Class war

(I wrote this back in 2012.)

From the Harper’s Index in the Sept 2012 Harper’s magazine:

Percentage change since 1970 of metropolitan American families residing in affluent neighborhoods: +121
Residing in poor neighborhoods: +108
Residing in Middle Class neighborhoods:  -34

The math is brutal. There are more than twice as many–almost two and a half times as many–affluent households now than there were in 1970. There are over twice as many poor households as they were in 1970. And the number of middle class households is down a whole third. If you consider that the country’s total household wealth is fairly fixed over time, you can see how this happened. The upper class has increased their share by taking it from the middle class. Their increased wealth didn’t come out of nothing. It’s not like there was a Gold Rush that increased the money supply several fold over night. Nope. It’s just that the salary structure and profit taking and were fundamentally altered so that most of that cash went to the rich and upper middle classes (who are now the lowest rung of the affluent  class.) They’ve locked in this bias, too–when the recession hit, a catastrophe that they themselves brought about, the upper class–the top 20%–suffered almost not at all. All the pain was born by the middle and lower classes, especially the middle class, who have been so stripped of cash that they can no longer even afford to be middle class. That’s what has made this downturn so devastating, and why the middle class can’t seem to recover: there’s no money for us. Almost all of the benefits of the recovery have gone to the top twenty percent.

The redistribution of wealth in this country has been profound–one of the greatest economic shifts in our history. The recession made that gulf even wider, and hardened it–a process that continues. There can’t be a reversal of this trend for a generation or two, it has been too profound a transfer for a quick fix. The middle class of even twenty years ago will not regain their position, not in their lifetimes. Our best years are long behind us. So we’ve adapted. We live poorer, spend less. We live in a totally separate world from the top twenty per cent. The businesses that succeed nowadays are ones that cater to the twenty percent. Businesses that cater to the middle class are prone to failure.

I don’t see a way out. We’ve lost the class war. Got our asses whipped before we even realized that there was a class war.

Way too many bedrooms

With the steady and dramatic drop in the US birth rate–it has never been lower than it is now, and it continues dropping–most couples now rarely have more than one or two children, if they have children at all. And single mothers follow the same pattern, one or two children. This means that there will soon be–within a decade, maybe–a glut of homes with three, four and five bedrooms. Indeed, as boomers die or sell off their large homes, these houses will begin hitting the market in huge numbers. Very few families with one or two kids will buy a five bedroom home. Childless couples will be even less likely to buy one. Yet suburbia, older urban neighborhoods, small towns and rural America contain far more homes with more than two bedrooms than they do homes with one of two bedrooms. Who will buy these houses? The prices will have to fall, indeed, a five bedroom house might be cheaper than a two bedroom house. And will renters, as there will still be a lack of places to rent (in large part because there are so many homes with too many bedrooms that make them expensive for a single family to rent) begin moving into these large homes, four or five tenants per home? It could be cheaper to rent a bedroom in a plush four or five bedroom home in Palos Verdes Estates than it would be to rent a studio apartment in Silver Lake. And I think we will see this begin happening within ten years. This is becoming a country of families with very few children or no children at all, in a land full of houses built for families with four and five children. We’re not the only country having less kids, of course, but we’re the only one that’s so full of sprawling ranch houses and three floor Victorians and four bedroom row houses. Things will be a lot better soon enough. Those Generation X kids will live out their fifties and sixties without spending half their monthly income on rent. As for us late period baby boomers, those of us born in the late fifties and early sixties….well, we’re screwed. We came of age in the 70’s and are getting old in the teens, two economically fucked up decades, complete messes, with politics just as horrid and everyone too broke to make the mortgage or rent. Oh well. It’s all in the timing.

abandoned farmhouse

Abandoned farm house in eastern Colorado. The great plains have been depopulated, the children grew up and moved away, the old people died, and their houses can be had for a song.

