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The Boom Was a Bust for Ordinary People
It begins to sound a bit naughty -- all this talk about the need to "stimulate" the economy, as if we were discussing how to make a porn film. I don't mean to trivialize our economic difficulties or the need for effective government intervention, but we have to face a disconcerting fact: For years now, that strange stimulus-crazed beast, the economy, has been going its own way, increasingly disconnected from the toils and troubles of ordinary Americans.
The economy, for example, has been expanding, at least until now, and growth is supposed to guarantee general well-being. As long as the gross domestic product grows, World Money Watch's Web site assures us, "so will business, jobs and personal income."
But hellooo, we've had brisk growth for the past few years, as the president has tirelessly reminded us, only without those promised increases in personal income, at least not for the poor and the middle class. According to a study just released by the Economic Policy Institute, real wages actually fell last year. Growth, some of the economists are conceding in perplexity, has been "decoupled" from widely shared prosperity.
I first began to sense this in the boom years of the late 1990s, when I was working in entry-level jobs for my book "Nickel and Dimed." While the stock market soared and fortunes were being made in the time it takes to say "IPO," my $6-to-$8-an-hour co-workers lunched on hot dog buns because that was all they could afford and, in some cases, fretted about whether they could find a safe place to sleep.
Growth is not the only economic indicator that has let us down. In the past five years, America's briskly rising productivity has been the envy of much of the world. But again, there's been no corresponding increase in most people's wages. It's not supposed to be this way, of course. Economists have long believed that some sort of occult process would intervene and adjust wages upward as people worked harder and more efficiently.
We like to attribute our high productivity to technological advances and better education. But a revealing 2001 study by the consulting firm McKinsey & Co. also credited America's productivity growth to "managerial . . . innovations" and cited Wal-Mart as a model performer, meaning that our productivity also relies on fiendish schemes to extract more work for less pay. Yes, you can generate more output per apparent hour of work by falsifying time records, speeding up assembly lines, doubling workloads and cutting back on breaks. That may look good from the top, but at the middle and the bottom, it can feel a lot like pain.
And what about the unemployment rate? The old liberal certainty was that "full employment" would create a workers' paradise, with higher wages and enhanced bargaining power for the little guy and gal. But we've had nearly full employment, or at least an official unemployment rate of under 5 percent, for years now, without the predicted gains. What the old liberals weren't counting on was a depressed minimum wage, weak unions and a witch's brew of management strategies to hold wages and salaries down.
So thoroughly is the economy decoupled from ordinary experience that according to a CNN poll, 57 percent of Americans thought we were already in a recession a month ago. Economists may complain that this is only because the public is ignorant of the technical definition of a recession, which specifies at least two consecutive quarters of negative growth. But most of the public employs the more colloquial definition of a recession, which is hard times. And -- far removed from whatever happens on Wall Street, the Nikkei, Dax, or the curiously named FTSE -- most Americans have been living in their own personal recession for years.
I could see this when I was doing research for a book on white-collar unemployment in 2004. Although the economy was officially on an upturn, I met laid-off people who'd been searching for a job for more than a year and often ended up -- after selling their homes and borrowing from relatives -- taking low-wage work as big-box sales clerks or even janitors.
In the months ahead, we can expect the hard times to spread. Citigroup has announced plans to eliminate 21,000 jobs; investment banks in general will shed 40,000. The mortgage industry is in a meltdown; Business Wire predicts a 37 percent increase in the number of companies planning layoffs this year. This is what a stimulus package needs to address: the persistent and growing struggles of the middle class and the working class, which is increasingly conterminous with the working poor.
There are reasons for doing so other than compassion. The chronically poor and the battered middle class have become a tripwire in the American economy -- generating defaults on debts, depressed consumption and global market turmoil.
Consider how we got into the current credit crisis in the first place, through defaults on subprime mortgages. These went to plenty of affluent folks and have wreaked havoc in gated communities. But overall, subprime loans were designed for, and snapped up by, the poor. According to a recent study from United for a Fair Economy, 55 percent of subprime loans went to African Americans and 17 percent to whites. Among whites, they went far more frequently to low-income people than to the wealthy -- 39 percent compared with 24 percent. Hence the subprime industry's noble boasts about providing the opportunity for home ownership to people who might otherwise have been excluded from it.
And why were so many Americans poor enough to turn to subprime mortgages and other dodgy credit schemes? The chief reasons are low wages and job insecurity. Chronically low wages afflict about 25 to 30 percent of the population -- more than twice the 12 percent the federal government counts as "poor." And even earnings in the six-figure range can be canceled overnight when an employer downsizes or outsources, leaving a family without income or health insurance.
For years now, we've had a solution, or at least a substitute, for low wages and unreliable jobs: easy credit. Payday loans, rent-to-buy furniture and exorbitant credit card interest rates for the poor were just the beginning. In its May cover story on "The Poverty Business," BusinessWeek documented the stampede to lend money to the people who could least afford to pay the interest on it: Buy your dream home! Refinance your house! Financiamos a todos! It wasn't just the bottom-feeders that joined the unseemly frenzy to lend to the poor; big companies, such as Wells Fargo and Countrywide Financial, plunged right in. But somehow, no one bothered to figure out where the poor were going to get the money to pay for all the money they were borrowing.
When personal finances are squeezed hard enough, you have the possibility of a genuine recession. People buy less, so growth declines to the point where even the economic overclass has to sit up and take notice. We saw the beginnings of that in the last Christmas season, which even Wal-Mart survived only through perilously deep discounting.
Not that we hadn't been warned. A century ago, Henry Ford realized that his company would only prosper if his own workers earned enough to buy Fords. But, like Wal-Mart, too many of our employers today haven't figured out that their cruelly low wages would eventually curtail their own growth and profits.
