decades Congress has handcuffed our tax police. It's as if your local mayor and city council told their police officers to focus on tricycle thefts, not violent crimes, and wouldn't pay for testing equipment and chemicals in the crime lab.

We relied in part on a database maintained by the TRAC, the Transactional Records Access Clearinghouse at Syracuse University. DCReport donors generously contributed money to purchase access to that database and to pay a Rochester Institute of Technology student to organize the data for analysis. Much of the data TRAC gets had to be extracted from our government through litigation over the public's right to know what our government is doing.

Tax Prosecutions Vanishing

From various official documents and interviews with tax officials, tax defense lawyers and accountants we found our government operates a system of tax law enforcement with these features:

  • Tax prosecution, never a major government activity and generally slipping for decades, collapsed under Trump
  • In 2016, the last Obama year, the IRS referred 2,744 tax cases for prosecution. Since Oct. 1, 2019, the IRS has referred just 231 cases
  • Justice rejected 162 of those cases, or 70%, for "insufficient evidence," an extraordinarily and hard to believe justification since on average each case involved more than a year of detective work
  • Justice rejected an additional 28 cases because prosecuting suspected tax criminals isn't a "national priority"
  • Justice Department's own data shows it is pursuing just 29 new cases
  • More than half of IRS criminal cases in the last decade were about illicit proceeds from narcotics trafficking, money laundering and other criminal activity, not tax cheating by people who underreport their income from lawful activities or overstate their deductions
  • Last year Justice Department prosecutors obtained just 530 guilty pleas and convictions after trial, making the odds of an American adult being found guilty of a federal tax crime about one in 473,000
  • The public never heard about most of those cases because the Justice Department failed to publicize them
  • Almost 900,000 high-income Americans didn't even file a tax return in the last three years of Obama
  • Virtually no effort is being made to collect the estimated $47.5 billion these prosperous-to-rich Americans owe. An Inspector General report says the IRS already dropped 42,600 cases and it is unlikely that any of the others will be pursued

Defunding America's Tax Police

The reality is Congress has defunded America's tax police. The IRS in 2018 had less than half the resources it did, relative to the size of the economy, as when Ronald Reagan was president in 1988, my analysis of federal budget data shows.

Over several decades, as anti-tax activist Grover Norquist persuaded Republicans to sign ironclad pledges to never raises taxes, these same officeholders have worked to make sure the IRS doesn't have the tools or staff to make sure people and companies pay what the law says they owe. Trump personally lobbied for one key change creating an entitlement program for real estate investors that lets them live tax-free if they are rich enough and follow the rules, making his own tax behavior all the more curious.

The beneficiaries of this throttling of the tax police budget and hobbling its operations have been the thin and increasingly rich slice of Americans at the top, especially people who like Trump exert total control of their business affairs.

Republicans persuaded enough Democrats to go along in handcuffing our tax police through laws, some of them based on bogus testimony by people who said they were victims of abusive IRS tactics. By law, the IRS could not respond to the Senate testimony. Congress' Government Accountability Office later wrote a secret report that showed the hearings were unreliable, Ryan Donmoyer of Tax Notes Magazine revealed in 2000. However, subsequent investigations by The Wall Street Journal, Tax Notes Magazine, The Virginian-Pilot and by me when I was the tax reporter for The New York Times showed the hearings were a sham from start to finish.

In response to the 1997 and 1998 Senate Finance Committee hearings led by the late Sen. William Roth of Delaware, and other hearings, Congress imposed all sorts of restrictions on IRS audits. Here are three telling examples we will explore later in this series:

  1. IRS auditors who notice that a taxpayer reports income of under $100,000 but has mansions, fine art and more cannot use that to begin a "lifestyle audit." One man was caught only because a mistress, furious that he didn't keep a promise to buy her a condo, ratted him out to the IRS
  2. Corporations must be told in advance what issues will be examined. If auditors find along the way evidence of tax owed for other reasons they cannot expand the audit unless they uncover clear evidence of criminality
  3. While Congress authorizes what look to be major cash awards to whistleblowers who report tax cheating the program has added less than $1 to every $5,000 in taxes Uncle Sam collects and it takes more than a decade on average to pay these awards

The costs of these favor-the-rich policies even when they cheat are borne by the other 99% of taxpayers. Tax burdens could otherwise be eased through reductions in government spending for their benefit and in added federal debt.

Institutional Corruption

The Framers of our Constitution were concerned deeply with corruption, but not the way they think of it today. They were well aware of the personal venality that today permeates the news from supermarket tabloids to the network news programs. But the Framers focused on how to ensure against institutional corruption ruining our democracy and our society. Law professor Zephyr Teachout explained it in plain English in her book Corruption in America: From Benjamin Franklin's Snuff Box to Citizens United.

