Yves here. This Real News Network interview on the results of the latest Survey of Consumer Finances paint a picture familiar to most readers: the rich are becoming richer while those with less wealth are falling further and further behind.
David Rosnick of CEPR makes an important observation in passing. The decline in the position of typical households is even worse the the Consumer Finances survey indicates. In 1989, many workers had pensions. Far fewer do now. The value of pensions isn’t included in these surveys due to the difficulty of determining what they are worth on a current basis. But they clearly are significant assets that relatively few working age people have now.
SHARMINI PERIES, EXEC. PRODUCER, TRNN: Welcome to The Real News Network. I’m Sharmini Peries, coming to you from Baltimore.
Household wealth has considerably fallen for a majority of Americans. A new report from the Center for Economic Policy Research by David Rosnick and Dean Baker shows that most households now have net less wealth than they did in 1989. The report, titled The Wealth of Households: An Analysis of the 2013 Survey of Consumer Finances, shows little or no gain for the majority of Americans over the last 25 years, even in the years since the end of the recession.
Now joining us from Amherst, Massachusetts, is one of the authors of the report, David Rosnick. David is an economist at the Center for Economic Policy Research in Washington, D.C.
David, welcome to The Real News Network.
DAVID ROSNICK, ECONOMIST, CEPR: Thank you for having me.
PERIES: David, just quickly explain to us what is the Consumer Finance Survey. I know it’s an important survey for economists, but why is it important to ordinary people? Why is it important to us?
ROSNICK: So, every three years, the Federal Reserve interviews a number of households to get an idea of what their finances are like, want to know, do they have a lot of wealth, how much are their houseOs worth, how much they owe on their mortgages, how much they have in the bank account, how much stocks do wealthy people on. This gives us an idea of their situations, whether they’re going to be prepared for retirement. And we can see things like the effect of the housing and stock bubbles on people’s wealth, whether they’ve been preparing for eventual downfalls, how they’ve reacted to various economic circumstances, how they’re looking to the long term. So it’s a very useful survey in terms of finding out how households are prepared and what the distribution of wealth is like.
PERIES: So your report is an analysis of the report. And what are your key findings?
ROSNICK: So, largely over the last 24 years there’s been a considerable increase in wealth on average, but it’s been very maldistributed. Households in the bottom half of the distribution have actually seen their wealth fall, but the people at the very top have actually done very well. And so that means that a lot of people who are nearing retirement at this point in time are actually not well prepared at all for retirement and are going to be very dependent on Social Security in order to make it through their retirement years.
PERIES: So, David, address the gap. You said there’s a great gap between those that are very wealthy and those that are not. Has this gap widened over this period?
ROSNICK: It absolutely has. As, say, the top 5 percent in wealth, the average wealth for people in the top 5 percent is about 66 percent higher in 2013, the last survey that was completed, compared to 1989. By comparison, for the bottom 20 percent, their wealth has actually fallen 420 percent. They basically had very little to start with, and now they have less than little.
PERIES: So the poorer is getting poorer and the richer is getting extremely richer.
ROSNICK: Very much so.
PERIES: Okay. And so what does this tell us about us in the middle?
ROSNICK: Us in the middle? There’s been very little progress. There’s been a lot of–productivity growth has been considerable over this period of time. You would think that people who are near retirement actually should have a fair bit more wealth, they should be better prepared for retirement. But in actuality, the middle quintile of those that are near retirement have actually lost a little bit of ground since 1989.
PERIES: Right. And so the survey and its findings, and perhaps your analysis of that survey, what is it used for? Will there be an effort on the part of the government to address this disparity?
ROSNICK: Well, I would hope that these findings show the critical importance of Social Security for those that are approaching retirement. Certainly we can see the effects over the course of the last decade or so of the collapse of the stock market at the turn of the millennium and the collapse of the housing bubble in this decade and see how badly that hurt a lot of families.
