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and are the only real growth industries of Obama Administration. In Jan 2010 35 millions,
or one in eight Americans, were on food stamps.
Obama's biggest — and only major — jobs program is the U.S. military
|When I was a kid they told us that automation would "free" us from working
long hours. What they didn't tell us what that they weren't going to pay us for all this leisure
time we'd get.
Mass unemployment is the primary indication of the collapse of a given form of society -- James Burnham
|"Unemployment" statistics has been the political advertising media for every Administration
in modern times
Chronic unemployment is an immanent feature of neoliberalism, which requires the army of unemployed to suppress wages in order to increase share of profits for the top 1$ and, especially, the top 0.01%. Another problem is secular (long-term) stagnation of the economy due to destruction of consumer demand, which comes with the deterioration of the standard of living and high level of unemployment. As Pope Francis noted:
...Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalized: without work, without possibilities, without any means of escape.
Human beings are themselves considered consumer goods to be used and then discarded. We have created a “disposable” culture which is now spreading. It is no longer simply about exploitation and oppression, but something new. Exclusion ultimately has to do with what it means to be a part of the society in which we live; those excluded are no longer society’s underside or its fringes or its disenfranchised – they are no longer even a part of it. The excluded are not the “exploited” but the outcast, the “leftovers”.
... ... ...
One cause of this situation is found in our relationship with money, since we calmly accept its dominion over ourselves and our societies. The current financial crisis can make us overlook the fact that it originated in a profound human crisis: the denial of the primacy of the human person! We have created new idols. The worship of the ancient golden calf (cf. Ex 32:1-35) has returned in a new and ruthless guise in the idolatry of money and the dictatorship of an impersonal economy lacking a truly human purpose. The worldwide crisis affecting finance and the economy lays bare their imbalances and, above all, their lack of real concern for human beings; man is reduced to one of his needs alone: consumption.
The institutions of neoliberal capitalism, while promoting an expanded role in the economy for "market forces" (read "financial oligarchy") simultaneously transform labor relations. The “market” under neoliberalism certainly no longer refers to competition as a form of the production and distribution goods and services. Instead, it means something more along the lines of international financial monopolies protected by collusion between captured vassal state institutions (including neoliberal fifth column domination in the all major branches of government, especially executive and legislative branches, educational institutions and media) and multinationals, which pay money to sustain this social order. The term “Free markets” under neoliberalism means letting rich people do what they want, not promoting efficient allocation of resources through competition and the price mechanism. The core of the fifth column are local oligarchs and so called "Chicago boys": sons and daughters of local elite who are trained for and indoctrinated for this purpose in Western universities. As George Monbiot aptly noted Neoliberalism – the ideology at the root of all our problems ( The Guardian, April 15, 2016)
We internalize and reproduce its creeds. The rich persuade themselves that they acquired their wealth through merit, ignoring the advantages – such as education, inheritance and class – that may have helped to secure it. The poor begin to blame themselves for their failures, even when they can do little to change their circumstances.
Never mind structural unemployment: if you don't have a job it's because you are unenterprising. Never mind the impossible costs of housing: if your credit card is maxed out, you're feckless and improvident. Never mind that your children no longer have a school playing field: if they get fat, it's your fault. In a world governed by competition, those who fall behind become defined and self-defined as losers.
Under neoliberalism labor relations assumes the form of full domination of labor by capitalists. Unions are officially suppressed and large part of middle class is brainwashed to hate using set of propaganda stories about unions corruption, welfare quinsy, lack of competitiveness in unionized industries (with Detroit as a prime story), etc. In this sense crushing by Reagan of the strike of air controllers was one of the first manifestation of this dominance. Workers again are downgraded to the role of debt slaves, who should be glad to get subsistence wages. And, for example, wages in Wal-Mart are really on subsistence level, no question about it (Making Change at Wal-Mart » Fact Sheet – Wages):
Wal-Mart jobs are poverty-level jobs.
Wal-Mart's average sale Associate makes $8.81 per hour, according to IBISWorld, an independent market research group. This translates to annual pay of $15,576, based upon Wal-Mart's full-time status of 34 hours per week1. This is significantly below the 2010 Federal Poverty Level of $22,050 for a family of four. The Wall Street Journal reported that the average Wal-Mart cashier makes just $8.48 an hour, far below the $11.22 national average for all cashiers.
This contrasts with the capital-labor compromise that characterized the state capitalism that existed several post-WWII decades and that was crushed by neoliberalism in 1970th. Neoliberalism also brought change in the relation between financial and non-financial capital: financial capital now again like in 1920th plays a dominant role dictating the rules of the game to manufacturing sector and controlling it via banks.
Under neoliberalism the wealthy and their academic servants, see inequality as a noble outcome. University professors of economics form the most corrupt part of intellectual elite – they are nothing more than employees of the financial oligarchy paid to administer intellectual anesthetic to those among debt slaves, who still have enough time to ask what’s going on. They want to further enrich top 1%, shrink middle class making it less secure, and impoverish poor. That's an officially state goal. Then in 1992, when asked what Iran-Contra was really all about, Bush I replied that it was done for "...the continuous consolidation of money and power into higher, tighter and righter hands."
The upward redistribution of wealth requires high unemployment to weep prols into unconditional obedience. In other words neoliberalism and high unemployment are twins.
Under the disguise of "free market" Newspeak neoliberals promote a type of economy which is often called a plantation economy. In this type of the economy all the resources and power are in the hands of a wealthy planter class who then gives preference for easy jobs and the easy life to their loyal toadies. The wealthy elites like cheap labor: it's much easier to dictate their conditions of employment when unemployment is high.
Keynesian economics values the middle class and does not value unemployment or cheap labor, so it is incompatible with neoliberal ideology and needs to be suppressed. Neoliberals created the system which richly reward stooges of neoliberalism for their loyalty to the top 1% bestowing on them an easier life than they otherwise merit. In a meritocracy where individuals receive public goods and services that allow them to compete on a level playing field, many neoliberal academic toadies would be losers who cannot compete.
One of the most important measures of the health of an economy is the following criteria: how many fulfilling, living-wage jobs are created or destroyed (most other economic factors can be distilled to this.). For example, widely used measure of economic growth, GDP is too influenced by financial masturbation and does not distinguish useful activity from harmful or irrelevant.
Under neoliberalism the elite revived Roman emperor Septimius Severus advice to his sons before he died at Eboracum (York) on February 4, 211:
"Avoid infighting, pay well the soldiers, and ignore everybody else" .
So during the Great Recession Congress simply tuned backs to unemployed. With the implicit message you just need to die out folks ;-).
Military budget at the same time was greatly expanded and several unnecessary wars were launched. Brainwashed American public eats all those neoliberal policies like real lemmings, demonstrating the level of groupthink and lack of critical thinking that is typical for high demand cults. So the myth about highly conscious "proletariat" that Marxists cherished remains a myth. Moreover quite opposite tendencies to creation of "enlightened lower classes" show their ugly face (Chris Hedges America is a Tinderbox naked capitalism):
ictus92, July 21, 2013 at 5:07 pm
To paraphrase Madeline Albright: “What’s the point of creating a totalitarian police state if you’re not going to use it?”
So where is the American totalitarian state going? If you look at the NDAA and the discussion around repealing the Posse Comitatus Act, the key words include quelling “domestic civil unrest”… So what are the “deep government” types anticipating so hysterically?
Well, the financial crisis keeps grinding away and is about to enter another phase of collapse as “quantitative easing” has run its course. Interest rates are rising, posing “technical insolvency” of the Federal Reserve itself. What this means is that time’s up for the 46 million in the Food Stamp Supplemental Program; 56 million getting Social Security retirement or disability benefits; and at least 20 million more needing full time employment. Obviously there’s some overlap, but the total number of people living on the margins of subsistence pushes 30% of the population.
For these, they face an immediate “Final Solution”… not exactly direct extermination, but death by deprivation, illness etc. Can work camps be far off for these tens of millions and the many millions more living paycheck to paycheck? This population and their sympathizers comprise the tinder for “civil unrest”. Hence the corollary to the famous “Collect it all” (communications) is “control it all” (civil disorder following further economic collapse).
Furthermore, prolonged neglect of key infrastructure will lead inevitably to severe food, water and electric power access shortages — another source of civil unrest potential.
Of course, overseas the totalitarian police state eliminates all expression of opposition that can change policies in the quest for “Permanent War” and “full spectrum” military dominance. This ends in global military confrontation… just as the financial crisis of the 30’s gave rise to another World War… only this time around world war will pitch towards thermonuclear war in short order. That’s how totalitarian regimes collapse into catastrophe, dragging the rest of us to an unpleasant demise.
Unfortunately, I don’t think there’s a damn thing any of us can do to arrest this beserk Levithan…
tongorad, July 20, 2013 at 3:21 pm
“This is America, not Denmark. In this country, tens of millions of people choose to watch FoxNews not simply because Americans are credulous idiots or at the behest of some right-wing corporate cabal, but because average Americans respect viciousness.
They are attracted to viciousness for a lot of reasons. In part, it reminds them of their bosses, whom they secretly adore. Americans hate themselves for the way they behave in public, always smiling and nodding their heads with accompanying really?s and uh-huhs to show that they’re listening to the other person, never having the guts to say what they really feel. So they vicariously scream and bully others into submission through right-wing surrogate-brutes. Spending time watching Sean Hannity is enough for your average American white male to feel less cowardly than he really is.
The left won’t accept this awful truth about the American soul, a beast that they believe they can fix “if only the people knew the Truth.”
But what if the Truth is that Americans don’t want to know the Truth? What if Americans consciously choose lies over truth when given the chance–and not even very interesting lies, but rather the blandest, dumbest and meanest lies? What if Americans are not a likeable people? The left’s wires short-circuit when confronted with this terrible possibility; the right, on the other hand, warmly embraces Middle America’s rank soul and exploits it to their full advantage. The Republicans know Americans better than the left. They know that it’s not so much Goering’s famous “bigger lie” that works here, but the dumber and meaner the lie, the more the public wants to hear it repeated.”
“We, The Spiteful” by Mark Ames
Dave, July 20, 2013 at 8:18 pm
Please consider that the “right” is far more realistic in their assessment of human nature. The “left” wants things to be according to what they think it should be, mostly because of their left wing educators. The majority of humans are not perfectible.
Even Asians, with their highly socialized societies, have behaved very badly towards those outside their country.
This tendency of self-deception of "blue color America" and resonating of Republican Party ideas within "working poor" and lower middle class, two strata of the US society that typically votes against its own economic interests is analyzed in What's the matter with Kansas And to fight neoliberal machine is not easy as media dominance is total, and on a new technological level, which does not require silencing of opponents, just ignoring them, approach the level typical for the USSR or Nazi Germany. And even if some people question the system, like (at the very beginning) Tea Party did, or later "Occupy Wall Street" movement did, they are mercilessly co-opted or crashed by well paid guard labor. The latter is one of the few types of employment which prospers under neoliberal empire. See The Rise of Guard Labor (dollarsandsense.org)
The reality is that many rich countries including the USA now face two problems. One is a shortage of jobs, especially middle class jobs. The other is stagnant (or falling) wages for those outside top 1%. This is not a temporary problem. Despite all the propaganda smoke this is an immanent feature of neoliberal regimes that now dominate in the USA and most other countries. Neoliberalism requires high unemployment as a way to keep workers in check and prevent attempts to slow down redistribution of wealth toward the top.
As George Bush Sr . noted in November 1992 neoliberalism is "the continuous consolidation of money and power into higher, tighter and righter hands". The essence is the consolidation of money and power to the top 0.1% or even 0.01%. In a very deep sense our new lords from financial and political oligarchy are not that different from feudal aristocracy, may be only less educated, more prone to avoid military service and much more greedy.
Unlike Keynesian economy which put middle class in the center of society serving a buffer between rich and poor, under neoliberalism middle class is no longer needed as a buffer between aristocracy and proles, as repressive power of the state and regime of total surveillance (National Security State) makes an organized opposition practically impossible. The fate of "Occupy Wall Street" movement is nice illustration here.
On the other hand neoliberalism as an ideology, while discredited by event of 2008 still does not have any viable alternative. Socialism was discredited by collapse of the USSR (which in reality was a neoliberal counterrevolution by Soviet nomenklatura including part of KGB). Authoritarian versions of state capitalism does not look too attractive, despite being quite effective as was proven by economic progress of "Asian tigers".
Other important factors are also in play. Technology has stripped away the ability for many to hold a job and the trend continues. In other words automation eats jobs. Outsourcing eats jobs too. Between those two trends almost no job growth left. This is a structural situation, not transitional caused by recession due to aftermath of 2008 financial bubble bust. In other words jobs that disappeared will never return. And jobs in construction sector and finance were artificial and unsustainable in any case, crisis or no crisis (as in "what can't last forever eventually stops." )
We are in the midst of slow motion employment collapse. Eurozone unemployment recently reached 12%. The US has probably 20% rate of involuntary unemployment now. The official unemployment "rate" is lower, but that is because both 60-65 years old and 20 to 24 year olds are dropping out of the wage force.
Add to this "peak energy" problem and the situation looks really bleak. That's the funny thing about oil and modern civilization -- almost everybody in large western urban centers is dependent on mass produced technology (much of which was invented before we were born) and cheap oil (and generally cheap energy), Those who live in those urban centers no longer have any direct control or ability to produce own food or transportation energy or heating. those three activities are completely outsourced. See Peak Oil Demand is Already a Huge Problem.
Globalization is yet another problem. I was actually surprised by how many jobs large corporations managed to shred during 2008-2013 without negatively affecting profitability. The impression is that it is no low limit. Usual wisdom is that if you shred too much, this labor shortage will bite you in a couple of years. This is no longer the case in the USA. No visible backlash at all. Even consumption that should be suffering due to destruction of middle class in this process is no suffering much, because it was already mostly top 1% game and, as such, is recession proof. Here is one interesting comment form Krugman column Globalization and Macroeconomics - NYTimes.com
The analysis is flawed. The issue is not goods trade - on its own, this is relatively benign. The real problem is the associated capital drain. Owners of capital will transfer productive capital abroad for better returns. This process creates deep structural problems for all developed economies. Here are some basic predictions:
- Real wage stagnation. Labor is less productive having less capital to work with.
- Rapid rise in income by capital owners. The big winners in this scenario, not only do they earn higher rents abroad, they earn higher rents at home as capital is now more scarce there.
- Rise in inequality - obviously, from above.
- Slow growth. Capital formation is moderated by the constant capital drain so grows more slowly than otherwise.
- Increase in structural unemployment. Because capital transfer abroad is slower than internal capital transfer, the restructuring is long term as opposed to the short to medium term restructuring that occurs in goods trade.
Recessions are difficult to manage and may become protracted. In a downturn, capital formation dries up but the capital drain continues. This erodes the output gap. A fiscal stimulus now has less headroom for expansion. On top of that, an increase in domestic demand may be met by investment in productive capital abroad; the domestic investment response is missing. This may even cause a fall in labor productivity ( UK productivity puzzle?).
In short, globalization IS the problem.
Recessions generate inequality in both income and well-being: people who lose their jobs bear a disproportionate burden of the recession. As Kathleen Geier noted the impact of unemployment on well-being it’s even worse than you thought
While reading this odd and meandering New York Times op-ed this morning, I stumbled upon a link to a fascinating study from last year on the impact of unemployment on non-monetary well-being. It was conducted by Stanford sociologist Cristobal Young, who discovered that unemployment has an even more catastrophic effect on personal happiness that we thought.
The study produced three major findings. The first is the devastating impact job loss has on personal well-being. Job loss, says Young, “produces a large drop in subjective well-being”:Job loss into unemployment, however, is a different matter; this brings on deep distress that is greater in magnitude than the effect of changes in family structure, home-ownership or parental status. The distress of job loss is also hard to ameliorate: family income does not help, unemployment insurance appears to do little and even reemployment does not provide a full recovery [italics mine].
The second finding is that while unemployment insurance (UI) is successful as a macroeconomic stabilizer, it doesn’t make unemployed people any happier. UI, says Young:is not central to their sense of well-being… [Snip] …[ I]t does little to support their identity, sense of purpose or self-regard.
Third, job loss has a strong, lasting negative impact on well-being that may persist for years:[J]ob loss has consequences that linger even after people return to work. Finding a job, on average, recovers only about two thirds of the initial harm of losing a job. It is not clear how long it takes for the nonpecuniary effect of unemployment to heal.
Other research suggests that what Young refers to as “the scarring effect” of job loss can last from three to five years, or even longer. He also notes that “the more generalized fear of becoming jobless” may persist.
Young’s discussion of these findings stresses the inequality theme. He points out that “recessions generate inequality in both income and well-being: people who lose their jobs bear a disproportionate burden of the recession.” He suggests job-sharing as a way to reduce the concentrated misery of unemployment. That’s a great idea that unfortunately never seems to go anywhere. Employers today seem more interested in squeezing as much labor out of employees as possible for the lowest cost. They’re looking to shrink their payroll rather than expand it. And unfortunately, there are very few public policies that promote job-sharing, let alone do it effectively.
The sheer human misery created by the economic downturn has been stunning. The economic damage is, in some ways, the least of it. Another study shows that the long-term unemployed experience shame, loss of self-respect, and strained relationships with friends and family. They even suffer significantly higher rates of suicide.
Yesterday, Paul Krugman and others discussed the impact of economic inequality vs. unemployment on income. Krugman argued that inequality has had the greater impact, and I agree. Among other things, inequality is also the root cause of the unemployment problem. Special interests which have disproportionate power in our political system prevented more stimulus and inflicted an austerity agenda, which has had a disastrous effect on employment. Enacting an economic equality agenda will be huge political challenge, but it’s the only way I can see of ultimately resetting the priorities of our government so that it starts working on behalf of ordinary Americans again.
There are two popular unemployment measured U3 (commonly cited as "official unemployment rate", which dramatically understates real unemployment) and U6, which is close to actual unemployment rate as was measured during the Great Depression. U3 is often as low as half of U6 (that's why it sometimes called 50 cents unemployment rate). As The Big Picture note in the entry Unemployment Reporting
- U3 is the "official unemployment rate" according to the BLS website. Due to this, it is the current measure of Unemployment that gets focused upon by most media, and therefore the public. It has, over the years, slowly excluded many of the factors that USED to go into how the US reported unemployment. Hence, there has been a gradual decrease in the Unemployment rate that has occurred regardless of what was happening in the Jobs market. U3 is now comprised in a way that merely repeating it without a slew of caveats borders on fraud.
- U6, on the other hand, is the broadest measure of Unemployment: It includes those people counted by U3, plus marginally attached workers (not looking, but want and are available for a job and have looked for work sometime in the recent past), as well as Persons employed part time for economic reasons (they want and are available for full-time work but have had to settle for a part-time schedule).
Its been pretty obvious for sometime that the Financial Media are doing a disservice to their readers by only reporting U3, given how dramatically it understates Unemployment. Indeed, consumer sentiment reports are at deep negative levels that only occur when Unemployment is much than what U3 has been saying. It is painfully obvious that U3 does not paint an accurate view of the Employment situation.
Here's the experiment I propose: Let's start reporting both, with appropriate descriptions of each. Report U3, add U6, provide monthly and year over year changes. Let the reader see the full picture, via BLS data.
I would like to stress it again: many factors point to the fact that the current level of unemployment is mostly structural. In other words jobs eliminated will not be coming back. Among the most important factors we can mention:
The first three factors changed the distribution of power between labor and capital in favor of capital; and those guys are not inclined to take prisoners, when there is a chance to fatten their pockets. None of the first three factors will probably be reversed soon, although neoliberal ideology is after 2008 entered a zombie state.
Also computerization and Internet allowed capital and political forces behind it much better organize politically. So like in in previous human history well organized and wealthy minority dictates its will less-organized poor majority.
I think that financial capital might eventually experience some setbacks. This bacchanalia of greed with those hedge fund which hack financial system left and right might come to an abrupt end with the rise of the price of oil. Even now price of oil indirectly pressure "masters of the universe". And remember famous slogan of 2008 "Jump suckers" ;-). It reflects the society attitude to financial oligarchy and as such entail certain dangers of "blowback" for all those derivatives games.
Not under Obama watch as he is essentially a sock puppet of financial oligarchy. But eventually setback for "big finance" can happen. At the end of the day it is oil that is the real convertible currency and when oil production is diminishing or flat, financial oligarchy will be pushed back.
Measures taken by political elite to save financial institutions after 2008 collapse means that unemployment is a part of a general political problem with neoliberalism as a social system. Under neoliberal regime the elite can't care less about long term unemployment. National Security State ensures the security of the neoliberal elite. Elections in the USA are a sham as two party system effectively blocks candidates outside the list approved by the current elite. The latter might even see sharp division of the society into "have" and "have nots" as a solution of oil depletion problem (Economist's View):
Monetary policy does not operate in a vacuum. Monetary policy operates in an economic system that includes fiscal and regulatory tools. It is a mistake to lock the fiscal and regulatory tools in a shed.
Fiscal policy ALWAYS operates in a recession, at least in the form of automatic stabilizers, (UI, etc.) and sometimes in the form of additional stimulus.
The meagre automatic stabilizers currently in place are enough for a mild recession, but are woefully short of what is needed in a recession like the recent one.
The primary objection to fiscal policy manipulations is that fiscal policy is more easily politicized. This overlooks the fact that monetary policy is not only political, but bankers (who constitute a wealthy special interest) have an agenda that tilts monetary policy to their own self interests.
The primary objection to using fiscal stimulus to address our unemployment crisis is POLITICAL. Wealthy special interests want pay less taxes and short term stimulus would interfere with their political agenda to roll back spending and reduce spending as a percent of GDP.
Wealthy special interests have the upper hand at the moment because enough politicians are dependent on their campaign donations. However, this politicalization of fiscal policy, doing too little to address unemployment, is the prime force behind the Fed keeping interest rates low. If enough fiscal stimulus was enacted to quickly return to full employment and inflation at or slightly above the target, the Fed would not have to consider extraordinary measures.
Anyone unhappy about extraordinary monetary measures should be urging Congress to fix unemployment now. This is not what our elites are doing. They are complaining about extraordinary monetary measures AND about additional stimulus. This suggests that these policy elites care nothing about social problems of long term unemployment, are content to have the US become a divided nation between haves and have nots and are content to oversee the creation of an underclass in order to concentrate wealthy upward.
When one is saying that unemployment became a structural problem that means that it is immune to the business cycle. For example, during the last economic expansion (Jan 2002 -Dec 2007), the median US household income dropped by $2,000. In other words many Americans were worse off at the end of an economic cycle as jobs went outsourced to low wage countries due to wage arbitrage...
The collapse of “casino capitalism” model in 2008-2009 was so profound that all sectors of the economy became depressed. As securitization mess exploded in the face of their creators as it became clear to everybody that the king is naked. Debt overhand of financial industry is tremendous and it was just socialized, not removed. Essentially it became the problem of the USA government debt. In many ways problems the USA faces now are more serious then the problems the country faced during Great Depression because economic crisis doubles as the crisis of dominant ideology -- the ideology of neoliberalism. And the Great Recession, despite Economic Cycle Institute premature desire to bury it, is still with us. Five years in the making as of 2013.
Ideology on which FIRE sector dominance was based is now questioned and that creates additional problems both nationally and internationally, much more internationally. Internationally it means a substantial loss of the USA "soft power", the factor that played tremendous role in the decade of 1990-2000. When other country laugh at the US financial oligarchy tribulations it is difficult to open new markets selling old neoliberalism doctrine. due to debt overhand the US dollar is replaced by currency swaps in national currency for several major trading partners of China such as Brazil and Russia. First of all that makes the crisis even deeper and analogies between the USSR and the USA more sinister. As with Stalinists in USSR who destroyed the country economically, there is a powerful block of republican dead enders and democratic supporters of financial oligarchy (blue dogs) who will continue to promote the current neoliberal course with its deification of "free markets" (free as in "free shooting zone"), oblivious to consequences of neoliberal policies which eat the society and protected by the size of their accounts. There is nothing new here. Oligarchic democracies can commit suicide. Actually none lasted long. And with such a formidable political wrecking crew in action and gridlock in Congress even over minor reforms that became less probable.
For all practical purposes two party system actually works like one-party system: democrats were also captured by FIRE industries to the extent that they should not be considered an independent party, but as a slightly more moderate wing of the Republican Party. Similarly by all accounts Obama is a moderate Republican with the policies to the right of such Republican Presidents as Dwight Eisenhower and Theodore Roosevelt. In a way, Democratic Party perform the role of spoiler: it exists for the sole purpose of attracting disgruntled left-wing electorate away from more radical parties. Republicans play symmetrical role for right wing crazies. None can or want to became the agent of change. In this sense Obama electoral slogan "change we can believe in" was a nasty, cruel joke of political insiders over political outsiders. Note how unceremoniously Obama dumped labor after his reelection, while courting it during his reelection campaign.
As private sector is still downsizing, and government can't be the employer of last resort due to dominance of neoliberal ideology, the whole situation looks more and more like Japanese lost decade. The only area where government can expand workforce are defense contractors (military keysianism):
Minsky, however, argued for a “bubble-up” approach, sending money to the poor and unskilled first. The government - or what he liked to call “Big Government” - should become the “employer of last resort,” he said, offering a job to anyone who wanted one at a set minimum wage. It would be paid to workers who would supply child care, clean streets, and provide services that would give taxpayers a visible return on their dollars. In being available to everyone, it would be even more ambitious than the New Deal, sharply reducing the welfare rolls by guaranteeing a job for anyone who was able to work. Such a program would not only help the poor and unskilled, he believed, but would put a floor beneath everyone else’s wages too, preventing salaries of more skilled workers from falling too precipitously, and sending benefits up the socioeconomic ladder.
It is important to understand that the USA is not just coping with the largest financial crisis in history, the USA is also going through a major restructuring of the American economy as well as the world economy due to plato in oil extraction. This transformation, which was postponed by two decades due the collapse of the USSR (which gave the USA companies half billion of new consumers and huge area to dollarize and buy assets for pennies on a dollar), will be very long, very painful and very slow. One additional factor that complicates the picture of "peak oil", is that it is more properly can be called "end of cheap oil", as at higher prices more oil became economically available. So this is not a peak but long plato.
As GDP is highly correlated with the energy consumption, the side effect of peak oil will probably be stagnant (close to zero after inflation) growth and with it speed up in permanent decline of the standard of living for middle class
Also complicating the situation is the status of baby boomers which lost significant part of their savings during last two bubble bursts and now need to retire or will be pushed out of workforce. Pensions are already cuts either directly or indirectly (via inflation). For example, defined benefit pensions almost disappeared outside of government job force. After housing crash middle class no longer has a realistic prospect to fund their retirement and need to work longer: that increases competition for jobs. For middle aged professionals who are unemployed now the odds of finding reasonably paid work are low and they create additional competition for young people entering work force from universities. People over 50 now face especially poor job prospects.
At the same time corporate executives became corporate aristocracy (with differences in pay raising from 10-20 to 100-200 more of average corporate salary; this is the differences close to what used to exist in feudal societies). Most corporations are taking a lazy way out of the crisis with relentless cost-cutting. This is a self-defeating strategy as cost cuttings eventually returns back via supply chain and bite the corporation which performs it. But so far this did not happened.
In addition productive sectors of economy are now under pressure of rampant financial speculation which serves as a huge tax on productive sectors of economy. Financial system is controlled by small number of large firms that permanently shifted their main activity into gambling and hacking of the financial system. There is some justice that computers which fueled all this crazy gambling on the strength of global reserve currency led to outsourcing of IT professionals to the extent that this part of US economy was destroyed and became a shadow of its former self in just ten years (2000-2010).
Another important sign of stagnation is that new college graduates face extremely bad job market which squeezes out anybody without substantial experience so for them it's Catch 22. Only graduates form Ivy League colleges has real prospect to get a job after graduation. Plus those with good family connections. In a way education is no longer a guarantee for better paying job, the same situation what was typical for the USSR and other countries of Eastern block during Brezhnev's stagnation.
There is also an interesting transformation of the quality of the education that also parallel transformation experienced by the USSR in post-war period, but in especially acute form, three decades before the collapse. Private education became more like subprime lending. It's quality became fake, as the term "diploma mills" suggests. This rat rate to the lowest possible quality (quality instead of quality) was the central tendency in Brezhnev's USSR.
In the USA in addition to devaluation of education caused by low quality "everything passes, everybody graduates, just pay" modus operandi of diploma mills, graduates from lower middle class families are now overloaded with debt, which creates for them really difficult situation and push many of them into low level service jobs like waiting. In other words excessive debt after college make getting into workforce using acquired specialty even more difficult as there is no space for long job search, relocation is more difficult and so on and so forth.
There is also huge criminal industry that flourished around people desperate attempts to find well paying jobs. Many educational scams like "we will make you an ultrasound technician in six month; 90% of our graduates found jobs that pay over $60K in the first month after graduation" or " software tester in four month; 100% of our graduates find jobs" are trying to capitalize of people desperate to find job, any job and getting into crushing debt trying to improve their chances in job market. Those criminals are not prosecuted. For more information see:
The employment growth comes mainly from the service sector which feeds off of consumer spending. It was hit by outsourcing especially in such areas as IT. Manufacturing no longer create jobs – outsourcing and computers eat them and you no longer need more people to make more stuff.
Peter Dornan at EconoSpeak has the following comment which perhaps looks deeper at why the elite is so indifferent to mass unemployment and growing poverty in the U.S.
“…The process is more complicated: where one sits in society and the kinds of problems one typically has to solve leads to a way of thinking, and this manner of thinking then informs politics.
For centuries, the finance perspective has played a central role in economic theorizing, and there is ordinarily a body of research to support it. What I am proposing is this: economic orthodoxy is regaining control over policy because it reflects the outlook of those who occupy the upper reaches of government and business….”
IMHO to get the economy out of this mess, government should concentrate on direct job creation (like was the case with Roosevelt administration), not on propping zombie banks hoping that they will generate credit necessary for creation o new jobs. Growth of credit will not happen and if it will happen it will not generate new jobs: most of it is pushed into speculation. Spectacular rise of S&P500 in first half of 2013 is a pretty good illustration of the process.
Long term high unemployment is a disaster for the country and disaster for the people, despite the fact that it is irrelevant for banksters, too busy playing in the huge casino they created. Failure to address this problem directly by Obama administration (which in economic terms is the second Summers-Bush administration making a joke in the slogan "change we can believe in") make Obama a real serial betrayer of people who elected him, the role he seems enjoy playing.
There are several additional factors that makes addressing the problem of chronic, structural unemployment even more difficult:
One can't solve the current problems the US are facing without the reform of the political system
and institutions. Power of lobbyists need to be curtailed. Senate needs to be reformed. Republican
Party probably should be dissolved or temporary prohibited like Communists after the dissolution
of the USSR as it is unable to reform. As there is no political will for political changes the crisis
is structural and little people have to suffer.
- There has been some evidence of a shift by employers to more temporary workers ("We are all temporary now!"). Increase of temporary workforce is the most trend that signifies a changing employment relations and social structure. Most recent research throw "cold water on the notion" that temporary workers turn into full-time workers. The notion that temp positions help low-skill workers to acquire experience and eventually join the permanent workforce in better long-term jobs. Actually opposite, very brutal process is happening. Many waiter/waitresses has a college degree and are pretty proficient in calculus and/or C language. The US workforce (and Japan's and Europe's) have been increasingly temporary for many years now.
- Even most 'permanent' jobs don't have the protections of seniority etc., and are basically temporary in nature. Due to capturing of the government it can block any significant reforms.
Essentially net job growth might occur only if three sectors: health, education and government related jobs. Municipalities are under tremendous financial stress and will start shedding jobs in late 2010 when Fed stimulus expires.
Peak Baby Boomer demographic drag effects and the composition of household spending are structural factors underlying the "new normal".
The composition of household spending is shifting from growth-oriented high-GDP-multiplier spending for housing, autos, durables, and child rearing to maintenance/subsistence, low-multiplier spending for property taxes, house maintenance, insurance premia, out-of-pocket spending for medical services and medications, and utilities.
Moreover, the composition of the labor force is becoming increasingly feminized, if you will, as the fastest growing sectors, education and health care services, are composed of 80-85% female employees, even as the labor force participation rate for males age 24-54 continues a mutli-decade decline to under 90%. If the pattern of the 1930s to WW II and that of Japan from the early '90s to date repeats, males under age 30-35 and over age 50-55 will suffer the highest rates of labor force dislocation, unemployment, underemployment, and loss of occupational continuity.
Thus, as structural demographic drag effects bear down on the US labor force and economy, and males experience lower participation rates and higher unemployment and underemployment, females will become increasingly relied upon by households and by underemployed, unemployed, or retired males to bear a larger financial burden as the debt-deflationary depression persists well into the end of the decade and early '20s.
That females do most of the discretionary household spending, the increasing share of females' after-tax incomes required for household subsistence will further reduce discretionary expenditures for meals out, travel, gifts, apparel, jewelry, etc.
With Libya and Syria added to the list, the hidden costs of foreign wars will weight on weakened economics more heavily. Annual cost per soldier oversees is approximately $1 Million per year.
The disability rates are higher. The cost of caring for the disabled are higher. Almost one out of two people coming back from Iraq and Afghanistan are disabled. This is an unfunded liability of—we calculate now to be almost a trillion dollars, over $900 billion. So, one of the big ways of reducing our deficit is a—is cut back some expenditures....
The latest internal government estimates place the cost of adding 40,000 American troops and sharply expanding the Afghan security forces, as favored by Gen. Stanley A. McChrystal, the top American and allied commander in Afghanistan, at $40 billion to $54 billion a year, the officials said.
Any expectations that Obama would show some sense of restraint about military spending have long ago vanished.
"It is my intention to finish the job” translates to "I will blow another $3 trillion war mongering if that is what it takes". And of course Pelosi does not think war idiocy should be at the expense of domestic idiocy.
War mongers want war but they do not want to pay for it. Sadly, Obama, Bush, Pelosi are all alike. Thus, Congress and the Administration is committed to having military idiocy and domestic idiocy at the same time.
God do we ever need a balanced budget amendment and a sound currency. We should not fund a damn thing unless we are willing to raise taxes to pay for it. Virtually no one but the war mongers and the military beneficiaries would be in support of raising taxes to pay for this monstrosity.
Rent that hypertrophied financial sector extracts from the rest of the society continues to be a serious drag on the economy. This drag adds to substantial drag caused by foreign wars and military bases as well as huge military industrial complex. While parasites are omnipresent in nature, two large parasites instead of one might spells trouble for the host. Moreover the ascendancy of the financial sector and the decline of manufacturing in the U.S. ("Casino Capitalism" ) has implications similar to consequences of an organized crime running the country. The creation of tangible products whose utility/quality can be more or less objectively measured were phased out in favor of "financial products," whose utility/quality is much easier to conceal behind legal/technical jargon and junk economics. That created a huge new class of white collar criminals. While Blankfein is out claiming that GS is doing God’s work, the reality is quite different: it became a training ground for new type of ruthless criminals, much more dangerous then bank robbers. Killing of Glass-Steagall by Clinton and leverage obtained by financial sector operating without regulatory limit created prerequisites to the financial panic of 2008. Glass-Steagall enshrined two principles that were abandoned:
The violation of the second principle directly leads to a regulatory capture in which anything goes and a corresponding observed "need" to accommodate indiscretions, as with the Greenspan/Bernanke put. It perhaps should be identified as THE primary cause, since it left Wall Street with the well-founded (LTCM, Latin America debt crisis, etc. ) and since-proved belief that prudence and capital were quite unnecessary, and that reckless, sociopathic deal making is profitable. Four examples :
A cynic believes that only selfishness motivates human actions. As
Gordon Gekko said “Greed is good”. I believe that the bonus structure led Wall Street to line
up all the pieces for the clash as fast as they could. Stan O’Neal is the poster child. After
presiding over all four of the steps above at Merrill Lynch he was paid $200 million to leave.
Where is the clawback!
The collapse in the U.S. commercial real estate market is fought by the government will maximum force but government resources to fight the crisis are diminishing too. in 2011 state financial crises led to cuts in state budget. In addition, in June 2013 municipal bonds came under fire, making financing more costly. Commercial debt is approximately one third of the size of the total residential debt and it is concentrated in the same places creating double whammy. In Florida commercial loans, broadly defined, are bigger then residential. Unlike residential real estate, problem with commercial real estate are not solved by growth of population and creation of new families.
Retail and white-collar positions will be directly impacted by CRE crash. As stores and offices
close, mall and office building owners suffer from cuts in cash flow and severely limited prospects
for new tenants. Insurance companies, hedge funds and regional banks are heavily invested in CRE
and are next in line so some financial jobs will be lost too. Extend and pretend might work but the
question is if there is enough liquidity to stretch loans.
My feeling is that even in corporate IT after drastic cuts that were the standard game for large corporations in 2008-2009, additional cuts are possible. But the situation on the ground is somewhat paradoxical as real cuts runs deeper that you would assume from headcount: a lot of current IT personnel belongs to "untouchable" caste -- wives of somebody higher up in this or linked by the supply chain company, sons of somebody important and so on. I can't give you percentage, but probably 10%-20% of "untouchables" would be an educated guess. So removing of at least 10% of the current IT workforce means removal of 12% or more those who do actual work.
Another factor is that cuts in IT are one way street as they stimulate replacing of people with technology and there are still tremendous potential for computerization of many areas including first of all IT itself.
For example all this cloud initiatives are in disguise politically correct way to move things
in the direction of higher automation and outsourcing because under the surface there is not much
innovation in those "new" technologies.
With the rising oil all bets for re-inflating the economy (aka kicking the can down the road)
Unemployment is a very harsh condition, that traumatize the workers greatly (Sliding into the Great Depression)
At first the unemployed searched eagerly and diligently for alternative sources of work. But if four months or so passed without successful reemployment, the unemployed tended to become discouraged and distraught.
After eight months of continuous unemployment, the typical unemployed worker still searches for a job, but in a desultory fashion and without much hope.
And within a year of becoming unemployed the worker is out of the labor market for all practical purposes: a job must arrive at his or her door, grab him or her by the scruff of the neck, and through him or her back into the nine-to-five routine if he or she is to be employed again.
The USA as a whole is facing the worst labor market prospects since 1929. In terms of duration of elevated unemployment we already rival the early 80s. But in no way we can expect a steep decline in the rate of unemployment in the way that happened in 1983 when unemployment declined at a brisk 2%. And permanent high unemployment creates economic conditions that feel like the USA brought back slavery. The new reserve army of the unemployed drives wages down, while average productivity continues to rise, as a way to generate surpluses to be channeled into executive bonuses. The whole sectors like IT were decimated by outsourcing. Unfortunately given the current overcapacity and ample supply of qualified job seekers in many occupations, I certainly don't expect labor arrangements and employment conditions to become more favorable.
Looks like 7% unemployment is going to become the "new normal". In any case government statistics is very suspect (see Fake Employment Statistics) and actually unemployment is higher. For example, the declining participation in work force means that actual unemployment rate is higher then reported.
Obama-Bush administration saved banks waiting most of taxpayers money and piling up debt in hopes that they restore credit flow in the economy. But this was a fallacy: banks aren’t lending to prospective home buyers, small businesses and real estate developers because bankers recognize the obvious — many of those loans won’t get repaid. Of course, as bankers refuse to lend, the stagnation becomes a self-fulfilling prophecy. But since society is burdened with too much debt, piling on more debt would not be the solution in any case.
There is no smooth, painless route back to the easy-money based false prosperity of Reagan-Clinton-Bush era (age of leveraging). We entered the age of deleveraging. Obama’s “you owe us” message to the banks is the height of naïveté’ and tells us a lot about him. In 2013 our problems are worse than they were in 2007 before the crisis. Peak credit is as dangerous for the economy as peak oil...
The inability of the economics profession to forecast unemployment in the short, medium, or long run would be downright comical, if not for the human tragedy involved. While the Occam Razor approach suggests incompetence as a culprit, I think it's a manifestation of the corruption of the profession by financial interests (with some "don't rock the boat" variations). First of all, economists much like elected officials and Wall Street executives have a vested interest in keeping the perception of a robust economy. The employment data announced each month are critical to this perception. That's why government "prints up jobs out of thin air" the same way the Federal Reserve prints money. This is economic propaganda and as such it is not that much different from the over-stated earnings practiced by companies of all striped and colors.
The second problem is that fiscal policy cannot solve the problem of job creation in all circumstances, especially in deleveraging environment. Position of people like The Fed Can Help, But Fiscal Policy Is The Key To Job Creation ) is a step in right direction. But without something like Jobs Corps to get out of the current situation is very difficult. In 1982 SETH S. KING wrote in NYT (PROPOSAL FOR JOB CORPS RECALLS ROOSEVELT PLAN):
Few of this city's recent celebrations of Franklin Delano Roosevelt's 100th birthday have passed without nostalgic references to the Civilian Conservation Corps, that President's cherished vehicle for getting thousands of jobless, hungry youths off the streets and putting them to work refurbishing the nation's parks and forests.
With today's unemployment rate nearing a postwar high and new thousands of young people again unable to find work, Congress is preparing to wrestle with the Reagan Administration for money to start a new youth job training program and reconstitute the Job Corps, the pale copy of the old C.C.C. that emerged in the Carter days.
But there is little in these plans that is likely to reproduce those Depression era pictures of sturdy, bare-chested young men planting trees, building bridges and saving the nation's battered farmlands.
Nor is today's procedure-encumbered Washington, where a year usually elapses between idea and action, likely to duplicate the astonishing start on the C.C.C., which four months after being conceived had been approved by Congress and had more than 300,000 young men being clothed, housed, fed and paid $30 a month while they breathed all that fresh air.
In this crisis the main lesson was that theologically captured by free market fundamentalism government can destroy economy at a really staggering rate. This is "Back in the USSR" situation. Eight years of Clinton and eight years of Bush administration (see The Economic Consequences of Mr. Bush, by Joseph E. Stiglitz) are as good proof of this as one can ever get. Clinton and Bush regimes (especially Rubin-Greenspan alliance and "vice president from an undisclosed location" activities) proved to be a real wrecking crew. But that does not mean that government cannot put it weight on easing the unemployment burden. Incentives such a investment tax credit matters. Not tax cuts for the rich, but direct investment credit. direct job creation which is anathema to market fundamentalism would be even better and less costly. Roosevelt administration did it, so why not capitalize on positive experience and develop it further ?
|In this crisis the main lesson was that theologically captured by free market fundamentalism government can destroy economy at a really staggering rate.|
In any case socializing losses and privatizing gain (crony capitalism) should be downsized. Insurance for gambling by big banks should be cut.
As long as economists believe their report card is the rise in GDP (GDP Mania), we will remain in a failure mode. A country is not defined by GDP but by the quality of life of its citizens. And quality of life cannot be assessed by a simplistic, one-dimensional metric such as GDP. The key dimensions for well-being are: employment, earnings, wealth, health, infrastructure, and living conditions. In that particular order. With employment as the critical factor: the USA looks like an underdeveloped banana republic by the current measure of unemployment and in many respect has became such.
It looks like high persistent unemployment became the defining feature of this recession. Jobs creation prospect in 2014 look pretty grim -- there is no sector other then government that can absorb redundant workforce and automation in manufacturing makes sure that those who are unemployed right now will stay unemployed in the foreseeable future. Most jobs cut are permanent, not temporary, especially in such sectors as IT (structural shift). As Robert Reich noted:
...The basic assumption that jobs will eventually return when the economy recovers is probably wrong. Some jobs will come back, of course. But the reality that no one wants to talk about is a structural change in the economy that's been going on for years but which the Great Recession has dramatically accelerated.
Under the pressure of this awful recession, many companies have found ways to cut their payrolls for good. They’ve discovered that new software and computer technologies have made workers in Asia and Latin America just about as productive as Americans, and that the Internet allows far more work to be efficiently outsourced abroad.
This means many Americans won’t be rehired unless they’re willing to settle for much lower wages and benefits. Today's official unemployment numbers hide the extent to which Americans are already on this path. Among those with jobs, a large and growing number have had to accept lower pay... Or they've lost higher-paying jobs and are now in a new ones that pays less.
The current crisis also means that financial services and real estate (FIRE) economy, this gigantic casino that the US government was trying to build for the last 25 years is now in trouble and shed workers in vast numbers (although working condition in financial industry are still good or very good depending on your position in the food chain). But the profitability of large banks and can achieved only by oversees expansion and derivatives games with foreign assets. The most profitable essentially converted themselves into hedge funds, getting most profits from trading operations, not from the traditional banking activities.
The simplest and the most obvious solution in the current situation is to cut work week and hours of work (4 days six hours a day). That will put enough people to work to make unemployment bearable and it might slightly help entertainment and hospitality industries which now is suffering more that others. From the other point of view if lower standard of living is inescapable, why not to make the transition smoother and more fun by cutting work hours.
But that's not enough. The USA needs drastically cut military budget. Military Keynesianism no longer works as expected. As John Maudin in his e-letter proposed (see Thoughts on the Economy- Problems and Solutions):
Mauldin: Unemployment is likely to continue to rise and last longer than ever before. We have to take care of the basic needs of those who want work but can't find it. Unemployment insurance should be extended to those who are still looking for work past the time for benefits to expire, and some program of local volunteer service should be instituted as the price for getting continued benefits after the primary benefits time period runs out. Not only will this help the community, but it will get the person out into the world where he is more likely to meet someone who can give him a job. But the costs of this program should be revenue-neutral. Something else has to be cut.
Mish: Can we deal with 15 million volunteers? Somehow I doubt it.
Mauldin: We have to re-think our military costs (I can't believe I am writing this!). We now spend almost 50% of the world's total military budget. Maybe we need to understand that we can't fight two wars and support hundreds of bases around the world. If we kill the goose, our ability to fight even one medium-sized war will be diminished. The harsh reality is that everything has to be re-evaluated. As an example, do we really need to be in Korea? If so, why can't Korea pay for much of the cost? They are now a rich nation. There are budgetary fiscal limits to being the policeman for the world.
Mish: Bingo. We can easily slash our military budget by 70% and still be the most powerful nation in the world. Moreover, it is time to declare the war in Iraq and Afghanistan over, pack our bags and leave. Gradually, over the next 5-8 years we should bring home all our troops from literally every county they are stationed.
This chart shows the absurdity of our spending.
Chart courtesy of Global Issues - World Military Spending.
By the way that chart does not include the latest increase in the US military budget. Please consider US lawmakers pass 680-billion-dollar defense budget billThe US House of Representatives passed a 680-billion-dollar defense authorization bill on Thursday that includes funds to train Afghan security forces and more mine-resistant troop carriers.
Lawmakers defied President Barack Obama's veto threat and approved 560 million dollars to continue work on an alternative engine for the F-35 fighter jet built by General Electric and British manufacturer Rolls-Royce.
The compromise legislation would also raise military pay by 3.4 percent -- half a percentage point higher than Pentagon recommendations -- and assign 6.7 billion dollars for mine-resistant armored vehicles known as MRAPs, which is 1.2 billion dollars more than the administration had proposed.
Nearly $700 billion dollars of "defense" spending. The amount needed for actual defense is 20% of that at most, and more likely 5%. Balancing the budget is easy if you start here.
Mauldin: Glass-Steagall, or some form of it, should be brought back. Banks, which are subject to taxpayer bailouts, should not be in the investment banking and derivatives-creating business. Derivatives, especially credit default swaps, should be on an exchange, and too big to fail must go. Banks have enough risk just making loans. Leverage should be dialed down, and hedge funds selling what amounts to naked call options in any form, derivative or otherwise, should be regulated.
