The Rise of the Have-Nots | The American middle class has toppled into a world of temporary employment, jobs without benefits, and retirement without security. |
Harold Meyerson | September 28, 2007 | web only
...
... But the idea that the economy could revert to its pre-New Deal configuration (in which the rich claimed all the wealth the nation created while everyone else just got by), the notion that the middle class might shrink even as the economy grew: Who, among all our generations and political persuasions, expected that?
Yet that's precisely what happened. Median family income over the past quarter-century has stagnated. The economic rewards from increased productivity, which went to working-class as well as wealthy Americans from the 1940s to the '70s, now go exclusively to the rich. The manufacturing jobs that anchored our prosperity were offshored, automated or deunionized; lower-paying service-sector jobs took their place.
...
Which is why a poll released this month by the Pew Research Center reveals a transformation of Americans' sense of their country and themselves that is startling. Pew asked Americans if their country was divided between haves and have-nots. In 1988, when Gallup asked that question, 26 percent of respondents said yes, while 71 percent said no. In 2001, when Pew asked it, 44 percent said yes and 53 percent said no. But when Pew asked it again this summer, the number of Americans who agreed that we live in a nation divided into haves and have-nots had risen to 48 percent -- exactly the same as the number of Americans who disagreed.
Americans' assessment of their own place in the economy has altered, too. In 1988, fully 59 percent identified themselves as haves and just 17 percent as have-nots. By 2001, the haves had dwindled to 52 percent and the have-nots had risen to 32 percent. This summer, just 45 percent of Americans called themselves haves, while 34 percent called themselves have-nots.
These are epochal shifts, of epochal significance. The American middle class has toppled into a world of temporary employment, jobs without benefits, retirement without security. Harder times have come to left and right alike: The percentage of Republicans who call themselves haves has declined by 13 points since 1988; the percentage of Democratic haves has declined by 12 points. ...
Sunday, September 30, 2007
cost of a college degree the past decade has produced an explosion in high-priced student loans that could haunt the U.S. economy for years
High-Priced Student Loans Spell Trouble | MARCY GORDON | September 30, 2007 02:13 PM EST
The near doubling in the cost of a college degree the past decade has produced an explosion in high-priced student loans that could haunt the U.S. economy for years.
While scholarship, grant money and government-backed student loans _ whose interest rates are capped _ have taken up some of the slack, many families and individual students have turned to private loans, which carry fees and interest rates that are often variable and up to 20 percent.
...
"This is literally a new form of indenture ... something that every American parent should be scared of," said Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers.
More than $17 billion in private student loans were issued last year, up from $4 billion a year in 2001. Outstanding student borrowing jumped from $38 billion in 1995 to $85 billion last year, according to experts and lawmakers. ...
The near doubling in the cost of a college degree the past decade has produced an explosion in high-priced student loans that could haunt the U.S. economy for years.
While scholarship, grant money and government-backed student loans _ whose interest rates are capped _ have taken up some of the slack, many families and individual students have turned to private loans, which carry fees and interest rates that are often variable and up to 20 percent.
...
"This is literally a new form of indenture ... something that every American parent should be scared of," said Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers.
More than $17 billion in private student loans were issued last year, up from $4 billion a year in 2001. Outstanding student borrowing jumped from $38 billion in 1995 to $85 billion last year, according to experts and lawmakers. ...
Violent crime in the United States rose more than previously believed in 2006 ... w. 2005 ... first steady increase in violent crime since 1993
Violent Crime, a Sticky Issue for White House, Shows Steeper Rise | By Dan Eggen | Washington Post Staff Writer | Tuesday, September 25, 2007; Page A07
Violent crime in the United States rose more than previously believed in 2006, continuing the most significant increase in more than a decade, according to an FBI report released yesterday.
The FBI's Uniform Crime Reporting Program found that robberies surged by 7.2 percent and homicides rose 1.8 percent from 2005 to 2006. Violent crime overall rose 1.9 percent, substantially more than an increase of 1.3 percent estimated in a preliminary FBI report in June.
The jump was the second in two years, following a 2.3 percent rise in 2005. Taken together, the two years represent the first steady increase in violent crime since 1993, FBI records show.
Violent crime in the United States rose more than previously believed in 2006, continuing the most significant increase in more than a decade, according to an FBI report released yesterday.
The FBI's Uniform Crime Reporting Program found that robberies surged by 7.2 percent and homicides rose 1.8 percent from 2005 to 2006. Violent crime overall rose 1.9 percent, substantially more than an increase of 1.3 percent estimated in a preliminary FBI report in June.
The jump was the second in two years, following a 2.3 percent rise in 2005. Taken together, the two years represent the first steady increase in violent crime since 1993, FBI records show.
Government, corporate, and consumer debt are all at record levels. Private debt has skyrocketed in the last three decades alone.
Private Debt Much Higher Than During the Great Depression
Sep 20, 2007 -- Private debt is much higher now than during the Great Depression, and has been allowed to grow as if there were no consequences to borrowing, and no limit to what can be paid back in the future.
Sep 20, 2007 -- Private debt is much higher now than during the Great Depression, and has been allowed to grow as if there were no consequences to borrowing, and no limit to what can be paid back in the future.
