Showing posts with label Middle Class. Show all posts
Showing posts with label Middle Class. Show all posts

04 October 2012

Roger Baker : 'Class' Used to Be a Dirty Word

Class Warfare. Political cartoon by Steve Segelin / Charleston City Paper.

'Class' used to be a dirty word:
Elections point to new paradigm
The 2012 presidential race is shaping up as a new kind of political fight being fairly openly fought around the issue of class and inequality with racial overtones.
By Roger Baker / The Rag Blog / October 3, 2012

Not so long ago, during Barack Obama's 2008 election for example, class was the "C" word; class was virtually a forbidden topic in American politics. During the Clinton era, politicians sidestepped the issue and got votes by appealing to the "middle class." American voters were taught to think of themselves as members of a nearly classless society within a naturally prosperous nation.

During Obama's first presidential election, his main response to the serious and growing economic crisis was to maintain the fiction that the interests of all economic classes, whether rich or poor, were identical. The 2008 presidential campaign, on the Democratic side, was all about hope.

The hope was that once the economy recovered, as it always did in the modern age, a new tide of economic recovery would lift all boats. This recovery would ease racial tension aimed at immigrants and the low income minority voters who made up much of the Democratic party base.

Especially under the post-9/11 period of corporate domination, the wealthy interests supporting the Republicans were benefiting from exploitative policies that resulted in extreme income inequity. This really amounted to class warfare, but to even raise the issue of inequality would bring immediate charges of inciting class warfare from Republicans.

Even as late as last year, frank discussion about economic injustice was deemed to be such a sensitive topic that Obama was afraid to discuss the issue of rampant and growing economic inequality. Edward-Isaac Dovere wrote at Politico that,
in May 2011, historian Robert Dallek finally asked Obama what the group [meeting in the White House's Family Dining Room] could do to help him. Obama’s answer went right to a present-day concern: “What you could do for me is to help me find a way to discuss the issue of inequality in our society without being accused of class warfare.”
In the 2008 election, Obama had been packaged and sold to voters as the wise and moderate choice. A reasonable African American, a non-partisan political mechanic willing to work with anyone to fix the economy.

He was elected as a man focused on helping a capitalist system, temporarily indisposed by financial excess, to recover. Fixing the economy would require everyone to pitch in and make some sacrifices to restore economic health to Wall Street, from whence benefits would trickle down for the common good.

How fast our politics can change. The 2012 election is now shaping up to be much more about anger and political polarization than hope. This election is now akin to choosing between two armies defined by class interests. Both parties are actively engaged in partisan warfare on the battlefield of congressional politics.

This legislative branch of federal government is essentially gridlocked and dysfunctional on basic issues of policy. Despite his willingness to compromise on virtually everything, Obama is being portrayed as a socialist intent on inciting class warfare.

Jason L. Riley wrote at The Wall Street Journal that,
After securing victory in all five Republican presidential primary contests last night, Mitt Romney told an audience in New Hampshire that President Obama is resorting to class warfare because he can't run on his record.
During the Republican primaries, each candidate had tried to outdo the competition by appealing to the large numbers of voters identifying with an increasingly angry and extremist Tea Party faction that is united with corporate interests in unquestioned devotion to U.S. military power and global finance capital. Government regulation of private capital has become the new enemy.

The Republican party line is that with bold finance capitalists like Mitt Romney in charge, private capital can be freed from the crippling influence of government regulation, thus opening the way to a new era of jobs and prosperity. The Republican convention in Tampa was pretty much dominated by angry white high income party activists ready for a political war against liberals and their fellow travelers.

Many had assumed that with Romney safely positioned as the Republican party nominee, he would tone down his extreme right-wing positions and become more like the moderately centrist governor of Massachusetts he used to be. However, his choice of a leading anti-government ideologue, Rep. Paul Ryan, pretty much blew that theory. Romney has chosen to run as an extreme right wing, selectively anti-government candidate.

Tim Dickinson wrote in Rolling Stone :
The GOP legislation awaiting Romney's signature isn't simply a return to the era of George W. Bush. From abortion rights and gun laws to tax giveaways and energy policy, it's far worse. Measures that have already sailed through the Republican House would roll back clean-air protections, gut both Medicare and Medicaid, lavish trillions in tax cuts on billionaires while raising taxes on the poor, and slash everything from college aid to veteran benefits.