Reaganomics

(originally written in 2009 or so)

The 1970’s were economically tough in America, very tough. But the downturn afflicted all classes, to no one’s benefit. There was no deliberate siphoning of wealth from the middle class to the wealthy. That is the difference between Nixon and Reagan…and something Steve Forbes, of course, is loathe to admit.  With the election of 1980 there begins a dramatic rise in the income of the very wealthy…but more importantly, the middle class began to divide…and the upper middle class began also to benefit tremendously from New Right economics while the rest of the middle class began to drop to working class wage levels. The top twenty percent, before the latest recession, had 85% of all the wealth in the country.  And 90% of all the liquid money. There is far too much focus on the top one of two percent….you cannot have a functioning economy with a handful of rich and everyone else broke.  But you can have an economy with one fifth rich and the rest struggling. Which is what we have now. And which we did not have before Reagan. Why? Because it was an impossibility before. There was literally no way for one fifth of the population to acquire four fifths of the wealth. That had to be legislated into effect, which is what happened in the first half of the first Reagan Administration. And you can see the effect in the charts…whereas rich, middle class and poor alike had all seen their income suffer in the seventies, from 1982 onward there is a dramatic change. The wealthy become increasingly wealthy, and the rest of us have very little income growth at all. And in fact when you account for inflation and the fact that we are paying for so much of our own benefits today, we are often making less than we were before 1980. I’m not denying that there would have been wage deterioration anyway…but I am saying that it would not have been to the degree it is now. The income structure that exists now is the result of Reaganomics. Without Reaganomics, the upper 20% of the United States would not be as separated from the rest of us as they are now.

What we have now was the creation of the Reagan Revolution, though the degree was something the Reagan adminstration never imagined. They thought all our wages would rise along with the wealthy (the essence of trickle down economics)…but at the same time they allowed upper management to begin shipping production–i.e., our jobs–overseas (mainly through tax benefits–which are still in effect). Thus began the great divide between the classes, something that seems by now impossible to stop. It will stop, I think. The Reagan Generation, those children of the FDR generation, who rejected everything their parents believed about income equality and egalitarianism as an American virtue, is dying out now. There are less and less of them. And the young voters today, the vast majority of them raised in cash strapped environments, are voting to the left pretty regularly. So eventually a big shakeout will occur, a counter to the Reagan Revolution, and much of what created such disparity will be legislated back out again. We’ll never be as rich as we were in the 1960’s, because the world has recovered from the two successive world wars and all the economies trapped in communist regimes have now rejoined the rest of the world. But it will be a lot better than it has been now. I think the Reagan Republicans somehow had the idea that money was unlimited, and that if the rich could make more money then everybody else could make more money too (again, that is trickle down economics). There was no limit to how much money you can make. Kind of like the way Republicans thought about the economy in the 1920’s. But there is a limit. Wealth is not infinite. It’s even less infinite when you begin to allow the upper class–that top 20%–to make a lot of their wealth from business in foreign countries and not allowing the rest of us to do the same. We can’t tap into that income, nor can we get any of it back via higher taxes on the rich. We’re just cut off, completely. So when it began to dawn on the Right that there model did not allow for rising profits for the whole nation, they just flat out didn’t give a damn. Which is pretty much their position now. The rich are rich because they deserve to be rich, and we are not because we are not rich. That wasn’t part of the Reagan creed. That evolved since then, crystallizing in the George W. Bush years. It is the greed unleashed by Reaganomics being hardened into privilege. The top twenty percent are the aristocracy, and we are the dirty masses. And that, more than any other factor, is why everything is so messed up now. Until that divide is smashed and the wealth disparity ended through some sort of redistribution (e.g. tax increases on the wealthy, limits on upper management pay, the replacement of benefits once provided by employers), the rich will only get richer and the rest of us poorer. What a dismal future that will be.

