“The Bear Market Economics Phenomenon” is an observation of Political Economics. Wall Street Admits: ‘We Got Rich Off the Backs of Workers’ thus creating the Bear Market. The Bear Market is America's default war.
The ethic of Wall Street is the ethic of celebrity. It is fused into one bizarre, perverted belief system and it has banished the possibility of the country returning to a reality-based world or avoiding internal collapse. A society that cannot distinguish reality from illusion dies.
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Rich people rarely tell you how they really feel about poor people.
Occasionally, though, you get a glimpse. Earlier this week, the
Washington Post published a storyabout
Rancho Santa Fe, a small but extremely wealthy enclave in Southern
California. Like the rest of California, the people of Rancho Santa Fe
are dealing with a drought. As you might imagine, that means water is
scarce and conservation is critical. For the denizens of Rancho Santa
Fe, however, conservation is someone else’s problem, namely poor people.
According
to Steve Yuhas, who lives in the area and hosts a conservative
talk-radio show, privileged people “should not be forced to live on
property with brown lawns, golf on brown courses or apologize for
wanting their gardens to be beautiful.” Oh, the humanity! In case it
wasn’t clear, Yuhas added that the right to water ought to scale with
income: “No, we’re not all equal when it comes to water.”
And Yuhas
isn’t alone. Gay Butler, an avid equestrian and fellow resident of
Rancho Santa Fe, fumed for similar reasons. “It angers me because people
aren’t looking at the overall picture,” she said. “What are we supposed
to do, just have dirt around our house on four acres?” Perhaps Butler
has a point. It’s one thing to demand sacrifice in extraordinary
circumstances, but we’ve got to draw the line somewhere, right? If a
woman wants to ride her finely manicured horse on a dirt-free prairie in
the middle of the desert, what matters a little drought?
Brett
Barbre, a fellow Orange Country aristocrat, also appears to get it. “I
call it the war on suburbia,” he remarked. “California used to be the
land of opportunity and freedom. It’s slowly becoming the land of one
group telling everyone else how they think everybody should live their
lives.” Barbre continued: “They’ll have to pry it [his water hose] from
my cold, dead hands.”
You may be asking yourself: Do restrictions
on water consumption during a historic drought really constitute an
all-out assault on human freedom? Fair question. Most of us fail to see
this issue in such grand terms. Maybe we’re missing something. Mr.
Barbre is either a bold lover of liberty or a detached plutocrat with a
penchant for hyperbole. You be the judge.
In any case, I see the
decadence of the people in Rancho Santa Fe as a microcosm of America
today, particularly corporate America. What these people exhibit, apart
from their smugness, is a complete absence of any sense of collective
responsibility. They can’t see and aren’t interested in the consequences
of their actions. And they can’t muster a modicum of moderation in the
face of enormous scarcity. Every resource, every privilege, is theirs to
pilfer with impunity. These people are prepared to endanger an entire
ecosystem simply to avoid the indignity of brown golf courses; this is
what true entitlement looks like.
The wealthiest Americans – and
their apostles in government – tell us that it’s the poor people who are
entitled, who take and exploit and keep more than they deserve. But
that’s a half-truth, and a dangerous one at that. Entitlement has many
faces, the most destructive of which is on display in Rancho Santa Fe.
These adolescent upper-crusters are entitled because they believe they
have a right to everything they can get hold of – regardless of the
costs. They believe living with others carries no obligations. Anyone
who places their right to pristine golf courses above their
responsibility to respect communal resources is a social toxin, a
privileged parasite eating away at the foundations of society. It’s
important that their actions be seen in this context.
There’s a
lesson in Rancho Santa Fe and in California more generally. What’s
happening there foreshadows our future. We’re confronted with crises on a
number of fronts. From climate change to economic inequality, our
institutions – and the people controlling them – are failing us. Changes
are necessary, but a segment of society (the 1 percent, we’ll call
them) is unwilling to sacrifice; they’re too invested in power, in
comfort. Whether it’s oil profiteers distorting climate science or Wall Street banks undermining efforts to
regulate the financial industry, entrenched interests are doing
everything possible to preserve the status quo, even when so doing
threatens to upend the whole system – just like the people of Rancho
Santa Fe.
The corrosive elitism in Rancho Santa Fe is the stuff
popular revolts are based on. These Dickensian vultures want to hoard
until nothing remains; they’re blind to those beyond their gated
communities. Disconnectedness is a close cousin of privilege, so it’s
not surprising that they live in a bubble. But their persecution mania,
their belief in their privileged status, is insufferable – and a public
hazard. They can’t imagine what it’s like to live without, so they’ll
risk anything to ensure that they don’t. California may survive the
selfish stupidity of a few citizens in Rancho Santa Fe, but it’s not
clear how long the country can survive the excesses and greed of Wall
Street and Big Business.