Mish: What we need to do is get rid of the Fed, FDIC, and fractional reserve lending. Regulation has failed every step of the way. Regulation created Fannie Mae, Freddie Mac, and the Fed. Regulation by the SEC anointed Moodys, Fitch, and the S&P as debt rating companies. We do not need more regulation, we need less regulation, a sound currency, and no Fed. Regulation is clearly the problem, yet the cries for still more regulation come from nearly every corner save the Austrian economists.
Mauldin: Let me see, is there any group I have not offended yet? But something like I am suggesting is going to have to be done at some point. There is no way we can continue forever on the current path. At some point, we will hit the wall. The fight between the bug and the windshield always ends in favor of the windshield. The bond market is going to have to see a credible effort to get back to a reasonable deficit, or we risk a very difficult economic environment. The longer we wait, the worse it will be.
Mish: "Is there any group I have not offended yet?" Yes. You failed to offend those on public pension plans. Not to fear, I did that myself in Five Major Pension Problems - One Simple Solution.
- Expecting 8% returns in a 4% world. When 30 year treasury bonds are yielding 4%, the dividend yield of the S&P 500 is 2%, and the S&P 500 PE is 140 (26 if you use operating earnings), 8% returns are from Fantasyland.
- Pension benefits start too early. People are living longer.
- Private employees do not receive these kind of benefits. Public employees should not either, especially at taxpayer expense.
- Indeed, continuing to chase high-yield in a low-yield world is a guarantee those plans will blow up again down the road.
- Pension plans are so underfunded that it is virtually impossible to catch up, no matter what risks the plan managers undertake. When asked how long it would now take for its investments to put the fund back on track, Ohio officials simply said: "Infinity."
Aug 15, 2018 | www.theamericanconservative.com
This fall, more than 20 million college students will begin a new academic year. To help cover rising tuition rates that continue to outpace inflation , they'll rely on one or more of the federal government's six low-interest loan programs, adding to the $1.5 trillion of student debt already owed in the United States. Despite nine repayment plans, eight forgiveness programs, and almost three dozen deferment options offered by the government, most won't be debt-free until they're in their 40s.
Aug 06, 2018 | www.nakedcapitalism.com
Charles Leseau , August 5, 2018 at 7:06 amLindsay Berge , August 5, 2018 at 8:09 am
The first thing that popped into my head for whatever reason was a little bit in Roald Dahl's Dickensian little childhood autobiography, Boy .
"At Prep School in those days, a parcel of tuck was sent once a week by anxious mothers to their ravenous little sons, and an average tuck-box would probably contain, at almost any time, half a home-made currant cake, a packet of squashed-fly biscuits, a couple of oranges, an apple, a banana, a pot of strawberry jam or Marmite, a bar of chocolate, a bag of Liquorice Allsorts, and a tin of Bassett's lemonade powder. An English school in those days was purely a money-making business owned and operated by the Headmaster. It suited him, therefore, to give the boys as little food as possible himself and to encourage the parents in various cunning ways to feed their offspring by parcel post from home.
'By all means, my dear Mrs Dahl, do send your boy some little treats now and again,' he would say. 'Perhaps a few oranges and apples once a week' – fruit was very expensive – 'and a nice currant cake, a large currant cake perhaps because small boys have large appetites, do they not, ha-ha-ha Yes, yes, as often as you like. More than once a week if you wish Of course he'll be getting plenty of good food here, the best there is, but it never tastes quite the same as home cooking, does it? I'm sure you wouldn't want him to be the only one who doesn't get a lovely parcel from home every week."Grumpy Engineer , August 5, 2018 at 9:37 am
This reminds me of the old joke.
Q. What is the difference between graduate students and galley slaves?
A. They fed galley slaves.jrs , August 5, 2018 at 1:12 pm
Today's "Pearls Before Swine" touched on the same theme:
Alas, it was a little too on-target for me to chuckle today.OpenThePodBayDoorsHAL , August 5, 2018 at 6:18 pm
It won't fix homelessness. 1 in 5 Los Angeles community college students is homeless and 1 in 10 Cal State students are homeless.
The thing is though not necessarily free community college is cheap anyway about $200 a class, and Cal State about 7k a year. One might be able to afford housing if they didn't have this expense? ONLY if they could pay for housing with student loans. In other words Houston we might have much bigger problems.ChrisAtRU , August 5, 2018 at 7:35 pm
Here's my question: When?
When will the overworked, distracted, and misinformed denizens of this great nation declare they have had enough?
That the richest society on Earth adds to the coffers of its billionaires, let's its corporations run offshore and tax-free, supplies unlimited munificence on its military death machine while its students starve, its populace moves further and further to financial precarity, its water and highway systems grind to a halt, its health care system generates infant mortality worse than Bulgaria.
What exactly is the tipping point?Daniel F. , August 5, 2018 at 1:52 pm
Say hello to my little friend, "United States Housing Authority" ??? ;-)
All I'm saying is that we have the power to fix everything , and we can look back to many things that were part of FDR's New Deal as guide posts to bigger and better solutions that are desperately needed today.
From the FDR & Housing Legislation site (fdrlibrary.org):
"The USHA was empowered to advance loans amounting to 90% of project costs, at low-interest and on 60-year terms. By the end of 1940, over 500 USHA projects were in progress or had been completed, with loan contracts of $691 million. The goal was to make the program self-sustainable through the collection of rents: one-half of rent from the tenants themselves, one-third paid by contributions from the Federal government; and one-sixth paid by annual contributions made by the localities themselves."
This where I believe Basic Income in tandem with a JG could provide a symbiotic relationship. You can give students a BI to (help) cover expenses beyond free tuition so they (and/or their families) could get affordable housing or subsidized university housing.
#WeCanDoBoldThingsChrisAtRU , August 5, 2018 at 9:08 pm
I'd call this person* a "raging regressive leftist" instead of a centrist: the latter tends to do excessive navel-gazing while the former blames those racist white people for anything and everything.
Then again, I was born in Europe, live in Europe, engage in live "politicking" in Europe, so my experiences with American politics come mostly from the internet.
On topic: getting your first degree in my country is mostly free in state-funded colleges and universities. Mostly, because 1: the applicant needs to meet a minimum point** threshold, 2: the applicant needs to meet the institutions's own threshold*** for that given department, 3: the applicant needs to rank high enough compared to the rest, because admissions are limited by nature, 4: the applicant needs to maintain a high enough GPA to stay in a state funded slot for their given department, and lastly, 5: there are some departments that receive no funding at all, and choosing one of those means paying by default.
During my university years, I've never met anyone who had to starve, not even the poorest students. There were, and are, several different scholarship programs aside from the usual "get a real high GPA and you'll receive a free price if you're lucky" ones. Students can usually get a student job in our larger cities, and depending on the department, there are some other ways to earn some money: engineering and IT students often get picked by larger firms in their sophomore or senior year, and even if they don't, there's always someone in need of some help with those killer assignments.
The problem here is housing. Dorm spaces are limited, and renting a room is relatively expensive costing somewhere around $500 USD per month in a country with a $22000 USD yearly median income (estimate by OECD). Getting a degree was widely regarded as a means of upward mobility by my father's generation, but the years after the destruction of the Iron Curtain proved them wrong. And of course, they knew nothing about the Free Western States.
*While I see a woman, these are the people who'd bite my face off for misgendering them. No such thing in continental Europe, for now.
**There's a minimum threshold of 260 points. Base points are calculated from high school grades, third and fourth year, and the high school diploma's grades. Bonus points are awarded for state accredited language certificates, high placements on certain students' competitions, and other degrees.
***Institutions apply their own thresholds based on the quantity and quality of their applicants.Alex Cox , August 5, 2018 at 11:03 am
Thanks for the insights from the other side of the Atlantic!Eureka Springs , August 5, 2018 at 11:48 am
When I was a graduate student at UCLA the food on campus was pretty cheap and the salads were sold by the size of the bowl, not by weight. We all became expert at piling those bowls high.
When I taught at CU Boulder, the food on campus was expensive and the salads were weighed. A healthy salad could easily cost you eleven bucks, so I stopped eating campus food and took sandwiches to work instead.
The increase in food prices seems to have parallelled the increase in fees over those forty years.
However, I would make another observation: many young people, in my experience, when they are stressed or working hard, tend to forget to eat – irrespective of how well-off they are. And many of the students I taught had been addicted at high school to "attention deficit" drugs like Ritalin and Adderol, which, being forms of speed, are appetite-suppressants.Frobn , August 5, 2018 at 5:28 pm
Ah yes. When splurging meant buying a dozen eggs to drop in ramen noodles and still miraculously paying one seventh of the phone bill before cutoff.wilroncanada , August 5, 2018 at 6:22 pm
One of our local charities has setting up a pantry with food from Feeding America for a state college in a rural area of Florida.Tyronius , August 6, 2018 at 1:27 am
Two of my daughters graduated from a university in a university town in Nova Scotia in the late1990s. That university set up its own food bank many years ago, to supplement the food banks set up by two churches and the town and county. Housing was still available (small town, student, faculty and school money spent locally), from shared apartments to rooming houses. In any sizable city in Canada or the US, those options for students may not now be available at all, because of greedy landlords, gentrification, and Air B'nb.
On the other hand, during the 1930s, my father-in-law was living in Vancouver, a teenager. He frequently told us stories of the many poor students who lived on or just off the beaches in the western part of the city, in shanties of driftwood and scraps while attending university. Try that now, in any city.
So, you see, today's undergraduates are in many ways even worse off than "great depression" students. Their possible makeshift accommodations have been legislated away.
Robbing the future of our nation to pay the fatcats. What a wonderful way to run a country! If We the People- loosely defined as the other 90%- don't step up and take our country back, we won't have one to speak of in another decade.
Aug 04, 2018 | www.unz.com
All of us obtain our knowledge of the world by two different channels. Some things we discover from our own personal experiences and the direct evidence of our senses, but most information comes to us via external sources such as books and the media, and a crisis may develop when we discover that these two pathways are in sharp conflict. The official media of the old USSR used to endlessly trumpet the tremendous achievements of its collectivized agricultural system, but when citizens noticed that there was never any meat in their shops, "Pravda" became a watchword for "Lies" rather than "Truth."
Now consider the notion of "anti-Semitism." Google searches for that word and its close variants reveal over 24 million hits, and over the years I'm sure I've seen that term tens of thousands of times in my books and newspapers, and heard it endlessly reported in my electronic media and entertainment. But thinking it over, I'm not sure that I can ever recall a single real-life instance I've personally encountered, nor have I heard of almost any such cases from my friends or acquaintances. Indeed, the only persons I've ever come across making such claims were individuals who bore unmistakable signs of serious psychological imbalance.
When the daily newspapers are brimming with lurid tales of hideous demons walking among us and attacking people on every street corner, but you yourself have never actually seen one, you may gradually grow suspicious.
Indeed, over the years some of my own research has uncovered a sharp contrast between image and reality. As recently as the late 1990s, leading mainstream media outlets such as The New York Times were still denouncing a top Ivy League school such as Princeton for the supposed anti-Semitism of its college admissions policy, but a few years ago when I carefully investigated that issue in quantitative terms for my lengthy Meritocracy analysis I was very surprised to reach a polar-opposite conclusion. According to the best available evidence, white Gentiles were over 90% less likely to be enrolled at Harvard and the other Ivies than were Jews of similar academic performance, a truly remarkable finding. If the situation had been reversed and Jews were 90% less likely to be found at Harvard than seemed warranted by their test scores, surely that fact would be endlessly cited as the absolute smoking-gun proof of horrendous anti-Semitism in present-day America.
Jul 10, 2018 | failedevolution.blogspot.com
In another interesting interview with Chris Hedges, Richard Wolff explains why the Trump presidency is the last resort of a system that is about to collapse:
Finally, if everybody tries to save themselves (protection), we have a historical example: after the Great Depression that happened in Europe. And most people believe that it was a large part of what led to WWII after WWI, rather than a much saner collective effort. But capitalism doesn't go for collective efforts, it tends to destroy itself by its own mechanisms. There has to be a movement from below. Otherwise, there is no counter force that can take us in another direction.
So, absent that counter force we are going to see this system spinning out of control and destroying itself in the very way its critics have for so long foreseen it well might.
When Trump announced his big tariffs on China, we saw the stock market dropped 700 points in a day. That's a sign of the anxiety, the danger, even in the minds of capitalists, about where this is going. If we hadn't been a country with two or three decades of a middle class - working class paid really well - maybe we could have gotten away with this. But in a society that has celebrated its capacity to do what it now fails to do, you have an explosive situation.
Everything is done to avoid asking the question to what degree the system we have in place - capitalism is its name - is the problem. It's the Russians, it's the immigrants, it's the tariffs, it's anything else, even the pornstar, to distract us from the debate we need to have had that we haven't had for a half a century, which puts us in a very bad place. We've given a free pass to a capitalist system because we've been afraid to debate it. And when you give a free pass to any institution you create the conditions for it to rot, right behind the facade.
The Trump presidency is the last gasp, it's letting it all hang out. A [neoliberal] system that's gonna do whatever it can, take advantage of this moment, grab it all before it disappears.
In France, it was said 'Après moi, le déluge' (after me the catastrophe). The storm will break.
Aug 02, 2018 | www.zerohedge.com
...A single person taking a minimum wage job would earn an annual income of $15,080. A married couple would earn $30,160. By the way, according to the Bureau of Labor Statistics, less than 4 percent of hourly workers in 2016 were paid the minimum wage. That means that over 96 percent of workers earned more than the minimum wage. Not surprising is the fact that among both black and white married couples, the poverty rate is in the single digits. Most poverty is in female-headed households.
Jul 30, 2018 | www.zerohedge.com
buzzsaw99 Sun, 07/29/2018 - 13:04 Permalinkdivingengineer -> buzzsaw99 Sun, 07/29/2018 - 13:14 Permalink
The fact that Mark Zuckerberg is so rich is annoying, and his separateness from Main Street may not be a great thing socially, but in an economic sense, his fortune did not "come from" the paychecks of ordinary workers...
It damn sure did. It came straight out of their pension funds. Thousands of pension funds across the world bought faang stocks and those workers will be getting fucked in the end while while zuck heads back to hawaii with their money. look at elon, his company hasn't made dime one in profit but he is a billionaire. amzn, with a p/e of 228. they didn't get that p/e without millions of ordinary folk buying their overpriced stock. it is pure ponzi-nomics with fascist overtones and the maggots are cashing out big time.cankles' server -> divingengineer Sun, 07/29/2018 - 13:24 Permalink
The greatest fortunes in history have been built in the last 10 years with 0% interest rates. You were spot on about pensions, they were the casualties, almost every private pension in the country bankrupted by 0% rates so that these fucks could amass unimaginable wealth.
Now the filthy commoner scum have the audacity to suggest that they should pay taxes on it. Where will the madness end?same2u -> divingengineer Sun, 07/29/2018 - 13:35 Permalink
A big reveal of corruption is happening before the end of the month.
The didn't do a half billion dollar renovation on Gitmo for nothing. It's for the treasonous scum that will be on trial in military tribunals.buzzsaw99 -> divingengineer Sun, 07/29/2018 - 13:42 Permalink
All my friends Jews knew this was going to happen. They were buying stocks like crazy when I was telling them to buy gold and get ready for a big reset that never happened. Ten years later they are all multimillionaires and I lost half of my money buying gold...james diamond squid -> buzzsaw99 Sun, 07/29/2018 - 13:48 Permalink
institutions bought their shares with real earned money. bezos did not. as far as i'm concerned being a ceo is a license to steal. bezos damn sure didn't earn that money because he is smarter or works harder than anyone else. look at how he treats his workers. what an asshole.Zorba's idea -> divingengineer Sun, 07/29/2018 - 14:09 Permalink
everyone wants to have an IPO or be in on an IPO, so they can dump their shares on a patsy at a later dateSocratesSolutions -> buzzsaw99 Sun, 07/29/2018 - 13:43 Permalink
True! The Elites have rigged the system...natural for them to rape our ASSets.divingengineer Sun, 07/29/2018 - 13:08 Permalink
It's even worse than that. So much worse. Facebook was stolen by the Satanic Judaic Zionist crowd. Research it. Another gentleman invented it. The Jews stole it, like they've stolen pretty much everything else. No wonder Napoleon said that "The Jews are the master robbers of the modern age". And beyond the criminal vile theft, you have what they are using it for. And that is?
Using it for the 911'd cows in America. And that is you. The Satanic Jews are murdering you and robbing you blind. They 911'd you physically with the Twin Towers. Now they're doing it mentally and financially with Facebook, a control system grid -- a gate to herd cattle which they view you as. They are herding you. You'll be 911'd again in larger and larger numbers until the Satanic Judaic is removed from the World Stage.
Here is the real creator of Facebook: https://www.youtube.com/watch?v=YJ4KRts8RFc
Zuckerberg is a planted punk Zionist spook. You're going to have to clear the world of all of these Satanic Judaic ladies and gentlemen. First the idea needs to come in to show how and why. This is underway.FORCE Sun, 07/29/2018 - 13:10 Permalink
Sickening wealth and sickening poverty, all on display only feet apart on the West Coast.
I don't know the answer, neither do they, but they better figure something out and quick if they know what's good for them.same2u Sun, 07/29/2018 - 13:12 Permalink
Amerikan pauper-proles;let them eat cake-appsdivingengineer -> same2u Sun, 07/29/2018 - 13:17 Permalink
Ever since the housing crisis I been waiting for the world to become a better place. I see now that I been fooling myself into believing that we live in a civilized and honest world. Nobody gives a shit about anyone nor anything, people only care about themselves...
How do we turn these viscous billionaire dogs on each other rather than on us?
We need to figure out how to play the game like they play it on us.
Jul 27, 2018 | www.zerohedge.com
Authored by Lee Camp via TruthDig.com,
Our society should've collapsed by now. You know that, right?
No society should function with this level of inequality (with the possible exception of one of those prison planets in a "Star Wars" movie). Sixty-three percent of Americans can't afford a $500 emergency . Yet Amazon head Jeff Bezos is now worth a record $141 billion . He could literally end world hunger for multiple years and still have more money left over than he could ever spend on himself.
Worldwide, one in 10 people only make $2 a day. Do you know how long it would take one of those people to make the same amount as Jeff Bezos has? 193 million years . (If they only buy single-ply toilet paper.) Put simply, you cannot comprehend the level of inequality in our current world or even just our nation.
So shouldn't there be riots in the streets every day? Shouldn't it all be collapsing? Look outside. The streets aren't on fire. No one is running naked and screaming (usually). Does it look like everyone's going to work at gunpoint? No. We're all choosing to continue on like this.
Well, it comes down to the myths we've been sold. Myths that are ingrained in our social programming from birth, deeply entrenched, like an impacted wisdom tooth. These myths are accepted and basically never questioned.
I'm going to cover eight of them. There are more than eight. There are probably hundreds. But I'm going to cover eight because (A) no one reads a column titled "Hundreds of Myths of American Society," (B) these are the most important ones and (C) we all have other shit to do.Myth No. 8 -- We have a democracy.
If you think we still have a democracy or a democratic republic, ask yourself this: When was the last time Congress did something that the people of America supported that did not align with corporate interests? You probably can't do it. It's like trying to think of something that rhymes with "orange." You feel like an answer exists but then slowly realize it doesn't. Even the Carter Center and former President Jimmy Carter believe that America has been transformed into an oligarchy : A small, corrupt elite control the country with almost no input from the people. The rulers need the myth that we're a democracy to give us the illusion of control.Myth No. 7 -- We have an accountable and legitimate voting system.
Gerrymandering, voter purging, data mining, broken exit polling, push polling, superdelegates, electoral votes, black-box machines, voter ID suppression, provisional ballots, super PACs, dark money, third parties banished from the debates and two corporate parties that stand for the same goddamn pile of fetid crap!
What part of this sounds like a legitimate election system?
No, we have what a large Harvard study called the worst election system in the Western world . Have you ever seen where a parent has a toddler in a car seat, and the toddler has a tiny, brightly colored toy steering wheel so he can feel like he's driving the car? That's what our election system is -- a toy steering wheel. Not connected to anything. We all sit here like infants, excitedly shouting, "I'm steeeeering !"
And I know it's counterintuitive, but that's why you have to vote. We have to vote in such numbers that we beat out what's stolen through our ridiculous rigged system.Myth No. 6 -- We have an independent media that keeps the rulers accountable.
Our media outlets are funded by weapons contractors, big pharma, big banks, big oil and big, fat hard-on pills. (Sorry to go hard on hard-on pills, but we can't get anything resembling hard news because it's funded by dicks.) The corporate media's jobs are to rally for war, cheer for Wall Street and froth at the mouth for consumerism. It's their mission to actually fortify belief in the myths I'm telling you about right now. Anybody who steps outside that paradigm is treated like they're standing on a playground wearing nothing but a trench coat.Myth No. 5 -- We have an independent judiciary.
The criminal justice system has become a weapon wielded by the corporate state. This is how bankers can foreclose on millions of homes illegally and see no jail time, but activists often serve jail time for nonviolent civil disobedience. Chris Hedges recently noted , "The most basic constitutional rights have been erased for many. Our judicial system, as Ralph Nader has pointed out, has legalized secret law, secret courts, secret evidence, secret budgets and secret prisons in the name of national security."
If you're not part of the monied class, you're pressured into releasing what few rights you have left. According to The New York Times , "97 percent of federal cases and 94 percent of state cases end in plea bargains, with defendants pleading guilty in exchange for a lesser sentence."
That's the name of the game. Pressure people of color and poor people to just take the plea deal because they don't have a million dollars to spend on a lawyer. (At least not one who doesn't advertise on beer coasters.)Myth No. 4 -- The police are here to protect you. They're your friends .
That's funny. I don't recall my friend pressuring me into sex to get out of a speeding ticket. (Which is essentially still legal in 32 states .)
The police in our country are primarily designed to do two things: protect the property of the rich and perpetrate the completely immoral war on drugs -- which by definition is a war on our own people .
We lock up more people than any other country on earth . Meaning the land of the free is the largest prison state in the world. So all these droopy-faced politicians and rabid-talking heads telling you how awful China is on human rights or Iran or North Korea -- none of them match the numbers of people locked up right here under Lady Liberty's skirt.Myth No. 3 -- Buying will make you happy.
This myth (Buying will make you happy) is put forward mainly by the floods of advertising we take in but also by our social engineering. Most of us feel a tenacious emptiness, an alienation deep down behind our surface emotions (for a while I thought it was gas). That uneasiness is because most of us are flushing away our lives at jobs we hate before going home to seclusion boxes called houses or apartments. We then flip on the TV to watch reality shows about people who have it worse than we do (which we all find hilarious).
If we're lucky, we'll make enough money during the week to afford enough beer on the weekend to help it all make sense. (I find it takes at least four beers for everything to add up.) But that doesn't truly bring us fulfillment. So what now? Well, the ads say buying will do it. Try to smother the depression and desperation under a blanket of flat-screen TVs, purses and Jet Skis. Now does your life have meaning? No? Well, maybe you have to drive that Jet Ski a little faster! Crank it up until your bathing suit flies off and you'll feel alive !
The dark truth is that we have to believe the myth that consuming is the answer or else we won't keep running around the wheel. And if we aren't running around the wheel, then we start thinking, start asking questions. Those questions are not good for the ruling elite, who enjoy a society based on the daily exploitation of 99 percent of us.Myth No. 2 -- If you work hard, things will get better.
According to Deloitte's Shift Index survey : "80% of people are dissatisfied with their jobs" and "[t]he average person spends 90,000 hours at work over their lifetime." That's about one-seventh of your life -- and most of it is during your most productive years.
Ask yourself what we're working for. To make money? For what? Almost none of us are doing jobs for survival anymore. Once upon a time, jobs boiled down to:
I plant the food -- >I eat the food -- >If I don't plant food = I die.
But nowadays, if you work at a café -- will someone die if they don't get their super-caf-mocha-frap-almond-piss-latte? I kinda doubt they'll keel over from a blueberry scone deficiency.
If you work at Macy's, will customers perish if they don't get those boxer briefs with the sweat-absorbent-ass fabric? I doubt it. And if they do die from that, then their problems were far greater than you could've known. So that means we're all working to make other people rich because we have a society in which we have to work. Technological advancements can do most everything that truly must get done.
So if we wanted to, we could get rid of most work and have tens of thousands of more hours to enjoy our lives. But we're not doing that at all. And no one's allowed to ask these questions -- not on your mainstream airwaves at least. Even a half-step like universal basic income is barely discussed because it doesn't compute with our cultural programming.
Scientists say it's quite possible artificial intelligence will take away all human jobs in 120 years . I think they know that will happen because bots will take the jobs and then realize that 80 percent of them don't need to be done! The bots will take over and then say, "Stop it. Stop spending a seventh of your life folding shirts at Banana Republic."
One day, we will build monuments to the bot that told us to enjoy our lives and leave the shirts wrinkly.
And this leads me to the largest myth of our American society.Myth No. 1 -- You are free.
... ... ...
Try sleeping in your car for more than a few hours without being harassed by police.
Try maintaining your privacy for a week without a single email, web search or location data set collected by the NSA and the telecoms.
Try signing up for the military because you need college money and then one day just walking off the base, going, "Yeah, I was bored. Thought I would just not do this anymore."
Try explaining to Kentucky Fried Chicken that while you don't have the green pieces of paper they want in exchange for the mashed potatoes, you do have some pictures you've drawn on a napkin to give them instead.
Try running for president as a third-party candidate. (Jill Stein was shackled and chained to a chair by police during one of the debates.)
Try using the restroom at Starbucks without buying something while black.
We are less free than a dog on a leash. We live in one of the hardest-working, most unequal societies on the planet with more billionaires than ever .
Meanwhile, Americans supply 94 percent of the paid blood used worldwide. And it's almost exclusively coming from very poor people. This abusive vampire system is literally sucking the blood from the poor. Does that sound like a free decision they made? Or does that sound like something people do after immense economic force crushes down around them? (One could argue that sperm donation takes a little less convincing.)
Point is, in order to enforce this illogical, immoral system, the corrupt rulers -- most of the time -- don't need guns and tear gas to keep the exploitation mechanisms humming along. All they need are some good, solid bullshit myths for us all to buy into, hook, line and sinker. Some fairy tales for adults.
It's time to wake up.
bobcatz -> powow Fri, 07/27/2018 - 16:43 PermalinkDingleBarryObummer -> bobcatz Fri, 07/27/2018 - 16:49 Permalink
Myth #9: America is not an Israeli colonybfellow -> DingleBarryObummer Fri, 07/27/2018 - 16:55 Permalink
#10: Muh 6 Gorillion
#11: Building 7Oldguy05 -> Oldguy05 Fri, 07/27/2018 - 22:25 Permalink
815M people chronically malnourished according to the UN. Bezos is worth $141B.
$141B / 815M people = $173 per person. That would definitely not feed them for "multiple years". And that's only if Bezos could fully liquidate the stock without it dropping a penny.
Author lost me right there.BennyBoy -> Nunny Fri, 07/27/2018 - 18:51 Permalink
" Point is, in order to enforce this illogical, immoral system, the corrupt rulers -- most of the time -- don't need guns and tear gas to keep the exploitation mechanisms humming along. All they need are some good, solid bullshit myths for us all to buy into, hook, line and sinker. Some fairy tales for adults. "
Seems like there's tear gas in the air and guns are going to be used soon. The myths are dying on the tongues of the liars. Molon Labe!....and I'm usually a pacifist.Oldguy05 -> Nunny Fri, 07/27/2018 - 22:43 Permalink
"American Society Would Collapse If It Weren't For Invasions Of Foreign Countries, Murdering Their People, Stealing Their Oil Then Blaming Them For Making The US Do It."Proofreder -> vato poco Fri, 07/27/2018 - 18:39 Permalink
Eisenhower's speeches were awesome and true. But he was right there doing the same shit. Was he feeling guilty in the end?east of eden -> vato poco Fri, 07/27/2018 - 18:55 Permalink
Freedom - just another word for nothing left to lose ...
https://www.youtube.com/watch?v=N7hk-hI0JKw&list=RDEMoIkwgyb6gDyuA-bFyRTheEndIsNear -> HopefulCynical Fri, 07/27/2018 - 18:33 Permalink
Well, in a world driven by oil, it is entirely bogus to suggest that citizens have to work their asses off. That was the whole point of the bill of goods that was sold to us in the late 70's and early 80'. More leisure time, more time for your family and personal interests.
Except! It never happened. All they fucking did was reduce real wages and force everyone from the upper middle class down, into a shit hole.
But, they will pay for their folly. Guaran-fucking-teed.
As one who has hoed many rows of cotton in 115F temperatures as well as picking cotton during my childhood and early adolescence during weekends and school holidays, I concur. It was a very powerful inducement to get a good education back when schools actually taught things and did not tolerate backtalk or guff from students instead of babysitting them. It worked, and I ended up writing computer software for spacecraft, which was much fun than working in the fields.
Jul 23, 2018 | www.theguardian.com
Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that "the market" delivers benefits that could never be achieved by planning.
Attempts to limit competition are treated as inimical to liberty. Tax and regulation should be minimised, public services should be privatised. The organisation of labour and collective bargaining by trade unions are portrayed as market distortions that impede the formation of a natural hierarchy of winners and losers. Inequality is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve.
We internalise and reproduce its creeds. The rich persuade themselves that they acquired their wealth through merit, ignoring the advantages – such as education, inheritance and class – that may have helped to secure it. The poor begin to blame themselves for their failures, even when they can do little to change their circumstances.
Never mind structural unemployment: if you don't have a job it's because you are unenterprising. Never mind the impossible costs of housing: if your credit card is maxed out, you're feckless and improvident. Never mind that your children no longer have a school playing field: if they get fat, it's your fault. In a world governed by competition, those who fall behind become defined and self-defined as losers.
Among the results, as Paul Verhaeghe documents in his book What About Me? are epidemics of self-harm, eating disorders, depression, loneliness, performance anxiety and social phobia. Perhaps it's unsurprising that Britain, in which neoliberal ideology has been most rigorously applied, is the loneliness capital of Europe. We are all neoliberals now.
Jul 20, 2018 | www.nakedcapitalism.com
By Enrico Verga, a writer, consultant, and entrepreneur based in Milan. As a consultant, he concentrates on firms interested in opportunities in international and digital markets. His articles have appeared in Il Sole 24 Ore, Capo Horn, Longitude, Il Fatto Quotidiano, and many other publications. You can follow him on Twitter @enricoverga .
International commerce, jobs, and economic migrants are propelled by a common force: profit.
In recent times, the Western middle class (by which I mean in particular industrial workers and office employees) has lost a large number of jobs and has seen its buying power fall. It isn't true that migrants are the source of all evil in the world. However, under current conditions, they become a locus for the exasperation of the population at twenty years of pro-globalization politics. They are tragically placed in the role of the straw that breaks the camel's back.
Western businesses have slipped jobs overseas to countries with low labor costs, while the middle class has been pushed into debt in order to try to keep up. The Glass-Steagall law and other brakes on American banks were abolished by a cheerleader for globalization, Bill Clinton, and these banks subsequently lost all restraints in their enthusiasm to lend. The cherry on top of the sundae was the real estate bubble and ensuing crash of 2008.
A damning picture of the results of 20 years of globalization is provided by Forbes , capitalism's magazine par excellence. Already in 2016, the surprise victory of Trump led to questions about whether the blond candidate's win was due in part to the straits of the American middle class, impoverished as a result of the pro-globalization politics of figures like Clinton and Obama.
Further support for this thesis is furnished by the New York Times , describing the collapse of the stars-and-stripes middle class. Its analysis is buttressed by lengthy research from the very mainstream Pew Center , which agrees that the American middle class is vanishing.
And Europe? Although the European middle class has been squeezed less than its American counterpart, for us as well the picture doesn't look good. See for example the analysis of the Brookings Institute , which discusses not only the flagging economic fortunes of the European middle class, but also the fear of prosperity collapsing that currently grips Europe.
Migrants and the Shock Doctrine
What do economic migrants have to do with any of this?
Far be it from me to criticize large corporations, but clearly they – and their managers and stockholders – benefit from higher margins. Profits (revenue minus costs and expenses) can be maximized by reducing expenses. To this end, the costs of acquiring goods (metals, agricultural products, energy, etc.) and services (labor) need to fall steadily.
In the quest to lower the cost of labor, the most desirable scenario is a sort of blank slate: to erase ongoing arrangements with workers and start over from zero, building a new "happy and productive" economy. This operation can be understood as a sort of "shock doctrine."
The term "economic shock therapy" is based on an analogy with electroshock therapy for mental patients. One important analysis of it comes from Naomi Klein , who became famous explaining in 2000 the system of fashion production through subsidiaries that don't adhere to the safety rules taken so seriously in Western countries (some of you may recall the scandal of Benetton and Rana Plaza , where more than a thousand workers at a Bangladesh factory producing Benetton (and other) clothes were crushed under a collapsing building).
Klein analyzes a future (already here to some degree) in which multinational corporations freely fish from one market or another in an effort to find the most suitable (i.e. cheapest) labor force. Sometimes relocating from one nation to another is not possible, but if you can bring the job market of other countries here in the form of a low-cost mass of people competing for employment, then why bother?
The Doctrine in Practice
Continuing flows of low-cost labor can be useful for cutting costs. West Germany successfully absorbed East Germany after the fall of the Berlin Wall, but the dirty secret of this achievement is the exploitation of workers from the former East, as Reuters reports .
The expansion of the EU to Poland (and the failed attempt to incorporate the Ukraine) has allowed many European businesses to shift local production to nations where the average cost of a blue or white collar worker is much lower ( by 60-70% on average ) than in Western European countries.
We see further evidence of damage to the European middle class daily, from France where the (at least verbally) pro-globalization Macron is cutting social welfare to attract foreign investment , to Germany where many ordinary workers are seriously exploited . And so on through the UK and Italy.
The migrant phenomenon is a perfect counterpoint to a threadbare middle class, given its role as a success story within the narrative of globalization.
Economic migrants are eager to obtain wealth on the level of the Western middle class – and this is of course a legitimate desire. However, to climb the social ladder, they are willing to do anything: from accepting low albeit legal salaries to picking tomatoes illegally ( as Alessandro Gassman, son of the famous actor, reminded us ).
The middle class is a silent mass that for many years has painfully digested globalization, while believing in the promises of globalist politicians," explains Luciano Ghelfi, a journalist of international affairs who has followed Lega from its beginnings. Ghelfi continues:
This mirage has fallen under the blows it has received from the most serious economic crisis since the Second World War. Foreign trade, easy credit (with the American real estate bubble of 2008 as a direct consequence), peace missions in Libya (carried out by pro-globalization French and English actors, with one motive being in my opinion the diversion of energy resources away from [the Italian] ENI) were supposed to have created a miracle; they have in reality created a climate of global instability.
Italy is of course not untouched by this phenomenon. It's easy enough to give an explanation for the Five Stars getting votes from part of the southern electorate that is financially in trouble and might hope for some sort of subsidy, but the North? The choice of voting center right (with a majority leaning toward Lega) can be explained in only one way – the herd (the middle class) has tried to rise up.
I asked him, "So in your opinion, is globalization in stasis? Or is it radically changing?" He replied:
I think unrestrained globalization has taken a hit. In Italy as well, as we have seen recently, businesses are relocating abroad. And the impoverished middle class finds itself forced to compete for state resources (subsidies) and jobs which can be threatened by an influx of economic migrants towards which enormous resources have been dedicated – just think of the 4.3 billion Euros that the last government allocated toward economic migrants.
This is an important element in the success of Lega: it is a force that has managed to understand clearly the exhaustion of the impoverished middle class, and that has proposed a way out, or has at least elaborated a vision opposing the rose-colored glasses of globalization.
In all of this, migrants are more victims than willing actors, and they become an object on which the fatigue, fear, and in the most extreme cases, hatred of the middle class can easily focus.
What Conflicts Are Most Relevant Today?
At the same time, if we observe, for example in Italy, the positions taken by the (pro-globalization?) Left, it becomes easier to understand why the middle class and also many blue collar workers are abandoning it. Examples range from the unfortunate declarations of deputy Lia Quartapelle on the need to support the Muslim Brotherhood to the explanations of the former president of the Chamber of Deputies, Laura Boldrini, on how the status of economic migrant should be seen as a model for the lifestyle of all Italians . These remarks were perhaps uttered lightly (Quartapelle subsequently took her post down and explained that she had made a mistake), but they are symptomatic of a certain sort of pro-globalization cultural "Left" that finds talking to potential voters less interesting than other matters.
From Italy to America (where Hillary Clinton was rejected after promoting major international trade arrangements that she claimed would benefit middle-class American workers) to the UK (where Brexit has been taken as a sort of exhaust valve), the middle class no longer seems to be snoring.
We are currently seeing a political conflict between globalist and nationalist forces. Globalists want more open borders and freer international trade. Nationalists want protection for work and workers, a clamping down on economic migrants, and rules with teeth aimed at controlling international trade.
If for the last twenty years, with only occasional oscillation, the pro-globalization side has been dominant in the West, elections are starting to swing the balance in a new direction.
Meanwhile, many who self-identify as on the Left seem utterly uninterested in the concerns of ordinary people, at least in cases where these would conflict with the commitment to globalization.
If the distinction between globalism and nationalism is in practice trumping other differences, then we should not let ourselves be distracted by bright and shiny objects, and keep our focus on what really matters.
fresno dan , July 20, 2018 at 7:06 amEnrico Verga , July 20, 2018 at 9:30 am
From the Forbes link:
"The first downside of international trade that even proponents of freer trade must acknowledge is that while the country as a whole gains some people do lose."
More accurate to say a tiny, tiny, TINY percentage gain.
Nice how they use the euphemism "country as a whole" for GDP. Yes, GDP goes up – but that word that can never be uttered by American corporate media – DISTRIBUTION – that essentially ALL gains in GDP have gone to the very top. AND THAT THIS IS A POLITICAL DECISION, not like the waves of the ocean or natural selection. There is plenty that could be done about it – BUT it STARTS with WANTING to do something effective about it .
And of course, the bizarre idea that inflation helps. Well, like trade, it helps .the very, very rich
https://www.themaven.net/mishtalk/economics/real-hourly-earnings-decline-yoy-for-production-workers-flat-for-all-employees-W4eRI5nksU2lsrOR9Z01WQ/Off The Street , July 20, 2018 at 9:43 am
im used to use reliable link ( on forbes it's not Pew but i quoted also Pew) :)Heraclitus , July 20, 2018 at 11:38 am
Nice how they use the euphemism "country as a whole" for GDP.
You have identified one of my pet peeves about economists and their fellow traveler politicians. They hide behind platitudes, and the former are more obnoxious about that. Economists will tell people that they just don't understand all that complexity, and that in the name of efficiency, etc, free trade and the long slide toward neo-liberal hell must continue.Jean , July 20, 2018 at 12:21 pm
I think the assertion that all economic gains have gone to the very top is not accurate. According to 'Unintended Consequences' by Ed Conard, the 'composition of the work force has shifted to demographics with lower incomes' between 1980 and 2005. If you held the workforce of 1980 steady through 2005, wages would be up 30% in real terms, not including benefits.
It's amazing that critics miss this.makedoanmend , July 20, 2018 at 7:12 am
But you are ignoring immigrant based population increases which dilutes your frozen population number. How convenient for argument's sake.
Not mentioned in the article are rent increases caused by more competition for scarcer housing.PlutoniumKun , July 20, 2018 at 8:30 am
I think the author has highlighted some home truths in the article. I once remember several years ago just trying to raise the issue of immigration* and its impact on workers on an Irish so-called socialist forum. Either I met silence or received a reply along the lines: 'that when socialists rule the EU we'll establish continental wide standards that will ensure fairness for everyone'. Fairy dust stuff. I'm not anti immigrant in any degree but it seems unwise not to understand and mitigate the negative aspects of policies on all workers. Those chickens are coming home to roost by creating the type of political parties (new or established) that now control the EU and many world economies.
During the same period many younger middle and upper middle class Irish extolled the virtues, quite openly, of immigration as way of lowering the power and wages of existing Irish workers so that the costs of building homes, labour intensive services and the like would be concretely reduced; and that was supposed to be a good thing for the material well being of these middle and upper middle classes. Sod manual labour.
One part of the working class was quite happy to thrown another part of the working class under the bus and the Left**, such as it was and is, was content to let it happen. Then established Leftist parties often facilitated the rightward economic process via a host of policies, often against their own stated policies in election manifestos. The Left appeared deceitful. The Irish Labour party is barely alive and subsisting on die-hard traditionalists for their support by those who can somehow ignore the deceit of their party. Surreaslist stuff from so-called working class parties,
And now the middle-middle classes are ailing and we're supposed to take notice. Hmmm. Yet, as a Leftist, myself, it is incumbent upon us to address the situation and assist all workers, whatever their own perceived status.
*I'm an immigrant in the UK currently, though that is about to change next year.
** Whether the "Left", such as the Irish Labour Party, was just confused or bamboozled matters not a jot. After the financial crises that became an economic crisis, they zealously implemented austerity policies that predominantly cleared the way for a right wing political landscape to dominate throughout Europe. One could be forgiven for thinking that those who called themselves Leftists secretly believed that only right wing, neo-liberal economic policies were correct. And I suppose, being a bit cynical, that a few politicos were paid handsomely for their services.makedoanmend , July 20, 2018 at 10:17 am
I think its easy to see why the more middle class elements of the left wing parties never saw immigration as a problem – but harder to see why the Trade Unions also bought into this. Partly I think it was a laudable and genuine attempt to ensure they didn't buy into racism – when you look at much trade union history, its not always pleasant reading when you see how nakedly racist some early trade union activists were, especially in the US. But I think there was also a process whereby Unions increasingly represented relatively protected trades and professions, while they lost ground in more vulnerable sectors, such as in construction.
I think there was also an underestimation of the 'balancing' effect within Europe. I think a lot of activists understimated the poverty in parts of Europe, and so didn't see the expansion of the EU into eastern Europe as resulting in the same sort of labour arbitrage thats occurred between the west and Asia. I remember the discussions over the enlargement of the EU to cover eastern Europe and I recall that there seemed to be an inbuilt assumption (certainly in the left), that rising general prosperity would ensure there would be no real migration impact on local jobs. This proved to be entirely untrue.
Incidentally, in my constituency (Dublin Central) in past elections the local Labour party was as guilty as any of pandering to the frequent racism encountered on the doorsteps in working class areas. But it didn't do them much good. Interestingly, SF was the only party who would consistently refuse to pander (At least in Dublin), making the distinction between nationalist and internationalist minded left wingers even more confusing.Glen , July 20, 2018 at 8:56 am
Yes, one has to praise the fact that the Unions didn't pander to racism – but that's about all the (insert expletive of choice) did correctly.
Your other points, as ever, are relevant and valid but (and I must but) I tend to think that parties like Labour were too far "breezy" about the repercussions about labour arbitrage. But that's water under the bridge now.
Speaking about SF and the North West in general, they have aggressively canvassed recent immigrants and have not tolerated racism among their ranks. Their simple reasoning was that is unthinkable that SF could tolerate such behaviour amongst themselves when they has waged a campaign against such attitudes and practices in the six counties. (SF are no saints, often fumble the ball badly, and are certainly not the end-all-be-all, but this is something they get right).Felix_47 , July 20, 2018 at 9:18 am
It has to be understood that much of immigration is occurring because of war, famine, collapsing societies (mostly due to massive wealth inequality and corrupt governments). Immigration is not the cause of the economic issues in the EU, it's a symptom (or a feature if you're on top). If you don't correct the causes – neo-liberalism, kleptocracy, rigged game – what ever you want to call it, then you too will become an immigrant in your own country (and it will be a third world country by the time the crooks on top are done).
Don't get caught up in the blame the other poor people game. It's a means to get the powerless to fight among themselves. They are not in charge, they are victims just like you.Louis Fyne , July 20, 2018 at 11:45 am
Having spent a lot of time in the Indian subcontinent and Afghanistan and Iraq I have to say that rampant overpopulation plays a big part. Anyone who can get out is getting out. It makes sense. And with modern communications they all know how life is in Europe or the US in contrast to the grinding horror that surrounds them.redleg , July 20, 2018 at 7:32 pm
But Conan tells me that Haiti is a tropical paradise! (my brother too spent a lot of time in Afghanistan and Iraq working with the locals during his deployments)
"Twitter liberalism" is doing itself by not recognizing that much of the developing world IS a corrupt cesspool.
Instead of railing against Trump, the Twitter-sphere needs to rail against the bipartisan policies that drive corruption, and economic dislocations and political dislocations. and rail against religious fundamentalism that hinders family planning.
But that can't fit onto a bumper sticker.
Calling Trump names is easier.Oregoncharles , July 20, 2018 at 2:05 pm
But if you actually do that, rail against bipartisan neoliberal policies on social media and IRL, the conservatives are far less hostile than the die-hard Dems. This is especially true now, with all the frothing at the mouth and bloodlust about Russia. Its raised their "it's ALL *YOUR* FAULT"-ism by at least an order of magnitude.makedoanmend , July 20, 2018 at 10:04 am
Actually, that's been true since the 18th C., at least for the US. TV may make it more vivid, and Europe has changed places, but most Americans have immigrant ancestors, most often from Europe.nervos belli , July 20, 2018 at 10:20 am
Very good points, and I agree with all of them.
However, it does seem that the policy of the EU, especially under the influence of Mutti Merkel, signalled a free-for-all immigration stance over the last several years, completely ignoring the plight of existing workers (many of whom would be recent immigrants themselves and the children of immigrants). That the so-called Left either sat idly by or jumped on Mutti's band wagon didn't do them any favours with working people. Every country or customs union has and needs to regulate its borders. It also makes some sense to monitor labour markets when unfavourable conditions appear.
It appears that only the wealthy are largely reaping the rewards of the globalist direction trade has taken. These issues need to be addressed by the emerging Left political parties in the West. Failure to address these issues must, I would contend, play into the hands of the more right wing parties whose job is to often enrich the local rich.
But, bottom line, your are correct workers do not come out well when blaming other workers for economies that have been intentionally created to produce favourable conditions for the few over the many.Ben Wolf , July 20, 2018 at 7:36 am
It's a blade with two sides.
There are push factors like the wars and poor countries. However neither of these causes can be fixed. Not possible. Europe can gnash their teeth all they want, not even when they did the unthinkable and put the US under sanctions for their warcrimes would the US ever stop. First there would be color revolutions in western europe.
As important as the push factors are the pull ones. 90% or so of all refugees 2015 went to Germany. Some were sent to other countries by the EU, these too immediately moved to Germany and didn't stay where they were assigned. So the EU has to clean up their act and would need to put the last 10 or so US presidents and administrations before a judge in Den Haag for continued war crimes and crimes against humanity (please let me my dreams). The EU would also need to clean up their one sided trade treaties with Africa and generally reign in their own corporations. All that is however not enough by far and at most only half the battle. Even when the EU itself all did these things, the poverty would remain and therefore the biggest push factor. Humans always migrate to the place where the economy is better.
The pull factors is however at least as big. The first thing to do is for Germany to fix their laws to be in sync with the other EU countries. At this point, Germany is utterly alone, at most some countries simply don't speak out against german policy since they want concessions in other areas. Main one here is France with their proposed EU and Euro reforms but not alone by far.Enrico Verga , July 20, 2018 at 9:31 am
Nationalists want protection for work and workers, a clamping down on economic migrants, and rules with teeth aimed at controlling international trade.
Socialism in one country is a Stalinist theory, and falling back upon it in fear of international capital is not only regressive but (assuming we aren't intentionally ignoring history) relective of a defensive mentality.
In other words, this kind of thinking is the thinking of the whipped dog cringing before the next blow.Andrew Watts , July 20, 2018 at 11:28 am
Am i a dog? :)Oregoncharles , July 20, 2018 at 1:47 pm
Or perhaps they want to regulate and control the power of capital in their country. Which is an entirely impossible proposition considering that capital can flee any jurisdiction and cross any border. After all, transnational capital flows which were leveraged to the hilt in speculative assets played an oversized role in generating the financial crisis and subsequent crash.