And families thought that they were going to be ready for retirement. They could see forward. They thought they had money, and they thought they were prepared. But because we let that bubble get out of control and let it explode on them, then they’re actually going to be very heavily dependent on Social Security. This is going to make a big difference for addressing Social Security, Medicare, the Affordable Care Act for people who are not quite there, just to make sure that they can make it through those years.
PERIES: And let’s take an example, David, like, let’s say, a teacher who has been teaching, making an average income of $63,000 and is now ready to retire in the next little while. What does this mean for somebody like that?
ROSNICK: For somebody–for a very middle-class kind of person, they’re going to have very, very little. For somebody who’s worked their whole life, I mean, on average, outside of home ownership, in 2013 the average net worth for somebody between the ages 55 and 64 is less than $90,000. Ninety thousand dollars sounds like, maybe, a lot to some people now, but you think, if they’re going to live for another 20 years past that, then there–actually it’s going to provide very little retirement income and leave nothing to pass on to the next generation.
PERIES: So this is in addition to perhaps the Social Security checks that they will be receiving. This is their sort of wealth that they have accumulated. So what we’re looking at going into the future is a great deal of really impoverished people that have been working all of their lives and unable to sustain any standard of living that they’re used to over the next 20, 30 years, that they would have retired and trying to survive.
ROSNICK: Well, this is why it’s going to be important to make sure that we don’t cut Social Security benefits, because that’s going to be an important support for these people. Private pensions have largely disappeared. It used to be–I mean, these numbers actually–they actually downplay the extent of the disparity, because back in 1989 there were still–you know, people who were near retirement actually had some sort of private pension they got from their employer. Now, a teacher will hopefully have some sort of state pension they can draw upon also. But we’ve seen, say, like, public workers in Detroit have lost their pensions, and a lot of them don’t necessarily have the same Social Security benefits that the rest of us do. So they’re getting doubly hit. The collapse of private and public pensions has been a serious problem.
PERIES: Right. And what is CEPR are saying about this situation now? What are some of the recommendations from your report to address some of this?
ROSNICK: Well, we need to be more aware of bubbles. That’s one thing. I mean, households will have a tendency to at least have some idea of what they need in order to prepare. If somebody’s near retirement, there’s only so much they can do to build their finances backup. But somebody who’s in their 30s or 40s and suddenly realize they don’t have housing wealth, they’ve got decades to rebuild their finances. So it’s important that nationally, like, the Federal Reserve and other policymakers are able to recognize when there’s going to be this kind of serious asset crisis and make sure that this is prevented, so that families have a predictable source of finances to be able to build our wealth. They also need–again, I’ve got to keep reiterating this–the protection of Social Security and Medicare to make sure that there’s underlying support even–even if things are going well for these families, still they need core income support to get them through their retirement.
PERIES: Right. David, I thank you so much for joining us today and explaining all of this to us.
ROSNICK: Thank you.
PERIES: And thank you for joining us on The Real News Network.
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Well, what do you expect?
The post-1970 cheap-labor immigration policy has, so far, increased the US population by over 80 million more than it would have been if the American people had been left to themselves. But even that’s not enough, now Obama is going to enact a cheap-labor-uber-alles immigration ‘reform’ that will drive the average American down to the level of India within a generation or two.
Supply and demand, people, supply and demand.
Supply and demand? One might equally well say that when economic decisions are made by a small number of people whose only motive is profit (profits which they increasingly don’t want to share) , then the rest of us will inevitably get screwed. If labor costs are cheaper elsewhere and capitalist employers want to cut costs, then they will move the factories. But capitalist employers are unelected and their wealth has been acquired within a system which in no way guarantees that rewards follow genuine contributions.
Supply and demand matter (and how manipulated are they and not just by immigration). But I wouldn’t rely on that alone, I’d want bargaining power (unions).
Try again.
Wage stagnation clearly started in the mid-1970s, way before any meaningful immigration liberalization or offshoring or outsouring took place.
