America's rich have no reason to be concerned about rising costs because because their wealth is still growing as a share of the economy. They're so rich, they now have more wealth than the entire American middle class.

From Bloomberg:

The middle 60% of U.S. households by income -- a measure economists often use as a definition of the middle class -- saw their combined assets drop to 26.6% of national wealth as of June, the lowest in Federal Reserve data going back three decades. For the first time, the super rich had a bigger share, at 27%. [...]

A generation ago, the middle class held more than 44% of real estate assets in the country. Now it’s down to 38%.

The pandemic generated a boom in housing values that has benefited most those who owned real estate in the first place. It also led to soaring rents this year, which hurt those who can’t afford a house. The self-feeding loop created more wealth for the wealthier.

Having 0.4 percent more wealth than the entire middle class may not sound like much at first glance, but that is a comparison between 1.3 million rich households and almost 78 million households in the middle class. It's actually obscene.

The reconciliation spending bill that congressional Democrats will eventually pass will raise taxes on the rich by some measure, but it won't even make a dent in this massive pile of wealth that becomes self-perpetuating at some point.

As Bloomberg points out, those who've gained the most are people who were already ahead; people who already had substantial assets. Everyone knows you have to spend money to make money in the first place and the rich have a lot to spend on investments in real estate and ventures in emerging stock.

There was a point in my life when I was embarrassed that I have almost no assets of my own, but the older I get the less I care. The older I get the more it sinks in that the game is rigged. That is a fundamental fact of life in America even without accounting for being transgender.

Now that enhanced benefits have entirely expire in every state, there's been no rush of people looking for jobs who weren't already looking for one.

Employers say the end of enhanced benefits hasn't helped them.

“People who have been on the sidelines have by and large stayed on the sidelines,” said Richard Wahlquist, president of the American Staffing Association, the country’s largest recruitment-industry group. “Nothing has changed in regard to the benefits that have fallen off and the need for people continues to grow.” [...]

Joanie Bily, chief workforce analyst at Atlanta-based EmployBridge, was one of the people who thought that her company would see a “significant increase” in the number of online applications once boosted benefits ended.

“I’ve been asking all of our locations across the U.S.: ‘Are you busier? How does it feel since the benefits have ended?’” said Bily, whose firm connects employees with companies across the U.S., focusing on manufacturing, logistics and call centers. “I pulled the data last night and I thought it would be better, but it’s not.”

This shouldn't surprise anyone -- especially not professionals who forecast these kinds of things -- given that ending benefits early made no significant difference in Republican controlled states. People aren't too lazy to return to work as much as everyone's lives and priorities have permanently changed because of the coronavirus pandemic.

And the coronavirus pandemic isn't over, by the way. The football stadiums may be packed, but that's not the full story behind the scenes in the service industry still fighting a loss of business. Moreover, nearly 2,000 people are dying per day from coronavirus complications.

And you know what? Maybe there just aren't as many people who think being a wage slave is a good way to spend our limited time on this earth. The last two years have hit very close to home for virtually everyone for a multitude of overlapping reasons. Many people have no choice to but take any job they can get, but life is complicated and that's more true now that it's ever been for tens of millions of people.

Without citing any evidence at all, GOP governors asserted that enhanced unemployment benefits were preventing people from returning to work, but we have evidence that suggests it made no difference.

According to Moody's Analytics, there's "no evidence" that exiting the enhanced program early made a material difference in employment.

"There's no sign of the end of supplemental UI" affecting employment, said Mark Zandi, chief economist at Moody's Analytics. "There's just no evidence."

Georgia, Louisiana, Texas and West Virginia experienced a 0.3 percent fall in unemployment, while Nebraska, Oklahoma, Tennessee and Wyoming all saw a 0.2 percent decline, according to the Bureau of Labor Statistics data. All except Louisiana and Tennessee cut off emergency unemployment insurance in June. (Louisiana ended benefits on July 31, while Tennessee ended them July 3.)

"It would show up in the July data," Zandi said. "But the increase in jobs in July is no different from the increase in jobs in June. In fact, it's a little bit less."