Wealth, it’s worth noting, isn’t the
enemy. The problem is the attitude of the wealthy, the contempt, the
indifference, and the lack of anything resembling civic virtue. To be
rich is no crime. To abuse privilege, to profit at the expense of
others, is quite another thing – and it’s all too common these days.
Sean Illing teaches political theory at Louisiana State University. Read more on his blog and follow him on Twitter.
ROCKY
MOUNT, Va. — A WOMAN came up to the book-signing table at an event at
my local library Monday night. She did not have a copy of the newly
released paperback of “Factory Man,” my book about what happened when 300,000 American furniture-making jobs were offshored to Asia.
But
she waited a half-hour in the signing line anyway, to introduce herself
and to tell me she was one of the more than 550 people laid off in 2001
when Furniture Brands International closed its Lane Furniture plant in
this former mill town.
She
couldn’t afford the $17 book, she whispered, because she was doing
housecleaning and other off-the-books, part-time work. (I offered to
give her one, but her gainfully employed sister-in-law ended up buying
her a copy before I could get to the box of books I keep in my car, for
just such occasions.)
In
the front row of the auditorium where I spoke sat a retired sales
executive from Bassett Furniture Industries. He’d spent his career
nearby in the eponymous company town of Bassett, a place that used to
teem with seven factories set along the banks of the Smith River. In
retirement, he and his wife live comfortably in a sprawling home in the
nearby resort community of Smith Mountain Lake.
But
they’ve had a hard time renting out property they still own in Bassett,
which saw its factories close, one after the other, as the company
offshored nearly all of its wood furniture production to China, Vietnam
and Indonesia in the wake of trade liberalization and China’s admission
into the World Trade Organization.
At
the other end of the front row sat another septuagenarian retiree,
whose eyes filled with tears, as I showed pictures of and spoke about
the people who line up outside the region’s food pantries
two hours before the doors open. His story was like that of others in
the crowd: His mother was raised in a Bassett-owned home, and his father
lost fingers to the company’s saws. He’s also a native of Henry County,
which has lost nearly half its jobs in the past two decades — not just
factory work but also jobs in the smaller companies that supplied the
factories, and in the mom-and-pop stores and diners where factory
workers used to spend their cash.
Unfettered
free trade has not only put the Henry County region near the top of
Virginia’s unemployment rankings for more than a decade, but it has also
ushered in an era of soaring food insecurity and Social Security disability claims.
And
crime, too. A sheriff’s deputy told me at another book signing that
many of his calls are now related to methamphetamine and heroin. An
unemployed man accidentally set an abandoned factory on fire while
trying to rip out copper electrical wires to sell on the black market;
he was riding a bicycle, an unusual sight in this hilly, rural,
car-reliant area.
After
weeks of Congressional chess over the Asia-Pacific trade accord, with
lawmakers finagling new methods to pass or block trade-negotiating
authority — depending on the day — the so-called “fast track” is now on
President Obama’s desk, a crucial step toward completion of the accord,
known as the Trans-Pacific Partnership.
Economists
aren’t sure how many factory jobs will be lost as a result, but even
T.P.P. proponents have acknowledged probable losses, especially in
lower-skilled, labor-intensive manufacturing.
People living in rural America just want someone in Washington to level with them:
Will
T.P.P. protect American jobs or hasten their demise? In talks and
readings I’m giving across Appalachia’s former furniture belt, that’s
always the first question I’m asked.
It’s
a complicated question, obscured by dueling political interests,
statistics slingers and documents that have been leaked as a
public-interest workaround to secret T.P.P. negotiations and a closely
guarded draft (though some 600 lobbyists were granted access to the
negotiating texts).
I
am not in possession of an economic crystal ball. But unlike most of
the lawmakers deciding the fate of America’s role in international
trade, I have spent much of the past three years talking to dislocated
workers still living in former factory towns. Most believe that T.P.P.
is simply the North American Free Trade Agreement “on steroids,” a done
deal driven by corporate greed-heads and the lobbyists they employ.
When
they hear proponents argue that T.P.P. will liberalize trade in
high-tech services and agriculture, making it possible to expand
America’s exports, they automatically replay President Bill Clinton’s
“win-win” prediction from early 2000: China’s entrance into the W.T.O.
would not cost Americans their jobs but would instead protect them, Mr.
Clinton insisted, because American companies would soon export more
goods to China’s growing consumer class.
Eventually.
In theory.
And
notwithstanding the fact that many Chinese factories were not above
dumping, or illegally underpricing, their products, to capture American
market share.
As
long as the consumer gets a slightly cheaper price on her bluejeans and
bedroom suites, who cares if China or any other country isn’t playing
by W.T.O. rules or adhering to labor and environmental standards?