Mass legal immigration took off after the passage of the Immigration and Nationality Act of 1965. Illegal immigration was already such a problem in 1969 that Cesar Chavez, Ralph Abernathy, and Walter Mondale marched at the Mexican border against the flood of cheap illegal scab labor that Big Ag, assisted by Richard Nixon, were allowing to flood the fields. So the bottom levels of the working classes were getting hammered at the same time that at the upper levels, the steel and automotive industries, were getting pummelled by foreign competition. Now not all of this foreign competition was “disloyal” or class warfare, many of the problems were due to US management incompetence. So by the mid-70’s as wages were beginning to stagnate, there is no doubt that mass (legal and illegal) immigration along with foreign competition was playing a role in the weakening of the unions. No one can deny, for example, that illegal immigration was the crucial element in the destruction of the United Farm Workers of America.
What is true is that generally (there are exceptions) mass off-shoring did not start until the end of the Cold War, and really took off in the 90’s. But the foreign competition that was beating US industry in the 70’s played a similar role as the off-shoring in the 90’s in that US workers were suddenly in competition with foreign workers paid much lower salaries.
No, the offshoring and outsourcing were much more the result of the leveraged buyout wave of the 1980s and the increased short-termist focus of US corporations.
And I have to tell you, as someone who started working in the mid-1970s, that while migrant workers had a huge impact on farm labor, they simply did not have an impact on wage rates generally. Wages still grew strongly in the 1960s, so your point about migrant workers dampening wage levels is empirically inaccurate. Wages didn’t stall until the mid 1970s:
http://www.washingtonpost.com/blogs/wonkblog/wp/2012/07/31/wages-arent-stagnating-theyre-plummeting/
And if you want to blame increase in workforce size on stagnating wage growth, the increase of the number of working women (particularly since those women were all native English speakers and better educated, as well as representing greater number) would almost certainly have had a greater impact. But no, it’s much more popular to blame migrants.
The death of well paid union jobs, which had been the anchor of both blue and white collar wages, went under assault as a result of Reagan breaking Patco, the air traffic controllers’ union. That sent a message to Corporate American that it was open season on unions.
And Reagan’s attack on unions in turn came out of a well-funded effort to shift US values to the right that started in 1971, with the Powell Memo. That set out a long-term vision of how corporations would use Madison-Avenue techniques to package and sell anti-ordinary worker, anti-middle class policies, and how well funded think tanks would given them legitimacy. You indeed saw a huge growth in those right wing organs: AEI, Heritage, Cato, Hudson, and a ton of others. In parallel was the growth of a law and economics movement which successfully corrupted legal instruction to make traditional notions like equity subordinate to ideas of economic efficiency.
The Republican Noise Machine: Right-Wing Media and How It Corrupts Democracy by David Brock is a good overview on the packaging and selling of the corporate right’s agenda to the public.
May I add:
The role of the major labor internationals that went to bed with America’s foreign policies substantially since early 1940’s…..the role of what became, AIFLD,(American Institute Foreign Labor Development) contributing to the “war on labor” here in this country.
“Big Labor” was promised a seat at the international table and in the end the rank and file got the short end of the stick…..Remember Lane Kirkland and Ronnie Reagan posing together in a famous photo?
Big Labor participated in the destabilization of grass roots labor in our covert/sometimes overt assault on foreign labor……the consequences were/and still are millions of foreigners fleeing that assault and coming here………
“Working Against Us”, “the American Institute of Free Labor Development and the International Policy of the AFL/CIO, 4 labor writers as authors. Published by NACLA, NY, NY.
Most American organized labor rank and file workers have/had no idea that their own internationals were “speaking with forked tongue” and still mostly do.
The 1970’s was in many ways the watershed decade for the radical transformation of the American economy and society, even more than the 1960’s (I lived through both as a young man). I have yet to read the definitive social-critical analysis of these years to explain the changes that, looking back, seem to have taken the country of my childhood right out from under me, gone forever, increasingly difficult to remember through the fog of nostalgia that tends to distort as much as to reveal.