Government intervention, whether short-term or long-term, needs to get to the heart of this problem by offering a hand to the poor and the unemployed. Until the House capitulated to Bush two weeks ago, Democrats seemed to be standing solidly behind a stimulus package that would include an increase in food-stamp allotments and an extension of unemployment benefits, both of which are screamingly obvious measures. Current unemployment benefits last just 26 weeks in most states and end up covering only a third of people who are laid off. Food stamps are in even shabbier shape, with an allotment amounting to about $1 per meal. Nothing could be more stimulating than putting money in the hands of those who will spend it quickly.
But you can't jump-start a car that lacks a working battery. We need less titillating talk about "stimulus" and more commitment to some fundamental repairs -- higher wages, a real safety net and a return to progressive taxation among them. The challenge isn't just to prop up stock prices but to rebuild an economy in which everyone shares the good times -- and no one is consigned to a permanent recession.
79 Comments so far
Show AllTime for a consumer strike:
www.spudkat.com
The bit about allowing your child to perish if not economically useful is hitting the nail on the head.
Everyday on my way to the corporate job I struggle to keep, I drive through the mission district. So I see everyday the people that our capitalist economy has discarded. The message from capitalism is that if you are not economically useful to someone with money, you should just go off and quietly starve to death.
The mention of "full employment" in the above piece is the same idea. Way back when, people used to press their politicians for 'full employment'. The way ordinary workers would define that is obvious. That is, full employement is when everyone has a job. Seems pretty basic.
But, somewhere along the way, the corporate economists decided to redefine 'full employment' as when there is about 5% unemployment. They got the politicians, including the Democrats to accept this definition. So today we see references like the above that the economy is at 'full employment' when there is 5% unemployment.
5% is one out of twenty. Think about that for a moment. Corporate America has decided the economy is a peak efficiency (for them of course) when there is one worker out of twenty out of work. Thus, those that manage the economy will do nothing to increase jobs with one out of twenty is unemployed.
But think about that. For most Americans, especially those in the lower wage\more unskilled end of the spectrum, everyone has to live paycheck to paycheck. Its so hard to get by these days that anything more is pretty much impossible. So, when someone at that level gets 'unemployed', its a pretty short trip to homelessness and lack of nutrition.
So, the official policy of this country is that one worker out of twenty should be out of work, and thus either homeless and struggling to survive or fighting and struggling to stay above that level. This of course helps corporate profits by making sure the other workers know they can be unemployed quickly because there are people out there who'd desperately want their jobs. Which in turn is part of the reason why the gains in the economy and productivity don't translate to a better life for those working.
Those two policies are both inherently evil to me. To say that you are willing to have people who aren't economically useful die of starvation or exposure is sick. And to say that you plan on having one worker out of twenty out of a job because that's what's best for corporate profits is also sick.
And you won't ever hear a Democrat candidate criticize either of these ideas.
Trickle-down economics has shown its failures.
Don't pee on me and tell me it's raining.
Trade unions.
First, think about the amount of anti-union propaganda you see on corporate media. Union leaders in most fiction, movies and tv shows are always portrayed as corrupt. And unions are always portrayed as something that gets in the way. There are very, very few stories that portray how unions help ordinary workers. You almost have to have had the personal experience of working in a union company to see that.
Also, think about sports and unions. Another avenue of anti-union propaganda. Anytime there's a labor dispute in sports, the corporate media blames the union for the fact that the people don't get their bread and circuses for awhile.
That's just the public perception of unions. What they've done is convince most people who aren't in a union that unions are a bad thing and that they shouldn't even think about having one.
Then there's the next level of all the nasty tricks to keep unions from forming. Strange rules on who can group together in a union, rules that let them intimidate elections, and the way they act pretty much means that trying to start a union can cost you your job.
Then of course, this all combines with outsourcing. A very standard claim is that a company will close a plant and move it overseas if the workers dare to form a union. Actually, although out-sourcing isn't mentioned in this good article, its a constant cause of much of this. For all workers, union and non-union, outsourcing is used as a threat. Don't ask for more money because there's someone in China who'll do your job for less.
And another line of defense for corporations is the corruption of union officials. We've seen times when Union officials seem to take the side of corporate management over the cause of workers at a plant. Making nice with corporate management seems to be more important to some union leaders than doing anything to help workers. Try typing "Freightliner 5" into google to see a recent case.
Chessgame56: You are on the right track. The solution is not in the economy or the political parties or the corporations. The solution is systemic change and conscious enlightenment. As long as we view our "problems" as those of lack of jobs and inequality of wealth distribution, we are succumbing to the old paradigm of competition as the only means of achieving progress in any endeavor. Look at the game of musical chairs and you have the model for global economic policy. We scramble for the last chair, and are willing to allow the one who fails to capture his/her seat to perish. Read The Soul of Money by Lynne Twist for a clear perspective of who we are with regard to money/wealth/prosperity/humanity.
How many of you would allow your child to perish if they did not meet the requirements of society for success? Why do we have "special education" categories for the "sub-prime achievers" in society? And why do we defund those programs first when the budgetary negotiations begin, in favor of the "Defense Budget"? In fact, in answer to the question I asked about allowing your child to perish for failing to achieve "normally", we do just that: we allow them to enter military service to pay for their education and become "all that they can be".
The time is now to radically shift our focus from competition and struggle to cooperation and compassion. We cannot afford to continue as we have been and expect to survive. The wealthy cannot survive without the contribution of the "working classes", and the working classes cannot survive without opportunities to paricipate in the creation of new ways of being in the world. Leisure and creativity are keys to progress; not unimpeded growth. The traditional definitions of work will be replaced with ones of collaboration and partnership. War has never worked, really. Peace is an active state of consciousness in which all stakeholders are taken into account, including the planet and all of its inhabitants. It is time to awaken to the Power of Love and release Fear and Greed.
peace,
st john
To frank1569,
The average folks are busy surviving, besides the media kept telling
them that things are great and if they are struggling then it is their
fault. Either they are lazy or not smart or educated enough. And this
have been drummed in their ears for years to the point of like brain
washing. The super rich has a very efficient and clever propoganda machine against a naive and not very polotically aware population.