Consumers
and journalists alike had failed to connect the dots between escalating
crime in dying factory towns and page-three wire stories about
Bangladesh textile factory fires. And why would they? The small-town
reporter has little license to cover the goings-on of the W.T.O. or the
United States International Trade Commission, and the few reporters who
do cover international trade rarely venture to towns like Rocky Mount or
Bassett.
All of which suits the press-avoiding chief executives just fine. The shareholders matter most.
The
globalization of low-skilled manufacturing is already a fait accompli,
T.P.P. proponents have argued, and the furniture- and textile-making
jobs that once made the Piedmont region of the mid-Atlantic hum are not
coming back from China or Mexico.
But
what about the other manufacturing jobs we’ve managed to hold onto in
the United States? How would the 1,350 workers at New Balance’s Maine
and Massachusetts factories fare, if faced with the elimination of
tariffs on shoes made by Vietnamese workers who earn an average of $90
to $129 a month?
As
imports soared in the decade following 2001, American manufacturing
sector jobs dropped by roughly a third. There are now more American
workers on disability (8.9 million) than are working on assembly lines
(8.6 million). And among the displaced workers in southside Virginia who
were retrained via Trade Adjustment Assistance funds — only about a
third of trade-displaced workers in Virginia opt for federally funded
retraining — most end up with lesser-paying service jobs, many of them
part-time.
“I
take the global long view,” said an urban planner and T.P.P. supporter
who came to a talk I gave last week in Greensboro, N.C., another former
furniture-making region. He’s right that globalization has fostered
better living conditions in the developing world. But improving the
lives of Indonesian peasants willing to work for desperately low wages
really has nothing to do with the decisions that closed some 63,300
American factories between 2001 and 2012.
Those
decisions were made by the biggest beneficiaries of unfettered free
trade, in a story line that seems straight out of a Michael Moore
documentary: the C.E.O. who now earns 300 times more than his average
worker; the shareholders who expect quarter-after-quarter growth in
corporate profits; the lawyers who helped devise the fine print in the
T.P.P. document and the lobbyists they hire who, if the leaks are to be
believed, think nothing of cutting off the supply of new generic drugs
for decades.
Unlike
most of the people in my rural, conservative audiences, I’d still like
to think President Obama means it when he says the T.P.P. will increase
economic growth and expand United States exports.
But
I’m stymied by the secrecy, I tell the people who turn up at my book
events, and by the influence of corporate money in election campaigns.
I’m troubled, too, by the failure to bring about a compromise that would
prohibit currency manipulation in countries that are part of the T.P.P.
like Japan and Malaysia, which distort their currencies to give their
own exports a boost.
I
worry that T.P.P. will simply exacerbate income inequality. Then I show
them a slide from Bassett, Va., circa 1942. A couple stands in front of
a company house, with their little girl, Bettie, in front of them.
The
little girl, now in her late 70s, told me she was so poor growing up
that, lacking pencils and paper, she learned to write by tracing her
letters in the condensation on the windows. But she went to college on
her father’s factory wages, and she grew up to become an inner-city
social worker with a master’s degree. That was the upward mobility
trajectory in America before globalization.
Then
I show them another black and white, this one of a ragamuffin girl,
circa 1969. When the economy was good, her mother soldered airplane
lights at a local factory. When it was bad, her mother picked up
under-the-table jobs like waitressing and babysitting for other people’s
kids.
That
little girl, now 51, was the first in her family to go to college, and
she threaded the needle of early trickle-down economics quite by luck:
She came of age when it was still possible for a promising poor kid to
go to college solely on Pell grants and other need-based financial aid.
That
little girl in the picture is me, standing in the driveway of a
ramshackle house in Urbana, Ohio. I did not grow up to become an
economist spouting theories of creative destruction. But I’ve spent the
past several years telling the tale of the people left behind, teetering
in globalization’s wake.
I wish I could tell the people in my audiences exactly who will benefit most from T.P.P.
But
anything this secretive, and this marked by corporate influence, leaves
little room for doubt: It will not be America’s factory workers.
Beth Macy is the author of “Factory Man: How One Furniture Maker Battled Offshoring, Stayed Local — and Helped Save an American Town.”
A version of this op-ed appears in print on June 25, 2015, on page A27 of the New York edition with the headline: Who’s Speaking Up for the American Worker?. Order Reprints|Today's Paper|Subscribe
Rich people rarely tell you how they really feel about poor people.
Occasionally, though, you get a glimpse. Earlier this week, the
Washington Post published a storyabout
Rancho Santa Fe, a small but extremely wealthy enclave in Southern
California. Like the rest of California, the people of Rancho Santa Fe
are dealing with a drought. As you might imagine, that means water is
scarce and conservation is critical. For the denizens of Rancho Santa
Fe, however, conservation is someone else’s problem, namely poor people.