In fact, the tenets of Ryan Republicanism are so extreme that they even offend the pioneers of trickle-down economics. "Ryan takes out the ax and goes after programs for the poor – which is the last thing you ought to cut," says David Stockman, who served as Ronald Reagan's budget director. "It's ideology run amok."

Why class conflict is back in style

With the help of the unlimited corporate cash made possible by the Citizens United ruling, it seemed possible until a few months ago for the Republicans to essentially buy the election. It is now beginning to look as if the Republicans have gone so far to the right, and so fast, that they have generated a backlash of fear that the polls indicate is likely to cost Romney and his corporate allies the presidential election. The Republicans now seem to be in panic mode, willing to use any means to try to hang onto power.

In the midst of this period of intense political polarization, Obama can't expect to run again as a centrist, offering not much more than scaled back hopes and still expect to win. Since Obama's election four years ago, the optimism of his core supporters has greatly faded. The public has watched Obama bail out the banks with their tax money without seeing much in return. Under the Obama administration, the rich have been getting richer fast, while most U.S. incomes have declined in real terms.

The 2010 movie Inside Job revealed the truth about institutionalized exploitation of the general public by the biggest banks and their allies. Wall Street bankers were revealed as gamblers promoting risky deals, confident that their bad bets would be covered by either the Federal Reserve or U.S. taxpayers. The public saw scandalous exploitation of the middle class by the unchecked power of concentrated wealth. Yet nobody went to jail.

The economic crisis was actually global, leading to a global upsurge of riots and protests. In early 2011, the Arab Spring, with economic roots, shook the established political order of the Mideast. In September of 2011, the Occupy Wall Street movement seemed to come suddenly out of nowhere, a great wave of publicly expressed political outrage against gross inequality and rapacious class oppression by those the Occupiers termed "the 1%."

The Wall Street Occupation captured headlines and stayed in the U.S. news for months, as government officials worked behind the scenes to stem a nationwide surge in regional occupations modeled after the original Zucotti Park Occupation in Manhattan.


The new middle class divide

The Occupy movement has portrayed the current situation as a battle between the oppressed masses and their ruling oppressors; a struggle between the few and the many. This picture presented by the Occupy movement, of the 1% exploiting the other 99%, is true in its way, but still too simple to explain the political dynamics behind this election.

The 1% formulation leaves out the economic forces that drive the Tea Party support and their less energetic sympathizers who also vote out of the political equation. As David Goldman points out in his "Spengler" column at Asia Times, the once monolithic American middle class is now internally divided into roughly equal groups, each with their own distinctly different economic interests and political perspectives.
The great split down the center of American society is not between the rich and the middle class, as the Obama campaign suggests, but within the middle class itself. This helps explain why Paul Ryan was a smart choice for the second spot on the Republican ticket. There are still more people paying taxes than getting a check from the government, and their patience with tax creep is exhausted. The home price collapse wiped out nearly half the median family's wealth during 2007-2010, but the tax burden middle-class homeowners continued to rise...

Now the baby boomers are entering their 60s after losing nearly half their wealth, in the least business-friendly environment the country has had since the 1970s. Rising taxes at the state and local level, and unprecedented deficits at the federal level, worry the middle class, with good reason.

Americans are concerned about the lack of opportunity, but they are even more concerned about the risk that they may lose what little they have left. It's not enough to promote entrepreneurship, as Romney does so enthusiastically. It's also important to talk about deficits. That is the thrust of the Tea Party, a classic middle-class creditors' party responding to the well-justified fear of higher taxes and inflation.
With this situation in mind, it gets a lot easier to make sense of the 2012 presidential election as a political contest between two emerging sectors of an implausibly large middle class, each with different perceptions and class interests.

The upper income sectors of the middle class tend to vote Republican, trying to protect their modest savings from federal taxation that would benefit the poor. They fear a loss of their savings that would be squandered on social programs to benefit the poor, those who don't pay federal taxes, and who tend to vote Democrat.

The top 1% already have most of the wealth and all the political power they can buy, but they lack the numbers needed to win an election. This being the case, the natural course is for the 1% of Republicans to ally themselves with the upper income sector of the middle class, who vote Republican based on their hopes, fears, and class interests.

