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Wednesday, February 26, 2014

How Govt. Hides the Poor: Formula for Measuring Poverty Dates to When a Loaf of Bread Cost 22 Cents



Depressing stats.

Photo Credit: Everett Collection / Shutterstock.com
Why is Congress still measuring poverty based on a 1963 trip to the grocery store?

To determine who is officially poor in America, the federal government compares a family’s annual cash income to a figure produced by an arcane formula that's based on the price of food in 1963, when a loaf of bread was 22 cents and a burger less than a quarter. Starting under President Lyndon Johnson, the government's official way of defining who is poor comes from calculating a minimum food budget for a family of four, tripling that figure to cover other living costs, and then indexing it annually for inflation.

The result is the federal poverty level. For 2014, that threshold was $23,850 for a family of four. Smaller families can subtract $4,060 per person. Individuals making $11,670 or less in 2014 were officially poor. Many government programs, from School Lunch to the Earned Income Tax Credit to Obamacare's subsidies, decide eligibility by comparing one’s annual cash income to the official poverty level—or to a multiple of it, say 150 percent.

Cities, states, advocates and academics have known for years that this measure of who is poor undercounts millions of Americans. They know that the 1960s-based formula ignores modern living costs, such as today's cheaper food but higher housing and other expenses. And they have developed alternative ways to track living costs that confirm poverty and economic insecurity of households just above the poverty line is far more widespread than Congress wants to admit.

But the 1960s poverty formula persists, and not without other pernicious effects. This heads-in-the-sand approach works against Congress spending more on current programs because lawmakers aren't using numbers that honestly depict the extent of economic insecurities. And an outdated methodology pre-empts a contemporary discussion of what a basic, dignified living standard costs, based on variables such as family size, one’s age and stage in life, and location.

“In the 1960s, the poverty measure was a focal point for the nation’s growing concern about poverty,” an April 2013 report by New York City’s Center for Economic Opportunity said, recounting this history and shortcomings. “Over the decades, society evolved and policies have shifted, but the official poverty measure remains frozen in time. As a result it has lost its credibility and usefulness.”

“In 2011, our poverty line for the two-adult, two-child family comes to $30,945,” the NYC agency said, after using a more sophisticated modern formula. “The 2011 official [federal] poverty threshold for the corresponding family was $22,811.”

Looking back to 2005, New York City found that its poverty rate consistently was 2 percent higher than the official federal rate. The federal formula did not just ignore changes in real life expenses, but also decades of government programs that didn’t pay out cash but kept more money in poorer people’s pockets.

“In recent years an increasing share of what government programs do to support low-income families takes the form of tax credits and in-kind benefits," the Center for Economic Opportunity said. "If policymakers or the public want to know how these programs affect poverty, the official measure cannot provide an answer.”  

There have been notable efforts in recent decades by government institutions, including Congress, to update, expand and replace the 1963 formula. But those efforts, while drawing a more realistic picture of who is poor in America, still aren’t framing federal policy. That’s because when it comes to Congress, better metrics aren’t used to create policy and law. One result is that anti-poverty advocates continually urge Congress to look at real living costs, and use more up-to-date numbers.

“Policymakers considering changes to social insurance programs such as Social Security and Medicare must consider the economic realities confronting older Americans,” a 2013 report by the Economic Policy Institute said, in one such example. EPI based its analysis on a more comprehensive but unofficial measure used by the Census Bureau—the same one used by New York City. Not surprisingly, EPI found that poverty and near-poverty were more widespread among the elderly than the government admitted.

“Many of America’s 41 million seniors are just one bad economic shock away from significant material hardship,” it reported. “Most seniors live on modest retirement incomes, which are often barely adequate—and sometimes inadequate—to cover the costs of basic necessities and support a simple, yet dignified, quality of life.”

But official Washington holds firm, using its arcane 1960s formula instead of adopting a more honest measure of tracking poverty and economically insecure Americans.

A Better Baseline

Social scientists have known for decades that the 1963-based poverty line didn’t include necessities such as shelter, utilities, healthcare, childcare, clothes, commuting and other out-of-pocket costs. In 1995, Congress asked the National Academy of Sciences (NAS) to create a formula including those factors. It did, but for years that sat on the shelf. It was used for academic research but not to recalibrate government policy and actions.

However, a decade after it was created, the NAS formula was adopted by several cities and states. Starting in 2005, New York, Philadelphia, Connecticut, Georgia, Illinois, Masachusetts, Minnesota and Wisconsin used the NAS formula and soon found out there were many more households living just above and below the poverty line.

Starting in March 2010, the Census Bureau started applying the 1995 formula, which it called the Supplemental Poverty Measure (SPM), and started issuing reports comparing the official and unofficial measures. For 2012, the “official measure” of poverty level income for “two-adult, two-child” households was $23,283, while the SPM was $31,060. For seniors, the Census Bureau said, “Note that poverty rates for those 65 years of age and over were higher under the SPM measure compared with the official measure.”

This Obama administration initiative, which was not embraced by the Congress, was noticed and praised by New York City Mayor Michael Bloomberg, who encouraged his city’s Center for Economic Opportunity to do a better job measuring poverty even if it meant acknowledging that New York had more poor people than previously thought.

“If we are going to successfully fight poverty, we need data that captures the challenges that poor households face as well as the benefits conveyed by our most significant government supports,” he said in 2011, when the Census released its first report using the NAS formula. “The decision to adopt this measure is not one that was made lightly; we know that a greater proportion of the American people are poor under this Supplemental Measure, and this is, if course an attention-grabbing finding. But it is important to have a measure that can accurately tell us what is going on.” 

What’s going on, as Bloomberg puts it, is that Congress is in the dark about the extent of economic insecurity and the role of government programs to offset it. Perhaps the best example is Social Security, which is not just an anti-poverty program paying the elderly a monthly benefit, but also helps millions of people with disabilities as well as children in families who lose a parent.

A recent Boston College study found that the country’s latest generation of retirees lack $6.6 trillion to maintain current lifestyles as they age, underscoring just how important Social Security will be for their quality of life. For millions of baby boomers, especially people of color and women, it will make up 90 percent or more of retirement income, according to experts like the non-partisan National Academy of Social Insurance.

In June 2013, the Social Security Administration said that there were 37 million retirees receiving benefits. Of those recipients, 23 percent of married couples and 46 percent of unmarried individuals relied on Social Security for 90 percent or more of their income. Those percentages are expected to grow in coming years, advocates say.

Washington’s current budget debate highlights this omission. President Obama is pushing to raise the minimum wage to $10.10 a hour, or $21,000 a year—saying that's a living wage. But absent from public debate is what it costs to keep vulnerable Americans, young and old, from falling into poverty or hovering above it by paying for household necessities.

How Much Is Needed?

When EPI experts Elise Gould and David Cooper looked at replacing the official poverty line with the more modern Supplemental Poverty Measure, they found that seniors with a household income (via any mix of social insurance benefits or savings) that was less than double the SPM could be thrown into poverty by a “single economic shock.”

“There is a large share of elderly Americans who are economicaly vulnerable; a single shock could push them precariously close to or into outright material deprivation,” they wrote. “With nearly half of all seniors in the United States falling below the threshold of economic vulnerability, policymakers must be especially careful when considering changes to social insurance programs—predominantly Social Security and Medicare—that protect this group.”

EPI’s conclusion that elderly Americans needed a monthly income twice that of the SPM is backed up ny an even more detailed poverty-line tool developed by the Washington-based advocacy group, Wider Opportunities for Women. It has an online index where anyone, from families with children to seniors, can plug in information on family type, income, location, savings and other expenses to calculate basic living costs below which one becomes impoverished—not being able to pay for necessities.

All of these tools and indices—the Supplemental Poverty Measure, EPI’s finding that elderly Americans need to earn double the SPM to weather inevitable crises, WOW’s economic security index—are a far cry from the official federal poverty threshold. They suggest that Congress and the White House should be looking at a different big picture: what it costs to live today and how far social insurance programs fall short of that line.