It wouldn't be the first time I've been called a Stalinist though.JBird , July 20, 2018 at 3:39 pm
And why would we care whether it's a "Stalinist" theory? For that matter, although worker ownership would solve some of these problems, we needn't be talking about socialism, but rather about more functional capitalism.
Quite a leap in that last sentence; you haven't actually established anything of the sort.disc_writes , July 20, 2018 at 8:10 am
but rather about a more functional capitalism.
Personally, I believe capitalism needs to go away, but for it, or any other economic system, to work, we would need a fair, equal, just, enforced rule of law that everyone would be under, wouldn't we?
Right now the blessed of our various nations do not want this, so they make so that one set is unfair, unequal, unjust, harshly enforced on most of their country's population while they get the gentle rules.
For a society to function long term, it needs to have a fair and just set of rules that everyone understands and follow, although the rules don't have to equal; people will tolerate different levels of punishments and strictness of the rules. The less that is the case the more dysfunctional, and usually the more repressive it is. See the Western Roman Empire, the fall of just about every Chinese dynasty, the Russian Empire, heck even the American War of Independence, and the American Civil War. In example, people either actively worked to destroy the system or did not care to support it.Lambert Strether , July 20, 2018 at 4:00 pm
Thank you for the article, a pretty lucid analysis of the recent electoral results in Italy and trends elsewhere. Although I would have liked to read something about people voting the way they do because they are xenophobe fascist baby-eating pedophile racist Putin friends. Just for fun.
Funny how the author's company promotes "Daily international job vacancies in UNDP, FAO, UN, UNCTAD, UNIDO and the other Governative Organization, Non Governative Organization, Multinationals Corporations. Public Relations, Marketing, Business Development."
Precisely the sort of jobs that infuriates the impoverishing middle classes.Felix_47 , July 20, 2018 at 9:16 am
Class traitors are important and to be encouraged (though a phrase with a more positive tone would be helpful).Andrew Watts , July 20, 2018 at 11:34 am
As recently as 2015, Bernie Sanders defended not only border security, but also national sovereignty. Asked about expanded immigration, Sanders flipped the question into a critique of open-borders libertarianism: "That's a Koch brothers proposal which says essentially there is no United States."
Unfortunately the ethnic division of the campaign and Hillary's attack seems to have led him to change his mind.Enrico Verga , July 20, 2018 at 9:36 am
That's probably due to the fact that just about everybody can't seem to differentiate between immigration and mass migration. The latter issue is a matter of distributing the pain of a collapsing order. state failure, and climate change while the former is simply engaging in the comfortable rhetoric of politics dominated by the American middle class.MyLessThanPrimeBeef , July 20, 2018 at 9:40 am
Oki lemme see.
1 people vote they like. im not updated if the voters eat babies but i'll check and let u know.
2 My company is not dream job. It is a for free ( and not making a penny) daily bulleting that using a fre soft (paper.li) collect international qualified job offers for whoever is willing to work in these sector.
i'm not pro or contro migrants. i actually only reported simple fact collating differents point :)JBird , July 20, 2018 at 3:42 pm
Economic migrants seek prosperity and are justified in doing so, yet they can also be seen as pawns in an international strategy that destroys the negotiating leverage of workers. The resulting contradictions potentially render conventional political classifications obsolete.
This appears on the homepage, but not here.
In any case, the 10% also seek prosperity. They are said to be the enablers of the 1%.
Perhaps pawns too.
Are economic migrants both pawns and enablers?Newton Finn , July 20, 2018 at 10:02 am
Yes. The economic migrants are both pawns and enablers as well as victims.ROB , July 20, 2018 at 10:11 am
Until the left alters its thinking to reflect the crucial information presented in this video, information more clearly and comprehensively spelled out in "Reclaiming the State" by Mitchell and Fazi, resurgent rightwing nationalism will be the only outlet for those who reject global neoliberalism's race to the bottom. It's that simple and sad.
https://www.youtube.com/watch?v=IynNfA1OhaoJohn Wright , July 20, 2018 at 11:16 am
To paint this as two pro-globalisation (within which you place the left) and pro-nationalism is simplistic and repositions the false dichotomy of left vs right with something just as useless. We should instead seek to speak to the complexities of the modern political spectrum. This is an example of poor journalism and analysis and shouldn't have been posted here, sorry Yves.JTMcPhee , July 20, 2018 at 11:17 am
By "false dichotomy of left vs right" are you implying there is little difference between left and right?
Is that not one of the themes of the article?
Please speak to the complexities of the modern political spectrum and give some examples of better and more useful journalism and analysis.John , July 20, 2018 at 11:44 am
Thanks for your opinion. Check the format of this place: articles selected for information or provoking thoughts, in support of a general position of driving toward betterment of the general welfare, writ large.
The political economy is at least as complex as the Krebs or citric acid cycle that biology students and scientists try to master. There are so many moving parts and intersecting and competing interests that in the few words that the format can accommodate, regarding each link, it's a little unkind to expect some master work of explication and rhetorical closure every time.
The Krebs cycle is basically driven by the homeostatic thrust, bred of billions of years of refinement, to maintain the healthy functioning and prolong life of the organism. There's a perceivable axis to all the many parts of respiration, digestion, energy flows and such, all inter-related with a clear organizing principle at the level of the organism. On the record, it's hardly clear that at the level of the political economy, and all the many parts that make it up, there is sufficient cohesion around a set of organizing principles that parallel the drive, at the society and species level, to regulate and promote the energy flows and interactions that would keep things healthy and prolong the life of the larger entity. Or that their is not maybe a death wish built into the "cultural DNA" of most of the human population.
Looks a lot to me that we actually have been invested (in both the financial and military senses of the word) by a bunch of different cancer processes, wild and unregulated proliferation of ecnomic and political tumor tissues that have invaded and undermined the healthy organs of the body politic. Not so clear what the treatments might be, or the prognosis. It is a little hopeful, continuing the biological analogy, that the equivalents of inflammation and immune system processes appear to be overcoming the sneaky tricks that cancer genes and cells employ to evade being identified and rendered innocuous.jrs , July 20, 2018 at 6:40 pm
Yes, "invested in a bunch of cancer processes" is a good description of allowing excessive levels of predatory wealth. Thus you end up with a bunch of Jay Gould hyper capitalists whose guiding principle is: I can always pay one half of the working class to kill the other half. Divide and conquer rules.JimmyV , July 20, 2018 at 12:04 pm
It's mostly simply wrong. This doesn't describe the political views of almost anyone near power anywhere as far as I can tell:
"Globalists want more open borders and freer international trade. Nationalists want protection for work and workers, "
Most of the nationalist forces are on the right and give @#$# all for workers rights. Really they may be anti-immigrant but they are absolutely anti-worker.Outis Philalithopoulos Post author , July 20, 2018 at 1:02 pm
The middle class does not really exist, it was a concept invented by capitalists to distract the workers from their essential unity as fellow wage slaves. Some make more wages, some make less wages but they all have their surplus value, the money left over after they have enough to take care of themselves, taken by the capitalist and used for his ends even though he may not have worked in the value creation process at all.
Economic migrants are members of the working class who have been driven from their home country to somewhere else by the capitalist system. While the article does mention capitalist shock doctrine methods for establishing imperialism and correctly notes that economic migrants are victims, it then goes on to try to lay a weak and insidious argument against them. The author goes on citing multiple different cases of worker wages being driven lower or stagnating, many of these cases have differing and sometimes complex reasons for why this happened. But migrants and globalization are to blame he says and that our struggle is nationalism vs globalism. He refuses to see what is staring him in the face, workers produce surplus value for society, more workers produce more surplus value. If society finds itself wealthier with more workers then why do workers wage fall or stagnate? He does note correctly that this is due to the workers now having a weaker bargaining position with the capitalist, but he seems to conclude from this without stating outrightly that we should then reject the economic migrants because of this.
However, we could instead conclude that if more workers produce more surplus value but yet their wages fall because the capitalist takes a larger share of the overall pot, that the problem is not more workers but instead the capitalist system itself which was rigged to exploit workers everywhere. Plus the workers bargaining position only weakens with a greater number of them if they are all just bargaining for themselves, but if they were to bargain togather collectively then there bargaining position has actually only grown even stronger.
Also he falsly equates democratic party policies with leftists, instead of correctly noting that the democratic party represents capitalist interests from a centrist position and not the left. The strength of global capitalism can only be fought by a global coalition of the working class. The struggle of Mexican and American workers are interrelated to each other and the same goes for that of European and Middle Eastern workers. The time has come for the left to raise the rallying cry of its great and glorious past.
That workers of the world must unite!Oregoncharles , July 20, 2018 at 1:56 pm
You claim, as if it were obvious, that "economic migrants are members of the working class who have been driven from their home country to somewhere else by the capitalist system."
Are all economic migrants therefore bereft of agency?
If the borders of the US were abruptly left completely open, a huge number of people would enter the country tomorrow, for economic reasons. Would they all have been "driven" here, or would they have some choice in the matter?
When you say, "he refuses to say what is staring him in the face, that [ ] more workers produce more surplus value," you are not only taking a gratuitously pedantic tone, you are actually not making a coherent critique. If economic migrants move from one country to another, the total pool of workers in the world has not increased; while according to your logic, if all the workers in the world were to move to Rhode Island, Rhode Island would suddenly be swimming in the richness of surplus value.
When you say, "we could instead conclude that [..] the problem is not more workers but instead the capitalist system itself which was rigged to exploit workers everywhere," you are straw-manning the author but also making a purely rhetorical argument. If you think the capitalist system can be replaced with a better one within the near future, then you can work toward that; but in the meanwhile, nations, assuming that they will continue to exist, will either have open borders or something short of that, and these decisions do affect the lives of workers.
When you say he "falsly equates democratic party policies with leftists," the false equivalence is coming from you. The article barely touches on the Democratic Party, and instead draws most of its examples from Europe, especially Italy. In Italy, the public figures he mentions call themselves part of the sinistra and are generally referred to that way. You might perhaps feel that they are not entitled to that name (and in fact, the article sometimes places "left" in quotation marks), but you should at least read the article and look them up before discussing the matter.Oregoncharles , July 20, 2018 at 4:47 pm
From the article: "Meanwhile, many who self-identify as on the Left seem utterly uninterested in the concerns of ordinary people, at least in cases where these would conflict with the commitment to globalization."
To Be Fair, Verga clearly is skeptical about those claims to be "on the Left," as he should be. Nonetheless, his initial mention of Democratic exemplars of globalization triggers American reflexes.Lambert Strether , July 20, 2018 at 3:47 pm
Something before this failed to post; was rejected as a double post.
In brief: corporate globalization is a conservative, Republican policy that Bill Clinton imposed on the Dems, where it has since become doctrine, since it pays. It's ultimately the reason I'm a Green, not a Democrat, and in a sense the reason there IS a Green Party in the US.Eduardo Pinha , July 20, 2018 at 1:00 pm
> The middle class does not really exist, it was a concept invented by capitalists
Let's not be simplistic. They have people for that.JBird , July 20, 2018 at 4:04 pm
The author points to stagnant middle class income in USA and Western Europe but fail to look the big picture. Middle class income has increased sharply in the past decades in Asia and Eastern Europe. Overall the gain huge, even though life is tougher in richer countries.jrs , July 20, 2018 at 6:50 pm
Overall the gain huge, even thought life is tougher in richer countries.
Please accept my apologies for saying this. I don't mean to offend. I just have to point out something.
Many in the Democratic Party, as well as the left, are pointing to other countries and peoples as well as the American 9.9% and saying things are great, why are you complaining? With the not so hidden implications, sometimes openly stated that those who do are losers and deplorables.
Saying that middle class incomes are merely stagnant is a sick, sick joke as well as an untruth. As an American, I do not really care about the middle classes in Asia and Eastern Europe. Bleep the big picture. The huge gains comes with a commensurate increase in homeless in the United States, and a falling standard of living for most the of the population, especially in the "wealthy" states, like my state of California. Most of us are using fingernails to stay alive and homed. If those gains had not been caused by the losses, I would be very please to see them. As it is, I have to live under President Trump and worry about surviving. Heck, worry about the rest of my family doing so.David in Santa Cruz , July 20, 2018 at 1:24 pm
"Saying that middle class incomes are merely stagnant is a sick, sick joke as well as an untruth."
I mean I actually do care somewhat about the people of the world, but we here in "rich countries" are being driven to homelessness at this point and told the goddamn lie that we live in a rich country, rather than the truth that we live in a plutocracy with levels of inequality approaching truly 3rd world. We are literally killing ourselves because we have to live in this plutocracy and our one existence itself is not even worth it anymore in this economic system (and we are lacking even a few of the positives of many other 3rd world countries). And those that aren't killing ourselves still can't find work, and even if we do, it doesn't pay enough to meet the most basic necessities.redleg , July 20, 2018 at 8:05 pm
1. It is unfortunate that Verga raises the rising cost of material inputs but fails to meaningfully address the issue. One of the drivers of migration, as mentioned in Comments above, is the population volcano currently erupting. Labor is cheap and globalization possible in large part because the world population has grown from 2 Billion to over 7 Billion in the past 60-odd years. This slow-growing mountain of human beings has created stresses on material inputs which are having a negative impact on the benefits derived from declining labor costs. This becomes a death-spiral as capital seeks to balance the rising cost of raw materials and agricultural products by driving down the cost of labor ever further.
2. Verga touches on the interplay of Nationalism and Racism in the responses of political parties and institutions in Italy and elsewhere. Voters appear to be abandoning Left and left-ish parties because the Left have been unable to come up with a definintion of national sovereignty that protects worker rights largely due to the importance of anti-racism in current Left-wing thought. Working people were briefly bought-off with cheap consumer goods and easy credit, but they now realize that low-wage migrant and off-shore workers mean that even these goodies are now out of reach. The only political alternative currently on offer is a brand of Nationalism defined by Racism -- which becomes acceptable to voters when the alternative is Third-World levels of poverty for those outside the 1% and their 9% enablers.
I don't see any simple solutions. Things may get very ugly.PKMKII , July 20, 2018 at 1:59 pm
The "left" abandoned the working class. Denied a political champion, the right offered the working class scapegoats.Tomonthebeach , July 20, 2018 at 3:23 pm
I certainly see that policies tampering down free trade, both of capital and labor, can benefit workers within a particular country. However, especially in the context of said policies in "Western" countries, this can tend towards a, protect the working class within the borders, leave those outside of it in impoverished squalor. Which doesn't mesh well with the leftist goal of global class consciousness. Much like the racially segregated labor policies of yesteryear, it's playing a zero-sum game with the working class while the ownership class gets the "rising tide lifts all boats" treatment.
So how do we protect workers within the sovereign, while not doing so at the cost of the workers outside of it? Schwieckart has an interesting idea, that tariffs on imports are used to fund non-profits/higher education/cooperatives in the country of export. However, I think we'd need something a bit more fine-tuned than that.whine country , July 20, 2018 at 4:28 pm
It has always baffled me that governments enable this global musical chairs game with the labor market. Nearly all Western governments allow tax dodging by those who benefit the most from their Navies, Armies, Patents, and Customs enforcement systems. However, it is the working class that carries the brunt of that cost while corporations off-shore their profits.
A simple-minded fix might be to start taxing foreign profits commensurate with the cost of enabling those overseas profits.ChrisAtRU , July 20, 2018 at 3:59 pm
Interesting that a corporation is a person just like us mortals when it is to their advantage, but unlike us humans, they can legally escape taxation on much of their income whereas a human being who is a US citizen cannot. A human citizen is generally taxed by the US on all income regardless of its source. OTOH, corporations (among other means) routinely transfer intellectual property to a non tax jurisdiction and then pay artificial payments to that entity for the rights to use such property. It is a scam akin to a human creating a tax deduction by transferring money from one pocket to another. Yes, proper taxation of corporations is a simple-minded fix which is absolutely not simple to legislate. Nice try though. Something else to ponder: Taxation without representation was said to be a major factor in our war of independence from Britain. Today no one seems to be concerned that we have evolved into representation without taxation. Doesn't see right to me.Anonymous2 , July 20, 2018 at 4:40 pm
"Klein analyzes a future (already here to some degree) in which multinational corporations freely fish from one market or another in an effort to find the most suitable (i.e. cheapest) labor force."
Our Industry Follows Poverty
FWIW I don't think it's productive to talk about things like immigration in (or to) the US in terms of just the here – as in what should/could we be doing here to fix the problem. It's just as much if not more about the there . If we view the global economic order as an enriched center feeding off a developing periphery, then fixing the periphery should be first aim. #Wall or #NoBorders are largely incendiary extremes. Ending Original Sin and creating some sort of supranational IOU/credit system (not controlled by World Bank or IMF!) will end the economic imbalance and allow countries who will never export their way out of poverty and misery a way to become equal first world nation states. With this equality, there will be less economic migration, less peripheral poverty and potentially less political unrest. It's a gargantuan task to be sure, but with rising Socialist sentiment here and abroad, I'd like to think we are at least moving in the right direction.JimmyV , July 20, 2018 at 5:02 pm
No mention of tax policy?
If the rich were properly taxed then social tensions would be greatly reduced and if the revenue raised were used to help the poorest in society much distress could be alleviated.
I worry that debate on migration/globalisation is being encouraged to distract attention from this issue.Outis Philalithopoulos Post author , July 20, 2018 at 7:30 pm
I may indeed have taken a gratuitously pedantic tone and could have chosen a better one, for that i apologise. I do however believe that much of my critique still stands, I will try to go through your points one by one.
"Are all economic migrants therefore bereft of agency?"
Not all but many are, especially the ones that most people are complaining about. Many of them are being driven from their home countries not simply for a better life but so they can have something approaching a life at all. While to fully prove this point would require an analysis of all the different migrants and their home country conditions, I do feel that if we are talking about Syrian refugees, migrants from Africa risking their lives crossing the Mediteranian sea, or CentralAmerican refugees than yes i do think these people to an extent have had their agency taken from them by global events. For Syrians, by being caught in an imperialist power struggle which while the civil war may not have been caused by it, it certainly has been prolonged because of it. Not too mention America played a very significant role in creating the conditions for ISIS, and western European powers don't have completely clean hands either due to their long history of brutal imperialism in the mideast. Africa of course also has an extensive past of colonization and suffers from a present of colonization and exploitation as well. For Central Americans there is of course the voracious american drug market as well as our politicians consistent appetite for its criminalisation to blame. There is also of course global climate change. Many of these contributing conditions are not being dealt with and so i believe that the migrations we have witnessed these last few years are only the first ining of perhaps even greater migrations to come. How we deal with it now, could determine whether our era is defined by mass deaths or something better. So to the extent that i believe many of these migrants have agency is similiar to how a person climbing onto the roof of there house to escape a flood does.
If the borders of the US were left completely open then, yes, there would most likely be a rush of people at first but over time they would migrate back and forth according to their needs, through the opening of the border they would gain agency. People often think that a country not permitting its citizens to leave is wrong and immoral, but if most countries close their borders to the people of a country going through great suffering, then it seems to me that is essentially the same even if the rhetoric may be different. The likeliness of this is high if the rich countries close there borders, since if the rich countries like the US and Italy feel they can not take them in, then its doubtful countries on the way that are much poorer will be able to either.
At the begining of your article you stated that "International commerce, jobs, and economic migrants are propelled by a common force: profit." This is the capitalist system, which is a system built upon the accumulation of capital, which are profits invested in instruments of labor, aka machines and various labor enhancements. Now Rhode island is quite small so there are geographical limitations of course, but if that was not an issue then yes. Wage workers in the capitalist system produce more value than they consume, if this was not the case they would not be hired or be hired for long. So if Rhode Island did not have the geographical limitations that it does, then with more workers the overall pot of valuable products and services would increase per capita in relation to the population. If the workers are divided and not unified into cohesive and responsive institutions to fight for there right share of the overall pie, which I believe should be all of it, then most of the gain to society will go to the capitalist as increased profits. So it is not the migrant workers who take from the native but instead actually the capitalist who exploits and trys to magnify there difference. So if the capitalist system through imperialism helped to contribute to the underlying conditions driving mass migration, and then it exploits there gratitude and willingness to work for less than native workers, than I believe it follows that they will wish to drive native anger towards the migrants with the ultimate goal of allowing them to exploit the migrant workers at an even more severe level. This could be true within the country, such as the US right now where the overarching result of anti-immigrant policies has been to not get rid of them but to drive there exploitation more into the shadows, or through mass deportations back to their home country followed by investments to exploit their desperation at super low wages that will then compete with the rich country workers, it is also possible they will all just die and everyone will look away. Either way the result will still be lower wages for rich country workers, it seems to me the only way out of the impass is for the native workers to realize their unity with migrant workers as exploited workers and instead of directing that energy of hostility at each other instead focus it upon the real root which is the capitalists themselves. Without the capitalists, more workers, held withing certain geographic limitations of course, would in fact only enrich each other.
So while nations may indeed continue to exist for awhile, the long term benefit of native workers is better served by making common cause with migrants against their mutual oppressors then allowing themselves to be stirred up against them. Making this argument to workers is much harder, but its the most beneficial if it can be made successfully.
This last point i do agree i may have been unfair to you, historically I believe the left generally referred to anarchists, socialists and communists. So I often dislike the way modern commentators use the left to refer to anything from a center right democrat like Hillary Clinton all the way to the most hard core communist, it can make understanding political subtleties difficult since anarchists, socialists and communists have radically different politics than liberals, much more so than can be expressed along a linear line. But as you point out you used quotes which i admit i did not notice, and of course one must generally use the jargon of the times in order to be understood.
Overall i think my main critique was that it seemed that throughout your article you were referencing different negative symptoms of capitalism but was instead taking that evidence for the negatives of globalism. I may come from a more radical tradition than you may be used to, but i would consider globalism to be an inherent aspect of capitalism. Capitalism in its algorithmic quest for ever increasing profits generally will not allow its self to be bound for long by people, nations, or even the physical and environmental limitations of the earth. While one country may be able to restrict it for a time unless it is overcome completely it will eventually reach out globally again. The only way to stop it is a prolonged struggle of the international working class cooperating with each other against capitalism in all its exploitive forms. I would also say that what we are seeing is not so much globalism vs nationalism but instead a rearrangement of the competing imperial powers, Russia, China, US, Germany and perhaps the evolution of multiple competing imperialisms similiar in nature to pre- world war times but that may have to wait for later.
A great deal of your article did indeed deal with Italy which I did not address but I felt that your arguments surrounding migrants was essentially of a subtle right wing nature and it needed to be balanced by a socialist counter narrative. I am very glad that you took the time to respond to my critique I know that putting analysis out there can be very difficult and i am thankful for your response which has allowed me to better express and understand my viewpoint. Once again I apoligise if I used some overly aggressive language and i hope your able to get something out of my response as well.Raulb , July 20, 2018 at 8:57 pm
I appreciate the more reflective tone of this reply. I believe there are still some misreadings of the article, which I will try to clarify.
For one thing, I am not the author of the article! Enrico Verga is the author. I merely translated the article. Enrico is Italian, however, and so for time zone reasons will be unable to respond to your comments for a while. I am happy to write a bit on this in the meantime.
You make two arguments.
The first is that many or most migrants are fleeing desperate circumstances. The article speaks however consistently of "economic migrants" – there are some overlapping issues with refugees, but also significant differences. Clearly there are many people who are economically comfortable in their home countries and who would still jump at a chance to get US citizenship if they could (look up EB-5 fraud for one example). Saying this does not imply some sort of subtle critique of such people, but they are not a myth.
I actually found your second argument more thought-provoking. As I understand you, you are suggesting something like the following. You support completely open borders. You acknowledge that this would lead at first to massive shifts in population, but in the long run you say things would stabilize. You acknowledge that this will lead to "lower wages for rich country workers," but say that we should focus on the fact that it is only within the capitalist system that this causality holds. You also suggest that it would probably lead, under current conditions, to workers having their anger misdirected at migrants and therefore supporting more reactionary policies.
Given that the shift to immediate open borders would, by this analysis, be highly detrimental to causes you support, why do you favor it? Your reasons appear to be (1) it's the right thing to do and we should just do it, (2) yes, workers might react in the way described, but they should not feel that way, and maybe we can convince them not to feel that way, (3) things will work themselves out in the long run.
I am a bit surprised at the straightforwardly idealistic tone of (1) and (2). As for (3), as Keynes said, in the long run we are all dead. He meant by this that phenomena that might in theory equilibrate over a very long time can lead to significant chaos in the short run; this chaos can meanwhile disrupt calculations about the "long term" and spawn other significant negative consequences.
Anyone who is open to the idea of radically new economic arrangements faces the question of how best to get there. You are perhaps suggesting that letting global capital reign supreme, unhindered by the rules and restrictions of nation-states, will in the long run allow workers to understand their oppression more clearly and so increase their openness to uniting against it. If so, I am skeptical.
I will finally point out that a part of the tone of your response seems directed at the impression that Enrico dislikes migrants, or wants other people to resent them. I see nothing in the article that would suggest this, and there are on the other hand several passages in which Enrico encourages the reader to empathize with migrants. When you suggest that his arguments are "essentially of a subtle right wing nature," you are maybe reacting to this misreading; in any case, I'm not really sure what you are getting at, since this phrase is so analytically imprecise that it could mean all sorts of things. Please try to engage with the article with arguments, not with vague epithets.
There is a bit of a dissonance here. Human rights has been persistently used by neoliberals to destabilize other regions for their own ends for decades now with little protest. And when the standard playbook of coups and stirring up trouble does not work its war and total destruction as we have seen recently in Iraq, Libya and Syria for completely fabricated reasons.
Since increased migration is the obvious first consequence when entire countries are decimated and in disarray one would expect the countries doing the destruction to accept the consequences of their actions but instead we have the same political forces who advocate intervention on 'human rights grounds' now demonizing migrants and advocating openly racist policies.
One can understand one mistake but 3 mistakes in a row! And apparently we are not capable of learning. The bloodlust continues unabated for Iran. This will destabilize an already destabilized region and cause even more migration to Europe. There seems to be a fundamental contradiction here, that the citizens of countries that execute these actions and who who protest about migrants must confront.
Maybe they should pay trillions of dollars of reparations for these intervention so these countries can be rebuilt and made secure again so migrants can return to their homes. Maybe the UN can introduce a new fund with any country considering destabilizing another country, for instance Iran, to first deposit a trillion dollars upfront to deal with the human fallout. Or maybe casually destabilizing and devastating entire countries, killing millions of people and putting millions more in disarray should be considered crimes against humanity and prosecuted so they are not repeated.
Jul 15, 2018 | www.unz.com
So effectively has the Beltway establishment captured the concept of national security that, for most of us, it automatically conjures up images of terrorist groups, cyber warriors, or "rogue states." To ward off such foes, the United States maintains a historically unprecedented constellation of military bases abroad and, since 9/11, has waged wars in Afghanistan, Iraq, Syria, Libya, and elsewhere that have gobbled up nearly $4.8 trillion . The 2018 Pentagon budget already totals $647 billion -- four times what China, second in global military spending, shells out and more than the next 12 countries combined, seven of them American allies. For good measure, Donald Trump has added an additional $200 billion to projected defense expenditures through 2019.
Yet to hear the hawks tell it, the United States has never been less secure. So much for bang for the buck.
For millions of Americans, however, the greatest threat to their day-to-day security isn't terrorism or North Korea, Iran, Russia, or China. It's internal -- and economic. That's particularly true for the 12.7% of Americans (43.1 million of them) classified as poor by the government's criteria : an income below $12,140 for a one-person household, $16,460 for a family of two, and so on until you get to the princely sum of $42,380 for a family of eight.
Savings aren't much help either: a third of Americans have no savings at all and another third have less than $1,000 in the bank. Little wonder that families struggling to cover the cost of food alone increased from 11% (36 million) in 2007 to 14% (48 million) in 2014.
The Working Poor
Unemployment can certainly contribute to being poor, but millions of Americans endure poverty when they have full-time jobs or even hold down more than one job. The latest figures from the Bureau of Labor Statistics show that there are 8.6 million "working poor," defined by the government as people who live below the poverty line despite being employed at least 27 weeks a year. Their economic insecurity doesn't register in our society, partly because working and being poor don't seem to go together in the minds of many Americans -- and unemployment has fallen reasonably steadily. After approaching 10% in 2009, it's now at only 4% .
Help from the government? Bill Clinton's 1996 welfare " reform " program , concocted in partnership with congressional Republicans, imposed time limits on government assistance, while tightening eligibility criteria for it. So, as Kathryn Edin and Luke Shaefer show in their disturbing book, $2.00 a Day: Living on Almost Nothing in America , many who desperately need help don't even bother to apply. And things will only get worse in the age of Trump. His 2019 budget includes deep cuts in a raft of anti-poverty programs.
Anyone seeking a visceral sense of the hardships such Americans endure should read Barbara Ehrenreich's 2001 book Nickel and Dimed: On (Not) Getting By in America . It's a gripping account of what she learned when, posing as a "homemaker" with no special skills, she worked for two years in various low-wage jobs, relying solely on her earnings to support herself. The book brims with stories about people who had jobs but, out of necessity, slept in rent-by-the-week fleabag motels, flophouses, or even in their cars, subsisting on vending machine snacks for lunch, hot dogs and instant noodles for dinner , and forgoing basic dental care or health checkups. Those who managed to get permanent housing would choose poor, low-rent neighborhoods close to work because they often couldn't afford a car. To maintain even such a barebones lifestyle, many worked more than one job.
Though politicians prattle on about how times have changed for the better, Ehrenreich's book still provides a remarkably accurate picture of America's working poor. Over the past decade the proportion of people who exhausted their monthly paychecks just to pay for life's essentials actually increased from 31% to 38%. In 2013, 71% of the families that had children and used food pantries run by Feeding America, the largest private organization helping the hungry, included at least one person who had worked during the previous year. And in America's big cities , chiefly because of a widening gap between rent and wages, thousands of working poor remain homeless , sleeping in shelters, on the streets, or in their vehicles, sometimes along with their families. In New York City, no outlier when it comes to homelessness among the working poor, in a third of the families with children that use homeless shelters at least one adult held a job.
The Wages of Poverty
The working poor cluster in certain occupations. They are salespeople in retail stores, servers or preparers of fast food, custodial staff, hotel workers, and caregivers for children or the elderly. Many make less than $10 an hour and lack any leverage, union or otherwise, to press for raises. In fact, the percentage of unionized workers in such jobs remains in the single digits -- and in retail and food preparation, it's under 4.5%. That's hardly surprising, given that private sector union membership has fallen by 50% since 1983 to only 6.7% of the workforce.
Low-wage employers like it that way and -- Walmart being the poster child for this -- work diligently to make it ever harder for employees to join unions. As a result, they rarely find themselves under any real pressure to increase wages, which, adjusted for inflation, have stood still or even decreased since the late 1970s. When employment is " at-will ," workers may be fired or the terms of their work amended on the whim of a company and without the slightest explanation. Walmart announced this year that it would hike its hourly wage to $11 and that's welcome news. But this had nothing to do with collective bargaining; it was a response to the drop in the unemployment rate, cash flows from the Trump tax cut for corporations (which saved Walmart as much as $2 billion ), an increase in minimum wages in a number of states, and pay increases by an arch competitor, Target. It was also accompanied by the shutdown of 63 of Walmart's Sam's Club stores, which meant layoffs for 10,000 workers. In short, the balance of power almost always favors the employer, seldom the employee.
As a result, though the United States has a per-capita income of $59,500 and is among the wealthiest countries in the world, 12.7% of Americans (that's 43.1 million people), officially are impoverished. And that's generally considered a significant undercount. The Census Bureau establishes the poverty rate by figuring out an annual no-frills family food budget, multiplying it by three, adjusting it for household size, and pegging it to the Consumer Price Index. That, many economists believe, is a woefully inadequate way of estimating poverty. Food prices haven't risen dramatically over the past 20 years, but the cost of other necessities like medical care (especially if you lack insurance) and housing have: 10.5% and 11.8% respectively between 2013 and 2017 compared to an only 5.5% increase for food.
Include housing and medical expenses in the equation and you get the Supplementary Poverty Measure (SPM), published by the Census Bureau since 2011. It reveals that a larger number of Americans are poor: 14% or 45 million in 2016.
For a fuller picture of American (in)security, however, it's necessary to delve deeper into the relevant data, starting with hourly wages, which are the way more than 58% of adult workers are paid. The good news: only 1.8 million , or 2.3% of them, subsist at or below minimum wage. The not-so-good news: one-third of all workers earn less than $12 an hour and 42% earn less than $15. That's $24,960 and $31,200 a year. Imagine raising a family on such incomes, figuring in the cost of food, rent, childcare, car payments (since a car is often a necessity simply to get to a job in a country with inadequate public transportation), and medical costs.
The problem facing the working poor isn't just low wages, but the widening gap between wages and rising prices. The government has increased the hourly federal minimum wage more than 20 times since it was set at 25 cents under the 1938 Fair Labor Standards Act. Between 2007 and 2009 it rose to $7.25, but over the past decade that sum lost nearly 10% of its purchasing power to inflation, which means that, in 2018, someone would have to work 41 additional days to make the equivalent of the 2009 minimum wage.
Workers in the lowest 20% have lost the most ground, their inflation-adjusted wages falling by nearly 1% between 1979 and 2016, compared to a 24.7% increase for the top 20%. This can't be explained by lackluster productivity since, between 1985 and 2015, it outstripped pay raises, often substantially, in every economic sector except mining.
Yes, states can mandate higher minimum wages and 29 have, but 21 have not, leaving many low-wage workers struggling to cover the costs of two essentials in particular: health care and housing.
Even when it comes to jobs that offer health insurance, employers have been shifting ever more of its cost onto their workers through higher deductibles and out-of-pocket expenses, as well as by requiring them to cover more of the premiums. The percentage of workers who paid at least 10% of their earnings to cover such costs -- not counting premiums -- doubled between 2003 and 2014.
This helps explain why, according to the Bureau of Labor Statistics , only 11% of workers in the bottom 10% of wage earners even enrolled in workplace healthcare plans in 2016 (compared to 72% in the top 10%). As a restaurant server who makes $2.13 an hour before tips -- and whose husband earns $9 an hour at Walmart -- put it , after paying the rent, "it's either put food in the house or buy insurance."
The Affordable Care Act, or ACA (aka Obamacare), provided subsidies to help people with low incomes cover the cost of insurance premiums, but workers with employer-supplied healthcare, no matter how low their wages, weren't covered by it. Now, of course, President Trump , congressional Republicans , and a Supreme Court in which right-wing justices are going to be even more influential will be intent on poleaxing the ACA.
It's housing, though, that takes the biggest bite out of the paychecks of low-wage workers. The majority of them are renters. Ownership remains for many a pipe dream. According to a Harvard study , between 2001 and 2016, renters who made $30,000-$50,000 a year and paid more than a third of their earnings to landlords (the threshold for qualifying as "rent burdened") increased from 37% to 50%. For those making only $15,000, that figure rose to 83%.
In other words, in an ever more unequal America, the number of low-income workers struggling to pay their rent has surged. As the Harvard analysis shows, this is, in part, because the number of affluent renters (with incomes of $100,000 or more) has leapt and, in city after city, they're driving the demand for, and building of, new rental units. As a result, the high-end share of new rental construction soared from a third to nearly two-thirds of all units between 2001 and 2016. Not surprisingly, new low-income rental units dropped from two-fifths to one-fifth of the total and, as the pressure on renters rose, so did rents for even those modest dwellings. On top of that, in places like New York City , where demand from the wealthy shapes the housing market, landlords have found ways -- some within the law, others not -- to get rid of low-income tenants.
Public housing and housing vouchers are supposed to make housing affordable to low-income households, but the supply of public housing hasn't remotely matched demand. Consequently, waiting lists are long and people in need languish for years before getting a shot -- if they ever do. Only a quarter of those who qualify for such assistance receive it. As for those vouchers, getting them is hard to begin with because of the massive mismatch between available funding for the program and the demand for the help it provides. And then come the other challenges : finding landlords willing to accept vouchers or rentals that are reasonably close to work and not in neighborhoods euphemistically labelled " distressed ."
The bottom line: more than 75% of "at-risk" renters (those for whom the cost of rent exceeds 30% or more of their earnings) do not receive assistance from the government. The real "risk" for them is becoming homeless, which means relying on shelters or family and friends willing to take them in.
President Trump's proposed budget cuts will make life even harder for low-income workers seeking affordable housing. His 2019 budget proposal slashes $6.8 billion (14.2%) from the resources of the Department of Housing and Urban Development's (HUD) by, among other things, scrapping housing vouchers and assistance to low-income families struggling to pay heating bills. The president also seeks to slash funds for the upkeep of public housing by nearly 50%. In addition, the deficits that his rich-come-first tax "reform" bill is virtually guaranteed to produce will undoubtedly set the stage for yet more cuts in the future. In other words, in what's becoming the United States of Inequality, the very phrases "low-income workers" and "affordable housing" have ceased to go together.
None of this seems to have troubled HUD Secretary Ben Carson who happily ordered a $31,000 dining room set for his office suite at the taxpayers' expense, even as he visited new public housing units to make sure that they weren't too comfortable (lest the poor settle in for long stays). Carson has declared that it's time to stop believing the problems of this society can be fixed merely by having the government throw extra money at them -- unless, apparently, the dining room accoutrements of superbureaucrats aren't up to snuff.
The levels of poverty and economic inequality that prevail in America are not intrinsic to either capitalism or globalization. Most other wealthy market economies in the 36-nation Organization for Economic Cooperation and Development (OECD) have done far better than the United States in reducing them without sacrificing innovation or creating government-run economies.
Take the poverty gap, which the OECD defines as the difference between a country's official poverty line and the average income of those who fall below it. The United States has the second largest poverty gap among wealthy countries; only Italy does worse.
Child poverty ? In the World Economic Forum's ranking of 41 countries -- from best to worst -- the U.S. placed 35th. Child poverty has declined in the United States since 2010, but a Columbia University report estimates that 19% of American kids (13.7 million) nevertheless lived in families with incomes below the official poverty line in 2016. If you add in the number of kids in low-income households, that number increases to 41%.
As for infant mortality , according to the government's own Centers for Disease Control, the U.S., with 6.1 deaths per 1,000 live births, has the absolute worst record among wealthy countries. (Finland and Japan do best with 2.3.)
And when it comes to the distribution of wealth, among the OECD countries only Turkey, Chile, and Mexico do worse than the U.S.
It's time to rethink the American national security state with its annual trillion-dollar budget. For tens of millions of Americans, the source of deep workaday insecurity isn't the standard roster of foreign enemies, but an ever-more entrenched system of inequality, still growing , that stacks the political deck against the least well-off Americans. They lack the bucks to hire big-time lobbyists. They can't write lavish checks to candidates running for public office or fund PACs. They have no way of manipulating the myriad influence-generating networks that the elite uses to shape taxation and spending policies. They are up against a system in which money truly does talk -- and that's the voice they don't have. Welcome to the United States of Inequality.
Rajan Menon, a TomDispatch regular , is the Anne and Bernard Spitzer Professor of International Relations at the Powell School, City College of New York, and Senior Research Fellow at Columbia University's Saltzman Institute of War and Peace Studies. He is the author, most recently, of The Conceit of Humanitarian Intervention .
ThreeCranes , July 16, 2018 at 1:56 am GMT"the United States has a per-capita income of $59,500 and is among the wealthiest countries in the world"anon  Disclaimer , July 16, 2018 at 2:56 am GMT
"and 42% earn less than $15. That's ..$31,200 a year."
Something doesn't add up. There is no way that the per capita income of the United States is $59,500.
Ahh, upon clicking the link, I see it is the mean. Meaning it's meaningless.But Rajan ,the American can always " honor the military " at the fast food drive through, even send a few pennies for the Wounded Warrior Project ,in addition to buying lotteries, and writing the tithe to the Mega Churches seeking blessing for the military men and women in uniform . They can sing with Trump"Make America Great Again " . They can come out of the woodshed to support wars , say things against Mexican, listen to FOX,and gather around Prospect park to celebrate birthdays , hop into a bus and continue texting to update the status on social media . They can nod with MSNBC that they have the best freedom that any corner of the world can afford . They if white can claim being discriminated by Asian Americans,if black by Mexicans,if Latinos by whites .Carlton Meyer , Website July 16, 2018 at 4:32 am GMT
Now it seems they could feel proud of the ability to guide China UK and Brazil/Argentina do the right things .Why do these experts fail to understand that our national security budget is twice that of the Department of Defense? It is no secret, POGO runs a tally showing it's twice as much:peterAUS , July 16, 2018 at 5:20 am GMT
For example, nuclear weapons are not included in our "defense budget" but eat up more than half of the budget for our Dept of Energy!
This author also fails to explain that mass immigration is the primary cause of stagnant wages for the working poor. From my blog:
Jul 16, 2018 – Illegal Immigration Replaced Slave Labor
In past blog posts, I explained how illegal immigration is a form of slave labor. It seems powerful people explained this to former President George W. Bush, but didn't tell him not to repeat it in public and that Americans no longer pick cotton by hand. As a result, Bush said this during a speech earlier this year:
"There are people willing to do jobs that Americans won't do. Americans don't want to pick cotton at 105 degrees, but there are people who want put food on their family's tables and are willing to do that. We ought to say thank you and welcome them."
Bush failed to note that millionaires pay only $10 an hour with no benefits for these tough jobs, yet most field workers are US citizens or green card holders. Illegals are hired to hold down wages and deter unions and strikes. If they would pay $20 an hour, plenty of Americans would show up to work. Most Americans don't know that millions of white Americans once picked cotton by hand, and picked more than Blacks or Mexicans.Articles like this pop up here every now and then.Biff , July 16, 2018 at 6:07 am GMT
Something doesn't compute.
If the situation is as grim as the article says, why so many people do their best to immigrate into USA?
Why more, just Westerners, try to immigrate into USA then Americans into those, just Western, countries?
I've known some Americans around here where I live.
I've known many more locals who've gone to live in USA, let alone tried to get to live in USA.
Something simply does not compute.
A simple question for an American:
If a person is prudent and sensible, is it really that hard to get by, unemployed, there?
Now, in similar topic an American did explain, some time ago, that there are so many ways to help those unemployed/underpaid. That the social security net isn't worse, but actually overall better, then in other Western countries.
Plus, of course, opportunities.
Again, all that data from the article I can't challenge. What doesn't make sense is net migration, just within Western sphere.
I do know some people, several dozen I guess, who live in USA. They have been doing quite well. From a bus driver to a top medical professional.
Anyone cares to shed some light there ?jilles dykstra , July 16, 2018 at 7:09 am GMT
For a fuller picture of American (in)security, however, it's necessary to delve deeper into the relevant data, starting with hourly wages, which are the way more than 58% of adult workers are paid. The good news: only 1.8 million, or 2.3% of them, subsist at or below minimum wage. The not-so-good news: one-third of all workers earn less than $12 an hour and 42% earn less than $15. That's $24,960 and $31,200 a year. Imagine raising a family on such incomes, figuring in the cost of food, rent, childcare, car payments (since a car is often a necessity simply to get to a job in a country with inadequate public transportation), and medical costs.
You forgot another expense poor communities have – governmental extraction forces GEF. Local law enforcement target the poor with the many petty offenses(they've purposely invented) to extract money for expanding and maintaining of their extortion racket. This no secret or conspiracy theory, for they readily admit to it. They target the poor because they understand that the poor do not have resources(lawyers, guns, and money) to fight back. They target the poor because they're poor, and the poor understand this as just another bill to pay – another added expense of living in their community.
Another indirect expense that makes all Americans a lot less rich – insurance. Everything that moves and everything that doesn't is at least singular insured or often double or tripled insured. Property is a good example of how one entity can be insured three times over by the owner, renter, contractor, sub-contractor. Your body is another example of how things "must be insured" ; no surprise when Obama care came along to do just that.Trump makes clear statements, I too like them.Stripes Duncan , July 16, 2018 at 7:24 am GMT
For me the USA is a third world country, the exceptions are oversized cars and gated communities.
On one of my visits to the USA I was asked if a child could be medically treated in the Netherlands, the choice for the parents was letting the child die, or sell their house.
In the Netherlands we have treatments that cost several hundred thousands of euro's per year, paid for by our medical care system.
Per person we pay about € 100 per month.
Pensions, the same.
Though the EU is busy destroying the best pension systems in the world, those of the Netherlands and the Scandinavian countries, this has not yet succeeded.
A disaster as the ENRON pension fund cannot happen here.
The USA is a great country to live in if you're rich.
And, of course, if you're willing to have the illusion that the poor have only themselves to blame for being poor.
USA society, terrible, in my opinion, 19th century, a moneycracy.
Eisenhower in his farewell speech warned for the military industrial complex, do not have the impression that anything changed since then.What percentage of the population growth of the United States since 1965 has been a result of immigrants and their descendants?H. T. , July 16, 2018 at 12:53 pm GMT
You cannot discuss the subject of this article without asking this question. It's at the very center of the issue.3 weeks after the US-NATO FAILED coup attempt in Georgia (more than 2000 died), the petrodollar [i.e., the banks) "crashed" (and Bush gave more than additional weapons [for more than $1 Billion) to Sakashviili] .anon  Disclaimer , July 16, 2018 at 12:57 pm GMT
Moreover, as Mr Kucinich explain, massive transfers occurred between certain banks :
ALSO, a must: The Truth About Glass-Steagall
The USA is a great country to live in if you're rich."
And if you hold large number of slaves known as immigrants from Central and S America
Immigrants serve same purpose the slaves did . It balances the poor middle class white's rage that can tilt the anger and hatred against the rich ( mostly white ).
This situation goes right into the creation of US It missed the social and political and religious changes of 18 th and 19 the centuries which gave birth to pre 2000 political system and social systems of EU .
Implosion of Soviet lent more credence to the economic-political system of USA because the blind and the deaf evaluated it for teh blind and the deaf who missed the success of the system on the back of African Latin American and Asian poor newly independent ) confused ) countries. Those countries provided the ingredients- moral ,economic,emotional , – to the working white class . It b;bolstered their hatred dismissive attitude to the foreigners and cemented their love for a hateful system that hurt actually the interest of the middle class and poor whites but gave them a sense of connection ,belonging,and partnerships through color language and religion- all are false .
This is the same mindset that glues the the untouchables and the poor Hindus to the RSS- BJP – Brahmanical system of oppression
Jul 14, 2018 | www.zerohedge.com
by Tyler Durden Fri, 07/13/2018 - 18:45 12 SHARES Authored Ryan McMaken via The Mises Institute,
On the matter of immigration, even many commentators who support ease of migration also oppose the extension of government benefits to immigrants.
The idea, of course, is that free movement of labor is fine, but taxpayers shouldn't have to subsidize it. As a matter of policy, many also find it prudent that immigrants ought to be economically self sufficient before being offered citizenship. Switzerland, for instance, makes it harder to pursue citizenship while receiving social benefits.
This discussion often centers around officially recognized "welfare" and social-benefits programs such as TANF and Medicaid. But it is also recognized that taxpayer-funded benefits exist in the form of public schooling, free clinics, and other in-kind benefits.
But there is another taxpayer-supporter program that subsidizes immigration as well: the US military.Government Employment for Immigrants
Last week, the AP began reporting that " the US Army is quietly discharging Immigrant recruits ."
Translation: the US government has begun laying off immigrants from taxpayer-funded government jobs.
It's unclear how many of these jobs have been employed, but according to the Department of Homeland security, "[s]ince Oct. 1, 2002, USCIS has naturalized 102,266 members of the military ."The Military as a Jobs Program
Immigrants, of course, aren't the only people who benefit from government jobs funded through military programs.
