The American Dream Is Alive and Well—in China

Posted on June 14, 2019 by Ellen Brown (ellenbrown.com)

Home ownership has been called “the quintessential American dream.” Yet today less than 65% of American homes are owner occupied, and more than 50% of the equity in those homes is owned by the banks. Compare China, where, despite facing one of the most expensive real estate markets in the world, a whopping 90% of families can afford to own their homes.

Over the last decade, American wages have stagnated and U.S. productivity has consistently been outpaced by China’s. The U.S. government has responded by engaging in a trade war and imposing stiff tariffs in order to penalize China for what the White House deems unfair trade practices. China’s industries are said to be propped up by the state and to have significantly lower labor costs, allowing them to dump cheap products on the U.S. market, causing prices to fall and forcing U.S. companies out of business. The message to middle America is that Chinese labor costs are low because their workers are being exploited in slave-like conditions at poverty-level wages.

But if that’s true, how is it that the great majority of Chinese families own homes? According to a March 2016 article in Forbes:

… 90% of families in the country own their home, giving China one of the highest home ownership rates in the world. What’s more is that 80% of these homes are owned outright, without mortgages or any other liens. On top of this, north of 20% of urban households own more than one home.

Due to their communist legacy, what Chinese buyers get for their money is not actually ownership in perpetuity but a long-term leasehold, and the quality of the construction may be poor. But the question posed here is, how can Chinese families afford the price tag for these homes, in a country where the average income is only one-seventh that in the United States?

The Misleading Disparity Between U.S. and Chinese Incomes

Some commentators explain the phenomenon by pointing to cultural differences. The Chinese are inveterate savers, with household savings rates that are more than double those in the U.S.; and they devote as much as 74%of their money to housing. Under China’s earlier one-child policy, many families had only one heir, who tended to be male; and home ownership was a requirement to score a wife. Families would therefore pool their resources to make sure their sole heir was equipped for the competition. Homes would be purchased either with large down payments or without financing at all. Financing through banks at compound interest rates doubles the cost of a typical mortgage, so sidestepping the banks cuts the cost of housing in half.

Those factors alone, however, cannot explain the difference in home ownership rates between the two countries. The average middle-class U.S. family could not afford to buy a home outright for their oldest heir even if they did pool their money. Americans would be savers if they could, but they have other bills to pay. And therein lies a major difference between Chinese and American family wealth: In China, the cost of living is significantly lower. The Chinese government subsidizes not only its industries but its families—with educational, medical and transportation subsidies.

According to a 2017 HSBC fact sheet, 70% of Chinese millennials (ages 19 to 36) already own their own homes. American young people cannot afford to buy homes because they are saddled with student debt, a millstone that now averages $37,000 per student and will be carried an average of 20 years before it is paid off. A recent survey found that 80% of American workers are living paycheck to paycheck. Another found that 60% of U.S. millennials could not come up with $500 to cover their tax bills.

In China, by contrast, student debt is virtually nonexistent. Heavy government subsidies have made higher education cheap enough that students can work their way through college with a part-time job. Health care is also subsidized by the government, with a state-run health insurance program similar to Canada’s. The program doesn’t cover everything, but medical costs are still substantially lower than in the U.S. Public transportation, too, is quite affordable in China, and it is fast, efficient and ubiquitous.

The disparity in incomes between American and Chinese workers is misleading for other reasons. The “average” income includes the very rich along with the poor; in the U.S., the gap between those two classes is greater than in China. The oversize incomes at the top pull the average up.

Even worse, however, is the disparity in debt levels, which pulls disposable income down. A survey after the 2008-09 credit crisis found that household debt in the U.S. was 136% of household income, compared with only 17% for the Chinese.

Another notable difference is that 70% of Chinese family wealth comes not from salaries but from home ownership itself. Under communism, all real property was owned by the state. When Deng Xiaoping opened the market to private ownership, families had an opportunity to get a home on reasonable terms; and as new homes were built they traded up, building the family asset base.

Deng’s market liberalization also gave families an income boost by allowing them to become entrepreneurs. New family-owned businesses sprang up, aided by affordable loans. Cheap credit from state-owned banks subsidized state-affiliated industries as well.

