TIME TO WAKE UP!

22 04 2010

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I was amazed when Ronald Reagan, who I knew then only as a second-rate actor,  was elected president in 1980, and I’ve been appalled at what he and his cohort have done to the country since. I’m all the more appalled because the folks whom they’ve mainly done it TO include me, a lower-middle-class cubicle dweller.

The poor and middle class have been disproportionately affected by Republican policies over the last 30 years, as more and more of the national income and wealth has flowed upward away from them. For documentation of this, see my earlier post here:

https://nightman1.wordpress.com/2009/07/31/so-thats-why-you-both-have-to-work/

Believe it or not, I suspected that this slow “pauperization” was happening long before the Internet came along to supply the actual statistics. The metastasizing growth of Wall-Mart and simultaneous waning of traditional department stores told me what was happening. People sliding ever downward in real income were struggling  to maintain their familiar lifestyles. To do so they had to abandon shopping at traditional department stores and consign themselves to the noise, disorder, aesthetic challenges, and under-service to be found at Wal-Mart, “the price leader.” *

Periodically during that period I tried to imagine why working people were swallowing the Reagan line — approving his effort to weaken unions, worker- and consumer-health protections, anti-trust enforcement, and the like, and cutting taxes for the most wealthy taxpayers, plus continually weakening the country’s social safety net.

I think I understand why now.

They did it because Reagan revived the founding myth of the USA.

For the generation of people who became the parents of my generation, the Depression had been a terrifying thing that lingered on in their hearts, keeping on raising questions about the wonderfulness of business and capitalism, long after the emergency that business and capitalism had created had passed. After all the suffering of the Depression and THEN of WWII, I doubt that boundless optimism was widespread among them.

But by 1979 those folks were mostly over being scared — and of course their kids, having grown up in a long period of general prosperity, had never been scared. So Reagan was able to come along and revive, even in working class hearts, that great American belief that everyone can get rich, or at least prosperous, if he just applies himself to it**.

That notion, which had had a large element of truth in it when the frontier brought us ever more virgin territory to exploit, is not lightly extirpated from the American heart***  by modern industrial and globalized reality, which drive down wages due to lack of collective bargaining, and easy exportation of jobs . It’s so HOPEFUL, and we’re an optimistic people. And it’s so CONSOLING!

As long as I believe I’m likely to be rich — or at least better off — later, I may manage never to truly notice that right now I’m working retail and taking crap every day for a few dollars an hour. And getting rid of government interference with business is going to seem like a great idea to me too, because, after all, I am surely going to be one of the interfered-with owners/managers some day, and, even if I never am, I will continue to admire the people who do get rich, and wish them well.

And of course I will hate taxes, because I know that when my inevitable richness arrives high taxes are going to steal my money!

Hence, the phenomenon, today, of the aggressively conservative pauper!

Let’s wait and see what happens when a lot of these people at or near the bottom of society, who had hoped to achieve a modest rise over their lifetimes, wake up and realize that not only are they never going to ascend any economic heights, they’re actually slipping back down the modest slopes they’ve already managed to climb.

OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO

Looks like some waking up is already going on:

http://74.125.113.132/search?q=cache:-NCdpwS0cJkJ:www.mvchamber.org/mvchamber_news.asp%3Fid%3D598+%22Belief+in+Attaining+American+Dream+Now+57%25%22&cd=3&hl=en&ct=clnk&gl=us

OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO

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* Back in the 1960s, when I grew up, people who didn’t have to count every  penny normally shopped at highly-respected department stores like Sears, Montgomery Wards, Macy’s, and Marshal Fields. Those places were busy but quiet, clean, orderly, carefully designed to appeal to the eye on every side, and full of well-made products and helpful salespersons. The Wal-Marts of that age, Woolworths, Kress, and K-mart, mostly received the custom of the poorer folk.

** That idea was first given compelling literary form in the bestselling late 19th Century stories of Horatio Alger, in all of which a penniless boy becomes, by virtue of his optimism and work ethic, a secure member of the upper middle class or beyond. But the idea was in the American air long before that. If you think about it, what would be more natural than that everyone born into a country with boundless frontier lands waiting to be exploited would assume that his personal prospects were equally boundless?