The military has long served as a jobs programs helpful in mopping up excess labor and padding employment numbers. As Robert Reich noted in 2011 , as the US was still coming out of the 2009 recession:
And without our military jobs program personal incomes would be dropping faster. The Commerce Department reported Monday the only major metro areas where both net earnings and personal incomes rose last year were San Antonio, Texas, Virginia Beach, Virginia, and Washington, D.C. -- because all three have high concentrations of military and federal jobs.
He's right. While the private sector must cut back and re-arrange labor and capital to deal with the new economic realities post-recession, government jobs rarely go away.
Because of this, Reich concludes "America's biggest -- and only major -- jobs program is the U.S. military."
Reich doesn't think this is a bad thing. He only highlights the military's role as a de facto jobs program in order to call for more de jure jobs programs supported by federal funding.
Given the political popularity of the military, however, it's always easy to protect funding for the military jobs programs than for any other potential jobs programs. All the Pentagon has to do is assure Congress that every single military job is absolutely essential, and Congress will force taxpayers to cough up the funding.
Back during the debate over sequestration, for example, the Pentagon routinely warned Congress that any cutbacks in military funding would lead to major jobs losses, bringing devastation to the economy.
In other words, even the Pentagon treats the military like a jobs program when it's politically useful.
Benefits for enlisted people go well beyond what can be seen in the raw numbers of total employed. As Kelley Vlahos points out at The American Conservative , military personnel receive extra hazard pay "even though they are far from any fighting or real danger." And then there is the "Combat Zone Tax Exclusion (CZTE) program which exempts enlisted and officers from paying federal taxes in these 45 designated countries. Again, they get the tax break -- which accounted for about $3.6 billion in tax savings for personnel in 2009 (the combat pay cost taxpayers $790 million in 2009)– whether they are really in danger or not."
There's also evidence that military personnel receive higher pay in the military than do their private-sector counterparts with similar levels of education and training.
Nor do the benefits of military spending go only to enlisted people. The Pentagon has long pointed to its spending on civilian jobs in many communities, including manufacturing jobs and white-collar technical jobs.
This, of course, has long been politically useful for the Pentagon as well, since as political scientist Rebecca Thorpe has shown in her book The American Warfare State , communities that rely heavily on Pentagon-funded employment are sure to send Congressmen to Washington who will make sure the taxpayer dollars keep flowing to Pentagon programs.
Whether you're talking to Robert Reich or some Pentagon lobbyist on Capitol Hill, the conclusion is clear: the military is both a jobs program and a stimulus program. Cut military spending at your peril!Military Spending Destroys Private Sector Jobs
The rub, however, is that military spending doesn't actually improve the economy. And much the money spent on military employment would be best spent on the private, voluntary economy.
This has long been recognized by political scientist Seymour Melman who has discussed the need for "economic conversion," or converting military spending into other forms of spending. Melman observes :
Since we know that matter and energy located in Place A cannot be simultaneously located in Place B, we must understand that the resources used up on military account thereby represent a preemption of resources from civilian needs of every conceivable kind.
Here, Melman is simply describing in his own way what Murray Rothbard explained in Man, Economy, and State . Namely, government spending distorts the economy as badly as taxation -- driving up prices for the private sector, and withdrawing resources from private sector use.
Ellen Brown further explains :
The military actually destroys jobs in the civilian economy. The higher profits from cost-plus military manufacturing cause manufacturers to abandon more competitive civilian endeavors; and the permanent war economy takes engineers, capital and resources away from civilian production.
But, as a classic case of "the seen" vs. "the unseen," it's easy to point to jobs created by military spending. How many jobs were lost as a result of that same spending? That remains unseen, and thus politically irrelevant.
Military fan boys will of course assure us that every single military job and every single dollar spent on the military is absolutely essential. It's all the service of "fighting for freedom." For instance, Mitchell Blatt writes , in the context of immigrant recruits, "I'm not worried about the country or origin of those who are fighting to defend us. What matters is that our military is as strong as it can be." The idea at work here is that the US military is a lean machine, doing only what is necessary to get the job done, and as cost effectively as possible. Thus, hiring the "best" labor, from whatever source is absolutely essential.
This, however, rather strains the bounds of credibility. The US military is more expensive than the next eight largest militaries combined . The US's navy is ten times larger than the next largest navy. The US's air force is the largest in the world, and the second largest air force belongs, not to a foreign country, but to the US Navy.
Yet, we're supposed to believe that any cuts will imperil the "readiness" of the US military.Cut Spending for Citizens and Non-Citizens Alike
My intent here is not to pick on immigrants specifically. The case of military layoffs for immigrants simply helps to illustrate a couple of important points: government jobs with the military constitute of form of taxpayer-funded subsidy for immigrants. And secondly, the US military acts as a job program, not just for immigrants but for many native-born Americans.
In truth, layoffs in the military sector ought to be far more widespread, and hardly limited to immigrants. The Trump Administration is wrong when it suggests that the positions now held by immigrant recruits ought to be filled by American-born recruits. Those positions should be left unfilled. Permanently.
cougar_w Fri, 07/13/2018 - 18:53 PermalinkExpendable Container -> cougar_w Fri, 07/13/2018 - 18:58 Permalink
No you retarded fuck, the military is a taxpayer-funed merc army supporting the overseas hegemonic goals of American-style Corporatism . That the military is full of the sons and daughters of poor people is only because rich whites won't send their trustfund babies to kill brown people for oil.
Smedley Butler, 1935: " War is a Racket "
How anyone still gets this wrong is symptomatic of too much inbreeding.cougar_w -> Expendable Container Fri, 07/13/2018 - 19:12 Permalink
The military is a taxpayer-funded merc army supporting Isra hell's goals none of which benefit the US.TeethVillage88s -> cougar_w Fri, 07/13/2018 - 19:08 Permalink
No, asshole. It's about money. About cash and gold. Profit. Markets. Growth. About cheap or free resources. Access to labor. New customers.
War makes companies rich, it might be the ONLY way they can get rich. War is waged when GM wants to sell trucks to the Pentagon. When Boeing wants to sell jets. When MIT wants money for arms research. When NATO wants a reason to exist. The dogs of war are loosed when oil gets tight. When countries won't "accept our cultural freedoms". When trade agreements aren't enough to open up new markets.
Isreal has fleeting nothing to do with it, except maybe when war aligns with their perceived need for hegemony in their own sphere. But by loading all this on Isreal you encourage others to miss the real fox in the henhouse. You could wipe Isreal off the Earth tomorrow and still have wars for profit for a thousand years to come.
This nation was born in war. It has practiced war since that day and will be at war with the rest of the world until humans are killed to the last and the last ounce of profit from war is had.Idiocracy's Not Sure Fri, 07/13/2018 - 18:56 Permalink
or from systematic corruption of all US Institutions and the politicization of all US Institutions... you need a job, you want to work here, you say this, and you do this, ... tow the line, no politics, no whistleblowing,... and we won't blackball your ass from the industry... got it... u got debts, keep ur nose clean!Quantify -> Idiocracy's Not Sure Fri, 07/13/2018 - 18:58 Permalink
the US military has slacking pay.AudiDoug Fri, 07/13/2018 - 19:17 Permalink
Yes the pay sucks but you get more done before 8am than most people do in a week. But seriously its a pretty good gig in the long run. Medical care a decent retirement system, travel a chance to meet and integrate with different cultures and kill them...its pretty cool.Debt Slave Fri, 07/13/2018 - 19:22 Permalink
Excluding a small percentage, the military is much like the DMV. We have a cartoon vision of all enlisted being GI Joe, ready to grab a gun and fight evil. This in not the case at all. Most positions are very simple, repetitive bureaucratic positions. Really is a giant Jobs program to keep people busy.DingleBarryObummer Fri, 07/13/2018 - 18:59 Permalink
"The idea at work here is that the US military is a lean machine, doing only what is necessary to get the job done, and as cost effectively as possible."
Then why are we still in Afghanistan?
No need to answer, the question is rhetorical.
Jul 06, 2018 | www.unz.com
... ... ...
For many Americans the Declaration of Independence is a fundamental text that tells the world who we are as a people. It is a distillation of American belief and purpose. Pundits and commentators, left and right, never cease reminding us that America is a new nation, "conceived in liberty and dedicated to the proposition that all men are created equal."
Almost as important as a symbol of American belief is Abraham Lincoln's Gettysburg Address. It is not incorrect to see a link between these two documents, as Lincoln intentionally placed his short peroration in the context of a particular reading of the Declaration.
Lincoln bases his concept of the creation of the American nation in philosophical principles he sees enunciated in 1776, and in particular on an emphasis on the idea of "equality." The problem is that this interpretation, which forms the philosophical base of both the dominant "movement conservatism" today -- neoconservatism -- and the neo-Marxist multicultural Left, is basically false.
... ... ...
Although those authors employed the phrase "all men are created equal," and certainly that is why Lincoln made direct reference to it, a careful analysis of the Declaration does not confirm the sense that Lincoln invests in those few words. Contextually, the authors at Philadelphia were asserting their historic -- and equal -- rights as Englishmen before the Crown, which had, they believed, been violated and usurped by the British government, and it was to parliament that the Declaration was primarily directed.
The Founders rejected egalitarianism. They understood that no one is, literally, "created equal" to anyone else. Certainly, each and every person is created with no less or no more dignity, measured by his or her own unique potential before God. But this is not what most contemporary writers mean today when they talk of "equality."
Rather, from a traditionally-Christian viewpoint, each of us is born into this world with different levels of intelligence, in different areas of expertise; physically, some are stronger or heavier, others are slight and smaller; some learn foreign languages and write beautiful prose; others become fantastic athletes or scientists. Social customs and traditions, property holding, and individual initiative -- each of these factors further discriminate as we continue in life.
None of this means that we are any less or more valued in the judgment of God, Who judges us based on our own, very unique capabilities. God measures us by ourselves, by our own maximum possibilities and potential , not by those of anyone else -- that is, whether we use our own, individual talents to the very fullest (recall the Parable of the Talents in the Gospel of St. Matthew).
... ... ...
Echoes of History , July 6, 2018 at 5:52 am GMT"All men are created equal" is a simply a rhetorical argument against the "divine right of kings" used to revive an ancient, fascist, Roman-style Republic style government, where men of equal political stature are bound together as a band of brothers into a "fasces" to form a militia, necessary to a free state like Rome once had in its beginning. No king, no standing army.Echoes of History , July 6, 2018 at 6:14 am GMT
Which is why there are fascist symbols throughout the US government, including in the US Senate. Watch CSPAN if you don't believe me. See those fasces?
And do study what the Founders said more. Like the author of the term "all men are created equal." He wrote in the same document:
" the merciless Indian Savages " -- Declaration of Independence
Does that sound like he thought whites and Indians were equal? Nope.
He also wrote:
"Nor is it less certain that the two races, equally free, cannot live in the same government. Nature, habit, opinion has drawn indelible lines of distinction between them." (Thomas Jefferson, Autobiography)
Does that sound like he thought blacks and whites were equal? Nope.
So stop spouting false Leftist propaganda about what the term "all men are created equal" means. All it does is make you sound extremely uninformed.@Dr. DoomWizard of Oz , July 6, 2018 at 8:16 am GMT
Yes, there is still an America, living and breathing, somewhat piled-on by Fake Americans at the moment. Don't give up on the Comeback Kid . You do not want to be as bitter and wrong as the defeatist Never Trumper" Cuckservatives. The Fake Americans will have to go back. Just like the Fake Europeans are already going back. Viktor Orban called Italy's decision to turn away rescue ship a "great moment." And the pendulum is just beginning to swing. The trend is your friend. Why don't you jump on the team and come on in for the big win?@Dan HayesAnon  Disclaimer , July 6, 2018 at 11:44 am GMT
Thank you for mentioning Jaffa. I had to look him up. Only Wikipedia so far but I found something of interest that you might like to comment on. Mention is made of Lincoln rejecting the Douglas arguments for states's rights on the ground that (majoritarian) democracy should not be allowed to enslave anyone. Is it possible to say that America's original sin of slavery ensured that there was an insoluble problem left behind by the original constitution makers plus the extension of the franchise to all adult white males?"..a careful analysis of the Declaration does not confirm the sense that Lincoln invests in those few words. Contextually, the authors at Philadelphia were asserting their historic -- and equal -- rights as Englishmen before the Crown, which had, they believed, been violated and usurped by the British government,.."
Thank you Mr Cathey. As a non American, I was always puzzled by the obvious falsehood of the statement "all men created equal" -- particularly in a nation that still legalized slavery -- and how it could still be repeated ad nauseaum. Interesting, how one victorious man and one victorious teaching can have such profound consequences for the way people live and think generations later.
'All men are created equal' is almost the opposite of that other common mistake, 'no pity for the weak'. Yet both lead to oppressive regimes. A true anthropology will lead to different healthy political systems. A twisted one, always to repressive institutions.
Crawfurdmuir , Next New Comment July 6, 2018 at 4:52 pm GMT@Echoes of HistoryRuss , Next New Comment July 6, 2018 at 5:08 pm GMT
"All men are created equal" is a simply a rhetorical argument against the "divine right of kings" used to revive an ancient, fascist, Roman-style Republic style government, where men of equal political stature are bound together as a band of brothers into a "fasces" to form a militia, necessary to a free state like Rome once had in its beginning. No king, no standing army.
My take is a little different, but not incompatible with yours.
The Declaration's assertion is "that all men are created equal, that they are endowed by their Creator with certain unalienable Rights "
So, to begin with, this is not a claim that all men are created equal in ability or character. The Founders recognized that they were not, and that ordinary social and economic inequalities, due to innate differences in ability or character, were natural, normal, and inevitable. The Declaration is first and foremost a legal document. It claims equality of rights – a legal claim, not a sociological, anthropological, or psychological one. Moreover, the rights are unalienable – that is, they cannot be alienated – sold, bartered, or given away – because someone entitled to them shall have moved from old England to the New World.
The grievance of the colonists was that taxes – the stamp tax, the tea tax, etc. – had been imposed upon them by the parliament at Westminster, an assembly in which they were not represented. Hence the slogan, "no taxation without representation." It was a principle based in the main non-religious issue of the English civil war (1642-1649). Charles I had attempted to levy "ship money" by royal prerogative, without the consent of Parliament. Unlike previous levies, which had been confined to coastal towns and were raised only in time of war, he did so in peacetime and extended the tax to inland areas. This provoked strong resistance; some local officials refused assistance to collection of the tax. The Petition of Right, written by Sir Edward Coke, complained:
Your subjects have inherited this freedom, that they should not be compelled to contribute to any tax, tallage, aid, or other like charge not set by common consent, in parliament.
Extra-parliamentary taxation was effectively ended by the Long Parliament of 1640. After the "Glorious Revolution" of 1689, it was formally prohibited by the English Bill of Rights.
All of this history was much more familiar to the Founders in 1776 than it is to Americans today. The point of the claim that "all men are created equal" was simply to argue that Englishmen, under English law, were equally entitled to representation in any assembly that levied taxes on them, whether they were resident in England or in its colonies.
The argument for levying taxes on the colonies was that they were needed to pay for the defense of the colonies during what we call the French and Indian War, which was in fact just the North American theatre of what in Europe is known as the Seven Years' War. That they may have been needed for this purpose was not in dispute. Englishmen in England were taxed to pay for the Seven Years' War, but they were represented in the Parliament that levied the tax. Americans were not. From their point of view the taxes levied on them were as objectionable as ship money had been to the people of England in the time of Charles I.
The Declaration is therefore a sort of American version of the Petition of Right. Jefferson was an admirer of Coke and undoubtedly saw the parallel. His high-flown language about equality was meant to make the case against George III on behalf of English subjects in North America in the same way that Coke's Petition of Right made the case against Charles I on behalf of English subjects in England. The colonists' objection was that English subjects, wheresoever domiciled within English jurisdiction, should have equal rights under English law.
Jefferson never intended to proclaim the equality of negro slaves or "Indian savages" with free whites. Jefferson's observations in his Notes on the State of Virginia make quite clear that he did not believe them to be equals with whites in ability or character. The Indians he regards as primitives, having some admirable and some frightful qualities, but above all, as formidable enemies. He despairs of the intelligence of blacks; he faults black slavery because it brings out lamentable tendencies of laziness and petty tyranny among whites. These remarks are striking for their candor and have the ring of truth even today.I appreciate Mr. Cathey's work here. On Tuesday the 3rd, one of the many overemployed sycophants in the executive ranks of the corporation which employs me deemed it necessary to bulk-email all of us peons with the message of how vital diversity and inclusion are to proper celebration of the 4th. Right -- because reserving mid-January through February for the blacks, March for women or Hispanics (I forget which), and June for the tutti-fruttis isn't nearly enough
Jun 28, 2018 | www.tomdispatch.com
Today's War-Financing Strategies Will Only Increase Inequality
By Stephanie Savell
In the name of the fight against terrorism, the United States is currently waging " credit-card wars " in Afghanistan, Iraq, Syria, and elsewhere. Never before has this country relied so heavily on deficit spending to pay for its conflicts. The consequences are expected to be ruinous for the long-term fiscal health of the U.S., but they go far beyond the economic. Massive levels of war-related debt will have lasting repercussions of all sorts. One potentially devastating effect, a new study finds, will be more societal inequality.
In other words, the staggering costs of the longest war in American history -- almost 17 years running, since the invasion of Afghanistan in October 2001 -- are being deferred to the future. In the process, the government is contributing to this country's skyrocketing income inequality.
Since 9/11, the U.S. has spent $5.6 trillion on its war on terror, according to the Costs of War Project, which I co-direct, at Brown University's Watson Institute for International and Public Affairs . This is a far higher number than the Pentagon's $1.5 trillion estimate, which only counts expenses for what are known as "overseas contingency operations," or OCO -- that is, a pot of supplemental money, outside the regular annual budget, dedicated to funding wartime operations. The $5.6 trillion figure, on the other hand, includes not just what the U.S. has spent on overseas military operations in Iraq, Afghanistan, Pakistan, and Syria, but also portions of Homeland Security spending related to counterterrorism on American soil, and future obligations to care for wounded or traumatized post-9/11 military veterans. The financial burden of the post-9/11 wars across the Greater Middle East -- and still spreading , through Africa and other regions -- is far larger than most Americans recognize.
During prior wars, the U.S. adjusted its budget accordingly by, among other options, raising taxes to pay for its conflicts. Not so since 2001, when President George W. Bush launched the "Global War on Terror." Instead, the country has accumulated a staggering amount of debt. Even if Washington stopped spending on its wars tomorrow, it will still, thanks to those conflicts, owe more than $8 trillion in interest alone by the 2050s.
Putting the Gilded Age to Shame
It's hard to fathom what that enormous level of debt will do to our economy and society. A new Costs of War study by political scientist and historian Rosella Capella Zielinski offers initial clues about its impact here. She takes a look at how the U.S. has paid for its conflicts from the War of 1812 through the two World Wars and Vietnam to the present war on terror. While a range of taxes, bond sales, and other mechanisms were used to raise funds to fight such conflicts, no financial strategy has relied so exclusively on borrowing -- until this century. Her study also explores how each type of war financing has affected inequality levels in this country in the aftermath of those conflicts.
The implications for today are almost painfully straightforward: the current combination of deficit spending and tax cuts spells disaster for any hopes of shrinking America's striking inequality gap . Instead, credit-card war spending is already fueling the dramatic levels of wealth inequality that have led some observers to suggest that we are living in a new Gilded Age , reminiscent of the enormous divide between the opulent lifestyles of the elite and the grinding poverty of the majority of Americans in the late nineteenth century.
Capella Zielinski carefully breaks down what effects the methods used to pay for various wars have had on subsequent levels of social inequality. During the Civil War, for example, the government relied primarily on loans from private donors. After that war was over, the American people had to pay those loans back with interest, which proved a bonanza for financial elites, primarily in the North. Those wealthy lenders became wealthier still and everyone else, whose taxes reimbursed them, poorer.
In contrast, during World War I, the government launched a war-bond campaign that targeted low-income people. War savings stamps were offered for as little as 25 cents and war savings certificates in denominations starting at $25. Anyone who could make a small down payment could buy a war bond for $50 and cover the rest of what was owed in installments. In this way, the war effort promoted savings and, in its wake, a striking number of low-income Americans were repaid with interest, decreasing the inequality levels of that era.
Taxation strategies have varied quite significantly in various war periods as well. During World War II, for instance, the government raised tax rates five times between 1940 and 1944, levying progressively steeper ones on higher income brackets (up to 65% on incomes over $1 million). As a result, though government debt was substantial in the aftermath of a global struggle fought on many fronts, the impact on low-income Americans could have been far worse. In contrast, the Vietnam War era began with a tax cut and, in the aftermath of that disastrous conflict, the U.S. had to deal with unprecedented levels of inflation. Low-income households bore the brunt of those higher costs, leading to greater inequality.
Today's wars are paid for almost entirely through loans -- 60% from wealthy individuals and governmental agencies like the Federal Reserve, 40% from foreign lenders. Meanwhile, in October 2001, when Washington launched the war on terror, the government also initiated a set of tax cuts, a trend that has only continued. The war-financing strategies that President George W. Bush began have flowed on without significant alteration under Presidents Obama and Trump. (Obama did raise a few taxes, but didn't fundamentally alter the swing towards tax cuts.) President Trump's extreme tax "reform" package, which passed Congress in December 2017 -- a gift-wrapped dream for the 1% -- only enlarged those cuts.
In other words, in this century, Washington has combined the domestic borrowing patterns of the Civil War with the tax cuts of the Vietnam era. That means one predictable thing: a rise in inequality in a country in which the income inequality gap is already heading for record territory.
Just to add to the future burden of it all, this is the first time government wartime borrowing has relied so heavily on foreign debt. Though there is no way of knowing how this will affect inequality here in the long run, one thing is already obvious: it will transfer wealth outside the country.
Economist Linda Bilmes has argued that there's another new factor involved in Washington's budgeting of today's wars. In every other major American conflict, after an initial period, war expenditures were incorporated into the regular defense budget. Since 2001, however, the war on terror has been funded mainly by supplemental appropriations (those Overseas Contingency Operations funds), subject to very little oversight. Think of the OCO as a slush fund that insures one thing: the true impact of this era's war funding won't hit until far later since such appropriations are exempt from spending caps and don't have to be offset elsewhere in the budget.
According to Bilmes, "This process is less transparent, less accountable, and has rendered the cost of the wars far less visible." As a measure of the invisible impact of war funding in Washington and elsewhere, she calculates that, while the Senate Appropriations Subcommittee on Defense discussed war financing in 79% of its hearings during the Vietnam era, since 9/11, there have been similar mentions at only 17% of such hearings. For its part, the Senate Finance Committee has discussed war-funding strategy in a thoroughgoing way only once in almost 17 years.
Hidden Tradeoffs and Deferred Costs
The effect of this century's unprecedented budgetary measures is that, for the most part, the American people don't feel the financial weight of the wars their government is waging -- or rather, they feel it, but don't recognize it for what it is. This corresponds remarkably well with the wars themselves, fought by a non-draft military in distant lands and largely ignored in this country (at least since the vast public demonstrations against the coming invasion of Iraq ended in the spring of 2003). The blowback from those wars, the way they are coming home, has also been ignored, financially and otherwise.
However little the public may realize it, Americans are already feeling the costs of their post-9/11 wars. Those have, after all, massively increased the Pentagon's base budget and the moneys that go into the expanding national security budget , while reducing the amount of money left over for so much else from infrastructure investment to science. In the decade following September 11, 2001, military spending increased by 50% , while spending on every other government program increased only 13.5%.
How exactly does this trade-off work? The National Priorities Project explains it well. Every year the federal government negotiates levels of discretionary spending (as distinct from mandatory spending, which largely consists of Social Security and Medicare). In 2001, there were fewer discretionary funds allocated to defense than to non-defense programs, but the ensuing war on terror dramatically inflated military spending relative to other parts of the budget. In 2017, military and national security spending accounted for 53% of discretionary spending. The 2018 congressionally approved omnibus spending package allocates $700 billion for the military and $591 billion for non-military purposes, leaving that proportion about the same. (Keep in mind, that those totals don't even include all the money flowing into that Overseas Contingency Operations fund). President Trump's proposals for future spending, if accepted by Congress, would ensure that, by 2023, the proportion of military spending would soar to 65% .
In other words, the rise in war-related military expenditures entails losses for other areas of federal funding. Pick your issue: crumbling bridges, racial justice, housing, healthcare, education, climate change -- and it's all being affected by how much this country spends on war.
Nonetheless, thanks to its credit-card version of war financing, the government has effectively deferred most of the financial costs of its unending conflicts to the future. This, in turn, contributes to how detached most Americans tend to feel from the very fact that their country is now eternally at war. Political scientist and policy analyst Sarah Kreps argues that Americans become invested in how a war is being conducted only when they're asked to pay for it. In her examination of the history of the financing of American wars, she writes , "The visibility and intrusiveness of taxes are exactly what make individuals scrutinize the service for which the resources are being used." If there were war taxes today, their unpopularity would undoubtedly lead Americans to question the costs and consequences of their country's wars in ways now missing from today's public conversation.
Pressing for a real war budget, though, is not only a mechanism to alert Americans to the effects (on them) of the wars their government is fighting. It is also a potential lever through which citizens could affect the country's foreign policy and pressure elected officials to bring those wars to an end. Some civic groups and activists from across the political spectrum have indeed been pushing to reduce the Pentagon budget, bloated by war, corruption , and fear-mongering . They are, however, up against both the power of an ascendant military-industrial complex and wars that have been organized, in their funding and in so many other ways, not to be noticed.
Those who care about this country's economic future would be remiss not to include today's war financing strategy among the country's most urgent fiscal challenges. Anyone interested in improving American democracy and the well-being of its people should begin by connecting the budgetary dots. The more money this country spends on military activities, the more public coffers will be depleted by war-related interest payments and the less public funding there will be for anything else. In short, it's time for Americans worried about living in a country whose inequality gap could soon surpass that of the Gilded Age to begin paying real attention to our " credit-card wars ."
Stephanie Savell, a TomDispatch regular , is co-director of the Costs of War Project at Brown University's Watson Institute for International and Public Affairs . An anthropologist, she conducts research on security and civic engagement in Brazil and in the U.S. She co-authored The Civic Imagination: Making a Difference in American Political Life .
Follow TomDispatch on Twitter and join us on Facebook . Check out the newest Dispatch Books, Beverly Gologorsky's novel Every Body Has a Story and Tom Engelhardt's A Nation Unmade by War , as well as Alfred McCoy's In the Shadows of the American Century: The Rise and Decline of U.S. Global Power , John Dower's The Violent American Century: War and Terror Since World War II , and John Feffer's dystopian novel Splinterlands .
Copyright 2018 Stephanie Savell
Jun 28, 2018 | consortiumnews.com
At War With Ourselves: The Domestic Consequences of Foreign Policies June 25, 2018 • 72 Comments
There is a direct connection between gun violence and suicide rates in the United States and America's aggressive foreign policy, argues Will Porter.
How America's Gun Violence Epidemic May Have Roots in Overseas War Zones
By Will Porter
Special to Consortium News
In recent months a string of school shootings in the United States has rekindled the debate over gun violence, its causes and what can be done to stop it. But amid endless talk of school shootings and AR-15s, a large piece of the puzzle has been left conspicuously absent from the debate.
Contrary to the notion that mass murderers are at the heart of America's gun violence problem, data from recent years reveals that the majority of gun deaths are self-inflicted.
In 2015, suicides accounted for over 60 percent of gun deaths in the U.S., while homicides made up around 36 percent of that year's total. Guns are consistently the most common method by which people take their own lives.
While the causes of America's suicide-driven gun epidemic are complex and myriad, it's clear that one group contributes to the statistics above all others: military veterans.
Beyond the Physical
According to a 2016 study conducted by the Department of Veterans Affairs, on average some 20 veterans commit suicide every single day, making them among the most prone to take their own lives compared to people working in other professions. Though they comprise under 9 percent of the American population, veterans accounted for 18 percent of suicides in the U.S. in 2014.
When veterans return home from chaotic war zones, resuming normal civilian life can present major difficulties. The stresses of wartime create a long-term, sustained "fight-or-flight" response, not only producing physical symptoms such as sweating, shaking or a racing heart rate, but inflicting a mental and moral toll as well.
Post-Traumatic Stress Disorder (PTSD) accounts for some of the physiological effects of trauma, the "fight-or-flight" response, but the distinct mental, moral and spiritual anguish experienced by many veterans and other victims of trauma has been termed " moral injury ."
A better understanding of that concept and the self-harm it motivates could go a long way toward explaining, and ultimately solving, America's suicide epidemic.
"Moral injury looks beyond the physical and asks who we are as people," Peter Van Buren, a former State Department Foreign Service officer, said in an interview. "It says that we know right from wrong, and that when we violate right and wrong, we injure ourselves. We leave a scar on ourselves, the same as if we poked ourselves with a knife."
While not a veteran himself, during his tenure with the Foreign Service Van Buren served for one year alongside American soldiers at a forward operating base in Iraq. His experiences there would stick with him for life.
"Over the course of the year I was there, the units I was embedded with lost three men, and all of them were lost to suicide, not to enemy action," Van Buren said. "This left an extraordinary impression on me, and triggered in me some of the things that I write about."
Van Buren: A profound sense of guilt.
After retiring from the Foreign Service, Van Buren began research for his novel " Hooper's War ," a fictional account set in WWII Japan. The book centers on American veteran, Nate Hooper, and explores the psychological costs paid by those who survive a war. Van Buren said if he set the book in the past, he thought he could better explore the subject matter without the baggage of current-day politics.
In his research, Van Buren interviewed Japanese civilians who were children at the time of the conflict and found surprising parallels with the soldiers he served with in Iraq. Post-war guilt, he found, does not only afflict the combatants who fight and carry out grisly acts of violence, but civilians caught in the crossfire as well.
For many, merely living through a conflict when others did not is cause for significant distress, a condition known as "survivor's guilt."
"In talking with them I heard so many echoes of what I'd heard from the soldiers in Iraq, and so many echoes of what I felt myself, this profound sense of guilt," Van Buren said.
'We Killed Them'
Whether it was something a soldier did, saw or failed to prevent, feelings of guilt can leave a permanent mark on veterans after they come home.
Brian Ellison, a combat veteran who served under the National Guard in Iraq in 2004, said he's still troubled by his wartime experiences.
Stationed at a small, under protected maintenance garage in the town of ad-Diwaniyah in a southeastern province of Iraq, Ellison said his unit was attacked on a daily basis.
"From the day we got there, we would get attacked every night like clockwork -- mortars, RPGs," Ellison said. "We had no protection; we had no weapons systems on the base."
On one night in April of 2004, after a successful mission to obtain ammunition for the base's few heavy weapons, Ellison's unit was ready to hit back.
"So we got some rounds for the Mark 19 [a belt-fed automatic grenade launcher] and we basically used it as field artillery, shot it up in the air and lobbed it in," Ellison said. "Finally on the last night we were able to get them to stop shooting, but that was because we killed 5 of them. At the time this was something I was proud of. We were like 'We got them, we got our revenge.'"
U.S. military poster. (Health.mil)
"In retrospect, it's like here's this foreign army, and we're in their neighborhood," Ellison said. "They're defending their neighborhood, but they're the bad guys and we're the good guys, and we killed them. I think about stuff like that a lot."
Despite his guilt, Ellison said he was able to sort through the negative feelings by speaking openly and honestly about his experiences and actions. Some veterans have a harder time, however, including one of Ellison's closest friends.
"He ended up going overseas like five times," Ellison said. "Now he's retired and he can't even deal with people. He can't deal with people, it's sad. He was this funny guy, everybody's friend, easy to get along with, now he's a recluse. It's really weird to see somebody like that. He had three young kids and a happy personality, now he's broken."
In addition to the problems created in their personal relationships, the morally injured also often turn to self-destructive habits to cope with their despair.
"In the process of trying to shut this sound off in your head -- this voice of conscience -- many people turn to drugs and alcohol as a way of shutting that voice up, at least temporarily," Van Buren said. "You hope at some point it shuts up permanently . . . Unfortunately, I think that many people do look for the permanent silence of suicide as a way of escaping these feelings."
A Hero's Welcome?
By now most are familiar with the practice of celebrating veterans as heroes upon their return from war, but few realize what psychological consequences such apparently benevolent gestures can have.
"I think the healthiest thing a vet can do is to come to terms with reality," Ellison said. "It's so easy to get swept up -- when we came home off the plane, there was a crowd of people cheering for us. I just remember feeling dirty. I felt like 'I don't want you to cheer for us,' but at the same time it's comforting. It's a weird dynamic. Like, I could just put this horror out of my mind and pretend we were heroes."
"But the terrible part is that, behind that there's reality," Ellison said. "Behind that, we know what we were doing; we know that we weren't fighting for freedom. So when somebody clings onto this 'we were heroes' thing, I think that's bad for them. They have to be struggling with it internally. I really believe that's one of the biggest things that contributes to people committing suicide. They're not able to talk about it, not able to bring it to the forefront and come to terms with it."
According to the 2016 VA study, 70 percent of veterans who commit suicide are not regular users of VA services.
The Department of Veteran Affairs was set up in 1930 to handle medical care, benefits and burials for veterans, but some 87 years later, the department is plagued by scandal and mismanagement. Long wait times, common to many government-managed healthcare systems, discourage veterans from seeking the department's assistance, especially those with urgent psychiatric needs.
An independent review was carried out in 2014 by the VA's Inspector General, Richard Griffin, which found that at one Arizona VA facility, 1,700 veterans were on wait lists, waiting an average of 115 days before getting an initial appointment.
"People don't generally seek medical help because the [VA] system is so inefficient and ineffective; everyone feels like it's a waste of time," said a retired senior non-commissioned officer in the Special Operations Forces (SOF) who wished to remain anonymous.
"The system is so bad, even within the SOF world where I work, that I avoid going at all costs," the retired officer said. "I try to get my guys to civilian hospitals so that they can get quality healthcare instead of military healthcare."
Beyond institutions, however, both Ellison and Van Buren agreed that speaking openly about their experiences has been a major step on their road back to normalcy. Open dialogue, then, is not only one way for veterans and other victims of trauma to heal, it may ultimately be the key to solving America's epidemic of gun violence.
The factors contributing to mass murders, school shootings and private crime are, no doubt, important to study, but so long as suicide is left out of the public discourse on guns, genuine solutions may always be just out of reach.
Will Porter is a journalist who specializes in U.S. foreign policy and Middle East affairs. He writes for the Libertarian Institute and tweets at @WKPancap.
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Jun 10, 2018 | www.unz.com
unit472 , June 3, 2018 at 11:57 am GMTI would agree that the America of the neighborhood tavern is dying but would not characterize our political leadership as a 'rootless, criminal cabal. Criminal they maybe but they are rooted in the Ivy League, principally Yale and Harvard, and the ideology to gain admission to those schools. I would say skills to gain entrance but, today, it is more a matter of ideology. Stray too far from the Clinton/Bush crony capitalist model or Obama's identity politics and your application goes into the garbage can and with it your chance of joining our governing elite.TG , June 3, 2018 at 2:31 pm GMTIndeed. I would say this from a slightly different angle: forget about the details of politics: constitutional monarchy, parliamentary democracy, a republic, democratic socialism, even marxism, checks and balances, an independent judiciary, an independent central bank, a written constitution all of these can be made to work, more or less, if the elites care about the nation as whole. And none of these will matter if the elites no longer care, if they value their own short-term profit over the long-term stability and strength of their nation.Stonehands , June 3, 2018 at 10:21 pm GMT
Back under FDR etc., the elites of this nation were worried about communists, and anarchists, and then Nazis. That made them care about this nation, they feared that if the nation went down they would go down as well. So they cared about the working class. I am old enough to remember when we used to celebrate that we had the highest wages in the world – that was considered a magnificent joint accomplishment and proof of the greatness of this nation. Now high American wages are routinely derided as evil, as proof that Americans are selfish and lazy and they need to be replaced by all those wonderful third-world refugees who have no alternative but to work for sub-poverty wages
I think the core of this rot is that the elites are no longer afraid. They no longer have reason to care. They live in gated estates, they fly from private airports (even first class in a public airport is not good enough/removed enough from the masses for them!), and if things fall apart they will just sail away in their yachts, tut-tutting about how Americans no longer deserve their presencePerhaps, Lin, by voluntarily entering an establishment in order to alter one's consciousness- whether in Vietnam or America- you are signaling your surrender and defeat in the war on the "true nature of reality."Dan , June 4, 2018 at 3:07 am GMT
The alcohol delusion amplifies greed hatred bondage.
And is anathema to wholesome higher insights.
Whether alcohol or heroin these self- ingrained defilements are an obstruction to the complete repose to the human spirit.@TGJohnnyWalker123 , June 6, 2018 at 5:25 am GMT
Everything is financialized and the elites are supranational. End of story. Enjoy the little things.@TGSwan Knight , Website June 9, 2018 at 2:42 pm GMT
Exactly. America's leaders behave criminally because they're not scared of the population. So there's nothing to constrain our leaders from behaving like grifters and conmen.
At some point, however, this will come to an end. Our massively skyrocketing national debt is totally unpayable, so investors will eventually stop buying our bonds. When that happens, our national economy and standard of living will collapse dramatically.
It's at that point when our leaders are either put in jail or flee the country.@unit472m___ , June 9, 2018 at 2:59 pm GMT
Rootless criminal cabal sounds right to me. I would add psychopathic@TGm___ , June 9, 2018 at 3:29 pm GMT
Elites are global, Americans are locals.@Dan
elites are supranational
So is capital, when the dollar will have only limited reserve currency status to the rest of the world, the American locals will be proportionately ruled by Russian oligarchs and Chinese priviledge.
American locals are just bulk humanity to these supranationals, they are defined by global consumerism of the same crap the elites despise. They sweat corn syrup and palm oil and seem to look "Pinker Steve" happy when digitally masturbating and being chemically subdued, encased in concrete scenarios.
Now after consumerism, since it is offset by limited resources of our planet, it will be real misery, as in plowing concrete. That must be mostly indifferent to our supranationals. Bulk humanity is basically obsolete, and extra-ordinary lucky. If it were for the supranational nuclei to have a long term policy, we the deplorables would be wiped away, say three quarters of us.
They are though eagerly observing, if we not, as always, will do it ourselves to us. The problem would die on itself. The ethnic White middle class down to the street is pointing the way.
Jun 08, 2018 | www.counterpunch.org
... ... ...
Nonetheless, you might have noticed that happy days aren't exactly here again. The real U.S. unemployment figure -- all who are counted as unemployed in the "official" rate, plus discouraged workers, the total of those employed part-time but not able to secure full-time work and all persons marginally attached to the labor force (those who wish to work but have given up) -- is 7.6 percent . (This is the "U-6" rate.) That total, too, is less than half of its 2010 peak and is the lowest in several years. But this still doesn't mean the number of people actually working is increasing.
Fewer people at work and they are making less
A better indication of how many people have found work is the "civilian labor force participation rate." By this measure, which includes all people age 16 or older who are not in prison or a mental institution, only 62.7 percent of the potential U.S. workforce was actually in the workforce in May, and that was slightly lower than the previous month. This is just about equal to the lowest this statistic has been since the breakdown of Keynesianism in the 1970s, and down significantly from the peak of 67.3 percent in May 2000. You have to go back to the mid-1970s to find a time when U.S. labor participation was lower. This number was consistently lower in the 1950s and 1960s, but in those days one income was sufficient to support a family. Now everybody works and still can't make ends meet.
And that brings us to the topic of wages. After reaching a peak of 52 percent in 1969, the percentage of the U.S. gross domestic product going to wages has fallen to 43 percent , according to research by the St. Louis branch of the Federal Reserve. The amount of GDP going to wages during the past five years has been the lowest it has been since 1929 , according to a New York Times report. And within the inequality of wages that don't keep up with inflation or productivity gains, the worse-off are doing worse.
The Economic Policy Institute noted , "From 2000 to 2017, wage growth was strongest for the highest-wage workers, continuing the trend in rising wage inequality over the last four decades." The strongest wage growth was for those in the top 10 percent of earnings, which skewed the results sufficiently that the median wage increase for 2017 was a paltry 0.2 percent, the EPI reports. Inflation may have been low, but it wasn't as low as that -- the typical U.S. worker thus suffered a de facto wage decrease last year.
What this sobering news tells us is that good-paying jobs are hard to come by. An EPI researcher, Elise Gould, wrote :
"Slow wage growth tells us that employers continue to hold the cards, and don't have to offer higher wages to attract workers. In other words, workers have very little leverage to bid up their wages. Slow wage growth is evidence that employers and workers both know there are still workers waiting in the wings ready to take a job, even if they aren't actively looking for one."
The true unemployment rates in Canada and Europe
We find similar patterns elsewhere. In Canada, the official unemployment rate held at 5.8 percent in April , the lowest it has been since 1976, although there was a slight decrease in the number of people working in March, mainly due to job losses in wholesale and retail trade and construction. What is the actual unemployment rate? According to Statistics Canada's R8 figure , it is 8.6 percent. The R8 counts count people in part-time work, including those wanting full-time work, as "full-time equivalents," thus underestimating the number of under-employed.
At the end of 2012, the R8 figure was 9.4 percent , but an analysis published by The Globe and Mail analyzing unemployment estimated the true unemployment rate for that year to be 14.2 percent. If the current statistical miscalculation is proportionate, then the true Canadian unemployment rate currently must be north of 13 percent. "[T]he narrow scope of the Canadian measure significantly understates labour underutilization," the Globe and Mail analysis conclude.
Similar to its southern neighbor, Canada's labor force participation rate has steadily declined, falling to 65.4 percent in April 2018 from a high of 67.7 percent in 2003.
The most recent official unemployment figure in Britain 4.2 percent. The true figure is rather higher. How much higher is difficult to determine, but a September 2012 report by Sheffield Hallam University found that the total number of unemployed in Britain was more than 3.4 million in April of that year although the Labour Force Survey, from which official unemployment statistics are derived, reported only 2.5 million. So if we assume a similar ratio, then the true rate of unemployment across the United Kingdom is about 5.7 percent.
The European Union reported an official unemployment rate of 7.1 percent (with Greece having the highest total at 20.8 percent). The EU's Eurostat service doesn't provide an equivalent of a U.S. U-6 or a Canadian R8, but does separately provide totals for under-employed part-time workers and "potential additional labour force"; adding these two would effectively double the true EU rate of unemployed and so the actual figure must be about 14 percent.
Australia's official seasonally adjusted unemployment rate is 5.6 percent , according to the country's Bureau of Statistics. The statistic that would provide a more realistic measure, the "extended labour force under-utilisation" figure, seems to be well hidden. The most recent figure that could be found was for February 2017, when the rate was given as 15.4 percent. As the "official" unemployment rate at the time was 5.8 percent, it is reasonable to conclude that the real Australian unemployment rate is currently above 15 percent.
Mirroring the pattern in North America, global employment is on the decline. The International Labour Organization estimated the world labor force participation rate as 61.9 percent for 2017, a steady decline from the 65.7 percent estimated for 1990.
Stagnant wages despite productivity growth around the world
Concomitant with the high numbers of people worldwide who don't have proper employment is the stagnation of wages. Across North America and Europe, productivity is rising much faster than wages. A 2017 study found that across those regions median real wage growth since the mid-1980s has not kept pace with labor productivity growth.
Not surprisingly, the United States had the largest gap between wages and productivity. Germany was second in this category, perhaps not surprising, either, because German workers have suffered a long period of wage cuts (adjusted for inflation) since the Social Democratic Party codified austerity by instituting Gerhard Schröder's "Agenda 2010" legislation. Despite this disparity, the U.S. Federal Reserve issued a report in 2015 declaring the problem of economic weakness is due to wages not falling enough . Yes, the Fed believes your wages are too high.
The lag of wages as compared to rising productivity is an ongoing global phenomenon. A separate statistical analysis from earlier this decade also demonstrated this pattern for working people in Canada, the United States, Britain, France, Germany, Italy and Japan. Workers in both Canada and the United States take home hundreds of dollars less per week than they would if wages had kept up with productivity gains.
In an era of runaway corporate globalization, there is ever more precarity. On a global scale, having regular employment is actually unusual. Using International Labour Organization figures as a starting point, John Bellamy Foster and Robert McChesney calculate that the "global reserve army of labor" -- workers who are underemployed, unemployed or "vulnerably employed" (including informal workers) -- totals 2.4 billion. In contrast, the world's wage workers total 1.4 billion. Writing in their book The Endless Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the USA to China , they write:
"It is the existence of a reserve army that in its maximum extent is more than 70 percent larger than the active labor army that serves to restrain wages globally, and particularly in poorer countries. Indeed, most of this reserve army is located in the underdeveloped countries of the world, though its growth can be seen today in the rich countries as well." [page 145]
Having conquered virtually every corner of the globe and with nowhere left to expand into nor new markets to take, capitalists will continue to cut costs -- in the first place, wages and benefits -- in their ceaseless scrambles to sustain their accustomed profits. There is no reform that can permanently alter this relentless internal logic of capitalism. Although she was premature, Rosa Luxemburg's forecast of socialism or barbarism draws nearer.
Pete Dolack writes the Systemic Disorder blog and has been an activist with several groups. His book, It's Not Over: Learning From the Socialist Experiment , is available from Zero Books.
Jun 06, 2018 | www.theatlantic.com
From my Brookline home, it's a pleasant, 10-minute walk to get a haircut. Along the way, you pass immense elm trees and brochure-ready homes beaming in their reclaimed Victorian glory. Apart from a landscaper or two, you are unlikely to spot a human being in this wilderness of oversize closets, wood-paneled living rooms, and Sub-Zero refrigerators.
If you do run into a neighbor, you might have a conversation like this: "Our kitchen remodel went way over budget. We had to fight just to get the tile guy to show up!" "I know! We ate Thai takeout for a month because the gas guy's car kept breaking down!"
You arrive at the Supercuts fresh from your stroll, but the nice lady who cuts your hair is looking stressed. You'll discover that she commutes an hour through jammed highways to work. The gas guy does, too, and the tile guy comes in from another state. None of them can afford to live around here. The rent is too damn high.
From 1980 to 2016, home values in Boston multiplied 7.6 times. When you take account of inflation, they generated a return of 157 percent to their owners. San Francisco returned 162 percent in real terms over the same period; New York, 115 percent; and Los Angeles, 114 percent. If you happen to live in a neighborhood like mine, you are surrounded by people who consider themselves to be real-estate geniuses.
(That's one reason we can afford to make so many mistakes in the home-renovation department.) If you live in St. Louis (3 percent) or Detroit (minus 16 percent), on the other hand, you weren't so smart. In 1980, a house in St. Louis would trade for a decent studio apartment in Manhattan.
Today that house will buy an 80-square-foot bathroom in the Big Apple.Related Story
The returns on (the right kind of) real estate have been so extraordinary that, according to some economists, real estate alone may account for essentially all of the increase in wealth concentration over the past half century. It's not surprising that the values are up in the major cities: These are the gold mines of our new economy. Yet there is a paradox. The rent is so high that people -- notably people in the middle class -- are leaving town rather than working the mines. From 2000 to 2009, the San Francisco Bay Area had some of the highest salaries in the nation, and yet it lost 350,000 residents to lower-paying regions.
Across the United States, the journalist and economist Ryan Avent writes in The Gated City , "the best opportunities are found in one place, and for some reason most Americans are opting to live in another."
According to estimates from the economists Enrico Moretti and Chang-Tai Hsieh, the migration away from the productive centers of New York, San Francisco, and San Jose alone lopped 9.7 percent off total U.S. growth from 1964 to 2009 .