Congress pretty much has imposed on the IRS the same institutionally corrupt approach that New Jersey casino regulators employed when Trump dominated Atlantic City gambling.

New Jersey officials created the impression of zealous law enforcement by noisily going after small fries and others who lack the resources to fight back. Or the regulators announced actions raising questions about the behavior of casino owners in dealings with mobsters, cocaine traffickers and money launderers while working hard to avoid making inquiries that would expose wrongdoing by those at the top.

My first book, Temples of Chance, revealed this institutionally corrupt strategy with many examples like cheating novice roulette players at one Trump casino. Another tack was giving favors to gamblers connected to the Yakuza criminal gangs in Japan or the Medellín drug cartel. Casinos owned by Trump and others even extended credit, comped suites, provided liquor and sent limousines to empty the trust accounts of rich child gamblers.

Actually, Congress has gone much further to hobble America's tax police.

The IRS is so short-staffed it cannot even send refunds it acknowledges are owed from 2017 tax returns. Instead of a refund check, some beleaguered taxpayers have shown me form letter after form letter directing them to not ask about their refund for yet another 60 days. An IRS that is not even staffed to refund people's overpayments is going to have a much harder time enforcing the tax laws when it comes to sophisticated tax cheating.

E.R. Brydalski analyzed the TRAC data used in this report.

Economists warn against deceptive White House spin on new GDP figures: 'Don't be fooled'

With the federal Bureau of Economic Analysis set to release third-quarter economic growth estimates Thursday that are expected to show a historic surge in GDP following the worst contraction on record in the previous quarter, experts and Democratic lawmakers are sounding the alarm about President Donald Trump's election-minded efforts to portray the deceptive numbers as proof that the economy is roaring back under his leadership.

Even though the numbers have not yet officially been released, the Trump reelection campaign is already running Facebook ads touting the "fastest GDP growth in history" and celebrating the "Great American Comeback" that the figures supposedly show.

"The economic calamity threatening American households is largely self-inflicted, and will get even more dire unless Congress takes bipartisan action soon."
—Rep. Don Beyer

But several economists and analysts have warned in recent days that the new BEA statistics will likely paint a highly misleading picture of the economy, which remains mired in deep recession as the coronavirus continues to spread and Congress fails to approve additional relief spending, leaving tens of millions of jobless and hungry Americans without desperately needed assistance.

The BEA is expected to peg third-quarter GDP growth at over 30% at an annualized rate—a figure that would be staggering if it didn't come on the heels of the worst GDP drop in U.S. history in the second quarter.

"Some basic math and data can help pierce through the mirage," economist and Brookings Institute fellow Jay Shambaugh wrote in a blog post Monday. "One reason 30 percent growth doesn't mean the economy is healed stems from how percentage changes work when going down and then up. If you own a stock priced at $100 and it drops 30 percent, it is now worth $70. If it gains back 30 percent, it is then worth $91 (the gain is just $21 because 30 percent of 70 is 21)."

"In the same manner," Shambaugh continued, "the large drop in output in the second quarter followed by similar sized increases in the third quarter will still leave a large hole."


Dean Baker, senior economist at the Center for Economic and Policy Research, noted Tuesday that "the economy would have to grow at a 53.3 percent annual rate in the third quarter to make up the ground lost in the first and second quarters."

Given that the BEA figures are likely to be among the last major economic indicators released ahead of the November 3 election, the Trump campaign has rushed to seize upon the numbers and the president is all but certain to hail them upon their release Thursday morning.

"Trump will claim credit. Don't be fooled," tweeted economist Robert Reich. "It follows one of sharpest drops in history. And the growth hasn't lasted. Latest indicators show big loss of momentum."

In a brief report (pdf) released Wednesday ahead of the new BEA statistics, Democrats on the Joint Economic Committee said Thursday's numbers "will not fully reflect the worsening public health crisis."

"Instead, on the surface, it will appear to suggest a dramatic economic turnaround," the committee says. "However, even record-breaking third quarter real GDP growth of 30%-35% will leave the U.S. economy substantially smaller than when the year began."


The Trump campaign's touting of the GDP figures as evidence of a booming economic recovery also ignores the deteriorating material circumstances of countless Americans as millions remain unemployed and struggle to afford food, rent, and other basic expenses.

Shortly after confirming Amy Coney Barrett to the Supreme Court late Monday, Majority Leader Mitch McConnell (R-Ky.) adjourned the Senate for recess until November 9, effectively killing the chances of a coronavirus relief package ahead of Election Day.

Rep. Don Beyer (D-Va.), vice chair of the Joint Economic Committee, said in a statement Wednesday that "Republicans' failure to reauthorize unemployment supports is a catastrophic mistake that threatens to engulf the personal finances of millions of families."