Rising Debt to Income Ratios
| Year | Debt to Income Ratio |
|---|---|
| 1952 | 40% |
| 2006 | 126% |
Source: Center for American Progress (CAP) Report
America is frequently called the 'richest nation on earth', but the reality is that the American people are living on borrowed money.
There is not one sector in the U.S. that has shown any measure of refrain. Government, corporate, and consumer debt are all at record levels. Private debt, which is debt from a private entity, such as a bank, has skyrocketed in the last three decades alone.
Our country is more leveraged by private debt than ever before. Families have the lowest rate of saving since 1929 and historic debt ratios according to the Family Income Report.
A Coming Depression
The staggering amount of private debt in the U.S. is frightening. The same debt problems that led to the Great Depression are currently present within our system:
...
The problem with private debt has not gone unseen by our nation's leaders. Many years ago, Thomas Jefferson issued a dire warning about banks and debt:
'If the American people ever allow the banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children will wake up homeless. I sincerely believe the banking institutions (having the issuing power of money) are more dangerous to liberty than standing armies. My zeal against these institutions was so warm and open at the establishment of the Bank of the United States (Hamilton's foreign system), that I was derided as a maniac by the tribe of bank mongers who were seeking to filch from the public.' ...
Monday, September 24, 2007
Americans Deeply Dissatisfied With Nation's Governance ... only 18% of independents and Democrats [satisfied]
September 21, 2007 | by Frank Newport | GALLUP NEWS SERVICE | Americans Deeply Dissatisfied With Nation's Governance | Democrats [and Independents.ed.] much more negative than Republicans
...
Sixty-seven percent of Americans are dissatisfied with the way the nation is being governed today, while only 31% are satisfied. This marks the most negative assessment of governance in response to this question since Gallup's September 1973 poll, conducted in the midst of the ongoing Watergate scandal then engulfing the Nixon administration. (At that time, 26% were satisfied and 66% were dissatisfied.)
There is a deep divide in the response to this governance question by partisanship. While more than 6 out of 10 Republicans say they are satisfied with the way the nation is being governed, only 18% of independents and Democrats agree.
While this partisan rift has been evident in each poll conducted since 2001, it has become more exaggerated in recent years. For example, there was a gap of 29 percentage points between the satisfaction level of Republicans and Democrats in September 2001, compared to the 45-point gap today.
...
Sixty-seven percent of Americans are dissatisfied with the way the nation is being governed today, while only 31% are satisfied. This marks the most negative assessment of governance in response to this question since Gallup's September 1973 poll, conducted in the midst of the ongoing Watergate scandal then engulfing the Nixon administration. (At that time, 26% were satisfied and 66% were dissatisfied.)
There is a deep divide in the response to this governance question by partisanship. While more than 6 out of 10 Republicans say they are satisfied with the way the nation is being governed, only 18% of independents and Democrats agree.
While this partisan rift has been evident in each poll conducted since 2001, it has become more exaggerated in recent years. For example, there was a gap of 29 percentage points between the satisfaction level of Republicans and Democrats in September 2001, compared to the 45-point gap today.
[Military spending} "such spending-totaling more than $1 trillion in 2008, according to the figures I’ve just cited-seems quite literally insane."
Saturday, September 22, 2007 by The Progressive | Pentagon Spending Totally Out of Control | by Amitabh Pal
...
“In ‘constant’ (inflation adjusted) dollars the Pentagon budget is now significantly larger than at any time in recent history,” says the Center for Defense Information in a recent press release. “It is now larger than the previous peaks of Department of Defense spending for the Korean and Vietnam wars and the similarly large increase during the early part of the Reagan presidency.”
In the most recent fiscal year, the Pentagon was ladled out an incredible $600 billion, if you total the “regular” budget and special “emergency” appropriations. When you add the nuclear weapons program of the Department of Energy, VA spending, and other Homeland Security expenditure, the total came to $760 billion-plus.
On Tompaine.com, Robert Dreyfuss calculates the defense budget to be more than $1 trillion, if you total all the sundry items, plus interest payments on past defense spending. Dreyfuss, who has written a book on U.S. nurturing of Islamic radicalism, “Devil’s Game: How the United States Helped Unleash Fundamentalist Islam,” has no illusions about Al Qaeda. But he rightly asks:
“To a rational observer, such spending-totaling more than $1 trillion in 2008, according to the figures I’ve just cited-seems quite literally insane. ...
...
...
“In ‘constant’ (inflation adjusted) dollars the Pentagon budget is now significantly larger than at any time in recent history,” says the Center for Defense Information in a recent press release. “It is now larger than the previous peaks of Department of Defense spending for the Korean and Vietnam wars and the similarly large increase during the early part of the Reagan presidency.”
In the most recent fiscal year, the Pentagon was ladled out an incredible $600 billion, if you total the “regular” budget and special “emergency” appropriations. When you add the nuclear weapons program of the Department of Energy, VA spending, and other Homeland Security expenditure, the total came to $760 billion-plus.
On Tompaine.com, Robert Dreyfuss calculates the defense budget to be more than $1 trillion, if you total all the sundry items, plus interest payments on past defense spending. Dreyfuss, who has written a book on U.S. nurturing of Islamic radicalism, “Devil’s Game: How the United States Helped Unleash Fundamentalist Islam,” has no illusions about Al Qaeda. But he rightly asks:
“To a rational observer, such spending-totaling more than $1 trillion in 2008, according to the figures I’ve just cited-seems quite literally insane. ...