According
to Steve Yuhas, who lives in the area and hosts a conservative
talk-radio show, privileged people “should not be forced to live on
property with brown lawns, golf on brown courses or apologize for
wanting their gardens to be beautiful.” Oh, the humanity! In case it
wasn’t clear, Yuhas added that the right to water ought to scale with
income: “No, we’re not all equal when it comes to water.”
And Yuhas
isn’t alone. Gay Butler, an avid equestrian and fellow resident of
Rancho Santa Fe, fumed for similar reasons. “It angers me because people
aren’t looking at the overall picture,” she said. “What are we supposed
to do, just have dirt around our house on four acres?” Perhaps Butler
has a point. It’s one thing to demand sacrifice in extraordinary
circumstances, but we’ve got to draw the line somewhere, right? If a
woman wants to ride her finely manicured horse on a dirt-free prairie in
the middle of the desert, what matters a little drought?
Brett
Barbre, a fellow Orange Country aristocrat, also appears to get it. “I
call it the war on suburbia,” he remarked. “California used to be the
land of opportunity and freedom. It’s slowly becoming the land of one
group telling everyone else how they think everybody should live their
lives.” Barbre continued: “They’ll have to pry it [his water hose] from
my cold, dead hands.”
You may be asking yourself: Do restrictions
on water consumption during a historic drought really constitute an
all-out assault on human freedom? Fair question. Most of us fail to see
this issue in such grand terms. Maybe we’re missing something. Mr.
Barbre is either a bold lover of liberty or a detached plutocrat with a
penchant for hyperbole. You be the judge.
In any case, I see the
decadence of the people in Rancho Santa Fe as a microcosm of America
today, particularly corporate America. What these people exhibit, apart
from their smugness, is a complete absence of any sense of collective
responsibility. They can’t see and aren’t interested in the consequences
of their actions. And they can’t muster a modicum of moderation in the
face of enormous scarcity. Every resource, every privilege, is theirs to
pilfer with impunity. These people are prepared to endanger an entire
ecosystem simply to avoid the indignity of brown golf courses; this is
what true entitlement looks like.
The wealthiest Americans – and
their apostles in government – tell us that it’s the poor people who are
entitled, who take and exploit and keep more than they deserve. But
that’s a half-truth, and a dangerous one at that. Entitlement has many
faces, the most destructive of which is on display in Rancho Santa Fe.
These adolescent upper-crusters are entitled because they believe they
have a right to everything they can get hold of – regardless of the
costs. They believe living with others carries no obligations. Anyone
who places their right to pristine golf courses above their
responsibility to respect communal resources is a social toxin, a
privileged parasite eating away at the foundations of society. It’s
important that their actions be seen in this context.
There’s a
lesson in Rancho Santa Fe and in California more generally. What’s
happening there foreshadows our future. We’re confronted with crises on a
number of fronts. From climate change to economic inequality, our
institutions – and the people controlling them – are failing us. Changes
are necessary, but a segment of society (the 1 percent, we’ll call
them) is unwilling to sacrifice; they’re too invested in power, in
comfort. Whether it’s oil profiteers distorting climate science or Wall Street banks undermining efforts to
regulate the financial industry, entrenched interests are doing
everything possible to preserve the status quo, even when so doing
threatens to upend the whole system – just like the people of Rancho
Santa Fe.
The corrosive elitism in Rancho Santa Fe is the stuff
popular revolts are based on. These Dickensian vultures want to hoard
until nothing remains; they’re blind to those beyond their gated
communities. Disconnectedness is a close cousin of privilege, so it’s
not surprising that they live in a bubble. But their persecution mania,
their belief in their privileged status, is insufferable – and a public
hazard. They can’t imagine what it’s like to live without, so they’ll
risk anything to ensure that they don’t. California may survive the
selfish stupidity of a few citizens in Rancho Santa Fe, but it’s not
clear how long the country can survive the excesses and greed of Wall
Street and Big Business.
Wealth, it’s worth noting, isn’t the
enemy. The problem is the attitude of the wealthy, the contempt, the
indifference, and the lack of anything resembling civic virtue. To be
rich is no crime. To abuse privilege, to profit at the expense of
others, is quite another thing – and it’s all too common these days.
Sean Illing teaches political theory at Louisiana State University. Read more on his blog and follow him on Twitter.
Back in the early 1990s, the North American Free Trade Agreement was
one of the hottest political issues in the country. When he was running
for president in 1992, Bill Clinton promised that NAFTA would
result in an increase in the number of high quality jobs for Americans
that it would reduce illegal immigration. Ross Perot warned that just the opposite would happen. He warned that if NAFTA was implemented there would be a "giant sucking sound"
as thousands of businesses and millions of jobs left this country.
Most Americans chose to believe Bill Clinton. Well, it is 20 years
later and it turns out that Perot was right and Clinton was dead wrong.