To Daniel David,
The mess we have right now was greatly helped by your beloved Bill clinton.
He shoved NAFTA down our throat after saying he is against it
He is for globalization and "free" trade. He signed the telecommunication
act that concentrated the Media in very few very rich hands. He deregulated the finacial markets by repealing the Glass-Steagal act. He opened most of the public lands for logging and mineral interest. In short he was president for the rich and powerful and diffinetly not for
the average Joe and Jane. What we need now is a third party. Keeping alternating between the two parties looking for that elusive "CHANGE" will not do. The current problems are too big for that useless and worn out approach.
The U.S. decline started years ago when government allowed outsourcing of jobs and giving corporations tax relief to screw American workers. Clinton's push for NAFTA really let the "shit hit the fan" by screwing the American workers beyond belief. When he signed NAFTA, I knew it was the end of jobs. America has now become a country of buying things then making things. Jobs created are in the low wage service areas. We have lost our manufacturing base and are headed for a third world economy. The wealthy have their money invested somewhere else and not in dollars. They knew this would happen and you can bet it was planned. Corporations own our government and the politicians and the deregulating of business gave them the carte blanche to do anything they wished. Reagen, Clinton and the Bushes have sold America out. Only the weathly will survive (as usual). None of the current candidates will change things and again Americans continue to vote against their own best interests. The recent primaries show how dumbed down Americans are. They believe the BS these candidates give ( in both parties). "Elections are a scam" article at www.bigeye.com/elections.htm says it all. Edwards was the only one talking about the working class, middle class, poor and elderly issues and Americans didn't take the time to search out the internet on him. They rely on the corporate owned media-TV and newspapers to tell them who to vote for. If elections are rigged as evidence says then we (the classes above) are in a ride to hell. Our Constitution is in shreds and sad to say, there doesn't seem to be a way out. The plans have been set and it is all in the favor of the elite who have enough money and care only for power and the hell with the citizens. They want to get rid of the poor, elderly and working classes because they see it a drain on bigger ownership plans of the country! We are now a Fascist country and as our Constitution crumbles to the ground, the government will say "EVERYTHING IS A- OKAY" and Americans believing the lie!
Very little mention,in these comments,on the demise of the Trade Unions.You don't think the employers worked so hard to get rid of them for no reason? The workers are now too busy or too scared of losing their job to fight the bosses for wages and conditions.This was the job the unions used to do:that protection has been disappearing fast to the joy of most employers.
One of the key of Thomas Jefferson's concept of Democracy was to keep power as close to the local level as possible.
Corporations have done exactly the opposite. That is they've moved power to the highest level possible. Up to the Federal government or even up to WTO or NAFTA trade bodies. This puts power out of reach and out of contact for ordinary citizens. You can talk to your city councilperson. Or you can organize a local campaign to unseat a city councilperson who is unresponsive to citizens. But its much harder to talk to a US Senator or to unseat a US Senator. Money plays a much bigger role in such contests. And bodies like the WTO or NAFTA are unaccessible to citizens.
The way the corporations have this today, their ability to control federal or international rules over-rules any local actions.
What we need is the opposite. What we need is what Jefferson had in mind. Government and power as local as possible. That doesn't mean we won't have corrupt officials. It just means we can watch them and replace them easier.
Quality Time,
The obvious answer is fear. Inherent to the culture, and fertilized quite actively. We even have a color scheme now for how much fertilizer is being applied to innervate the public.
There aren't many people who lack such attachments — and those who do have no interest in running for political office.
--Yes, Paul, as it stands modern politics is nothing if not a competition between egos. It seems that now, though, more than ever, the status quo is becoming a threat to the survival of the entire race. For some reason, when given a choice, the majority appearantly prefer taking the road to self-destruction. That being said, I think it is due as much to ignorance as evil (which some might attribute it to). And the powers that be need to keep us in ignorance to rule us as they do.
The Democrats need to pick up this and act
to develop a populist consciousness in the
party.
Seen on Common Dreams: "Mommy, the free hand of the market is touching me inappropriately!" All too often as corporations gain wealth they typically lobby the government to take advantage of the poor and the neophyte. Corporations have been given judicial 'person' status, but they can live forever in multiple nations at the same time and they have no feelings. However, a person without feelings is usually called insane. I think we should give corporations a different judicial status, perhaps "The Undead." I believe attempting to regulate corporate crime is in our best interest, but some say, no, capital flight will make things worse. So, they say, it's best to just let them have their way with us, but increasingly they will take their pound of flesh. And do not expect any "activist judges" to ride to the rescue (this is The Bush Legacy, after all). Populism was gnawed to the bone. Consumption was a disease when I was born. Now it's the leading driver of our economy. We used to manufacture useful items. Now we manufacture sophisticated ponzi schemes of sub-prime mortgage repackaged derivative moneymaking miracle assets and even gift-wrapped with AAA ratings, all at no extra charge. Those AAA bond insurers are now in trouble, as things continue to cascade. Many Americans are near bankruptcy. Add in the national debt and each one of us owes an additional $30,000. This has yet to metastasize, but it will. We spit blood in the Middle East. We ship bales of hundred dollar bills to Iraq and lose track of them; and so the dollar plummets (the remainder of The Legacy). It's been reported (unsubstantiated) that American oil companies are offering $5 million per vote in the Iraqi legislature to get a new oil law in place that is highly favorable for these corporations. This is surely a sick joke. Exxon has just made $40 BILLION last year and the value of Iraqi oil is on the order of $30 trillion. Offering a paltry $5 million per vote is truly insulting. Surely those votes are worth $10 million each, if they're worth a penny. Even at 10 times this figure, this would be a boon to the oil companies and possibly to America. So, what's not to like? Well, plenty actually. Not only does it show the world the hypocrisy of American-style democracy of the richest, but also long-term, it undermines the great changes that are needed and needed soon to compete with Europe and China, and to work with the world to mitigate the worst of global climate change. What changes are needed? Well, more ideas and less consumption; more efficiency and less extravagance; more sharing, less selfishness. Resurrection and redemption are possible, but I fear silver bullets have become too precious.