...
Thursday, September 20, 2007
Bush Claims He "Got A B In Econ 101" ... Transcripts shows C--.
Bush Claims He "Got A B In Econ 101" | September 20, 2007 11:09 AM
...
"You need to talk to economists," he answered when asked if there was a risk of recession in the US economy. "I think I got a B in Econ 101. I got an A however in keeping taxes low, and being fiscally responsible with the people's money."
President Bush as an undergraduate at Yale did not in fact receive a grade of B in his economics course. Bush received a grade that would correspond with a C-.
...
President Bush, who earned a Bachelor's degree with a major in History at Yale, has long described himself as a 'C student.' He also has a Masters of Business Administration from Harvard.
...
"You need to talk to economists," he answered when asked if there was a risk of recession in the US economy. "I think I got a B in Econ 101. I got an A however in keeping taxes low, and being fiscally responsible with the people's money."
President Bush as an undergraduate at Yale did not in fact receive a grade of B in his economics course. Bush received a grade that would correspond with a C-.
...
President Bush, who earned a Bachelor's degree with a major in History at Yale, has long described himself as a 'C student.' He also has a Masters of Business Administration from Harvard.
Monday, September 17, 2007
steady erosion of our manufacturing base, elimination of millions of skilled industrial jobs, creation of a crushing burden of household ... debt
09/15/07 | Economic Crisis: The U.S. Political Leadership Has Failed | Richard C. Cook
...
But he was wrong in thinking that the solution was deregulation of the economy, particularly deregulation of financial and investment institutions which took place during his two terms. The result was enormous growth in the power and influence of Wall Street and the big banks over the rest of the economy. The era of leveraged mergers, acquisitions, and buyouts was the predecessor of the disaster of today with the unfolding fiasco of equity, hedge, and derivative funds in the process of collapse.
After Reagan came President George H.W. Bush. By the end of his term, the loss of manufacturing jobs had produced another recession. Within a couple of years of Bill Clinton’s election in 1992, action by Secretary of the Treasury Robert Rubin to strengthen the dollar attracted enough foreign investment to create the dot.com bubble.
...
Our political leadership has let us down in the following critical respects:
... This system, with interest rates much higher, on average, than during previous decades, has been catastrophic for the U.S. economy. It has enriched the financial industry at the expense of everyone else through what can only be called institutionalized usury. Under this system, every period of economic growth since 1983 has been a bank-created bubble, while the general population has become steadily poorer. The Federal Reserve claims that it raises interest rates to reduce inflation, when in fact higher interest rates cause inflation by making every transaction more expensive. Under the reign of monetarism, the U.S. dollar has lost over eighty percent of its value. In fact, government policies are designed to generate inflation, because this makes it cheaper to pay down the national debt and while augmenting tax revenues.
It has been well-documented that since the early 1980s the federal government has acquiesced in every respect to economic policies that have resulted in the steady erosion of our manufacturing base, elimination of millions of skilled industrial jobs, creation of a crushing burden of household and individual debt, crumbling of our physical infrastructure, privatization or elimination of public services, failure to meet such crises as the Katrina disaster, export of jobs to low-cost foreign labor markets, unfair distribution of taxation, and toleration of the influx of millions of illegal aliens who keep wages low within the domestic economy.
...
These wars are being paid for by sale of Treasury bonds to possible future adversaries such as China, while the U.S. bubble economy that is backing up our military forces overseas is deflating. Clearly something has to give, either through exhaustion of our military capability abroad, economic collapse at home, or the catastrophe of a world war. The denouement seems to be drawing closer as foreign governments dump their U.S. dollars which are declining in value due to the twin trade and fiscal deficits. What our leaders should now be doing is recognize the fact that we live in a multilateral world where conflicts can only be resolved by nations acting as equals under the umbrella of the U.N. ...
...
But he was wrong in thinking that the solution was deregulation of the economy, particularly deregulation of financial and investment institutions which took place during his two terms. The result was enormous growth in the power and influence of Wall Street and the big banks over the rest of the economy. The era of leveraged mergers, acquisitions, and buyouts was the predecessor of the disaster of today with the unfolding fiasco of equity, hedge, and derivative funds in the process of collapse.
After Reagan came President George H.W. Bush. By the end of his term, the loss of manufacturing jobs had produced another recession. Within a couple of years of Bill Clinton’s election in 1992, action by Secretary of the Treasury Robert Rubin to strengthen the dollar attracted enough foreign investment to create the dot.com bubble.
...
Our political leadership has let us down in the following critical respects:
... This system, with interest rates much higher, on average, than during previous decades, has been catastrophic for the U.S. economy. It has enriched the financial industry at the expense of everyone else through what can only be called institutionalized usury. Under this system, every period of economic growth since 1983 has been a bank-created bubble, while the general population has become steadily poorer. The Federal Reserve claims that it raises interest rates to reduce inflation, when in fact higher interest rates cause inflation by making every transaction more expensive. Under the reign of monetarism, the U.S. dollar has lost over eighty percent of its value. In fact, government policies are designed to generate inflation, because this makes it cheaper to pay down the national debt and while augmenting tax revenues.
