Why work, when millions can earn much more staying home, collecting $600 plus average $400 state unemployment check

Republican and Democrat politicians, plus the Media brain trust, are missing the catastrophe coming from the $600-a-week Covid-19 unemployment compensation supplemental benefit for all 50 states.

In the ivory tower of statistic worship and technocratic analysis, the supplement makes sense. When millions lose jobs, unemployment insurance only covers about $400 average per week. With overtime, stock bonuses and such, the average earnings before taxes in America is about $970 a week, so $400 + $600 = $1,000, totally replaces the median wage.

The tragedy of this false logic: it ignores that half of the full time employed make more than $970, and half make less, many far less, as low as minimum wage: $270 weekly, after taxes.

Two examples:

  • Median high school grad 25 and older (26 million workers) earns $710 weekly after payroll taxes, laid off and receives $400 unemployment compensation, plus $600 supplemental – a total $1,000. Earnings are $290 a week more by not working.
  • Minimum wage worker earning $270 weekly, laid off and receives $210 unemployment compensation, plus $600 supplemental – a total of $810, three times as much by not working.

For millions of workers it pays to not work. Not only do they make more money, there’s no miserable boss, crazy deadlines, childcare costs, driving or transit expense. Even if the government payments were the same, let alone three times as much, wouldn’t nearly everyone stay home?

Some libertarians disagree, claiming that employees love their jobs, miss their fellow workers, find meaning in life by spending 40 hours or more away from home and family. This is another proof that libertarians are rich folks, who make up jobs they like, and just want to get away from the clatter of servants washing dishes (or a nagging spouse). For the rest of us, their golf and three-hour lunches are not real work.

Unfortunately, this supplemental unemployment cash will last until the end of July.

And that means going to work is stupid and irresponsible if you are the average person. Stay home. Enjoy the summer. You might even vacation with that earlier additional $1,200 per person stimulus check that went to every adult, except those claimed as a dependent on someone else’s income tax return (including blind, crippled and senile).

For two more months the current 17 million unemployed, mostly in lower paying jobs, will make every effort not to return to work.

For many businesses no staff means no income, and they will close, go bankrupt.

Even when workers return, what will be their reaction when, for example, their weekly pay is $300, not $800?

However, you might ask, suppose your boss decides to reopen and offer you your job again?

You might hate your boss if this happens. An employer who makes someone accept $300 or $400 a week for working, instead of earning $700 or $800 by not working, is asking for serious labor troubles.

Most employers are smart. They won’t bring back the workers until after the end of July.

And so the shutdown must continue for many businesses, even though they might enter the green phase,

This will kill the economy as more business go bankrupt – a bonanza by the way for the hedge funds, banks and investors who snatch up distressed firms.

A recent interview with National Public Radio (NPR) illustrated the problem:

“The very people we hired have now asked us to be laid off,” according to shop owner Sky Marietta, “Not because they did not like their jobs or because they did not want to work, but because it would cost them literally hundreds of dollars per week to be employed.”

You also have to think [of] the benefit of not having to go to work, especially during a pandemic.

It’s not that we don’t wish that we could pay our employees at that level all the time. You’re always wanting to pay your staff the best you possibly can. But to be put in a position where you can’t compete with them being at home, unemployed, it’s really tricky. It’s a really difficult situation to be in.”

To make things worse, the Covid-19 stimulus act also includes a provision to lend businesses money that doesn’t have to be repaid if it is used to pay salaries to retain workers.

Jamie Black-Lewis

Jamie Black-Lewis, who owns Oasis Medspa & Salon and Amai Day Spa in Washington state, said she received two forgivable loans through the new federal Paycheck Protection Program, She thought it was great to help keep her 35 employees who had their pay halted when the spas closed.

No surprise, the loans and being kept on payroll made many of her employees angry. The reaction she got was a “firestorm of hatred about the situation,” Black-Lewis said.

These employees realized they could make more money from unemployment than employment.

It’s a windfall they see coming, In their mind, I took it away.

Of course, the unethical business owner can win big if they want to break the rules.

First, don’t offer jobs back to your past employees, who are now on unemployment benefits.

Then hire new workers, who are employed elsewhere at a lower wage, and report you are not cutting staff and deserve a forgivable federal loan.

In time for August 1, lay off the “replacement” workers and rehire the old staff.

That way, they get the extra money, you get the help, and taxpayers are on the hook for your scam.

And with the efficiency of our government whiz kids, no reviews will be made of cheating the program, even if there was any way or desire to recover our money.

Many of America’s biggest companies paid no federal income tax last year, or had credits under new corporate-friendly tax law

The Warner Estate – fancy digs in Beverly Hills for Jeffrey Bezos, the owner of Amazon, Blue Origin and the Washington Post. The modern King Midas (or Uncle Scrooge?) just paid $165 million – a new record for California RE.

What a guy! “Jeff” Bezos, the world’s richest person, has been paid the same $81,840 salary from Amazon for two decades.

Perhaps, because he needed extra cash last year to pay grocery bills, divorce lawyers and utilities, Bezos sold $1.8 billion of his Amazon stock, and kept about $1.44 billion after 20% federal capital gains tax.