But now history is repeating itself, and most Americans don't even realize that it is happening.
As you will read about at the end of this article, Barack Obama has
been negotiating a secret trade treaty that is being called "NAFTA on
steroids", and if Congress adopts it we could lose millions more good
paying jobs.
It amazes me how the American people can fall for the same lies over and over again. The lies that serial liar
Barack Obama is telling about "free trade" and the globalization of the
economy are the same lies that Bill Clinton was telling back in the
early 1990s. The following is an excerpt from a recent interview with Paul Craig Roberts...
I
remember in the 90′s when former Presidential candidate Ross Perot
emphatically stated that NAFTA (North American Free Trade Agreement)
would create a giant “sucking sound” of jobs being extracted away from
the U.S. He did not win the election, and NAFTA was instituted on Jan.
1, 1994. Now, 20 years later, we see the result of all the jobs that
have been “sucked away” to other countries.
“Clinton and his collaborators promised that the deal would bring
“good-paying American jobs,” a rising trade surplus with Mexico, and a
dramatic reduction in illegal immigration. Considering that thousands of
kids are pouring over the border as we speak, well, how’d that work out
for us?
Many Americans like to remember Bill Clinton as a "great president"
for some reason. Well, it turns out that he was completely and totally
wrong about NAFTA. The following are 20 facts that show how NAFTA is
destroying the economy...
#4 The number of illegal immigrants living in the United States has more than doubled since the implementation of NAFTA.
#5 In the year before NAFTA, the U.S. had a trade
surplus with Mexico and the trade deficit with Canada was only 29.6
billion dollars. Last year, the U.S. had a combined trade deficit with
Mexico and Canada of 177 billion dollars.
#6 It has been estimated that the U.S. economy loses approximately 9,000 jobs for every 1 billion dollars of goods that are imported from overseas.
#7 One professor has estimated that cutting the total U.S. trade deficit in half would create 5 million more jobs in the United States.
#8 Since the auto industry bailout, approximately 70 percent of all GM vehicles have been built outside the United States. In fact, many of them are now being built in Mexico.
#9 NAFTA hasn't worked out very well for Mexico either. Since 1994, the average yearly rate of economic growth in Mexico has been less than one percent.
#10 The exporting of massive amounts of government-subsidized U.S. corn down into Mexico has destroyed more than a million Mexican jobs and has helped fuel the continual rise in the number of illegal immigrants coming north.
#11 Someone making minimum wage in Mexico today can buy 38 percent fewer consumer goods than the day before NAFTA went into effect.
#12 Overall, the United States has lost a total of more than 56,000 manufacturing facilities since 2001.
#13 Back in the 1980s, more than 20 percent of the jobs in the United States were manufacturing jobs. Today, only about 9 percent of the jobs in the United States are manufacturing jobs.
#14 We have fewer Americans working in manufacturing today than we did in 1950 even though our population has more than doubled since then.
#15 Back in 1950, more than 80 percent of all men in the United States had jobs. Today, only 65 percent of all men in the United States have jobs.
#16 As I wrote about recently, one out of every six men in their prime working years (25 to 54) do not have a job at this point.
#17 Because we have shipped millions of jobs
overseas, the competition for the jobs that remain has become extremely
intense and this has put downward pressure on wages. Right now, half
the country makes $27,520 a year or less from their jobs.
#18 When adults cannot get decent jobs, it is often children that suffer the most. It is hard to believe, but more than one out of every five children in the United States is living in poverty in 2014.
#19 In 1994, only 27 million Americans were on food stamps. Today, more than 46 million Americans are on food stamps.
#20 According to Professor Alan Blinder of Princeton University, 40 million more U.S. jobs could be sent offshore over the next two decades if current trends continue.
For much more on this, please watch the video by Charlie LeDuff posted below. It is well worth a few minutes of your time..
So if NAFTA is so bad for American workers, then why don't our politicians just repeal it?
Well, unfortunately most of them are not willing to do this because
it is part of a larger agenda. For decades, politicians from both major
political parties have been working to slowly integrate North America.
The eventual goal is to turn North America into another version of the
European Union.
Just check out what former general and CIA chief David Petraeus had to say about this...
“After America comes North America,” Petraeus said
confidently in answering the question about what comes after the United
States, the theme of the panel discussion. “Are we on the threshold of
the North American decade, question mark? I threw that away — threw away
the question mark — and boldly proclaimed the coming North American
decade, says the title now.” He also boasted about how the three
economies have been put “together” over the last 20 years as part of
the “implementation” of the North American Free Trade Act.