“Quantitative Easing With Chinese Characteristics”

All this was done with the help of China’s federal government, which in recent decades has pumped massive amounts of economic stimulus into the economy. Unlike the U.S. Federal Reserve’s quantitative easing, which went straight into big bank reserve accounts, the Chinese stimulus has generated new money for productive purposes, including local business development and infrastructure. Sometimes called “qualitative easing,” this “quantitative easing with Chinese characteristics” has meant more jobs, more GDP and more money available to spend, which in turn improves quality of life.

The Chinese government has done this without amassing a crippling federal debt or triggering runaway inflation. In the last 20 years, its M2 money supply has grown from just over 10 trillion yuan to 80 trillion yuan ($11.6T), a nearly 800% increase. Yet the inflation rate of its Consumer Price Index (CPI) has remained low. In February of this year, it was just 1.5%. In May it rose to 2.7% due to an outbreak of swine fever, which drove pork prices up; but this was a response to shortages, not to an increase in the money supply. Radically increasing the money supply has not driven consumer prices up because GDP has increased at an even faster rate. Supply and demand have risen together, keeping consumer prices low.

Real estate prices, on the other hand, have skyrocketed 325% in the last two decades, fueled by a Chinese shadow banking system that is largely beyond regulatory control. Pundits warn that China’s housing is in an unsustainable bubble that will pop, but the Chinese housing market is still more stable than the U.S. subprime market before 2008, with its “no-doc no-down” loans. Chinese buyers typically put 40 to 50% down on their homes, and the demand for houses remains high. The central bank is also taking steps to cool the market, by targeting credit so that it is steered away from real estate and other existing assets and toward newly-produced goods and services.

That central bank intervention illustrates another difference between Chinese-style qualitative easing and Western-style QE. The People’s Bank of China is not trying to improve banking sector liquidity so that banks can make more loans. Chinese economists say they don’t need that form of QE. China’s banks are already lending, and the central bank has plenty of room to manipulate interest rates and control the money supply. China’s central bank is directing credit into the local economy because it doesn’t trust the private financial market to allocate credit where local markets need it. True to its name, the People’s Bank of China seems actually to be a people’s bank, geared to serving the economy and the public rather than just the banks themselves.

Time for More QE?

In early April, President Trump said in one of his many criticisms of the U.S.  central bank that he thought the Fed should be doing more quantitative easing (expanding the money supply) rather than quantitative tightening (shrinking the money supply). Commentators were left scratching their heads, because the official U.S. unemployment rate is considered to be low. But more QE could be a good idea if it were done as Chinese-style qualitative easing. A form of monetary expansion that would allow Congress to relieve medical and educational costs, grant cheap credit to states to upgrade their roads and mass transit, and support local businesses could go a long way toward making American workers competitive with Chinese workers.

Unlike the U.S. government, the Chinese government supports its workers and its industries. Rather than penalizing China for that “unfair” trade practice, perhaps the U.S. government should try doing the same. China’s legacy is socialist, and after opening to international trade it has continued to serve the collective good, particularly of its workers. Meanwhile, the U.S. model has been regressing into feudalism, with workers driven into slave-like conditions through debt. In the 21st century, it is time to upgrade our economic model from one of feudal exploitation to a cooperative democracy that recognizes the needs, contributions and inalienable rights of all participants.

___________________________

This article was first published on Truthdig.org. Ellen Brown is an attorney, founder of the Public Banking Institute, and author of thirteen books including Web of Debt andThe Public Bank SolutionHer latest book is Banking on the People: Democratizing Money in the Digital Age, published by the Democracy Collaborative. She also co-hosts a radio program on PRN.FM called “It’s Our Money.” Her 300+ blog articles are posted at EllenBrown.com.

Public Banks Are a Safer Alternative to Wall Street

Go to the profile of California Public Banking Alliance

California Public Banking AllianceMay 28, 2019

By David Jette (medium.com)

“It is hopeless to seek a better way, turn back” is the tired old refrain of the Wall Street lobby and their reliable allies who oppose even the exploration of public banking by California cities and counties. In Monday’s Los Angeles Times’ Editorial, “A public bank would be risky, expensive and a potential waste of tax dollars,” the Times takes a disconcertingly hardline position against a bill that will provide Californians with an alternative to predatory Wall Street banks.