Barbara comes close, but doesn't get to the crux of the problem. Namely, the technical definition of "recession" isn't something we need to hold our breaths for, nor is it a good economic descriptor for the bottom 90% of America.
Furthermore, the US apparently doesn't honor such a neat and tidy definition of recession. It may be largely the research of this group: http://en.wikipedia.org/wiki/National_Bureau_of_Economic_Research
(But I see this Wikipedia page has been edited recently, check other sources to verify)
"GDP" is sort of like counting the plunder after a Viking raid returns to the homeland (from Asia in this case). If the shares aren't divided among the villagers, and only retained by the chieftains -- it may continue to make the GDP look good in the aggregate, but it is not a statistical mean/median measure.
Still worse, recessions aren't even calculated at the state level. The Minnesota state economist has already indicated that our state is in a recession: http://minnesota.publicradio.org/display/web/2008/01/15/recessionmain/.
The credit crisis and recession started long before all these highly publicized mortgage defaults. We've been in a recession for years. Regular folks (you know, the ones who pay higher payroll taxes for WORKING than those who get paid via investment dividends) have been getting screwed for so long it is finally starting to backfire in the face of all the wealthy investor hedge fund types. Funny, how the only time you hear the media start talking recession and our economic woes is when those who have been raping and pillaging us start to complain about how it's hurting them.
The worst offenders IMHO are the "Human" "resources" crowd---they are the f**in' gatekeepers that undermine both white collar and any other collar workers. They intentionally create glass ceilings that never side with workers, only management. That's why "over-qualified" people with training and education and experience wind up being janitors. HR floats vague job descriptions, establish wage and salary points, don't negotiate, and cover management's asses doing actuarial-type lay-off and "downsizing" schemes. Anybody who's worked at all would know that HR is the Orwell Department of any company.
ehrenreich's comment about economists' frustration over public perception reminds me of my days working in a hospital: elderly female patient complains of difficulty breathing (pale face, blue lips and starting to panic); the intern on call examines her, looks at her chart, and says in perplexity "but your O2 sats are almost 100%"---in other words, are you going to believe me or your lying lungs?
Somewhere along the line we evolved, from being personnel (which hints at us being human), to a resource, which tells us in no uncertain terms, that we are to be worked like a machine, and then discarded when we cannot keep up with the pace, just like an asset, which is depreciated over a number of years.
The 90% of us who struggle, are too busy watching our backs and working, to organize any kind of action. There is always the chance that any kind of industrial action will end with us losing our jobs. Once upon a time, we had political parties who would fight our corner, but today, all politicians are owned by industry and the media.
The problem of defining terms like recession, gross national product etc. is that it looks only at a few factors. I was at a conference once and asked an economist why they didn't factor in pollution, number of child deaths, number of hungry, homeless. He couldn't answer.
"Recession", like most economist terms, are framed from the perspective of the top, the financiers, bankers, wealthy investors, etc. The way the modern globalized economy (predicated on sweatshop, developing world and communist labor) is arranged, recession works a couple logical statements like this:
1. A recession for the wealthiest 1-5% DOES mean a recession for the remaining 95-99% because they'll pass their losses onto consumers and governments.
2. A recession for the bottom 95-99% does NOT necessarily mean a technical recession as indicated in the GDP -- since the top 1-5% may still be raking in fantastic wealth from their offshoring: they just aren't sharing it around.
And remember when all we heard about was the encouragement of
"an ownership society". The system has to change from the top down. Economic stimulus should look towards some sort of savings plan, not spending.
An endless war for the filthy rich and Daddy Warbucks is all the 'stimulus' we can stand. Our surviving children have been condemned to lifetimes of slavery as it is.
when I first started working in the 1970's, I made $450 a month as a secretary and that provided for $150 rent, $50 car payment, $75 groceries... I always had money for clothes and extras... and the jobs were easier, no multitasking, making one person do three jobs, the dollar has been devalued, all of the money has gone to fight an unethical war, while people starve, go homeless, without medical care, it is a travesty what has happened to our country during the Bush years, and also in the Clinton years... we need CHANGE... REAL CHANGE..
And to think the observers here at CD have been slamming me for months over our need to switch (yesterday) from Republican power to Democratic power in government. Ya think it doesn't matter who runs the agencies, the Supreme Court, the veto power, the budget and tax policies, the Fed, the MIC, the entitlements' futures and the federal oversight of everything economic?
Well, it does. And we now have years of damage to (slowly) undo and repair. And that's IF we're lucky enough to get the chance. A lot of tax-cut money is going to oppose you (us) this year. You pass the top end tax cuts, you let 'em keep the millions and billions, and guess what? That money sloshes into your next political campaign to fight YOU.
Dan,
Our country has had only Republicrats in the White House for 150 years. If the history of the corporate parties leads only to this, to periodic depressions that even a two-bit hack amateur economist saw years away, how many more years do your Democrats need? Another 150?
The funny thing is that you predicate success on a mere empty label "Democrats", not on qualities. Tell us what those presumed qualities are, and why they are so exclusively locked into partisan containers?
Through the lust for greed and power the invisible hand has morphed into the invisible fist.
So tell me, if things are so bad, why aren't people angry? Why is no one interested in rising up and demanding change?
Paul,
The basic difference in "qualities" is that Dems are tax and spend, Republicans (lately) are borrow and spend. This latter approach leaves the dollar in tatters, and makes Pareto's predictions come true that wealth gaps tend to widen if not deliberately countered with taxes.