Meanwhile, Amazon wage earners were hit with up to a 37% income tax. Even a single employee making $40k pays a higher rate than 20%.

The Bezos’ $1.8 billion sale, unlike Amazon employees’ wages, was also not subject to the 7.65% FICA tax, which supports Social Security and Medicare. That exemption for the rich saved him another $138 million.

All together, he avoided about $300 million in taxes – thanks to that 2017 capital gains tax rate change, passed with the combined support of Donald Trump, Mitch McConnell, Chuck Schumer and Nancy Pelosi.

Following the huge stock sale, Bezos still owned about 56,000,000 shares of Amazon  – each worth $2,135 today.

Despite a recent divorce settlement, he is still the richest person in the world with about $115 billion, and ex-wife Mackenzie is worth $38 billion, making her the third richest woman in the world.

At this point, my corporate-crony-loving friends are thinking:

Bezos may not pay much in taxes, but Amazon is still a big tax payer, even though the bipartisan tax bill also “reformed” the corporate tax rate from 35% to 21%.

Congress and the White House promised that drastically lowering the corporate tax rate also meant removing corporate loopholes in the final bill.

Guess what? The government lowered the rate, but the tax avoidance continued.

In millions of dollars, the following are what big companies earned in IRS credits, instead of paying corporate income tax last year for 2018 profits. The red percentages are the minus income tax rate they paid.

Federal Income Tax Paid in 2018*

Company Profit Credit Tax Rate
Amazon.com $10,835 -129 -1.20%
Delta Air Lines $5,073 -187 -3.70%
Starbucks $4,774 -75 -1.60%
Chevron $4,547 -181 -4.00%
General Motors $4,320 -104 -2.40%
EOG Resources $4,067 -304 -7.50%
Occidental Petroleum $3,379 -23 -0.70%
Duke Energy $3,029 -647 -21.40%
Dominion Resources $3,021 -45 -1.50%
Honeywell International $2,830 -71 -2.50%
FedEx $2,312 -107 -4.60%
Deere $2,152 -558 -25.90%
American Electric Power $1,943 -32 -1.60%
Nvidia $1,843 -32 -1.70%
Williams $1,828 -83 -4.50%
Kinder Morgan $1,784 -22 -1.20%
Public Service Enterprise $1,772 -97 -5.50%
Hartford Financial Services $1,753 -18 -1.00%
Principal Financial $1,641 -55 -3.30%
Edison International $1,600 -57 -3.60%
Ally Financial $1,587 -12 -0.80%
FirstEnergy $1,495 -16 -1.10%
McKesson $1,477 -10 -0.70%
Prudential Financial $1,440 -210 -14.60%
Xcel Energy $1,434 -34 -2.40%
PulteGroup $1,340 -44 -3.30%
Molson Coors $1,325 -23 -1.70%
Devon Energy $1,297 -14 -1.10%
DTE Energy $1,215 -17 -1.40%
WEC Energy Group $1,139 -218 -19.20%
PPL $1,110 -19 -1.70%
Halliburton $1,082 -19 -1.80%
CenturyLink $1,041 -576 -55.30%
Ameren $1,035 -10 -1.00%
Brighthouse Financial $989 -166 -16.80%
Netflix $899 -22 -2.50%
CMS Energy $774 -67 -8.70%
Darden Restaurants $760 -7 -0.90%
Rockwell Collins $722 -40 -5.50%
Whirlpool $717 -110 -15.30%
Westrock $710 -4 -0.60%
Air Products & Chemicals $671 -17 -2.50%
MGM Resorts International $648 -12 -1.80%
Atmos Energy $600 -10 -1.70%
Eli Lilly $598 -54 -9.10%
Alaska Air Group $576 -5 -0.90%
Cliffs Natural Resources $565 -1 -0.10%
First Data $559 -121 -21.60%
DXC Technology $522 -6 -1.10%
IBM $500 -342 -68.40%
Celanese $480 -142 -29.50%
Activision Blizzard $447 -243 -54.40%
UGI $446 -3 -0.60%
Goodyear Tire & Rubber $440 -23 -5.20%
United States Steel $432 -40 -9.30%
Owens Corning $405 -5 -1.20%
Penske Automotive Group $393 -13 -3.30%
Freeport-McMoRan Copper $391 -75 -19.20%
Mohawk Industries $373 -6 -1.50%
Ryder System $350 -47 -13.50%
Aramark $315 -48 -15.30%
MDU Resources $314 -16 -5.10%
Tapestry $307 -24 -7.90%
Builders FirstSource $255 -2 -0.70%
Tenet Healthcare $251 -6 -2.40%
AECOM Technology $244 -186 -76.50%
JetBlue Airways $219 -60 -27.40%
DowDuPont $217 -119 -54.80%
Realogy $199 -13 -6.50%
AK Steel Holding $169 -1 -0.30%
Levi Strauss $145 -25 -17.30%
Trinity Industries $138 -19 -13.90%
Pitney Bowes $125 -26 -21.00%
ABM Industries $88 0 -0.20%
Avis Budget Group $78 -37 -47.40%
SPX $67 -4 -6.60%
Beacon Roofing Supply $63 -4 -7.10%
Andersons $46 -1 -1.20%
SpartanNash $40 -2 -4.10%
Phillips-Van Heusen $18 -31 -168.10%
Sanmina-SCI $16 0 -0.80%
Murphy Oil $12 -10 -84.10%
INTL FCStone $9 -10 -110.30%
Gannett $7 -11 -164.20%

* Rounded to millions of dollars – Source: corporate 10-K filings

The next time you are flying Delta or JetBlue, think zero taxes and zero seat room.