There's no need to measure poverty and economic insecurity by indexing family food budgets based on large eggs costing 45 cents a dozen and macaroni-and-cheese dinners 39 cents, as they did in Wisconsin in 1963.

Steven Rosenfeld covers democracy issues for AlterNet and is the author of "Count My Vote: A Citizen's Guide to Voting" (AlterNet Books, 2008).

Friday, February 21, 2014

Obama Appears to Have Abandoned the Idea of Cutting Social Security — For Now



Progressive victory over the austerity agenda could start a larger and needed conversation.

Photo Credit: Image by Shutterstock

A progressive political victory emerged in Washington in the fight over future funding of Social Security on Thursday, as news reports said President Obama will not propose using a new and stingier cost-of-living adjustment (COLA) formula that would cut future benefits when presenting his 2015 federal budget.
“The White House says President Barack Obama’s upcoming budget proposal will not include his past offer to accept lowered cost-of-living increases in Social Security and other benefit programs,” the Associated Press reported. “Those had been a central component of his long-term debt-reduction strategy.”

The AP report, later confirmed by the White House, is the latest twist in what has been a week of contradictory signals from top White House officials who said that Obama was still open to reductions in future Social Security benefits as part of a major budget deal with Republicans.

"This offer from the President remains on the table, Deputy Press Secretary Josh Ernest said Thursday, who went on to explain that the stingier COLA was not in the White House's proposed 2015 budget because Republicans never made a serious offer to end tax breaks for the rich.

"The President is not going to be in a position where he is going to ask senior citizens and middle-class families to make sacrifices in pursuit of reducing the deficit and not ask the wealthy and well-connected to make some sacrifices, too; that it’s just not fair and it’s not good policy," he said.

But the White House spokesman said that Obama was still open to future Social Security cuts if the Republicans got serious about closing tax loopholes. "If Republicans hearing this exchange are thinking to themselves, well, you know what, that makes a lot of sense, maybe I should call the White House and say, 'Hey, look, I’m willing to close some tax loopholes if you’re willing to put some entitlement reform changes on the table,' then I would encourage those Republicans to call the White House right now.  I’m sure we can set up a meeting and we can have a conversation about that. But that offer has been on the table for more than a year and we have not seen any constructive engagement from the other side."

The AP report prompted many progressive advocacy groups to issue press releases calling it "welcome news" and declare victory.

"We are thrilled," said Richard Fiesta, Executive Director of the Alliance for Retired Americans. "Our voices were heard. Nationwide, grassroots actions and people-powered politics worked. We applaud the President for doing the right thing: listening and keeping this unjust cut out of his budget proposal. A negotiating tactic or not, cuts to Social Security’s earned benefits will only serve to increase income inequality and hurt the most vulnerable members of our society."

In recent days, a groundswell of opposition has arisen in anticipation that Obama would include the so-called chained CPI in his fiscal year 2015 budget. Sixteen U.S. senators and 117 representatives have signed letters urging him to drop the proposal. Advocacy groups launched e-mail campaigns and were ramping up pressure Thursday morning—when the AP report broke.
The chained CPI would lower Social Security benefits by 6.5 percent over 20 years, the National Women’s Law Center found, saying that  equals 16 weeks of lost groceries for a single 85-year-old woman.

Since the mid-1980s, Congress has repeatedly cut back spending on Social Security by proactively instituting stingier cost-of-living formulas. Last fall, economist Dean Baker testified in Congress that benefits for retirees, averaging $1,290 a month in 2014, would be more than 25 percent higher without these cutbacks since 1983. In January, Congress similarly cut back future increases to veterans’ pensions.

The White House is expected to release its 2015 budget in early March. In the past week, top officials were equivocating on whether the chained CPI would be included.

On Thursday, Gene Sperling, outgoing White House Director of the National Economic Council and Assistant to the President for Economic Policy spoke at the “Morning Money Breakfast Briefing” in Washington organized by Politico.com and the Peter G. Peterson Foundation, which has spent millions on p.r. campaigns to significantly cut Social Security and other safety net programs to retire the federal debt without a tax increase. Tweets reported, “Sperling won’t say whether budget will include chained CPI [the stingier COLA]. Says potus [president of the United States] has been willing to compromise.”
Last Friday, top White House Spokesman Jay Carney was asked about the chained CPI and the 2015 budget and appeared to endorse it, saying, “What I can tell you is the president has demonstrated in the past and continues—and will continue to demonstrate his commitment to achieving additional deficit reduction that addresses our medium- and long-term challenges through a balanced approach.”

Progressives can claim a political victory because it will signal a shift in the framing of the discussion around strengthening Social Security. What progressives will likely do next is try to turn the political discussion to expanding Social Security benefits and raising taxes on the wealthiest Americans ensuring the program is solvent for decades.

In the Senate, Iowa Democrat Tom Harkin has introduced a bill to do just that. It would increase current benefits by about the same amount that the chained CPI would have cut—about $70 a month, shift to another COLA that more accurately tracks the elderly’s annual expenses, and raises Social Security taxes for people earning more than $117,000. Most Americans are not aware that only the first $117,000 of income is taxed for Social Security; capital gains are not taxed for it.

In contrast, debt-obsessed Republicans attacked Obama for not showing fiscal discipline and embracing austerity.

"The withdrawal by the President on this specific issue, and his general pivot away from focusing on the nation's medium and long-term fiscal challenges, reflects a dangerous trend," said Maya MacGuineas, head of the Peterson-bankrolled Campaign to Fix the Debt. "The nation needs the President to lead on this issue. The clear pullback on his part is a disturbing sign that he will not."
It will be a curious to watch if the issue is raised by Republicans in a 2014's congressional elections, as polls consistently find that upwards of 80 percent of Americans, regardless of party, support Social Security and back steps to strengthen it—including raising taxes on wealthier Americans.

Steven Rosenfeld covers democracy issues for AlterNet and is the author of "Count My Vote: A Citizen's Guide to Voting" (AlterNet Books, 2008).

Tuesday, February 18, 2014

The world's 85 richest individuals possess far more wealth than the poorest half of our global population.

85 Billionaires and the Better Half


An urban slum in Hanoi, Viet Nam. (Photo: Flickr / United Nations / Creative Commons)

The world's 85 richest individuals possess as much wealth as the 3.5 billion souls who compose the poorer half of the world's population, or so it was announced in a report by Oxfam International. The assertion sounds implausible to me.  I think the 85 richest individuals, who together are worth many hundreds of billions of dollars, must have far more wealth than the poorest half of our global population.

How could these two cohorts, the 85 richest and 3.5 billion poorest, have the same amount of wealth? The great majority of the 3.5 billion have no net wealth at all. Hundreds of millions of them have jobs that hardly pay enough to feed their families. Millions of them rely on supplements from private charity and public assistance when they can. Hundreds of millions are undernourished, suffer food insecurity, or go hungry each month, including many among the very poorest in the United States.

"The number of people living in poverty is growing at a faster rate than the world's population. So poverty is spreading even as wealth accumulates. It is not enough to bemoan this enormous inequality, we must also explain why it is happening."

Most of the 3.5 billion earn an average of $2.50 a day. The poorest 40 percent of the world population accounts for just 5 percent of all global income. About 80 percent of all humanity live on less than $10 a day. And the poorest 50 percent  maintain only 7.2 percent of the world's private consumption. How exactly could they have accumulated an amount of surplus wealth comparable to the 85 filthy richest?

Hundreds of millions live in debt even in "affluent" countries like the United States. They face health care debts, credit card debts, college tuition debts, and so on. Many, probably most who own homes—and don't live in shacks or under bridges or in old vans—are still straddled with mortgages. This means their net family wealth is negative, minus-zero. They have no  propertied wealth; they live in debt.

