THERE MAY BE NO “HERE” HERE

19 01 2010

There may only be a fading myth born of a 500-year spree. The West found a whole new continent to exploit in 1492—a once-in-a-millennium event. The glorious promise of wealth inherent in that event has drawn people who transcendentally love money here from all over the world continuously from then ’til now.

Like a vast Darwinian juggernaut, this uniquely American situation has selected for that type of person to become our citizenry over all those many generations. It’s a wonder we have anything here at all but  businesspersons and bankers! The long, long influx of the acquisitive has expressed itself most endearingly as “the American dream.” Time is running out on that dream, what with all our national wealth going into mad wars, and China rising fast and all.

So what’s left is a nation of some very bewildered people. They were sure they were all going to get rich. Now lots of the ones near the bottom of the middle class are coming to realized they’re headed down, not up.*

At times when a society’s foundational myths are crumbling they are clutched at all the more passionately. Or, as one smart commentator said in response to today’s New York Times column by David Brooks:

Brian
Milwaukee, WI
January 19th, 2010
10:14 am

The reason for disillusionment [with President Obama and the Democrats] is because most Americans are still clinging to the delusion of their own specialness. A fake narrative endlessly peddled by the conservative dream makers to keep the pocket picking endless.

“Oh yes, stout American, you are a giant of your time. A hero. Admired. Individual. Listen to our rousing conservative homage to your ego.”

But of course it’s fiction. Fiction lapped up like sweet water in a desert, but still fiction.

Americans, haven’t reacted [to the recent and perhaps continuing Depression and the Obama’s resulting election] with a “deep, vestigial sense of proportion”. They’ve reacted with a tantrum, ticked off because the fiction is exposed and they can’t accept it. They can’t accept that the riches they were promised by the free market and housing boom was in fact a shell game. They’ve been Bushwacked.

The problem with Obama is that he’s actually trying to tie solutions to his rhetoric and, politically, Americans aren’t used to that. Don’t want it. We are not prepared and are still addicted to our delusion. Right now we resemble teenagers on a school day morning who don’t want to get up and face the test they haven’t studied for. ‘I’m sick’.

Wake up America and face the music.”

_____________________________________________________________________________________________________

*For evidence of how and why they are headed down, see my earlier post,  “So THAT’S Why You Both Have to Work” at

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

Globalization and the resulting export of once-well-paid working class job is likely to make all this worse in future.





LEARN ALL ABOUT WHAT MAKES OUR ECONOMY TICK—IN ONE POST

3 09 2009

LLLL

I know economics is “the dismal science”, but this man is such a good writer that the information slips into your brain with a minimum of pain:

http://www.nytimes.com/2009/09/06/magazine/06Economic-t.html?pagewanted=1&_r=1&hp

LLLLLL

The greatest thing I’ve learned over my 62 years of life is that if you think you’re totally right, you have just become wrong.

The above url leads to a clear description of how the immense demonstration of this truth which all of us have just lived through came to occur.

Check it out!





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.)

TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT

“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.”

TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT

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:

LLLLLLLLLLLLLLLLL

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.
Download high resolution TIF


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.
Download high resolution TIF


Source: Congressional Budget Office, Historical Effective Federal Tax Rates: 1979 to 2004, Table 1C, December 2006.
Download high resolution TIF

eeeeeeeeeeeeee

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).
Download high resolution TIF


Source: Economic Policy Institute, State of Working America 2006-07, Figure 5F, citing Wolff (2006).
Download high resolution TIF


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.
Download high resolution TIF


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).
Download high resolution TIF


Source: Economic Policy Institute, State of Working America 2006-07, Figure 5b, citing Wolff (2006).
Download high resolution TIF


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.
Download high resolution TIF

eeeeeeeeeeeeee

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.
Download high resolution TIF


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).
Download high resolution TIF

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.
Download high resolution TIF


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.
Download high resolution TIF





GREAT MINDS THINK ALIKE

26 07 2009

http://www.huffingtonpost.com/bill-maher/new-rule-not-everything-i_b_244050.html





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.





KRUGMAN ON RECENT ECONOMICS

9 06 2009

(And a Fun Phillipic from a Commentor)

First read Nobel-Prize Winning Economist Paul Krugman in Sunday’s New York Times on recent economic history here and in Great Britain:

http://www.nytimes.com/2009/06/08/opinion/08krugman.html

Then read this comment on that column by Clifford in Washington:

2009 6:36 am

Link

“There is not going to be anything new happening because the Landed Gentry Party controls the economy regardless of which political wing occupies the throne.

The only way that the economy of this nation is going to change — Remember that word? — is when everyone has a health-care plan like that of the civilized countries in Europe where the health of their citizens trumps the profits that the oligarchs in  law-of-the jungle America demand, and when homes are truly affordable and no one is allowed to offer crooked mortgages that rob the people blind, both those who can afford homes and those who cannot.

Adequate wages and salaries for the masses, with a common-sense tax structure that allows them to survive, round out the necessary data for whatever you or anyone else hopes that will arise after this Depression is over in two years and when the economy is back to normalcy in five years.

Without those basic criteria being satisfied there is no hope for a change for the better, but what does remain is a formula for business as usual. The people need to see this fact and react to change the status quo.

Changing the wings of the Government on the so-called election days is a loser, as that route only keeps the rich rich and the poor poor, as the last forty years of smooth talking has clearly shown.

Something on the order of what happened here in 1776, and in France in that period, and in Russia in 1911, is necessary to clean out the barn to get rid of all the corrupting pathogens.

I don’t see that happening with an ignorant electorate that believes whatever any smooth, or not so smooth, talker who happens to occupy the throne says.”

— Clifford, WA

This commentor must be at least somewhat young, because he seems still to retain a vestige of hope of change in the USA. In actuality, ever since the confluence of the Industrial Revolution and the “American Dream” in the post-Civil-War period made the USA the Heaven on Earth for Owners of Capital, the rest of us have had nothing to say about the running of the country. The Owners can be relied upon to spend whatever it takes, in bribes to Congress and propaganda directed at the masses, to see that that situation continues.