A friend posted:
Just saw that people in America living at or below the “poverty level” has doubled in the past 5 years! Good times!!!!!
Well, when this last recession ended companies did not respond by rehiring but instead did the opposite. So the returning profits went into executive bonuses and shareholders (often those same executives) instead of labor force. Wages also stayed depressed, benefits have been cut back, and changes in the tax code made during the Reagan Administration gave financial incentive to ship American jobs overseas where wages are a fraction of ours (in India, a tenth of ours). Weakening labor protections have allowed permanent employees to be replaced by temps, and in a trend that makes one wonder if anyone is enforcing labor laws at all, many entry level positions in companies are filled by unpaid interns. It’s very likely that you if you are over fifty then you are making one third to one half less than you were making even a decade ago. Worse yet, chances are good that you are now making, when inflation and loss of benefits are factored in, about the same as you were making when you got your first real job. Your entire working life has left you where you started.
There is a logic at work here. It’s the logic of Wall Street and is inexplicable unless you read how executive bonuses are tied to the profit margin in the annual reports. If you can’t increase the price of your stocks, you are not a successful business. The mission of businesses is now to serve the big shareholders, instead of shareholders providing capital to improve the business which in turn will raise the value of the shares. T Boone Pickens turned the model inside out. The people who master the art of accumulating the most shares of stock and then selling them at a profit now run the economy. It makes no sense. We try to survive at their whim. It’s capitalism gone utterly mad, turned into something as warped and destructive a socio-economic philosophy as its arch-enemy communism.
There’s no sign we can yet see that any of this will reverse. I’m not saying it is irreversible, but we can’t see how it will change, not yet. It’s a trend that began 40 years ago and really went into overdrive during George W. Bush’s two terms which pretty much validated pure greed as a positive social force. Much as happened in the decades immediately following the American Civil War in the age of the Robber Baron. As a result, today most of the former working and middle classes have been pushed into poverty or near poverty. Hence the doubling of that poverty rate in the last five years. The recession knocked middle class people over like nine pins, wiping them out, leaving them with nothing.
However, about 20% of the US is doing really well, and continue only to do better. People who focus on the top two or even top one per cent miss that point. It’s not just a tiny few but an entire class that dominates the US economically. This is a true class war, the top twenty per cent versus the rest of us, and we have lost. That upper twenty per cent have achieved total victory. In 2008 figures the top 20% held 85% of the total wealth in the country. Eight five per cent. And over 90% of the cash money. Over ninety per cent. It has not been like this since the end of the twenties. The FDR social revolution was completely reversed by the Reagan Revolution. 1980 was the beginning of the end. We lay vanquished now beneath the feet of that top twenty per cent. If you want to see how vanquished, take a drive through the Westside of Los Angeles, or up in the Hollywood Hills, or through the vast swathes of the San Gabriel Valley where they live, segregated from the rest of us. Wealth segregation has long surpassed racial segregation in this country. It’s a de facto apartheid. Park your beat up old car on a quiet Beverly Hills street for an hour or so and read the paper. See how long it is before the cops show up and tell you to get out of there. Doesn’t even necessarily matter what color you are. If you aren’t rich, you are not supposed to be there.
The Reagan Revolution, though, has burned itself out. It is held in power only by clever gerrymandering, and the fact that rural districts and small state are over represented in Congress, or by the aging populations of small states that have more elderly voters than do the larger, growing states. Elderly voters are Reagan voters. In 1980 the elderly were FDR voters. But they died out and the Reagan voters took over and what a mess they made of things. But they are disappearing now, taking their party with them. Their blatantly restrictive voting laws just show how terrified they are. Change is coming. Slowly, the wealth of the country will even out more. Greed will return to its rightful place amid the seven deadly sins. Too late for those of us in our fifties, but your kids will benefit.
Here’s a cycle for you….the 1890’s was economically catastrophic. the 1930’s were catastrophic. The 1970’s were catastrophic. And the 2010’s are proving catastrophic as well. The economic system that was put in place by the American Civil War (which completely replaced the pre-Civil War system in which slaves accounted for more dollar value than all the assets in the North combined) seems to have these forty years cycles. People our age–I am 56–were born at just the right time to begin and end our working lives right at the low points. Timing, they say, is everything.