Millions among the poorest 50 percent in the world may have cars but most of them also have car payments. They are driving in debt.  In countries like Indonesia, for the millions without private vehicles, there are the overloaded, battered buses, poorly maintained vehicles that specialize in breakdowns and ravine plunges. Among the lowest rungs of the 50 percent are the many who pick thru garbage dumps and send their kids off to work in grim, soul-destroying sweatshops.

The 85 richest in the world probably include the four members of the Walton family (owners of Wal-Mart, among the top ten superrich in the USA) who together are worth over $100 billion. Rich families like the DuPonts have controlling interests in giant corporations like General Motors, Coca-Cola, and United Brands. They own about forty manorial estates and private museums in Delaware alone and have set up 31 tax-exempt foundations. The superrich in America and in many other countries find ways, legal and illegal, to shelter much of their wealth in secret accounts. We don't really know how very rich the very rich really are.

Regarding the poorest portion of the world population—whom I would call the valiant, struggling "better half"—what mass configuration of wealth could we possibly be talking about? The aggregate wealth possessed by the 85 super-richest  individuals, and the aggregate wealth owned by the world's 3.5 billion poorest, are of different dimensions and different natures. Can we really compare private jets, mansions, landed estates, super luxury vacation retreats, luxury apartments, luxury condos, and luxury cars, not to mention hundreds of billions of dollars in equities, bonds, commercial properties, art works, antiques, etc.—can we really compare all that enormous wealth against some millions of used cars, used furniture, and used television sets, many of which are ready to break down?  Of what resale value if any, are such minor durable-use commodities, especially in communities of high unemployment, dismal health and housing conditions, no running water, no decent sanitation facilities, etc? We don't really know how poor the very poor really are.

Millions of children who number in the lower 50 percent never see the inside of a school. Instead they labor in mills, mines and on farms, under conditions of peonage.  Nearly a billion people are unable to read or write. The number of people living in poverty is growing at a faster rate than the world's population. So poverty is spreading even as wealth accumulates. It is not enough to bemoan this enormous inequality, we must also explain why it is happening.

But for now, let me repeat: the world's richest 85 individuals do not have the same amount of accumulated wealth as the world's poorest 50 percent. They have vastly more. The multitude on the lower rungs—even taken as a totality—have next to nothing.

Michael Parenti
Michael Parenti's recent books include: God and His Demons (Prometheus), Contrary Notions: The Michael Parenti Reader (City Lights); Democracy for the Few, 9th ed. (Wadsworth); The Assassination of Julius Caesar (New Press), Superpatriotism (City Lights), and The Culture Struggle (Seven Stories Press). For further information, visit his website: www.michaelparenti.org.

It's the System, Stupid: The Gross Injustices of American Capitalism


Economist Gar Alperovitz talks to Buffett about how to create a new system from the ground up.

Peter Buffett and his wife, Jennifer, head up the NoVo Foundation, whose $1 billion endowment was made possible by Peter's father, famed investor Warren Buffett.Last year, Peter wrote a scathing opinion piece in the New York Times that called out traditional philanthropy for treating symptoms while ignoring the underlying systemic issues. Now that the dust has settled, Peter Buffett sat down with Gar Alperovitz, longtime advocate for a transition to a more just, equitable, and sustainable economic system, for a conversation about hope, change, personal commitment, and community roots.

GA: I want to make it a dialogue. I’m not a reporter, but I do want to start with the obvious questions, with the piece you did in the New York Times on the "charitable industrial complex” and the reaction that you received.

PB: Well, it’s been fantastic. I was utterly surprised that it mattered that much, what I had to say. And that it mattered that much that I said it. I got a lot of responses like, “Thank god somebody said this, and thank god you said it!”
So then I wrote the op-ed thinking, oh, it’ll just be a blog, and when I finished I thought, well, maybe somebody might be interested in this. So when the NYT said yes, I was certainly flattered and excited, but still I had no idea how far it would go. It’s like writing a hit song—you’re just writing a song; you don’t know that it’s going to resonate the way it does. In fact, I say to my musician friends, here I’ve been spending my whole life trying to write a hit song, and it ended up being an op-ed in the NYT!

GA: I know you also got a lot of criticism.

PB: This is the interesting part. Within the first three to four days, maybe even longer, I received an absolute tsunami, beyond a flood, of support and positive responses—crashed the NoVo website for a couple of days, came in through my info@PeterBuffet.com address, hundreds of hundreds of responses, all positive, 100 percent.

And then the people who actually had their own megaphone, inside the system that I was talking about, started responding, and that’s when the negativity began. It came from, essentially, the institutionalized way of thinking. Immediately what I saw was that the people who got the feeling of it, the systemic nature or the overarching sense of what I was trying to put out there as an observation, totally got it. The people who wanted to reduce it—this sentence is wrong, that sentence is shows how nuts he is—were the ones who criticized it. Well, isn’t that the problem? I thought it was interesting seeing the issue once again show itself in who supported and who criticized the piece.

GA: That’s really interesting because I thought you were going to answer—but I’m glad you didn’t—that you were mostly attacked. That’s the part I saw.
PB: The positive responses are what people didn’t see, because it was email after email personally.

GA: Even more important, is the recognition in other’s eyes that one has a voice. A lot of people don’t know that they have a voice.

PB: We really feel like that at the foundation as one of the key components for us is to either give people the agency to have a voice, or if they don’t feel like their voice is valid for some reason, to have other voices speak for them to show them that it is. One way or another, we want to create this awareness around your own agency that your voice matters.

GA: I’ll tell you my story: I wrote a Ph.D. thesis which turned out to be on the decision to use the atomic bomb. I hadn’t started there. I started with the development of American economic imperialism in 1944-'45, and the planning for the post-war era. And I ran into the fact that people, when the atomic bomb became available, saw it as way to keep the Russians in the corner and enforce their position. This was at Cambridge, and Simon and Schuster decided to publish it.

I was 26—I thought, oh, isn’t that nice? And then all of a sudden, I had the same experience you had. It was front page on the New York Times and the Washington Post, but attacked, of course.

PB: Of course. Wow.

GA: I was like, whoa that’s a different world out there! What’s really interesting about the inside of the system is that even Harry Truman who made this decision actually believed that he was doing good. If you see him as an evil person conspiring, you miss the whole.

PB: I don’t particularly subscribe to the idea that there are people out there with their fingers on the triggers, pulleys, levers and buttons, sort of a conspiracy side of things, as much as a system that is running…

GA: It’s much deeper than a conspiracy.

PB: Right! The thing I love is that nobody’s that smart, nobody’s that together. No politician has it all figured out. That’s not to say that there weren’t bad actors when the engines were starting, for instance during the Industrial revolution.  People have gotten the car going off in that direction, but at that point, it’s going. That’s the hardest part about this. We’re inside this system and people absolutely not only believe it’s real, they need to believe it’s real.
GA: One of the things I’ve discovered—I’ve been speaking around the country, mainly because of my new book—most people understand that there is a systemic problem. It’s not politics and who you elect; the long-term trends are perfectly clear. It’s not a secret.

PB: You’re saying that most people get that it’s systemic.

GA: Yes, they get it. Media continues to be all about the Tea Party, and whether Barack Obama made the right move yesterday, and all that stuff. But what’s actually being said across the country is that there is a systemic problem. They voice it in different ways—some people talk about the big corporations, some about the government. But to say that there is a systemic problem is to speak to something people basically know. Lots of people.

PB: Yes, you’re right. Exactly. That was what was interesting about the response to the op-ed. These were not just philanthropic people in the NGOs cheering me on. These were people that just got that I was talking about a systemic deal.
GA: That’s the challenge. You put that issue in the center.  “If you don’t like capitalism, and you don’t want socialism, then what do you want and how do we get there?” It is that level of question.

PB: It’s funny, I was talking to someone at KPFK in Los Angeles, on Pacifica radio. He wanted me to go toward revolution and communism, essentially. And I said, look, all those words are charged for various people for various reasons, so I’ll just use the word “awaken.” How about that? How can I get to a word that isn’t charged? That’s a problem with “socialism” in particular.