Some of the things I do remember about this time include the PATCO strike, very well. What is often not mentioned is that PATCO was attempting to do something that had not been permitted under federal civil service law, that is, bargain for wages as well as working conditions. Wage bargaining, PATCO correctly assessed, was the issue that made or broke unions and had enabled state and local public employees to finally begin to earn a decent, living wage beginning in the 1960’s (think the iconic Mike Quill and the NYC TWU). Reagan correctly (from his point of view) saw that to fail to break PATCO on this issue was to open the floodgates and turn the U.S. civil services into something akin to its European counterpart, with the possibility of general strikes and the rest. And of course to encourage private sector unions in their drive to organize and to change federal and state labor laws to strengthen the right to picket strike and organize.
What I also remember well however, is how little support PATCO was able to garnish from other unionized workers (and in many cases from union leadership as well). It seemed to me at the time that some of the strongest hostility came from rank and file of trade and utilities unions. Of course Reagan, following the Nixon playbook, shrewdly played the patriot-nationalist card, painting PATCO as a threat to national security as well as composed of a bunch of ingrates who should have been happy to have jobs. But by then the segmentation of the American workforce, a tactic that played right into the hands of the corporate-capitalist class, was in full swing. The American worker lucky enough to possess a decent paying skilled or semi-skilled union job was being taught to see their situation as morally “deserved” and to see newer aspirants to similar positions, whether recently arrived immigrants or members of racial-ethnic groups previously suppressed by law, custom and prejudice as threats/dangers/enemies of their own recently won status.
I recall too that it was, I think, in the 1970’s that the threat of “relocation”, at that time mainly from the more heavily unionized north and northeastern states to the union-hostile south began to play a major role in the destruction of the power of labor. This was the beginning of the “globalization” factor and of the off-shoring of manufacturing jobs that has been commented on extensively and that took off a decade or so later. What is often not recalled is that unions attempted to lobby Congress to amend the NLRA (National Labor Relations Act) and the appointment of labor-friendly members to the NLRB to ensure that plant relocation would be a mandatory subject of bargaining and thus prevent relocation or the threat of relocation to be a way to destroy the power of labor. They were, of course, not successful, and factories and business continued to move, first to so-called “right-to-work” states and eventually to Asia.
And I remember the beginning of the financialization of the American corporation that I experienced on a “micro” scale, a kid lucky enough to have a summer job while in university at a large resources-extraction corporation’s HQ in NYC. I recall white-collar conversations about compensation and about how salaries had steadily risen over the past decade (the company was said to be doing “really well”). And I remember how towards the end of my association more and more conversation was about stock prices and Wall Street favor and about the new executive managerial style brought in by “those young MBA”s”, and about (for the first time) worries of a “take-over” by “outsiders” (the company, although public, had had family leadership for many years).
And most of all I remember how gradually the material-economic components to the identity of the blue-collar and middle class worker were written out of existence. The great narrative, the myth that explains to us what it means to be “an American” no longer included any hint of class solidarity, of the kind of work we did, the pay we earned, the common living conditions in the small towns and urban neighborhoods and “cookie-cutter” suburbs of America. Formerly the struggle of economic and material improvement was seen by most ordinary Americas as a struggle for certain necessary conditions to maintain, strengthen, and perpetuate a way-of-life in which the common core assumptions about the “good life” remained basically stable and unchallenged: family, stable job, residential security, public schools, public places — neighborhood bars, coffee shops, civic clubs, parks and playgrounds — where people could meet and interact as social equals.
The financialization of the economy, indeed of social life itself to a great extent, the drive for the maximization of private profit and the pursuit of interests and ‘efficiencies” conceived entirely apart from any impact of the common good of society as a whole, should have been seen as a grave threat to the very conditions of material and economic security, only recently achieved, that were the foundation of these other civic and social institutions. Instead, through a Rightwing grand and diabolical deceit, aided and abetted by a “new Left” that increasingly postured itself as the enemy of this older and more traditional way of life, the enemy was reconceived as the new “elites”, the young, urban, hip “Leftist” who despised the old ways and represented a singular assault on everything good about America. Meanwhile, steadily, relentlessly, the material conditions and hard-won economic improvements that had gradually made small town, urban-neighborhood, and inner-suburban life decent and livable were being destroyed by a capitalist class that paid lip-service to Bedford Falls while at the same time endlessly working to change it into Pottersville.