To be clear: AB 857 (Assemblymembers David Chiu and Miguel Santiago) does not mandate the creation of a state or public bank, nor does it dictate what towns and cities should do with their money. It opens the door for localities to explore a public banking option responsibly with legislated transparency and oversight.

Wall Street megabanks can no longer wish away or deny the failures of their industry and the harm that it has caused to California. In 2008–2009, risky bets made by Wall Street banks collapsed the world economy and led to the loss of billions of dollars in public funds and millions of jobs and homes, amplifying the already destructive social and racial wealth gap. These bets were made by the very same banks that currently hold the deposits and investments of California taxpayer funds. From 2008 to 2012 alone, the Federal Deposit Insurance Corporation closed 465 private banks. During the turmoil of the Great Recession, some of these banks collapsed on improperly papered home loans, executing illegal foreclosures on people living in California cities and counties, stealing their nest eggs and putting families on the streets.

From Main Street to Wall Street: the six biggest banks in the country received a massive wealth transfer of more than $8.2 trillion from American taxpayers during the 2008 financial crash. Source: Better Markets.

Millions of Californians in support of AB 857 from San Diego to Eureka are standing up to say “Enough!” and prevent these banks from doing business with public entities. From Los Angeles to San Francisco through other cities across the state, divestment movements demand that our public funds no longer be entrusted to Wall Street greed and shameless destruction of our communities and the environment.

The problem cities face in divesting from these banks, which have failed in their basic civic duties, is that nearly all major banks are guilty of predatory behavior. The City of San Jose, for example, must decide between ignoring Wells Fargo’s less than satisfactory CRA rating (cited in the LA Times no less), or waiving their Wage Theft prevention policy to hire JP Morgan Chase. Either way, the city must compromise its ethical investment responsibilities because its financial options are limited — limitations that the Editorial Board and Wall Street seek to preserve.

That is why city after city is endorsing AB 857, which will establish the framework for chartering and regulating public banks in California by giving localities a responsible option for banking our funds. A public bank’s mission is to benefit the city or region that it serves: wealth is reinvested locally.

The interest and profit of a public bank belongs to the community.

This bill defines a public bank as being different than any other commercial bank in only one way — public banks will be owned in full by the city or county which funds them. Unlike private banks, no private shareholders will benefit from the activity of a public bank — the interest and profit earned by a public bank belongs to the community.

AB 857 answers the specific state-level questions that feasibility studies in Los Angeles, San Francisco and Oakland have already raised: public deposits will be fully insured and fully collateralized; and all banks must be approved by state and federal regulators as well as local governing bodies. They will be run as independent corporations, with professional management and a demonstrable separation of lending authority from elected officials, to prevent political patronage and to insulate localities from potential risk. As public entities, they will be fully transparent, ensuring freedom from corruption.

Opponents lean on flawed studies that say public banks would be too expensive while forgetting that Wall Street has already evaporated billions of the state’s wealth and triggered widespread austerity in the wake of their malfeasance, causing teachers, social workers, and public safety workers to lose their jobs and pensions. Wall Street banks want us to keep relying on megabanks while ignoring their track record of excessive risk and ethical transgressions. They point to long-past efforts to found public banks in the US, while staring right past the devastation their industry has caused for the climate and for working people.

Why do we rely on privately owned, shareholder-focused firms with little accountability and a history of catastrophic greed and error when another model is so successful in North Dakota, Germany, Costa Rica, and elsewhere?

Public banking advocates from the California Public Banking Alliance in Sacramento for Lobby Day, May 2019.

We appreciate the Times’ observation that public banking advocates are persistent. We are. The banks are waging an asymmetrical fight against our grassroots volunteer effort. Nevertheless, we persist. Public banking advocates from a dozen cities and regions, hand-in-hand with organized labor, climate justice and housing activists, advocates for responsible government, and players from the fintech and social finance industries are working daily to bring this public banking option to California.

A vote for AB 857 is a vote to give Californians financial freedom from a Wall Street status quo that is completely divorced from the wellbeing of our communities. California cities and counties need a better way to bank, both for their financial security and integrity, and for the future of our economy and our planet.