*** Nor should it be, entirely. The Horatio Alger story is not a “myth” in the sense of a lie, but rather in the anthropological sense of an idealized story known by everyone in a culture, and which serves to explain the world and give meaning to their lives. People can certainly sometimes still “make it” in the USA. Recently I received a narrative of the life of a fellow member of my high school class of ’66. He had ended up doing very well, and it was inspiring to read about the twists and turns of events that he had navigated adroitly for 44 years to to reach his affluent current state. (You know who you are, Bobby!)

But not everyone is fitted to be or wants to be an “entrepreneur”. The big organization in which I work has several thousand employees.  They are not paid well, and most of their work is tedious paper-pushing. I suspect they stay because they are people, like the vast majority of every American generation before them, who just want a job where they can make a decent living and then go home and play with their kids. Back in my youth this was a thoroughly respectable aspiration, and millions of such people could achieve it through high-paying factory jobs. Why in fact there were so many people with such jobs back then that I must have seen a million beer commercials on TV that were directed just at them: A bunch of guys are standing around in a bar after getting off work. They are slugging back beers at a great rate while laughing and carrying on and obviously having lots of fun. All is right in their world.

I never thought as I watched those dumb ads that one day I’d be nostalgic for the world they reflected.

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REVOLUTION NEVER COMES WITH A WARNING II

9 01 2010

You’ve heard this kickass song by Michael Ferranti and Spearhead. Now see the words to it here:

https://nightman1.wordpress.com/2009/05/24/revolution-never-comes-with-a-warning/

See a great video with the song here:

http://www.youtube.com/watch?v=Q1gIOqJzCDw

And, finally, see an even better video by the guy who made that video, here:

http://www.youtube.com/watch?v=GSMgfuuSkhA&annotation_id=annotation_626812&feature=iv

Feel like fighting now? See why you’re right:

http://www.youtube.com/watch?v=oNEIJ-k5mJo&NR=1





SCREWED BY THE RECESSION? HERE’S WHY.

26 10 2009

Knowledge is when you have ideas.

Ideology is when ideas have you.

At the url below you can see a history of a period in the late 1990s when one lady in Washington tried to go against the prevailing economic ideology of the last 30 years — which we later saw crash and burn so spectacularly in October of 2008.

http://www.pbs.org/wgbh/pages/frontline/warning/view/#morelink





MAD CAPITALISM

24 10 2009

A couple of decades ago, certain wealthy interests began buying up radio stations, stripping their staffs down to the absolute minimum needed to function, removing local programming from them, and then borrowing money against them to buy still more stations to add to their collections — and so on, ad nauseum. The cashflow from the stations was very nice for those rich folk, and no-one much cared about all the laid-off employees to whom much of that money had once gone to in the form of salaries.

The radio broadcasting version of the story of American business over the last 40 years, in short.

Later, after this consolidation had gone on for a long time, radio began losing listeners because only a few broadcasting formats were allowed by the amalgamation masters, and younger people were bored with them. For God’s sake, even I, a crusty old bably boomer, don’t want to hear songs from the past over and over and over again, daily and forever.

Now one of those eaters of stations, Citadel Communicatons, seems to be headed toward bankruptcy. Here is an interesting discussion of how the company’s immediate future is likely to play out, from a commentator on the radio business who has been prescient on the future of radio under the amalgamators for years:

http://insidemusicmedia.blogspot.com/2009/10/pre-packaged-bankruptcy-for-citadel.html





BACK ON MY HOBBYHORSE!

28 08 2009

HERE’S A GUY WHO’S AS MAD AS I AM ABOUT

WHAT WE’VE BECOME.

(And he’s on the front line–out there in the world of the young and  still hopeful, unlike me.)

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“Dr. Krugman’s nuanced assessment is correct, but regardless of the details, the US economy faces serious danger that will not easily be overcome. That’s because the true basis of the economic catastrophe here is cultural— the undermining of compassion, fair play, and the most basic sense of proportion in favor of outrageous greed, viciousness, and corruption in high places. Our economy is now a cruel, exploitative, predatory system of excessive crony capitalism.

As an old engineering professor, I’m on the front lines of this horrific debacle— my field has been eviscerated with particular ferocity. I teach a young American generation condemned to dismal indentured servitude- outsourcing and the H1B have decimated engineering in North America, since foreign grads, as in India, finish schooling with little debt and much lower cost-of-living.