Regarding the nonsupport of PATCO from other unions, it may be relevant that PATCO was one of the very few unions, maybe the only one of significance, that endorsed Reagan in 1980, IIRC?
Absolutely correct, Yves. I remember reading a business school case study of the LBO Congoleum buyout, which resulted in the workforce losing their pensions. This pioneering work took place in the mid-1980’s . Repeated ad nauseum since.
Respectfully, Yvez, it’s much more popular to “blame migrants” for driving down wages than women because it is universally recognized that women – citizens – have an equal right to participate in our economy and derive the same benefits thereof as do men. If a cultural change taking them from the kitchen to the factory floor, for example, resulted in in the fall, stagnation, or slower growth of wages, so be it. It doesn’t merit much angst for most of us.
Neither illegal nor legal immigrants enjoy that right. That the former don’t should require little explanation, regardless of the compassion that we might feel for struggling foreigners. The latter enjoy the privilege of joining our workforce as a result of law or policy put in place by the usual, which is why it is detrimental, as always, to the working and middle classes.
Do you disagree? I find your dismissal of illegal immigration, in particular, as one variable contributing to the destruction of our middle class society, mysterious, particularly given clear counter examples in the international community providing empirical evidence that rational restrictions on immigration can make a difference.
But what about automation? And was it financed ethically? Or were so-called creditworthy companies allowed to replace workers using the publics’ (which, of course, includes workers’) credit?
And why? Because endogenous money creation is good? Yes, it is – IF that money creation is truly endogenous and not some fascist hodgepodge of government privilege and private profit as our is.
I’ll take the guess behind Door Number One.
With the following enhancement. The move towards “cheap immigration” was set off in earnest as a response to “free trade policies”. For instance, Japan had been moving their manufacturing of passive electronics to Taiwan and Korea in the ’60s. US manufacturers had to follow suit to stay competitive.
As the world turned, it became obvious that all manufacturing industries should do that. When I went to work at my first job in the late 70s, Mitsubishi Heavy Industries put about 30% of my company’s annual sales in a LA warehouse at half our price. ( and the industry standard was to build to order with a 16 week lead time) GE survived it by moving offshore (and diversifying into other lines of biz), but the lesser company I worked for didn’t.
But perhaps I’m wrong about all this. Would be happy to hear the “right reason” before I drop dead.
The same government that created the bubble of 2007 is now going to keep this bubble from popping to protect all of us “middle classers”? My sides hurt from laughing at the hubris of this statement. Anyone who thinks the government is going to rescue anybody but themselves and their $$ friends will be poorer still.
The mis-allocation of trillions of wealth into residential real estate is a crime. Houses, unless you run a sweatshop in the basement, are not productive investments, and therefore should not be bought with debt.
That being said, if you’re lucky, housing will sort of keep up with inflation, but NOT net of property taxes, repairs (if you bother to make them), etc.
Flooding the country with refugees from a drug war in Mexico that’s a direct result of neoliberal policies is just one arrow in the quiver of our rulers. We should take a good look at Mexico because that’s what our future looks like. The 19th century filibusterers finally brought it all home. The Roman pattern of the formation of the latifundia and the oligarchy repeats and it should come as no surprise since the country was modeled on the Roman Republic.
Again, see my earlier comment. You’ve got the wrong explanatory variables. Mexican immigration didn’t start in a big way until the 1990s (save migrant farm workers, they’d long been a fixture of farming in the southern parts of the US) and it mainly displaced low-wage jobs (farm labor, yard men, domestic workers). It’s a factor, but it isn’t the driver.
Dunno Yves, this chart says you have it wrong:
http://www.pewhispanic.org/files/2012/04/2012-phc-mexican-migration-01a.png
Can you read a chart? It appears not.
