Entries Tagged 'Economics and Investing' ↓

Are you self-employed? Read THIS!

Dear Readers of Brucenomics

I started this blog as a newsletter that I sent to a few friends as the ‘Financial Crisis’ of 2007-9 began. It grew from there and landed me on Huffington Post for a couple of years.

Ever since the elections of 2016, politics has swamped economics in people’s minds. Plus, for the past four years I’ve been through medical crises that made it impossible to keep on blogging at my former pace. And now I’m involved in a new project of writing a book.

But today, we’re in a whole new era of crises that is going to blow traditional economics thinking apart. 

So I’ve decided that with Brucenomics, I’m going to continue to try to suggest novel ways we can make our economic system better.

I’ve just put up a post titled Wake Up America!”  for what do “after the COVID-19” period. 

Previous blog posts I recommend reading for discussion of what to do after this crises include “Fault Lines”- Parts One – Three, and “Six ideas To Improve Our U.S. Economy”

But we have to change our thinking right now

In fact, I think Americans are going to have to let go of some of our pride in our work as the sole source of our meaning to others in this society.

“Welfare” is supposed to denote a healthy existence for people, not connote a dirty word. 

Also, we are too attached to the word “independence”. Now that we are all becoming quarantined at home we will learn just how dependent we are on other people’s help to get through this crises. 

Many of us will not be able to get through without help. How can we build goals of service in our lives to others and make our society stronger?  

And why not aim for a world where we work less and have more time for others and ourselves to be who we want to be? 

Future plans for Brucenomics

However, what I really want to cover most in Brucenomics is what I wrote about for Huffington Post years ago. That is how freelancers can survive in this crisis. 

Self-employed professionals, and owners of sole-proprietorships and small LLCs are an endangered species that make up well over 10 percent of our economy by now. 

While corporations are being handed tons of money, the bottom 10 percent, the self-employed, won’t even get loans from the banks that are handing out zero interest loans to ‘small businesses’ and huge corporations both of which have many employees. 

Why do I say that? Because self-employed business owners have been classified by the IRS for tax purposes as half employer and half employee. 

We are required to pay the full amount of payroll taxes, while employees only pay half. This is patently unfair and why so many “small businesses” fail. 

Giving tax credits to self-employed business owners for their expenses of doing business often results in those business owners putting business debt on their own personal credit cards and then not having enough money to pay for their SE tax bill or business expenses during economic downturns. 

The IRS even encourages this practice by allowing tax deductions for personal credit card fees and interest.

There is talk by Republicans in Congress and our President about paying both employers and employees a cash payment. This is insane for the situation we are in right now. 

Requiring employees to work in order to get paid by employers who will get reimbursed by the government is just not possible. It is the employees who cannot go to work and get paid right now who need the money to pay their bills.

If they go through with this, you can bet, Congress will probably treat self-employed as if we were either only employers or only employees. This is how we are regarded today by the IRS for self-employed (i.e., FICA) taxes. 

Self-employed cannot deduct the costs of our own labor on our business’ income-tax form. We have to keep working or our business goes under.

We need to insist that self-employed sole owners of a business must be allowed to get full payroll tax relief during this crisis and like employees be able to collect Social Security when we retire.. 

Too, self-employed people need loans just as much as anyone else, but rarely can get them.

A self-employed business or even a small business with an employee or two, cannot survive without both working and paying bills for the overhead costs of their business. 

Meanwhile corporations will pay nothing for  the costs of workers and management wages and salaries that the government will give them loans for.

This is why all of us need to protect self-employment:  Without both the employer and employee halves of a self-employed business owner there will be no self-employed businesses left standing.

Please speak up if you are self-employed! We need spokespersons who can get the attention of Washington D.C.—or self-employment for many will not survive this crises.

Wake Up America!

The Scourges of Our Times

Thanks to human technology, coronavirus is a reminder that we are all part of a global economy. With the first case of unknown cause just one county away from me, and with seven weeks with the ordinary flu this year under my belt, I’m worried.

But more than this, I’m grieving the loss of what I thought was my proud country over the past three years. And I’m sad about the hardships so many of us are encountering when it comes to finances and hopes for a better future.

For the past four years I’ve written less and less because politics and the President’s daily doings have erased economics in the Trump era. Even conservatives who espouse Adam Smith’s political economy, Ronald Reagan, and right-wing libertarians aren’t getting much news coverage.

Why Our National Economy is Not Really Booming

Continue reading →

A Brief New Postscript to Blowout

For those interested in the Oil and Gas industry there is another book being promoted about an oil baron’s life story. It’s being heralded in book reviews here and abroad.

The name is of the man is Calouste Gulbenkian and the title of the book is Mr Five Percent: The many lives of Calouste Gulbenkian, the world’s richest man, by Jonathan Conlin (London: Profile Books Ltd., Southampton University, 2019, 416 pp)

Gulbenkian’s claims to fame are his large art collection left to the Gulbenkian Foundation in Lisbon, Portugal after his death in 1955.

He was a Turkish businessman of a wealthy Armenian living in Istanbul who made a name for himself that paralleled John D. Rockfeller and Jean Paul Getty in the early 20th century, making it into Life Magazine at the time by being called “the richest man in the world”.

Gulbenkian’s contribution to the oil industry was his dedication to creating international cartels that bypassed government controls, and championed vertical integration.

Vertical integration seems to be a practice purported to offer large advantages for the oil and gas field, but it’s a practice that has ignored costs and the inefficiencies of those companies to an extent that was harmful to the companies themselves, the economy, and financial markets.

Other names for this practice are “conglomeration”.

Today, the concern about the industry is more about fracking because of the even higher costs of this practice that can result in harmful “dis-economies”.

Others of course, defend the practice of vertical integration by pointing out some of its virtues, while on the other hand, The Motley Fool declares that today’s “Big Oil Companies are not integrated, just co-existing.”

Given that the oil and gas companies play a major role in climate change, this debate is one that should be discussed by our politicians, but unfortunately for our quality of life, isn’t in the forefront of the news today.

Yet, it looks like it soon will be given the climate crises taking place this past year!