If you had been working in IT or manufacturing sector, you probably felt we've been in a 'recession' for quite some time now. Credit began to seem like real money, especially between contracts (if you were lucky enough to even get a 3-month gig), forget job security or benefits. And all the while, MSM is telling you how great the economy is doing. Then you ask yourself, "is it just me??"
Live in a red state and you find people are in such deep denial that they tell other members of their church congregation (while continuing to donate money they don't have), that all is well, until one day they quietly disappear because their house was foreclosed on.
Through all that it of little comfort to know that you're safe from the dreaded terrorists, which at least would be something if only it were true.
Quality Time: I'll tell you. I started teaching in 1973 for $405/month take home. That was just before the "Oil Crisis." Gasoline went from 29.9 cents/gallon to 62.9 almost overnight. Hamburger went from 49 cents/pound to $1.29, etc. and I'd just signed a one year contract. And I was one of the lucky ones. By the 1980's I still had my low-paying job; I still do. Most of my relatives and friends were "laid off." Fired, sacked, same thing.
TV news in the 70's always had some reporter shoving a microphone into a bypasser's face and asking, "Do you believe in the Energy Crisis?"
Well, that got me thinking. Remember, Nixon was still President and Kissinger was looked upon as some sort of a Hero/Genius. The way I figured it at the time, they and their Buddies had had enough of those pesky "protesters" of the 60's and early 1970's. They probably decided that hungry, jobless folks don't think about protesting, they think about their next meal and rent payment. I know I did. Fix oil prices.... Voila! "Protester" problem solved.
Of course my friends and relatives thought I was nuts when I shared my insights. They may have been right. But so may have I.
Does that help to answer your question?
We have a largely regressive tax system. IP law, patent law, monopolies, big boxes, globalization, offshoring, NAFTA, worker visas, passports, total absence of any Commons, entitlements to the m.i.c., etc. all act to impede the economic mobility of wage slaves.
We'll need better than what most Democrats have to offer in order to really address these issues. Capitalism's very existence is predicated on a permanently sustained under-class. We have growing poverty, gap between rich and poor, etc. not accidentally, but as a direct byproduct of an economic system fundamentally at odds with democracy. Note that I'm not suggesting socialism as the only theoretical alternative.
Quality Time,
Our problems in der Heimat, in the grand scheme of things, are nothing. It's unfortunate that our way of life is somewhat built on the exporting of so much violence. But in historical cases, people even allow genocides to occur to their own populaces (USSR, China, etc.) without rising up. Why didn't more slaves rise up? The crux of the problem is lack of safe harbor.
If they can get stock prices up, expect economists to resume the propaganda that the economy is great. The people who are meaningfully affected by a poor worker's economy are not important enough to gain media attention. Bush has been touting his superior economy for years without being called on it. Expect more of the same. Never underestimate the favor that money buys. Cynical? Yes. Realistic? I sure think so.
Recession. Inflation. It really doesn't matter to the person trying to stay afloat. When I started my job it was a fairly good job with a few benefits. But, in the last few years that have been no raises, and benefits have been dropped, including medical insurance. During that time the price of gas has nearly doubled, as has the price of basics like milk and eggs. And, I am not in this boat alone. There aren't any jobs available in my area so quitting is not an option. Barbara has a good grasp of the plight of the poor and middle classes, moreso than most writers. I welcome her articles.
Those actuairal types devalued the value of human beings, you know for life insurance or other losses. You know if someone deprives you of a limb or finger...it is worth less. That is not to say the actuarily speaking you cannot survive on unemployment or even social security very long, and they have figured out exactly how long. Trust me, they know exactly what they are doing.
Dubyuh's great economy story is starting to wear a little thin now that the "Sub-prime"-(read garbage loan) crisis is starting to reach a crescendo. The economy has always been great for Dubyuh since he has never participated in this thing most people know as "reality". Food and fuel are not included in the official economic numbers since these would tend to confirm that the economy is heading toward full scale disaster. Payday loans and house flipping have kept many with a false sense of well being since the REPO man had not yet arrived to throw them out of their abodes. Well the repo man a.k.a. the wolf at the door is comin' a knocking to a gated community near you.
The stocks are plummeting again now that the word on the street is that the service sector, those jobs that are among the most difficult to send to China, are going steeply downhill as well. Are you in need of a job kid? Payday loans- That's where the action is in Dubyuh's Amerka these days. Are you feeling lucky- Punk?
With all due respect, it takes two to tango. Sure, the fed and the corporations have teamed-up to maximize obscene profits, but if real "change" is to occur, the oppressed classes need to accept responsibility for our share of the mess we're in. As BE says, it's not like we weren't warned. Yet, we didn't save, we didn't re-prioritize, we didn't go green, we didn't rise up against the greed machine, we allowed a band of nuts to tear apart our country for eight long years, we didn't - or wouldn't - read the fine print on the loans we knew we couldn't afford, we didn't campaign hard enough for progressive candidates, we can't even get ourselves to stop buying Exxon products.
Yes, "they" are conspiring against us because their disease, Greed, can never be sated. But we have yet to stand up and take responsibility for our own actions and behaviors.
Sorry RJ Hayes, the Democratic Party will not field a populist candidate as long as they are addicted to the corporate bucks that non-populists can garner.
Notice how the party pretends Kucinich doesn't exist.
why is everyone, especially so-called liberals, so afraid of using the four letter word- JOBS!. JOBS!JOBS!JOBS!JOBS!JOBS!JOBS!JOBS!JOBS!
they sent them all overseas and now we can't afford to but the things they make. brilliant business plan. now gimme my $300 check so i can get one more month out of my truck and a tank of gas before they repossess it. then i'm on easy street. right. ain't the capitalist religion wonderful.