Go to the profile of California Public Banking Alliance

California Public Banking Alliance

We are a coalition of public banking activists in California working to create socially and environmentally responsible city and regional public banks.

Bleeding John Bolton Stumbles Into Capitol Building Claiming That Iran Shot Him

5/17/19 (theonion.com)

Illustration for article titled Bleeding John Bolton Stumbles Into Capitol Building Claiming That Iran Shot Him

WASHINGTON—Bursting through the Congressional chamber doors while moaning and clutching his shoulder, John Bolton reportedly stumbled into the Capitol building Friday claiming that he’d been shot by Iran. “Help, help, I’ve just been attacked by a large Middle Eastern country around 636,000 square miles in size,” said the national security advisor, telling those assembled that he’d just been minding his own business when an aggressive Islamic Republic had thrown him on the ground and shot him with a long-range missile. “Right after Iran shot me, I heard the nation laugh and say ‘Somebody stop me before I go on a homicidal rampage.’ It was acting crazed and irrational, and I could smell enriched uranium coming from one of its urban centers. Please, hurry, if we move quickly, we might still be able to catch it before it’s too late.” Upon further questioning, Bolton admitted that the incident had happened so fast that it was possible he’d been attacked by Venezuela or North Korea. 

Candlelight vigil held in Hong Kong to mark Tiananmen Square massacre

Guardian News Published on Jun 4, 2019

Thousands of pro-democracy activists in Hong Kong gathered on Tuesday night to mark 30 years since China’s bloody crackdown on pro-democracy protesters in Beijing’s Tiananmen Square. Hong Kong is the only region under Beijing’s jurisdiction that holds significant public commemorations of the 1989 violence. Hong Kong has a degree of freedom not seen on the mainland as a legacy of British rule that ended in 1997.

Subscribe to Guardian News on YouTube ► http://bit.ly/guardianwiressub Tiananmen Square massacre marked with Hong Kong vigil ► https://www.theguardian.com/world/201…

Beijing silent as tight security surrounds Tiananmen Square anniversary ► https://www.theguardian.com/world/201…

‘We must do more than remember’: what Tiananmen means to the Chinese diaspora ► https://www.theguardian.com/world/201…

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Hong Kong police clash with people protesting China extradition bill

FRANCE 24 English Published on Jun 12, 2019 Subscribe to France 24 now: http://f24.my/youtubeEN FRANCE 24 live news stream: all the latest news 24/7 http://f24.my/YTliveEN

Hong Kong police fired tear gas and pepper spray Wednesday at bottle-throwing demonstrators in a major escalation of public anger against an extradition bill that would allow people to be sent to mainland China for trial.

Visit our website: http://www.france24.com

Extinction Rebellion

International Highlights (rebellion.earth)

XR Berlin: Chained to the Chancellery

11 June | Berlin

Rebels in Berlin have chained themselves to the Chancellery fence in a bid to attract Angela Merkel’s attention and persuade the government to declare a climate emergency. In a twist on the standard ‘lock-in’ action, they have mailed the keys to release them to 13 government ministries, accompanied by a letter detailing their specific demands.

XR Netherlands

11 June | The Hague

Rebels in the Netherlands have been seeking to transmit their message of emergency to Dutch politicians. Having tried letters and polite words in May, and seeing little change they came back on Tuesday with banners and chants, disrupting the chamber after a motion on biodiversity was opposed.

XR Italy

1 June | Rome

Rebels took to the streets in a critical mass of bicycles.

XR Moldova

1 June | Chisinau

XR Canada

1 June | Peterborough

A Dance of Life and Death in Ontario saw over 75 people march downtown raising awareness on the climate crisis. The protest included street theatre, animal masks, and music raising the spirit to stop ecological collapse and species extinction.

XR Mexico

2 June | Zocalo, Mexico City

XR Mexico held a dramatic die-in around the flagpole in the central square outside the National Palace in Mexico City. At the action, speeches were heard from XR, Fridays for Futures, and other partners, and rebels held fun, family-friendly activities like face painting and up-cycling workshops to engage the public.

XR Argentina

4 June | National Museum of Fine Art, Buenos Aires, Argentina

XR Argentina made their non-violent direct action debut this week, staging a die-in at an iconic Argentine cultural institution, the National Museum of Fine Art in Buenos Aires. During the hour-long die-in, they announced XR’s 3 demands and called for their government to act now in the face of the current ecological and climate emergency.