It is well known by now that the immediate cause of the insanity is the unimaginable pettiness of backyard politics. Local zoning regulation imposes excessive restrictions on housing development and drives up prices. What is less well understood is how central the process of depopulating the economic core of the nation is to the intertwined stories of rising inequality and falling social mobility.
Real-estate inflation has brought with it a commensurate increase in economic segregation. Every hill and dale in the land now has an imaginary gate, and it tells you up front exactly how much money you need to stay there overnight. Educational segregation has accelerated even more. In my suburb of Boston, 53 percent of adults have a graduate degree. In the suburb just south, that figure is 9 percent.
This economic and educational sorting of neighborhoods is often represented as a matter of personal preference, as in red people like to hang with red, and blue with blue. In reality, it's about the consolidation of wealth in all its forms, starting, of course, with money. Gilded zip codes are located next to giant cash machines: a too-big-to-fail bank, a friendly tech monopoly, and so on. Local governments, which collected a record $523 billion in property taxes in 2016, make sure that much of the money stays close to home.
But proximity to economic power isn't just a means of hoarding the pennies; it's a force of natural selection. Gilded zip codes deliver higher life expectancy, more-useful social networks, and lower crime rates. Lengthy commutes, by contrast, cause obesity, neck pain, stress, insomnia, loneliness, and divorce, as Annie Lowrey reported in Slate . One study found that a commute of 45 minutes or longer by one spouse increased the chance of divorce by 40 percent .
Nowhere are the mechanics of the growing geographic divide more evident than in the system of primary and secondary education. Public schools were born amid hopes of opportunity for all; the best of them have now been effectively reprivatized to better serve the upper classes. According to a widely used school-ranking service, out of more than 5,000 public elementary schools in California, the top 11 are located in Palo Alto. They're free and open to the public. All you have to do is move into a town where the median home value is $3,211,100. Scarsdale, New York, looks like a steal in comparison: The public high schools in that area funnel dozens of graduates to Ivy League colleges every year, and yet the median home value is a mere $1,403,600.
Racial segregation has declined with the rise of economic segregation. We in the 9.9 percent are proud of that. What better proof that we care only about merit? But we don't really want too much proof. Beyond a certain threshold -- 5 percent minority or 20 percent, it varies according to the mood of the region -- neighborhoods suddenly go completely black or brown. It is disturbing, but perhaps not surprising, to find that social mobility is lower in regions with high levels of racial segregation. The fascinating revelation in the data, however, is that the damage isn't limited to the obvious victims. According to Raj Chetty's research team , "There is evidence that higher racial segregation is associated with lower social mobility for white people." The relationship doesn't hold in every zone of the country, to be sure, and is undoubtedly the statistical reflection of a more complex set of social mechanisms. But it points to a truth that America's 19th-century slaveholders understood very well: Dividing by color remains an effective way to keep all colors of the 90 percent in their place.
With localized wealth comes localized political power, and not just of the kind that shows up in voting booths. Which brings us back to the depopulation paradox. Given the social and cultural capital that flows through wealthy neighborhoods, is it any wonder that we can defend our turf in the zoning wars? We have lots of ways to make that sound public-spirited. It's all about saving the local environment, preserving the historic character of the neighborhood, and avoiding overcrowding. In reality, it's about hoarding power and opportunity inside the walls of our own castles. This is what aristocracies do.
Zip code is who we are. It defines our style, announces our values, establishes our status, preserves our wealth, and allows us to pass it along to our children. It's also slowly strangling our economy and killing our democracy. It is the brick-and-mortar version of the Gatsby Curve. The traditional story of economic growth in America has been one of arriving, building, inviting friends, and building some more. The story we're writing looks more like one of slamming doors shut behind us and slowly suffocating under a mass of commercial-grade kitchen appliances.7. Our Blind Spot
In my family, Aunt Sarah was the true believer. According to her version of reality, the family name was handed down straight from the ancient kings of Scotland. Great-great-something-grandfather William Stewart, a soldier in the Continental Army, was seated at the right hand of George Washington. And Sarah herself was somehow descended from "Pocahontas's sister." The stories never made much sense. But that didn't stop Sarah from believing in them. My family had to be special for a reason.
The 9.9 percent are different. We don't delude ourselves about the ancient sources of our privilege. That's because, unlike Aunt Sarah and her imaginary princesses, we've convinced ourselves that we don't have any privilege at all.
Consider the reception that at least some members of our tribe have offered to those who have foolishly dared to draw attention to our advantages. Last year, when the Brookings Institution researcher Richard V. Reeves, following up on his book Dream Hoarders , told the readers of The New York Times to "Stop Pretending You're Not Rich," many of those readers accused him of engaging in "class warfare," of writing "a meaningless article," and of being "rife with guilt."
In her incisive portrait of my people, Uneasy Street , the sociologist Rachel Sherman documents the syndrome. A number among us, when reminded of our privilege, respond with a counternarrative that generally goes like this: I was born in the street. I earned everything all by myself. I barely get by on my $250,000 salary. You should see the other parents at our kids' private school.
In part what we have here is a listening problem. Americans have trouble telling the difference between a social critique and a personal insult. Thus, a writer points to a broad social problem with complex origins, and the reader responds with, "What, you want to punish me for my success?"
In part, too, we're seeing some garden-variety self-centeredness, enabled by the usual cognitive lapses. Human beings are very good at keeping track of their own struggles; they are less likely to know that individuals on the other side of town are working two minimum-wage jobs to stay afloat, not watching Simpsons reruns all day. Human beings have a simple explanation for their victories: I did it . They easily forget the people who handed them the crayon and set them up for success. Human beings of the 9.9 percent variety also routinely conflate the stress of status competition with the stress of survival. No, failing to get your kid into Stanford is not a life-altering calamity.
The recency of it all may likewise play a role in our failure to recognize our growing privileges. It has taken less than one lifetime for the (never fully formed) meritocracy to evolve into a (fledgling) aristocracy. Class accretes faster than we think. It's our awareness that lags, trapping us within the assumptions into which we were born.
And yet, even allowing for these all-too-human failures of cognition, the cries of anguish that echo across the soccer fields at the mere suggestion of unearned privilege are too persistent to ignore. Fact-challenged though they may be, they speak to a certain, deeper truth about life in the 9.9 percent. What they are really telling us is that being an aristocrat is not quite what it is cracked up to be.
A strange truth about the Gatsby Curve is that even as it locks in our privileges, it doesn't seem to make things all that much easier. I know it wasn't all that easy growing up in the Colonel's household, for example. The story that Grandfather repeated more than any other was the one where, following some teenage misdemeanor of his, his father, the 250-pound, 6-foot-something onetime Rough Rider, smacked him so hard that he sailed clear across the room and landed flat on the floor. Everything -- anything -- seemed to make the Colonel angry.
Jay Gatsby might have understood. Life in West Egg is never as serene as it seems. The Princeton man -- that idle prince of leisure who coasts from prep school to a life of ease -- is an invention of our lowborn ancestors. It's what they thought they saw when they were looking up. West Eggers understand very well that a bad move or an unlucky break (or three or four) can lead to a steep descent. We know just how expensive it is to live there, yet living off the island is unthinkable. We have intuited one of the fundamental paradoxes of life on the Gatsby Curve: The greater the inequality, the less your money buys.
We feel in our bones that class works only for itself; that every individual is dispensable; that some of us will be discarded and replaced with fresh blood. This insecurity of privilege only grows as the chasm beneath the privileged class expands. It is the restless engine that drives us to invest still more time and energy in the walls that will keep us safe by keeping others out.Perhaps the best evidence for the power of an aristocracy is the degree of resentment it provokes. By that measure, the 9.9 percent are doing pretty well indeed.
Here's another fact of life in West Egg: Someone is always above you. In Gatsby's case, it was the old-money people of East Egg. In the Colonel's case, it was John D. Rockefeller Jr. You're always trying to please them, and they're always ready to pull the plug.
The source of the trouble, considered more deeply, is that we have traded rights for privileges. We're willing to strip everyone, including ourselves, of the universal right to a good education, adequate health care, adequate representation in the workplace, genuinely equal opportunities, because we think we can win the game. But who, really, in the end, is going to win this slippery game of escalating privileges?
Under the circumstances, delusions are understandable. But that doesn't make them salutary, as Aunt Sarah discovered too late. Even as the last few pennies of the Colonel's buck trickled down to my father's generation, she still had the big visions that corresponded to her version of the family mythology. Convinced that she had inherited a head for business, she bet her penny on the dot-com bubble. In her final working years, she donned a red-and-black uniform and served burgers at a Wendy's in the vicinity of Jacksonville, Florida.
Jun 06, 2018 | newrepublic.com
My 16-year-old daughter is sitting on a couch, talking with a stranger about her dreams for the future. We're here, ominously enough, because, she says, "all my friends are doing it." For a moment, I wonder whether we have unintentionally signed up for some kind of therapy. The professional woman in the smart-casual suit throws me a pointed glance and says, "It's normal to be anxious at a time like this." She really does see herself as a therapist of sorts. But she does not yet seem to know that the source of my anxiety is the idea of shelling out for a $12,000 "base package" of college-counseling services whose chief purpose is apparently to reduce my anxiety. Determined to get something out of this trial counseling session, I push for recommendations on summer activities. We leave with a tip on a 10-day "cultural tour" of France for high schoolers. In the college-application business, that's what's known as an "enrichment experience." When we get home, I look it up. The price of enrichment: $11,000 for the 10 days.
That's when I hear the legend of the SAT whisperer. If you happen to ride through the yellow-brown valleys of the California coast, past the designer homes that sprout wherever tech unicorns sprinkle their golden stock offerings, you might come across him. His high-school classmates still remember him, almost four decades later, as one of the child wonders of the age. Back then, he and his equally precocious siblings showed off their preternatural verbal and musical talents on a local television program. Now his clients fly him around the state for test-prep sessions with their 16-year-olds. You can hire him for $750, plus transportation, per two-hour weekend session. (There is a weekday discount.) Some of his clients book him every week for a year.Affirmative-action programs are to some degree an extension of the system of wealth preservation. They indulge rich people in the belief that their college is open to all.
At this point, I'm wondering whether life was easier in the old days, when you could buy a spot in the elite university of your choice with cold cash. Then I remind myself that Grandfather lasted only one year at Yale. In those days, the Ivies kicked you out if you weren't ready for action. Today, you have to self-combust in a newsworthy way before they show you the door.
Inevitably, I begin rehearsing the speech for my daughter. It's perfectly possible to lead a meaningful life without passing through a name-brand college, I'm going to say. We love you for who you are. We're not like those tacky strivers who want a back-windshield sticker to testify to our superior parenting skills. And why would you want to be an investment banker or a corporate lawyer anyway? But I refrain from giving the speech, knowing full well that it will light up her parental-bullshit detector like a pair of khakis on fire.
The skin colors of the nation's elite student bodies are more varied now, as are their genders, but their financial bones have calcified over the past 30 years. In 1985, 54 percent of students at the 250 most selective colleges came from families in the bottom three quartiles of the income distribution. A similar review of the class of 2010 put that figure at just 33 percent. According to a 2017 study, 38 elite colleges -- among them five of the Ivies -- had more students from the top 1 percent than from the bottom 60 percent . In his 2014 book, Excellent Sheep , William Deresiewicz, a former English professor at Yale, summed up the situation nicely: "Our new multiracial, gender-neutral meritocracy has figured out a way to make itself hereditary."
The wealthy can also draw on a variety of affirmative-action programs designed just for them. As Daniel Golden points out in The Price of Admission , legacy-admissions policies reward those applicants with the foresight to choose parents who attended the university in question. Athletic recruiting, on balance and contrary to the popular wisdom, also favors the wealthy, whose children pursue lacrosse, squash, fencing, and the other cost-intensive sports at which private schools and elite public schools excel. And, at least among members of the 0.1 percent, the old-school method of simply handing over some of Daddy's cash has been making a comeback. ( Witness Jared Kushner, Harvard graduate .)
The mother lode of all affirmative-action programs for the wealthy, of course, remains the private school. Only 2.2 percent of the nation's students graduate from nonsectarian private high schools, and yet these graduates account for 26 percent of students at Harvard and 28 percent of students at Princeton. The other affirmative-action programs, the kind aimed at diversifying the look of the student body, are no doubt well intended. But they are to some degree merely an extension of this system of wealth preservation. Their function, at least in part, is to indulge rich people in the belief that their college is open to all on the basis of merit.
The plummeting admission rates of the very top schools nonetheless leave many of the children of the 9.9 percent facing long odds. But not to worry, junior 9.9 percenters! We've created a new range of elite colleges just for you. Thanks to ambitious university administrators and the ever-expanding rankings machine at U.S. News & World Report , 50 colleges are now as selective as Princeton was in 1980, when I applied. The colleges seem to think that piling up rejections makes them special. In fact, it just means that they have collectively opted to deploy their massive, tax-subsidized endowments to replicate privilege rather than fulfill their duty to produce an educated public.
The only thing going up as fast as the rejection rates at selective colleges is the astounding price of tuition. Measured relative to the national median salary, tuition and fees at top colleges more than tripled from 1963 to 2013. Throw in the counselors, the whisperers, the violin lessons, the private schools, and the cost of arranging for Junior to save a village in Micronesia, and it adds up. To be fair, financial aid closes the gap for many families and keeps the average cost of college from growing as fast as the sticker price. But that still leaves a question: Why are the wealthy so keen to buy their way in?
The short answer, of course, is that it's worth it.
In the United States, the premium that college graduates earn over their non-college-educated peers in young adulthood exceeds 70 percent. The return on education is 50 percent higher than what it was in 1950, and is significantly higher than the rate in every other developed country. In Norway and Denmark, the college premium is less than 20 percent; in Japan, it is less than 30 percent; in France and Germany, it's about 40 percent.
All of this comes before considering the all-consuming difference between "good" schools and the rest. Ten years after starting college, according to data from the Department of Education, the top decile of earners from all schools had a median salary of $68,000 . But the top decile from the 10 highest-earning colleges raked in $220,000 -- make that $250,000 for No. 1, Harvard -- and the top decile at the next 30 colleges took home $157,000. (Not surprisingly, the top 10 had an average acceptance rate of 9 percent, and the next 30 were at 19 percent.)
It is entirely possible to get a good education at the many schools that don't count as "good" in our brand-obsessed system. But the "bad" ones really are bad for you. For those who made the mistake of being born to the wrong parents, our society offers a kind of virtual education system. It has places that look like colleges -- but aren't really. It has debt -- and that, unfortunately, is real. The people who enter into this class hologram do not collect a college premium; they wind up in something more like indentured servitude.
So what is the real source of this premium for a "good education" that we all seem to crave?
One of the stories we tell ourselves is that the premium is the reward for the knowledge and skills the education provides us. Another, usually unfurled after a round of drinks, is that the premium is a reward for the superior cranial endowments we possessed before setting foot on campus. We are, as some sociologists have delicately put it, a "cognitive elite."
Behind both of these stories lies one of the founding myths of our meritocracy. One way or the other, we tell ourselves, the rising education premium is a direct function of the rising value of meritorious people in a modern economy. That is, not only do the meritorious get ahead, but the rewards we receive are in direct proportion to our merit.
But the fact is that degree holders earn so much more than the rest not primarily because they are better at their job, but because they mostly take different categories of jobs. Well over half of Ivy League graduates, for instance, typically go straight into one of four career tracks that are generally reserved for the well educated: finance, management consulting, medicine, or law. To keep it simple, let's just say that there are two types of occupations in the world: those whose members have collective influence in setting their own pay, and those whose members must face the music on their own. It's better to be a member of the first group. Not surprisingly, that is where you will find the college crowd.
why do America's doctors make twice as much as those of other wealthy countries? Given that the United States has placed dead last five times running in the Commonwealth Fund's ranking of health-care systems in high-income countries, it's hard to argue that they are twice as gifted at saving lives. Dean Baker, a senior economist with the Center for Economic and Policy Research, has a more plausible suggestion : "When economists like me look at medicine in America -- whether we lean left or right politically -- we see something that looks an awful lot like a cartel." Through their influence on the number of slots at medical schools, the availability of residencies, the licensing of foreign-trained doctors, and the role of nurse practitioners, physicians' organizations can effectively limit the competition their own members face -- and that is exactly what they do.
Lawyers (or at least a certain elite subset of them) have apparently learned to play the same game. Even after the collapse of the so-called law-school bubble, America's lawyers are No. 1 in international salary rankings and earn more than twice as much, on average, as their wig-toting British colleagues. The University of Chicago law professor Todd Henderson, writing for Forbes in 2016, offered a blunt assessment : "The American Bar Association operates a state-approved cartel."
Similar occupational licensing schemes provide shelter for the meritorious in a variety of other sectors. The policy researchers Brink Lindsey and Steven Teles detail the mechanisms in The Captured Economy . Dentists' offices, for example, have a glass ceiling that limits what dental hygienists can do without supervision, keeping their bosses in the 9.9 percent. Copyright and patent laws prop up profits and salaries in the education-heavy pharmaceutical, software, and entertainment sectors. These arrangements are trifles, however, compared with what's on offer in tech and finance, two of the most powerful sectors of the economy.
By now we're thankfully done with the tech-sector fairy tales in which whip-smart cowboys innovate the heck out of a stodgy status quo. The reality is that five monster companies -- you know the names -- are worth about $3.5 trillion combined, and represent more than 40 percent of the market capital on the nasdaq stock exchange. Much of the rest of the technology sector consists of virtual entities waiting patiently to feed themselves to these beasts.
Let's face it: This is Monopoly money with a smiley emoji. Our society figured out some time ago how to deal with companies that attempt to corner the market on viscous substances like oil. We don't yet know what to do with the monopolies that arise out of networks and scale effects in the information marketplace. Until we do, the excess profits will stick to those who manage to get closest to the information honeypot. You can be sure that these people will have a great deal of merit.
The candy-hurling godfather of today's meritocratic class, of course, is the financial-services industry. Americans now turn over $1 of every $12 in GDP to the financial sector; in the 1950s, the bankers were content to keep only $1 out of $40. The game is more sophisticated than a two-fisted money grab, but its essence was made obvious during the 2008 financial crisis. The public underwrites the risks; the financial gurus take a seat at the casino; and it's heads they win, tails we lose. The financial system we now have is not a product of nature. It has been engineered, over decades, by powerful bankers, for their own benefit and for that of their posterity.
Who is not in on the game? Auto workers, for example. Caregivers. Retail workers. Furniture makers. Food workers. The wages of American manufacturing and service workers consistently hover in the middle of international rankings. The exceptionalism of American compensation rates comes to an end in the kinds of work that do not require a college degree.
You see, when educated people with excellent credentials band together to advance their collective interest, it's all part of serving the public good by ensuring a high quality of service, establishing fair working conditions, and giving merit its due. That's why we do it through "associations," and with the assistance of fellow professionals wearing white shoes. When working-class people do it -- through unions -- it's a violation of the sacred principles of the free market. It's thuggish and anti-modern. Imagine if workers hired consultants and "compensation committees," consisting of their peers at other companies, to recommend how much they should be paid. The result would be -- well, we know what it would be, because that's what CEOs do.
It isn't a coincidence that the education premium surged during the same years that membership in trade unions collapsed. In 1954, 28 percent of all workers were members of trade unions, but by 2017 that figure was down to 11 percent.
Education -- the thing itself , not the degree -- is always good. A genuine education opens minds and makes good citizens. It ought to be pursued for the sake of society . In our unbalanced system, however, education has been reduced to a private good, justifiable only by the increments in graduates' paychecks. Instead of uniting and enriching us, it divides and impoverishes. Which is really just a way of saying that our worthy ideals of educational opportunity are ultimately no match for the tidal force of the Gatsby Curve. The metric that has tracked the rising college premium with the greatest precision is -- that's right -- intergenerational earnings elasticity, or IGE. Across countries, the same correlation obtains: the higher the college premium, the lower the social mobility.
As I'm angling all the angles for my daughter's college applications -- the counselor is out, and the SAT whisperer was never going to happen -- I realize why this delusion of merit is so hard to shake. If I -- I mean, she -- can pull this off, well, there's the proof that we deserve it! If the system can be gamed, well then, our ability to game the system has become the new test of merit.
So go ahead and replace the SATs with shuffleboard on the high seas, or whatever you want. Who can doubt that we'd master that game, too? How quickly would we convince ourselves of our absolute entitlement to the riches that flow directly and tangibly from our shuffling talent? How soon before we perfected the art of raising shuffleboard wizards? Would any of us notice or care which way the ship was heading?
Let's suppose that some of us do look up. We see the iceberg. Will that induce us to diminish our exertions in supreme child-rearing? The grim truth is that, as long as good parenting and good citizenship are in conflict, we're just going to pack a few more violins for the trip.
Jun 06, 2018 | www.mybudget360.com
We currently exist in a land of financial contradictions. US household incomes adjusting for inflation are back to levels last seen in the late 1980s. However, holiday spending is going strongly largely by people going into big debt . Many are going to be paying for the holiday season of 2013 deep into years to come. More troubling than spending via debt is the record level of wealth inequality in the United States.
We would need to go back to the Gilded Age to find similar levels of wealth inequality.
The latest data shows that roughly 75 percent of the financial wealth in America is held in the hands of the top 10 percent of households. Or to invert this, 25 percent of all US wealth is divided up amongst the bottom 90 percent of the population.
Wealth is the true measure of financial stability. It used to be the case that housing was the one safe store of wealth for Americans but Wall Street has hijacked this asset class and has converted it to another commodity to speculate on. Yet by looking at spending habits and financial behavior many Americans think they are simply temporarily embarrassed millionaires.
They act against their own interests while wealth inequality rages on.
Jun 06, 2018 | www.theatlantic.com
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At the end of each week, we would return to our place. My reality was the aggressively middle-class world of 1960s and '70s U.S. military bases and the communities around them. Life was good there, too, but the pizza came from a box, and it was Lucky Charms for breakfast. Our glory peaked on the day my parents came home with a new Volkswagen camper bus. As I got older, the holiday pomp of patriotic luncheons and bridge-playing rituals came to seem faintly ridiculous and even offensive, like an endless birthday party for people whose chief accomplishment in life was just showing up. I belonged to a new generation that believed in getting ahead through merit, and we defined merit in a straightforward way: test scores, grades, competitive résumé-stuffing, supremacy in board games and pickup basketball, and, of course, working for our keep. For me that meant taking on chores for the neighbors, punching the clock at a local fast-food restaurant, and collecting scholarships to get through college and graduate school. I came into many advantages by birth, but money was not among them.
The meritocratic class has mastered the old trick of consolidating wealth and passing privilege along at the expense of other people's children.
I've joined a new aristocracy now, even if we still call ourselves meritocratic winners. If you are a typical reader of The Atlantic , you may well be a member too. (And if you're not a member, my hope is that you will find the story of this new class even more interesting -- if also more alarming.) To be sure, there is a lot to admire about my new group, which I'll call -- for reasons you'll soon see -- the 9.9 percent. We've dropped the old dress codes, put our faith in facts, and are (somewhat) more varied in skin tone and ethnicity. People like me, who have waning memories of life in an earlier ruling caste, are the exception, not the rule.
By any sociological or financial measure, it's good to be us. It's even better to be our kids. In our health, family life, friendship networks, and level of education, not to mention money, we are crushing the competition below. But we do have a blind spot, and it is located right in the center of the mirror: We seem to be the last to notice just how rapidly we've morphed, or what we've morphed into.Related Story
The meritocratic class has mastered the old trick of consolidating wealth and passing privilege along at the expense of other people's children. We are not innocent bystanders to the growing concentration of wealth in our time. We are the principal accomplices in a process that is slowly strangling the economy, destabilizing American politics, and eroding democracy. Our delusions of merit now prevent us from recognizing the nature of the problem that our emergence as a class represents. We tend to think that the victims of our success are just the people excluded from the club. But history shows quite clearly that, in the kind of game we're playing, everybody loses badly in the end.2. The Discreet Charm of the 9.9 Percent
Let's talk first about money -- even if money is only one part of what makes the new aristocrats special. There is a familiar story about rising inequality in the United States, and its stock characters are well known. The villains are the fossil-fueled plutocrat, the Wall Street fat cat, the callow tech bro, and the rest of the so-called top 1 percent. The good guys are the 99 percent, otherwise known as "the people" or "the middle class." The arc of the narrative is simple: Once we were equal, but now we are divided. The story has a grain of truth to it. But it gets the characters and the plot wrong in basic ways.
It is in fact the top 0.1 percent who have been the big winners in the growing concentration of wealth over the past half century. According to the UC Berkeley economists Emmanuel Saez and Gabriel Zucman, the 160,000 or so households in that group held 22 percent of America's wealth in 2012 , up from 10 percent in 1963. If you're looking for the kind of money that can buy elections, you'll find it inside the top 0.1 percent alone.
A Tale of Three Classes ( Figure 1 ):
The 9.9 percent hold most of the wealth in the United States.
Saez / Zucman
Every piece of the pie picked up by the 0.1 percent, in relative terms, had to come from the people below. But not everyone in the 99.9 percent gave up a slice. Only those in the bottom 90 percent did. At their peak, in the mid-1980s, people in this group held 35 percent of the nation's wealth. Three decades later that had fallen 12 points -- exactly as much as the wealth of the 0.1 percent rose.
In between the top 0.1 percent and the bottom 90 percent is a group that has been doing just fine. It has held on to its share of a growing pie decade after decade. And as a group, it owns substantially more wealth than do the other two combined. In the tale of three classes (see Figure 1), it is represented by the gold line floating high and steady while the other two duke it out. You'll find the new aristocracy there. We are the 9.9 percent.
So what kind of characters are we, the 9.9 percent? We are mostly not like those flamboyant political manipulators from the 0.1 percent. We're a well-behaved, flannel-suited crowd of lawyers, doctors, dentists, mid-level investment bankers, M.B.A.s with opaque job titles, and assorted other professionals -- the kind of people you might invite to dinner. In fact, we're so self-effacing, we deny our own existence. We keep insisting that we're "middle class."
As of 2016, it took $1.2 million in net worth to make it into the 9.9 percent; $2.4 million to reach the group's median; and $10 million to get into the top 0.9 percent. (And if you're not there yet, relax: Our club is open to people who are on the right track and have the right attitude.) "We are the 99 percent" sounds righteous, but it's a slogan, not an analysis. The families at our end of the spectrum wouldn't know what to do with a pitchfork.
We are also mostly, but not entirely, white. According to a Pew Research Center analysis, African Americans represent 1.9 percent of the top 10th of households in wealth; Hispanics, 2.4 percent; and all other minorities, including Asian and multiracial individuals, 8.8 percent -- even though those groups together account for 35 percent of the total population.
One of the hazards of life in the 9.9 percent is that our necks get stuck in the upward position. We gaze upon the 0.1 percent with a mixture of awe, envy, and eagerness to obey. As a consequence, we are missing the other big story of our time. We have left the 90 percent in the dust -- and we've been quietly tossing down roadblocks behind us to make sure that they never catch up.
Let's suppose that you start off right in the middle of the American wealth distribution. How high would you have to jump to make it into the 9.9 percent? In financial terms, the measurement is easy and the trend is unmistakable. In 1963, you would have needed to multiply your wealth six times. By 2016, you would have needed to leap twice as high -- increasing your wealth 12-fold -- to scrape into our group. If you boldly aspired to reach the middle of our group rather than its lower edge, you'd have needed to multiply your wealth by a factor of 25 . On this measure, the 2010s look much like the 1920s.
If you are starting at the median for people of color, you'll want to practice your financial pole-vaulting. The Institute for Policy Studies calculated that, setting aside money invested in "durable goods" such as furniture and a family car, the median black family had net wealth of $1,700 in 2013, and the median Latino family had $2,000, compared with $116,800 for the median white family. A 2015 study in Boston found that the wealth of the median white family there was $247,500, while the wealth of the median African American family was $8. That is not a typo. That's two grande cappuccinos. That and another 300,000 cups of coffee will get you into the 9.9 percent.Video: America's Class Problem
N one of this matters, you will often hear, because in the United States everyone has an opportunity to make the leap: Mobility justifies inequality. As a matter of principle, this isn't true. In the United States, it also turns out not to be true as a factual matter. Contrary to popular myth, economic mobility in the land of opportunity is not high, and it's going down.
Imagine yourself on the socioeconomic ladder with one end of a rubber band around your ankle and the other around your parents' rung. The strength of the rubber determines how hard it is for you to escape the rung on which you were born. If your parents are high on the ladder, the band will pull you up should you fall; if they are low, it will drag you down when you start to rise. Economists represent this concept with a number they call "intergenerational earnings elasticity," or IGE, which measures how much of a child's deviation from average income can be accounted for by the parents' income. An IGE of zero means that there's no relationship at all between parents' income and that of their offspring. An IGE of one says that the destiny of a child is to end up right where she came into the world.
According to Miles Corak, an economics professor at the City University of New York, half a century ago IGE in America was less than 0.3 . Today, it is about 0.5. In America, the game is half over once you've selected your parents. IGE is now higher here than in almost every other developed economy. On this measure of economic mobility, the United States is more like Chile or Argentina than Japan or Germany.
The story becomes even more disconcerting when you see just where on the ladder the tightest rubber bands are located. Canada, for example, has an IGE of about half that of the U.S. Yet from the middle rungs of the two countries' income ladders, offspring move up or down through the nearby deciles at the same respectable pace. The difference is in what happens at the extremes. In the United States, it's the children of the bottom decile and, above all, the top decile -- the 9.9 percent -- who settle down nearest to their starting point. Here in the land of opportunity, the taller the tree, the closer the apple falls.
All of this analysis of wealth percentiles, to be clear, provides only a rough start in understanding America's evolving class system. People move in and out of wealth categories all the time without necessarily changing social class, and they may belong to a different class in their own eyes than they do in others'. Yet even if the trends in the monetary statistics are imperfect illustrations of a deeper process, they are nonetheless registering something of the extraordinary transformation that's taking place in our society.
A few years ago, Alan Krueger, an economist and a former chairman of the Obama administration's Council of Economic Advisers, was reviewing the international mobility data when he caught a glimpse of the fundamental process underlying our present moment . Rising immobility and rising inequality aren't like two pieces of driftwood that happen to have shown up on the beach at the same time, he noted. They wash up together on every shore. Across countries, the higher the inequality, the higher the IGE (see Figure 2). It's as if human societies have a natural tendency to separate, and then, once the classes are far enough apart, to crystallize.
The Great Gatsby Curve ( Figure 2 ): Inequality and class immobility go together.
Economists are prudent creatures, and they'll look up from a graph like that and remind you that it shows only correlation, not causation. That's a convenient hedge for those of us at the top because it keeps alive one of the founding myths of America's meritocracy: that our success has nothing to do with other people's failure. It's a pleasant idea. But around the world and throughout history, the wealthy have advanced the crystallization process in a straightforward way. They have taken their money out of productive activities and put it into walls. Throughout history, moreover, one social group above all others has assumed responsibility for maintaining and defending these walls. Its members used to be called aristocrats. Now we're the 9.9 percent. The main difference is that we have figured out how to use the pretense of being part of the middle as one of our strategies for remaining on top.
Krueger liked the graph shown in Figure 2 so much that he decided to give it a name: the Great Gatsby Curve. It's a good choice, and it resonates strongly with me. F. Scott Fitzgerald's novel about the breakdown of the American dream is set in 1922, or right around the time that my great-grandfather was secretly siphoning money from Standard Oil and putting it into a shell company in Canada. It was published in 1925, just as special counsel was turning up evidence that bonds from that company had found their way into the hands of the secretary of the interior. Its author was drinking his way through the cafés of Paris just as Colonel Robert W. Stewart was running away from subpoenas to testify before the United States Senate about his role in the Teapot Dome scandal. We are only now closing in on the peak of inequality that his generation achieved, in 1928. I'm sure they thought it would go on forever, too.3. The Origin of a Species
Money can't buy you class, or so my grandmother used to say. But it can buy a private detective. Grandmother was a Kentucky debutante and sometime fashion model (kind of like Daisy Buchanan in The Great Gatsby , weirdly enough), so she knew what to do when her eldest son announced his intention to marry a woman from Spain. A gumshoe promptly reported back that the prospective bride's family made a living selling newspapers on the streets of Barcelona. Grandmother instituted an immediate and total communications embargo. In fact, my mother's family owned and operated a large paper-goods factory. When children came, Grandmother at last relented. Determined to do the right thing, she arranged for the new family, then on military assignment in Hawaii, to be inscribed in the New York Social Register .
Sociologists would say, in their dry language, that my grandmother was a zealous manager of the family's social capital -- and she wasn't about to let some Spanish street urchin run away with it. She did have a point, even if her facts were wrong. Money may be the measure of wealth, but it is far from the only form of it. Family, friends, social networks, personal health, culture, education, and even location are all ways of being rich, too. These nonfinancial forms of wealth, as it turns out, aren't simply perks of membership in our aristocracy. They define us.
We are the people of good family, good health, good schools, good neighborhoods, and good jobs. We may want to call ourselves the "5Gs" rather than the 9.9 percent. We are so far from the not-so-good people on all of these dimensions, we are beginning to resemble a new species. And, just as in Grandmother's day, the process of speciation begins with a love story -- or, if you prefer, sexual selection.
The polite term for the process is assortative mating . The phrase is sometimes used to suggest that this is another of the wonders of the internet age, where popcorn at last meets butter and Yankees fan finds Yankees fan. In fact, the frenzy of assortative mating today results from a truth that would have been generally acknowledged by the heroines of any Jane Austen novel: Rising inequality decreases the number of suitably wealthy mates even as it increases the reward for finding one and the penalty for failing to do so. According to one study, the last time marriage partners sorted themselves by educational status as much as they do now was in the 1920s .
For most of us, the process is happily invisible. You meet someone under a tree on an exclusive campus or during orientation at a high-powered professional firm, and before you know it, you're twice as rich. But sometimes -- Grandmother understood this well -- extra measures are called for. That's where our new technology puts bumbling society detectives to shame. Ivy Leaguers looking to mate with their equals can apply to join a dating service called the League. It's selective, naturally: Only 20 to 30 percent of New York applicants get in. It's sometimes called "Tinder for the elites."From Our June 2018 Issue
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It is misleading to think that assortative mating is symmetrical, as in city mouse marries city mouse and country mouse marries country mouse. A better summary of the data would be: Rich mouse finds love, and poor mouse gets screwed. It turns out -- who knew? -- that people who are struggling to keep it all together have a harder time hanging on to their partner. According to the Harvard political scientist Robert Putnam, 60 years ago just 20 percent of children born to parents with a high-school education or less lived in a single-parent household; now that figure is nearly 70 percent. Among college-educated households, by contrast, the single-parent rate remains less than 10 percent. Since the 1970s, the divorce rate has declined significantly among college-educated couples, while it has risen dramatically among couples with only a high-school education -- even as marriage itself has become less common. The rate of single parenting is in turn the single most significant predictor of social immobility across counties, according to a study led by the Stanford economist Raj Chetty.
None of which is to suggest that individuals are wrong to seek a suitable partner and make a beautiful family. People should -- and presumably always will -- pursue happiness in this way. It's one of the delusions of our meritocratic class, however, to assume that if our actions are individually blameless, then the sum of our actions will be good for society. We may have studied Shakespeare on the way to law school, but we have little sense for the tragic possibilities of life. The fact of the matter is that we have silently and collectively opted for inequality, and this is what inequality does. It turns marriage into a luxury good, and a stable family life into a privilege that the moneyed elite can pass along to their children. How do we think that's going to work out?
This divergence of families by class is just one part of a process that is creating two distinct forms of life in our society. Stop in at your local yoga studio or SoulCycle class, and you'll notice that the same process is now inscribing itself in our own bodies. In 19th-century England, the rich really were different. They didn't just have more money; they were taller -- a lot taller. According to a study colorfully titled "On English Pygmies and Giants," 16-year-old boys from the upper classes towered a remarkable 8.6 inches, on average, over their undernourished, lower-class countrymen. We are reproducing the same kind of division via a different set of dimensions.
Obesity, diabetes, heart disease, kidney disease, and liver disease are all two to three times more common in individuals who have a family income of less than $35,000 than in those who have a family income greater than $100,000. Among low-educated, middle-aged whites, the death rate in the United States -- alone in the developed world -- increased in the first decade and a half of the 21st century. Driving the trend is the rapid growth in what the Princeton economists Anne Case and Angus Deaton call "deaths of despair" -- suicides and alcohol- and drug-related deaths.
The sociological data are not remotely ambiguous on any aspect of this growing divide. We 9.9 percenters live in safer neighborhoods, go to better schools, have shorter commutes, receive higher-quality health care, and, when circumstances require, serve time in better prisons. We also have more friends -- the kind of friends who will introduce us to new clients or line up great internships for our kids.
These special forms of wealth offer the further advantages that they are both harder to emulate and safer to brag about than high income alone. Our class walks around in the jeans and T‑shirts inherited from our supposedly humble beginnings. We prefer to signal our status by talking about our organically nourished bodies, the awe-inspiring feats of our offspring, and the ecological correctness of our neighborhoods. We have figured out how to launder our money through higher virtues.
Most important of all, we have learned how to pass all of these advantages down to our children. In America today, the single best predictor of whether an individual will get married, stay married, pursue advanced education, live in a good neighborhood, have an extensive social network, and experience good health is the performance of his or her parents on those same metrics.
We're leaving the 90 percent and their offspring far behind in a cloud of debts and bad life choices that they somehow can't stop themselves from making. We tend to overlook the fact that parenting is more expensive and motherhood more hazardous in the United States than in any other developed country, that campaigns against family planning and reproductive rights are an assault on the families of the bottom 90 percent, and that law-and-order politics serves to keep even more of them down. We prefer to interpret their relative poverty as vice: Why can't they get their act together?
New forms of life necessarily give rise to new and distinct forms of consciousness. If you doubt this, you clearly haven't been reading the "personal and household services" ads on Monster.com. At the time of this writing, the section for my town of Brookline, Massachusetts, featured one placed by a "busy professional couple" seeking a "Part Time Nanny." The nanny (or manny -- the ad scrupulously avoids committing to gender) is to be "bright, loving, and energetic"; "friendly, intelligent, and professional"; and "a very good communicator, both written and verbal." She (on balance of probability) will "assist with the care and development" of two children and will be "responsible for all aspects of the children's needs," including bathing, dressing, feeding, and taking the young things to and from school and activities. That's why a "college degree in early childhood education" is "a plus."
In short, Nanny is to have every attribute one would want in a terrific, professional, college-educated parent. Except, of course, the part about being an actual professional, college-educated parent. There is no chance that Nanny will trade places with our busy 5G couple. She "must know the proper etiquette in a professionally run household" and be prepared to "accommodate changing circumstances." She is required to have "5+ years experience as a Nanny," which makes it unlikely that she'll have had time to get the law degree that would put her on the other side of the bargain. All of Nanny's skills, education, experience, and professionalism will land her a job that is "Part Time."
The ad is written in flawless, 21st-century business-speak, but what it is really seeking is a governess -- that exquisitely contradictory figure in Victorian literature who is both indistinguishable in all outward respects from the upper class and yet emphatically not a member of it. Nanny's best bet for moving up in the world is probably to follow the example of Jane Eyre and run off with the lord (or lady) of the manor.
If you look beyond the characters in this unwritten novel about Nanny and her 5G masters, you'll see a familiar shape looming on the horizon. The Gatsby Curve has managed to reproduce itself in social, physiological, and cultural capital. Put more accurately: There is only one curve, but it operates through a multiplicity of forms of wealth.
Rising inequality does not follow from a hidden law of economics, as the otherwise insightful Thomas Piketty suggested when he claimed that the historical rate of return on capital exceeds the historical rate of growth in the economy. Inequality necessarily entrenches itself through other, nonfinancial, intrinsically invidious forms of wealth and power. We use these other forms of capital to project our advantages into life itself. We look down from our higher virtues in the same way the English upper class looked down from its taller bodies, as if the distinction between superior and inferior were an artifact of nature. That's what aristocrats do.
... ... ...5. The Invisible Hand of Government
As far as Grandfather was concerned, the assault on the productive classes began long before the New Deal. It all started in 1913, with the ratification of the Sixteenth Amendment. In case you've forgotten, that amendment granted the federal government the power to levy a direct personal-income tax. It also happens that ratification took place just a few months after Grandfather was born, which made sense to me in a strange way. By far the largest part of his lifetime income was attributable to his birth.
Grandfather was a stockbroker for a time. I eventually figured out that he mostly traded his own portfolio and bought a seat at the stock exchange for the purpose. Politics was a hobby, too. At one point, he announced his intention to seek the Republican nomination for lieutenant governor of Connecticut. (It wasn't clear whether anybody outside the clubhouse heard him.) What he really liked to do was fly. The memories that mattered most to him were his years of service as a transport pilot during World War II. Or the time he and Grandmother took to the Midwestern skies in a barnstorming plane. My grandparents never lost faith in the limitless possibilities of a life free from government. But in their last years, as the reserves passed down from the Colonel ran low, they became pretty diligent about collecting their Social Security and Medicare benefits.
There is a page in the book of American political thought -- Grandfather knew it by heart -- that says we must choose between government and freedom. But if you read it twice, you'll see that what it really offers is a choice between government you can see and government you can't. Aristocrats always prefer the invisible kind of government. It leaves them free to exercise their privileges. We in the 9.9 percent have mastered the art of getting the government to work for us even while complaining loudly that it's working for those other people.
Consider, for starters, the greatly exaggerated reports of our tax burdens. On guest panels this past holiday season, apologists for the latest round of upwardly aimed tax cuts offered versions of Mitt Romney's claim that the 47 percent of Americans who pay no federal income tax in a typical year have "no skin in the game." Baloney. Sure, the federal individual-income tax, which raised $1.6 trillion last year, remains progressive. But the $1.2 trillion raised by the payroll tax hits all workers -- but not investors, such as Romney -- and it hits those making lower incomes at a higher rate, thanks to a cap on the amount of income subject to the tax. Then there's the $2.3 trillion raised by state and local governments, much of it collected through regressive sales and property taxes. The poorest quintile of Americans pays more than twice the rate of state taxes as the top 1 percent does , and about half again what the top 10 percent pays.
Our false protests about paying all the taxes, however, sound like songs of innocence compared with our mastery of the art of having the taxes returned to us. The income-tax system that so offended my grandfather has had the unintended effect of creating a highly discreet category of government expenditures. They're called "tax breaks," but it's better to think of them as handouts that spare the government the inconvenience of collecting the money in the first place. In theory, tax expenditures can be used to support any number of worthy social purposes, and a few of them, such as the earned income-tax credit, do actually go to those with a lower income. But more commonly, because their value is usually a function of the amount of money individuals have in the first place, and those individuals' marginal tax rates, the benefits flow uphill.
Let us count our blessings: Every year, the federal government doles out tax expenditures through deductions for retirement savings (worth $137 billion in 2013); employer-sponsored health plans ($250 billion); mortgage-interest payments ($70 billion); and, sweetest of all, income from watching the value of your home, stock portfolio, and private-equity partnerships grow ($161 billion). In total, federal tax expenditures exceeded $900 billion in 2013. That's more than the cost of Medicare, more than the cost of Medicaid, more than the cost of all other federal safety-net programs put together. And -- such is the beauty of the system -- 51 percent of those handouts went to the top quintile of earners, and 39 percent to the top decile.
The best thing about this program of reverse taxation, as far as the 9.9 percent are concerned, is that the bottom 90 percent haven't got a clue. The working classes get riled up when they see someone at the grocery store flipping out their food stamps to buy a T-bone. They have no idea that a nice family on the other side of town is walking away with $100,000 for flipping their house.
But wait, there's more! Let's not forget about the kids. If the secrets of a nation's soul may be read from its tax code, then our nation must be in love with the children of rich people. The 2017 tax law raises the amount of money that married couples can pass along to their heirs tax-free from a very generous $11 million to a magnificent $22 million. Correction: It's not merely tax-free; it's tax-subsidized. The unrealized tax liability on the appreciation of the house you bought 40 years ago, or on the stock portfolio that has been gathering moths -- all of that disappears when you pass the gains along to the kids. Those foregone taxes cost the United States Treasury $43 billion in 2013 alone -- about three times the amount spent on the Children's Health Insurance Program.
Grandfather's father, the Colonel, died in 1947, when the maximum estate-tax rate was a now-unheard-of 77 percent. When the remainder was divvied up among four siblings, Grandfather had barely enough to pay for the Bentley and keep up with dues at the necessary clubs. The government made sure that I would grow up in the middle class. And for that I will always be grateful.... ... ...
8. The Politics of Resentment
The political theology of the meritocracy has no room for resentment. We are taught to run the competition of life with our eyes on the clock and not on one another, as if we were each alone. If someone scores a powerboat on the Long Island waterways, so much the better for her. The losers will just smile and try harder next time.
In the real world, we humans are always looking from side to side. We are intensely conscious of what other people are thinking and doing, and conscious to the point of preoccupation with what they think about us. Our status is visible only through its reflection in the eyes of others.
Perhaps the best evidence for the power of an aristocracy is to be found in the degree of resentment it provokes. By that measure, the 9.9 percent are doing pretty well indeed. The surest sign of an increase in resentment is a rise in political division and instability. We're positively acing that test. You can read all about it in the headlines of the past two years.
The 2016 presidential election marked a decisive moment in the history of resentment in the United States. In the person of Donald Trump, resentment entered the White House. It rode in on the back of an alliance between a tiny subset of super-wealthy 0.1 percenters (not all of them necessarily American) and a large number of 90 percenters who stand for pretty much everything the 9.9 percent are not.
According to exit polls by CNN and Pew, Trump won white voters by about 20 percent. But these weren't just any old whites (though they were old, too). The first thing to know about the substantial majority of them is that they weren't the winners in the new economy. To be sure, for the most part they weren't poor either. But they did have reason to feel judged by the market -- and found wanting. The counties that supported Hillary Clinton represented an astonishing 64 percent of the GDP, while Trump counties accounted for a mere 36 percent. Aaron Terrazas, a senior economist at Zillow, found that the median home value in Clinton counties was $250,000, while the median in Trump counties was $154,000. When you adjust for inflation, Clinton counties enjoyed real-estate price appreciation of 27 percent from January 2000 to October 2016; Trump counties got only a 6 percent bump.
The residents of Trump country were also the losers in the war on human health. According to Shannon Monnat, an associate professor of sociology at Syracuse, the Rust Belt counties that put the anti-government-health-care candidate over the top were those that lost the most people in recent years to deaths of despair -- those due to alcohol, drugs, and suicide. To make all of America as great as Trump country, you would have to torch about a quarter of total GDP, wipe a similar proportion of the nation's housing stock into the sea, and lose a few years in life expectancy. There's a reason why one of Trump's favorite words is unfair . That's the only word resentment wants to hear.
Even so, the distinguishing feature of Trump's (white) voters wasn't their income but their education, or lack thereof. Pew's latest analysis indicates that Trump lost college-educated white voters by a humiliating 17 percent margin. But he got revenge with non-college-educated whites, whom he captured by a stomping 36 percent margin. According to an analysis by Nate Silver, the 50 most educated counties in the nation surged to Clinton : In 2012, Obama had won them by a mere 17 percentage points; Clinton took them by 26 points. The 50 least educated counties moved in the opposite direction; whereas Obama had lost them by 19 points, Clinton lost them by 31. Majority-minority counties split the same way: The more educated moved toward Clinton, and the less educated toward Trump.