Your Starbucks latte may cost big bucks for fancy coffee, but remember just your single server may pay more total  income tax than the entire coffee giant with 2,818 locations – combined.

Did someone say last year was a fluke, and corporations like Amazon usually pay their fair share?

Wrong! Last year was the second year in a row that Amazon paid no income taxes. The projection for this year is they may fork over about a miserable 1% on $13 billion in profits.

One final note. That $165 million Bezos spent on his new Beverly Hills mansion was just 0.13% of his total fortune.

That means Bezos can afford 768 more $165 million estates.

And that includes setting aside dollars for the clock.

Of course, it would be a different story if he and Amazon had to pay taxes just like the rest of us…

Higher wages, more jobs not from Trump pro-business economy; instead credit goes to DOL for overtime exempt rule change

Business-beholden members of Congress are falsely boasting that their 2017 tax law has been responsible for less unemployment and slightly higher hourly wages.

They praise themselves and President Donald Trump for cutting corporate rates from 35% to 21%, eliminating most taxes on dividends and capital gains, doubling the exemption for inheritance tax, and dropping the tax for corporate foreign profits – laundered for years overseas – from 35% to 15%.

The most onerous claim is that because these tax cuts made rich people richer, the wealthy decided to hire more workers and give generous raises. It’s what they call: “trickle down economics.”

In practice none of this pollyana politics is true, logical or based upon any evidence, except the rantings of wealth-snobs who believe that even a little more – is too much – for the little people. Cake anyone?

The 2017 tax cuts for the upper class and their investments has led to record profits for Wall Street firms (some up 50% just this past year). Overall corporate wealth is burgeoning – indicated by our booming stock market. The more profits, the more valuable a business becomes, and the higher its stock price.

If the “trickle” had been used for workers, profits would have stabilized or dropped. Stock prices would have remained steady or slightly lower, as company valuations were not boosted with more tax cut induced dividends and reinvestment.

The real force behind more jobs, lower unemployment and higher wages is the U.S. Department of Labor (DOL) decision to increase the minimum overtime threshold salary for low-level managers from $455 to $684 a week – a $189 raise equaling $4.73 more an hour. Old rule was $23,660 annually. Under the new law it’s $33,280, an added $9,620.

This 50% pay hike went into effect on Jan. 1, 2020, and U.S. businesses have been adjusting for at least a year, changing employment levels to eliminate the new rules’ more expensive overtime remuneration, and raising wages and salaries to reflect this new pro-worker reality.

Trickle Theory Works Well for the “Smart” Folks!

Until this month you could claim someone was exempt from overtime if they exceeded $455 weekly ($11.38 an hour). As exempt employees, you might require them to work six days or seven days a week, 12 or more hours a day, and still only receive their $455. Someone working under them could be paid $10 an hour and earn more than them with just four hours overtime (40 x 10 + (1.5 x 4 x 10)).

The old rules even allowed you to pay a “manager” that $455, and require them to supervise hourly workers earning $20 an hour, $30, $50, the sky was the limit.

This law went into effect in 2004 when President George Bush and his GOP-controlled House and Senate changed the rules on how overtime exemption was calculated. That’s when the $455 limit was established and the dollar amount has not changed until now.

Consider that the $8,060 salary limit set in 1975 was the equivalent of $38,301 today — far above last year’s $23,660 threshold. Every year, more and more Americans have been working extra hours for free.

The new overtime rule is less than the President Barack Obama decision in 2014 to double the salary threshold to $47,000. In a subsequent legal dispute, a federal judge in Texas ruled the change invalid in 2017, claiming that the DOL “exceeded its authority.”

$15 Minimum Wage Affects Millions from Bottom Up!

Why the change from the DOL under the current Republican administration? Corporations are facing higher local minimum wages as the $15-an-hour movement spreads.

Anticipating a $15 level in most jurisdictions, the DOL cleverly sets the new overtime exemption minimum rate at $17 an hour. That requires the lowest wage worker to need six hours overtime to reach the same weekly pay as the manager.

How does this work in the real world?

Imagine that you have 20 hourly workers at $10 an hour, plus four working managers at $455 salary with each “boss” putting in ten hours a day, or 50 hours a week. Under the new rules the managers became employees, and are entitled to a group’s total of 40 hours overtime pay at 150% of the usual rate.  At this point it’s cheaper to hire an additional employee for 40 hours, instead of paying overtime’s (1.5 x 40) 60 hours additional wages.

On a national scale the result of adding employees, instead of paying overtime, is more jobs and a lower unemployment rate.

But some managers are obviously just that, and suppose they now earn $700 a week. Won’t they ask for and receive a raise by pointing out they are just earning only $16 a week more than the minimum pay of $684, when there used to be a gap of $245?

All Workers Should Be Fairly Valued!

Higher wages for managers means more money overall for middle class consumers.