That chart shows that immigration from Mexico went from what looks like 250,000 to 4 million from 1970 to 1990. It also shows that the liberalization of 1965 didn’t have much impact, since the inflection point looks to be 1970.
It went from 4 million to 6.5 million from 1990 to 2000 That rate is 1/3 higher than the rate of 1970 to 1990.
It then went from 6.5 million to 12 million in the next 11 years. That is 5.5 million, which is over 2X the rate from 1970 to 1990. So the real explosion, from 4 million to 12 million, took place in the last two decades, not the two prior to that.
BTW, the number of women in the workforce went from 15 million to 43.2 million from 1970 to 2010. Why aren’t you blaming women? Why are you so keen to demonize immigrants?
Better trolls, please.
Of course adding so many women to the work force contributed to lowering wages. In the paper Women, War, and Wages: The Effect of Femal Labor Supply on the Wage Structure at Midcentury, Acemoglu and Autor give the following summary for WW2:
These conclusions seem totally obvious and would hold true in a somewhat different fashion when discussing low skill immigration.
But — and this is a Kim Kardashian sized but – what we are talking about here is HOUSEHOLD wealth and income. So while adding women to the workforce does indeed lower wages, it also at the same time INCREASES household wealth because now you have two people working in the same houehold. So in fact the numbers on household wealth and income would have been even worse if women didn’t join the workforce. Adding immigrants both lowers wages AND increases the number of households. So women joining the workforce were somewhat necessary to help ameliorate the negative consequences of globalization.
Attached is a chart that shows household income in the US between 1947 and 2007.
http://en.wikipedia.org/wiki/Household_income_in_the_United_States#mediaviewer/File:United_States_Income_Distribution_1947-2007.svg
Looking at the bottom quintile it is clear that wage gains stopped in 1969. Although typically women in the lowest wage quintile have always worked at proportionally high percentages (feminism is mostly a middle to upper middle class phenomenon), surely the percentage of bottom quintile women did increase to some extent. So even taking this into account, the bottom quintile household income has been flat since 1969. Correlation is not causation but the least we could say is that these figures “tombe bien” with the idea that increases in legal and illegal immigration starting in 1965 (along with pressure from foreign competition in industry) did indeed negatively impact bottom quintile wages.
The central problem is that the US standard of living got way too high relative to the rest of the world. Life is like a gas, it redistributes itself to find a natural equilibrium . So I don’t see how Americans could have protected themselves from a redistribution unless they had adhered to protectionnism.
Either all the 7 billion’s quality of material life rise to US standards, the US standard drops to the ROW’s standards or the 2 average out over time. But the odds are high that even an averaging out would completely destroy our ecosystem…
It would be nice if there could be more fairness in the US but maybe it implies much lower average material standards. However, most are still stuck on the idea that all generations should enjoy a better quality of material life which makes no sense if the world goes to 9 billion and considering how we are treating the environment.
So I don’t see how Americans could have protected themselves from a redistribution unless they had adhered to protectionnism. Moneta
Oh really?
WHAT IF all large companies and farm land in the US were roughly equally owned by ALL US citizens? Then whom be hurt by automation, outsourcing, immigrant workers and cheap foreign goods? Or why is it that only SOME US citizens benefit from those things and not All US citizens?
Smoot Hawley was a major cause of World War II. We should not be thinking of returning to that vomit.
Then we get globalization…
BTW, I’m not condoning protectionism. I am just saying that we can’t all have our cake and eat it too.
I think we ought to live with a “lower” standard of living–our obsession with “mass quantities” is ultimately destructive–but our problem is not economic so much as cultural. We want all this “stuff” to fill the empty and meaningless lives we actually lead–everyone is looking for escape of some kind. Half the people of the country are in chronic pain, half the country is depressed or anxiety ridden (they overlap obviously) and most people are stressed and worried about their situation–instead of focusing on the culprits most people fall for wanting “security” from terrorists, criminals and immigrants and swallow the increasingly absurd fantasies and engineerd lies the mainstream media puts out.