The video secretly made of Romney speaking to his wealthy contributors revealed a man who views the election in just this way. In order to win the election, Romney needs to pit the interests of the affluent 50% of middle class taxpayers, focused on their own wealth preservation, and get their support in opposition to those who depend on a multitude of federal benefits like pensions, social security, food stamps, and what remains of the social safety net.

The Republicans are united in opposition to nearly all government taxation in theory (excepting foreign domination and bank control perpetuation costs). This outlook is rooted in the Tea Party source of political support, since their anti-tax position requires the broad support of voters to win elections. Realistically the Tea Party is motivated by trying to minimize the tax burden placed on the "have a little and desperate to save what's left" sector of the middle class, which is increasingly fearful of sinking toward poverty through taxation.

In this regard, the Tea Party sector is in a strategic alliance that overlaps with the prevailing desires of the 1%; the very wealthy who oppose nearly any changes to the status quo, which would be likely to cost them very much to implement. All this based on a predictable preference for the very rich to employ as little of their own money to stay as rich as possible, and for as long as possible." According to The Huffington Post,
Voters remain overwhelmingly pessimistic about a still sluggish economy, yet appear poised to reelect President Barack Obama because of perceptions that he understands their lives better than Republican nominee Mitt Romney and would do more to favor the middle class rather than the very wealthy.
The nightmare scenario for the 1% and their Republican allies is that the currently repressed but still deeply held sentiments visibly expressed by the Occupy movement remain, ready to be channeled and expressed as support for Obama over Romney, as is indicated in an October 1, Gallup Poll.
More Americans believe middle-income earners would be better off in four years if President Barack Obama is re-elected than if Mitt Romney wins, by 53% to 43%. The public also says lower-income Americans would be better off under an Obama presidency, while, by an even larger margin, they say upper-income Americans would do better under Romney.
In other words the polls suggest that the public is really viewing this election in terms of their class interests. They suggest that a populist pendulum of political awareness may be swinging to the left, perhaps even picking up speed as it goes. Obama's previous hope is now being replaced by fear of Romney's rapacious greed-junkie reputation.

The context is that many American families are barely surviving now. Members of the Democratic Party base are pinning their diminished hope on the promises of a somewhat more combative and re-imaged Obama. If Obama isn't FDR, at least he isn't Mitt Romney, who scorns them in private on the secret video.

As Saul Alinsky used to say, there are only two real sources of power -- people power and money power. If Obama fails to satisfy even on the scaled back expectations of his popular base during his second term, things could head in the direction of Greece. Lacking a decisive edge in corporate money power, he has to depend on continuing political support from his popular base for his people power.

Obama told a meeting of bankers in 2009 that he is the only thing standing between them and the mobs with pitchforks. In the absence of mobs with pitchforks, and also without effective support from Congress, Obama lacks negotiating power:
"My administration is the only thing between you and the pitchforks,” Barack Obama told the CEOs of the world’s most powerful financial institutions on March 27, when they cited competition for talent in an international market as justification for paying higher salaries to their employees.

Arrayed around a long mahogany table in the White House state dining room, the bankers struggled to make themselves clear to the president, but he wasn’t in a mood to hear them out. He interrupted them by saying, “Be careful how you make those statements, gentlemen. The public isn’t buying that."

The latent potential of left populism

The 2012 presidential race is in this way shaping up as a new kind of political fight being fairly openly fought around the issue of class and inequality with racial overtones.

Meanwhile, Senator Bernie Sanders, an independent from Vermont, describes the current reality of class in the USA as follows:
...in America today we have the most unequal distribution of income and wealth of any major country on earth and... the gap between the very rich and everyone else is growing wider. Today, the top 1 percent earns more income than the bottom 50 percent of Americans. In 2010, 93 percent of all new income went to just the top 1 percent. In terms of wealth, the top 1 percent owns 42 percent of the wealth in America while the bottom 60 percent owns just 2.3 percent...
Most Democrats and Republicans are far too dependent on corporate money to talk as candidly as Sanders does. However, if Sanders and other independent progressive voices like him keep talking about class and civil rights in an honest way, people are likely to start listening to them more than Obama.