If managers do see their wages jump 1.5 times their old rate, won’t the people working under them also demand an equivalent percentage? They may not get the whole amount, but they will most likely receive a substantial increase.

There are currently 120 million U.S. workers, and 50 million of them are overtime exempt employees.

But imagine if the 2017 minimum of $47,000 had not been shot down by U.S. District Judge Amos Mazzant, who claimed the salary level was set too high. The judge ignored that the DOL spent two years working on the rule and reviewed nearly 300,000 public comments before adopting it.

That change would have more than doubled the salary minimum and immensely improved the lives of tens of millions of families.

The new law also allows some categories of workers not subject to either the minimum wage or overtime exempt rules:

Exemptions from Both Minimum Wage and Overtime Pay:

  1. Executive, administrative, and professional employees (including teachers and academic administrative personnel in elementary and secondary schools), outside sales employees, and employees in certain computer-related occupations (as defined in DOL regulations)
  2. Employees of certain seasonal amusement or recreational establishments, employees of certain small newspapers, seamen employed on foreign vessels, employees engaged in fishing operations, and employees engaged in newspaper delivery
  3. Farm workers employed by anyone who used no more than 500 “man-days” of farm labor in any calendar quarter of the preceding calendar year
  4. Casual babysitters and persons employed as companions to the elderly or infirm

Exemptions from Overtime Pay Only:

  1. Certain commissioned employees of retail or service establishments; auto, truck, trailer, farm implement, boat, or aircraft sales-workers; or parts-clerks and mechanics servicing autos, trucks, or farm implements, who are employed by non-manufacturing establishments primarily engaged in selling these items to ultimate purchasers
  2. Employees of railroads and air carriers, taxi drivers, certain employees of motor carriers, seamen on American vessels, and local delivery employees paid on approved trip rate plans
  3. Announcers, news editors, and chief engineers of certain non-metropolitan broadcasting stations
  4. Domestic service workers living in the employer’s home
  5. Employees of motion picture theaters
  6. Farm workers

Partial Exemptions from Overtime Pay:

  1. Partial overtime pay exemptions apply to employees engaged in certain operations on agricultural commodities and to employees of certain bulk petroleum distributors
  2. Hospitals and residential care establishments may adopt, by agreement with their employees, a 14-day work period instead of the usual 7-day workweek if the employees are paid at least time and one-half their regular rates for hours worked over 8 in a day or 80 in a 14-day work period, whichever is the greater number of overtime hours
  3. Employees who lack a high school diploma, or who have not attained the educational level of the 8th grade, can be required to spend up to 10 hours in a workweek engaged in remedial reading or training in other basic skills without receiving time and one-half overtime pay for these hours. However, the employees must receive their normal wages for hours spent in such training and the training must not be job specific
  4. Public agency fire departments and police departments may establish a work period ranging from 7 to 28 days in which overtime need only be paid after a specified number of hours in each work period

The billionaires who own the media – Part 2

George Soros

Besides their age – 89 – George Soros (born Schwartz György) and Warren Buffett, profiled here last week (see Part 1), have much in common:

Both are billionaires. Both attempt to avoid publicity. Both have media empires.

George Soros

But, to borrow from the late JFK, Soros is no Warren Buffett.

The lovable Buffett is described as the “Oracle of Omaha” and promises to will nearly all his wealth to charity.

Soros almost destroyed the Bank of England and the Pound Sterling with his plotting in 1992.

Buffett is an investor. Soros is a hedge fund manager.

But regardless of differences, both have at least one thing in common – their major power in the publishing world and ability to wield political power with both Democrats and Republicans.

Soros is a giant in the influence control world. Since 2002 his donations to think tanks and action groups total some $18 billion.

“Soros: The Life and Times of a Messianic Billionaire,” explains Soros’ media obsession from when his early career interests were “history or journalism or some form of writing.” He was “editor-in-chief and publisher of his own newspaper, “The Lupa News.” From this small venture, Soros has grown his interests into an influence empire.

Soros supports organizations that are so-called sources for journalists, as well as non-profit newspapers.

In addition, he funds groups like Moveon.org, but those organizations are not included in the following list of Soros-funded members of The Institute for Nonprofit News (INN):


 

The billionaires who own the media – Part 1

Warren Buffett

BH Media Group serves communities in 10 states. We own and operate 30 daily newspapers along with their digital sites. BH Media also publishes 47 paid weekly newspapers and 32 other print products.

If you ever wondered what billionaires do with their money, besides buying 600-foot yachts and $100 million NYC penthouses – think media and the power it offers to often otherwise shallow money-grubbers.

Warren Buffett

A certain exception to the stupidity charge is Warren Buffet, 89, who has managed to keep a low-key public image and enjoy a relatively modest personal life. What Buffett does with his money is accumulate power by investing in our largest corporations.

When it comes to rich folks owning your company, you can bet employees are not only grateful for their jobs, but also willing to suspend belief and think they agree with the owner’s whims and even political stances.

Nobody wants to make the boss unhappy, not even editors of newspapers and producers of tv shows.

Which brings me to newspapers and Buffett’s holdings.