Give people a minimum source of funds, guaranteed housing, food and minimal health care and people will cheer up and become more creative with their lives that cringing in front of electronic devices looking to fill the empty spaces. As was noted the other day people at work spend a lot of time not being at work by cruising the web, playing games, going on social networks, smoking outside or whatever.
The central problem is that the US standard of living got way too high relative to the rest of the world. Life is like a gas, it redistributes itself to find a natural equilibrium . So I don’t see how Americans could have protected themselves from a redistribution unless they had adhered to protectionism.
Either all the 7 billion’s quality of material life rise to US standards, the US standard drops to the ROW’s standards or the 2 average out over time. But the odds are high that even an averaging out would completely destroy our ecosystem…
That’s the central message of globalism right there, all fantastic claims to the wonders of “comparative advantage” notwithstanding. And as we’ve seen, even the oligarchy is now distributed somewhat equitably across the globe. Again, hardly surprising, since global capitalism knows no, and indeed, would be happy to erase all political borders as it suits them.
That’s not exactly true. By the late 1960s, living standards in Europe were surpassing those of the United States. Other countries had lower infant mortality rates, longer life expectancy and so on. What the US really excelled in was the provision of consumer goods, which were much cheaper here than in other countries. We also had larger houses, although at much higher cost. If we look decile by decile, though, we find that lower-income people in the US always had lesser lives than same-decile populations in Europe. Poorer people there get cheaper medical care, subsidized housing etc., so their lives are much more secure than those of poorer people in the US.
Bingo. Quality of life is measured in terms of things and not services…. that’s why we get rich people looking to skimp on the nanny.
Yes, well, in India, which qualifies as a low user of resources and certainly low living standards, 99.9% of the population live up to their ears in human excrement. So if the goal is to even out living standards in a zero sum world of 7 or 9 billion, that means 99.999% of us will be up to our necks in human excrement.
The US will finally become an importer of shit!
One of the few things we still do well all by ourselves.
This was supposed to go under Moneta’s comment about America the Wasteful.
BTW Canada consumes more energy per capita than the US… so I understand it’s not jut the US.
The difference can be explained by the need for heating energy due to many months of winter conditions in the vast majority of Canada.
Plus the huge consumption of energy to produce energy.
There is a difference between goals and destiny.
We could accept that our materialism should be toned down and aim for more fairness. But today’s reality is most everyone is still clinging to the notion of increased material wealth over time… this means that we as a society will keep on pushing for higher energy consumption. And if the theory that resources are limited, this push for development that increases energy consumption will lead to even more wealth discrepancy… because the energy use will take away from the more disenfranchised moving up the wealth curve.
Do we have any more room for shit? Seems like we’re pretty much full up already.
We’ll need the fertilizer once we unpave the roads.
The trends we have noted since the late seventies has been noted by non-careerist economists since the early nineties but the mainstream media has, in the main, chosen not to report it–since then the trend has increased and most people are beginning to realize this as polls show that most people today don’t believe their children will do better than they are doing–this is a major cultural trend because Americans have always been “optimistic” and forward looking however deluded. More important than income/wealth studies that have come is a study (I don’t think it’s been repeated) by Elizabeth Warren about how American families are falling behind despite an increase in two-income families. Her talk in 2007 called The Coming Collapse of the Middle Class illustrates Warren’s clarity of thinking and is a dramatic answer to those of you who were putting her down yesterday. Her basic finding comparing families in the 1970s to the early 2000s was that they are living with a very narrow safety margin and that any crisis would drive many of them over the edge. In fact this is what has happened. We are witnessing not just the collapse of middle-class life which features a sense of security to a stress-filled existence that is causing wildlife all kinds of problems dealing with the stunning growth of the uses of anti-depressants, pain medications, anxiety drugs and so on as well as the cultural pollution of increasingly escapist pastimes and entertainments and an information system that is now dominated by propaganda and manipulation.