The “highly integrated” forces of Canada, the United States, and
Mexico, Petraeus continued, will become the world’s powerhouse for
energy and science. “There are four revolutions that are ongoing at
various levels in each of the countries but foremost in the United
States,” said the former CIA chief, who now serves as chairman of the
KKR Global Institute. “The energy revolution is the first of those,
which has created the biggest change in geopolitics since the rise of
China since 1978.” The other “revolutions” include IT, manufacturing,
and life sciences, which, “as highly integrated as they are, allow you
to argue that after America comes North America,” he added.
When you hear our politicians talk about "free trade", what they are
really talking about is integrating us even further into the emerging
one world economic system. And over the past couple of years, Barack
Obama has been negotiating a secret treaty
which would send the deindustrialization of America into overdrive.
The formal name of this secret agreement is "the Trans-Pacific
Partnership", and it would ultimately result in millions more good jobs
being sent to the other side of the planet where it is legal to pay
slave labor wages. The following is a description of this insidious
treaty from one of my previous articles...
Did
you know that the Obama administration is negotiating a super secret
"trade agreement" that is so sensitive that he isn't even allowing
members of Congress to see it? The Trans-Pacific Partnership is being
called the "NAFTA of the Pacific" and "NAFTA on steroids", but the truth
is that it is so much more than just a trade agreement. This treaty
has 29 chapters, but only 5 of them have to do with trade. Most
Americans don't realize this, but this treaty will fundamentally change
our laws regarding Internet freedom, health care, the trading of
derivatives, copyright issues, food safety, environmental standards,
civil liberties and so much more. It will also merge the United States
far more deeply into the emerging one world economic system. Initially,
twelve nations will be a party to this treaty including the United
States, Mexico, Canada, Japan, Australia, Brunei, Chile, Malaysia, New
Zealand, Peru, Singapore and Vietnam. Together, those nations represent
approximately 40 percent of global GDP. It is hoped
that additional nations such as the Philippines, Thailand and Colombia
will join the treaty later on.
Unfortunately, most Americans are as uneducated about these issues as they were back in 1994.
The
22 statistics that you are about to read prove beyond a shadow of a
doubt that the middle class is being systematically wiped out of
existence in America.
The rich are getting richer and the poor are getting poorer at a
staggering rate.
Once upon a time, the United States had the largest
and most prosperous middle class in the history of the world, but now
that is changing at a blinding pace.
So why are we witnessing such fundamental changes? Well, the
globalism and "free trade" that our politicians and business leaders
insisted would be so good for us have had some rather nasty side
effects. It turns out that they didn't tell us that the "global
economy" would mean that middle class American workers would eventually
have to directly compete for jobs with people on the other side of the
world where there is no minimum wage and very few regulations. The
big global corporations have greatly benefited by exploiting third
world labor pools over the last several decades, but middle class
American workers have increasingly found things to be very tough.
The reality is that no matter how smart, how strong, how educated or
how hard working American workers are, they just cannot compete with
people who are desperate to put in 10 to 12 hour days at less than a
dollar an hour on the other side of the world. After all, what
corporation in their right mind is going to pay an American worker ten
times more (plus benefits) to do the same job? The world is
fundamentally changing. Wealth and power are rapidly becoming
concentrated at the top and the big global corporations are making
massive amounts of money. Meanwhile, the American middle class is being
systematically wiped out of existence as U.S. workers are slowly being
merged into the new "global" labor pool.
What do most Americans have to offer in the marketplace other than
their labor? Not much. The truth is that most Americans are absolutely
dependent on someone else giving them a job. But today, U.S. workers
are "less attractive" than ever. Compared to the rest of the world,
American workers are extremely expensive, and the government keeps
passing more rules and regulations seemingly on a monthly basis that
makes it even more difficult to conduct business in the United States.
So corporations are moving operations out of the U.S. at breathtaking
speed. Since the U.S. government does not penalize them for doing so,
there really is no incentive for them to stay.
What has developed is a situation where the people at the top are
doing quite well, while most Americans are finding it increasingly
difficult to make it. There are now about 6 unemployed Americans for
every new job opening in the United States, and the number of
"chronically unemployed" is absolutely soaring. There simply are not
nearly enough jobs for everyone.
Many of those who are able to get jobs are finding that they are
making less money than they used to. In fact, an increasingly large
percentage of Americans are working at low wage retail and service jobs.
But you can't raise a family on what you make flipping burgers at
McDonald's or on what you bring in from greeting customers down at the
local Wal-Mart.
The truth is that the middle class in America is dying -- and once it is gone it will be incredibly difficult to rebuild.
For
the first time in U.S. history, banks own a greater share of
residential housing net worth in the United States than all individual
Americans put together.
In
1950, the ratio of the average executive's paycheck to the average
worker's paycheck was about 30 to 1. Since the year 2000, that ratio
has exploded to between 300 to 500 to one.
For
the first time in U.S. history, more than 40 million Americans are on
food stamps, and the U.S. Department of Agriculture projects that number
will go up to 43 million Americans in 2011.