Buffett has long been a big shot in the publishing world, and his Berkshire Hathaway (BH) owned 1.7 million shares in Graham Holdings, the Washington Post’s parent company. In 2013 the richest man in the world, Jeff Bezos, bought the Post, and made a deal with Buffett, the third richest man in the world, to divest BH shares.

Buffett then bought Media General (MG), a newspaper group with influence in political swing states like Virginia (30 papers) and nine papers that cover the “mid-south,” which includes Florida. All together, he has 77 newspapers in the MG group.

Other newspapers in the Buffett stable include the Buffalo News and Omaha World-Herald.

While all owners of newspapers say their staff has “editorial independence”, even a NYT Opinion Page writer is smart enough to know that an expose of the boss’ affair with the head of the press room, will not help your career and dismissal is a matter of when, not if.

Editors and reporters toe the line and “consult” with owners before even thinking of humiliating the person who pays their salary.

So, what Buffett believes is important because he is a publishing and corporate powerhouse.

Son of a Congressman, Buffett established the Susan Thompson Buffett Foundation, named after his late wife, and has donated heavily to liberal groups:

  • Planned Parenthood: $289 million
  • Marie Stopes International: $211 million
  • National Abortion Federation: $85 million
  • DKT International: $78 million
  • Engender Health: $32 million
  • Guttmacher Institute: $29 million
  • NARAL: $24 million

Regardless of where you stand on the parameters of abortion, the media has been very careful not to involve Buffett in the controversy, despite his huge financial contributions to one side of the issue.:

Out of the 545 stories and interviews with Buffett on ABC, CBS and NBC since 2001, the networks only mentioned his abortion funding once, and even that was only a passing reference to his wife’s support of Planned Parenthood. Not once did the networks mention how much money Buffett poured into the abortion industry. – Media Research Center

Buffett is sincere in his abortion stance:

Before Roe v. Wade, abortion was only legal in California, so Buffett sponsored the Ecumenical Fellowship – a so-called “church” that would arrange the abortions for women from other states, and plan their travel arrangements. Eventually, the Ecumenical Fellowship merged with the Los Angeles chapter of Planned Parenthood. – Live Action

Not only are newspapers he owns influenced by his politics (he supported Hillary Clinto against Barack Obama), but he may have the most influence on many of America’s leading corporations, their executives and their major shareholders.

Only a fool would like to disagree with an investor, who owns millions, even billions of dollars in their company stock.

There’s no simple way to end the power of the rich over the companies where we work and the newspapers we read – unless we tax the very rich enough to keep them just “medium” rich.

The following are Berkshire Hathaway minority holdings in companies, their stock shares owned by BH & value of Buffett investments ($100 million cutoff):

Apple 255,300,329 $40,271,000,000
Bank of America 918,919,000 $22,642,000,000
Wells Fargo and Co 449,349,102 $20,706,000,000
The Coca-Cola Company 400,000,000 $18,940,000,000
American Express 151,610,700 $17,777,870,682
The Kraft Heinz Company 325,634,818 $10,609,182,370
U.S. Bancorp 146,346,999 $6,688,000,000
JPMorgan Chase & Co. 50,661,394 $4,946,000,000
Mondelēz International 24,669,778 $4,659,627,669
Bank of New York Mellon Corp 84,488,751 $3,977,000,000
Moodys Corp 24,669,778 $3,455,000,000
Delta Air Lines, Inc. 65,535,000 $3,270,000,000
Goldman Sachs 18,784,698 $3,138,000,000
General Motors 72,269,696 $2,715,895,176
Verisign Inc 12,952,745 $2,509,335,289
Southwest Airlines Co 47,890,899 $2,226,000,000
DaVita Inc. 38,565,570 $2,020,064,557
Charter Communications, Inc. 6,789,054 $1,935,000,000
United Continental Holdings 21,938,642 $1,837,000,000
Visa Inc 10,562,460 $1,687,986,733
American Airlines 43,700,000 $1,483,615,000
Liberty Sirius XM Group Series 31,090,985 $1,224,984,809
Mastercard 4,934,756 $1,210,544,994
PNC Financial Services Group 8,263,062 $1,090,228,400
Costco Wholesale Corporation 4,333,363 $1,055,043,890
Phillips 66 11,895,842 $1,020,068,452
Amazon 483,300 $904,000,000
Travelers Companies Inc 5,958,391 $845,078,596
Sirius XM Holdings Inc. 137,915,729 $787,498,813
Red Hat Inc. 4,175,792 $771,059,993
Synchrony Financial 20,803,000 $715,623,200
Axalta Coating Systems 24,264,000 $630,378,720
Teva Pharmaceutical Industries 43,249,295 $625,817,299
Store Capital Corp. 18,621,674 $617,680,927
Liberty Sirius XM Group Series 14,860,360 $582,526,112
Restaurant Brands Int. 8,438,225 $565,445,457
Torchmark Corporation 6,353,727 $553,663,771
Liberty Global A Class 19,791,000 $520,305,390
StoneCo Ltd. 14,166,748 $392,277,252
Suncor Energy Inc. 10,758,000 $347,913,720
Liberty Global C Class 7,346,968 $188,229,320