Morally Repugnant Elite

I was reading an article from 1994 on Haiti’s “Morally Repugnant Elite” and was stopped cold by the first paragraph:
“Haiti’s tiny upper class, the 1 percent of the population that hogs half the nation’s income, is referred to by American diplomats in Port-au-Prince as ‘MREs’, short for ‘morally repugnant elites’.”

The notion, in 1994, that one per cent of a nation could control half a nation’s income was so objectionable as to be morally repugnant. Yet now the entire world is that way. Worse than that, even. One percent of the world now has more money than the other 99%. Indeed, sixty two people, combined, are now richer than the several billion of the poorest half of the population of the world put together. Haiti, as appalling as it was in 1994, had a more equitable balance of income than the entire world has today. The rich keep getting richer, hogging, as the article says, half the world’s income, with no sign their share will not keep growing. There is money being made, but less and less people are seeing any of it.

Continue reading

Making fun of poor people on Black Friday

It’s been pointed out that Black Friday is the only day of the year that lower income families can afford to buy household items otherwise beyond their means. I think there’s an element of class prejudice in our condemnation and satire of Black Friday shoppers. After all, it’s not the upper class and two per centers cramming into Walmart, and you don’t see all those professionals without kids lining up to be the first in at Target. We’re just keeping alive the fine old tradition of making fun of everything poor people do.

You can’t be a democratic socialist and think you’re better than the working class. But that is the problem when Progressives have the highest income level of any American political orientation. Nearly a quarter of those surveyed Occupying Wall Street a couple years ago had incomes that qualifed them as wealthy, one third had post-graduate degrees, and the vast majority were white. Rather than reflecting the working class, they were much were much reflective of the American upper class. Those condemning ‘Murica tend to be the very thing they hate. If they weren’t so overpaid, there wouldn’t be so many of the less fortunate acting crazy at Walmart on Black Friday. Shopping at Whole Foods is a far more destructive act than fighting over a microwave at Walmart.

If you make good money now, and live comfortably, you are probably in the top fifth of American Income earners. That makes you part of the problem. Just ask Bernie Sanders.

 

The disappearing Middle Class

(2012)

From the “Harper’s Index” in the September 2012 Harper’s Magazine….

Percentage change since 1970 of the share of metropolitan American families residing in affluent neighborhoods: +121

Residing in poor neighborhoods: +108

Residing in Middle Class neighborhoods:  -34

The math there is just brutal. There are more than twice as many–almost two and a half times as many–affluent households now than there were in 1970. There are over twice as many poor households as they were ion 1970. And the number of middle class households is down a whole third. If you consider that the total household wealth money supply has been fairly fixed over that time, you can see how this happened.  The upper class has increased their share by taking it from the middle class. Their increased wealth didn’t come out of nothing. It’s not like there was a Gold Rush that increased the money supply several fold over night. Nope. It’s just that the salary structure and profit taking and were fundamentally altered so that most of that cash went to the rich and upper middle classes (who are now the lowest rung of the affluent  class.) They’ve locked in this bias, too–when the recession hit, that they themselves caused, the upper class–the top 20%–suffered almost not at all. All the pain was born by the middle and lower classes, especially the middle class, who have been so stripped of cash that they can no longer even afford to be middle class. That’s what has made this downturn so devastating, and why the middle class can’t seem to recover: there’s no money for us. Almost all of the benefits of the recovery have gone to the top twenty percent.  The redistribution of wealth in this country has been profound…one of the greatest economic shifts in our history. The recession made that gulf even wider,and hardened it.,.and endlessness of the recession has only continued that process. There can’t be a reversal of this trend for a generation or two. The middle class of even twenty years ago will not regain their position, not in their lifetimes. Our best years are long behind us. So we’ve adapted. We live poorer, spend less. We live in a totally separate world from the top twenty. The businesses that succeed nowadays are ones that cater to the twenty percent. Businesses that cater to the middle class fail.

I don’t see a way out. We’ve lost the class war. Got our asses whipped before we even realized that there was a class war.