The historian Richard Hofstadter drew attention to Anti-intellectualism in American Life in 1963; Susan Jacoby warned in 2008 about The Age of American Unreason ; and Tom Nichols announced The Death of Expertise in 2017. In Trump, the age of unreason has at last found its hero. The "self-made man" is always the idol of those who aren't quite making it. He is the sacred embodiment of the American dream, the guy who answers to nobody, the poor man's idea of a rich man. It's the educated phonies this group can't stand. With his utter lack of policy knowledge and belligerent commitment to maintaining his ignorance, Trump is the perfect representative for a population whose idea of good governance is just to scramble the eggheads. When reason becomes the enemy of the common man, the common man becomes the enemy of reason.
Did I mention that the common man is white? That brings us to the other side of American-style resentment. You kick down, and then you close ranks around an imaginary tribe. The problem, you say, is the moochers, the snakes, the handout queens; the solution is the flag and the religion of your (white) ancestors. According to a survey by the political scientist Brian Schaffner, Trump crushed it among voters who "strongly disagree" that "white people have advantages because of the color of their skin," as well as among those who "strongly agree" that "women seek to gain power over men." It's worth adding that these responses measure not racism or sexism directly, but rather resentment. They're good for picking out the kind of people who will vehemently insist that they are the least racist or sexist person you have ever met, even as they vote for a flagrant racist and an accused sexual predator.
No one is born resentful. As mass phenomena, racism, xenophobia, anti-intellectualism, narcissism, irrationalism, and all other variants of resentment are as expensive to produce as they are deadly to democratic politics. Only long hours of television programming, intelligently manipulated social-media feeds, and expensively sustained information bubbles can actualize the unhappy dispositions of humanity to the point where they may be fruitfully manipulated for political gain. Racism in particular is not just a legacy of the past, as many Americans would like to believe; it also must be constantly reinvented for the present. Mass incarceration, fearmongering, and segregation are not just the results of prejudice, but also the means of reproducing it.
The raging polarization of American political life is not the consequence of bad manners or a lack of mutual understanding. It is just the loud aftermath of escalating inequality. It could not have happened without the 0.1 percent (or, rather, an aggressive subset of its members). Wealth always preserves itself by dividing the opposition. The Gatsby Curve does not merely cause barriers to be built on the ground; it mandates the construction of walls that run through other people's minds.
But that is not to let the 9.9 percent off the hook. We may not be the ones funding the race-baiting, but we are the ones hoarding the opportunities of daily life. We are the staff that runs the machine that funnels resources from the 90 percent to the 0.1 percent. We've been happy to take our cut of the spoils. We've looked on with smug disdain as our labors have brought forth a population prone to resentment and ripe for manipulation. We should be prepared to embrace the consequences.
The first important thing to know about these consequences is the most obvious: Resentment is a solution to nothing. It isn't a program of reform. It isn't "populism." It is an affliction of democracy, not an instance of it. The politics of resentment is a means of increasing inequality, not reducing it. Every policy change that has waded out of the Trump administration's baffling morass of incompetence makes this clear. The new tax law; the executive actions on the environment and telecommunications, and on financial-services regulation; the judicial appointments of conservative ideologues -- all will have the effect of keeping the 90 percent toiling in the foothills of merit for many years to come.
The second thing to know is that we are next in line for the chopping block. As the population of the resentful expands, the circle of joy near the top gets smaller. The people riding popular rage to glory eventually realize that we are less useful to them as servants of the economic machine than we are as model enemies of the people. The anti-blue-state provisions of the recent tax law have miffed some members of the 9.9 percent, but they're just a taste of the bad things that happen to people like us as the politics of resentment unfolds.
The past year provides ample confirmation of the third and most important consequence of the process: instability. Unreasonable people also tend to be ungovernable. I won't belabor the point. Just try doing a frequency search on the phrase constitutional crisis over the past five years. That's the thing about the Gatsby Curve. You think it's locking all of your gains in place. But the crystallization process actually has the effect of making the whole system more brittle. If you look again at history, you can get a sense of how the process usually ends.10. The Choice
I like to think that the ending of The Great Gatsby is too down-beat. Even if we are doomed to row our boats ceaselessly back into the past, how do we know which part of the past that will be?
History shows us a number of aristocracies that have made good choices. The 9.9 percenters of ancient Athens held off the dead tide of the Gatsby Curve for a time, even if democracy wasn't quite the right word for their system of government. America's first generation of revolutionaries was mostly 9.9 percenters, and yet they turned their backs on the man at the very top in order to create a government of, by, and for the people. The best revolutions do not start at the bottom; they are the work of the upper-middle class.
These exceptions are rare, to be sure, and yet they are the story of the modern world. In total population, average life expectancy, material wealth, artistic expression, rates of violence, and almost every other measure that matters for the quality of human life, the modern world is a dramatically different place than anything that came before. Historians offer many complicated explanations for this happy turn in human events -- the steam engine, microbes, the weather -- but a simple answer precedes them all: equality. The history of the modern world is the unfolding of the idea at the vital center of the American Revolution.
The defining challenge of our time is to renew the promise of American democracy by reversing the calcifying effects of accelerating inequality. As long as inequality rules, reason will be absent from our politics; without reason, none of our other issues can be solved. It's a world-historical problem. But the solutions that have been put forward so far are, for the most part, shoebox in size.
Well-meaning meritocrats have proposed new and better tests for admitting people into their jewel-encrusted classrooms. Fine -- but we aren't going to beat back the Gatsby Curve by tweaking the formulas for excluding people from fancy universities. Policy wonks have taken aim at the more-egregious tax-code handouts, such as the mortgage-interest deduction and college-savings plans. Good -- and then what? Conservatives continue to recycle the characterological solutions, like celebrating traditional marriage or bringing back that old-time religion. Sure -- reforging familial and community bonds is a worthy goal. But talking up those virtues won't save any families from the withering pressures of a rigged economy. Meanwhile, coffee-shop radicals say they want a revolution. They don't seem to appreciate that the only simple solutions are the incredibly violent and destructive ones.
The American idea has always been a guide star, not a policy program, much less a reality. The rights of human beings never have been and never could be permanently established in a handful of phrases or old declarations. They are always rushing to catch up to the world that we inhabit. In our world, now, we need to understand that access to the means of sustaining good health, the opportunity to learn from the wisdom accumulated in our culture, and the expectation that one may do so in a decent home and neighborhood are not privileges to be reserved for the few who have learned to game the system. They are rights that follow from the same source as those that an earlier generation called life, liberty, and the pursuit of happiness.Related Stories
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Yes, the kind of change that really matters is going to require action from the federal government. That which creates monopoly power can also destroy it; that which allows money into politics can also take it out; that which has transferred power from labor to capital can transfer it back. Change also needs to happen at the state and local levels. How else are we going to open up our neighborhoods and restore the public character of education?
It's going to take something from each of us, too, and perhaps especially from those who happen to be the momentary winners of this cycle in the game. We need to peel our eyes away from the mirror of our own success and think about what we can do in our everyday lives for the people who aren't our neighbors. We should be fighting for opportunities for other people's children as if the future of our own children depended on it. It probably does.
This article appears in the June 2018 print edition with the headline "The Birth of a New American Aristocracy."
Jun 06, 2018 | discussion.theguardian.com
Janeee -> Jas636 , 3 Jun 2018 21:52There are many societies that tolerate a certain degree of economic inequality, but still provide decent living conditions, services and infrastructure for most citizens. The notion that we either have extreme inequality or extreme poverty is empirically and morally empty.
Jun 05, 2018 | twitter.com
The decline in union density is.' @LipstickEcon on new research that links declining unionization to rising #inequality, via @Slate https://slate.com/human-interest/2018/05/study-unions-increasingly-represent-educated-workers.html #EGgrantee..."
May 14, 2018 | www.rt.com
The economist John Maynard Keynes said "When the facts change, I change my mind. What do you do, sir?" But many students continue to be deceived by their professors who, even after the great financial crisis, refuse to change their mind and continue to actively peddle theories that are plain wrong. So on the show we ask if the academics are failing us, how do we begin to reverse such a heavily entrenched education system? Host Ross Ashcroft is joined by Professor Steve Keen and the author and economist Steven Payson.
Apr 24, 2018 | www.nakedcapitalism.com
marku52 , April 20, 2018 at 3:57 pmhemeantwell , April 20, 2018 at 4:59 pm
Stumbling and Mumbling has a good riff on this topic:
". Economics, for me, is not about armchair theorizing. It should begin with the facts, and especially the big ones. The facts are that share buy-backs do usually matter, so thought experiments that say otherwise are wrong from the off. Similarly, the fact that wage inflation has been low for years (pdf) is much more significant than any theorizing about Phillips curves."
The comments are good as well:
"That's a category error: you don't define "Economics", tenure committees define it, and they award tenure to people who have a long record of publishing "internally consistent" ("armchair theorizing") papers."
"I found myself sitting next to a very likable young middle-aged academic tenured at an elite British university, whom henceforth I will refer to as Doctor X and whose field is closely associated with this blog. Every year I publish papers in the top journals and they're pure shit." Doctor X, who by now had had a glass or two, felt bad about this, not least because "students these days are so idealistic and eager to learn; they're really wonderful." Furthermore Doctor X could and would like "to write serious papers but what would be the point?" "
http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2018/04/facts-vs-hand-waving-in-economics.html#commentsApe , April 22, 2018 at 3:32 am
Yeah. I'm inclined to think the author needs to curb his enthusiasms and take up dejected drinking.
The nub of his presentation was a model in which consumers, due to cognitive limitations, were unable to fully examine every single product they purchased. The result was that regulations guaranteeing a certain standard of safety, quality and the like could improve competition by giving people more time to shop around instead of having to devote so much time to investigate specific products. Thus, regulation would improve markets and competition
This is Nobel-level work? It amounts to finding a way to pitch a product to anti-regulation dogmatists. I'm sure that you could find similar arguments being made during the Progressive era regulatory push. Only they would have been framed more as "people will have more time to shop around if they're not killed by previous ingestion of the product."Larry Motuz , April 22, 2018 at 4:34 pm
Dude – they aren't actually doing fancy math. Linear regression – like it's 1850!
Most of their important proofs are irrelevant crap with wholes. The math is mostly undergraduate math! The emperor has no clothes!
The problem isn't just math trickery – it's not even proper ingenuity.
Just read a Summer or Krugman paper – it's 70 pages of words, 3 graphs of imaginary numbers and stats 2 equations. That's not mathematization.Sound of the Suburbs , April 22, 2018 at 9:08 am
What I mean by 'mathemagics' is the misuse of mathematics –even simple mathematics -- to create the illusion that 'utility' or 'indifference curves' actually pertain to real concepts. In reality, they 'mathematize' gobbledygook passed off as coherent concepts. There is nothing so conceptually barren as 'utility' or 'indifference curve' analytics. The notion that one can derive any coherent 'demand' analysis for any one consumer that is individual human being (or life form of any kind) for any product, or that one can aggregate these up is mathematical junk.Sound of the Suburbs , April 22, 2018 at 9:09 am
The Classical Economists used the broader political economy rather than today's narrow economics.
The Washington Consensus dreamed of a world run by the laws of economics.
The laws of economics worked in China's favour and the Western economies got hollowed out.
Disposable income = wages – (taxes + the cost of living)
Maximising profit required minimising wages.
The minimum wage is set when disposable income equals zero.
The minimum wage = taxes + the cost of living
China had it made and the West had tilted the playing field against itself.
The US eventually woke up the geopolitical consequences of a world governed by the laws of economics that had worked in China's favour.
Trump has just made things worse with his tax cuts.
If we reduce taxes on the wealthy they will create more jobs and wages.
If we reduce taxes on the wealthy they will create more jobs and wages in Asia where they can make more profit. They can then ship the stuff back here increasing Western trade deficits.Sound of the Suburbs , April 22, 2018 at 9:17 am
"There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning. " Warren Buffet, 25 May 2005
Did your class think about the geopolitics?
I don't think so.
William White (BIS, OECD) is on board for the benefits of the broader political economy.
skippy , April 20, 2018 at 3:47 pm
Apr 24, 2018 | www.nakedcapitalism.com
Economics conducted a curriculum review of 174 modules at 7 Russell Group universities -- rightly or wrongly considered the 'top' universities in the UK -- and we found that the uncritical acceptance of one type of economics begins with education. Under 10% of modules even mentioned anything other than mainstream or 'neoclassical' economics; in econometrics, over 90% of modules devoted more than two-thirds of their lectures to linear regression. Only 24% of exam questions required critical or independent thinking (i.e. were open-ended); this dropped to 8% if you only counted the compulsory macro and micro modules that form the core of economics education.
We have previously called this 'indoctrination', and while this may seem dramatic the dictionary definition of indoctrination is to "teach a person or set of people to accept a set of beliefs uncritically", which we think adequately characterises the results of the review, as well as our own experience and many widely used economics textbooks. Given this education, it is no wonder that economists remain wedded to the fundamental precepts of choice models and linear regression no matter where they turn their attention. By putting the method first, the implicit assumption becomes that answering a question using this framework is prima facie interesting, and critical evaluation of these tools against others is made unthinkable.
Jim Haygood , , April 20, 2018 at 11:01 am
For nearly thirty years after the Efficient Market Hypothesis (EMH) became received gospel in the mid-1960s, the claim that stock prices exhibited momentum (which shouldn't be true in a perfectly efficient market) was roundly mocked by mainstream economists.
Then in 1993, Jegadeesh and Titman published a paper titled "Returns to Buying Winners and Selling Losers: Implications for Stock Market Efficiency" in the Journal of Finance . Its evidence for a momentum effect was impossible to refute.
So economists bolted en masse to the opposite side of the boat. Today there are thousands of papers on momentum, often presenting some fairly trivial arithmetic that home-based amateurs have long used. But it's formulated into equations with Greek letters, and a [totally boring] statistical panel appears in the Appendix to prove some statistical significance.
A few professors actually exploited their discoveries to get rich. Cliff Asness, a U of Chicago PhD (but a practitioner, not a professor) offers some light-hearted commentary on his mentor Eugene Fama:
Of course the book The Fama Portfolio also contains contributions by other authors (or how the heck did I get in there?) that reflect, directly or indirectly, on Gene's work.
Being able to read Gene's originals and some of the major papers by others that explore his work in one volume is both a treat and incredibly useful (these contributors, unlike John Liew and myself, are themselves serious academic luminaries!).
OK, enough shilling. If you love finance and don't immediately pine for this book, I can't help you any further☺
Synoia , April 20, 2018 at 11:33 am
If it was only like the movie THX1138.
Where the police were call off their pursuit, when within a finger nail of – helping – their subject. Because the economic perimeters their models produced, with the help of computational machines, gave a ridged defined view of the operation. Seems the subject was operating outside the econometric perimeters due to mental illness – was a patient whom escaped at the time.
Alas we never get to see what he saw when he popped out on the surface, save a blinding orb.
In retrospect did they do the underground thingy to better control, could nature itself be a threat to the model, hence the need to control every aspect of environment for behavioral reasons.
Anywho I'll just leave this on my way to work:
"If we accept that we need fundamental reform, what should the new economics -- "de-conomics" as I'm calling it -- look like?
First, we need to accept that there is no such thing as "value-free" analysis of the economy. As I've explained, neoclassical economics pretends to be ethically neutral while smuggling in an individualistic, anti-social ethos " – Howard Reed
Chris , April 20, 2018 at 12:22 pm
Linear regression is economists' preferred empirical technique
That's really a powerful tool in a world which is chaotic.
The trouble with embracing chaos and catastrophe theory is the "chaos" part of predicting the future. But economists, being human and liking their paychecks, are not interested in any predictions which do not cater, or pander, to the needs of their bosses or paymasters.
Why, that might suggest the boss is wrong! Such heresy leads to a quick execution!
Fundamentally, economics is a religion, with priests, high priests, creed, dogma, punishment for heretics, and all the other trappings of a religion. But the pay is good, so Clive's rule for middle class jobs applies.
Disclaimer: My view of Religion is similar: Why?
1. You'll get your reward in the afterlife, after you are dead!
2. We know this is true, because we've never had a complaint.
Synoia , April 20, 2018 at 1:53 pm
Linear regression certainly is a powerful tool for examining linear distributions, but it essential to first confirm that the distribution is linear, and to remember that on occasion, samples drawn from random (unrelated) distributions can show a spurious correlation.
blennylips , April 20, 2018 at 2:40 pm
but it essential to first confirm that the distribution is linear
Very true, but how is this proven? In nature and economics are there any linear distributions? If so over what range?
I notice a preponderance of using straight lines instead of growth curves. I also notice chaos, or noise, in behaviors, coupled with a complete non-understanding of entropy.
In nature linear behavior is unlikely. If it were linear we'd see straight branches on trees, rainfall evenly distributed and the wind would always blow at constant speed, with predictable eddies.
I suppose a rock dropped would exhibit linear behaviors until it hits the ground, and at that point in time the "dropping rock" system become decidedly chaotic, from stuck in the mud, to bouncing in a random direction, to bursting into pieces, pieces who's destiny is completely uncertain.
― Nassim Nicholas Taleb, Antifragile: Things That Gain from Disorder
I've debated many economists who claim to specialize in risk and probability: when one takes them slightly outside their narrow focus, but within the discipline of probability, they fall apart, with the disconsolate face of a gym rat in front of a gangster hit man."
Nassim, I think covers all this better than anyone else. Would love to hear of similarly comprehensive works.
Fooled by Randomness covers problems with assumed linearity and normal distributions.
Apr 07, 2018 | www.theguardian.com
An alarming projection produced by the House of Commons library suggests that if trends seen since the 2008 financial crash were to continue, then the top 1% will hold 64% of the world's wealth by 2030. Even taking the financial crash into account, and measuring their assets over a longer period, they would still hold more than half of all wealth.
Since 2008, the wealth of the richest 1% has been growing at an average of 6% a year – much faster than the 3% growth in wealth of the remaining 99% of the world's population. Should that continue, the top 1% would hold wealth equating to $305tn (£216.5tn) – up from $140tn today.
BrianSand , 7 Apr 2018 14:53The population of third world countries is skyrocketing. The population of developed countries, outside the importation of poor immigrants, is static. The top 1% of world population will continuously become comparatively richer as long as this is the case.feliciafarrel -> apaliteno , 7 Apr 2018 14:50Landlord52 -> Whattayagonnado huh , 7 Apr 2018 14:46
but there's no way the UK has 10 million of the world's richest 75 million.
You need £550,000 to be in the top 1% in the world.
In the UK there are 27m households with an average of 1.94 adults per household.
25% of households have £550,000 or more.
That means 6.75m households are in the top 1% of the world, At 1.94 adults per household, that's 13,000,000 people.
However, assuming households are not 'legal people' but the adults within them are, then you'd have to divide household income by the number of adults (1.94) to get the wealth per person. So to reach £550,000 per person, a household would have to have net wealth of £1.067m, and only 10% of households have that wealth.
10% of 27m is 2.7m and that equates to only 5,240,000 people.
So in terms of households we easily reach 10m mark, but in terms of individual people, you are correct, it is 'only' 5.24m. Still and awful lot of people though.A single mother get £20k on benefits per years. Over 18 years that is £360,000. She has two kids, so that iwill cost £3,000 in education per years. 2 kids x 14 years x £3,500 per years = £98,000. We pay for child birth costs, free vaccinations, anti-natal care, free prescriptions, free eye care, free dental care, free school meals, we pay her countal tax bil. Plus if she is lucky, she get a free £450,000 council home.PotholeKid -> counttrumpage , 7 Apr 2018 14:45
Even if she works for a few years, it will never be enough to pay what she has received from the state. PLus we have to make provisions for her pension and her elderly care, meals on wheels, elderly health care etc...
That is easily £1m to £2million per single mother....
yeah... we are such a terrible society....The plebs are well on the way to figuring it out alright and so have the 1%. That's we now live under a militarized surveillance state which serves the elites.. Think again if voting will ever change this.. Bernie was doomed from the getgo.hundredhander , 7 Apr 2018 14:42I think the principle here is that the longer this goes on and the greater inequality becomes then the more extreme will be the countervailing force.DogsLivesMatter , 7 Apr 2018 14:41
It is in everybody's interest that the world becomes fairer. That governments govern in the interests of as many people as possible. That public services like health and education are available to all regardless. That taxes are progressive and that governments have international treaties to deal with tax avoidance and evasion. That our democratic processes are as robust as possible and that all our organs of state are as transparent as possible and open to scrutiny to the public.
If the accumulation of wealth on this scale continues unabated it will end in tears... inevitably.
Furthermore I believe that there is a relationship between inequality - and all the things that go with it and follow from it - and environmental degradation.
Greater fairness between individuals and between countries is, in my opinion, one of the essential requirements for us to surmount the epic problems that we face in the world today.I think most of us have are aware of what really happens at Davos. The wealthy and powerful are cooking up more schemes to screw the 99% over. Your Bono's and your Bill Gates are no friends to the working class or the working poor. Take Jeff Bezos for example. He has a mass of wealth totaling $112 Billion.
- To end global hunger - $30 Billion
- To end homelessness in the USA - $20 Billion
Jeff Bezos, or even Bill Gates could do that in an instant and still have Billions to spare. The super rich don't care about "regular" people, and never have.
Peter Rabbit ComfortablyPlumb 7 Apr 2018 14:25
This is the Osborne analogy regurgitated.
If you live in a £2.5 million house, you are wealthy, not average or poor. To be wealthy is not some form of human rights entitlement, especially if it is at the cost of the overwhelming majority. This concept is known as "greed" and "selfishness". Obviously your mantra is that of Gordon Gekko "greed is good".
The real focus of our taxation system should be to tax wealth and recipients of silly amounts of annual income.
All these arguments are dated and are applicable to the Thatcher era of the early 1980s which has long gone and is not going to return. The problem facing our society currently is run away social and economic inequality and the entrenchment of substantial wealth for a very small number of people which is fuelling generational social and inequality.
TakoradiMan BrotherLead 7 Apr 2018 14:24
I presume that most those living in the U.K. will fall within top 1% which the Guardianista loath so much.
I'm sorry but this post is utterly clueless.
To be in the top 1% you need to have a household income of well over £50k per annum (closer to £100k I suspect - no one here has yet given very authoritative figures); only a fraction of the UK population are that well off.
AnneK1 Landlord52 7 Apr 2018 14:24
Except that they don't and the charities have to come along and ask us for more money because the public sector haven't used tax revenue efficiently. I would say Britain's ineffective public sector are the greatest threat to Corbyn's chances of forming the government we need to rid us of these dangerous Tories.
PeterlooSunset 7 Apr 2018 14:24
The richest 1% own the corporate media (including the private equity firms keeping the Guardian afloat) that keep telling us we have to focus our attention on identity politics while they loot all the wealth.
prematureoptimsim -> Inthesticks 7 Apr 2018 14:23
Ur talking about something called "Reagan-nomics" or what was commonly and lovingly referred to as "trickle down economics". After the destruction of unionized labor, years of globalization, record profits for corporations & wall street and a high octane doze of Reagan / Thatcher Neoliberalism, "trickle down" has obviously been a complete failure.
U need proof ? Just examine recent history of presidential elections. . . .
- Barack Obama - ( Mr. Hope and Change )
- Donald Trump - ( Mr. Make America Great Again ).
And in the end it's the same as it ever was. The rich get richer and. . . . Well u know the rest. Good luck to u. Enjoy ur crumbs.
Mar 30, 2018 | www.theguardian.com
Bin Salman's affair with academia isn't a fluke – it's a result of the neoliberal logic by which universities increasingly operate. As the journalist David Dickson noted in 1984, American universities and corporations have "teamed up to challenge the democratic control of knowledge" by delegating control over academic research to "the marketplace".
This market rationality extends even to the way research is evaluated – which the Saudi government has been gaming. To give one example, it paid highly cited mathematicians at universities around the world to list King Abdulaziz University as an affiliation, thereby making it the seventh "best" mathematics department worldwide in the 2014 US News and World Report university rankings .
Here, the Saudi government is only playing by the rules of a game designed by western elites. This is the same logic that has been used to allow corporations, nonprofits and the military to steadily buy out chunks of academia to the point where it makes little sense to presume clear boundaries exist between these entities. As a result, numerous partnerships entangle MIT researchers with Bin Salman. On his Boston tour, he also visited IBM's Cambridge research facility, which recently partnered with MIT to form an artificial intelligence research laboratory in exchange for a $240m commitment to the university. Boston Dynamics , an MIT partner that builds robots for the US military, also offered a demonstration. Such alliances ought to cast doubt on MIT's promise to understand the "societal and ethical" implications of AI and build socially beneficial technologies.
The terms of all of these partnerships are essentially opaque, while the secrecy that surrounds them denies the community the chance to deliberate and take action. The growth of unaccountable university partnerships, like other crises facing educational institutions, stems from the absence of democratic engagement. When universities decide to sell themselves to the highest bidder, they become deaf to the interests of their students and the wider societies in which they operate. Subservience to war criminals and corporate overlords tends to follow.
Apr 04, 2018 | www.theguardian.com
Bin Salman's affair with academia isn't a fluke – it's a result of the neoliberal logic by which universities increasingly operate. As the journalist David Dickson noted in 1984, American universities and corporations have "teamed up to challenge the democratic control of knowledge" by delegating control over academic research to "the marketplace".
This market rationality extends even to the way research is evaluated – which the Saudi government has been gaming. To give one example, it paid highly cited mathematicians at universities around the world to list King Abdulaziz University as an affiliation, thereby making it the seventh "best" mathematics department worldwide in the 2014 US News and World Report university rankings .
Here, the Saudi government is only playing by the rules of a game designed by western elites. This is the same logic that has been used to allow corporations, nonprofits and the military to steadily buy out chunks of academia to the point where it makes little sense to presume clear boundaries exist between these entities. As a result, numerous partnerships entangle MIT researchers with Bin Salman. On his Boston tour, he also visited IBM's Cambridge research facility, which recently partnered with MIT to form an artificial intelligence research laboratory in exchange for a $240m commitment to the university. Boston Dynamics , an MIT partner that builds robots for the US military, also offered a demonstration. Such alliances ought to cast doubt on MIT's promise to understand the "societal and ethical" implications of AI and build socially beneficial technologies.
The terms of all of these partnerships are essentially opaque, while the secrecy that surrounds them denies the community the chance to deliberate and take action. The growth of unaccountable university partnerships, like other crises facing educational institutions, stems from the absence of democratic engagement. When universities decide to sell themselves to the highest bidder, they become deaf to the interests of their students and the wider societies in which they operate. Subservience to war criminals and corporate overlords tends to follow.
Mar 30, 2018 | www.governing.com
State colleges and universities are relying more on tuition dollars to fund their operations even as state funding rises and colleges come under pressure to keep tuition low.
Last fiscal year, for the first time, tuition revenue outpaced government appropriations for higher education in the majority of states, according to the annual higher education finance report from the State Higher Education Executive Officers Association. The association represents chief executives of statewide governing, policy and coordinating boards of postsecondary education.
Tuition dollars are becoming a more important revenue source as more students head to college, tuition prices rise, and state lawmakers struggle to return higher education funding to the per-student levels seen before the Great Recession.
The report looked at net tuition revenue, which it defined as tuition and fees minus medical student tuition, state and institutional financial aid and other waivers and discounts. It found that tuition dollars paid by families -- a figure that includes federal grants and loans -- made up 46 percent of funding for U.S. public colleges and universities in fiscal 2017, almost double tuition's share of higher education funding in 1990.
In over half of states, the share was higher. In Vermont, New Hampshire, Delaware and Pennsylvania, over 70 percent of higher education funding came from tuition dollars last year.
Nationwide, net tuition revenue peaked as a funding source for public higher education in 2013, after the collapsing economy sent a wave of students back to school at the same time as state lawmakers were cutting funding for colleges. Since then, enrollments have fallen and state investments in higher education and financial aid have increased.
RELATED Explaining the Cost of College Tuition in Every State
Apr 02, 2018 | www.nakedcapitalism.com
Posted on March 30, 2018 by Yves Smith Yves here. See also this related Kaiser Health News story: Omissions On Death Certificates Lead To Undercounting Of Opioid Overdoses .
It takes a lot of courage for an addict to recover and stay clean. And it is sadly not news that drug addiction and high levels of prescription drug use are signs that something is deeply broken in our society. There are always some people afflicted with deep personal pain but our system is doing a very good job of generating unnecessary pain and desperation.
By Martha Bebinger of WBUR. Originally published at Kaiser Health News
Mady Ohlman was 22 on the evening some years ago when she stood in a friend's bathroom looking down at the sink.
"I had set up a bunch of needles filled with heroin because I wanted to just do them back-to-back-to-back," Ohlman recalled. She doesn't remember how many she injected before collapsing, or how long she lay drugged-out on the floor.
"But I remember being pissed because I could still get up, you know?"
She wanted to be dead, she said, glancing down, a wisp of straight brown hair slipping from behind an ear across her thin face.
At that point, said Ohlman, she'd been addicted to opioids -- controlled by the drugs -- for more than three years.
"And doing all these things you don't want to do that are horrible -- you know, selling my body, stealing from my mom, sleeping in my car," Ohlman said. "How could I not be suicidal?"
For this young woman, whose weight had dropped to about 90 pounds, who was shooting heroin just to avoid feeling violently ill, suicide seemed a painless way out.
"You realize getting clean would be a lot of work," Ohlman said, her voice rising. "And you realize dying would be a lot less painful. You also feel like you'll be doing everyone else a favor if you die."
Ohlman, who has now been sober for more than four years, said many drug users hit the same point, when the disease and the pursuit of illegal drugs crushes their will to live. Ohlman is among at least 40 percent of active drug users who wrestle with depression, anxiety or another mental health issue that increases the risk of suicide.
Measuring Suicide Among Patients Addicted To Opioids
Massachusetts, where Ohlman lives, began formally recognizing in May 2017 that some opioid overdose deaths are suicides. The state confirmed only about 2 percent of all overdose deaths as suicides, but Dr. Monica Bhare l, head of the Massachusetts Department of Public Health, said it's difficult to determine a person's true intent.
"For one thing, medical examiners use different criteria for whether suicide was involved or not," Bharel said, and the "tremendous amount of stigma surrounding both overdose deaths and suicide sometimes makes it extremely challenging to piece everything together and figure out unintentional and intentional."
Research on drug addiction and suicide suggests much higher numbers.
"[Based on the literature that's available], it looks like it's anywhere between 25 and 45 percent of deaths by overdose that may be actual suicides," said Dr. Maria Oquendo , immediate past president of the American Psychiatric Association.
Oquendo pointed to one study of overdoses from prescription opioids that found nearly 54 percent were unintentional. The rest were either suicide attempts or undetermined.
Several large studies show an increased risk of suicide among drug users addicted to opioids, especially women. In a study of about 5 million veterans, women were eight times as likely as others to be at risk for suicide, while men faced a twofold risk.
The opioid epidemic is occurring at the same time suicides have hit a 30-year high , but Oquendo said few doctors look for a connection.
"They are not monitoring it," said Oquendo, who chairs the department of psychiatry at the University of Pennsylvania. "They are probably not assessing it in the kinds of depths they would need to prevent some of the deaths."
That's starting to change. A few hospitals in Boston, for example, aim to ask every patient admitted about substance use, as well as about whether they've considered hurting themselves.
"No one has answered the chicken and egg [problem]," said Dr. Kiame Mahaniah , a family physician who runs the Lynn Community Health Center in Lynn, Mass. Is it that patients "have mental health issues that lead to addiction, or did a life of addiction then trigger mental health problems?"
With so little data to go on, "it's so important to provide treatment that covers all those bases," Mahaniah said.
'Deaths Of Despair'
When doctors do look deeper into the reasons patients addicted to opioids become suicidal, some economists predict they'll find deep reservoirs of depression and pain.
In a seminal paper published in 2015, Princeton economists Angus Deaton and Anne Case tracked falling marriage rates, the loss of stable middle-class jobs and rising rates of self-reported pain. The authors say opioid overdoses, suicides and diseases related to alcoholism are all often "deaths of despair."
"We think of opioids as something that's thrown petrol on the flames and made things infinitely worse," Deaton said, "but the underlying deep malaise would be there even without the opioids."
Many economists agree on remedies for that deep malaise. Harvard economics professor David Cutle r said solutions include a good education, a steady job that pays a decent wage, secure housing, food and health care.
"And also thinking about a sense of purpose in life," Cutler said. "That is, even if one is doing well financially, is there a sense that one is contributing in a meaningful way?"
Tackling Despair In The Addiction Community
"I know firsthand the sense of hopelessness that people can feel in the throes of addiction," said Michael Botticelli , executive director of the Grayken Center for Addiction at Boston Medical Center; he is in recovery for an addiction to alcohol.
Botticelli said recovery programs must help patients come out of isolation and create or recreate bonds with family and friends.
"The vast majority of people I know who are in recovery often talk about this profound sense of re-establishing -- and sometimes establishing for the first time -- a connection to a much larger community," Botticelli said.
Ohlman said she isn't sure why her attempted suicide, with multiple injections of heroin, didn't work.
"I just got really lucky," Ohlman said. "I don't know how."
A big part of her recovery strategy involves building a supportive community, she said.
"Meetings; 12-step; sponsorship and networking; being involved with people doing what I'm doing," said Ohlman, ticking through a list of her priorities.
There's a fatal overdose at least once a week within her Cape Cod community, she said. Some are accidental, others not. Ohlman said she's convinced that telling her story, of losing and then finding hope, will help bring those numbers down.
The National Suicide Prevention Lifeline is 800-273-8255.
This story is part of a partnership that includes WBUR , NPR and Kaiser Health News.
Mar 27, 2018 | www.nakedcapitalism.com
res ipsa loquitur although as one wag said, this news tidbit does seem to disprove the claim that young people aren't risk takers. But it may establish that they are innumerate or more specifically, bad at statistics. One of Nassim Nicholas Taleb's recommendations about investing boils down to "Be paranoid" and "Don't be greedy" and leveraged cryptocurrency speculation is the opposite of that.
This sort of thing does not help the image of student borrowers, although it does strengthen the case for regulating cryptocurrencies far more strictly. Given the decline in the status of cab drivers, who historically have been indicators of market peaks (when cab drivers talk about their stocks, it's usually sign of a bubble), this finding may also be a proof of Peak Cryptocurrency.
From Investopedia :
According to a study by The Student Loan Report, over one-fifth of current university students with student loan debt indicated that they used their student loan money to invest in digital currency such as bitcoin.
The student loan news and information website found that 21.2% of the 1,000 students they surveyed indicated that they used their borrowed cash to gamble on the highly volatile digital currency market. While school administrators may look down upon the practice of using borrowed funds for non-school expenses, Student Loan Report indicates that there are currently no rules against it. College students are able to use loans for "living expenses," a flexible category that covers a wide range of potential necessities.
Given that 70% of retail investors in futures lose money, there's not a strong reason for thinking that latecomers to the cryptocurrency party would be stellar traders. I wonder how many students who lose so much money on bad cryptocurrency wagers that it undermines their ability to finish their course of study (presumably they really did need at least some of that "living expense" money for bona fide living expenses) will be willing to 'fess up to that fact.
JTMcPhee , March 27, 2018 at 9:40 pmdjrichard , March 27, 2018 at 11:14 pm
I guess that means that almost 4/5ths of students did NOT use "loan" proceeds (which are part of the whole Casino enterprise, after all) to
gamble invest"expose themselves to market risk" by moving those bits representing "money" into the block chain spurt
And I also guess that means that the Puritans among us, and the mopes who want to make sure everyone else gets as screwed by "the system" as they have been by so diligently paying off those student loans/debt millstones, will now have a new line of argument about why the Banksters and the scum among the legislators and "loan servicers" and kickback-collecting higher-education administrators should be fully armed to go after mope students and graduates-without-portfolios-but-with-lots-of-"credentials" and their parents and other "guarantors" to extract that last full measure of blood from the turnipheads who signed on the dotted line without much of a clue that the "contract" was drafted by some Shylock named "Mephistopheles "
Say it loud, say it clear -- "#juststoppaying. No other way to end the game, is there? And yes, there will be blood, economically speaking, in the Streetocop , March 27, 2018 at 11:12 pm
It's not so much the banksters that issued these student loans as it is the Fed Gov. http://www.privatestudentloanfacts.com/the-private-student-loan-market.html
But think how it helped stimulate the economy. Except that unlike other Fed Gov spending, the Fed Gov wants this money back. D'oh! And as we know, it's very difficult to discharge student loans through bankruptcy (which at least gives the economy more slack for other debt to be paid off).
So ultimately it doesn't stimulate the economy. It just feeds various maws: the education industry and its bubble, the corporations and their inflated requirements for hiring for jobs. Edit: And the cryptocurrency bubble who knew? While subtracting from other maws: housing starts, family starts, etc.
As Mosler puts it, still the same amount of dogs chasing down the same amount of bones: https://www.youtube.com/watch?v=2vTjLwYCi24
Come on, no way this passes the smell test. Online "mobile-friendly" polling outfit (Pollfish), no additional info even in the actual source article.
I doubt you could find 20% of college students who even know where to buy crypto. Maybe, maybe you could find 20% who are more aware than "heard about it on the news".
Mar 27, 2018 | news.slashdot.org
(propublica.org) As the world's dominant technology firm, payrolls at International Business Machines swelled to nearly a quarter-million U.S. white-collar workers in the 1980s. Its profits helped underwrite a broad agenda of racial equality, equal pay for women and an unbeatable offer of great wages and something close to lifetime employment, all in return for unswerving loyalty. But when high tech suddenly started shifting and companies went global, IBM faced the changing landscape with a distinction most of its fiercest competitors didn't have: a large number of experienced and aging U.S. employees .
The company reacted with a strategy that, in the words of one confidential planning document, would "correct seniority mix." It slashed IBM's U.S. workforce by as much as three-quarters from its 1980s peak, replacing a substantial share with younger, less-experienced and lower-paid workers and sending many positions overseas. ProPublica estimates that in the past five years alone, IBM has eliminated more than 20,000 American employees ages 40 and over, about 60 percent of its estimated total U.S. job cuts during those years. In making these cuts, IBM has flouted or outflanked U.S. laws and regulations intended to protect later-career workers from age discrimination, according to a ProPublica review of internal company documents, legal filings and public records, as well as information provided via interviews and questionnaires filled out by more than 1,000 former IBM employees.
Mar 22, 2018 | www.weforum.org
"Before accounting for taxes and transfers, the U.S. ranked 10th in income inequality; among the countries with more unequal income distributions were France, the U.K. and Ireland. But after taking taxes and transfers into account, the U.S. had the second-highest level of inequality, behind only Chile. "
" The five countries with the worst income inequality -- Chile, Mexico, Turkey, the United States, and Israel -- also had the five highest poverty rates in the OECD. The relationship is not perfect, however. The United Kingdom fell just outside the five worst countries for income equality, but its poverty rate was 13th lowest among developed nations."
Suggest flipping to slide 13:
https://thediplomat.com/2013/06/government-for-the-people-in-china/ Reply 21 March 2018 at 11:41 AM JamesT said in reply to Terry... Terry
I've been thinking about this as well. I went looking for a graph of median income in China and the US over the last 20 years ... and could not find one. What I would really like to see is a graph of median income increases over the last 20 years - I would argue this is more relevant than the easy to find graphs of GDP increases.
Median income in Russia increased something like 270% in inflation adjusted terms during the first 10 years that Putin was in power. The Economist claims this was solely due to the increase in oil prices. I went looking at countries that had comparable oil-production-per-person and found that Canada (whose oil production per person is essentially identical to Russia) saw its median income increase only 9% in the same period.
This isn't to say that Putin's leadership is necessarily good in the long term, but the western press are clearly ignoring important economic statistics regarding both China and Russia. Reply 21 March 2018 at 03:10 PM Fred said in reply to Terry... Terry,
"by some measures" If you torture the data long inenough it confesses. So the US is one of the five worst in income inequality? Maybe those Chineese imigrants should all stay in China to enjoy their "percentages". Of course they might first ask just what the 400% increase in Chineese income means. Oh, that's right, the 400% increase from almost nothing to 4 times almost nothing. The negative 1% reduction in bottom 50% of income distribuiton in the US over that 4 decades resulted in:
"Median individual income for all earners in the workforce was $37,610.00, and the breakpoint to be a one-percenter (99th percentile) was $300,800.00."
So the 50% percentile in the US has a 37K icome. What is it for China, it certainly isn't 37K. That's right, acording to the link you provided it's 14,600 USD. In China, with the official exchange rate.
"but the western press are clearly ignoring important economic statistics regarding both China and Russia."
Yes indeed, they ignore the actual data and repeat out percentages with no idea of the underlying facts of how those percentages were created and not bothering to ask how they were calculated. Reply 21 March 2018 at 09:11 PM
Part 3 - A False Promise
This 'Washington Consensus' is the false promise promoted by the West. The reality is quite different. The crux of neoliberalism is to eliminate democratic government by downsizing, privatizing, and deregulating it. Proponents of neoliberalism recognize that the state is the last bulwark of protection for the common people against the predations of capital. Remove the state and they'll be left defenseless .
Think about it. Deregulation eliminates the laws. Downsizing eliminates departments and their funding. Privatizing eliminates the very purpose of the state by having the private sector take over its traditional responsibilities.
Ultimately, nation-states would dissolve except perhaps for armies and tax systems. A large, open-border global free market would be left, not subject to popular control but managed by a globally dispersed, transnational one percent. And the whole process of making this happen would be camouflaged beneath the altruistic stylings of a benign humanitarianism.
Globalists, as neoliberal capitalists are often called, also understood that democracy, defined by a smattering of individual rights and a voting booth, was the ideal vehicle to usher neoliberalism into the emerging world. Namely because democracy, as commonly practiced, makes no demands in the economic sphere. Socialism does. Communism does. These models directly address ownership of the means of production. Not so democratic capitalism. This permits the globalists to continue to own the means of production while proclaiming human rights triumphant in nations where interventions are staged.
The enduring lie is that there is no democracy without economic democracy.
What matters to the one percent and the media conglomerates that disseminate their worldview is that the official definitions are accepted by the masses. The real effects need never be known. The neoliberal ideology (theory) thus conceals the neoliberal reality (practice). And for the masses to accept it, it must be mass produced. Then it becomes more or less invisible by virtue of its universality.
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Mar 03, 2018 | www.nakedcapitalism.com
Paul Cardan , March 2, 2018 at 3:12 pm
"[Capitalism] has been the greatest engine of, it's been the greatest anti-poverty program and engine of progress that we've seen."
I can almost smell the economics section of my local bookstore. Strange science, economics. Judging from the titles, much of it consists of cheerleading. Very different from history, anthropology, or sociology.
I never see history titles like Bronze Age: Greatest Age EVAH! It's surprising economists feel the need to engage in happy talk, considering that markets are supposed to be natural, just, and efficient. Like clergy preaching to a perpetually backsliding laity about the one true God, Whom only a fool would doubt. If God were so great, there'd be no need to harp on it. In any case, this goes some way toward accounting for Bennet's statement.
It takes a half-educated person to say something like that. First you get the ideas by way of a certain education, and then you don't think about them, in part because the educators discourage that kind of thing.
Feb 22, 2018 | angrybearblog.com
Karl Kolchak, February 21, 2018 11:38 pmLongtooth , February 22, 2018 8:04 pm
" liberals are concerned about minorities and the poor."
What a joke. "Liberals" stopped caring about those things after Clinton showed them the "third way," which was really just a way to be kinder, gentler conservatives.
LEFTISTS still care about minorities and the poor, which is why liberals do everything in their power to keep them from ever getting elected and would rather throw an election to someone like Trump than let Bernie Sanders be president.
Here's paper that economistsview just linked to today. It traces the events leading to Trump -- or shall I say leading to the recognition by those that have been economically disenfranchised which led to Trump.
In it's composite as well as most (though not all) causes the paper describes, it is the best and most well-founded causations history I've come across directly relating to "Divide & Rule".
Feb 23, 2018 | economistsview.typepad.com
On the link between US pay and productivity, by Anna Stansbury and Lawrence Summers, VoxEU :
Pay growth for middle class workers in the US has been abysmal over recent decades – in real terms, median hourly compensation rose only 11% between 1973 and 2016. 1 At the same time, hourly labour productivity has grown steadily, rising by 75%.
This divergence between productivity and the typical worker's pay is a relatively recent phenomenon. Using production/nonsupervisory compensation as a proxy for median compensation (since there are no data on the median before 1973), Bivens and Mishel (2015) show that typical compensation and productivity grew at the same rate over 1948-1973, and only began to diverge in 1973 (see Figure 1).
Figure 1 Labour productivity, average compensation, and production/nonsupervisory compensation 1948-2016
Notes : Labour productivity: total economy real output per hour (constructed from BLS and BEA data). Average compensation: total economy compensation per hour (constructed from BLS data). Production/nonsupervisory compensation: real compensation per hour, production and nonsupervisory workers (Economic Policy Institute).What does this stark divergence imply about the relationship between productivity and typical compensation? Since productivity growth has been so much faster than median pay growth, the question is how much does productivity growth benefit the typical worker? 2
A number of authors have raised these questions in recent years. Harold Meyerson, for example, wrote in American Prospect in 2014 that "for the vast majority of American workers, the link between their productivity and their compensation no longer exists", and the Economist wrote in 2013 that "unless you are rich, GDP growth isn't doing much to raise your income anymore". Bernstein (2015) raises the concern that "[f]aster productivity growth would be great. I'm just not at all sure we can count on it to lift middle-class incomes." Bivens and Mishel (2015) write "although boosting productivity growth is an important long-run goal, this will not lead to broad-based wage gains unless we pursue policies that reconnect productivity growth and the pay of the vast majority".
Has typical compensation delinked from productivity?
Figure 1 appears to suggest that a one-to-one relationship between productivity and typical compensation existed before 1973, and that this relationship broke down after 1973. On the other hand, just as two time series apparently growing in tandem does not mean that one causes the other, two series diverging may not mean that the causal link between the two has broken down. Rather, other factors may have come into play which appear to have severed the connection between productivity and typical compensation.
As such there is a spectrum of possibilities for the true underlying relationship between productivity and typical compensation. On one end of the spectrum – which we call 'strong delinkage' – it's possible that factors are blocking the transmission mechanism from productivity to typical compensation, such that increases in productivity don't feed through to pay. At the opposite end of the spectrum – which we call 'strong linkage' – it's possible that productivity growth translates fully into increases in typical workers' pay, but even as productivity growth has been acting to raise pay, other factors (orthogonal to productivity) have been acting to reduce it. Between these two ends of the spectrum is a range of possibilities where some degree of linkage or delinkage exists between productivity and typical compensation.
In a recent paper, we estimate which point on this linkage-delinkage spectrum best describes the productivity-typical compensation relationship (Stansbury and Summers 2017). Using medium-term fluctuations in productivity growth, we test the relationship between productivity growth and two key measures of typical compensation growth: median compensation, and average compensation for production and nonsupervisory workers.
Simply plotting the annual growth rates of productivity and our two measures of typical compensation (Figure 2) suggests support for quite substantial linkage – the series seem to move together, although typical compensation growth is almost always lower.
Figure 2 Change in log productivity and typical compensation, three-year moving average
Notes : Data from BLS, BEA and Economic Policy Institute. Series are three-year backward-looking moving averages of change in log variable.Making use of the high frequency changes in productivity growth over one- to five-year periods, we run a series of regressions to test this link more rigorously. We find that periods of higher productivity growth are associated with substantially higher growth in median and production/nonsupervisory worker compensation – even during the period since 1973, where productivity and typical compensation have diverged so much in levels. A one percentage point increase in the growth rate of productivity has been associated with between two-thirds and one percentage point higher growth in median worker compensation in the period since 1973, and with between 0.4 and 0.7 percentage points higher growth in production/nonsupervisory worker compensation. These results suggest that there is substantial linkage between productivity and median compensation (even the strong linkage view cannot be rejected), and that there is a significant degree of linkage between productivity and production/nonsupervisory worker compensation.