And these are Berkshire’s wholly owned subsidiaries

Acme Brick Company
AltaLink
Ben Bridge Jeweler
Benjamin Moore & Co.
Berkadia
Berkshire Hathaway Assurance
Berkshire Hathaway Automotive
Berkshire Hathaway Energy
BoatUS
Borsheim’s Fine Jewelry
Brooks Sports
The Buffalo News
Burlington Northern Santa Fe Corporation
Business Wire
Cavalier Homes
Central States Indemnity
Charter Brokerage
Clayton Homes
CORT Business Services
CTB Inc.
Dairy Queen
Duracell
Ebby Halliday Companies
Fechheimer Brothers Company
FlightSafety International
Forest River
Fruit of the Loom
Garanimals
GEICO
General Re
Helzberg Diamonds
H.H. Brown Shoe Group
International Metalworking Companies (IMC)
Johns Manville
Jordan’s Furniture
Justin Brands
Kansas Bankers Surety Company
Kern River Pipeline
Larson-Juhl[41]
Louis Motor
Lubrizol
Marmon Group
McLane Company
Medical Protective
MiTek
National Indemnity Company
Nebraska Furniture Mart
NetJets
NetJets Europe
Northern Natural Gas
NV Energy
Omaha World-Herald
Oriental Trading Company
PacifiCorp
Pampered Chef[63]
Pilot Flying J
Precision Castparts Corp.
Precision Steel Warehouse, Inc.
RC Willey Home Furnishings
Richline Group
Russell Brands
Scott Fetzer Company
See’s Candies
SE Homes
Shaw Industries
Star Furniture
TTI, Inc.
United States Liability Insurance Group
Wesco Financial
WPLG-TV
XTR

China’s companies win the race for producing employment giants, dwarfing American firms like GM, Apple or Exxon

Longhua Subdistrict, Shenzhen

When you don’t count Walmart, the largest employers in the world, are in China, not the United States.

And the biggest firms in China are industrial and manufacturing companies, not a low-wage retailer

China National Petroleum (1,636,532), China State Grid (913,546), Foxconn (803,126) and Sninopec (667,799) together employ 4,021,003 workers.

Foxconn is well known in the U.S. for producing Apple phones in Longhua Town, Shenzhen, in the south of China.

Hundreds of thousands of workers (counts vary between 230,000 and 450,000) are employed in the walled campus of Foxconn City, one of many factory locations.

Like America’s Gilded Age company towns, Foxconn Campus includes 15 factories, worker dormitories, four swimming pools, a fire brigade, its own television network, and a city center with company grocery store, bank, restaurants, bookstore, and hospital.

Compare firms like Foxconn to the closest American industrial company – General Electric (313,000) – which has its workforce here and in China, according to a GE document:

GE China houses over 20,000 employees, 30 manufacturing bases, and more than 30 joint ventures, with a presence across 40 cities in the country. It also houses R&D teams in 8 cities in China. In 2017, GE’s orders in China amounted to US $8.1 billion.

One unfair tax advantage to America is that a firm’s China operations can help to avoid paying anything in support of our public needs. Our largest industrial employer may be a good example. The NY Times reported that between 2008 and 2015:

General Electric, International Paper, Priceline.com and PG&E, incurred a total federal income tax bill of less than zero over the entire eight-year period — meaning they received rebates.

But China’s dominance is not just in manufacturing and industrial employment, it far outpaces us in finance.

China has the largest major bank employment in the world: Agricultural Bank of China (491,578), Industrial Bank of China (433,048), China Construction Bank (370,415), Bank of China (311,133), and China State Construction (270,467).

Our largest bank, JPMorgan Chase, has 252,539 workers, many overseas.

These statistics lead to the conclusion that a socialist economic system, like China, does create jobs, even while guaranteeing healthcare and other services – benefits usually only for purchase in America. While China concentrates on increasing factories and employment in its own country, U.S. firms often do the opposite.

Meanwhile, China’s average wage is $12,000 in American dollars, compared to $6,900 in 2011, and $31,000 here. The government also requires employers to provide ten paid holidays, five to 15 paid vacation days, as well as up to 98 days of paid maternity leave, plus paternity leave that varies between 7 and 20 days. Workers must receive 30 days notice of layoffs, and sign an employer/employee contract.

China’s elected and appointed officials have the major voice in determining economic policy on a company-by-company basis. For example, products of China are free of VAT and other taxes when exported to the rest of the world. Imports are always taxed with the VAT, as well as tariffs that can often even double prices.

In the United States, the opposite is true. In recent years both political parties have allowed corporate interests to dictate public policy to government officials. And since corporations own all major media outlets, this corporate capitalism is promoted at all turns.

Most European nations have compromised on near-absolute control of government by corporations (U.S.) and absolute control of corporations by government (China). In varying degrees these countries attempt to blend the best of two economic/political systems.

Americans often cannot afford to pay for nursing homes, drugs, or childcare.

Chinese workers currently have lower pay, stricter working conditions, and face a government that controls most aspects of their lives.

Compromise, anyone, for the public good?