Some states that accepted enhanced benefits for as long as congressional Democrats intended actually saw declines in unemployment greater than the states that withdrew from the program in June.

While ending the benefits did not make a significant difference in most states, it did lead to a 20 percent drop in consumer spending where benefits were allowed to expire.

"There's a pretty minimal impact in terms of people going back to work, and a much more significant impact in terms of loss of income and consequent drops in spending," said Rachel Deutsch, director of worker justice campaigns at the progressive Center for Popular Democracy.

I can't imagine this will surprise anyone, but it goes to show you that you should never take it at face value when a Republican asserts an economic truth. They're almost always wrong.

It's not a coincidence that the delta variant of the coronavirus is primarily surging in the same states that declined the benefits.

Republicans are going to have to make the same choice now that President Biden is making a similar offer to them.

Biden is reportedly offering the GOP a bargain for establishing a lower, minimum tax rate in exchange for spending less on infrastructure if they will vote for it.

U.S. President Joe Biden offered to scrap his proposed corporate tax hike during negotiations with Republicans on an infrastructure package, two sources familiar with the matter said on Thursday, in what would be a major concession by the Democratic president as he works to hammer out a deal.

Biden offered to drop plans to hike corporate tax rates as high as 28%, and set a minimum tax rate that companies should pay instead at 15%, sources said.

In return, Republicans would have to agree to at least $1 trillion in new infrastructure spending, one source said.

Whether or not this is actually a good deal feels like a secondary question to whether or not Republicans will agree to it. It doesn't matter if it's good or not if they won't.

President Obama's grand bargain was also panned by critics, but in the end it didn't matter because the GOP wouldn't go along with it.

If Republicans still won't budge after Biden offers this level of compromise, he'll have the rhetorical ammunition he needs to move forward with reconciliation. President Obama used this same strategy to pass some of his preferred policies by pushing them into a must-pass government funding bill to avoid a shutdown after the GOP refused to compromise.

Even if we never learn how many jobs the program saved, however, it seems fairly clear that we spent too much money on it. Each individual loan distributed under the program was relatively small, but the overall cost of the program was enormous.

Depending on who you ask, the program could have cost over $220,000 per job saved.

One of the most cited studies, led by a Massachusetts Institute of Technology economist David Autor, pegged the jobs saved by PPP’s first round at a fairly low 2.3 million -- at a high cost of $224,000 per job. At the other end of the spectrum, two Federal Reserve economists estimated in January that PPP preserved 13 million jobs at a more modest $43,000 each. [...]

About 46% of small businesses that had their PPP loans fully funded were forced to cut jobs at some point since March 1, 2020, while 71% of those that got no PPP loans said they reduced their workforce, according to a 2021 Federal Reserve survey.

Companies getting PPP loans, which were forgivable under conditions including spending a majority of the funds on payroll, were much more likely to try to rehire the workers later, the survey showed.

Costing between $43,000 to $224,000 per job saved is obviously a very wide spread. Assuming the truth is somewhere in the middle of those figures, we can say that the program cost more than most payrolls did.

Some businesses received PPP loans totaling in the millions, but the vast majority of the 11.6 million loans distributed by the Small Business Administration were relatively small in comparison. Most small business applicants received less than the projected cost of $43,000 per job and that's the most conservative cost estimate.

I've always said we should have sent the money directly to Americans in the form of additional stimulus checks and these estimates support that in hindsight. It would have been more equitable if we did.

Additional studies will tell us more over time, but right now it looks like we sunk nearly a trillion into this program and a large portion if not most of it was siphoned off by corporate middle-men and fraudsters. Legitimate small businesses owners who were helped by the program are undoubtedly thankful for it and I'm glad for them, but this is a lot of money we can't even account for.

It's not a direct comparison, but spending $800 billion on an unaccountable program during an emergency feels like we just spent a similar amount on unaccountable military contractors in Iraq again. A lot of the money is just gone with no recourse.

Democrats intend to pay for their proposals by raising taxes on the rich, of course, but Republicans are against raising taxes. And without new taxes, how do you pay for it?