My students by contrast, are inevitably saddled with staggering debt in their grueling years of training. Those drowning in student loans are “lucky”— if they also suffer injury, auto accident or crime (as victims, not perpetrators), then the vultures in our corrupt financial, health care and legal systems prey upon them relentlessly, reducing them to virtual serfdom (aggravating our recession by draining capital away from consumers and true producers). The brightest graduates suffer the most, and if they slip at any point, rather than being helped, they’re kicked harder and harder while down— apparently the highest “virtue” in our plutocratic Potemkin economy. As a further insult, they are confronted with usurious interest rates and then denied employment due to their credit ratings and unavoidable debt just to be trained— practices so outrageous, they are harshly punished as felonies elsewhere in the world.

Unsurprisingly, my students vote with their feet— by the spring of 2009, 40% were inclined to emigrate from the USA. They leave for engineering hubs like Korea, Japan, China, Belgium, Holland, Germany, France or Sweden, but also places like South America. Why? These are far better places to raise kids, and they cherish talent and creativity rather than squandering human capital in the neo-feudalism that now rules the USA. Only Britain and Australia suffer similar brain drains, mainly since they have adopted much of our own brand of neoliberalism and predatory capitalism.

My parents, immigrants to the USA decades ago, would weep if they saw what we have become. For young engineers, the future global languages of our field (and the sciences in general) will be Chinese and German, and anyone in the field would be well-advised to learn one (or both) of them to technical standard, write your papers and even found journals in them, whether or not you emigrate.

Commonsense and maddeningly obvious reforms, thus far stifled, are needed at once for these outrages and excesses that have stolen so much from the American populace. Our moneyed elites fail to realize that revolutions have started over far less.”

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This post is to New York Times column of Paul Krugman of 8-28-09, and may be found here:

http://community.nytimes.com/comments/www.nytimes.com/2009/08/28/opinion/28krugman.html?permid=7#comment7





So THAT’S Why We Both Have to Work!

31 07 2009


Anyone who reads this blog will notice I’m always upset about something. I have done you readers a disservice by picking out things on the margin to fulminate about, and never getting to the heart of the matter.

That heart is the steady decline of the working middle class in the USA since 1980, and the concomitant continuous march of more and more of the country’s wealth up the class ladder to the wealthiest Americans.

I haven’t written about the heart of the matter because it was extremely difficult to pull together all the data that substantiated these changes — data that I had heard about in bits and pieces over the years.

Now, happily, I’ve found a site that poops these facts out, as drawn from census and othe data through 2005:

http://www.demos.org/inequality/index.cfm

It’s a wonderfully clear site, with charts and graphs to clarify the straightforward discussion, so please take a look.

In case you don’t, here’s perhaps the most cogent data set in that site:

Note the steady rise of the incomes of ordinary working people from 1947 through 1979, and the leveling out since. In case you ever wondered where the Ozzie and Harriet world of the 1950s and ’60s, when one worker could support a family, has gone, this graph contains your answer.

The usual accoutrements of middle class life — many of them functional necessities, like more than one car per family — have multiplied, while the average earnings of those aspiring to that life  have stayed the same. Since all Americans tend to believe that they are at least middle class, or soon will be, this disparity has resulted in desperate efforts by many families to either earn more money (working two or more jobs per family), or, failing that,  access and spend first their savings and then any credit they can get.

And where has all the money that used to regularly increase the incomes of working people gone? I’m sure you can guess:

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By the Numbers

Income | Wealth | Executive Compensation | Wages | Data Banks | Download PDF Version


Income

The top one percent of households received 21.8 percent of all pre-tax income in 2005, more than double what that figure was in the 1970s. (The top one percent’s share of total income bottomed out at 8.9 percent in 1976.) This is the greatest concentration of income since 1928, when 23.9 percent of all income went to the richest one percent. (Piketty and Saez)

The above figures include capital gains, which are strongly affected by the ups and downs of the financial markets. Excluding capital gains, the richest one percent claimed 17.4 percent of all pre-tax income in 2005, more than double what that figure was in the 1970s. (It bottomed out at 7.8 percent in 1973.) This is the greatest concentration of income since 1936, when the richest one percent received 17.6 percent of total income. (Piketty and Saez)