Name Industry Revenue
USD millions
Workers Nations
Walmart Retail $500,343 2,300,000 United States
China National Petroleum Oil and gas $326,008 1,636,532 China
State Grid Electricity $348,903 913,546 China
Foxconn Electronics $154,699 803,126 Taiwan
Tata Group Conglomerate $110,700 702,454 India
Sinopec Oil and gas $326,953 667,793 China
Volkswagen Automotive $260,028 642,292 Germany
Amazon Retail $177,866 566,000 United States
Agricultural Bank of China Financials $122,366 491,578 China
Gazprom Oil and gas $111,983 469,600 Russia
Industrial Bank of China Financials $153,021 453,048 China
Kroger Retail $122,662 449,000 United States
Berkshire Hathaway Financials $242,137 377,000 United States
China Construction Bank Financials $138,594 370,415 China
Toyota Automotive $265,172 369,124 Japan
Ping An Insurance Financials $144,197 342,550 China
Samsung Electronics $211,940 320,671 South Korea
General Electric Conglomerate $122,274 313,000 United States
Bank of China Financials $115,423 311,133 China
Exor Financials $161,677 307,637 Italy
Walgreens Boots Alliance Pharmaceuticals $118,214 290,000 United States
Daimler Automotive $185,235 289,321 Germany
China State Construction Construction $156,071 270,467 China
United Health Healthcare $201,159 260,000 United States
AT&T Telecom $160,546 254,000 United States
JPMorgan Chase Financials $113,899 252,539 United States
Japan Post Holdings Conglomerate $116,616 245,863 Japan
Honda Automotive $138,646 215,638 Japan
CVS Health Healthcare $184,765 203,000 United States
Ford Automotive $156,776 202,000 United States
BNP Paribas Financials $117,375 189,509 France
Costco Retail $129,025 182,000 United States
General Motors Automotive $157,311 180,000 United States
China Life Insurance Financials $120,224 170,517 China
Verizon Telecom. $126,034 155,400 United States
SAIC Motor Automotive $128,819 148,767 China
Allianz Financials $123,532 140,553 Germany
Apple Electronics $229,234 123,000 United States
Total Oil and gas $149,099 98,277 France
AXA Financials $149,461 95,728 France
Royal Dutch Shell Oil and gas $311,870 84,000 Netherlands United Kingdom
Glencore Mining $205,476 82,681 Switzerland
BP Oil and gas $244,582 74,000 United Kingdom
Exxon Mobil Oil and gas $244,363 71,200 United States
McKesson Healthcare $208,357 68,000 United States
Chevron Oil and gas $134,533 51,900 United States
Cardinal Health Pharmaceuticals $129,976 40,400 United States
AmerisourceBergen Pharmaceuticals $153,144 19,500 United States
Fannie Mae Financials $112,394 7,200 United States
Trafigura Commodities $136,421 3,935 Singapore
Workers line up, ready to manufacture Apple phones in China

Seven men together are twice as rich as 16,800,000 median Black households, or 42,000,000 citizens

They are all white.

They are all men.

They are all rich.

But you never hear politicians, professors or protestors criticize these richest men in America, because wealth has its privileges and allows immense power.

It’s not just being able to buy your children entrance into the best colleges, or owning a $100 million house that you visit for just one week in the summer, or traveling in private jets, or even owning yachts that can cost as much as Queen Mary 2.

Great wealth also allows you to pay for political campaigns and earn eternal gratitude and favors to you and your elite class.

For a dire lesson in inequality, contrast the entitled rich to the median Black family in America, whose net worth is $16,300.

There are 16.8 million Black families, which equals 42 million individuals. Together, their total wealth is $274 billion, less than $7,000 a person.

If you are super rich it doesn’t take long to make that Black person’s $7,000 in net wealth. For example, last year Jeff Bezos earned $7,000 every five seconds of every minute of every hour of every day for 365 days.

Jeffrey Preston Bezos

Three men have more combined wealth than all 42,000,000 Black citizens of America – Jeff Bezos ($145 billion), William Gates ($99 billion), and Warren Buffett ($85 billion) – a total of $330 billion, versus national median Black wealth of $274 billion.

Add four more men – Larry Ellison ($65 billion), Mark Zuckerberg ($61 billion), Michael Bloomberg ($57 billion) and Larry Page ($55 billion) – and you reach a total of $567 billion – more than twice the wealth ($274 billion) of America’s Black citizens.

That $567 billion is enough to send a check for $5,670 to every family (100 million) in America. It could build 100,000 schools at a cost of $5.67 million each, or buy 22,680,000 new cars at $25 grand apiece.

After the top seven  the Charles and David Koch have $50.5 billion each. Those sons of the founder of the John Birch Society are the same guys who invested $800 million in the last election to put their candidates into office. That was less than one percent of their wealth and it created a host of friends in high places.

Worldwide, there are 2,153 billionaires, including 256 women, with a total wealth of $9.1 trillion, up from $7.6 trillion last year, proving once again that the rich do indeed get richer and richer, year after year.

The following video with Jane Goodall and others from DAVOS 2019 is more than worthwhile to watch:

 

The very rich cannot only pay for QM2-size yachts, they have enough $$ to purchase entire nations!

Captain Kevin Oprey stands in front of the Queen Mary 2.

Instead of playing the lottery or completing my 2018 Income Tax, yesterday I imagined I was Jeff Bezos

It was a typical day with nothing to do except harass the workers at Whole Foods, so I decided to buy a boat.