In proportion to the attention people pay to Bernie and other truthful populists, it is going to get increasingly harder for those like the Koch Brothers to maintain the control of the 1%. It is a lot easier when people are ignorant and there are only "lesser evil" choices.

Put in political context, this election outcome is of huge importance. Not because of what Obama can or will accomplish, but because of what the public desperately hopes and expects that he can get done -- as a sign of a revival of American class consciousness.

It is important because of what is likely to happen in consequence if the public's scaled-back expectations are not satisfied. This election is in an important way a de facto political referendum on the populist goal of preserving what remains of a social safety net dating back to the great depression.

Obama must depend on retaining wide support to deliver on expectations. His claim that he is the only thing standing between them and the "mobs with pitchforks" needs credibility. Lacking a threat of mobs with pitchforks that he can successfully restrain, plead for, and then help in some modest way, Obama lacks both political power and purpose.

The public will expect Obama to bring some relief as their benefit for electing him. If elections can't bring change, then the public support for government plummets, meaning the 1% will increasingly have to resort to naked power to maintain class control.

This is not easy to do in a nation that can see more clearly than ever that class does indeed make a difference, and that they will probably be better off listening to Senator Bernie Sanders than to President Barack Obama.

[Roger Baker is a long time transportation-oriented environmental activist, an amateur energy-oriented economist, an amateur scientist and science writer, and a founding member of and an advisor to the Association for the Study of Peak Oil-USA. He is active in the Green Party and the ACLU, and is a director of the Save Our Springs Association and the Save Barton Creek Association in Austin. Mostly he enjoys being an irreverent policy wonk and writing irreverent wonkish articles for The Rag Blog. Read more articles by Roger Baker on The Rag Blog.]

The Rag Blog

[+/-] Read More...

16 January 2012

Ted McLaughlin : Class Conflict and the Disappearance of the Middle Class


Class conflict rises
as middle class disappears

The growing inequality of wealth and income in this country has reached a point where it is now causing a conflict between the rich (the 1%) and the vast majority of Americans.
By Ted McLaughlin / The Rag Blog / January 16, 2012

The graphic above (from Think Progress) shows what has been happening to the American middle class in the last 40 years. To put it bluntly, it is disappearing. While the rich continue to get much richer (with their income growing by over 240% since 1980), the loss of millions of jobs and the stagnant non-growth of wages for most Americans has shrunk the middle class and thrown many more Americans into working class status (if they're lucky) or even worse, into abject poverty.

The Republican "trickle-down" economic policies, instituted by Ronald Reagan and accelerated by George W. Bush, deregulated financial institutions and encouraged Wall Street to play dangerous games with investor funds -- culminating in the loss of trillions of dollars, many millions of jobs, and the start of the most serious recession since the Great Depression. In addition, these same politicians encouraged corporations to outsource millions more American jobs by rewarding them with tax breaks.

The idea was that when the rich and corporations had a lot of money they would use that money to create jobs and the growing wealth would be shared by everyone. It didn't work, because the wealthy aren't the real job creators -- no matter how much money they have. This is clearly illustrated by our current situation -- where the rich have a larger share of the country's wealth and income since before the Great Depression and American corporations are sitting on trillions of dollars in cash. And yet only a pitiful handful of jobs are being created.

There is only one thing that creates jobs -- demand for goods and services. When the working and middle classes have money to spend demand is created, and jobs are created to meet that demand -- and all classes in society benefit (including the rich). But Republican policies have taken money from the working and middle classes and given it to the rich. Since the mass of our society no longer has much money to spend, demand is depressed and the recession continues with little or no job creation.

The chairman of the President's Council of Economic Advisors, Alan Krueger, says the shift in income over the last three decades is the equivalent of moving $1.1 trillion from the 99% to the 1% every single year of those three decades. Is it any wonder that the middle class is disappearing, and we look more like a banana republic every day?

Class distinctions were not important when our economy was working for everyone. But in this current economy, where the rich get richer and everyone else becomes poorer, class is again becoming an issue. It's become an issue because the gap between the "haves" and "have-nots" is huge, and growing larger all the time.

The Republicans and the 1% call this "class warfare," but the truth is that the class war has been going on for the last 30 years -- and it has been waged by the rich against the rest of America. But Americans are finally waking to realize what has been done to them over the last three decades by the rich (and their Republican lackeys).