Held on the eve of World Environment Day, this action marks the beginning of a series of rebellious actions for XR Argentina that will demand an answer from the government.

Here’s the link to download a video of the action.

XR Switzerland

6 June | Bern

Rebels from all over Switzerland gathered in Bern at Swiss Parliament’s opening summer session. Walking from the Bundesplatz to mourn the beings who are already dying from the consequences of pollution, the destruction of natural habitats, intensive hunting and fishing, agricultural production methods and climate change, the protesters stopped in front of Parliament and spilled ‘blood.’ Together, rebels lay down in the public space and staged a die-in in homage to the victims of past and present ecocides.

XR Colombia

8 June | Medellin

XR Colombia marched with the Carnival March this past Saturday to protest fracking and mining in the region. Check out this video from the event.

XR Youth US

Last week, XR Youth US held protests at City Hall in San Francisco and Times Square in NYC. Find out more on their website or check out their Instagram.

52 U.S. Code § 30121 – Contributions and donations by foreign nationals

(a) Prohibition It shall be unlawful for—

(1)foreign national, directly or indirectly, to make—

(A) a contribution or donation of money or other thing of value, or to make an express or implied promise to make a contribution or donation, in connection with a Federal, State, or local election;

(B) a contribution or donation to a committee of a political party; or

(C) an expenditure, independent expenditure, or disbursement for an electioneering communication (within the meaning of section 30104(f)(3) of this title); or

(2) a person to solicit, accept, or receive a contribution or donation described in subparagraph (A) or (B) of paragraph (1) from a foreign national.

(b) “Foreign national” defined

As used in this section, the term “foreign national” means—

(1) a foreign principal, as such term is defined by section 611(b) of title 22, except that the term “foreign national” shall not include any individual who is a citizen of the United States; or

(2) an individual who is not a citizen of the United States or a national of the United States (as defined in section 1101(a)(22) of title 8) and who is not lawfully admitted for permanent residence, as defined by section 1101(a)(20) of title 8.

(Pub. L. 92–225, title III, § 319, formerly § 324, as added Pub. L. 94–283, title I, § 112(2), May 11, 1976, 90 Stat. 493; renumbered § 319, Pub. L. 96–187, title I, § 105(5), Jan. 8, 1980, 93 Stat. 1354; amended Pub. L. 107–155, title III, §§ 303, 317, Mar. 27, 2002, 116 Stat. 96, 109.)

The SF Community Housing Act: Public Housing For Everyone

Op-Ed by Laksh Bhasin

In the era of Medicare for All and Childcare for All, let’s tax wealthy corporations and begin to create a right to shelter.

The United States has a long, racist, and classist history of defunding and privatizing federal public housing. The Bay Area isn’t any better and it’s time to change course.

From the beginning, New Deal public housing was segregated to benefit white voters. After World War II, the Federal Housing Administration used redlining to subsidize homeownership in the suburbs for white households, but refused to insure mortgages in black neighborhoods.

As “white flight” to the suburbs unfolded, intensifying segregation, the remaining public housing tenants lacked political power compared to white landowners and real-estate interests. Because of this, right-wing and neoliberal politicians found it easier to defund and demolish public housing. Nixon froze funds for public housing and celebrated the demolition of the iconic, predominantly black, Pruitt-Igoe project in St. Louis, Missouri. Reagan slashed tens of billions of dollars in funding for new public housing development under the guise of “balancing the budget.” Clinton halted the construction of new public housing. Obama passed the Rental Assistance Demonstration program in 2012 to privatize public housing, instead of funding over $25 billion in backlogged repairs. And Trump is working to gut HUD completely.

There are now only 1000 units of federal public housing in San Francisco, and a decent home is unaffordable to all but the very wealthy. Seventy percent of SF renters making less than $75,000 are rent-burdened, construction workers can’t afford to live here, and you may be out of affordable options yourself.

It’s time to reverse this trend. Let’s pass the SF Community Housing Act (SFCHA) and fund “universal public housing” — self-sustainable City-owned housing available to anyone who lives, works, or studies in San Francisco. Let’s stop depending on the profit-driven private real-estate market, invest in a long-term dependable City housing infrastructure, and work to guarantee affordable housing for all of us.