How is it possible to find this relationship when productivity has clearly grown so much faster than median workers' pay? Our findings imply that even as productivity growth has been acting to push workers' pay up , other factors not associated with productivity growth have acted to push workers' pay down . So while it may appear on first glance that productivity growth has not benefited typical workers much, our findings imply that if productivity growth had been lower, typical workers would have likely done substantially worse.
If the link between productivity and pay hasn't broken, what has happened?
The productivity-median compensation divergence can be broken down into two aspects of rising inequality: the rise in top-half income inequality (divergence between mean and median compensation) which began around 1973, and the fall in the labour share (divergence between productivity and mean compensation) which began around 2000.
For both of these phenomena, technological change is often invoked as the primary cause. Computerisation and automation have been put forward as causes of rising mean-median income inequality (e.g. Autor et al. 1998, Acemoglu and Restrepo 2017); and automation, falling prices of investment goods, and rapid labour-augmenting technological change have been put forward as causes of the fall in the labour share (e.g. Karabarbounis and Neiman 2014, Acemoglu and Restrepo 2016, Brynjolffson and McAfee 2014, Lawrence 2015).
At the same time, non-purely technological hypotheses for rising mean-median inequality include the race between education and technology (Goldin and Katz 2007), declining unionisation (Freeman et al. 2016), globalisation (Autor et al. 2013), immigration (Borjas 2003), and the 'superstar effect' (Rosen 1981, Gabaix et al. 2016). Non-technological hypotheses for the falling labour share include labour market institutions (Levy and Temin 2007, Mishel and Bivens 2015), market structure and monopoly power (Autor et al. 2017, Barkai 2017), capital accumulation (Piketty 2014, Piketty and Zucman 2014), and the productivity slowdown itself (Grossman et al. 2017).
While we do not analyse these theories in detail, a simple empirical test can help distinguish the relative importance of these two categories of explanation – purely technology-based or not – for rising mean-median inequality and the falling labour share. More rapid technological progress should cause faster productivity growth – so, if some aspect of faster technological progress has caused inequality, we should see periods of faster productivity growth come alongside more rapid growth in inequality.
We find very little evidence for this. Our regressions find no significant relationship between productivity growth and changes in mean-median inequality, and very little relationship between productivity growth and changes in the labour share. In addition, as Table 1 shows, the two periods of slower productivity growth (1973-1996 and 2003-2014) were associated with faster growth in inequality (an increasing mean/median ratio and a falling labour share).
Taken together, this evidence casts doubt on the idea that more rapid technological progress alone has been the primary driver of rising inequality over recent decades, and tends to lend support to more institutional and structural explanations.
Table 1 Average annual growth rates of productivity, the labour share and the mean/median ratio during the US' productivity booms and productivity slowdowns
mulp , February 20, 2018 at 12:08 PMThe 70s was when the ideology of free lunch economics was born and then rose to take over virtually the entirety of economics.Christopher H. , February 20, 2018 at 04:13 PM
Even Krugman adopts a lot of free lunch economics.
In free lunch economics, costs are dependent on price, not price dependent on costs. And profits rising on maximum efficiency, maximum factor utilization, not profits going to zero when factor utilization and efficiency are maximized.
Free lunch economics is the opposite of Keynesian principles. Free lunch economists prescribe the opposite of what Keynes prescribed in similar circumstances.
Keynes called for maximizing aggregate labor costs. Free lunch economists call for minimizing aggregate labor costs.
As all real economic costs are labor costs, everything else being profits and rents, when Bernie bros call for lower costs, or oppose higher costs, they are arguing for lower labor costs, lower wages. Economics is zero sum.
Food costs are low because of government subsidies and government policies promoting low labor costs, low wages.
Progressives should be opposed to SNAP and food banks which are directly or indirectly government funded/subsidized. The solution is to ensure jobs are available than pay wages high enough to buy food that farmers sell at high prices which allow them to pay all their bills.
FDR and Congress set price floors for many goods, and paid workers living wages to do productive work. Conservatives fought these measures to increase costs. Note Hoover was very interested in building capital assets, but he wanted workers to be paid as little as possible, and as few as possible. He promoted working workers to death to cut costs, even when the assets built would certainly generate high returns over their useful lives.
Friedman created the intellectual free lunch theory to justify Hoover's business theory applied to government policy.
Friedman invented the free lunch welfare handout to make the free lunch economy work, because he knew economies are zero sum. Instead of SNAP which is restricted cash, he called for unrestricted cash so labor costs could be cut to increase profits, with government free lunch handouts given to workers to pay the high profits on the goods they were paid to produce.
Again, this is contrary to Keynes and FDR.
Yet Bernie progressives call for Friedman's free lunch economics subsidy of profits in consumer spending subsidies to enable low wages and high profits.
This research and paper merely provide evidence that Friedman's free lunch economics have driven public policy and private sector investment.
Milton Friedman's free lunch economics principles have successfully driven lower productivity growth as he intended, based on his Newsweek articles circa 1970, and based on other 70s era statements and lectures.What does Summers propose to do to increase productivity? Work the workers harder?RGC , February 21, 2018 at 04:07 AM
The low hanging fruit is full employment which as Dean Baker and others have discussed will spur productivity growth.
We are seeing an experiment right now with low unemployment.
Unions lost bargaining power since Reagan.llisa2u2 , February 21, 2018 at 04:50 AM
Illegal immigrant labor took menial jobs (meatpacking, landscaping, construction).
The government stopped prosecuting employers for hiring illegal immigrants.
Manufacturing jobs went overseas.
Foreign manufacturers located in right-to-work states.
US Manufacturers stopped competing with foreigners because it was too hard and the profit was too low (GE).
The potential drop in GDP was replaced by borrowing:
OMG- how many understatements can be written, without acknowledging basic facts and truth.llisa2u2 , February 21, 2018 at 05:06 AM
A good place to start would be a similar, I mean really similar, and use CEO pay. Come on lets see a CEO pay VS productivity - the CEO's sure aren't doing the work, and neither are the midline managers. Come on lets see some real good charts on "divergence" factors starting in 1973. Quit the BS. The economy is presently increasing based on human predation. Ignore it, til it stares you in the face, upfront and personal.https://www.advisorperspectives.com/dshort/updates/2018/02/15/five-decades-of-middle-class-wages-january-2017-updateRGC , February 21, 2018 at 05:10 AMhttp://www.slate.com/articles/business/the_united_states_of_debt/2016llisa2u2 , February 21, 2018 at 05:11 AM
I couldn't find one at FRED.
Five Charts That Show Americans Families' Debt Crisis
U.S. households owe trillions in student loans, credit card loans, auto loans, and mortgages.
By Chris Kirk
http://www.slate.com/culture/2018/02/trevor-noah-has-some-terrible-ideas-for-addressing-school-shootings.htmlhttps://www.advisorperspectives.com/dshort/updates/2017/09/19/u-s-household-incomes-a-50-year-perspectivellisa2u2 , February 21, 2018 at 05:13 AM
Spinning, Spinning- yeah let's hear some more from left and right!Trickling down is NON-FACT.llisa2u2 , February 21, 2018 at 05:22 AM
SUCKING UP is "INDEED" the real fact of the economic dynamics over the last 50 years.In my effort to help counter the blatant irresponsibility of not only..... but also, practically every leading economist worldwide- here EV- start interviewing and publishing this man's works- https://www.sciencedirect.com/science/article/pii/S1057521914001070llisa2u2 , February 21, 2018 at 05:32 AMFrom cited link- for those who want the reason why, I even posted a link on banking, when this article is on labor divergence etc. etc.Christopher H. , February 21, 2018 at 09:54 AM
5.4.1. Implications for economic theory
The empirical evidence shows that of the three theories of banking, it is the one that today has the least influence and that is being belittled in the literature that is supported by the empirical evidence. Furthermore, it is the theory which was widely held at the end of the 19th century and in the first three decades of the twentieth. It is sobering to realise that since the 1930s, economists have moved further and further away from the truth, instead of coming closer to it. This happened first via the half-truth of the fractional reserve theory and then reached the completely false and misleading financial intermediation theory that today is so dominant. Thus this paper has found evidence that there has been no progress in scientific knowledge in economics, finance and banking in the 20th century concerning one of the most important and fundamental facts for these disciplines. Instead, there has been a regressive development. The known facts were unlearned and have become unknown. This phenomenon deserves further research. For now it can be mentioned that this process of unlearning the facts of banking could not possibly have taken place without the leading economists of the day having played a significant role in it. The most influential and famous of all 20th century economists, as we saw, was a sequential adherent of all three theories, which is a surprising phenomenon. Moreover, Keynes used his considerable clout to slow scientific analysis of the question whether banks could create money, as he instead engaged in ad hominem attacks on followers of the credit creation theory. Despite his enthusiastic early support for the credit creation theory (Keynes, 1924), only six years later he was condescending, if not dismissive, of this theory, referring to credit creation only in inverted commas. He was perhaps even more dismissive of supporters of the credit creation theory, who he referred to as being part of the "Army of Heretics and Cranks, whose numbers and enthusiasm are extraordinary", and who seem to believe in "magic" and some kind of "Utopia" (Keynes, 1930, vol. 2, p. 215).33
Needless to mention, such rhetoric is not conducive to scientific argument. But this technique was followed by other economists engaged in advancing the fractional reserve and later financial intermediation theories. US Federal Reserve staffer Alhadeff (1954) argued similarly during the era when economists worked on getting the fractional reserve theory established:
"One complication worth discussing concerns the alleged "creation" of money by bankers. It used to be claimed that bankers could create money by the simple device of opening deposit accounts for their business borrowers. It has since been amply demonstrated that under a fractional reserve system, only the totality of banks can expand deposits to the full reciprocal of the reserve ratio. [Original footnote: 'Chester A. Phillips, Bank Credit (New York: Macmillan, 1921), chapter 3, for the classical refutation of this claim.'] The individual bank can normally expand to an amount about equal to its primary deposits" (p. 7).
The creation of credit by banks had become, in the style of Keynes (1930), an "alleged 'creation'", whereby rhetorically it was suggested that such thinking was simplistic and hence could not possibly be true. Tobin used the rhetorical device of abductio ad absurdum to denigrate the credit creation theory by incorrectly suggesting it postulated a 'widow's cruse', a miraculous vessel producing unlimited amounts of valuable physical goods, and thus its followers were believers in miracles or utopias.
This same type of rhetorical denigration of and disengagement with the credit creation theory is also visible in the most recent era. For instance, the New Palgrave Money (Eatwell et al., 1989), is an influential 340-page reference work that claims to present a 'balanced perspective on each topic' (Eatwell et al., 1989, p. viii). Yet the financial intermediation theory is dominant, with a minor representation of the fractional reserve theory. The credit creation theory is not presented at all, even as a possibility. But the book does include a chapter entitled "Monetary cranks". In this brief chapter, Keynes' (1930) derogatory treatment of supporters of the credit creation theory is updated for use in the 1990s, with sharpened claws: Ridicule and insult is heaped on several fateful authors that have produced thoughtful analyses of the economy, the monetary system and the role of banks, such as Nobel laureate Sir Frederick Soddy (1934) and C.H. Douglas (1924). Even the seminal and influential work by Georg Friedrich Knapp (1905), still favourably cited by Keynes (1936), is identified as being created by a 'crank'. What these apparently wretched authors have in common, and what seems to be their main fault, punishable by being listed in this inauspicious chapter, is that they are adherents of the credit creation theory. But, revealingly, their contributions are belittled without it anywhere being stated what their key tenets are and that their analyses centre on the credit creation theory, which itself remains unnamed and is never spelled out. This is not a small feat, and leaves one pondering the possibility that the Eatwell et al. (1989) tome was purposely designed to ignore and distract from the rich literature supporting the credit creation theory. Nothing lost, according to the authors, who applaud the development that due to
"the increased emphasis given to monetary theory by academic economists in recent decades, the monetary cranks have largely disappeared from public debate " (p. 214).
And so has the credit creation theory. Since the tenets of this theory are never stated in Eatwell et al. (1989), the chapter on 'Cranks' ends up being a litany of ad hominem denigration, defamation and character assassination, liberally distributing labels such as 'cranks', 'phrase-mongers', 'agitators', 'populists', and even 'conspiracy theorists' that believe in 'miracles' and engage in wishful thinking, ultimately deceiving their readers by trying to "impress their peers with their apparent understanding of economics, even though they had no formal training in the discipline" (p. 214). All that we learn about their actual theories is that, somehow, these ill-fated authors are "opposed to private banks and the 'Money Power' without their opposition leading to more sophisticated political analysis" (p. 215). Any reading of the highly sophisticated Soddy (1934) quickly reveals such labels as unfounded defamation.
To the contrary, the empirical evidence presented in this paper has revealed that the many supporters of the financial intermediation theory and also the adherents of the fractional reserve theory are flat-earthers that believe in what is empirically proven to be wrong and which should have been recognisable as being impossible upon deeper consideration of the accounting requirements. Whether the authors in Eatwell et al. (1989) did in fact know better is an open question that deserves attention in future research. Certainly the unscientific treatment of the credit creation theory and its supporters by such authors as Keynes, who strongly endorsed the theory only a few years before authoring tirades against its supporters, or by the authors in Eatwell et al. (1989), raises this possibility.
5.4.2. Implications for government policy
There are other, far-reaching ramifications of the finding that banks individually create credit and money when they do what is called 'lending money'. It is readily seen that this fact is important not only for monetary policy, but also for fiscal policy, and needs to be reflected in economic theories. Policies concerning the avoidance of banking crises, or dealing with the aftermath of crises require a different shape once the reality of the credit creation theory is recognised. They call for a whole new paradigm in monetary economics, macroeconomics, finance and banking (for details, see for instance Werner, 1997, 2005, 2012, 2013a,b) that is based on the reality of banks as creators of the money supply. It has potentially important implications for other disciplines, such as accounting, economic and business history, economic geography, politics, sociology and law.
5.4.3. Implications for bank regulation
The implications are far-reaching for bank regulation and the design of official policies. As mentioned in the Introduction, modern national and international banking regulation is predicated on the assumption that the financial intermediation theory is correct. Since in fact banks are able to create money out of nothing, imposing higher capital requirements on banks will not necessarily enable the prevention of boom–bust cycles and banking crises, since even with higher capital requirements, banks could still continue to expand the money supply, thereby fuelling asset prices, whereby some of this newly created money can be used to increase bank capital. Based on the recognition of this, some economists have argued for more direct intervention by the central bank in the credit market, for instance via quantitative credit guidance (Werner, 2002, 2003a, 2005).
5.4.4. Monetary reform
The Bank of England's (2014b) recent intervention has triggered a public debate about whether the privilege of banks to create money should in fact be revoked (Wolf, 2014). The reality of banks as creators of the money supply does raise the question of the ideal type of monetary system. Much research is needed on this account. Among the many different monetary system designs tried over the past 5000 years, very few have met the requirement for a fair, effective, accountable, stable, sustainable and democratic creation and allocation of money. The view of the author, based on more than twenty-three years of research on this topic, is that it is the safest bet to ensure that the awesome power to create money is returned directly to those to whom it belongs: ordinary people, not technocrats. This can be ensured by the introduction of a network of small, not-for-profit local banks across the nation. Most countries do not currently possess such a system. However, it is at the heart of the successful German economic performance in the past 200 years. It is the very Raiffeisen, Volksbank or Sparkasse banks – the smaller the better – that were helpful in the implementation of this empirical study that should serve as the role model for future policies concerning our monetary system. In addition, one can complement such local public bank money with money issued by local authorities that is accepted to pay local taxes, namely a local public money that has not come about by creating debt, but that is created for services rendered to local authorities or the community. Both forms of local money creation together would create a decentralised and more accountable monetary system that should perform better (based on the empirical evidence from Germany) than the unholy alliance of central banks and big banks, which have done much to create unsustainable asset bubbles and banking crises (Werner, 2013a,b).
AND, be sure to read why a lot of present economist's are so OFF "talking points" that they don't know they are even off the fundamental talking points, and way off track! You have to start reading the Werner article from the beginning to understand that preceding exclamatory sentence.
Here's something for the Neolibros who desperately want an excuse for why Hillary lost to the orange clown.Christopher H. said in reply to kurt... , February 21, 2018 at 06:24 PM
Confessions of a Russiagate Skeptic
Why I have my doubts about whether Trump colluded with Moscow.
By BLAKE HOUNSHELL February 18, 2018
f, like me, you've been following every twist and turn of the Russia investigations, you've probably wrestled with the same question that has been gnawing at me for more than a year now: What if there's nothing there?
No, I'm not denying the voluminous evidence that Russia, at Kremlin strongman Vladimir Putin's personal direction, sought to meddle in the 2016 election, and that Donald Trump was clearly his man. The indictment on Friday of 13 Russians -- and the incredible forensic detail in the 37-page complaint filed by Special Counsel Robert Mueller's team -- ought to have convinced any reasonable person that the Russia investigation is definitely a somethingburger. But what kind of somethingburger is it?
President Trump has seized on Deputy Attorney General Rod Rosenstein's statement that "there is no allegation in the indictment that any American was a knowing participant in this illegal activity" to say that the special counsel has vindication his oft-repeated refrain that there was "NO COLLUSION" between Russia and the Trump campaign. This is obviously nonsense -- the key words in Rosenstein's remarks being "in the indictment," which in any case dealt only with a sliver of Russian efforts to tilt the election in Trump's favor.
Of course, Mueller has put some serious points on the board. In addition to the 13 Russians and three Russian organizations from Friday's indictments, we've also seen two indictments of Trump associates thus far -- former Trump campaign chairman/manager Paul Manafort and his wingman Rick Gates -- and two plea bargains, from sometime national security adviser Michael Flynn and volunteer campaign adviser George Papadapoulos. There is also other stuff hanging out there -- most of all Donald Trump Jr.'s infamous meeting in Trump Tower, the one he enthusiastically scheduled after being told the Russians on offer had dirt on Hillary Clinton. Mueller's team has had nothing to say -- yet? -- about the hacked emails of the Democratic National Committee or Clinton campaign chairman John Podesta. And there is no indication, despite the professed optimism of White House lawyer Ty Cobb, that they are wrapping up anytime soon.
There are, of course, odd aspects of Trump's behavior that arouse suspicions. His obsequious praise of Putin. The aborted effort to roll back the old Russia sanctions, and the failure to enforce the new ones. His refusal to accept that Moscow meddled in the election, despite the conclusions of his own staff, the intelligence community and pretty much everyone looking at the evidence in good faith. Firing his FBI director and reportedly ordering the firing of the special counsel. His constant fulminations against the "Russia hoax." The fact that he hasn't directed any effort to safeguard the 2018 midterms. If Trump is guilty, he sure is acting like it.
And there is the fact Trump aides have repeatedly lied about the fact, and extent, of contact between campaign officials and Russia. If the Trump Tower meeting was as innocuous as Donald Jr. says it was, for instance, why the misleading claim that it was about "adoptions"?
I keep coming back the slapdash nature of Trump's 2016 operation, and the chaos and dysfunction that everyone who covered that campaign saw play out each day. Like the Trump White House, the Trump campaign was a viper's nest of incompetence and intrigue, with aides leaking viciously against one another almost daily. So much damaging information poured out of Trump Tower that it's hard to believe a conspiracy to collude with Moscow to win the election never went public. If there was such a conspiracy, it must have been a very closely guarded secret.
Then there's the Trump factor to consider. Here's a man who seems to share every thought that enters his head, almost as soon as he enters it. He loves nothing more than to brag about himself, and he's proven remarkably indiscreet in the phone calls he makes with "friends" during his Executive Time -- friends who promptly share the contents of those conversations with D.C. reporters. If Trump had cooked up a scheme to provide some favor to Putin in exchange for his election, wouldn't he be tempted to boast about it to someone?
And there are aspects of the Russia scandal, too, that don't quite add up for me. Take Flynn's plea bargain. As Preet Bharara, the former U.S. attorney for the Southern District of New York, noted after the deal became public, prosecutors usually prefer to charge participants in a conspiracy with charges related to the underlying crime. But Flynn pleaded guilty only to lying to the FBI, which Bharara surmised suggests might mean Mueller didn't have much on him. It certainly seems unlikely that any prosecutor would charge Flynn for violating the 219-year-old Logan Act, a constitutionally questionable law that has never been tested in court, for his chats with the Russian ambassador. It's not even clear if the (stupid) idea of using secure Russian communications gear, as Flynn and Trump's son-in-law Jared Kushner reportedly considered doing, would have been a crime.
Then there is Papadopoulos, the hapless campaign volunteer who drunkenly blabbed to the Australian ambassador to London that the Russians were sitting on loads of hacked emails. He, likewise, confessed only to lying to the FBI. Papadopoulos desperately tried to arrange meetings between Trump or top Trump officials and Russians, which apparently never happened. Papadopoulos has been cooperating with Mueller for months, but how much does he really have to offer? He seems like an attention-seeking wannabe -- the kind who puts "Model U.N. participant" on his resume.
Speaking of attention-seeking wannabes, Carter Page was another volunteer campaign adviser who was enthusiastic about collaborating with Russia. His writings and comments suggest he has been a Putin apologist for years. But anyone who has seen Page's TV interviews or read through his congressional testimony can tell that there's something not quite right about him. He's apparently broke, doesn't have a lawyer, and has issued lengthy, bizarre statements comparing himself to Martin Luther King, Jr. Back in 2013, when a Russian agent tried to recruit Page, he described him as too much of an "idiot" to bother with. This is the mastermind of the Russia scandal?
As for Manafort and Gates, the charges against them are serious and detailed. They stand accused of failing to register as foreign agents for their overseas work, as well as various offenses related to money laundering. But Mueller has yet to charge them with any crimes related to their work on the Trump campaign. Gates is reportedly working out a cooperation deal with Mueller's team -- perhaps he has stories to tell. And we can't rule out the idea that Mueller is prepared to file superseding charges against either or both of the two men. But so far, their alleged crimes seem unrelated to 2016.
There is, of course, plenty of public evidence that Trump was all too happy to collude with Putin. "Russia, if you're listening, I hope you're able to find the 30,000 emails that are missing," springs to mind, not to mention Trump's endless invocation of WikiLeaks in the closing weeks of the 2016 campaign. What's particularly eerie, too, is how Trump's divisive racial rhetoric and claims about how the election was going to be "rigged" in favor of Hillary Clinton echoes the messages described in Mueller's latest indictment. Not to mention the voluminous fodder Trump has given Mueller for a (very) hypothetical obstruction of justice case.
Mueller's team doesn't leak, and he's repeatedly surprised us, as he did again on Friday. But I'm still waiting for a smoking gun -- and the special counsel hasn't shown us one yet, assuming he ever will.
We'll see when Mueller finally wraps up his investigation, but we know that garbage people like you and Yggies are taking this opportunity to attack the Left even though there is on evidence for it.kurt -> Christopher H.... , February 22, 2018 at 09:51 AM
Bernie and Jill Stein supporters aren't implicated at all and only scum like you would suggest so. No doubt you are paid by DNC Super PACs.
Russiagate Targets the Left
Liberal conspiracy theorists are using Russiagate to smear Bernie Sanders and Jill Stein. How long until they come for you?
id Russia conspire to put its thumb on the scales for Bernie Sanders and Jill Stein in 2016?
If you've paid any attention to mainstream coverage of Robert Mueller's indictment of the Russians involved in running an online troll farm that opposed Hillary Clinton's campaign, then you're probably certain the answer is "yes." There's been no shortage of headlines declaring that the accused -- typically referred to simply as "Russians" -- "tried to help" or "aimed to help" the two left-wing candidates, or that they "appear to have been helped by Russian election interference." Even the New York Times, the paper of record, declared that the company, Internet Research Agency, aimed to "bolster" Sanders and Stein's candidacies.
You'll find this same narrative on the nominally liberal MSNBC. Stein was grilled on MSNBC about the Russian attempt to "boost" her campaign. Meanwhile, Ari Melber, one of the network's pundits, seemed to suggest there was something fishy going on between Sanders and the Russian trolls with an innuendo-laden question to Democratic Sen. Richard Blumenthal.
"It says in here that Donald Trump was the main intended beneficiary, and Bernie Sanders was the other major party candidate who was a beneficiary," said Melber. "Neither of them have clearly stood up today and said: 'I don't want that help from the Russians, please don't do that kind of thing for me, and anything that happened, I disclaim.'"
It all sounds pretty damning. Until you read the actual indictment.
Fast and Loose
The sole reference to Stein in the nearly 10,000-word document is a sentence that mentions one single Instagram post from Blacktivist, an account controlled by the company, saying: "Choose peace and vote for Jill Stein. Trust me, it's not a wasted vote."
Sanders, meanwhile, appears twice. The first mention is when the document states the company's work was "primarily intended to communicate derogatory information about Hillary Clinton and to support Bernie Sanders and then-candidate Donald Trump." The second is a few lines down, when it provides an example of this support: an outline of themes for future content that was circulated around the company, urging employees to "use any opportunity to criticize Hillary and the rest (except Sanders and Trump -- we support them)." The indictment doesn't specify anything else, including any examples of material support for Sanders's campaign.
These scant references comprise the sole basis for headline after headline about the Kremlin-backed trolls working for Sanders and Stein's campaigns. Some Clinton backers such as Joy-Ann Reid uncritically spread the narrative that "Russia was helping Jill Stein and Sanders," while others used it as a launching pad to suggest Sanders was knowingly in cahoots with the Russian efforts.
MSNBC's Melber has been particularly dogged in pushing this narrative. Despite the lack of evidence in the indictment, Melber claimed on his show that "Mueller has shown that [the Russians] spent 2016 pushing another campaign to elect Bernie Sanders."
When Sanders, appearing on Meet the Press, said that the trolls only began flooding pro-Sanders Facebook pages with anti-Clinton content after she had already won the nomination -- a claim backed up by previous reporting -- Melber pushed back.
"That may be how Sanders remembers it," said Melber. "But now we know it began much earlier with those February marching orders, and the very next month a Sanders volunteer, John Mattes, says a 'huge wave of fake news stories' slamming Clinton from abroad targeted Sanders supporters."
The quote that Melber is referring to -- "huge wave of fake news stories" -- comes from this Guardian piece from July 2017. It also happens to have been wildly misrepresented by Melber.
For one, the words were never uttered by Mattes, a Sanders campaign volunteer in California and investigative journalist who played a role in bringing the Iran-Contra scandal to light in the 1980s. Rather, the phrase was used by the Guardian article's author, Julian Borger. Secondly, at no point is it stated that this "wave" was targeting Sanders supporters. In fact, reading the whole passage it's clear that neither Borger nor Mattes was saying that the "wave" had anything to do with Sanders at all. Here is the passage in full:
A huge wave of fake news stories originating from eastern Europe began washing over the presidential election months earlier, at the height of the primary campaign. John Mattes, who was helping run the outline campaign for the Democratic candidate Bernie Sanders from San Diego, said it really took off in March 2016.
"In a 30-day period, dozens of full-blown sites appeared overnight, running full level productions posts. It screamed out to me that something strange was going on," Mattes said. Much of the material was untraceable, but he tracked 40 percent of the new postings back to eastern Europe.
In fact, publicly available interviews with Mattes make this clear, such as this NBC 7 interview in which Mattes explains what led him to look into the troll activity in the first place.
"Hundreds and hundreds of people were joining Bernie Sanders pages on Facebook for a campaign that was over. It made no sense," he told the network.
I spoke to Mattes, who confirmed as much.
"I did not do that, at all," he said about the claim that he looked into troll activity on pro-Sanders pages during the primaries. "Anybody who says that I knew what was happening in March 2016 is misconstruing what I've said publicly."
Mattes, who says he was never consulted by MSNBC about Melber's use of his quote, adds that he has "not seen any reporting that there was material assistance that would have helped" Sanders during the primaries. While he does say that he found Sanders page administrators around the country complaining about fake news sites being posted on their pages, that was in May, and was largely haphazard. The trolls didn't appear to target California, for instance, even though it was clear by at least mid-May that the state was the Sanders's campaign's last hope.
"Had there been an outrageous blasting of Hillary Clinton on our Facebook pages in the outrageous manner that occurred after the convention, I would've noticed it," says Mattes. "If the Russians had really wanted to help Bernie, our last stand was in California, and I didn't see it."
As of the time of writing, Melber's segment is still available for viewing online on the MSNBC website, even though Mattes says he contacted MSNBC to register his objections regarding the misquote. I reached out to Melber and MSNBC and asked them if they plan on issuing a public retraction. This story will be updated with their response.
It appears, then, that the widespread claim that "the Russians" were helping Sanders's campaign, and did so during the primaries, is fake news -- much like the kind that those advancing this narrative accuse the Kremlin of spreading to subvert American democracy.
What appears to have happened here is a marked collapse of basic journalistic standards. Various news outlets and pundits have created a narrative about Russian material support for left-wing presidential candidates based on precisely three references in a thirty-seven-page document that don't actually provide evidence of such a thing. Ari Melber, meanwhile, misattributed and misrepresented a quote from a year-old article and never bothered to speak to the individual he was supposedly quoting -- all for the purposes of quickly and falsely debunking Sanders's defense of his campaign.
A less charitable interpretation is that the media -- unfriendly towards Sanders, uncritical of the national security establishment, and predisposed to run sensational stories about Russian interference -- ran headfirst into a story that seemed to be an ideal blend of these two trends, facts be damned.
The widespread adoption of this narrative as a cudgel wielded against prominent left-wing political figures, often by liberals, shows the danger of the current political climate, in which liberal anchors openly speculate whether their political opponents are foreign agents. The moment such accusations are turned leftward is never far away.
Look at what's happening in the Mexican presidential race. The current front-runner is a left-wing, anti-Trump populist running on a platform promising to renegotiate NAFTA, establish a universal pension, pump billions into infrastructure spending, and undo the current president's privatization of gas and oil fields. One Bloomberg op-ed charged he would be an ideal beneficiary of a Putin-backed disinformation campaign. Another, this time at the Washington Post, asserted that Putin "may" be working to help him, an unsupported charge repeated by one of his opponent's aides in January.
Those hostile to left-wing causes have also made use of the accusation of Russia meddling. Texas Republican Lamar Smith, a man saturated with the fumes of fossil fuel industry money, has accused anti-fracking environmental groups and Facebook ads of being funded by the Kremlin. Others have also hyped up the work of Russian troll farms in promoting black activism and the Dakota Access Pipeline protests. It brings to mind the intelligence assessment released by the Directorate of National Intelligence last January, which, in lieu of detailing evidence for the Russian hacking of the DNC, instead cited Russia Today's coverage of US wealth inequality, police brutality, mass surveillance, corruption, fracking, and more as examples of Russian propaganda.
And in the future, such attacks can easily be turned on the liberals now weaponizing Russiagate. What would happen if and when a Kremlin-backed disinformation campaign appeared to come to the aid of the Democrats in a future election? It's not so far-fetched: the legal analysis website Law & Crime recently reported that the pundit most retweeted by the trolls indicted by Robert Mueller was MSNBC's very own Joy-Ann Reid, who received around ten times more retweets than Sanders from the same trolls. It remains to be seen if news outlets will claim that Reid was being "helped" by the Russian disinformation campaign, or if Ari Melber will ask for her to renounce their aid.
Liberals should be wary of continuing to use Russiagate for partisan purposes, and of abandoning reporting standards to punish their ideological challengers, whether consciously or not. Weapons, after all, have a way of getting into other people's hands.
Oh lookie - the troll found someone who wrote an article with sketchy references that ignores evidence - but he posted it because he agrees with it!Eric377 , February 21, 2018 at 12:40 PMEmployers have spent a lot of effort understanding their processes in greater and greater detail over the past 25 years. "Labor productivity" is very, very gross measure and does not have much meaning to the employer. What exactly in the process is generating improvements and can an employee effectively withhold their contribution to the improvement are key questions that are pursued very aggressively. If the new layout of the fabrication cells drives a lot of extra productivity or if a redesign of the product itself increases producibility, the human labor in the process is not going to be compensated very much regardless of the aggregate shift in labor productivity. If you can hire someone out of a fast food restaurant and hit the 95% productivity target by the close of his/her first shift, well the incumbent worker in the position is not going to be getting a big slice of general productivity measures. On the whole, firms are assessing situations accurately and taking actions that are in their profit interests. If they were getting this wrong a lot they would make changes. Employers are usually very pragmatic and if higher compensation makes them more money, they do not hesitate. But it usually does not make them more money.Christopher H. said in reply to Eric377... , February 21, 2018 at 06:20 PM"Employers are usually very pragmatic and if higher compensation makes them more money, they do not hesitate."Longtooth , February 22, 2018 at 02:22 AM
This is not the case at all.I don't know whether other commenters have already made this observation, but in case they haven't:Longtooth , February 22, 2018 at 02:49 AM
The paper can be summarized by the relationship of median wage growth to productivity growth as the sum of two variables A & B:
c(3)W = c(1)A + c(2)B
where c(i) are the coefficients of the relations of each term to productivity growth.
What the authors implied is that c(1) is positive and c(2) is negative by a much greater absolute value than c(1), resulting in a very low but positive c(3).
For this to be the case, then variable B must be the composite weighted sum of all factors besides those with positive coefficients included in A.
The authors did not identify those factors the sum of which are B.
But, that identification only matters to identify what if any of those factors can be adjusted, eliminated, or substantially modified. And since they are each related to Productivity growth but still sum to a composite weighted negative coefficient c(2) they must adjustable, or eliminatable, or modifiable such that in composite the coefficient c(2) sums to near zero.
The simple fact that the coefficient of B has increasingly become more negative over time strongly suggests that many or most or even all of these factors that sum to B may not in fact be adjustable, eliminatable, or modifiable to any appreciable degree, since otherwise they would have already been identified and adjustments, etc. made (1973 to 2018 is nearly two generations of time).
In other words the coefficients of factors B that sum to c(2) must clearly also have strong positive weighted coefficients that relate to other than productivity growth but which are each still related to productivity growth.
It is obvious then that the other relationships (non-productivity growth) of factors B weigh positively (since 1973 and increasingly so since then) far more than those that sum to coefficients c(2) which only relate to productivity growth.
Simply stated the other relationships of B to non-productivity growth terms have had increasingly greater priority than those related to productivity growth .. enough so to fully counteract them at an increasingly greater rate with time.
I submit that Summers et.al. know this already and even what the major drivers are, but intentionally left them in their Posted "economics" as unknowns to keep from upsetting the apple cart.
"This divergence between productivity and the typical worker's pay is a relatively recent phenomenon.."Longtooth -> Longtooth... , February 22, 2018 at 02:59 AM
Only if you consider 46 years (1973 to 2018) "recent". Most economists would reject that assertion. Most non-economists would reject that assertion. Most laypersons would reject that assertion.
So on what basis can Summers et.al. possibly assert it as true?
The period since the end of WWII completely changed global and domestic economies and that period is 73 years of time, so that the most recent 45 years comprises 61% of it or well over half the period since WWII's end has been in effect.
Basically the most recent 45 years begins a few short years after LBJ's administration and the Nixon's failed admin -- but which was followed by Ford, Carter, and Reagan's.I'm not indicting the presidential administrations only using them to show that "recent" begins in the post LBJ / Nixon time-frame. I don't know anybody that would refer to Nixon's presidency as a "recent" administration, including me (and I was born in 1945). My 40 something offspring and their cousins and all their friends refer to that as "ancient history". Summers was born nearly a decade after I was, and so must be using a hugely different concept of "recent" than I do or than my children and their generation do.RC AKA Darryl, Ron , February 22, 2018 at 03:23 AM
Historians have a different concept of "recent" since their operating time frames cover at least from the Industrial revolution and more often than not several centuries more."On the link between US pay and productivity" is more a matter of the link between Anna Stansbury and Larry Summers than a matter of analytical elegance. OTOH, Anna is quite elegant.Christopher H. , February 22, 2018 at 05:51 AMhttps://www.bloomberg.com/news/articles/2018-02-22/fed-staff-pondered-inflation-puzzle-and-came-away-none-the-wiserRGC , February 22, 2018 at 06:24 AM
Fed Staff Pondered Inflation Puzzle and Came Away None the Wiser
By Matthew Boesler
February 22, 2018, 12:00 AM EST
Former Federal Reserve Chair Janet Yellen has called low inflation a bit of a "mystery." So it was appropriate that at her final Fed meeting, she and her colleagues received a special briefing on what had gone wrong with the computer models they use to forecast price pressures.
The conclusion of the briefing: The models aren't great for forecasting, but alternative options aren't obvious either. Perhaps even more troubling for policy makers is that inflation appears to be anchored below the Fed's 2 percent target.
The presentations by Fed staff economists were described in the minutes of the policy-setting Federal Open Market Committee's Jan. 30-31 meeting published Wednesday. The failure to anticipate last year's decline in inflation, despite a tightening labor market, was chalked up to transitory factors like a one-time drop in the price of cell-phone services.
No alternative frameworks for understanding inflation beyond the Fed's reliance on the decades-old Phillips Curve relationship -- which relies on the level of the unemployment rate and household inflation expectations -- were uncovered.
"The staff found little compelling evidence for the possible influence of other factors such as a more competitive pricing environment or a change in the markup of prices over unit labor costs," according to the minutes of the gathering, which took place just before Jerome Powell succeeded Yellen as chairman. "The prediction errors in recent years were larger than those observed during the 2001-07 period but were consistent with historical norms."
On one hand, the findings arm Fed officials with ammunition in the debate about whether inflation will pick up again this year as unemployment remains low. "Almost all" FOMC participants continued to see the Phillips Curve relationship between unemployment and inflation as a useful guide, according to the minutes, which reinforces the case for gradually raising interest rates even with relatively slow price increases.
But the news was not all good.
"Two of the briefings presented findings that the longer-run trend in inflation, absent cyclical disturbances or transitory fluctuations, had been stable in recent years at a little below 2 percent," according to the minutes.
The findings echoed a concern that led Chicago Fed President Charles Evans to dissent against the FOMC's most recent rate hike in December. After that meeting, he explained his decision on the grounds that U.S. households' expectations for inflation may have fallen below 2 percent, which may make it harder for actual inflation to rise.
Fed officials' preferred inflation gauge has been below 2 percent throughout most of the last six years. Prices rose 1.7 percent in the 12 months through December, according to the Commerce Department index.
But in the discussion among FOMC participants that followed the briefings, there was no indication that Evans's concerns were becoming more widespread, despite the staff's findings. Only "a few" said inflation expectations appeared to have fallen below 2 percent, though "a number" noted the importance of stressing the symmetric nature of the Fed's inflation goal.
Dorian Bon reviews a collection of essays by socialist authors and journalists, many of them SW contributors, that asks tough questions about Trumpism--and answers them.
Trump and the crisis that caused him
"In 2008, Obama rode a wave of popular enthusiasm into the White House. "Two years later," Selfa writes, "the formerly discredited and out-of-touch Republican Party scored a historic landslide in the 2010 midterm election. In the largest congressional midterm victory since 1938, the Republicans captured sixty-three seats, ending the four-year Democratic majority in the House of Representatives."
"How did this happen? When Obama took office two years before, with the Democrats controlling both houses of Congress, his administration quickly proceeded to appoint Bush-era officials to top positions in the Treasury and Pentagon.
The fiscal stimulus law passed weeks after Obama's inauguration, while significant, excluded jobs programs to ease rising unemployment. The administration imposed sweeping concessions on unionized workers through the auto industry bailout, even while corporate executives continued to be rewarded with lavish payoffs.
As the business elite found a willing partner in the new White House, poll after poll showed that Americans had begun to associate Obama and the Democratic Party with big finance."
Feb 23, 2018 | www.moonofalabama.org
ger | Feb 22, 2018 11:40:39 AM | 2
In an uninformed America, fake news organization like NYT, Wapo and Economist can peddle fake news about fake news with nary a question of its accuracy. A dangerous time for the world. MORONS R/U$
A P , Feb 22, 2018 11:50:18 AM | 3"I care not what puppet is placed on the throne of England to rule the Empire, ... The man that controls Britain's money supply controls the British Empire. And I control the money supply."james , Feb 22, 2018 12:03:16 PM | 4
Baron Nathan Mayer Rothschild
Bearing mind that the US Federal Reserve is a private consortium of Rothschild-linked banks and it was another Rothschild that basically wrote the Balfour Declaration...
"Power tends to corrupt and absolute power corrupts absolutely. Great men are almost always bad men, even when they exercise influence and not authority; still more when you superadd the tendency of the certainty of corruption by authority." Lord Acton
Add in Zimbardo (Stanford Prison Experiment) and Milgram (Shock Experiments) revealing how the influence machine operatesand you have the schema behind what passes for crony capitalism that infests the world. The icing on the oligarchic system is Bernays-inspired propaganda.
Perfect storm.well octopi are very intelligent as i understand it.. so they got that right!test , Feb 22, 2018 12:05:26 PM | 5
i agree with @2 ger and @3 A P.. this constant mantra to get russia is a real interesting set up if you ask me... someone hopes to make a ton of money off war.... these same people don't care about the death of others either... not pretty..Sigh, nothing but racism against Russians, MSM really wants ww3 with Russia and unfortunately they will probably get it if their hatred, hysteria soar coming months, years.James lake , Feb 22, 2018 12:22:27 PM | 6
As b said earlier this week, all for the click-bait.
Woman threatened online after CNN publicly confronts her on her porch for "siding with Russian trolls"
https://www.scoopnest.com/user/RT_com/966693158724792320-woman-threatened-online-after-cnn-publicly-confronts-her-for-siding-with-russian-trollsRussiagate is the means the USA are using to manufacture consent for war.golom , Feb 22, 2018 12:29:46 PM | 7
A war that is not based on any real cause - just the Neo cons agenda. That is what the Meuller enquiry is designed to with the cooperation of the media - to make Americans hate Russia enough for war to be on the agenda
Putin is demonised - like with Saddam Hussein and Bin Laden and Ghaddafi
It started with obama and the demonisation of Putin.
Hillary was meant to continue this - Trump (Macmasters, Haley, Tillerson and the gang) are following the plan set out by the Neo-cons.
The question is will Europe follow - the UK and France and Poland may the Baltic's are dumb enough but I am not so sure about the rest of Europe.Octopus ist a Symbol like any other, depicting for example methods of surveilance states. If Sueddeutsche got attacked for using nazi symbolism, this is mosty due to the strong influence of zionist groups in germany, showing off on their power. Bruce schneier likely confirms this, even he though he uses a slightly different symbol: the squid.test , Feb 22, 2018 12:38:16 PM | 8James lakeJo Garcia , Feb 22, 2018 12:40:16 PM | 9
"The question is will Europe follow - the UK and France and Poland may the Baltic's are dumb enough but I am not so sure about the rest of Europe".
Unfortunately you are misinformed, the anti-russian hatred is probably worse in europe than in america. Remember economist is a brittish/european news magazine.Who most likely resembles an octopus, and acts more likely as one, is George Soros. Have never seen his likeness mocked in any publication. It is far overdue.psychohistorian , Feb 22, 2018 1:12:19 PM | 10This is amazing Big Lie projection by the elite. It shows their current weakness when they project their ability onto others as b clearly shows.....has private banking been reeled in since 1894 or has it grown to project more power and control?hopehely , Feb 22, 2018 1:32:37 PM | 11
Please remember folks that it is our social contract that needs to change rather than punish some individuals and leave finance in private hands. Have we "evolved" enough to be able to manage finance as a public utility? Like with gun (aggression) control, if we can get some adults to lead the discussion and evolution instead of the psychopaths leadership we have currently, there shouldn't be a problem.Posted by: test | Feb 22, 2018 12:38:16 PM | 8ben , Feb 22, 2018 1:37:30 PM | 12
the anti-russian hatred is probably worse in europe than in america. Remember economist is a brittish/european news magazine.
Not in whole Europe. In Southern/Mediterranean Europe for example you do not find hatred towards Russia. And how much Britain is European anyways, they call us 'continentals' after all.james @ 4 said:"i agree with @2 ger and @3 A P.. this constant mantra to get russia is a real interesting set up if you ask me... someone hopes to make a ton of money off war.... these same people don't care about the death of others either... not pretty.."bevin , Feb 22, 2018 1:37:56 PM | 13
Couldn't have said it any better james, kudos...The picture of Putin as meddling octopus attacking democracies is of course dumb nonsense. There is no evidence that the Russian government was in any way involved in the U.S. election..."Skeletor , Feb 22, 2018 2:17:34 PM | 14
No evidence either that the US, where electors choose between Trump and Clinton, Democrat neo-cons and republican neo-cons, is a democracy.
Perhaps The Economist is re-cycling Karl Marx's old, 1848, charge against 'that power, whose head is in Moscow and whose hand is in every cabinet in Europe' a charge that today fits the arbiter of all wannabe, whose head is in Washington. to a tee.@ BAnonymous , Feb 22, 2018 2:44:10 PM | 15
The link to the NYT article is broken....or more likely they have removed the article.
Good reporting as always above. Thank you."well octopi are very intelligent as i understand it.. so they got that right!" James @4test , Feb 22, 2018 2:57:53 PM | 16
They are also very good at spraying black ink indiscriminately in order to make their escape or mask their presence.hopehelyjo6pac , Feb 22, 2018 3:15:34 PM | 17
I cant see any difference between southern states like Spain, France vs northern like Holland and Norway.
The media is even more hawkish than the folks also.No comment needed. Enjoy.jo6pac , Feb 22, 2018 3:17:04 PM | 18
https://www.mintpressnews.com/hillary-clinton-begs-forgiveness-rothschilds-leaked-email/221570/Another one because I'm having fun.
https://www.globalresearch.ca/hillary-clintons-intimate-relationship-with-the-rothschild-banking-dynasty-the-shadowy-network-of-super-elites/5542966This is a nice piece of the German journalist Norbert Häring about Soros:
He carefully sorted out what seems to be fact and what is gossip. Alt right people here hate this approach.
Hausmeister , Feb 22, 2018 3:26:09 PM | 19augusto , Feb 22, 2018 3:59:21 PM | 20
This is a nice piece of the German journalist Norbert Häring about Soros:
He carefully sorted out what seems to be fact and what is gossip. Alt right people here hate this approach.The famous british weather forecast in never a past thing: ", ladies & gentelment a heavy thick mist this morning covers the Channel, thus isolating the European continent...''mauisurfer , Feb 22, 2018 4:18:30 PM | 21Hauspsychohistorian , Feb 22, 2018 4:49:58 PM | 22
Here it is in english
http://norberthaering.de/en/32-english/news/944-soros-inet@ mauisurfer with the english translation of the Soros and INET piece....Thanks!Lester , Feb 22, 2018 5:02:21 PM | 23
Most of my undergraduate study was in macro economics which showed the myth behind the religion of private finance/property and ongoing inheritance. I was one of the folks in class that asked too many questions and would never get invited to an INET gathering but was a computer nerd by then anyway.
The point that struck me about the situation is that to overturn private finance also means dealing with the excesses of patriarchy ....sigh We are a species that has advanced amazingly so in so many ways and yet here we are with a multi-century pattern of private finance controlling the lifeblood of human commerce like a vampire. This may have made some sense in the feudal era but we are past that aren't we?
I hope we don't destroy ourselves trying to evolve.Putin works for the Rothschilds. Putin is the bankers' faithful employee. Putin was just a low-level KGB member and suddenly he becomes Russia's president? Just like Obama the unknown became the US president?karlof1 , Feb 22, 2018 5:21:15 PM | 24
http://vladimirsuchan.blogspot.com.tr/2016/01/who-rules-russia-its-system-is-set-up.html?m=1And before the Octopus there was the Hydra and its related mythology .Formerly T-Bear , Feb 22, 2018 5:31:30 PM | 25
In one sense it's certainly projection. I imagine the text is full of falsifications and allegations offered with no facts to back them, which is what we've seen from all other media and linked governments. Clearly, Russia is seen as an easier target than China thanks to the years of Cold War brainwashing. But when we're confronted with such excrement, what's the message we see being sent? I see an elaborate Ponzi Scheme built on a slowly disintegrating foundation of lies in the process of imploding. The so-called Masters of the Universe no longer hold any Truths and must thus rely on their seemingly infinite lies broadcast via the Propaganda System. Meanwhile, The Resistance holds all the Truths and refutes the lies easily. The Resistance rapidly gains the credibility the Masters once wielded.