A recent survey by the Pew Research Center shows that a full two thirds of the population (66%) now believe there are "strong" or "very strong" class conflicts between the rich and the poor. That's a jump of 19% over just two years ago, in 2009, when only 47% believed that. And this increased belief in this strong class conflict cuts across all ethnic, political, income, age, and education demographics. In the following list, I give the current percentage who believe this (followed by the 2009 percentage in parentheses):

Total population...............66% (47%)

Whites...............65% (43%)
African-Americans...............74% (66%)
Hispanics...............61% (55%)

Republicans...............55% (38%)
Democrats...............73% (55%)
Independents...............68% (45%)

Less than $20k...............64% (47%)
$20k to $40k...............66% (46%)
$40k to $75k...............71% (47%)
Over $75k...............67% (49%)

Age 18 to 34...............71% (54%)
Age 35 to 49...............64% (48%)
Age 50 to 64...............67% (45%)
Over age 65...............55% (36%)

College grad...............66% (48%)
Some college...............70% (50%)
High school or less...............64% (44%)

The growing inequality of wealth and income in this country has reached a point where it is now causing a conflict between the rich (the 1%) and the vast majority of Americans. And it has also caused an erosion of the American dream.

Many no longer believe the old canard that anyone can get rich in America because America has a vibrant class mobility. About 72% of those who say there is a strong class conflict, also say the rich got that way either because they were born into it or because they knew the right people -- not because they earned it by working for it.

The rich, through their Republican cohorts, may have started the class war back in 1980, but the rest of America is waking up and starting to fight back. It will be a long and tough fight though, because the rich and the corporations own far too many members of Congress. But that fight can be won -- it must be won if democracy is to survive in America.

[Ted McLaughlin also posts at jobsanger. Read more articles by Ted McLaughlin on The Rag Blog.]

The Rag Blog

[+/-] Read More...

19 February 2010

Poor Grow Poorer : Richest 1% Has Captured America's Wealth


The ultra rich have captured America;
How can we take it back?


By David DeGraw / February 19, 2010

"The war against working people should be understood to be a real war... Specifically in the U.S., which happens to have a highly class-conscious business class... And they have long seen themselves as fighting a bitter class war, except they don't want anybody else to know about it." -- Noam Chomsky
As a record amount of U.S. citizens are struggling to get by, many of the largest corporations are experiencing record-breaking profits, and CEOs are receiving record-breaking bonuses. How could this be happening, how did we get to this point?

The Economic Elite have escalated their attack on U.S. workers over the past few years; however, this attack began to build intensity in the 1970s. In 1970, CEOs made $25 for every $1 the average worker made. Due to technological advancements, production and profit levels exploded from 1970-2000. With the lion's share of increased profits going to the CEO's, this pay ratio dramatically rose to $90 for CEOs to $1 for the average worker.

As ridiculous as that seems, an in-depth study in 2004 on the explosion of CEO pay revealed that, including stock options and other benefits, CEO pay is more accurately $500 to $1.

Paul Buchheit, from DePaul University, revealed, "From 1980 to 2006 the richest 1% of America tripled their after-tax percentage of our nation's total income, while the bottom 90% have seen their share drop over 20%." Robert Freeman added, "Between 2002 and 2006, it was even worse: an astounding three-quarters of all the economy's growth was captured by the top 1%."

Due to this, the United States already had the highest inequality of wealth in the industrialized world prior to the financial crisis. Since the crisis, which has hit the average worker much harder than CEOs, the gap between the top one percent and the remaining 99% of the U.S. population has grown to a record high. The economic top one percent of the population now owns over 70% of all financial assets, an all time record.

As mentioned before, just look at the first full year of the crisis when workers lost an average of 25 percent off their 401k. During the same time period, the wealth of the 400 richest Americans increased by $30 billion, bringing their total combined wealth to $1.57 trillion, which is more than the combined net worth of 50% of the US population. Just to make this point clear, 400 people have more wealth than 155 million people combined.

Meanwhile, 2009 was a record-breaking year for Wall Street bonuses, as firms issued $150 billion to their executives. 100% of these bonuses are a direct result of our tax dollars, so if we used this money to create jobs, instead of giving them to a handful of top executives, we could have paid an annual salary of $30,000 to 5 million people.