It has been well-documented that since the early 1980s the federal government has acquiesced in every respect to economic policies that have resulted in the steady erosion of our manufacturing base, elimination of millions of skilled industrial jobs, creation of a crushing burden of household and individual debt, crumbling of our physical infrastructure, privatization or elimination of public services, failure to meet such crises as the Katrina disaster, export of jobs to low-cost foreign labor markets, unfair distribution of taxation, and toleration of the influx of millions of illegal aliens who keep wages low within the domestic economy.
...
These wars are being paid for by sale of Treasury bonds to possible future adversaries such as China, while the U.S. bubble economy that is backing up our military forces overseas is deflating. Clearly something has to give, either through exhaustion of our military capability abroad, economic collapse at home, or the catastrophe of a world war. The denouement seems to be drawing closer as foreign governments dump their U.S. dollars which are declining in value due to the twin trade and fiscal deficits. What our leaders should now be doing is recognize the fact that we live in a multilateral world where conflicts can only be resolved by nations acting as equals under the umbrella of the U.N. ...
Friday, September 14, 2007
What the Warfare State Really Costs ... $2 trillion number seems low ... economic impact of lives lost, jobs interrupted and oil prices driven higher
What the Warfare State Really Costs | By Thomas E. Woods, Jr
09/13/07 "Lew Rockwell" --- Estimates of the cost of the Iraq war continue to escalate to levels well beyond what its optimistic architects once promised. Most notable, perhaps, has been the estimate of Columbia University’s Joseph Stiglitz, who, in a January 2006 paper with Harvard’s Linda Bilmes, put the full cost at around $2 trillion. By the end of the year, the two had grown even more pessimistic:
The $2 trillion number – the sum of the current and future budgetary costs along with the economic impact of lives lost, jobs interrupted and oil prices driven higher by political uncertainty in the Middle East – now seems low.
...
09/13/07 "Lew Rockwell" --- Estimates of the cost of the Iraq war continue to escalate to levels well beyond what its optimistic architects once promised. Most notable, perhaps, has been the estimate of Columbia University’s Joseph Stiglitz, who, in a January 2006 paper with Harvard’s Linda Bilmes, put the full cost at around $2 trillion. By the end of the year, the two had grown even more pessimistic:
The $2 trillion number – the sum of the current and future budgetary costs along with the economic impact of lives lost, jobs interrupted and oil prices driven higher by political uncertainty in the Middle East – now seems low.
...
Distorting the civilian economy
Over the course of a great many books and articles, Melman argued that the military establishment had deformed the civilian economy – depriving it of capital, making it less competitive, and reordering the priorities of its universities. “Industrial productivity,” he wrote,
the foundation of every nation’s economic growth, is eroded by the relentlessly predatory effects of the military economy.... Traditional economic competence of every sort is being eroded by the state capitalist directorate that elevates inefficiency into a national purpose, that disables the market system, that destroys the value of the currency, and that diminishes the decision power of all institutions other than its own. ...
fears that Americans may no longer be able to find the second jobs and recklessly borrow the money needed to buy imported stuff.
The party's over for American consumers | By Froma Harrop | Syndicated columnist | Wednesday, September 12, 2007
The new numbers on consumer confidence are out. They show American consumers very confident that the economy is going down the tubes.
Over in Asia and Europe, stocks plunged on fears that Americans may no longer be able to find the second jobs and recklessly borrow the money needed to buy imported stuff. Economists now freely use the "recession" word following the report that American payrolls fell in August, the first monthly decline in four years.
American consumers, in other words, are all dried up. And the discussion has begun on what kind of baloney economy kept them lubricated for so long.
...
And it's vindication time for the economists who've argued for years that expanding household debt is not a brilliant formula for national greatness. And they no longer have to counter the free-lunch theories — among them that a rising population will power the housing-bubble machine unto eternity, and that if you change accounting methods, American families don't seem so much over their heads in debt. ...
The new numbers on consumer confidence are out. They show American consumers very confident that the economy is going down the tubes.
Over in Asia and Europe, stocks plunged on fears that Americans may no longer be able to find the second jobs and recklessly borrow the money needed to buy imported stuff. Economists now freely use the "recession" word following the report that American payrolls fell in August, the first monthly decline in four years.
American consumers, in other words, are all dried up. And the discussion has begun on what kind of baloney economy kept them lubricated for so long.
...
And it's vindication time for the economists who've argued for years that expanding household debt is not a brilliant formula for national greatness. And they no longer have to counter the free-lunch theories — among them that a rising population will power the housing-bubble machine unto eternity, and that if you change accounting methods, American families don't seem so much over their heads in debt. ...
Tuesday, September 11, 2007
US GDP is 70% consumer spending. That means that wages have to increase beyond the rate of inflation OR THE ECONOMY CAN’T GROW.
Soup Kitchen U.S.A. | By Mike Whitney
09/11/07 "ICH" -- -- The days of the dollar as the world’s “reserve currency” may be drawing to a close. In August, foreign central banks and governments dumped a whopping 3.8% of their holdings of US debt. Rising unemployment and the ongoing housing slump have triggered fears of a recession sending wary foreign investors running for the exits. China, Japan and Taiwan have been leading the sell off which has caused the steepest decline since 1992.
...
After all, the Fed’s loose monetary policies added to Bush’s extravagant spending---$3 trillion added to the National Debt in just 6 years--- doomed the country from the beginning. Deficit spending has been the central organizing principle from day 1. Now comes the hangover. ...