Between 1979 and 2005, the top five percent of American families saw their real incomes increase 81 percent. Over the same period, the lowest-income fifth saw their real incomes decline 1 percent. (Census Bureau)

In 1979, the average income of the top 5 percent of families was 11.4 times as large as the average income of the bottom 20 percent. In 2005, the ratio was 20.9 times. (EPI, State of Working America 2006-07, Figure 1J)

All of the income gains in 2005 went to the top 10 percent of households, while the bottom 90 percent of households saw income declines. (EPI Snapshot, March 28, 2007)

Unprecedented levels of capital income are fueling inequality in the current business cycle. In the third quarter of 2006, the share of corporate income going to capital (profits and interest) hit an all-time high of 23 percent, with the remaining 77 percent going to employee compensation. Since capital income disproportionately goes to the top of the income scale, this shift towards capital income increases the income gap. (EPI Snapshot, Jan. 17, 2007)


Source: Thomas Piketty and Emmanuel Saez, “Income Inequality in the United States, 1913-1998,” Quarterly Journal of Economics, 118(1), 2003. Updated to 2005 at http://emlab.berkeley.edu/users/saez.
Download high resolution TIF


Source: U.S. Census Bureau, Historical Income Tables, Table F-3.
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Source: Analysis of U.S. Census Bureau data in Economic Policy Institute, The State of Working America 1994-95 (M.E. Sharpe: 1994) p. 37.
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Source: Congressional Budget Office, Historical Effective Federal Tax Rates: 1979 to 2004, Table 1C, December 2006.
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Wealth

In 1962, the wealth of the richest one percent of U.S. households was roughly 125 times greater than that of the typical household. By 2004, it was 190 times (EPI, State of Working America 2006-07, Figure 5B).

The richest one percent of U.S. households now owns 34.3 percent of the nation’s private wealth, more than the combined wealth of the bottom 90 percent. The top one percent also owns 36.9 percent of all corporate stock. (EPI, State of Working America 2006-07, Table 5.1 and Figure 5F).

The total inflation-adjusted net worth of the Forbes 400 rose from $470 billion in 1995 to $1.25 Trillion in 2006. (Arthur Kennickel, Federal Reserve Board, Currents and Undercurrents: Changes in the Distribution of Wealth, 1989-2004 (pdf) and Forbes Magazine.)

The U.S. Personal Savings Rate declined from 11.2 percent in 1982 to NEGATIVE 1.1 percent in 2006. (Bureau of Economic Analysis, National Income and Product Accounts, Table 2.1)


Source: Economic Policy Institute, State of Working America 2006-07, Table 5.1, citing Wolff (2006).
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Source: Economic Policy Institute, State of Working America 2006-07, Figure 5F, citing Wolff (2006).
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Source: 1989-2004: Arthur B. Kennickell, “Currents and Undercurrents: Changes in the Distribution of Wealth, 1989-2004,” Federal Reserve Board, Jan. 30, 2006, Table 1. 2005-06: Forbes.com.
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Source: 1922-53: Edward N. Wolff, Top Heavy (New Press: 1996). 1962-2004: Economic Policy Institute, State of Working America 2006-07, Table 5.3, citing Wolff (2006).
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Source: Economic Policy Institute, State of Working America 2006-07, Figure 5b, citing Wolff (2006).
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Source: White: Brian K. Bucks, Arthur B. Kennickell, and Kevin B. Moore, “Recent Changes in U.S. Family Finances: Evidence from the 2001 and 2004 Survey of Consumer Finances,” Federal Reserve Bulletin, vol. 92 (February 2006), Table 3. African American and Hispanic: Arthur B. Kennickell, “Currents and Undercurrents: Changes in the Distribution of Wealth, 1989-2004,” Survey of Consumer Finances Working Paper, January 30, 2006.
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Executive Compensation

American CEOs earned 411 times as much as average workers in 2005, up from 107 times in 1990. (United for a Fair Economy, Executive Excess 2006, based on Business Week and the Wall Street Journal).

Top executives in the U.S. now make about twice the pay of their counterparts in France, Germany and the U.K., and about four times that of Japanese and Korean corporate chieftains. (Lucian Bebchuk, testimony before the House Financial Services Committee, Mar 8, 2007.)