GA: Although, you’ve seen the poll data. People under 30, who will be the creators of the new era, are slightly positive on "socialism," probably because Fox news is against it.

PB: Yes, exactly, Fox is probably doing themselves in, and they don’t realize it!
GA: But all of this is not manifest; we need to crystallize it somehow. The thing I discovered just going around the country, and particularly this last round, is that there is also a huge amount going on on the ground. But people don’t know that! People do not have the information. So they see the bleak and the dark, and the talking heads. And when you begin to give them information on what's developing locally all over the place, the most common reaction I get is “Oh! There’s some hope!” In the media, people don't get that, what they get is stalemate and deadlocked power.

PB: Yes, they’re getting what’s fed to them. Maybe the most important thing to us at the foundation is giving people the knowledge that other people are there too. Again, that alone gives them hope.

GA: Knowledge, information and also some perspective on how to move forward.

PB: It’s about trailblazers. What's critical is finding like-minded people that maybe have taken one step further than you have, and then you feel safe to taking that step yourself.

GA: Yes, it makes it seem possible, that it might be possible. There may be a way forward. But language is important. Half of our time at the Democracy Collaborative is spent on the ground, working on how to democratize ownership of wealth through community building strategies, and the other part is focused on the systemic question: if you don’t like capitalism and you don’t like socialism, then what do you want?

My language on this, I’m from Racine, Wisconsin, and my first test, is to think about my very good friend who I go back to see occasionally, who I started kindergarten with. And he’s extremely conservative, very religious and really smart. And last time I saw him, and I talked to him about this. If you don’t have a way to speak to people who are ordinary Americans like the guys I grew up with, you’re not in the game.

Let me ask you one more question about this, because I can't resist. How much of this—as a kid from Racine asking a kid from Omaha—how much of the spirit of this comes from the local Midwestern experience?

PB: In some sense, all of it. There’s some fundamental geographical DNA that plays a role in the literal DNA, I think I’m the sixth or seventh generation in Omaha, my great-great-whatever came in in the 1860s and started a grocery store in 1869, that was there for 100 years. That was the family business. My great-great-grandfather, I joke about this, his name was Earnest and his brother’s name was Frank. And their sister’s name was Grace! But talk about a work ethic!

My mother lived two blocks from where she grew up and where I was born. So in other words, I would go see my grandparents all the time—they were two blocks away. And I had the same English teacher my mother had in high school, and it just goes on and on. It was a community. This essentially could happen anywhere, but it feels very Midwestern.

GA: It’s a small enough city that you could have that feeling of community. Where I'm from the size of the town is smaller, about 80,000. I’ll probably romanticize this, but looking back, let me tell you how it was. The truth of it was, the zoo didn’t have an elephant and they wanted an elephant. (It's a whole other question whether that's a good thing.) So they put up a paper-mâché elephant with a slot in it, people would drop their pennies in, and ultimately, step by step, they got an elephant. They could actually count on the community.

I have this image, and I remember reading this story, where they’re training young firemen, and they have to learn to go into the fire and then come out the other end. They are one thing at the outset, and frightened. And they come out the other end as a fireman once they’ve actually faced it and done it. What I hear you doing is embracing Warren Buffett’s son, and coming out the other end, using it.

PB: Yes, absolutely. That’s exactly right.

GA: Wonderful. Did you have any hesitation about doing this?

PB: No, and I’ll tell you why. I got it from my parents, and my nature, too. It takes both. We grew up not having any idea what my dad did.
GA: You really didn’t know?

PB: We really didn’t know. When my sister was in grade school and she had to list our father’s occupation, she put security analyst. Everybody thought he checked alarm systems. He’d read the paper every night in the same place, going through S&P 500s, Moody’s, huge bulletins, but we had no idea. Honestly, we rented the same house in Laguna Beach for the summer for 10 years, over 10 years, and then they finally bought a house. So we had a second home when I was 13 or 14, and that was a big deal. And that was a $125,000 house on the beach, it wasn’t a $4 million house or whatever.

So there were little things that were a little different, but nothing that was wildly different than anybody in the neighborhood. We didn’t have any sense of that. When I was in my 20s, in the '80s, he showed up on some richest person list, it might’ve been when Forbes started doing it. And my mom and I were on the phone laughing saying, wow, now everybody is going to start looking at us differently, even though we’re still the same. But being in Milwaukee and being a musician, it was actually not a thing because my friends were painters, house painters, and musicians. We never got a ton of feedback one way or the other.
But when Jennifer and I moved here to New York City in 2005, I called my dad and said, this is weird. This is the first time I felt like the name is doing things to people. My wife calls it the funhouse mirror. And he hadn’t thought of it, my dad was like, oh, yeah, this is kind of like you’re a Rockefeller or something in NY. I mean, none of us think that way, and he hadn’t either.  In the past decade or so, he’s been really way more public. And so now, of course, he walks down the street and people recognize him and are excited to see him—and he deserves it. He’s worked his tail off for years and years and years.

But when I was growing up, it was never a factor; when it started to become one, I was already fully formed, essentially, or certainly formed enough, because I’ll never be fully formed. I was formed enough to be able to recognize that it could be a tool. How am I going to use this thing? It’s worth using, and it’s stupid to run away from it. Why live in anything other than a positive relationship to it? How do I work with this? It’s been spectacular, trying to figure this out, especially after this op-ed because that opened up so many things, and I want to be careful.

GA: That’s a whole different public life. It’s not only music.

PB: Exactly right, and the foundation is of course a big part of this because it has enough assets to potentially shift things.  What do we do with that? How do we behave? We knew from the minute we got the money that our behavior is as important as the money. Luckily Jennifer and I have been together for 22 years, and we have worked through our personal relationship stuff.  However you want to say it, we are learning so much about being in a relationship to each other that that can only begin to reflected out into the larger world.

We’re rooted individually and together, and what I’ve learned, ultimately, is the whole "be the change" thing is way more complicated than people think. People think it’s do the change you want to see in the world. Being is so much harder, but you get so much back for doing it. I don’t want to use the word ‘work’ because it’s not work, it’s this wonderful place of discovery. It literally grounds you. And I am literally barefoot all of the time. That’s no joke. I’m convinced that being in nature, eating from the land you live on, drinking water from the land you live on, all these things are things that we’ve experienced for millennia, and have only been separated from at most 150 years, Are essential. Whatever the next thing is, it has to have that as a component. A deep local commitment.

GA: I was just thinking this about it the other day talking with my wife (we’re in our 41st year). I went to William Horlick High in Racine, WI, and my friends, going to public school, were blue-collar and farm kids—I could walk from our house easily in five minutes to a farm to get fresh food. That’s gone now from Racine, it’s changed. But we had that possibility, to connect to the land, to meet people of different backgrounds….

PB: Public education is a huge part of that. My education was public from all the way through kindergarten through high school, and you’re right, you meet everybody there.

GA: But it wasn’t a question. It’s just the way it was.

PB: It’s community. Our grandparents didn’t call it organic food, right?

GA: What about the larger ecological piece—climate change? Where does that come in for you?

PB: Well, to me, it gets into the stopping the bleeding part when there’s a systemic nature of the wound. Climate change falls into the category of critical. It’s another piece of the systemic problem. I don’t put it in a different category than violence against women, economic inequality, or all the things that create the other layers of injustice, except that it’s an injustice against the planet, which is probably the deepest. In NoVo, we aren’t specifically addressing climate issues, but that doesn’t mean we don’t think it’s important.

GA: To say that it is a systemic problem, rather than a technological problem, changes the debate.

PB: I have friends who are so passionate about doing all this stuff around climate change, but it’s like the Affordable Care Act. These things are big deals, but let's remember the Einstein quote, “The significant problems we face cannot be solved by the same level of thinking that created them.” All this carbon sequestering, people talking about burying CO2 under the ocean: you have to be kidding me. Which generation is going to pay for that?