"The economic calamity threatening American households is largely self-inflicted, and will get even more dire unless Congress takes bipartisan action soon," Beyer added. "We are no longer talking about stimulus, we are talking about life-preservers for millions people who have been terribly hurt and face worse personal tragedy."


Even MOMA is mocking Kim Kardashian West for flaunting private island vacation photos amid pandemic

Kim Kardashian West is a famous person. She is also a wealthy person and her extended family has been at the forefront of the "reality stars" entertainment economy for some time. She is married to Kayne West. Together they are very very wealthy. And like all wealthy people, they live in very rarified air. And like most one-percenters, they are narcissistic in both their pursuit of wealth and their achievement of wealth. It's also Kim Kardashian West's 40th birthday!

On Tuesday, Kim Kardashian West put up a post of glamour shots showing a big crew of friends and family living it up in some tropical area. She wrote, "After 2 weeks of multiple health screens and asking everyone to quarantine, I surprised my closest inner circle with a trip to a private island where we could pretend things were normal just for a brief moment in time." I mean, after "2 weeks of multiple health screens and asking everyone to quarantine," I'm surprised that people were "surprised" by Mrs. Kardashian West's luxurious trip. Of course, the tone-deaf, privileged, and ill-timed boasting Kardashian West was very quickly memed into the history books. This was because a) hundreds of thousands of people are dying and our Republican-led government isn't doing anything about it, b) hundreds of thousands of people are dying and our Republican-led government isn't doing anything about it, and c) hundreds of thousands of people are dying and our Republican-led government isn't doing anything about it.


Warms the heart doesn't it?


Good point.


You know it. Let's lighten the load.


Fugetaboutit.


Almost too close to the bone here.


And darker.


And darker.


MOMA stepped up.


Here's a reminder.


And let's lighten it up again.





The fact that she has the money to not worry about a lack of stimulus while families are just gutted by this very preventible pandemic means she is a part of the problem. There are very few people in her position. Very few. Maybe a couple of thousand people in a world filled with billions of people. Her lack of understanding isn't unique to her, but don't feel sorry for her for getting criticized for it. She doesn't care about you. While the extremely wealthy among us might do cool things from time to time, like championing an end to mass incarceration, in the end, they aren't on your side. They are only and forever on their own side.

Sleep experts say it’s time to ditch daylight saving time — here's why

Michael S. Jaffee, University of Florida

For most of the U.S., the clock goes back one hour on Sunday morning, Nov. 1, the “fall back" for daylight saving time. Many of us appreciate the extra hour of sleep.

But for millions, that gain won't counter the inadequate sleep they get the rest of the year. About 40% of adults – 50 to 70 million Americans – get less than the recommended minimum seven hours per night.

Some researchers are concerned about how the twice-a-year switch impacts our body's physiology. The American Academy of Sleep Medicine, the largest scientific organization that studies sleep, now wants to replace daylight saving time with a move to a year-round fixed time. That way, our internal circadian clocks would not be misaligned for half the year. And it would eliminate the safety risk from sleep loss when transitioning to daylight savings time.

I am a neurologist at the University of Florida. I've studied how a lack of sleep can impair the brain. In the 1940s, most American adults averaged 7.9 hours of sleep a night. Today, it's only 6.9 hours. To put it another way: In 1942, 84% of us got the recommended seven to nine hours; in 2013, it was 59%. To break it down further, a January 2018 study from Fitbit reported that men got even less sleep per night than women, about 6.5 hours.


The case for sleep

Problems from sleep shortage go beyond simply being tired. Compared to those who got enough sleep, adults who are short sleepers – those getting less than seven hours per day – were more likely to report 10 chronic health conditions, including heart disease, diabetes, obesity, asthma and depression.

Children, who need more sleep than adults, face even more challenges. To promote optimal health, six- to 12-year-olds should sleep nine to 12 hours a day; teens from 13 to 18, eight to 10 hours. But a Sleep Foundation poll of parents says children are getting at least one hour less than that. And researchers have found that sleep deprivation of even a single hour can harm a child's developing brain, affecting memory encoding and attentiveness in school.

Sleep impacts every one of our biological systems. Serious consequences can result with poor sleep quality. Here's a short list: Blood pressure may increase. Risk of coronary heart disease could go up. Our endocrine system releases more cortisol, a stress hormone. We become more aroused by “fight or flight" syndrome. There's a reduction of growth hormone and muscle maintenance. There's a higher chance of increased appetite and weight gain. The body has less glucose tolerance and greater insulin resistance; in the long term, that means an increased risk for Type 2 diabetes.