Our grassroots ballot initiative will raise hundreds of millions of dollars each year in taxes on multimillion-dollar corporations, to acquire or construct at least 1500 rental units of public housing every three years (compare that to the 645 affordable units constructed in 2018). With this tax, we can also fund more childcare centers near housing, improved Muni frequency and pay for Muni workers, and community meeting spaces.

With an income distribution focused on working class tenants, the SFCHA equitably proposes a sustainable public housing system. Through a five-tier income-based lottery, the program predominantly allocates units to low-income and moderate-income tenants, and all rents are capped at 25% of household income. Instead of further perpetuating segregation, the SFCHA serves every community and sets minimum goals for housing in each Supervisorial district.

Importantly, in our proposal, tenants will be heard. Community Councils of tenants, elected by tenants, are given the power to organize like a union does at work. These tenant associations can call for a rent strike (withholding rents) to hold the City accountable over maintenance and rehabilitation, and can compel meetings with their Supervisor. Unionized City workers would maintain the housing on a day-to-day basis, and public input is incorporated throughout the measure.

All of this is achievable in San Francisco if we continually tax the enormous wealth in our city — and specifically focus on the greed of the tech industry that has lobbied for the Twitter tax break, a reduced tax on stock compensation, and the switch from payroll tax to gross receipts tax.

Large-scale public housing is not a new idea. In Vienna, one of the most affordable cities in the world, three in five residents live in social housing of some form, and 25% of the housing stock is fully publicly-owned and publicly-managed. Taxes fund the continued acquisition and construction of social housing, and tenants with higher incomes subsidize operating costs for tenants with low incomes — just as the healthy subsidize the sick in their universal healthcare system. A broad-based political constituency — like what we have with Social Security and what we can have with Medicare for All — keeps the overwhelmingly popular program going.

With universal public housing — and a system growing larger year by year — we can begin to guarantee a right to shelter. We can give everyone a strong safety net, reduce life expectancy discrepancies by race, and spur entrepreneurship for social good instead of private profit.

Anyone who lives or works in San Francisco can qualify, which would start to reverse some of the worst economic and racial impacts of gentrification and displacement.

We can give the public sector leverage over the private real-estate industry — which currently controls housing decisions and is a massive lobbyist — while creating good-paying union jobs.

We can deliver economic justice for all workers and offset income disparities by taxing wealth.

All of this can be accomplished if we put the SF Community Housing Act on the ballot and pass similar social housing systems nationwide, such as the Social Housing Act in Maryland.

We’ve developed this initiative over almost two years with housing activists, policy experts, and community groups. But we want your thoughts and feedback too, because these homes are for you. We will only win this fight if we can put up a thoughtful, forceful, united front against the wealthy interests who control our tax system and real-estate landscape.

Laksh Bhasin is a tech worker, coauthor of the SF Community Housing Act, and coordinator for the SF Berniecrats Housing Committee. Find out more at www.facebook.com/sfcommunityhousingact/ or www.sfcommunity.us, and get involved by emailing sfcommunityhousingact@gmail.com.

Bernie Sanders landmark speech on democratic socialism

Global News June 12, 2019

Democratic candidate Bernie Sanders formally outlined his vision of ‘democratic socialism’ and defends his core beliefs at a rally on June 12. Sanders is one of several candidates running to represent the Democrats in the 2020 Presidential Election.

For more info, please go to http://www.globalnews.ca

OSF Editor’s note: This is a Canadian website. There were no American websites which showed the entire 50 minute speech at the time pf this posting.

Ice on Fire (2019): Official Trailer | HBO

HBO Published on May 22, 2019 

Produced by Oscar-winner Leonardo DiCaprio, George DiCaprio and Mathew Schmid and directed by Leila Conners, Ice on Fire is an eye-opening documentary that focuses on many never-before-seen solutions designed to slow down our escalating environmental crisis.

Ice on Fire premieres June 11 at 8 PM. #HBO#HBODocs#IceOnFireHBO Subscribe to the HBO YouTube Channel: https://goo.gl/wtFYd7 Don’t have HBO? Order Now: https://play.hbonow.com/