GA: It’s really interesting, to focus it that way: it’s not the way the movements are currently engaged. They are trying for piecemeal legislation and they come up against the fact that it is really the system that needs changing. We better get an alternative, and that shifts the conversation.

PB: I think some of the problem gets back to the question of hope. I think it's beautiful to see some of the people who are so passionate about this cause, but then you say, actually that’s not going to work, you need to change the system.
GA: And they say, well how do I change that?

PB: Exactly, then they say, well, that’ll never happen, so what do I do?

We’re talking about people who have a lot of influence and you would think the kind of the imagination to admit, you know what, you’re right, let’s go! I’m struck by the way ego stops this from happening. You know, someone has a cause, it’s their cause, they’re going to fight for it: to say to them, you know what, actually, it doesn’t matter unless you tackle the big picture. Nobody wants to hear that.

GA: But they know. And if it’s a system problem, we better figure what’s the alternative, at least  have some ideas about it. We better have some starting points. I use the term evolutionary reconstruction. Which means you need to reconstruct institutions, and reform doesn’t get you there.

PB: That’s the thing. I’m so with you on that. Reform is giving energy to the existing problem, ultimately.

GA: And revolution, typically, doesn’t get you there either. Either you’re going to find a way, over time, to change the institutional structure and the patterns in culture that reinforce it, or you are stuck. This might be possible, it might not be, but what’s interesting is that once people understand it they begin to have a path.

PB: They have to. They absolutely do. And that’s the hard part; I think of it as a lilypad—people need something to jump to, otherwise they’re not going to jump. I found that in my own career as a musician, I was doing commercials commercials commercials, and I felt comfortable, safe, and it took seeing something I could jump to, that was built strong enough, to make the leap.

We feel that it’s our responsibility to start building the scaffolding—creating the conditions so that something can be built. We don’t need to be saying that this is exactly what it should be. But we obviously have to have enough of an inkling about what we think it could be, but not be attached to the exact outcome.
I joke about it, that we’re trying to use money as if money doesn’t matter. But that’s the trick, you have to use the existing structure so that the existing structure can go away. And this plays out differently in certain sectors, you can imagine alternatives easier in some than others. There are certain things—politics, the economic structure—people can’t imagine another way.

The idea is that you can start to give people agency—that’s where the Internet can help—and then knitting these people together. You can, I’m sure, cite more local examples than I can, time-dollars and these various things. In fact, there’s a bank in New England that’s going to start lending local currency, which I think is so interesting. I think the key is small, local transformation that then gets knitted together. In a different vein, we’re working with Ai-Jen Po on domestic worker union rights, and she’s really helped me see a similar process, knitting together migrant workers, service workers, domestic workers, Walmart employees— there’s various constituencies that all are starting to feel that they are not alone.

GA: That’s critical, not feeling alone is politically critical.

PB: It’s huge! You need to start with extremely small and manageable, extremely bite size chunks of change that you can turn into a meal. Honestly, I think the country is too big anyway. I’ve always had this feeling that bioregions, in particular, would be a way people naturally have and can organize themselves around. And that the country could go in this direction, probably over 100 years, 20 years, 400 years? I don’t know how long it’s going to take.

GA: I’m smiling because I have argued the same thing for a long time: a continental system is too big to manage democratically. Is participatory democracy possible with 318 million people? I don’t think so.

PB: No, exactly. And that’s okay.

GA: It means that there’s a whole radical shift in constitutional structures that's necessary if you want a democratic system. There are a few places I see beginning glimmerings of this regional notion. In the Pacific Northwest, there’s a lot of discussion of regional issues, and then in New England, there is a growing effort to focus on air quality and climate change, on energy, and on food as region wide concerns.

PB: Exactly. And again, a bioregion just makes sense. I don’t know if you’re familiar with Ecotrustand Salmon Nation. That is visionary.

GA: Actually, if you go back to the 1930s and the early vision of the TVA (not what it became in WW2) what it was was a river system. That’s what they were trying to manage.

But regional scale is an argument that people have the hardest time with; when I talk about this question, and I say, no this doesn’t make sense, at some point this country is too big to manage. That’s very hard for people to get their heads around. At some point, you’re talking about scaling down the system, or it doesn’t solve the problem. That’s really tough. “Capitalism” is easy to talk about compared with actually thinking about regional scale decision-making of a genuinely serious kind.

PB: Yes, which is strange to me because history is definitely on our side when you’re talking about localism. The nation-state is a new idea and it’s an idea.  Wednesday: just an idea. America: just an idea. You have to remember that.
GA: I spend most of my time these days writing books. It’s all about ideas. And I often say, I don’t think ideas matter at all, most of the time. Except sometimes they do…and then they can matter to people a very great deal.

I think this is the first time in my adult life—including the '60s—and as a historian I would say, I think it may be the first time in American history where we are truly up against systemic limits and the systemic issues are really on the table. The Great Depression was nothing compared with the political-economic and ecological limits now challenging the system. And this makes it a really important time.

PB: And wars can’t take us out of it, which is what happened both with WWI and WWII.

GA: That’s absolutely critical. The war option is declining as an option to bail out the system. I agree entirely. And the traditional liberal solution, for better or worse, is not available largely because of the collapse of the labor movement, which was the heart of its power base.

PB: And that’s why knitting together the workers in a way that we hope we can help do is valuable.

GA: And this then points to the evolution towards a different system. That is really what we are talking about and that’s when ideas matter; it’s not just projects. I put it like this sometimes: I am really for projects. But I’m totally against “projectism,” the idea that my project is better than your project and so on.

PB: Exactly, and this is, again, part of the problem. We have so successfully individualized people that they don’t get this necessity for social interaction and working together and moving together. And I think part of it is the origin of species:  the piece of that story that got amplified was essentially every man for himself, survival of the fittest. When in fact, my understanding is that most of that story was the communal nature of the animal kingdom, which we’re a part of.

But the industrial revolution amplified the piece that mattered to them. I find that whole period so interesting. Have you read Looking Backward? I just read this after someone reacting to the op-ed suggested I should. It’s amazing and it speaks to that time where a book mattered. What that book launched is pretty extraordinary. And I do think it was only WWI that stopped, not only the momentum of the book, but the thinking of the time.

GA: The socialists and all of that early movement were especially interesting because when it came down to earth it was community socialism. Municipal socialism, like in Milwaukee. But it was community-based, it was not just state socialism.

PB: And these nationalist clubs that started spawning up all over, and it gets back to projects versus projectism, because it’s people recognizing the similarities of what they’re doing, even though it might be different for their particular locale.

GA: We have to have the chutzpah to imagine and declare that this period of history could be the pre-history of the next great transformation.

PB: And that’s exciting to people. As opposed to scaring people.

GA: And we need to discuss it openly. Say that it’s a system problem and it’s capitalism. Working for the next three or four decades laying groundwork for transformation becomes meaningful if people acknowledge and embrace the first proposition.

PB: What’s encouraging is that we are at a point where if you say the problem is capitalism, you don’t get branded something. All you’re doing is saying—and this is what the op-ed was about— that from the place that I sit, this is what I’m seeing. Saying that doesn’t make me something else; it just makes me an observer of the state we’re in, let’s all work towards something else. But I’m not going to brand myself some brand from the past that will serve to demonize me or put me outside the circle in someway. And that’s the trick, because the system wants us to do that.

GA: Absolutely. We just held the first meeting for something we’re calling the “Next System Project” this past Thursday. We had 18 people in the room, including the president of the American Political Science Association, who just finished her term, and the president of the Academy of Management, that’s 19,000 business school professors, along with others, professors, activists, and so on.

The issue we were discussing was: if we are facing a systemic problem, how do we put that on the table and how do we talk about it seriously? Every single person in that room, hands down, said it was a system problem, not a political problem. Not a social problem. Isn’t that interesting? We were surprised at the unanimity and clarity; it was striking just how enthused everyone was about tackling the question at the level of the system.