Sleep deprivation is associated with increased inflammation and a decreased number of antibodies to fight infections. It may also cause a decrease in pain tolerance, reaction times and memory. Occupational studies show sleep loss can cause poor work performance, including more days missed and more car accidents.

Recent research suggests the body's waste removal process relies on sleep to get rid of harmful proteins from the brain, particularly abnormal variants of amyloid. These are the same proteins that are elevated in Alzheimer's patients. Studies show that older adults who sleep less have greater accumulation of these proteins in their brains.

On the other hand, getting enough sleep helps the body in many ways by protecting against some of these damaging effects and by boosting the immune system.

The problem with DST

Most of the risk associated with daylight saving time occurs in the spring, when we turn the clock forward and lose one hour of sleep. The idea of a national permanent year-round time has support, but disagreements exist on whether the fixed time should be standard time or daylight savings time.

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States advocating for permanent daylight saving time are typically those that rely on tourism. Environmentalists, favoring less energy consumption from morning heating and evening air conditioning, often support permanent standard time. Religious groups, whose prayer times are linked to sundown and sunrise, also tend to prefer permanent standard time. So do many educators, opposed to transporting children to school during mornings when it's still dark.

As you ponder what system is best for a national year-round standard, consider this: The American Academy of Sleep Medicine has recommended we go with permanent standard time – a better way to align with our natural circadian clock and minimize health and safety risks.

And just think: If we change to permanent standard time, then for the first time in decades, you won't lose an hour of sleep every spring.The Conversation

Michael S. Jaffee, Vice Chair, Department of Neurology, University of Florida

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Trump claims he created a ‘booming’ economy. Economists say he inherited it from Obama

With the 2020 presidential election only a week away, President Donald Trump continues to brag that he single-handedly turned the U.S. economy around after taking office in January 2017. But journalist Rebecca Carballo, in a report for the Houston Chronicle, stresses that according to economists, Trump inherited an economy that was already in recovery when he took office.

"Despite Trump's claims of an economic renaissance under his administration," Carballo explains, "data show the pre-pandemic economy growing along trends established during the second term of former President Barack Obama. The coronavirus, however, disrupted those trends, reshaping the debate not only over who should get credit for the earlier boom, but also, how to respond to unprecedented hardships created by the pandemic and manage what economists say could be a long, difficult recovery."

Obama took office in January 2009 during the Great Recession, which was the worst economic crisis since the Great Depression of the 1930s. Economically, 2009 and 2010 were brutal. Unemployment in the United States reached 10% in December 2009 but decreased considerably during Obama's second term. In December 2016, Obama's last full month in office, the Bureau of Labor Statistics' official unemployment rate was 4.7%.

In other words, Trump's claim that his presidency alone created a "booming" economy is bogus. The president who oversaw the United States' recovery from the Great Recession was Obama, not Trump — although unemployment continued to decrease in 2018 and 2019 before soaring in 2020 because of the coronavirus pandemic.

"Trump's argument for another term has focused on the three years of prosperity before COVID-19," Carballo notes. "But even Trump's favorite indicator — the stock market — shows the economy's performance during the Trump Administration is similar to Obama's second term. The Dow Jones industrial average gained 45% during Obama's last four years, compared to 50% under Trump when the market peaked in February and 44% as of Friday's close."

Wall Street has decided it’s fine with Democrats sweeping the election — here's why

President Donald Trump has tried to portray himself as an economic savior, and warned that Joe Biden winning the election would be a disaster for jobs and businesses.

But according to Politico, Wall Street executives don't agree. Many of them are now actively rooting for Democrats to sweep the 2020 election — because Republicans have failed to deliver crucial stimulus.

"Traders in recent weeks have been piling into bets that a 'blue wave' election, in which Democrats also seize the Senate, will produce an economy-juicing blast of fresh fiscal stimulus of $3 trillion or more that carries the U.S. past the coronavirus crisis and into a more normal environment for markets," reported Ben White. "Far from panicking at the prospect of a Biden win, Wall Street CEOs, traders and investment managers now mostly say they would be fine with a change in the White House that reduces the Trump noise, lowers the threat of further trade wars and ensures a continuation of the government spending they've seen in recent years."

According to the report, Wall Street traders still like the idea of Trump winning, as it would mean a continuation of their preferred tax and regulatory policy. But they are willing to give that up, at least in the short term, for an all-Democratic government that would provide economic relief to the pandemic.

"The market very much believes that Biden is going to win and the Senate is going to tip to Democrats," said one Wall Street CEO to Politico. "And the assumption is that we are going to have a very significant increase in stimulus very quickly and that's very positive for markets. But the fact is there is still a tremendous amount of uncertainty around the outcome of the election and when stimulus might actually come, if it ever does."

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