So while U.S. workers are now working more hours and have become dramatically more productive and profitable, our pay is actually declining and all the dramatic increases in wealth are going straight into the pockets of the Economic Elite.

If our income had kept pace with compensation distribution rates established in the early 1970s, we would all be making at least three times as much as we are currently making. How different would your life be if you were making $120,000 a year, instead of $40,000?

So it should come as no surprise to see that we now have the highest inequality of wealth in the industrialized world and the highest inequality of wealth in our nation's history. The backbone of America, a hard working middle class that has made our country a world leader, has been devastated.

Now that we have a better understanding of how our income has been suppressed over the past 40 years, let's take a look at how the economy has been designed to take the limited money we receive and put it into the hands of the Economic Elite as well.

Cartoon from links.org.


Costs of living

Other than in the workplace, in almost all our costs of living the system is now blatantly rigged against us. Let's take a look at it, starting out with our tax system.

In total, the average U.S. citizen is forced to give up approximately 30% of our income in taxes. This tax system is now strategically designed to flow straight into the hands of the Economic Elite. A huge percentage of our tax dollars ultimately end up in their pockets. The past decade proves that -- whether it's the Republicans or the Democrats running the government -- our tax money is not going into our community, it is going into the pockets of the billionaires who have bought off both parties -- it is obscene.

For an example of how this system flows to the Economic Elite, just look at the Wall Street "bailout." The real size of the bailout is estimated to be $14 trillion -- and could end up costing trillions more than that. By now you are probably also sick of hearing about the bailout, but stop and think about this for a moment. Do you comprehend how much $14 trillion is?

What could be accomplished with this money is almost beyond common comprehension.

And this is just the tip of the iceberg that has hit us. On top of the trillions given to the Wall Street elite, we already have a record $12.3 trillion in national debt -- and we now have to pay $500 billion in interest to the Economic Elite on this debt every year, yet another way they are milking us dry. When you add in unfunded liabilities owed, like social security payments, we actually owe a stunning $74 trillion. That adds up to a debt of $242,000 for every man, woman and child in America.

Trillions more, 25% of taxpayer dollars allocated to military spending, goes unaccounted for every year, not to mention the billions spent on overcharging and outright fraud. During the War on Terror, the Economic Elite have used our tax money to build a private army that has more soldiers deployed than the U.S. military -- a congressional study revealed that 69% of the "U.S." fighting forces deployed throughout the world in our name are in fact private mercenaries, 80% of them are foreign nationals.

Private contractors regularly get paid three to five times more than our soldiers, and have been repeatedly caught overcharging and committing fraud on a massive scale. A congressional investigation revealed this and strongly recommended that we seize wasting tax dollars on these private military contractors. However, under Obama, there has actually been a drastic increase in total tax dollars spent on them.

In 2009, just over $1 trillion tax dollars were spent on the military, it's safe to say that at least $350 billion of that was needlessly wasted.

When you research our tax system you see an unprecedented level of waste and fraud rampant throughout most expenditures. Our tax system is a national disaster of epic proportions. It is literally an organized criminal operation that continues to rob us in broad daylight, with zero accountability.

Politicians and mainstream "news" outlets will not tell you this, but most every serious economist knows that due to so much theft and debt created in the tax system, the only way to fix things, other than stopping the theft and seizing the trillions that have been stolen, will be for the government to cut important social funding and drastically raise our taxes.

Other than the record national debt, many states are running record deficits and are barreling toward economic disaster, raising the likelihood of higher taxes, more government layoffs and deep cuts in services. Our nation's biggest state economies, like California and New York, are the ones in most trouble.

To merely say that things will not be improving economically is to be a delusional optimist. The truth that you will not hear: we have been hit by an economic deathblow and the United States lay in ruins.

It's not just this criminal tax system; the theft is now built into all our costs of living.

Trillions more in our spending on food and fuel has been stolen due to fraudulent stock transactions and overcharging. Just 10 years ago, in 2000, American families paid 7% of our income on food and fuel. We now pay 20%.