Source: Business Week and Wall Street Journal annual Executive Compensation surveys. Adjusted for inflation using CPI-U, Consumer Price Index, All Urban Consumers.
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Source: United for a Fair Economy, Executive Excess 2005, based on annual CEO pay studies conducted by Business Week (1990-2004) and the Wall Street Journal (2005).
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eeeeeeeeeeeeee

Wages v. Savings

Between 1949 and 1979, the inflation-adjusted average hourly wage for production workers rose 75 percent, from $9.00 to $15.78. Since 1979, the average production-worker wage has risen only 2 percent, from $15.78 to $16.11. (EPI, State of Working America 2006-07, Table 3.3)

Between 1979 and 2004, American workers raised their productivity 64 percent, while their median hourly compensation rose only 12 percent. (Economic Policy Institute, Datazone: PDF, XLS)

In 2006, households in the bottom 20 percent received $23 due to the Bush tax cuts. Households in the middle 20 percent received $448. Families in the top 1 percent received $39,020. And households in the top 0.1 percent received $200,523. (Urban-Brookings Tax Policy Center, Table T06-0034)


Source: Economic Policy Institute, The State of Working America 2006-07, table 3.4. For source data, see “Hourly Wage Decile Cutoffs for All Workers, 1973-2005 (2005 dollars)” on this page.
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Source: Economic Policy Institute, The State of Working America 2006-07, table 3.3. For source data, see “Hourly and weekly earnings of production and nonsupervisory workers, 1947-2005 (2005 dollars)” on this page.


Source: Bureau of Economic Analysis, National Income and Product Accounts, Table 2.1, Personal Income and Its Disposition.
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GOOD NEWS FOR THE REST OF US

13 06 2009

GOP-Leaning Majority Fading in U.S.

(This report in the Washington Post tells about an in-depth analysis of recent political outcomes made  by experts from both right and left.)

http://www.washingtonpost.com/wp-dyn/content/article/2009/06/13/AR2009061301209.html?hpid=topnews

I’ve always felt this shift would happen eventually. Here’s why:

http://krugman.blogs.nytimes.com/2007/09/18/introducing-this-blog/

This chart, in the blog of economist Paul Krugman, shows the share of the nation’s total income that has gone to the richest 10 percent of the American population over the past 90 years. There was a startling increase in the percentage of total income that THE REST OF US received back in 1942, and a steep decrease in our percentage of the pie beginning in 1982. Krugman calls this increasing widening of the gap between the Rich and THE REST OF US “the great divergence.”

I could see the results of this divergence, starting back around 1990, in the everyday life going on around me. A few of the indicators I saw:

1.  Continual growth of Walmart, and, at the other end of the retail scale, of high-end
retailers like Neiman-Marcus, while retailers like Sears steadily declined.

This was evidence that the rich had ever more money to spend, while THE REST OF US had ever less, so we had to make finding “the best price” the controlling criterion in all our buying.

2. Continual decrease in the American savings rate, and a matching increase in use of credit.

This was evidence that THE REST OF US were being increasingly pinched as we tried to maintain a middle-class lifestyle on incomes that were not growing and often shrinking.

3. Observation of my fellow low-level office workers, among whom both parents’
working has become essentially universal, and among whom the wives invariably
take off no more than six weeks for childbearing — a period that I could see routinely
caused moms to leave their new babies so early that it almost broke their hearts to
do so. (And, no, most of these, are not jobs that represent promising careers for the
moms that would make them eager to get back to work.)

4. Ever-growing number-of-hours-worked-per-year statistics for THE REST OF US in
the USA, so that we are now THE people in the entire world who work the most. (We
passed the Japanese some time ago!)

This weakening of the American middle class relative to American rich people was the inevitable result of the long dominance of Republican ideas here. In every Western country since the middle of the 19th Century there has always been a Right, which represents the interests of the owners of capital, and a Left, which tries to make life better for workers.

That is the essence of the great, long contention between the two sides of the political  spectrum — an economic class struggle, represented in the USA by the struggle between Democrats and Republican. And ever since the election of Ronald Reagan in 1980 Republicans and Republican ideas have predominated here.

When workers are continually being weakened economically, eventually the worm will turn, and we will have a swing to the Left.

We are now seeing that swing begin.