But not just any boat. A big boat – in fact, a ship. Large enough to carry all my “friends” and impress the other rich folks, including Zuckerberg and Gates and that goofy, Bloomberg guy .

My third-assistant personal manager (day side) had a suggestion – build a yacht that’s a duplicate of Queen Mary 2 (QM2). He explained the benefits:

  • At 151,200 tons, the ship will handle the biggest storms.
  • It will carry 2,620 passengers.
  • The 1,253 crew will give great service
  • The ship will go 30 knots an hour, so pirates – no problem..
  • The cost was only $521 million to create it.
  • Our China connection means we can surely build it cheaper.

Being brave Bezos, I decided to ahead, but I had to ask my accountant, where could we get the money? He was right on top of the problem:

Jeff, not to worry. We’ll only have to use the income that we earned one week last year. We’ll pay cash.

This was surprising. Was there a week last year when I made enough money to pay for QM2?

My accountant explained that the Bezos’ holdings made him personally enough income in 2018 to buy a new QM2 every week.

“Actually,” he said with a pensive stare, “you earned almost enough to buy two QM2s every week last year.”

Enough musing….

Time for me to wake up and finish my income taxes.

Same earnings. Same expenses as last year. New law says I have to pay more, thanks to bipartisan collusion in Congress.

Now, back to Bezos. He is not alone in having obscene wealth.

If we add up the fortunes of the top ten richest persons in the world, the total is $808 billion.

Here’s the list:

1:   $140,000,000,000.00Jeffrey Preston Bezos
2:   $97,000,000,000.00…..Charles & David Koch*
3:   $93,500,000,000.00…..William Henry Gates III
4:   $84,300,000,000.00…..Warren Edward Buffett
5:   $83,200,000,000.00…..Amancio Ortega Gaona
6:   $72,200,000,000.00…..Mark Elliot Zuckerberg
7:   $69,700,000,000.00…..Carlos Slim Helu
8:   $62,100,000,000.00…..Lawrence Joseph Ellison
9:   $53,300,000,000.00…..Michael Rubens Bloomberg
10: $53,000,000,000.00…..Bernard Jean Étienne Arnault

*Two Koch brothers worth $48.5 billion each!

Did you ever wonder what would happen if these rich men decided to pool their $808 billion and make really big purchases – for example – entire nations, based on each country’s net worth?

Pick one or more, depending on where you stand in the top ten:

 South Africa $786 Billion
 Finland $697 Billion
U. A. E.  $684 Billion
 Colombia  $616 Billion
 Malaysia  $598 Billion
 Thailand  $525 Billion
 Czech Rep.  $524 Billion
 Philippines  $518 Billion
 Peru  $467 Billion
 Pakistan  $422 Billion
 Argentina  $345 Billion
 Romania  $317 Billion
 Vietnam  $307 Billion
 Hungary  $294 Billion
 Kuwait  $278 Billion
 Iran  $272 Billion
 Iraq  $272 Billion
 Qatar  $265 Billion
 Bangladesh  $240 Billion
 Morocco  $216 Billion
 Libya  $252 Billion
 Algeria  $241 Billion
 Egypt  $212 Billion
 Luxembourg  $188 Billion
 Slovakia  $151 Billion
 Oman  $144 Billion
 Lebanon  $140 Billion
 Nigeria  $139 Billion
 Iceland  $138 Billion
 Bulgaria  $138 Billion
 Slovenia  $133 Billion
 Croatia  $120 Billion
 Tunisia  $120 Billion
 Ecuador  $116 Billion
 Costa Rica  $111 Billion
 Angola  $102 Billion
 Uruguay  $97 Billion
 Cyprus  $91 Billion
 Sri Lanka  $82 Billion
 Panama  $77 Billion
 Serbia  $73 Billion
 Jordan  $72 Billion
 Kazakhstan  $62 Billion
 El Salvador  $61 Billion
 Estonia  $60 Billion
 Honduras  $58 Billion
 Kenya  $57 Billion
 Lithuania  $57 Billion
 Ukraine  $55 Billion
 Latvia  $53 Billion
 Myanmar  $52 Billion
 Azerbaijan  $52 Billion
 Georgia  $49 Billion
 Malta  $49 Billion
 Bolivia  $48 Billion
 Bahamas  $45 Billion
 Bosnia  $40 Billion
 Paraguay  $38 Billion
 Albania  $37 Billion
 Turkmenistan  $37 Billion
  Nepal  $35 Billion
 Mauritius  $34 Billion
 Ivory Coast  $34 Billion
 Cambodia  $33 Billion

Finally, imagine you plan to please the wife on Valentine’s Day, even though you’re on the bottom of the top ten list:

Hon, have I got a surprise for you. We’re taking a trip on an ocean liner – the CEO Bezo 1. And, we’re going to the Bahamas.

“Why the Bahamas,” she asks. “We’ve been there a dozen times.”

“Because I’m going to greet my people. I just bought the entire country for $41 billion – a ten percent discount off of book value.”

I didn’t mention that Jeff just settled on the combined purchase of Bolivia and Paraguay for his latest mistress. Soon enough, my wife will read about it in the National Enquirer or People Magazine

It’s hard to keep up with the Bezos.