This
is what American workers now must compete against: in China a garment
worker makes approximately 86 cents an hour and in Cambodia a garment
worker makes approximately 22 cents an hour.
A recent poll
showed that more than half of all people in this country don’t believe
that the American dream is real. Fifty-nine percent of those polled in June agreed that “the American dream has become impossible for most people to achieve.” More and more Americans believe there is “not much opportunity” to get ahead.
The public has
reached this conclusion for a very simple reason: It’s true. The key
elements of the American dream—a living wage, retirement security, the
opportunity for one’s children to get ahead in life—are
increasingly unreachable for all but the wealthiest among us. And it’s
getting worse. As inequality increases, the fundamental elements of the
American dream are becoming increasingly unaffordable for the majority.
Here are seven ways the American dream is dying.
Most people can’t get ahead financially.
If the American dream means a reasonable rate of income growth for working people, most people can’t expect to achieve it.
As Ben Casselman observes at fivethirtyeight.com,
the middle class hasn’t seen its wage rise in 15 years. In fact, the
percentage of middle-class households in this nation is actually
falling. Median household income has fallen since the financial crisis
of 2008, while income for the wealthiest of Americans has actually
risen.
Thomas Edsall wrote in the New York Timesthat
“Not only has the wealth of the very rich doubled since 2000, but
corporate revenues are at record levels.” Edsall also observed that, “In
2013, according to Goldman Sachs, corporate profits rose five times faster than wages.”
The stay-at-home parent is a thing of the past.
There was a
time when middle-class families could lead a comfortable lifestyle on
one person’s earnings. One parent could work while the other stayed home
with the kids.
Those days are gone. As Elizabeth Warren and co-author Amelia Warren Tyagi documented in their 2003 book, The Two-Income Trap,
the increasing number of two-earner families was matched by rising
costs in a number of areas such as education, home costs and
transportation.
These cost
increases, combined with wage stagnation, mean that families are
struggling to make ends meet—and that neither parent has the luxury of
staying home any longer. In fact, parenthood has become a financial
risk. Warren and Tyagi write that “Having a child is now the single best
predictor that a woman will end up in financial collapse.” This book
was written over a decade ago; things are even worse today.
The rich are more debt-free. Others have no choice.
Most Americans
are falling behind anyway, as their salary fails to keep up with their
expenses. No wonder debt is on the rise. As Joshua Freedman and Sherle R. Schwenninger
observe in a paper for the New America Foundation, “American
households… have become dependent on debt to maintain their standard of
living in the face of stagnant wages.”
This
“debt-dependent economy,” as Freedman and Schwenninger call it, has
negative implications for the nation as a whole. But individual families
are suffering too.
Rani Molla of the Wall Street Journalnotes
that “Over the past 20 years the average increase in spending on some
items has exceeded the growth of incomes. The gap is especially poignant
for those under 25 years old.”
There are increasingly two classes of Americans: Those who are taking on additional debt, and the rich.
Student debt is crushing a generation of non-wealthy Americans.
Education for
every American who wants to get ahead? Forget about it. Nowadays you
have to be rich to get a college education; that is, unless you want to
begin your career with a mountain of debt. Once you get out of college,
you’ll quickly discover that the gap between spending and income is
greatest for people under 25 years of age.
Education, as Forbescolumnist Steve Odland
put it in 2012, is “the great equalizer… the facilitator of the
American dream.” But at that point college costs had risen 500 percent
since 1985, while the overall consumer price index rose by 115 percent.
As of 2013, tuition at a private university was projected to cost nearly $130,000 on average over four years, and that’s not counting food, lodging, books, or other expenses.
Public colleges
and universities have long been viewed as the get-ahead option for all
Americans, including the poorest among us. Not anymore. The University
of California was once considered a national model for free,
high-quality public education, but today tuition at UC Berkeley is
$12,972 per year. (It was tuition-free until Ronald Reagan became
governor.) Room and board is $14,414. The total cost of on-campus
attendance at Berkeley, including books and other items, is estimated to
be $32,168.
The California story has been repeated across the country, as state cutbacks
in the wake of the financial crisis caused the cost of public higher
education to soar by 15 percent in a two-year period. With a median
national household income of $51,000, even public colleges are quickly
becoming unaffordable
Sure, there are
still some scholarships and grants available. But even as college costs
rise, the availability of those programs is falling, leaving
middle-class and lower-income students further in debt as out-of-pocket costs rise.
Vacations aren’t for the likes of you anymore.
Think you’d like to have a nice vacation? Think again. According to a 2012 American Express survey,
Americans who were planning vacations expected to spend an average of
$1,180 per person. That’s $4,720 for a family of four. But then, why
worry about paying for that vacation? If you’re unemployed, you can’t
afford it. And even if you have a job, there’s a good chance you won’t
get the time off anyway.