PB: I will say that, to me, that’s probably Obama’s greatest gift: he’s shown that nothing that stays within our current system is going to work. He really did that for all of us.
GA: I think we’ve been in some sense dropping the ball. People understand more than we have been saying. Particularly when the rhetoric is dropped.

PB: That gets back to the needing to knit together. And I think that’s happening. I loved that the most searched words in Merriam-Webster was capitalism and socialism. These are the kind of things we can measure now—technology will be extremely valuable in terms of saying that this is undeniable and here’s why.

GA: We need to make this shift manifest to people. This is a different time in history, and this is really the moment. People are beginning to adopt a frame that the next two to three decades count and that we need to be thinking in terms of movement-building, project-building and idea-building. I think of it as the pre-history of the next great shift. National People’s Action is talking about a 40 year plan; BALLE, who we both work with, is talking about a generation of work. You know the progressive era—it took this long, but if you can get rolling, things can really change, and that’s what we’re talking about. The way I sometimes put it, and it drives some people crazy, is well, you want to play this game? The chips are a few decades of your life. That’s what it’s about.

PB: I tell staff here, we’ll probably be dead when the things we’re working on actually come to fruition, and that’s okay. We want to see indicators, but don’t count on being at the party.

GA: I’m going to give you two numbers that really resonate in my experience. In the talks that I’ve been giving, the one that really floors people is that 400 people in the US have more wealth than the bottom 180 million. I used to say that this was literally medieval, but I don’t anymore because a medieval historian came up to me and told me it was never that bad in the medieval period.

PB: Oh my god.

GA: It’s a staggering number.

PB: And in a global context, it’s even more staggering.

GA: But it also points towards one of the things any serious alternative systemic design will need to address.

The other number emerges when I tell people that we don’t have any economic problems, and they say what are you talking about? And I explain that the current American economy today produces roughly $200,000 for every family of four right now. We don’t have an economic problem, we have a political problem managing the wealthiest economy in the world. If we were at full-employment, it’d be closer to $250,000. Or—I then say—$100,000/year with a 20-hour week.

That opens one’s eyes. About equality and inequality, and the distribution of work and work time.

PB: And the framework around “deserving” and welfare, all those claims that if people just wanted to work, they could. That stuff drives me crazy.

GA: The technical term for that is "bullshit."

PB: Another number: how small Occupy was in terms of constituency, 250,000 people at its peak. And think about how nervous just that many made a whole lot of people.

GA: And that’s just openers.

PB: We’re talking just 1 or 2 percent of the population, to really get something going. To build that movement, you need to give people a sense that there are thousands and thousands of people out there working for the same things; you need to give them a sense that they’re not alone.

GA: And that there may be a path. There may be a direction. There may be a different system out there if we build it.

Peter Andrew Buffett is an American musician, composer, author and philanthropist. He is an Emmy Award-winner and co-chair of the NoVo Foundation.

Gar Alperovitz is the Lionel R. Bauman Professor of Political Economy at the University of Maryland and the co-founder of the Democracy Collaborative. His new book, What Then Must We Do? has just been published by Chelsea Green.

5 Signs America’s Super-Rich Are Going Off the Deep End



Inequality seems to have made the wealthy very upset...for themselves.

Photo Credit: Shutterstock.com
Is it us, or have America’s ultrawealthy been sounding increasingly unhinged lately? Despite the fact that the wealth of the 1 percent jumped 31 percent from 2009 to 2012 while the other 99 percent of America saw a gain of only 0.4 percent, the rich are very upset, and they need to tell us about it. Maybe it’s all the talk about income inequality that’s gotten them so stirred up. Whatever it is, here are five signs that the zillionaires seem to be losing it.

1. The rich are mouthing off in epic rants.

They’re going on talk shows, writing editorials, bitching and moaning, and taking every opportunity to tell us just how fed up they are.

Wealthy upper-eastsiders in New York are screaming that progressive Mayor de Blasio is punishing them by not plowing their streets of snow. Billionaire Home Depot founder Ken Langone warned Pope Francis that if he doesn’t shut it about income inequality, the charitable contribution spigot will be turned off. Nutcase venture capitalist Thomas Perkins just claimed that there is a war on the rich comparable to the Holocaust and that the wealthy deserve more votes. Bill O’Reilly warned, "Every affluent person in America is in danger. Every one." He asks you to pray for them.

During the Occupy protests, there was a surge of wailing from the 1 percent about perceived demonization and vilification, and it seems to have risen once again. It’s gotten so bad that Jason Furman, head of the President's Council of Economic Advisers (and quite rich himself) has told his fellow 1 percenters to knock off the “hyperventilating.”

2. The Ivy League apologists are out ‘splainin’ in full force.

Harvard’s Greg Mankiw is America’s most shameless defender of the 1 percent (just in case you didn’t know that about him, he wrote a paper titled, “Defending the One Percent”). You can rely upon the chairman and professor of economics at Harvard and former Mitt Romney advisor to pontificate about why the megarich are smarter and more creative than you and not deserving of your ire. Mankiw just published an op-ed in the New York Times describing the risks our brave gazillionaire “superheroes” take to promote the public good.

Noting that actor Robert Downey Jr. recently got a movie paycheck of $50 million, Mankiw enjoys a little taunting: “Does that fact make you mad?...Does it make you want to take to the streets in protest?” He then condescends to observe that of course we don’t get mad at Robert Downey Jr. because our pea brains can comprehend how he made his money. It’s when our limited mental faculties can’t digest the wondrous activities of CEOs and financiers that we become sour.

Largely oblivious to the fact that a significant portion of America’s wealthy have arranged things so they can get away with cheating, bullying and creating nasty financial products that drain the pockets of their fellow citizens, Mankiw assures us that CEOs deserve their sky-high paychecks because the “value of making the right decisions is tremendous” (like Jamie Dimon overseeing a bank that has enjoyed an historic "crime spree?”) and because of all the taxes they pay (like Apple’s famous “Double Irish with a Dutch sandwich” tax evasion scheme?).
He goes on to ‘splain that financiers are among America’s “most talented and thus highly compensated individuals.” (Talented, perhaps, at redistributing money upward?)

3. A new field of psychology is emerging to treat the uberwealthy.

Being loaded is a load to bear, evidently. A recent article in Mother Jones outlines new trends in psychotherapy emerging to deal with this overwhelming burden.

Jamie Traeger-Muney, a “wealth psychologist,” became the first shrink employed by a bank to work directly with customers when Wells Fargo hired her to offer touchy-feely counsel to people worth over $50 million in 2006. Now business is booming and she works with several other big banks and financial institutions. She notes that the rich are upset by all the bad press they’re getting and that they need to explore their feelings. (May we suggest the editorial pages of the Wall Street Journal, which are always open for this purpose?) For his part, psychology consultant John Warnick, who works with bank advisors, is careful not to use the awkward term "wealthy," but rather “legacy families” when dealing with American fatcats. Has a nicer ring to it.

As the rich pile up more and more money, there’s a whole new industry of coaches who deal with everything from how to divvy up the loot to the kids to coping with the guilt and alienation of “Sudden Wealth Syndrome.” They teach the rich to meditate and cope with the biases against wealth that can “gnaw at an inheritor’s self-worth.”

4. They’re barricading themselves in.

It is a perennial problem for the super-rich that once you’ve got the loot, you’ve got to guard it. In a February 15 New York Times blog, economists Samuel Bowles and Arjun Jayadev report that America now has as many private security guards as high school teachers.

Bowles and Jayadev note that the share of our labor force dedicated to guard labor (broadly defined) has risen fivefold since 1890 and today stands four times higher than that of Sweden, which has similar high living standards. “In America,” the authors write, “growing inequality has been accompanied by a boom in gated communities and armies of doormen controlling access to upscale apartment buildings.” Economic disparities, they note, tend to “push nations to devote more of their productive capacity to guarding people and property.”