...
Consider this: US GDP is 70% consumer spending. That means that wages have to increase beyond the rate of inflation OR THE ECONOMY CAN’T GROW. It’s just that simple. So how is it that 50% of the American people still believe Bush’s supply side baloney that cutting taxes for the uber-rich strengthens the economy? How does that increase wages or build a healthy middle class. If we want a strong economy wages have to keep pace with productivity so that workers can buy the goods they produce.
...
That’s it. No growth---just a galaxy of debt-instruments with odd-sounding names (CDOs, MBSs, CDSs, etc) stacked precariously on top of each other. That’s what we call "wealth" in America.
It’s all smoke and mirrors. The financial system has decoupled from the productive elements of the economy and is now beginning to show disturbing signs of instability. ...
09/11/07 "ICH" -- -- The days of the dollar as the world’s “reserve currency” may be drawing to a close. In August, foreign central banks and governments dumped a whopping 3.8% of their holdings of US debt. Rising unemployment and the ongoing housing slump have triggered fears of a recession sending wary foreign investors running for the exits. China, Japan and Taiwan have been leading the sell off which has caused the steepest decline since 1992.
...
After all, the Fed’s loose monetary policies added to Bush’s extravagant spending---$3 trillion added to the National Debt in just 6 years--- doomed the country from the beginning. Deficit spending has been the central organizing principle from day 1. Now comes the hangover. ...
...
Consider this: US GDP is 70% consumer spending. That means that wages have to increase beyond the rate of inflation OR THE ECONOMY CAN’T GROW. It’s just that simple. So how is it that 50% of the American people still believe Bush’s supply side baloney that cutting taxes for the uber-rich strengthens the economy? How does that increase wages or build a healthy middle class. If we want a strong economy wages have to keep pace with productivity so that workers can buy the goods they produce.
...
That’s it. No growth---just a galaxy of debt-instruments with odd-sounding names (CDOs, MBSs, CDSs, etc) stacked precariously on top of each other. That’s what we call "wealth" in America.
It’s all smoke and mirrors. The financial system has decoupled from the productive elements of the economy and is now beginning to show disturbing signs of instability. ...
[US pays] for it by giving up ownership of existing assets--stocks, bonds, companies, real estate, commodities. ... a DEBTOR nation ...
American Economy: R.I.P. | By Paul Craig Roberts
09/10/07 "ICH' -- -- The US economy continues its slow death before our eyes, but economists, policymakers, and most of the public are blind to the tottering fabled land of opportunity.
In August jobs in goods-producing industries declined by 64,000. The US economy lost 4,000 jobs overall. The private sector created a mere 24,000 jobs, all of which could be attributed to the 24,100 new jobs for waitresses and bartenders, and the government sector lost 28,000 jobs.
In the 21st century the US economy has ceased to create jobs in export industries and in industries that compete with imports. US job growth has been confined to domestic services, principally to food services and drinking places (waitresses and bartenders), private education and health services (ambulatory health care and hospital orderlies), and construction (which now has tanked). The lack of job growth in higher productivity, higher paid occupations associated with the American middle and upper middle classes will eventually kill the US consumer market.
The unemployment rate held steady, but that is because 340,000 Americans unable to find jobs dropped out of the labor force in August. The US measures unemployment only among the active work force, which includes those seeking jobs. Those who are discouraged and have given up are not counted as unemployed.
With goods producing industries in long term decline as more and more production of US firms is moved offshore, the engineering professions are in decline. Managerial jobs are primarily confined to retail trade and financial services.
When US companies offshore their production for US markets, the consequences for the US economy are highly detrimental. One consequence is that foreign labor is substituted for US labor, resulting in a shriveling of career opportunities and income growth in the US. Another is that US Gross Domestic Product is turned into imports. By turning US brand names into imports, offshoring has a double whammy on the US trade deficit. Simultaneously, imports rise by the amount of offshored production, and the supply of exportable manufactured goods declines by the same amount.
The US now has a trade deficit with every part of the world. In 2006 (the latest annual data), the US had a trade deficit totaling $838,271,000,000.
...
It means that Americans are consuming $800 billion more than they are producing.
How do Americans pay for it?
They pay for it by giving up ownership of existing assets--stocks, bonds, companies, real estate, commodities. America used to be a creditor nation. Now America is a debtor nation. Foreigners own $2.5 trillion more of American assets than Americans own of foreign assets. When foreigners acquire ownership of US assets, they also acquire ownership of the future income streams that the assets produce. More income shifts away from Americans.
...
The jobs data and the absence of growth in real income for most of the population are inconsistent with reports of US GDP and productivity growth. Economists take for granted that the work force is paid in keeping with its productivity. A rise in productivity thus translates into a rise in real incomes of workers. Yet, we have had years of reported strong productivity growth but stagnant or declining household incomes. And somehow the GDP is rising, but not the incomes of the work force.
Something is wrong here. Either the data indicating productivity and GDP growth are wrong or Karl Marx was right that capitalism works to concentrate income in the hands of the few capitalists. A case can be made for both explanations.
...