Their big idea is to reappropriate money that was already allocated for state governments in the American Rescue Plan.

[Senator Roger Wicker] said the Republican plan would largely be paid for by repurposing Covid relief money for state governments that was authorized by the $1.9 trillion pandemic-relief bill enacted in March. Additionally, he indicated the GOP offer would count the money spent in the China bill toward the total.

That may be a non-starter for the White House, however, which has proposed corporate tax increases to pay for its plan.

“We hope to move forward with Republicans” on infrastructure, Senate Majority Leader Chuck Schumer said on Tuesday. At the same time, he said the Democrats wouldn’t let the GOP “stand in our way.” Schumer said the plan, one way or another, is “to move forward in July.”

You know, legally speaking, state governments might have something to say about it if the federal government suddenly tried to take back money that was already appropriated for them. State governments have already made plans for that money. Here in Ohio, the state government is already using COVID relief money to fund vaccine drives including a lottery program.

The White House and congressional Democrats aren't going to even entertain this idea and, when they don't, Republicans are going to claim they tried to meets Democrats halfway only to be rejected. But they didn't. It's smoke and mirrors. Almost half of their counteroffer includes spending already authorized or planned and the other half is funded by stealing from states. It's a joke.

The GOP's new offer is designed to garner positive headlines across political media while not actually conceding much ground beyond their original offer. They're using clever accounting to make their offer appear $500 billion bigger than it actually is.

A growing list of Republican-controlled states are ending the enhanced benefits for their own residents because, in their own words, businesses are having trouble hiring people who are too lazy to work.

Montana Gov. Greg Gianforte started the domino effect on May 4.

Since then, at least 10 others have announced they will exit the federal unemployment programs, which have been in place since March 2020.

They include Alabama, Arkansas, Idaho, Iowa, Mississippi, Missouri, North Dakota, South Carolina, Tennessee and Wyoming. More may soon follow. [...]

“My decision is based on a fundamental conservative principle — we do not want people on unemployment,” Idaho Gov. Brad Little said Tuesday. “We want people working."

It's based on principle, the governor of Idaho says, not economics.

If $300 per week is all it takes to keep people at home then businesses obviously aren't paying enough in wages, but there are other concerns.

The list of states turning down enhanced unemployment benefits aligns with a list of states that have some of the lowest rates of vaccination against the coronavirus, the lowest wages in the country, and states that chose not to expand Medicaid under Obamacare. The virus is dissipating but not dead and accumulating medical debt or dying for a poverty wage is still a concern for millions of people.

It's not as if turning down enhanced benefits will save states money while the cost is covered by the federal government. They're doing this for ideological reasons.

It's bewildering to me that any official would choose to bankrupt more of their own constituents when choosing not to wouldn't cost them anything at all. It's cruel for cruelty's sake.

Don't vote for people who want you broke and dead.

It's been a while since we've checked in on the state of the program and things are somehow comically worse now than they were during the height of the coronavirus pandemic.

We already knew that the mechanism for forgiving PPP loans could take a long time to administer because the Trump regime did such a poor job of recording who even received loans in the first place, but the situation is becoming more clear now.

It won't just take a long time to process every loan; it could take literally a decade.

From the Washington Business Journal:

That is partly because of the addition of a second round of the forgivable loan program that launched in 2021, as well as the crush of forgiveness applications in front of what has historically been a small agency, said PPP expert and attorney Tenley Carp, a partner at law firm Arnall Golden Gregory LLP. She said the timeline, in which small businesses have up until 10 months from the end of their loan’s covered period, to apply for forgiveness, plus time for lenders and the SBA to consider appeals, and the resulting legal challenges that follow, could see some PPP loans in limbo for the better part of a decade.

Set your expectations accordingly, she said.

“Honestly, because of how long it will take to get through millions of loan forgiveness applications, I now think I would not be shocked if I said to myself one day that, 'It started in 2020 and we are getting very close to 2030,'” Carp said, adding she originally thought in 2020 that the entire process would play out in three to four years. “Now, I can see this taking six to eight years to wrap.”