Wealthy American citizens have gone into survivalist mode, constructing luxury bunkers and panic rooms in their fancy apartments. The 1 percent doomsday preppers are requesting everything from secret passageways to pepper-spray sprinklers, in preparation for every conceivable disaster and attacker. Chris Pollack, president of Pollack+Partners, a New York-based design and construction outfit, told Forbes magazine that spending on home security has seen a noticeable uptick in the past five years. Some of the stuff is in the realm of science fiction, like infrared cameras, biometric technologies and ballistics-proof suites.

5. Buying sprees are getting weirder.

There are only so many Prada bags you can buy before it starts to get boring. So the overly affluent have to resort to ever stranger and more refined items and services on which to spend their cash.

All across the world, luxury goods are booming. But wealthy American shoppers are particularly hedonistic in their spending. Serendipity 3 in New York City sells a $300 hamburger held together with a solid gold, diamond-encrusted toothpick. In South Beach, Miami, you can take a bath in Evian mineral water for $5,000. For the morbidly minded, luxury taxidermy is all the rage just now.

Going out in high style is becoming increasingly popular; America’s plutocrats may not have caught up with their Chinese counterparts, who hire strippers for funerals, but they’re working on it. Choose a burial-at-sea on a luxury yacht, or pick up a family mausoleum at California’s Forest Lawn Memorial Park for $825,000. American richies excel in upscale pet funerals, spending thousands to send Fido on a diamond-studded journey to the afterlife. You can even have your deceased pet mummified for $30,000.

All of this behavior leads us to believe that the rich are getting a little nervous about all that cash they're hoarding, and how they got it. Maybe burying yourself alive in a bunker with an open line to your wealth therapist is the only thing left to do.

Lynn Parramore is an AlterNet senior editor. She is cofounder of Recessionwire, founding editor of New Deal 2.0, and author of "Reading the Sphinx: Ancient Egypt in Nineteenth-Century Literary Culture." She received her Ph.D. in English and cultural theory from NYU. She is the director of AlterNet's New Economic Dialogue Project. Follow her on Twitter @LynnParramore.

Sunday, February 16, 2014

The “outraged” “We are not against the system – the system is against us.”)

Ruthless Criticism

The “outraged”:

An outrage which thrives on illusions about crisis, democracy and the market economy

In Spain, Greece, France and elsewhere, large crowds of people, most of them young, assemble in downtown squares and protest. They show their deep disappointment, describe themselves across all national borders as the “outraged”, and find a common ground in their refusal to appreciate or accept how they are being treated by their governments. They unfurl banners that say:
“We are not against the system – the system is against us.”
No question, they’ve got that right: the system is against them. A general attack on their living conditions has taken place and continues to take place. The life they have eked out until now is not only becoming increasingly difficult, but impossible on an ever larger scale. More and more people, including and especially the oft-cited “well-educated young people,” are to be consigned to long term unemployment; governments are mercilessly cutting social programs, etc. The “system” is taking away the prospects to which they are accustomed. They counter that they aren't asking for anything unreasonable; they just want to be able to continue to live that life, that they are just ordinary people and can't understand why they are being given such a raw deal:
“We are ordinary people. We are like you: people, who get up every morning to study, work or find a job, people who have family and friends. People who work hard every day ...” (Manifesto of the Spanish Demonstrators)
But what makes the “outraged” think that by referring to themselves as ordinary people they have acquired something like an entitlement, a right that the authorities show them some consideration? And are the authorities really committing a violation if they redefine what it is to be an ordinary person? Because that is what is happening and that is what the “outraged” refuse to realize.
They say they are used to working hard. They also say they are used to going through life with modest demands – they carry this like a seal of approval when they say that they are not demanding anything unreasonable, just the status quo. So they assert their willingness to – keep on! – doing their duties as a small cog in this system. But the thing is, they never sought out this state of normality, and they certainly didn’t bring it about; it was arranged for them by the authorities. The latter’s laws determine down to the smallest detail what normality looks like and what people have to do to get by in it. They have defined the only way people can earn a living, or how they have to get by without any earnings, how they have to start and organize a family, how and whether they can afford retirement or not, etc., etc. In brief, in the normality which the “outraged” want to take back, they were nothing but dependent variables, pawns of the state. If they say: “We had a chance which you now take away from us,” then that was a “chance” which the state had established – not for their sake, but according to its calculations and its benefits. That hasn’t changed at all, which is proven by their governments’ current actions and which the “outraged” themselves experience for themselves and complain about. On the basis of the laws laid down by the state, the politicians, that is, those who are responsible for state interests, make the laws with which they create the “new normal,“ the normality needed by the state – and if that means casting aside the basic needs of the people, then that is how the state implements what it needs. The “system” is not meant to accord with the basic needs of the people; rather, the latter’s living conditions are made to accord with what the system needs for its ends. It makes clear how pathetic the calculations of the so-called “little people” are in relation to the calculations that count in this “system.” And what the “system” currently deems necessary is no secret; the politicians are entirely open about the fact that this society is based on and thrives on the functioning of the credit system – and if its “rescue” comes first, then not only is that more important than the normality longed for by the “outraged,” but the latter is also incompatible with the rescue of the credit system. In the words of the Greek Finance Minister: “Our measures are harsh and unfair, but there is no way around them.”
The “outraged” say: “The system is against us.” So they see that the “system” is not willing to put up with their livelihood. But as the first half of their slogan assures, they are very clear about the fact that they are not willing to show the same intransigence in return: “We are not against the system.” According to what they say themselves, the “system” has announced a fight against them, but they do not want to reciprocate this fight. The only way they care to deal with the antagonism between their own needs and those of the system is by pointing to it in outrage: They beseech the politicians, assuming that nobody could actually want to harm ordinary citizens in this way, and that the people simply don’t deserve that kind of treatment. The whole protest is permeated by a persistent lack of comprehension, a constantly repeated complaint summarized in the cry that this just can’t be happening!
But it is happening – so the “outraged” try to explain the truly incomprehensible. They do not come to the conclusion, or rather, they refuse to come to the conclusion that the “system” now as before acts according to its own needs and that the “outraged” now as before are only the material for pursuing those needs. They can only explain the truly incomprehensible by assuming some grave deviation or violation that has brought the “system” into conflict with itself. If the “system,” which once allowed an ordinary life, now suddenly makes that impossible, then they assume that this can only be because some evil will has imposed itself. Instead of looking at the reason for the way the “system“ is managed, they are looking for someone to blame in the “system.“ That can of course not have been the ordinary people like you and I, but only “the powerful,” who have been irresponsible and who have failed in their primary task of preserving “normality,” because they are only looking out for themselves and have sold out on all that is good and true. In short: The “system” is not managed not on the basis of its own laws, but has gone bad in a single violation of the law – wherever you look, it is pervaded by “corruption.” In the words of a manifesto:
“We are all concerned and angry about the political, economic, and social outlook which we see around us: corruption among politicians, businessmen, bankers, leaving us helpless, without a voice. This situation has become normal, a daily suffering, without hope.” (True Democracy Now! Manifesto)
First, it is a riddle why the same politicians, businessmen and bankers who guaranteed and were responsible for the old and supposedly bearable normality should have suddenly embarked on criminal careers. Second, it is a mistake to denounce these characters, the Zapateros and Papandreous, even if one is impudent and demands “away with them all!” The protesters thereby only reject the people in office, not their legitimate authority. But what would change if new people came to occupy the same offices? Third, the fuss about corruption is ridiculous, because what is personal enrichment compared to the force that these politicians are entitled to exercise over and against others in line with all the rules of democracy? But all that is of no interest to the “outraged” – the main thing is they have found their culprits and can actually continue to believe in a truly “good system.” It doesn’t occur to them to fight against the culprits now with all their might, rather they want to make an impression on the “powerful” by referring to their own “helplessness“ and lack of a “voice.” Why do they think they are able to score points against the “powerful” with that kind of a complaint? Can they really not imagine anything different than that their living conditions continue to be set by politicians, businessmen and bankers, that they must continue to conform to their orders? “Everyday suffering without any hope,” they say pathetically – they want to continue to be able to hope. They themselves are “helpless and without a voice” and can only hope that the “powerful” come to their senses, as only they can again provide a better normalcy.