This drastic increase is primarily driven by fraudulent market manipulation that drives up stock prices. Congress uncovered this in 2006; as part of the Enron investigation they found that companies manipulated the oil market to create major spikes in stock values, and then they didn't do anything about it -- nothing to see here, just move on.

As mentioned before, we have the most expensive health care system in the world and we are forced to pay twice as much as other countries, and the overall care we get in return ranks 37th in the world. On average, U.S. citizens are now paying a record high 8% of their income on medical care.

Part of the reason why foreclosure rates are so high is because the percentage of income Americans pay on their housing has risen to 34%.

So for these basic necessities -- taxes, food, fuel, shelter and medical bills -- we have already lost 92% of our limited income. Then factor in ever-increasing interest rates on credit cards, student loans, rising prices for cable, internet, phone, bank fees, etc., etc., etc. We are being robbed and gouged in all costs of living, in every aspect of our life. No wonder bankruptcies are skyrocketing and the number of people suffering from psychological depression has reached an epidemic level.

The American worker is screwed over every step of the way, and it all starts with the explosion in the cost of a college education. This is one of the Economic Elite's most devastating weapons. To have any chance of succeeding in this economy, it is commonly believed that you must attend the best college possible. With the rising costs involved, today's students are graduating with record levels of debt from student loans.

At the same time, the unemployment rate among recent college graduates has risen higher than the national average, and those that do find work are making significantly less than they expected to make. This combination of extreme debt and reduced pay has crippled an entire generation right from the start and has put them in a vicious cycle of spiraling debt that they will struggle with for the rest of their lives. The most recent college graduates are now known as a "lost generation."

The American dream has turned into a nightmare. The economic system is a sophisticated prison cell; the indentured servant is now an indebted wage slave; whips and chains have evolved into debts.
"There are two ways to conquer and enslave a nation. One is by sword. The other is by debt." -- John Adams
Concealing national wealth
"Liberty in the concrete signifies release from the impact of particular oppressive forces; emancipation from something once taken as a normal part of human life but now experienced as bondage... Today, it signifies liberation from material insecurity and from the coercions and repressions that prevent multitudes from participation in the vast cultural resources that are at hand." -- John Dewey
When you take the time to research and analyze the wealth that has gone to the economic top one percent, you begin to realize just how much we have been robbed. Trillions upon trillions of dollars that could make the lives of all hard working Americans much easier have been strategically funneled into the coffers of the Economic Elite. The denial of wealth is the key to the Economic Elite's power. An entire generation of massive wealth creation has been strategically withheld from 99% of the U.S. population.

The U.S. public doesn't have any understanding of how much wealth has been generated and concentrated into the hands of the Economic Elite over the past 40 years; there is no historical frame of reference. This withholding of wealth is truly the greatest crime against humanity in the history of civilization.

What could be done with all the money that has been hoarded by the Economic Elite is extraordinary!

Let's consider what we could do with the money that has been stolen from us? On top of what should be our average six-figure yearly income, we could have:
  • Free health care for every American,
  • A free 4 bedroom home for every American family,
  • 5% tax rate for 99% of Americans,
  • Drastically improved public education and free college for all,
  • Significantly improved public transportation and infrastructure,
The list goes on...

This is not some far-fetched fantasy. These are all things that Franklin D. Roosevelt talked about doing in the 1940's, long before the explosion of wealth creation in our technologically advanced global economy. The money for all this is already there, stashed into the claws of the Economic Elite.

The denial of wealth to the masses is the key to the Economic Elite's power. Outside of outdated and obsolete economic models and theories -- and incredibly short-sighted greed -- there is no reason why all this money should be kept in the hands of a few, at the immense suffering and expense of the many.

If Americans could just understand how much wealth is being withheld from us, we would have a massive uprising and the Economic Elite would be swept away, into the history books alongside the evil despots of the past.

[This is Part II of David DeGraw's report, "The Economic Elite vs. People of the USA," originally published at Amped Status. Click here for Part I. Read more of David McGraw's writing here.]

© 2010 Amped Status

Source / Amped Status / AlterNet
Thanks to S.M. Wilhelm / The Rag Blog

[+/-] Read More...

05 August 2008

Robert Reich : The Heart of the Economic mess.

Former labor secretary Robert B. Reich.

Most Americans can no longer maintain their standard of living. And the core problem isn't the housing crisis or rising oil and food prices.
By Robert B. Reich / August 4, 2008.