This has been going on for at least the last 27 years, when Reagan came into office and bad mouthed us all as workers. Funny how before he got into office, we were the envy of the world as the most productive people, making the best products, of anywhere on the planet. Once he became president, we were all shiftless, lazy, drunken or drugged out, and would rather be on welfare than working. Suddenly, the layoffs started, I know people who lost a decade's worth of wage increases practically overnight, and WE had to pay 100% for the insurance that the company used to pay for or do without. And it was the "welfare queens" and the waitresses who weren't claiming their meager tips as wages who were all ruining America. Those people who still had jobs had to do the work of those who had lost their jobs, and somehow, they did it.
Go forward from that, and even that wasn't good enough. So we got the NAFTA shaft, and they took even those jobs away and gave them to those in other countries who wouldn't or couldn't complain about the 14 hour days, unsafe sweatshop conditions and no vacations. Funny thing is that for those of us who were saying that this was going on ever since Reagan, we don't get to work, anymore, and there is very little comfort or joy in being able to say "I TOLD YOU THIS WAS GOING TO HAPPEN!" It's pretty sad when I, a trained musician without any formal knowledge of economics at all, can tell you 27 years ahead of time what is going to happen, and those in economics can't see that without spreading the money around to more poeple instead of less, you DON'T HAVE an economy. This magic of the "free market" is just that, foolish belief in magic. Meanwhile, the congress passes tax breaks for dismantling a factory and offshoring jobs, and replacing them with NOTHING, and talks about how it's great for business. It's just diastrous to the American worker, the economy, and the country in general, that's all.
It's just foolish to keep living under this Alzheimer's economic system that rewards those who destroy the country for their own greed. Unless we go back to a system that spreads out the money instead of concentrating it in the hands of a very few, it won't get any better, but will, in fact, will get worse.
Good article but it doesn't go back far enough to show you why we are where we are now. It might take a book to do that, though, and space is limited...
Quality,
Great observation. Why is no one standing up and demanding change? It is called indoctrination. Perhaps the most sophisticated and best system of mass propaganda ever devised. Why else would most of the posts above talk about curtailing or regulating corporations. That makes about as much sense as allowing your child to spend only 3 hours instead of 8 with a mass murdering psychopath. Capitalism, and as a result the foundation of America is/has been corrupt and evil from day one. Remember the native indians? How about the 2 million Vietnamese civilians Americans bombed into oblivion? How about the incinerated civilians at Hiroshima and Nagasaki? Don't like that, how about the close to 1 million Iraqi civilians? I am sure the germans justified their genocide of the Jews with similar arguments. The fact that America cannot apply to itself the standards it applies to others has already decided your country's fate.
Capitalism will not survive it's next great crisis which is coming....
The decline and fall of the American Empire is upon us.
The 18th Century Scottish philosopher Adam Ferguson recognized that human societies typically follow a similar pattern -- small groups combine, general order is established, great wealth is created, a small wealthy elite is formed and rules, the wealthy elite becomes corrupt, the society decays and falls. What is happening in the US is far from unique and is repeating a pattern that has been with us throughout the history of human civilization.
What is unique about the current predicament is that the US government possesses the means, as in nuclear weapons, to end civilization and even human life on earth if not all vertebrate life. As US citizens, on recognition of this danger it becomes our duty to minimize the probability of catastrophe as this weakening giant desperately tries to remain a hegemon.
I liked Alex Cockburn's line "bitch slapped by the invisible hand".
The truth is we are being robbed. The corporate "masters" as Adam Smith called them, have skimmed all the cream and more.
We need to cap prices and at previous levels. Imagine the economic stimulus from buck fifty gas. From ordering health insurance bandits to lower premiums thirty percent.
We could use government to help us instead of helping the thieves rob us into a depression. Oddly they are suffering "catastrophic success" and would be better off if we spanked them a little.
Hey, there are quite a few economists who refer to this "occult process would intervene" you mention as a Marxist Revolution, but ok, call it an "occult process" if you like. Most economists agree that as competition between capital goes up, the only way to take out profits is to take it from the labor side of the equation, this according to Marx would finally lead to a revolution where the working classes take over the capital and spread the labor earnings evenly.
this according to Marx would finally lead to a revolution where the working classes take over the capital and spread the labor earnings evenly.
--the problem is that deep down human nature is the same in the working class as in the elite, and if and when the poor become the 'new elite,' they behave the same. That's why any real solution will have to come from authentically enlightened individuals who are free of fear and greed. Other than that the best we can hope for is temporary fix.
chessgame56,
There aren't many people who lack such attachments -- and those who do have no interest in running for political office.
I see it as a sustained power stalemate. Build power structures and regulations producing no apex, small political jurisdictions, no single person representing more than like 1,000 constituents, build systems which forbid the massive accumulation of power.
Sure, there is human nature (shit floats to the top). It's the broader backdrop, the institutions themselves, which must change. Because as it currently stands, our institutions for centuries primarily promote power cannibals, carnivores, soothsayers and sycophants. Our most sociopathic qualities.
When does logic begin to kick in? (please look at the statement
below from a recent CNN business article and
see my counter-points)
Weakness spreading:
Economists took the latest report as a sign that problems are no longer restricted to just housing and manufacturing.
"We're definitely seeing conditions spread to more parts of the economy. The big drop in business activity, that's a huge red flag," said Gus Faucher, director of macroeconomics for Moody's Economy.com.
Faucher said his firm now believes the economy is in a recession but he believes it's possible that growth will resume in the second half of this year.
However, Faucher noted this will depend upon additional rate cuts from the Federal Reserve, coupled with Congress quickly passing a proposed $150 billion stimulus package. That package includes $600 tax rebates for most U.S. taxpayers and some temporary tax cuts for businesses.
Economist Bob Brusca of FAO Economics said he doubted that the U.S. was in recession a week ago, but now he believes there's about a 75% chance that a recession began in January.
"That's what recessions do. They come upon you all of a sudden," he said. "When you look back at history, you're struck by how even-keel it is until the bottom just falls out."