Monday, February 10, 2014

28 Signs That The Middle Class Is Heading Toward Extinction

A Sheep No More


28 Signs That The Middle Class Is Heading Toward Extinction

By Michael Snyder
The death of the middle class in America has become so painfully obvious that now even the New York Times is doing stories about it.  Millions of middle class jobs have disappeared, incomes are steadily decreasing, the rate of homeownership has declined for eight years in a row and U.S. consumers have accumulated record-setting levels of debt.  Being independent is at the heart of what it means to be “middle class”, and unfortunately the percentage of Americans that are able to take care of themselves without government assistance continues to decline.  In fact, the percentage of Americans that are receiving government assistance is now at an all-time record high.  This is not a good thing.  Sadly, the number of people on food stamps has increased by nearly 50 percent while Barack Obama has been in the White House, and at this point nearly half the entire country gets money from the government each month.  Anyone that tries to tell you that the middle class is going to be “okay” simply has no idea what they are talking about.  The following are 28 signs that the middle class is heading toward extinction…

#1 You don’t have to ask major U.S. corporations if the middle class is dying.  This fact is showing up plain as day in their sales numbers.  The following is from a recent New York Times article entitled “The Middle Class Is Steadily Eroding. Just Ask the Business World“…
In Manhattan, the upscale clothing retailer Barneys will replace the bankrupt discounter Loehmann’s, whose Chelsea store closes in a few weeks. Across the country, Olive Garden and Red Lobster restaurants are struggling, while fine-dining chains like Capital Grille are thriving. And at General Electric, the increase in demand for high-end dishwashers and refrigerators dwarfs sales growth of mass-market models.
As politicians and pundits in Washington continue to spar over whether economic inequality is in fact deepening, in corporate America there really is no debate at all. The post-recession reality is that the customer base for businesses that appeal to the middle class is shrinking as the top tier pulls even further away.
#2 Some of the largest retailers in the United States that once thrived by serving the middle class are now steadily dying.  Sears and J.C. Penney are both on the verge of bankruptcy, and now we have learned that Radio Shack may be shutting down another 500 storesthis year.
#3 Real disposable income in the United States just experienced the largest year over year drop that we have seen since 1974.
#4 Median household income in the United States has fallen for five years in a row.
#5 The rate of homeownership in the United States has fallen for eight years in a row.
#6 In 2008, 53 percent of all Americans considered themselves to be “middle class”.  In 2014, only 44 percent of all Americans consider themselves to be “middle class”.
#7 In 2008, 25 percent of all Americans in the 18 to 29-year-old age bracket considered themselves to be “lower class”.  In 2014, an astounding 49 percent of them do.
#8 Incredibly, 56 percent of all Americans now have “subprime credit”.
#9 Total consumer credit has risen by a whopping 22 percent over the past three years.
#10 The average credit card debt in the United States is $15,279.
#11 The average student loan debt in the United States is $32,250.
#12 The average mortgage debt in the United States is $149,925.
#13 Overall, U.S. consumers are $11,360,000,000,000 in debt.
 #14 The U.S. national debt is currently sitting at$17,263,040,455,036.20, and it is being reported that is has grown by$6.666 trillion during the Obama years so far.  Most of the burden of servicing that debt is going to fall on the middle class (if the middle class is able to survive that long).
#15 According to the Congressional Budget Office, interest payments on the national debt will nearly quadruple over the next ten years.
#16 Back in 1999, 64.1 percent of all Americans were covered by employment-based health insurance.  Today, only 54.9 percent of all Americans are covered by employment-based health insurance.
#17 More Americans than ever find themselves forced to turn to the government for help with health care.  At this point, 82.4 millionAmericans live in a home where at least one person is enrolled in the Medicaid program.
#18 There are 46.5 million Americans that are living in poverty, and the poverty rate in America has been at 15 percent or above for 3 consecutive years.  That is the first time that has happened since 1965.
#19 While Barack Obama has been in the White House, the number of Americans on food stamps has gone from 32 million to 47 million.
#20 While Barack Obama has been in the White House, the percentage of working age Americans that are actually working has declined from60.6 percent to 58.6 percent.
#21 While Barack Obama has been in the White House, the average duration of unemployment in the United States has risen from 19.8 weeks to 37.1 weeks.
#22 Middle-wage jobs accounted for 60 percent of the jobs lost during the last recession, but they have accounted for only 22 percent of the jobs created since then.
#23 It is hard to believe, but an astounding 53 percent of all American workers make less than $30,000 a year in wages.
#24 Approximately one out of every four part-time workers in America is living below the poverty line.
#25 According to the most recent numbers from the U.S. Census Bureau, an all-time record 49.2 percent of all Americans are receiving benefits from at least one government program each month.
#26 The U.S. government has spent an astounding 3.7 trillion dollarson welfare programs over the past five years.
#27 Only 35 percent of all Americans say that they are better off financially than they were a year ago.
#28 Only 19 percent of all Americans believe that the job market is better than it was a year ago.
As if the middle class didn’t have enough to deal with, now here comes Obamacare.
As I have written about previously, Obamacare is going to mean higher taxes and much higher health insurance premiumsfor middle class Americans.
Not only that, but millions of hard working Americans are going to end up losing their jobs or having their hours cut back thanks to Obamacare.  For example, a fry cook named Darnell Summers recently told Barack Obama directly that he and his fellow workers “were broken down to part time to avoid paying health insurance“…
And the Congressional Budget Office now says that Obamacare could result in the loss of 2.3 million full-time jobs by 2021.
Several million people will reduce their hours on the job or leave the workforce entirely because of incentives built into President Barack Obama’s health care overhaul, the Congressional Budget Office said Tuesday.
That would mean job losses equal to 2.3 million full-time jobs by 2021, in large part because people would opt to keep their income low to stay eligible for federal health care subsidies or Medicaid, the agency said. It had estimated previously that the law would lead to 800,000 fewer jobs by that year.
But even if we got rid of Obamacare tomorrow that would not solve the problems of the middle class.
The middle class has been shrinking for a very long time, and something dramatic desperately needs to be done.
The numbers that I shared above simply cannot convey the level of suffering that is going on out there on the streets of America today.  That is why I also like to share personal stories when I can.  Below, I have posted an excerpt from an open letter to Barack Obama that a woman with a Master’s degree and 30 years of work experience recently submitted to the Huffington Post.  What this formerly middle class lady is having to endure because of this horrible economy is absolutely tragic…
Dear Mr. President,
I write to you today because I have nowhere else to turn. I lost my full time job in September 2012. I have only been able to find part-time employment — 16 hours each week at $12 per hour — but I don’t work that every week. For the month of December, my net pay was $365. My husband and I now live in an RV at a campground because of my job loss. Our monthly rent is $455 and that doesn’t include utilities. We were given this 27-ft. 1983 RV when I lost my job.
This is America today. We have no running water; we use a hose to fill jugs. We have no shower but the campground does. We have a toilet but it only works when the sewer line doesn’t freeze — if it freezes, we use the campground’s restrooms. At night, in my bed, when it’s cold out, my blanket can freeze to the wall of the RV. We don’t have a stove or an oven, just a microwave, so regular-food cooking is out. Recently we found a small toaster oven on sale so we can bake a little now because eating only microwaved food just wasn’t working for us. We don’t have a refrigerator, just an icebox (a block of ice cost about $1.89). It keeps things relatively cold. If it’s freezing outside, we just put things on the picnic table.
You can read the rest of her incredibly heartbreaking letter right here.
This is not the America that I remember.
What in the world is happening to us?
SOURCE: The Economic Collapse