The case for Marx is that offshoring has boosted corporate earnings by lowering labor costs, thereby concentrating income growth in the hands of the owners and managers of capital. According to Forbes magazine, the top 20 earners among private equity and hedge fund managers are earning average yearly compensation of $657,500,000, with four actually earning more than $1 billion annually. The otherwise excessive $36,400,000 average annual pay of the 20 top earners among CEOs of publicly-held companies looks paltry by comparison. The careers and financial prospects of many Americans were destroyed to achieve these lofty earnings for the few.
Hubris prevents realization that Americans are losing their economic future along with their civil liberties and are on the verge of enserfment.
09/10/07 "ICH' -- -- The US economy continues its slow death before our eyes, but economists, policymakers, and most of the public are blind to the tottering fabled land of opportunity.
In August jobs in goods-producing industries declined by 64,000. The US economy lost 4,000 jobs overall. The private sector created a mere 24,000 jobs, all of which could be attributed to the 24,100 new jobs for waitresses and bartenders, and the government sector lost 28,000 jobs.
In the 21st century the US economy has ceased to create jobs in export industries and in industries that compete with imports. US job growth has been confined to domestic services, principally to food services and drinking places (waitresses and bartenders), private education and health services (ambulatory health care and hospital orderlies), and construction (which now has tanked). The lack of job growth in higher productivity, higher paid occupations associated with the American middle and upper middle classes will eventually kill the US consumer market.
The unemployment rate held steady, but that is because 340,000 Americans unable to find jobs dropped out of the labor force in August. The US measures unemployment only among the active work force, which includes those seeking jobs. Those who are discouraged and have given up are not counted as unemployed.
With goods producing industries in long term decline as more and more production of US firms is moved offshore, the engineering professions are in decline. Managerial jobs are primarily confined to retail trade and financial services.
When US companies offshore their production for US markets, the consequences for the US economy are highly detrimental. One consequence is that foreign labor is substituted for US labor, resulting in a shriveling of career opportunities and income growth in the US. Another is that US Gross Domestic Product is turned into imports. By turning US brand names into imports, offshoring has a double whammy on the US trade deficit. Simultaneously, imports rise by the amount of offshored production, and the supply of exportable manufactured goods declines by the same amount.
The US now has a trade deficit with every part of the world. In 2006 (the latest annual data), the US had a trade deficit totaling $838,271,000,000.
...
It means that Americans are consuming $800 billion more than they are producing.
How do Americans pay for it?
They pay for it by giving up ownership of existing assets--stocks, bonds, companies, real estate, commodities. America used to be a creditor nation. Now America is a debtor nation. Foreigners own $2.5 trillion more of American assets than Americans own of foreign assets. When foreigners acquire ownership of US assets, they also acquire ownership of the future income streams that the assets produce. More income shifts away from Americans.
...
The jobs data and the absence of growth in real income for most of the population are inconsistent with reports of US GDP and productivity growth. Economists take for granted that the work force is paid in keeping with its productivity. A rise in productivity thus translates into a rise in real incomes of workers. Yet, we have had years of reported strong productivity growth but stagnant or declining household incomes. And somehow the GDP is rising, but not the incomes of the work force.
Something is wrong here. Either the data indicating productivity and GDP growth are wrong or Karl Marx was right that capitalism works to concentrate income in the hands of the few capitalists. A case can be made for both explanations.
...
The case for Marx is that offshoring has boosted corporate earnings by lowering labor costs, thereby concentrating income growth in the hands of the owners and managers of capital. According to Forbes magazine, the top 20 earners among private equity and hedge fund managers are earning average yearly compensation of $657,500,000, with four actually earning more than $1 billion annually. The otherwise excessive $36,400,000 average annual pay of the 20 top earners among CEOs of publicly-held companies looks paltry by comparison. The careers and financial prospects of many Americans were destroyed to achieve these lofty earnings for the few.
Hubris prevents realization that Americans are losing their economic future along with their civil liberties and are on the verge of enserfment.
Friday, September 7, 2007
social mobility has slowed to a level below that in most of Europe, including Britain ... Long ago the wealthy declared war on the poor in [US]
In the US, class war still means just one thing: the rich attacking the poor | By Gary Younge in New York
The Democrats need to represent the swelling ranks of have-nots as vigorously as Bush has stuck up for the haves
...
... The report showed that since George Bush came to power the poverty rate had risen by 9%, the number of people without health insurance had risen by 12%, and real median household income had remained stagnant. On the second anniversary of Hurricane Katrina we learned the racial disparity in income and the gap between rich and poor show no sign of abating.
...
... Paradoxically, the states with the highest levels of poverty and lowest incomes are staunchly Republican. Poor people tend not to vote, and candidates tend neither to appeal nor refer to them. However, economically they are a glaring and shameful fact of American life; socially and culturally they dominate the centre of almost every moral panic - but politically they do not exist.
None the less, in recent years the conditions associated with poverty have spread far beyond the poor. Almost two-thirds of those who lost their health insurance last year earn $75,000 or more. ...
...
According to the Economic Policy Institute, in 1989 American CEOs earned 71 times more than the average worker - today, by most calculations, it is up to around 270 times. Meanwhile, social mobility has slowed to a level below that in most of Europe, including Britain.
...
The conservative columnist Cal Thomas said of Edwards: "His populist jargon is nothing but class warfare." If only. Long ago the wealthy declared war on the poor in this country. The poor have yet to fight back.