IF I OFFEND ANYONE WITH WHAT I'VE WRITTEN BELOW I APOLOGIZE BUT I'M SEARCHING FOR ANSWERS IN PLACE OF THE SHODDY LOGIC/LIES THAT SEEMS TO HAVE TAKEN OVER:
My (Jeremy's) Counter-Points - Growth this Year? Ok, so when do these guys realize that what they are selling makes absolutely no sense?
Point 1:We're in an incredibly expensive war that our current President says we're finally "winning" but that "winning" formula is based off of our "troop surge". Those surging troops are scheduled to come home in a few months BUT the President won't/can't bring them home in a few months because, if you have the advantage of using logic, the minute we draw down those troops Iraq becomes a really bloody place again. Why, because the Iraqi's do not have a functioning government so all the underlying issues (much like America actually) remain unsolved and unresolved. So it's a powder keg that will explode the minute we reduce our presence. So the President won't reduce the troops this year no matter what as that would be a death nail to the Republican's Presidential Election chances. So the unabated expense of Iraq will continue through the rest of this year at least.
Point 2: If the Federal Reserve keeps lowering interest rates (I.E. printing more money) against an already internationally weak dollar inflation is inevitable, but it won't just be inflation we incur but STAGFLATION. Which is a much more insidious and ruinous problem as it combines inflation with total stagnation of the economy (jobs, wages, financing, real estate all stagnate during a recession). Most economist don't even know how to correct this problem and most agree it takes at least 5 years to come out of a stagflation type economies. In fact the best remedy is RAISING INTEREST RATES:
"Stagflation is a complex dilemma. Economists generally agree that no known monetary policy changes or fiscal policy changes are sufficient to remedy the problem in less than five years. Stagflation is difficult to remedy because no single solution will balance the market. Even fiscalists tend to agree with monetarists that eventually, to remove the inflation component of stagflation, the money supply must be reduced, which worsens the recession." - Wikipedia
Point 3: Our housing market is in shambles and only somewhere in the middle of the initial meltdown (foreclosures). Once the foreclosure calm down then you'll be left with the long process of "finding the bottom" of the market. How do you even find a bottom to a housing market that is tanking on its own DURING A RECESSION? You don't, expect incredibly cheap houses 3-5 years from now ($125,000 homes in the San Fernando valley again?). Plus, for almost all of us our houses double as our savings (excluding retirement funds which can't be practically used w/o massive tax issues/losses). So we'll all be faced with credit card debt (if you a "normal" debt ridden American that is), no savings, no equity or even worse upside down mortgages (house worth less than your mortgage). So how will $600 - $1500 rebates do a damn thing for any of us exactly?
Point 4: Tied to the housing market: The mortgage industry is practically destroyed at this point and the banking industry is caught up in the massive problem of "bundled sub-prime" securities worth nothing. So write-off's are occurring on a massive scale in the banking industry. That then trips the bond insurers who backed the Banks on these securities. This effect is just coming to light now and nobody has any grasp on just how massive that problem with be for the Bond Insurance Market and no tax cut for businesses can fix this problem. In fact even a government bailout like the S&L bailout of years ago would not work for a number of fairly complicated reasons. So at best the Banks will be saved by foreign investment like Citigroup recently was (I.E. - the $500 billion we're giving to the middle east and Russia in oil imports each year now) and our banks will then be owned by the Middle East or the Banks will literally collapse. I could go on an on with this point but you get the picture.
Point 5: I'd call this the 8,000,000 pound Gorilla in the room which nobody wants to talk about. We are at the tail end of the fossil fuel era. However you slice or dice it, Oil, Natural Gas and even Coal have "peaked" or are just about to (doesn't really matter much at this point which it is). If you picture a Bell Curve we are at the top of it with almost all fossil fuel resources (not to mention massive fresh water issues) and about to begin the downward slope, which is an exponential downward slope. But the world is still on a very steep upward trajectory in demand/use of fossil fuels to support their "exponentially growing economies and populations" throughout the world. This real and absolute contradiction can barely last during this moment much less another few years or decades. The price of oil is not coming down anytime soon and will in fact rise dramatically from here on out resulting in more war and more desperation to keep our current system even in some kind of recognizable existence. Everything you will touch, eat or walk on today was created, produced or derived from the benefit of cheap fossil fuels, think about that.
Point 6: Healthcare costs keep rising and our system sucks for just about all of us in either costs, full coverage or care. Enough said on this one.
Point 7: The overriding financial problem that will not go away now no matter what stimulus package, rebate, etc. occurs. GLOBAL WARMING. Is it real? Yes. How bad and how fast will it change everything? No one really can say but so far the conservative world of science has underestimated the speed and damage of it at every turn so far much to the surprise of nearly everyone. But if you still doubt, riddle me this: "if Global Warming is still in doubt, why is the most anti-environment President in history willing to put the Polar Bear on the threatened list due to Global Warming?".
Point 8: This is the point that the "stimulus package" is really meant to help, our economy is based 75% on consumer spending and services (well it's really based on Military Spending but government revenues prop that up so without consumerism related tax revenues the government has no money to hand over to the Lockheed and Boeing's of the world). But the average American is so debt ridden and now "house" poor that at best the stimulus package would temporarily "blow up the consumerism balloon" one last time but to no real lasting effect. Logic dictates most of all here. We've tried to have it all ways, in all directions for a long time now and it just can't continue with are consumer economy as more and more forces line up opposed to it.
Final Point: This is an election year, politics will trump everything and stall most things from getting done. The President is one of the lamest of lame duck President's in history and just proposed a $3 trillion budget (try counting to $3 trillion some time). Over a trillion of that is marked for Military Spending. A reduction in Medicare and all other healthcare funding by the federal government is proposed to be reduced. Do any of you really think that our economy produces $3 trillion in tax revenue, etc. for our government in any given year? Really?