I've long inferred that the appeals process would be the most lengthy process and the Trump regime is primarily responsible for that.

As you may recall, the Trump regime was still rewriting the rules for loan forgiveness even months after the first round of loans was dispersed in the spring of last year. The regime was still rewriting the rules as recently as during the holiday season. That seems relevant to any legal appeal filed by a business that literally may not have known what the criteria for forgiveness was.

It would be fair to say that Congress is also responsible for this mess because they handed the Trump regime a mandate to create the program but ultimately left the details to former Treasury Secretary Steve Mnuchin, but it didn't have to be this bad.

We spent nearly a trillion dollars on this program and we still don't know how many jobs it supposedly saved. We probably never will.

But that could change soon. Labor Secretary Marty Walsh says he believes many contract workers should be legally classified as employees since they basically are in any practical sense of the word. The Labor department is expected to draft new policies to address this in the near future.

From Reuters:

“We are looking at it but in a lot of cases gig workers should be classified as employees... in some cases they are treated respectfully and in some cases they are not and I think it has to be consistent across the board,” Walsh told Reuters in an interview on Thursday, expressing his view on the topic for the first time.

“These companies are making profits and revenue and I’m not (going to) begrudge anyone for that because that’s what we are about in America... but we also want to make sure that success trickles down to the worker,” he said. [...]

The U.S. Bureau of Labor Statistics reported in 2017 that 55 million people in the United States were gig workers - or 34% of the workforce - and was projected to rise to 43% in 2020.

The gig economy immediately calls to mind companies like Uber, but the practice of hiring workers as contractors with fewer if any benefits is becoming more widespread as reflected by the numbers above. Some of the biggest corporations in the world such as Microsoft have internal walls within the company separating full-time employees from contractors. These hiring practices are less visible to the public because most people will never meet the person who coded their software, but many more people have probably used a ride-hailing service at least once.

The gig-economy is an enormous money-making machine for a tiny number of people in corporate offices. Executives and shareholders see enormous valuations for company stock based on a business model with very little labor costs compared to other companies with fewer contractors. This is contributing to inequality even within the corporate world as tech startups rake in billions overnight playing by a different set of rules than legacy employers do. A company like Uber -- to use as a frequent example -- can be valued in the tens of billions even if they haven't turned a profit yet because the valuation is based on exploitation of a workforce that subsidizes their own employment by accepting a job with no benefits.

That is not to say that every gig or every company with gig workers is bad, but it's a structural hole in labor law that is exacerbating other issues like unemployment and access to health care. The coronavirus pandemic necessitated the creation of an entirely new federal unemployment program to cover gig workers who were never covered by state-based programs.

I doubt the Biden administration can close the entire hole, but they could make a dent.

According to the latest numbers from the Commerce Department, consumer spending has increased by the most since long before I was even born.

Gross domestic product expanded at a 6.4% annualized rate following a softer 4.3% pace in the fourth quarter, the Commerce Department’s preliminary estimate showed Thursday. Personal consumption, the biggest part of the economy, surged an annualized 10.7%, the second-fastest since the 1960s.

The inflation-adjusted value of domestically produced goods and services climbed to an annualized $19.1 trillion, indicating GDP will soon eclipse the pre-pandemic peak of nearly $19.3 trillion.

U.S. equities climbed to all-time highs after the GDP report and a batch of corporate earnings.

Zero Republicans in Congress voted for this.

Moreover, policies they opposed with the most vigor are largely responsible for this surge in consumer spending and economic activity.

Republican senators warned us that Americans were going to take their stimulus checks and go shopping at Wal-Mart and that's more or less what we've all done. But that's a good thing. At the end of the day and macroeconomically speaking, it doesn't matter what people spent it on as long as they did spend it. All consumer spending contributes to the economy in some way.

It's hard not to be optimistic about everyone's economic prospects in the coming years and in the post-pandemic world. Even if President Biden's infrastructure spending proposals are scaled down to get them through Congress, it could lead to higher but sustainable growth rather than another bubble.