In October 2000, Bush quipped to a group of wealthy diners: "What an impressive crowd: the haves, and the have-mores. Some people call you the elite; I call you my base." If only the have-nots had such a determined and confident advocate.
The Democrats need to represent the swelling ranks of have-nots as vigorously as Bush has stuck up for the haves
...
... The report showed that since George Bush came to power the poverty rate had risen by 9%, the number of people without health insurance had risen by 12%, and real median household income had remained stagnant. On the second anniversary of Hurricane Katrina we learned the racial disparity in income and the gap between rich and poor show no sign of abating.
...
... Paradoxically, the states with the highest levels of poverty and lowest incomes are staunchly Republican. Poor people tend not to vote, and candidates tend neither to appeal nor refer to them. However, economically they are a glaring and shameful fact of American life; socially and culturally they dominate the centre of almost every moral panic - but politically they do not exist.
None the less, in recent years the conditions associated with poverty have spread far beyond the poor. Almost two-thirds of those who lost their health insurance last year earn $75,000 or more. ...
...
According to the Economic Policy Institute, in 1989 American CEOs earned 71 times more than the average worker - today, by most calculations, it is up to around 270 times. Meanwhile, social mobility has slowed to a level below that in most of Europe, including Britain.
...
The conservative columnist Cal Thomas said of Edwards: "His populist jargon is nothing but class warfare." If only. Long ago the wealthy declared war on the poor in this country. The poor have yet to fight back.
In October 2000, Bush quipped to a group of wealthy diners: "What an impressive crowd: the haves, and the have-mores. Some people call you the elite; I call you my base." If only the have-nots had such a determined and confident advocate.
Big corporations have become de facto governments, ... Maximizing profits, holding down wages, and externalizing costs ... central economic dynamics
How Popular Movements Can Confront Corporate Power and Win | By Michael Marx and Marjorie Kelly, YES! Magazine. Posted August 29, 2007.
Corporate power lies behind nearly every major problem we face--from stagnant wages and unaffordable health care to overconsumption and global warming. In some cases, it is the cause of the problem; in other cases, corporate power is a barrier to system-wide solutions. This dominance of corporate power is so pervasive, it has come to seem inevitable. ...
With global warming a massive threat to our planet and a majority of U.S. citizens wanting action, why is the U.S. government so slow to address it? In large part because corporations use lobbying and campaign finance to constrain meaningful headway.
Why are jobs moving overseas, depressing wages at home, and leaving growing numbers under- or unemployed? In large part because trade treaties drafted in corporate-dominated back rooms have changed the rules of the global economy, allowing globalization to massively accelerate on corporation-friendly terms, at the expense of workers, communities, and the environment.
Why are unions declining and benefits disappearing? In large part because corporate power vastly overshadows the power of labor and governments, and corporations play one region off against another, busting unions to hold down labor costs while boosting profits, fueling a massive run-up in the stock market.
...
With all this happening, why do we not read more about the pervasiveness of corporate power? In large part because even the "Fourth Estate," our media establishment, is majority owned by a handful of mega-corporations.
Big corporations have become de facto governments, and the ethic that dominates corporations has come to dominate society. Maximizing profits, holding down wages, and externalizing costs onto the environment become the central dynamics for the entire economy and virtually the entire society. ...
...
Corporate power lies behind nearly every major problem we face--from stagnant wages and unaffordable health care to overconsumption and global warming. In some cases, it is the cause of the problem; in other cases, corporate power is a barrier to system-wide solutions. This dominance of corporate power is so pervasive, it has come to seem inevitable. ...
With global warming a massive threat to our planet and a majority of U.S. citizens wanting action, why is the U.S. government so slow to address it? In large part because corporations use lobbying and campaign finance to constrain meaningful headway.
Why are jobs moving overseas, depressing wages at home, and leaving growing numbers under- or unemployed? In large part because trade treaties drafted in corporate-dominated back rooms have changed the rules of the global economy, allowing globalization to massively accelerate on corporation-friendly terms, at the expense of workers, communities, and the environment.
Why are unions declining and benefits disappearing? In large part because corporate power vastly overshadows the power of labor and governments, and corporations play one region off against another, busting unions to hold down labor costs while boosting profits, fueling a massive run-up in the stock market.
...
With all this happening, why do we not read more about the pervasiveness of corporate power? In large part because even the "Fourth Estate," our media establishment, is majority owned by a handful of mega-corporations.
Big corporations have become de facto governments, and the ethic that dominates corporations has come to dominate society. Maximizing profits, holding down wages, and externalizing costs onto the environment become the central dynamics for the entire economy and virtually the entire society. ...
...
Tuesday, September 4, 2007
we're talking about is the Republican administration reducing competition ... Why Japan Is Eating America's Lunch On Broadband
Why Japan Is Eating America's Lunch On Broadband | Posted August 31, 2007 | 02:34 AM (EST)
...
... We know how to fix most of them and people who keep saying, "well, that's complicated" are either stupid (unlikely), are benefiting from the status quo or are imagining the migraine of trying to fight entrenched interests.
Broadband access is exactly the same. The U.S. is getting its lunch eaten. As SaveTheInternet points out, they get access that is often 30x faster than the U.S. As a result they are experiencing innovation -- and enjoying applications that Americans simply don't have access to. As this Washington Post story points out:
The speed advantage allows the Japanese to watch broadcast-quality, full-screen television over the Internet, an experience that mocks the grainy, wallet-size images Americans endure.