So I would argue, don't believe the hype about a quick fix to our problems. We're entering a new era in American economy, change is coming. View the recession as the recognized beginning of a painful transition which will lead to an economy that bears little resemblance to the "fossil fuel economy based on exponential growth" that all the countries of the world are now driven with. The middle class in America must begin a dialogue amongst itself in order to save itself, big government and the self-interested elite/corporations do not care about you or me and as soon as your checkbook reads $0 you will be tossed aside and ignored until you become a viable consumer for them again. None of us lived during the dawning of the Industrial Era, The Great Depression or World War II so none of us have felt the instant jolt of massive, unplanned for change but it can and does happen. One day it's this the next day it's that. "When you look back at history, you're struck by how even-keel it is until the bottom just falls out."
If you find this useful or interesting feel free to pass it on, if you feel I'm insane I would tend to agree with you, if you feel you have a better view of any or all of the above please write back. This was written very quickly and I was not an "A" student in English to begin with.
Regards,
Jeremy Schneider
Kivals,
"The 18th Century Scottish philosopher Adam Ferguson recognized that human societies typically follow a similar pattern — small groups combine, general order is established, great wealth is created, a small wealthy elite is formed and rules, the wealthy elite becomes corrupt, the society decays and falls. What is happening in the US is far from unique and is repeating a pattern that has been with us throughout the history of human civilization."
Actually, I think Plato beat your man Ferguson by a thousand years or so in his writing of "The Republic" (the small wealthy elite is called the "oligarchy"). But it's a valid point.
I think the worst addiction Americans have today is MSM - they just can't turn off their TVs and radios - in fact, they even PAY to be brainwashed. I know this isn't the only problem, but it is one of the gravest threats we face today. How can you have a sane converstation with friends, relatives, or neighbors when they are brainwashed? It is impossible to discuss anything with someone who cannot grasp even a theoretical alternative - because they only know the corporate song-and-dance.
Hitler once dismissed protesters by saying 'Your children will know nothing else." That's what's happened to Americans today - several generations know nothing else, other than what they have been told by MSM. Even older generations - those who lived through the depression and/or post-WWII boom years - have been brainwashed by the constant stream of BS pouring into their lives, mainly through TV and radio, although propaganda is also prevalent in print - billboards, magazines, movies, and even school books.
People have been told what to think - and what is acceptable to say, or even think - by the very people who are exploiting them. This is why slaves didn't revolt, or why oppressed people often don't revolt - at least until their very lives are threatened. They just don't have any alternatives - they have been told that this is the way it is, and this is the best way - the only way.
We know (at least on CD) that a better life is possible - but that requires honesty, fairness, responsiblity (accountability) and justice - true freedom, especially freedom of speech. This doesn't mean just getting your own soapbox, but having a venue for all people to express opinions and debate alternative models. This DOES mean shutting off the propaganda machine - and that IS within our reach - it is a choice we make. So why do so many people actually PAY to be brainwashed? It is an addiction - just try turning off your TV and radio for a month, and you'll see what I mean. (Most families simply cannot do this - that's how bad the addiction really is in our society.)
I was never addicted to either TV or radio, and because my family lived under Nazi occupation, I was made aware of propaganda and media ploys all through my childhood. I am flabbergasted that almost every person is addicted to TV and radio - so much so that they actually prefer being brainwashed to engaging another real live person. (Just try visisting with someone when their 'favorite' program is on and you'll see what I mean.)
In the computer trade we have a saying - GIGO - 'garbage in, garbage out' - that applies to our current social predicament. Until Americans (or any people) can shut off the relentless tirade of corporate propaganda, we will be unable to address our social problems. And let me remind you that many billions of dollars of sophisticated research has been developed by psychologists to assure that brainwashing is irresistible - you simply cannot consume this tripe and stay sane. The drum-beat goes one from Day One - chidlren are indoctrinated from the earliest ages, and this brainwashing goes on in school as well as via TV babysitters, right on up to 'talk radio' for those times you are away from your TV. This is the real Orwellian threat - and Americans are addicted. Generation after generation has been brought up with the corporate model drummed into their heads - and the message is reinforced with appeals to the primitive brain - note all the sexual messages, food, competition, etc, stressed to hook you. Have you ever asked why people watch sports on TV instead of playing them? Why they would want to watch other people pretending to have sex - instead of having a healthy sex-life themselves? (We used to call such voyeurs 'peeping toms' - now it's just 'normal' movie, TV, and magazine fair.)
Deprogramming is difficult - beating an addiction is difficult - and here you have the double-whammy. So don't wonder why we are living like this. After all, tyrants have ruled by controlling the media all through history - that's why the slaves didn't revolt, and why oppressed and exploited people suffer even when their very lives are threatened - it's the message, stupid! But shutting off this debilitating threat to our lives is so difficult that most people simply cannot comprehend why they should do it, let alone dare tackle such a formidable issue. It's easier to live in denial - keep pretending that this insidious threat really isn't doing any harm.
The 'ruling elite' control people by deciding what they can think or say - and most Americans go right along with this idiotic program. Stalin, Mao, or Hitler never dreamed it could be so easy!
Americans are indeed to blame for their misfortunes - they can't or won't turn off the damned corporate propaganda machine. So it's their own fault - being anti-social still means that you are a sociopath. And all that BS about 'individualism is just that - BS. Humans are social animals - they get to choose their own society. So look around and see what your fellow humans have chosen for you. And maybe call them on that...
I have a novel idea - ban advertising. Yes, ban all advertising, of any kind - only factual information (with no pictures) should be available. This would stop a lot of the problems - and it would end much of the money-trail that corrupts everything in our lives.
St. John- That is the way. Keep your eye on the prize, and that is, "humanity".
As long as this country keeps turning down high quality candidates in favor of professional politicians with charisma offering money, there will be no change. The people are not cohesive except in war. The people don't want one payer health care because they want to be free to try to get the best compared to others. They don't want to see themselves as compromising for the general welfare. They want to go at it alone. That's America, and that's what's wrong with it.