As the Center for Economic and Policy Research
found in 2013, the United States is the only advanced economy in the
world that does not require employers to offer paid vacations to their
workers. The number of paid holidays and vacation days received by the
average worker in this country (16) would not meet the statutory minimum
requirements in 19 other developed countries, according to the CEPR.
Thirty-one percent of workers in smaller businesses had no paid vacation
days at all.
The CEPR also found that 14 percent of employees at larger corporations also received no paid vacation days. Overall, roughly one in four working Americans gets no vacation time at all.
Rep. Alan Grayson, who has introduced the Paid Vacation Act, correctly notes that the average working American now spends 176 hours more per year on the job than was the case in 1976.
Between the pressure to work more hours and the cost of vacation, even people who do get vacation time—at least on paper—are hard-pressed to take any time off. That’s why 175 million vacation days go unclaimed each year.
Even with health insurance, medical care is increasingly unaffordable for most people.
Medical care when you need it? That’s for the wealthy.
The Affordable
Care Act was designed to increase the number of Americans who are
covered by health insurance. But health coverage in this country is the
worst of any highly developed nation—and that’s for people who have
health insurance.
Every year the
Milliman actuarial firm analyzes the average costs of medical care,
including the household’s share of insurance premiums and out-of-pocket
costs, for a family of four with the kind of insurance that is
considered higher quality coverage in this country: a PPO plan which
allows them to use a wider range of healthcare providers.
Even as overall
wealth in this country has shifted upward, away from middle-class
families, the cost of medical care is increasingly being borne by the
families themselves. As the Milliman study
shows, the employer-funded portion of healthcare costs has risen 52
percent since 2007, the first year of the recession. But household costs
have risen by a staggering 73 percent, or 8 percent per year, and now
more than $9,600. In the same time period, Census Bureau figures show
that median household income has fallen 8 percent.
That means that household healthcare costs are skyrocketing even as income falls dramatically.
The recent
claims of “lowered healthcare costs” are misleading. While the rate of
increase is slowing down, healthcare costs are continuing to increase.
And the actual cost to working Americans is increasing even faster, as
corporations continue to maximize their record profits by shifting
healthcare costs onto consumers. This shift is expected to accelerate as
the result of a misguided provision in the Affordable Care Act which will tax higher-cost plans.
According to an
OECD survey, the number of Americans who report going without needed
healthcare in the past year because of cost was higher than in 10 comparable countries.
This was true for both lower-income and higher-income Americans,
suggesting that insured Americans are also feeling the pinch when it
comes to getting medical treatment.
As inequality
worsens, wages continue to stagnate, and more healthcare costs are
placed on the backs of working families, more and more Americans will
find medical care unaffordable.
Americans can no longer look forward to a secure retirement.
Want to retire
when you get older, as earlier generations did, and enjoy a secure life
after a lifetime of hard work? You’ll get to… if you’re rich.
There was a
time when most middle-class Americans could work until they were 65 and
then look forward to a financially secure retirement. Corporate pensions
guaranteed a minimum income for the remainder of their life. Those
pensions, coupled with Social Security income and a lifetime’s savings,
assured that these ordinary Americans could spend their senior years in
modest comfort.
No longer. As
we have already seen, rising expenses means most Americans are buried in
debt rather than able to accumulate modest savings. That’s the main
reason why 20 percent of Americans who are nearing retirement age haven’t saved for their post-working years.
Meanwhile,
corporations are gutting these pension plans in favor of far less
general programs. The financial crisis of 2008, driven by the greed of
Wall Street one percenters, robbed most American household of their
primary assets. And right-wing “centrists” of both parties, not
satisfied with the rising retirement age which has already cut the
program’s benefits, continue to press for even deeper cuts to the
program.
One group, Natixis Global Asset Management,
ranks the United States 19th among developed countries when it comes to
retirement security. The principal reasons the US ranks so poorly are
1) the weakness of our pension programs; and 2) the stinginess of our
healthcare system, which even with Medicare for the elderly, is far
weaker than that of nations such as Austria.
Economists used
to speak of retirement security as a three-legged stool. Pensions were
one leg of the stool, savings were another and Social Security was the
third. Today two legs of the stool have been shattered, and anti-Social
Security advocates are sawing away at the third.
Conclusion
Vacations; an
education; staying home to raise your kids; a life without crushing
debt; seeing the doctor when you don’t feel well; a chance to retire:
one by one, these mainstays of middle-class life are disappearing for
most Americans. Until we demand political leadership that will do
something about it, they’re not coming back.
Can the
American dream be restored? Yes, but it will take concerted effort to
address two underlying problems. First, we must end the domination of
our electoral process by wealthy and powerful elites. At the same time,
we must begin to address the problem of growing economic inequality.
Without a national movement to call for change, change simply isn’t
going to happen.