Ultra-high-speed applications are being rolled out for low-cost, high-definition teleconferencing, for telemedicine -- which allows urban doctors to diagnose diseases from a distance -- and for advanced telecommuting to help Japan meet its goal of doubling the number of people who work from home by 2010.
Oh, and all that speed -- costs less too.
Now, 10 years ago Japan had slower internet than the U.S. So they looked to the U.S. to see how to do it -- and they saw that the U.S. had open access laws (where in the old days, companies could buy access to the lines at wholesale rates -- which is why there was an ISP on every corner in the 90s) and decided they were key.
...
...
... We know how to fix most of them and people who keep saying, "well, that's complicated" are either stupid (unlikely), are benefiting from the status quo or are imagining the migraine of trying to fight entrenched interests.
Broadband access is exactly the same. The U.S. is getting its lunch eaten. As SaveTheInternet points out, they get access that is often 30x faster than the U.S. As a result they are experiencing innovation -- and enjoying applications that Americans simply don't have access to. As this Washington Post story points out:
The speed advantage allows the Japanese to watch broadcast-quality, full-screen television over the Internet, an experience that mocks the grainy, wallet-size images Americans endure.
Ultra-high-speed applications are being rolled out for low-cost, high-definition teleconferencing, for telemedicine -- which allows urban doctors to diagnose diseases from a distance -- and for advanced telecommuting to help Japan meet its goal of doubling the number of people who work from home by 2010.
Oh, and all that speed -- costs less too.
Now, 10 years ago Japan had slower internet than the U.S. So they looked to the U.S. to see how to do it -- and they saw that the U.S. had open access laws (where in the old days, companies could buy access to the lines at wholesale rates -- which is why there was an ISP on every corner in the 90s) and decided they were key.
...
If this quaint idea of "competition" seems familiar, that's because America invented "open access" policies in the first place. And open access worked for decades to bring lower prices and more choices in long-distance phone service and dial-up Internet access.
The Japanese first adopted open access because they were worried about falling behind us. But under pressure from our own phone and cable monopolists, the Bush administration abandoned open access -- and the fundamental protections for Net Neutrality along with it.
Now they're standing idly by as America drops further and further behind the rest of the world in every measure of broadband progress.
Now here's the thing. What we're talking about is the Republican administration reducing competition. In a competitive market this wouldn't have happened. When you're dealing with a natural monopoly (and phone and cable lines are natural monopolies because driving more than one each to each home doesn't make sense) you have to legislate the market in such a way as to make sure competition exists. The free market can't do its thing if there isn't a market -- and in most of the U.S. there isn't a market. You have at best two possible suppliers. Often one. And in many areas -- if you want "high" speed -- none. ...
productivity jumped almost 20 percent since 2000 ,,, wages rise 3% ... fall 1.1 percent since 2003
GDP growth not reaching paychecks | September 3 2007: 12:09 PM EDT
The economic recovery that began in 2001 has lifted productivity growth and employment of late, but has had little impact on many workers' wages.
NEW YORK (CNNMoney.com) -- The economic expansion that began six years ago has failed to benefit most workers, according to a report from the nonpartisan Economic Policy Institute, released Monday.
...
After rising quickly in the second half of the 1990s, most workers real wages have been stagnant in the 2000s, especially since 2003.
While productivity jumped almost 20 percent since 2000, the real median hourly wage of all workers rose just 3 percent in the same period. Since 2003, productivity has risen 5 percent, while the median hourly wage fell 1.1 percent.
...
Yet, in the period between 2003 and 2007, wage gains for median workers, male and female, as well as high school and college workers have all been flat or falling.
Not so for workers at the highest end of the wage scale. At the 95th percentile, real wages have risen 9.4 percent since 2000 and 5.1 percent since 2003. ...
...
One of the reasons for the discrepancy between growth and productivity and real wages is that workers' bargaining power has diminished during the period, the report showed.
Although the unemployment rate has been low in historical terms, it doesn't fully reflect the problems in the labor market caused by weak job growth or workers withdrawing from the labor force altogether. ...
The economic recovery that began in 2001 has lifted productivity growth and employment of late, but has had little impact on many workers' wages.
NEW YORK (CNNMoney.com) -- The economic expansion that began six years ago has failed to benefit most workers, according to a report from the nonpartisan Economic Policy Institute, released Monday.
...
After rising quickly in the second half of the 1990s, most workers real wages have been stagnant in the 2000s, especially since 2003.
While productivity jumped almost 20 percent since 2000, the real median hourly wage of all workers rose just 3 percent in the same period. Since 2003, productivity has risen 5 percent, while the median hourly wage fell 1.1 percent.
...
Yet, in the period between 2003 and 2007, wage gains for median workers, male and female, as well as high school and college workers have all been flat or falling.
Not so for workers at the highest end of the wage scale. At the 95th percentile, real wages have risen 9.4 percent since 2000 and 5.1 percent since 2003. ...
...
One of the reasons for the discrepancy between growth and productivity and real wages is that workers' bargaining power has diminished during the period, the report showed.
Although the unemployment rate has been low in historical terms, it doesn't fully reflect the problems in the labor market caused by weak job growth or workers withdrawing from the labor force altogether. ...
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