After the crash: the pauperisation of middle-class America

After the crash: the pauperisation of middle-class America
With the crisis now in its fifth year, it's plain that the rich and powerful have restructured society toward ever-greater inequality

Richard Wolff
guardian.co.uk, Friday 27 May 2011 17.00 BST

...At the same time, the housing market remains deeply depressed as 1.5-2m home foreclosures are scheduled for 2011, separating more millions from their homes. After a short upturn, housing prices nationally have resumed their fall: one of those feared “double dips” downward is thus already under way in the economically vital housing market.

The combination of high unemployment and high home foreclosures assures a deeply depressed economy. The mass of US citizens cannot work more hours – the US already is No 1 in the world in the average number of hours of paid labour done per year per worker. The mass of US citizens cannot borrow much more because of debt levels already teetering on the edge of unsustainability for most consumers. Real wages are going nowhere because of high unemployment enabling employers everywhere to refuse significant wage increases. Job-related benefits (pensions, medical insurance, holidays, etc) are being pared back.

There is thus no discernible basis for a substantial recovery for the mass of Americans.

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Republicans are now celebrating “American exceptionalism”, the unique greatness of living conditions in the US. Yet again, their politics stress vanishing social conditions whose disappearance frightens Americans who counted on them. In reality, the US is fast becoming more and more like so many countries where a rich, cosmopolitan elite occupies major cities with a vast hinterland of people struggling to make ends meet. The vaunted US “middle class” – so celebrated after the second world war even as it slowly shrank – is now fast evaporating, as the economic crisis and the government’s “austerity” response both favour the top 10% of the population at the expense of everyone else….

http://www.guardian.co.uk/commentisfree/cifamerica/2011/may/27/economics-useconomy
via:
http://www.balloon-juice.com/2011/05/29/and-in-other-news-wasf/#more-70778

Seems high to me; what do you think? a little less than 50% financed domestically and about the same for foreign investment in our credit card/deficit spending. This deficit issue is the heart of everything and I think there are important questions as to who owns what in the way of whatever equity was involved in the '08 Derivative Crash. No one seems to want to talk about that.

I thought about 80% of our debt is financed domestically (so those investment bonds do okay in a pretty dicey market). Right?

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End the Wars!

funny thing is vast numbers don't realize we now have a fascist government: fascism is as fascism does. :patriot:

"An increasingly unequal capitalist economy pays for the increasingly undemocratic politics it needs."

I know that for a fact and so does our state dept of labor.

another name for IMF austerity or shock therapy. Since 1980 when raygun took over they have been using every crisis - big or little - to work behind our backs to funnel the profits to the rich. They are not even waiting for a crisis anymore because they have sucked the well dry and they are calling that a crisis. They have stolen all the jobs and money that once kept us a nation of equals.

So what are we going to do about it?

http://blogs.hbr.org/cs/2011/05/americas_vanishing_middle_clas.html

The US economy today borders on schizophrenic. To be sure, we are seeing signs of positive momentum. The last three months have delivered almost 250,000 new jobs per month on average. Great news, but at the same time, unemployment is growing and now exceeds nine percent. Both consumer confidence and small business confidence is higher than where they were last year. But confidence has been falling rapidly for the past few months.

Were Charles Dickens to show up as a commentator on the evening news, he would have a ready vocabulary to describe our current economic situation: This recovery is very much A Tale of Two Cities. After years of record low interest rates, multiple stimulus packages, and the expansion of tax cuts and credits, we are in the midst of a very real recovery, but it is a recovery characterized by asymmetry. Banks and major corporations are flush with capital — large businesses are recording record profits — but job growth is tepid, unemployment remains high and small businesses are struggling.

At first glance, the combination of record corporate profits alongside anemic job growth seems contrary, but the two are directly connected. The primary reason corporate profits are at record highs is that large companies learned to be lean and highly productive during the worst years of the recession. The profits generated through a reduced but more productive headcount has induced many large companies to continue this lean approach even as we emerge from recession. The result: record profits despite weak revenue growth, which leads to a lack of hiring.