The Hydra in Greek Mythology is killed in several differing ways. But the most important aspect of its being is the reason for its existence: Hera raised it specifically to kill Heracles--it's a tool of the Elite made to kill one of the Elite's main challengers. Yet, it was a member of the Elite--Athena--who provides Heracles with the ultimate weapon to slay the Hydra. Yes, Truth is stranger than Fiction; and it must be recalled that Mythology always is constructed around a core of Truth.@ psychohistorian | Feb 22, 2018 4:49:58 PM | 22Ivan , Feb 22, 2018 7:24:46 PM | 26
What? No cognitive dissonance? Look closely again! Rothschild is exactly what your "Private Finance" looks like. I would have thought you would highly approve. Are you sure you took Economics 101? or just had a bad reaction to a pizza?It is interesting that the host "b", who is scrupulous about anti-semitic biases, has now to acknowledge at least tangentially that the anti-semites got some things right. The anti-semites may have gone overboard with their accusations, but as always there is a kernel of truth. The Jewish opinion-makers have no sense of moderation, or fairplay and that has always turned off anyone who thinks about these things. I myself have turned away from being a raging 110% Zionist to total indifference now.Don Bacon , Feb 22, 2018 8:24:11 PM | 27Whose tentacles control the world?che , Feb 22, 2018 8:29:40 PM | 28
From the Iran Deputy FM on the nuclear deal :The world will be plunged into a new nuclear crisis if Donald Trump continues to sabotage the Iran nuclear deal, the country's deputy foreign minister has warned. Abbas Araghchi, a deputy foreign minister, accused Mr Trump's administration of violating the agreement by threatening to reimpose sanctions and said Tehran could walk away from the deal if it did not begin to see economic benefits from the deal.countries that are parties to the JCPOA--
" I don't think the deal can survive in this way, if the atmosphere of confusion continues, if companies or banks will not cooperate with Iran . We cannot stay in a deal in which there is no benefit for us," he said. "That's a fact." . . . here
United States .. .The meddler
So Trump, not Putin, menaces Western democracies. Change the head on that octopus.U.S. Mainstream news television and print has become boring predicable relentless propaganda nonsense, pure hype. Half is pure hype propaganda and the other is mostly advertisement selling products like pharmaceuticals any news item is product placement, LOL. It is Frightening at the same time hard to believe that the American Public is still falling for the same shell game, evil dictator, etc. This Defraud of the American Public, relentless and diabolical misinformation mind control, and Mr. Obama and his ilk insist they will decide what is true or not, fake news or not. And they will marginalize criminalize or physically damage the outliers.saul alilinsky sachscoburg gotha , Feb 22, 2018 8:37:18 PM | 29i live on rothschild street it is very nice and safe already no arab spring here as we removed them and sent them to munchen,garmischpartenkirken,scotland,wales london and norway sweden barbera lerner spector sorted the shipping out for us super better thsn dhl logistics already.Grieved , Feb 22, 2018 8:44:32 PM | 30
"The great Ideal of Judaism is ...that the whole world shall be imbued with Jewish teachings, and that in a Universal Brotherhood of Nations - a greater Judaism, in fact -- all the separate races and religions [and nations] shall disappear."
https://www.henrymakow.com/@24 karlof1Jen , Feb 22, 2018 9:03:50 PM | 31
Mythology contains its core of truth because, I submit, events and symbols both arise from the same source, and share the same pattern.
In plain terms: we are too self-important to think we put the connections together. The connections come already made, we just ascertain them.
In useful terms: the mythologies contain patterns of existence that remain alive even if we only see the patterns from mythologies that owe their fame to past events. Whatever a story evokes, it also invokes. It can happen again because it never went away. The pattern is universal, enduring, primordial. Plus ca change...
And your Hydra story is wonderful. And hopeful :)Karlofi @ 24: In a way, the Hydra did kill Heracles (the mortal part of him). Heracles shot a centaur who was menacing his second wife Deianira with one of his arrows (which he had previously dipped in the Hydra's blood). The centaur told Deianira to dip a shirt into his blood (the centaur's blood, that is), falsely claiming that his blood could be used as a love potion. Some time in the future, Heracles' eye starts to wander and Deianira remembers the centaur's last words. She gives Heracles the bloodstained shirt to wear. The Hydra poison in the shirt starts killing Heracles and he cannot take it off.Debsisdead , Feb 22, 2018 9:23:13 PM | 32It is vital to acknowledge that animus towards zionists is culturally driven rather than racially motivated. Saturday morning Hebrew classes - frequently instructed by fresh outta the IDF young israelis, has been an essential part of the indoctrination of jews into zionism. Without that it would have been impossible to develop the cohort of fervently pro-Israeli jews. Wind the clock back 5 or 6 decades and you will find that among the wider jewish population zionists were outnumbered by a mixture of secular jews who wanted integration and those orthodox jews who believed zionism to be contrary to established teaching. Not now.hopehely , Feb 22, 2018 9:51:48 PM | 33
However there is another major downside to the accepted indoctrinations. Spend time with a third generation arab american, italian- american or Greek-american and you will find that aside from the surname they appear just as any amerikan would. Not so for Amerikan jews, whose brainwashing has served to seperate them from the wider population.
This is particularly apparent in attitudes towards women. Over the early years of emigration to the "New World" there have been numerous instances of recent migrants from Italy Greece and the ME being involved in some dreadful activities against local women. Now, these have frequent been used by a racist media to persuade fools that the particular nationality in question is deviant, violent and will 'steal our womenfolk'. After a couple decades of local Italian-amerikans, Greek-amerikans and Arab-amerikans it all settles down into a crime rate within the usual boundaries of citizens.
That hasn't prevented race-baiting by third generation feminists, the worst example being englander Labour Party MP Sarah Champion claiming that all muslims were misogynist after a gang of 1st & 2nd generation Pakistani-englanders were convicted of grooming 'young white girls'. The link which certainly doesn't represent my view on this gives a flavour of how the englander media published racist tropes while pretending to be opposed to racism.
I mention the Champion case because one group of englanders and amerikans are always given a free pass on sexism, even though they, unlike descendants of xtian and islamic immigrants, continue with their belief in gender based oppression into all subsequent generations of amerikans.
Take a look at the primary perpetrators in the #ME TOO tweeting? Harvey Weinstein, Woody Allen, Roman Polanski to name a tiny percentage of the Hollywood "heavy Hitters" who have been accused of sexual harassment and/or rape and who happen to be Jews.
I have always held that the combination of "we are the chosen people" rhetoric combined with the "all goy women are easy" [I mean to say married goyim don't even wear a sheitel ) nonsense has encouraged jews to hang on to gender based prejusices long after the societies which other migrants came from ditched such tosh.
Yet there have been no articles on the rate of Judaism amongst sex pests and rapists. Why not?
I'm not highlighting this because I reckon the world needs more racist propaganda, but because a well-researched article which considered all the issues properly could put these 'hebrew classes' that let's face it, are the judaic equivalent of wahabi Madrasa brainwashing, under pressure to reform the curriculum away the anti-=women, anti-islam - hell anti anyone/anything which isn't judaic- and into less socially divisive anti-hate speech stuff.
Looking at any of the problems across this rock in 2018 with a race-based mindset is wasteful and untrue. amerikans of all colours and creeds cheer on the destruction of the 'undeveloped' world not because of their hair or skin colour, but because they have had their minds filled with garbage ever since someone first turned on a vid tube to 'distract' them.Posted by: Ivan | Feb 22, 2018 7:24:46 PM | 26
to acknowledge at least tangentially that the anti-semites got some things right.
I myself have turned away from being a raging 110% Zionist to total indifference now.
What happened? Moved to Israel and didn't like it there? Too quiet on Saturdays?
Feb 22, 2018 | www.nakedcapitalism.com"Really, if the lower orders don't set us a good example, what on earth is the use of them? They seem, as a class, to have absolutely no sense of moral responsibility." –Oscar Wilde, The Importance of Being Earnest
By Lambert Strether of Corrente .
Credit Slips informs us of an important new study, "Life in the Sweatbox," by Pamela Foohey, Robert M. Lawless, Katherine M. Porter, and Deborah Thorne, forthcoming from the Notre Dame Law Review , and available for download now at SSRN . Foohey summarizes the article:
"Sweatbox" refers to the financial sweatbox -- the time before people file bankruptcy, which is when they often are on the brink of defaulting on their debts and lenders can charge high interest and fees. In the article, we focus on debtors' descriptions of their time in the sweatbox.
Based on CBP data, we find that people are living longer in the sweatbox before filing bankruptcy than they have in the past. Two-thirds of people who file bankruptcy reported struggling with their debts for two or more years before filing. One-third of people reported struggling for more than five years, double the frequency from the CBP's survey of people who filed bankruptcy in 2007. For those people who struggle for more than two years before filing -- the "long strugglers" -- we find that their time in the sweatbox is marked by persistent debt collection calls, the loss of homes and other property, and going without healthcare, food, and utilities. And although long strugglers do not file bankruptcy until long after the benefits outweigh the costs, they still report being ashamed of needing to file.
Our results suggest that the bankruptcy system, at present, cannot deliver its promised "fresh start" to many of the families that seek its protection.
In this brief post, I'll look at one aspect of how the bankruptcy system came to be as it is: The narrative that debtors perform a "utilitarian calculus" in deciding whether or not to seek bankruptcy. This narrative is false, based the results of "Life in the Sweatbox." Since it will crop up again if bankruptcy reform efforts gain traction -- as they should -- it's important to debunk it now. This subject matter is new to me, so I will primarily quote from and contextualize Foohey, Lawless, Porter, and Thorne.
First, let's define the "sweatbox.' Foohey et al., page 1:
The time before a person files bankruptcy is sometimes called the financial "sweatbox." People in the financial sweatbox are on the brink of defaulting on their debts, which is when their lenders can charge high interest rates and fees and otherwise profit from their customers' financial misery.
Although the term "sweatbox" often is connected with bankruptcy, how long people spend in the sweatbox before filing and what it means to live in the sweatbox has yet to be carefully examined. Understanding what people endure while in the sweatbox is crucial to evaluating the longstanding belief that people decide to file bankruptcy based on a strategic, financial calculation.
Second, current personal bankruptcy law is premised on the narrative that people seek personal bankruptcy out of self-interest (the "utilitarian calculus"). Foohey et al., page 2:
The term "financial sweatbox" came out of the debates leading to the 2005 passage of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), a major amendment to the Bankruptcy Code designed to decrease consumer bankruptcy filings by making filing more difficult, expensive, and timeconsuming. The consumer credit industry insisted that changes to bankruptcy were needed because bankruptcy courts were full of deadbeat, "can-pay" debtors who filed "bankruptcies of convenience" to try to escape their rightful obligations and who felt no shame in "abusing" the system. This story contradicted the overwhelming expert consensus that the bankruptcy system functioned well, abuse was rare, and there was no need for drastic overhaul.
And from page 12:
To make its case for restricting access to bankruptcy and thus extend the time consumers spend in the sweatbox, the consumer credit industry painted a picture of profligate spending and uninhibited use of bankruptcy. This picture was not new. Rather, it was updated and embellished for more than a decade. Proponents further linked people's supposed propensity to file at the first sign of financial trouble to a purported drastic decline in bankruptcy's stigma.
. Proponents never substantiated the often-cited "fact" that bankruptcy was costing every American family $400 a year. The claim that bankruptcy courts were filled with "can-pay" debtors was contradicted by decades of robust empirical evidence that people file bankruptcy after experiencing exogenous shocks, such as decline in income, increased expenses, job loss, divorce, and medical problems. Based on this evidence, the related claim that bankruptcy's stigma had disappeared became suspect. If anything, comparing levels of consumer debt and the number of bankruptcy filings, the stigma of filing may have increased over past decades.
Nonetheless, lured by tales of a $400 bankruptcy "tax," Congress embraced the consumer credit industry's assertion that restricting eligibility to and otherwise making it harder to file bankruptcy was the best policy.
(The politics of bankruptcy legislation, it seems, make the politics of health care law look like deliberations at Aristotle's Lyceum .) So now you have been inocculated against the talking points from the credit "industry" (so-called), especially that virulent "$400 a year" one. I'm about to give the article's internal logic on why these talking points are false, but the article is lavishly footnoted and you can run down plenty of additional material for yourself.
Third, the struggle to avoid bankruptcy involves immense suffering. Page 39:
To squeeze a few more dollars out of their lives, people work overtime, forego basic necessities, face serious health consequences, deal with persistent debt collection calls, end up in court, lose homes, and sell what little they own .
Financial misery hurts families. For couples, financial distress is "complicated by the internal dynamic of the household." Struggling with unmanageable debts can strain marriages and relationships. Fights over how to make ends meet, shifting of responsibilities for dealing with ever-worsening finances, and watching loved ones deal with the emotional distress that comes with money troubles may lead to separation and divorce. Splitting one household into two only worsens the financial problems .
For parents, financial troubles are compounded with worries over how the kids cope with the hardships. If homes are foreclosed, children are displaced along with their parents, and may switch schools, possibly more than once as their parents find a workable living situation. Home loss is linked with educational regression. Even if children are not displaced, they notice their parents' financial distress. Schedules change, diets change, and activities are scaled back as parents cut spending. Such changes can confuse children, resulting in behavioral and emotional problems. The effects of prolonged financial problems extend beyond families to workplaces and communities. Existing in a state of money scarcity damages people's ability to lead productive lives. Merely determining how one will survive day to day depletes people's mental resources. This leaves little energy for attending to anything else, including one's job, threatening people's livelihoods and leading to further economic drain. People withdraw from society, adding to their isolation. And the costs of life in the sweatbox are magnified by people's reported underutilization of health-related services and insurance, which can permanently harm people's health.
(The article does not mention Case-Deaton's "deaths of despair," but I'm sure all these hellish stressors have measurable health effects; see NC's discussion of "embodiment." )
Fourth, many prolong the struggle to avoid bankrupcty long after it's in their interest to do so. Page 3:
[T]wo-thirds of people who file bankruptcy report that they seriously struggled with their debts for more than two years prior to bankruptcy. Almost one-third report that they seriously struggled for more than five years, double the frequency from the CBP's survey of people who filed bankruptcy in 2007. For those people who struggle for more than two years before filing bankruptcy -- the "long strugglers" -- their time in the sweatbox is particularly damaging, distinguishing them from other debtors. They lose their homes to foreclosure, sell other property, report going without food and other necessities, all while employing multiple tactics to try to make ends meet and dealing with persistent debt collection calls and lawsuits. When long strugglers finally file, they enter bankruptcy with fewer assets than other debtors and overwhelming unsecured debts. . Yet seven out of ten long strugglers say they felt shame upon filing bankruptcy. These debtors' reports about their prebankruptcy lives suggest .
Finally and finally, QED. Debtors, especially long strugglers, cannnot be presumed to perfom a "utilitarian calculus." Page 42:
Debtors' presumed utilitarian calculation that underlies debates about access to bankruptcy supposes more knowledge about law and shrewdness about timing than our data suggest people have. People's willingness to file is diminished further by feelings of shame about using bankruptcy even when filing is clearly financially beneficial. Combined, the bankruptcy system is severely hampered in delivering the fresh start it is assumed to bestow on struggling families.
And from page 38:
Far from being a first resort, bankruptcy is the last refuge for struggling families, and their decisions to file .
At this point, I'm thinking that the situation in bankruptcy is so hellish that that loveable goof, Joe Biden, actually did student debtors a favor by not allowing them to file for it [hollow laughter].
It also occurs to me that since it's not obvious that our elites are likely to feel shame, and it's quite obvious that they're adept at utilitarian calculus (ka-ching), perhaps they're projecting their own values and behavior onto the rest of us?
This is an excellent article, far richer in data, ideas, and policy concepts than I've sought to convey here. Recommended reading . Grab a cup of coffee!
Nov 11, 2017 | www.strategic-culture.org
New figures published this week on obscene inequality show how the capitalist economic system has become more than ever deeply dysfunctional. Surely, the depraved workings of the system pose the greatest threat to societies and international security. Yet, Western leaders are preoccupied instead with other non-existent threats – like Russia.
Take British prime minister Theresa May who this week was speaking at a posh banquet in London. She told the assembled hobnobs, as they were sipping expensive wines, that "Russia is threatening the international order upon which we depend". Without providing one scrap of evidence, the British leader went to assert that Russia was interfering in Western democracies to "sow discord".
May's grandstanding is a classic case study of what behavioral scientists call "displacement activity" – that is, when animals find themselves in a state of danger they often react by displaying unusual behavior or making strange noises.
For indeed May and other Western political leaders are facing danger to their world order, even if they don't openly admit it as such. That danger is from the exploding levels of social inequality and poverty within Western societies, leading to anger, resentment, discontent and disillusionment among increasing masses of citizens. In the face of the inherent, imminent collapse of their systems of governance, Western leaders like May seek some relief by prattling on about Russia as a threat.
This week European bank Credit Suisse published figures showing that the wealth gap between rich and poor has reached even more grotesque and absurdist levels. According to the bank, the world's richest 1% now own as much wealth as half the population of the entire planet. The United States and Britain are among the top countries for residing multi-millionaires, while these two nations have also emerged as among the most unequal in the world.
The data calling out how dysfunctional the capitalist system has become keeps on coming. It is impossible to ignore the reality of a system in deep disrepair, yet British and American politicians in particular – apart from notable exceptions like Jeremy Corbyn and Bernie Sanders – have the audacity to block out this reality and to chase after risible phantoms. (The exercise makes perfect sense in a way.)
Last week, a report from the US-based Institute of Policy Studies found that just three of America's wealthiest men – Bill Gates, Jeff Bezos and Warren Buffett – own the same level of wealth as the poorest half of the entire US population. That is, the combined monetary worth of these three individuals – reckoned to be $250 billion – is equivalent to that possessed by 160 million citizens.
What's more, the study also estimates that if the Trump administration pushes through its proposed tax plans, the gap between rich elite and the vast majority will widen even further. This and other studies have found that over 80% of the tax benefits from Trump's budget will go to enrich the top 1% in society.
All Western governments, not just May's or Trump's, have over the past decades overseen an historic trend of siphoning wealth from the majority of society to a tiny elite few. The tax burden has relentlessly shifted from the wealthy to the ordinary workers, who in addition have had to contend with decreasing wages, as well as deteriorating public serves and social welfare.
To refer to the United States or Britain as "democracies" is a preposterous misnomer. They are for all practical purposes plutocracies; societies run by and for a top strata of obscenely wealthy.
Intelligent economists, like the authors at the IPS cited above, realize that the state of affairs is unsustainable. Morally, and even from an empirical economics point of view, the distortion of wealth within Western societies and internationally is leading to social and political disaster.
On this observation, we must acknowledge the pioneering work of Karl Marx and Friedrich Engels who more than 150 years ago identified the chief failing of capitalism as being the polarization of wealth between a tiny few and the vast majority. The lack of consumption power among the masses owing to chronic poverty induced by capitalism would result in the system's eventual collapse. Surely, we have reached that point in history now, when a handful of individuals own as much wealth as half the planet.
Inequality, poverty and the denial of decent existence to the majority of people stands out as the clarion condemnation of capitalism and its organization of society under private profit. The human suffering, hardships, austerity and crippled potential that flow from this condition represent the crisis of our time. Yet instead of an earnest public debate and struggle to overcome this crisis, we are forced by our elites to focus on false, even surreal problems.
American politics has become paralyzed by an endless elite squabble over whether Russia meddled in the presidential elections and claims that Russian news media continue to interfere in American democracy. Of course, the US corporate-controlled news media, who are an integral part of the plutocracy, lend credibility to this circus. Ditto European corporate-controlled media.
Then we have President Donald Trump on a world tour berating and bullying other nations to spend more money on buying American goods and to stop cheating supposed American generosity over trade. Trump also is prepared to start a nuclear war with North Korea because the latter is accused of being a threat to global peace – on the basis that the country is building military defenses. The same for Iran. Trump castigates Iran as a threat to Middle East peace and warns of a confrontation.
This is the same quality of ludicrous distraction as Britain's premier Theresa May this week lambasting Russia for "threatening the world order upon which we all depend". By "we" she is really referring to the elites, not the mass of suffering workers and their families.
May and Trump are indulging in "perception management" taken to absurdity. Or more crudely, brainwashing.
How can North Korea or Iran be credibly presented as global threats when the American and British are supporting a genocidal blockade and aerial slaughter in Yemen? The complete disconnect in reality is testimony to the pernicious system of thought-control that the vast majority of citizens are enforced to live under.
The biggest disconnect is the obscene inequality of wealth and resources that capitalism has engendered in the 21 st century. That monstrous dysfunction is also causally related to why the US and its Western allies like Britain are pushing belligerence and wars around the planet. It is all part of their elitist denial of reality. The reality that capitalism is the biggest threat to humanity's future.
Do we let these mentally deficient, deceptive political elites and their media dictate the nonsense? Or will the mass of people do the right thing and sweep them aside?
Jan 16, 2018 | angrybearblog.com
Denis Drew, January 11, 2018 10:25 amJimH , January 11, 2018 10:39 am
"We all know that that the widely touted unemployment rate overstates the strength of the labor market given so many having dropped out of the labor force, and upward pressure on wages has remained weak, despite some improvement on that front recently."
Barkley, this understates (too typically I'm afraid) the depth of the "Great Wage Depression." Everybody (everybody progressive anyway) eternally points to economic growth benefiting only the upper few percent for decades -- then -- whenever they assess the effect of the economy upon voters (not you here) they skip right over sink hole wage rates and keyhole focus right on the unemployment rate (or if we're lucky the real employment rate) when what voters want is $20/hr jobs plain and simple: high (or at least really livable) wages.
Simply put, if fast food can pay $15/hr at 33% (!) labor costs, then, other retail should be able pay $20/hr at 10-15% labor costs, and, Walmart (God bless it) may be able to pay $25/hr at 7% labor costs. If this means shifting 10% of overall income to the bottom 40%, that means scratching 14% of their income from the "middle" 59% (who get roughly 70% of overall income) -- in higher prices. Which may mean we have been paying the 40% too little for too along. But if the 40% get labor union organized (where this little speech is going) we may find ourselves willing to up if we want them to show up at work.
I have always been willing to tell any gang banger (not that I ever run into any) that side-ways guns and gang signs and all that would look pretty funny in, say, Germany where they pay people to work. And, that if Walmart were paying $25/hr we wouldn't be hearing about any of this here.
As it is, the "middle" 59% can replenish their pockets at the expense of top 1% income whose share has ballooned from 10% to 22.5% over recent (de-unionizing) decades. Just reintroduce confiscatory taxation of the kind existing in the Eisenhower era. Say, 90% over $2 million income -- and this time we really mean it -- very top incomes (CEOs, news anchors, er, quarterbacks) now 20X what they were since per capita income only doubled. I predict any social inertia (it's only human nature) on the part of the 59% to jack upper taxes up will be overcome by the friendly persuasion on the part of the 40% -- who want to jack up the price of that burger just a bit more.
* * * * * *
Super easy way back [ONLY WAY BACK] is restoring healthy labor union density (6% unions outside gov equates to 20/10 bp). When Democrats take over Congress, we must institute mandatory union certification and re-certification elections at every work place (stealing a page from the Republican's anti-union playbook -- see Wisconsin gov workers). I would add the wrinkle of making the cycle one, three or five years -- plurality rules -- take a lot of potential rancor out of first time votes in some workplaces.
Why Not Hold Union Representation Elections on a Regular Schedule?
November 1st, 2017 – Andrew Strom
WHICH IS WHERE I CAME INTO THIS MOVIE
PS. NY Times' Nate Cohn found that Trump won by trading places with Obama. Obama ran as the black guy (presumably working folks oriented -- were we wrong) against Wall Street Romney; Trump ran as blue collar-acting guy against Wall Street Hillary. True progressive Bernie would have stomped Trump. (Bernie hasn't caught on to re-stocking union density as the only real way to help working people yet -- but at least he won't get in the way while waiting to catch on.)Varsovian , January 11, 2018 12:14 pm
First, I agree with your assessment that President Trump is claiming credit for things which he has not caused. But this economy is awful for those at the low end of the income scale. Low pay, high rent, and rising food costs. (Sometimes by subterfuge.)
I remember reading an interview of an older person. The interviewer asked what life was like during the Great Depression. And they replied that it wasn't bad if you had a job.
This is similar to our situation today. It is not bad if you have a good paying full time job. In that case you have almost no understanding of what some others are complaining about. Income inequality is a sterile term for what happens to other people.
- Others like those who have not dropped out of the labor force but who are no longer counted as looking for work because they exhausted their unemployment benefits. (No one contacts them to see if they are still looking for work.)
- Others like those who have full time employment but their wages are low and static.
- Others like those who need a full time job but a part time job is all they can get.
- Others like those who work but only get by because they applied for food stamps. (SNAP)
- Others like those living on Social Security and seeing pitifully tiny COLAs.
- Others like older Americans with savings which pay almost no interest.
And others, like all of the above, who see the prices of the things that they consume going up while the CPI is showing little inflation.
Some of those others live in the rust belt states where they have seen an extended economic decline.
Neither of the two major political parties addresses those 'others' issues. And because they are almost completely disconnected from their voters' issues, they did not perceive the building anger.
Candidate Trump addressed the major concern of those 'others', which was their declining spending power. He did that by addressing the economic threats posed by illegal immigration and free trade treaties which allowed companies to move production overseas.
President Trump lost in the polls and won the election. It doesn't really surprise me that he is continuing to score low in the polls.
Of course, the two major parties can continue on their current paths. And they can blame their losses on flawed voters. And eventually they will do their complaining from their homes.
The businessman Mohamed El-Erian rejects the populist label for the current multi national voter rebellions, he prefers anti-establishment. And so do I.Barkley Rosser , January 11, 2018 3:28 pm
Oh no, not another extrapolation based on the false economic stats Poland pumped out pre-2015!!
No-one takes the drastic choice of emigration lightly – especially if you know you're going to be bottom of the heap in the new country. Can't you find an American to talk about his forbears escaping poverty in Europe only to face hard times in the New World?
Two million Poles fled Poland's much touted "Economic Miracle". Funnily, they stopped emigrating when REAL economic growth, wage growth and the setting up of a welfare state started!
Hard Right crony capitalism with illegal fuel import deals with Putin and falsified public accounting didn't cause happiness. Despite the figures, Poland wasn't a world leader in the export of cellphones, for example.
Rosser continues to bark up the wrong tree! Worse – he's making some sort of social philosophy out of it.
Denis and Jim,
You and I have already been around on this, but I shall point out that the credibility of sources in Poland that you like to cite have collapsed since the Law and Justice Party you shill for took over.
The most believable data is that there has been no major economic change in the state of the Polish economy from before and after the political change, although some minor changes (which you have hyped while ignoring others not fitting your party line). The big bottom line is no noticeable change in overall GDP growth in Poland, basically chugging along unspectacularly in the 1-2% annual range with mild quarterly fluctuations.
So, sorry, I am going to stick with calling this the Poland problem." You folks are the poster boys for this. Tough, and good luck getting any world leader not also an authoritarian liar supporting your embarrassing government.
Dec 28, 2017 | extranewsfeed.com
Working Class w/ No Living Wage: The Absurd Math of US Income
As the stock market gleefully claws its way to more record-breaking highs, Forbes reports a full 56% of US Americans now have less than $1,000 to their names -- and 25% have less than $100 . But the economy, as they say, is booming. Even with 165 million on the breadline and an hourly minimum wage of only $7.25 nationally, surging Amazon share prices have added $13 billion to Jeff Bezos' net-worth since mid-September. For perspective, $13 billion is enough to pay the student-loan debts of 432,000 millennials. It's also plenty to end world hunger for a year, according to the International Institute for Sustainable Development . And Bezos -- now the world's richest man -- smashes a bottle of organic champagne to celebrate his new wind-farm. The question is -- how do markets grow as the wealth of the people shrinks and wages fall? What do the commentariat mean by "economic growth" when the nation's income can hardly keep half of its people's heads above water?The National Income:
How Much Value is Created by the US Economy?
There are a lot of ways to measure economies -- for example, gross domestic product or GDP is the value of everything a country produces ( minus the cost to produce it ) and the employment-rate measures the number of paying jobs. The gross national income or GNI is what you get after adding up all of the income earned by everyone. GNI includes every citizen ( even in other countries ) and every kind of income from wages or salaries to social security and unemployment benefits, investment returns, or the sale of assets like houses and cars.
GNI is basically the total value of all money paid to everyone, minus the expenses of doing the business everyone is getting paid for. According to the macroeconomic accounts on the Federal Reserve's website, the GNI was about $18.7 trillion dollars in 2016 for the US.Gross National Wages:
Every Paycheck Combined
Now, how much of America's multi-trillion-dollar paycheck ends up in the pockets of people who work in the US? Since the "gross national wage" is apparently not as important to US media-outlets as Jeff Bezos' latest earnings or the many triumphs of the Dow Jones, this number is a bit more camouflaged. Luckily, the total number who are employed by all industries and their average wages or salaries can be found in the bowels of the Bureau of Labor Statistics' website. Multiplying these two numbers -- the total employed by all industries and their mean-average yearly wages -- gives the combined wages and salaries of everyone with a job in the US, from the clerks and mechanics to the brain-surgeons and corporate executives.(total employed) × (mean-average wages per-year) =
140,400,040 × $49,630 = $6,968,053,985,200 or ~$7 trillion
$7 trillion dollars to split between all employed people in the United States. Everyone who built everything and provided every service -- managers, janitors, lawyers, nurses, librarians, bartenders, and everyone else who had a job in 2016 -- collectively earned about $7 trillion of the $18.7 trillion national paycheck.
But who gets the remaining $11,781,946,014,800?Federal Benefits & Social Welfare
The national income also includes money received from government benefits, such as disability, retirement, and social security. The Bureau of Labor Statistics lists the 2016 total federal benefits received at $2.0393 trillion.Total US Income = $18,750,000,000,000
Combined Wages & Salaries of All Employed Folks = $6,968,053,985,200
Income from Federal Social Benefits = $2,039,300,000,000Total Income - (Wages & Salaries + Benefits) = $9,763,546,014,800
And about $9.8 trillion is still missing.Literally All Working People Combined
Earn Less Than Half of American Income
According to the BLS data, there are an estimated 146 million people who hold some sort of job in the US. These 146 million workers create every commodity , serve every meal , harvest every last grain , empty every waste bin , teach every student , build every house , and pour milk into every single cappuccino in the nation. And together they take about 37.2% of the American pie. All of the so-called "handouts" from the federal government -- social security, retirement, disability, and other benefits -- only amount to another 10.8% of the GNI.
The combined income from all employment and federal benefits still only adds up to 48% of America's paycheck. And that means that the other 52% must be paid to someone -- or some thing -- without a job.Unearned Income: Landlords, Industrial Capitalists, & Wall Street Investors
Property income -- or, as the classical economists knew it, unearned income -- is earned through ownership ( rather than wages , which are earned by time spent working ). There are three basic types of unearned income. Rent is paid to owners of land or other natural resources, profit is paid to owners of capital ( like factories, equipment, machines, etc. ), and interest is paid to owners of financial assets ( like stocks, securities, debt, etc. ). The $13 billion Jeff Bezos made when Amazon share prices increased, for example, was "earned" by owning something rather than creating something or providing some service.
This type of income is a bit harder to keep track of -- especially considering that the wealthy seem to be in the habit of using offshore tax-havens and shell companies ( like those revealed in the Panama and Paradise Papers ) to stash their fortunes. With that being said, the US Department of Commerce's accounts show nearly $7 trillion -- or about the same as 146 million working people made combined -- paid out for interest, rent, and corporate profits . Another trillion and a half or so was paid to "proprietors" or, more colloquially, the owners.
And now we have a rough sketch of the great American paycheck: Are Workers Worthy of Their Wages?
Not in the United States of America!
There are two basic components to the whole economic activity and wealth of human civilization -- capital and labor . On one hand there is capital -- all of the natural resources, materials, lands, machines, and everything that everything is made of and made with -- and, on the other hand, there are the countless workers whose labor-power transforms that stuff into the societies we live in.
Without the time, energy, creativity, and sacrifices made by the 146 million human beings who make everything and offer every service, the wealth of people like Jeff Bezos would not exist. Business magnates like Jeff Bezos, Warren Buffet, and Bill Gates need working classes -- working classes do not need them . And yet Bezos, Buffet, and Gates now possess more wealth than the bottom 50% of the nation combined. Through the prism of the American economy, people like Bezos, Buffet, and Gates are just as valuable as the poorest 160 million of the working classes who collectively labor billions of hours each week.
And that is unfair -- that doesn't add up. The "American Dream" -- the whole idea about how anyone willing to work hard should be able to prosper or, at the very least, make ends meet -- is objectively untrue . The truth is -- if you want to earn wealth in the US or even if you only want to earn enough to pay the bills on time -- honest work is not a very good strategy.
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the same political rants you see on Facebook, but they're well written.
Interesting article, John. I work for a financial tech company that provides personal financial planning to employees as part of their benefits package. A lot of people are struggling -- about 80% of Americans live paycheck to paycheck, 50% of people can't handle a $500 unexpected expense without putting it on a credit card, and about 33% have saved1 response John Laurits Dec 6
Yes! Thank you for mentioning unpaid domestic labor, as well as the roles that racism and patriarchy play in the awful saga of inequality -- these are more than crucial to any real class analysis. My biggest regret about this article is that I was unable to include a discussion of unpaid domestic labor and how it contributes to the greater picture ofConversation with John Laurits . LaMar Going Nov 30
I am weary of half-truths, lies and ignorance from writers like this.3 responses John Laurits Nov 30
1. False dichotomy. Option C: In the haste of your search for some technicality to use in your attempt at attacking the article's credibility, you did not consider that the second half of my casual description of GDP as "value of everything a country produces minus the cost to produce it" refers to the exclusion of the value of intermediate goods2 responses Conversation between Joshua Shepard and John Laurits . Joshua Shepard Dec 1
Great breakdown! This is something I could see myself busting out with some investigative reporting. You took the macro budget and broke it down into the major segments and the makeup of each segment -- wouldn't it be a great college project to have students across the country further breakdown each segment, using tools to find the inefficiencies? We1 response John Laurits Dec 7
Hi! Thanks & I'm glad you found the article useful :)
In response to your question about what I think about using tech to hold them accountable, I say -- : I'm all about it! In my humble (yet frequently accurate) opinion, one of Marx's most important insights about how revolutionary change occurs was his description of newConversation between Joe Psotka and John Laurits . Joe Psotka Dec 5
I would like to see how this comparison of GNI into capital and wages has changed historically, and how it might continue to change with automation overwhelming us.
However, I can't agree completely that the capitalists do nothing to merit their work. They too should be paid wages, just not the obscene one that they get now1 response John Laurits Dec 5
I'll be writing about automation and the US workweek in my next post :) And to clarify my position -- as a Marxist libertarian-socialist, I have zero problems with the idea of people accumulating wealth created by their own efforts/labor (which I'd roughly define as the sacrifice of a person's time to create value). When Bezos or any human being1 response Applause from John Laurits (author) Allyson Saad Nov 29
Substantive piece.Applause from John Laurits (author) Elsie Brown Dec 6 interest is paid to owners of financial assets ( like stocks, securities, debt, etc. ). The $13 billion Jeff Bezos made when Amazon share prices increased, for example, was "earned" ...
Those who own enough money get paid just for holding onto it. That seems deeply wrong. If money could decay in some way no one would hoard it. You'd rather have someone owe you $100 than have $100 in your pocket.3 responses Conversation with John Laurits . Regina Bash-Taqi Dec 6
Good information but I don't agree with your description of 'honest' work. The world is changing, so we all need to change with it. There will always be people who are ahead of the curve such as Gates, Bezos and Buffet, but I believe if all of us change our game -- we'll get our share and things will shift.1 response John Laurits Dec 6
So your solution is for the vast majority of the world's population, the working poor, to just 'change [their] game?'Applause from John Laurits (author) alex carter Dec 2
Great article. This is boiling up to some kind of a head.
In other words, Got Guillotine?Conversation with John Laurits . Rod Ruger Dec 6
If someone has an idea for a product or service and employs members of the working class to implement that idea, what portion of the resulting income does the dude with the idea get? No ideas/innovation means a stone age existence.1 response John Laurits Dec 6
Intellectual labor is totally a thing and people ought to be paid for doing that as well -- and I'm curious as to which part of the post led you to think I might advocate withholding compensation from creatives, inventors, or idea-people? The BLS statistics I use in the post include everyone who sacrifices time from the 24 hours they all have each dayConversation with John Laurits . Sceptical Meerkat Dec 9
Why would somebody me pay more for an American worker if one can hire a Mexican illegal immigrant?1 response John Laurits Dec 9
Yeah, I'm sure the economic system will somehow result in a different and better outcome if we can only find a way to oppress the poorer, browner workers a bit more1 response Sceptical Meerkat Dec 9 Yeah, I'm sure the economic system will somehow result in a different and better outcome if we can only find a way to oppress the poorer, browner workers a bit more
Depends better for whom.
The low qualified qualified workers' wages are undercut by competition from cheaper immigrant workers, so they will win if immigration is controlled while would be immigrant will lose.
Just wishful thinking and empty talk about the need to increase wagers from people who don't pay those wages is meaningless.1 response John Laurits Dec 9
Just wishful thinking and empty talk about the need to increase wagers from people who don't pay those wages is meaningless.
Yep, that's what Czar Nicholas II kept thinking, too1 response Conversation with John Laurits . Rick Fischer Dec 9
Mr. Laurits slips a few things past us in all his details. His "worth it" criterion is a valid one, in my opinion. Income from doing something that is of value to society does make the income "worth it". (I'm really over-simplifying here. Try not to search too hard for some exception or other.)1 response John Laurits Dec 9
You wrote:"His descriptions of the red slice, about half the total income, are skimpy, and his examples leave the reader with the vague feeling that that half is not "worth it". Which I surmise is his intent. But it's not entirely true; mostly not true, in fact."
Dec 24, 2017 | www.unz.com
As we move into 2018, I am swinging away from the Republicans. I don't support the Paul Ryan "Better Way" agenda. I don't support neoliberal economics. I think we have been going in the wrong direction since the 1970s and don't want to continue going down this road.
- Opioid Deaths: As we all know, the opioid epidemic has become a national crisis and the White working class has been hit the hardest by it. It is a "sea of despair" out there.
- White Mortality: As the family crumbles, religion recedes in his life, and his job prospects dwindle, the middle aged White working class man is turning to drugs, alcohol and suicide: The White suicide rate has soared since 2000:
- Median Household Income: The average household in the United States is poorer in 2017 than it was in 1997:
- Real GDP: Since the late 1990s, real GDP and real median household income have parted ways:
- Productivity and Real Wages: Since the 1970s, the minimum wage has parted ways with productivity gains in the US economy:
- Stock Market: Since 2000, the stock market has soared, but 10% of Americans own 80% of stocks. The top 1% owns 38% of stocks. In 2007, 3/4th of middle class households were invested in the stock market, but now only 50% are investors. Overall, 52% of Americans now own stocks, which is down from 65%. The average American has less than $1,000 in their combined checking and savings accounts.
Do you know what this tells me?
It tells me that the bottom line is that Christmas has become a harder season for White families. We are worse off because of BOTH social and economic liberalism which has only benefited an elite few. The bottom half of the White population is now in total disarray – drug addiction, demoralization, divorce, suicide, abortion, atomization, stagnant wages, declining household income and investments – and this dysfunction is creeping up the social ladder. The worst thing we can do is step on the accelerator.
Paul Ryan and his fellow conservatives look at this and conclude we need MORE freedom. We need lower taxes, more free trade, more deregulation, weaker unions, more immigration and less social safety net spending. He wants to follow up tax reform with entitlement reform in 2018. I can't but see how this is going to make an already bad situation for the White working class even worse.
I'm not rightwing in the sense that these people are. I think their policies are harmful to the nation. I don't think they feel any sense of duty and obligation to the working class like we do. They believe in liberal abstractions and make an Ayn Rand fetish out of freedom whereas we feel a sense of solidarity with them grounded in race, ethnicity and culture which tempers class division. We recoil at the evisceration of the social fabric whereas conservatives celebrate this blind march toward plutocracy.
Do the wealthy need to own a greater share of the stock market? Do they need to own a greater share of our national wealth? Do we need to loosen up morals and the labor market? Do we need more White children growing up in financially stressed, broken homes on Christmas? Is the greatest problem facing the nation spending on anti-poverty programs? Paul Ryan and the True Cons think so.
Yeah, I don't think so. I also think it is a good thing right now that we aren't associated with the mainstream Right. In the long run, I bet this will pay off for us. I predict this platform they have been standing on for decades now, which they call the conservative base, is going to implode on them. Donald Trump was only the first sign that Atlas is about to shrug.
(Republished from Occidental Dissent by permission of author or representative)
Dec 12, 2017 | www.theamericanconservative.com
On America's 'long emergency' of recession, globalization, and identity politics.
Can a people recover from an excursion into unreality? The USA's sojourn into an alternative universe of the mind accelerated sharply after Wall Street nearly detonated the global financial system in 2008. That debacle was only one manifestation of an array of accumulating threats to the postmodern order, which include the burdens of empire, onerous debt, population overshoot, fracturing globalism, worries about energy, disruptive technologies, ecological havoc, and the specter of climate change.
A sense of gathering crisis, which I call the long emergency , persists. It is systemic and existential. It calls into question our ability to carry on "normal" life much farther into this century, and all the anxiety that attends it is hard for the public to process. It manifested itself first in finance because that was the most abstract and fragile of all the major activities we depend on for daily life, and therefore the one most easily tampered with and shoved into criticality by a cadre of irresponsible opportunists on Wall Street. Indeed, a lot of households were permanently wrecked after the so-called Great Financial Crisis of 2008, despite official trumpet blasts heralding "recovery" and the dishonestly engineered pump-up of capital markets since then.
With the election of 2016, symptoms of the long emergency seeped into the political system. Disinformation rules. There is no coherent consensus about what is happening and no coherent proposals to do anything about it. The two parties are mired in paralysis and dysfunction and the public's trust in them is at epic lows. Donald Trump is viewed as a sort of pirate president, a freebooting freak elected by accident, "a disrupter" of the status quo at best and at worst a dangerous incompetent playing with nuclear fire. A state of war exists between the White House, the permanent D.C. bureaucracy, and the traditional news media. Authentic leadership is otherwise AWOL. Institutions falter. The FBI and the CIA behave like enemies of the people.
Bad ideas flourish in this nutrient medium of unresolved crisis. Lately, they actually dominate the scene on every side. A species of wishful thinking that resembles a primitive cargo cult grips the technocratic class, awaiting magical rescue remedies that promise to extend the regime of Happy Motoring, consumerism, and suburbia that makes up the armature of "normal" life in the USA. They chatter about electric driverless car fleets, home delivery drone services, and as-yet-undeveloped modes of energy production to replace problematic fossil fuels, while ignoring the self-evident resource and capital constraints now upon us and even the laws of physics -- especially entropy , the second law of thermodynamics. Their main mental block is their belief in infinite industrial growth on a finite planet, an idea so powerfully foolish that it obviates their standing as technocrats.
The non-technocratic cohort of the thinking class squanders its waking hours on a quixotic campaign to destroy the remnant of an American common culture and, by extension, a reviled Western civilization they blame for the failure in our time to establish a utopia on earth. By the logic of the day, "inclusion" and "diversity" are achieved by forbidding the transmission of ideas, shutting down debate, and creating new racially segregated college dorms. Sexuality is declared to not be biologically determined, yet so-called cis-gendered persons (whose gender identity corresponds with their sex as detected at birth) are vilified by dint of not being "other-gendered" -- thereby thwarting the pursuit of happiness of persons self-identified as other-gendered. Casuistry anyone?
The universities beget a class of what Nassim Taleb prankishly called "intellectuals-yet-idiots," hierophants trafficking in fads and falsehoods, conveyed in esoteric jargon larded with psychobabble in support of a therapeutic crypto-gnostic crusade bent on transforming human nature to fit the wished-for utopian template of a world where anything goes. In fact, they have only produced a new intellectual despotism worthy of Stalin, Mao Zedong, and Pol Pot.
In case you haven't been paying attention to the hijinks on campus -- the attacks on reason, fairness, and common decency, the kangaroo courts, diversity tribunals, assaults on public speech and speakers themselves -- here is the key take-away: it's not about ideas or ideologies anymore; it's purely about the pleasures of coercion, of pushing other people around. Coercion is fun and exciting! In fact, it's intoxicating, and rewarded with brownie points and career advancement. It's rather perverse that this passion for tyranny is suddenly so popular on the liberal left.
Until fairly recently, the Democratic Party did not roll that way. It was right-wing Republicans who tried to ban books, censor pop music, and stifle free expression. If anything, Democrats strenuously defended the First Amendment, including the principle that unpopular and discomforting ideas had to be tolerated in order to protect all speech. Back in in 1977 the ACLU defended the right of neo-Nazis to march for their cause (National Socialist Party of America v. Village of Skokie, 432 U.S. 43).
The new and false idea that something labeled "hate speech" -- labeled by whom? -- is equivalent to violence floated out of the graduate schools on a toxic cloud of intellectual hysteria concocted in the laboratory of so-called "post-structuralist" philosophy, where sundry body parts of Michel Foucault, Jacques Derrida, Judith Butler, and Gilles Deleuze were sewn onto a brain comprised of one-third each Thomas Hobbes, Saul Alinsky, and Tupac Shakur to create a perfect Frankenstein monster of thought. It all boiled down to the proposition that the will to power negated all other human drives and values, in particular the search for truth. Under this scheme, all human relations were reduced to a dramatis personae of the oppressed and their oppressors, the former generally "people of color" and women, all subjugated by whites, mostly males. Tactical moves in politics among these self-described "oppressed" and "marginalized" are based on the credo that the ends justify the means (the Alinsky model).
This is the recipe for what we call identity politics, the main thrust of which these days, the quest for "social justice," is to present a suit against white male privilege and, shall we say, the horse it rode in on: western civ. A peculiar feature of the social justice agenda is the wish to erect strict boundaries around racial identities while erasing behavioral boundaries, sexual boundaries, and ethical boundaries. Since so much of this thought-monster is actually promulgated by white college professors and administrators, and white political activists, against people like themselves, the motives in this concerted campaign might appear puzzling to the casual observer.
I would account for it as the psychological displacement among this political cohort of their shame, disappointment, and despair over the outcome of the civil rights campaign that started in the 1960s and formed the core of progressive ideology. It did not bring about the hoped-for utopia. The racial divide in America is starker now than ever, even after two terms of a black president. Today, there is more grievance and resentment, and less hope for a better future, than when Martin Luther King made the case for progress on the steps of the Lincoln Memorial in 1963. The recent flash points of racial conflict -- Ferguson, the Dallas police ambush, the Charleston church massacre, et cetera -- don't have to be rehearsed in detail here to make the point that there is a great deal of ill feeling throughout the land, and quite a bit of acting out on both sides.
The black underclass is larger, more dysfunctional, and more alienated than it was in the 1960s. My theory, for what it's worth, is that the civil rights legislation of 1964 and '65, which removed legal bar