The Federal Reserve Board's "beige book" for June and July offers a clear explanation for why the economy has slowed to a crawl. It shows American consumers cutting way back on their purchases of everything from food to cars, appliances and name-brand products. As they do so, employers inevitably are cutting back on the hours they need people to work for them, thereby contributing to a downward spiral.

The normal remedies for economic downturns are necessary. But even an adequate stimulus package will offer only temporary relief this time, because this isn't a normal downturn. The problem lies deeper. Most Americans can no longer maintain their standard of living. The only lasting remedy is to improve their standard of living by widening the circle of prosperity.

The heart of the matter isn't the collapse in housing prices or even the frenetic rise in oil and food prices. These are contributing to the mess, but they are not creating it directly. The basic reality is this: For most Americans, earnings have not kept up with the cost of living. This is not a new phenomenon, but it has finally caught up with the pocketbooks of average people. If you look at the earnings of nongovernment workers, especially the hourly workers who comprise 80 percent of the work force, you'll find they are barely higher than they were in the mid-1970s, adjusted for inflation. The income of a man in his 30s is now 12 percent below that of a man his age three decades ago. Per-person productivity has grown considerably since then, but most Americans have not reaped the benefits of those productivity gains. They've gone largely to the top.

Inequality on this scale is bad for many reasons, but it is also bad for the economy. The wealthy devote a smaller percentage of their earnings to buying things than the rest of us because, after all, they're rich. They already have most of what they want. Instead of buying, the very wealthy are more likely to invest their earnings wherever around the world they can get the highest return.

This underlying earnings problem has been masked for years as middle- and lower-income Americans found means to live beyond their paychecks. But they have now run out of such coping mechanisms. As I've noted elsewhere, the first coping mechanism was to send more women into paid work. Most women streamed into the work force in the 1970s less because new professional opportunities opened up to them than because they had to prop up family incomes. The percentage of American working mothers with school-age children has almost doubled since 1970, to more than 70 percent. But there's a limit to how many mothers can maintain paying jobs.

So Americans turned to a second way of spending beyond their hourly wages: They worked more hours. The typical American now works more each year than he or she did three decades ago. Americans became veritable workaholics, putting in 350 more hours a year than the average European, more even than the notoriously industrious Japanese.

But there's also a limit to how many hours Americans can put into work, so Americans turned to a third coping mechanism: They began to borrow. With housing prices rising briskly through the 1990s and even faster from 2002 to 2006, they turned their homes into piggy banks by refinancing home mortgages and taking out home-equity loans. But this third strategy also had a built-in limit. And now, with the bursting of the housing bubble, the piggy banks are closing. Americans are reaching the end of their ability to borrow, and lenders have reached the end of their capacity to lend. Credit-card debt, meanwhile, has reached dangerous proportions. Banks are now pulling back.

As a result, typical Americans have run out of coping mechanisms to keep up their standard of living. That means there's not enough purchasing power in the economy to buy all the goods and services it's producing. We're finally reaping the whirlwind of widening inequality and ever-more-concentrated wealth.

The only way to keep the economy going over the long run is to increase the real earnings of middle-class and lower-middle-class Americans. The answer is not to protect jobs through trade protection -- that would only drive up the prices of everything purchased from abroad. Most routine jobs are being automated anyway. Nor is the answer to give tax breaks to the very wealthy and to giant corporations in the hope they will trickle down to everyone else. We've tried that, and it hasn't worked. Nothing has trickled down.

Rather, the long-term answer is for us to invest in the productivity of our working people -- enabling families to afford health insurance and have access to good schools and higher education -- while also rebuilding our infrastructure and investing in the clean energy technologies of the future. We must also adopt progressive taxes at the federal, state and local levels. In other words, we must rebuild the American economy from the bottom up. It cannot be rebuilt from the top down.
Robert Reich is a professor of public policy at the Richard and Rhoda Goldman School of Public Policy at the University of California at Berkeley. He was secretary of labor in the Clinton administration.
Source / AlterNet

The Rag Blog

[+/-] Read More...

Only a few posts now show on a page, due to Blogger pagination changes beyond our control.

Please click on 'Older Posts' to continue reading The Rag Blog.