Yet, the interest in social-democracy continues to collapse and the notion today has moved towards “personal responsibility” and away from social responsibility. Decline has not manifested in solidarity but fragmentation and there is no way around this. Many people blame “the poor”, immigrants and so on and rarely want to point their fingers at the real culprits–the corporate executives and owners (including stockholders) and the political, media, and academic elites. So what did the few voters decide to do this fall? Vote for a party that, at least, is honest enough to insure that that same class becomes even more firmly entrenched in power and the average citizen continues to be fucked with (since obviously the victim seems to enjoy it) and we note preparations for more war and more money for the National Security State (NSS)–despite the fact that we can prove that there are no threats out there that even come close to the threats from the NSS itself and their Wall Street partners.
Propaganda works, mass hypnosis works, Jedi mind-tricks work and will continue to work on a confused and fragmented public devolving into chronic pain and addiction. Whatever Jefferson envisioned folks ain’t happening here.
Do they believe this is because of the 1% or because the US had too much vs. the ROW and we are going through a grinding tug-of-war where the redistribution of resources is at stake?
I guess this answers my 1st question. I try to imagine a scenario where our elite goes on the podium and says: “My Dear Fellow Americans. Our consumerism has gotten out of hand and we are consuming too much of the world’s resources. In the name of fairness, let’s give the ROW a chance. As of today, we will limit our energy and resource consumption to 50% of what we used in the recent past and make sure that every fellow American uses the exact same amount. And please rest assured that we, the 1%, will be bound to the same standards as we, citizens of the world, are all in this together”
In my view if a leader or leaders came on the scene that could realistically articulate our situation on this planet it would unlock the natural human tendency for connection with others and the world–if the media allowed that to happen. We are happier giving than taking–this has been shown time and time again yet the powerful depend on fooling us to believe that we should live to consume and gratify every desire (as long as that desire earns profit for the already rich).
“My Dear Fellow Americans. Our consumerism has gotten out of hand and we are consuming too much of the world’s resources. In the name of fairness, let’s give the ROW a chance. As of today, we will limit our energy and resource consumption to 50% of what we used in the recent past and make sure that every fellow American uses the exact same amount. And please rest assured that we, the 1%, will be bound to the same standards as we, citizens of the world, are all in this together”
A statement like that, much as I’d like to hear it as well, would reveal that the whole capitalist exponential growth paradigm/scheme itself was bankrupt and fraudulent, and that, of course, they can never allow to happen. If the great unwashed masses were to ever understand the logic behind our current predicament, it would be Katie bar the door. Our exponential growth debt-based system depends on growth to keep the pie plates in the air. We can’t not grow for long without having massive debt defaults and deflation. Hence QE to Infinity and all the rest of the current insanity. Besides which, the 1% has no interest in us other than as wealth transfer devices, never mind the ROW.
Let’s say 1% of the population is a sociopath, that means we have at least 70M people on this planet who don’t care about fairness… enough to run a few countries and companies
Many people blame “the poor”, immigrants and so on and rarely want to point their fingers at the real culprits–the corporate executives and owners (including stockholders) and the political, media, and academic elites.
Do you seriously think that working class people who are against mass immigration are just doing it to “blame” the immigrants? Just about any critic of mass immigration on economic grounds that I have ever seen explicitly blames it on wealthy elites and calls it a form of class warfare. The whole “blame” strawman is just a way to support mass immigration without actually presenting an argument in favor of it. In other words we must blindly support it or we are “blaming” the poor immigrants. Oligarchs everywhere love that kind of thinking. It is basically saying we cannot discuss the terrible impact on salaries and wealth of the bottom 50% of society (and the huge benefits that accrue to the top 10%) because we might hurt someone’s feelings.
What if someone complained about slavery saying that it only enriched the top 10% and hurt the bottom 50% economically? Would that be “blaming” the slaves?
And why shouldn’t we question the motives of the top echelon of our economic system who fill the airwaves and print space with endless and empty propaganda in favor of mass immigration? Just one of the most ridiculous examples was from the New Republic — now owned by a lesser Facebook oligarch — that argues that we need to become more like Qatar and have masses of explicitly low caste immigrants like they have in many Gulf states. Is resisting calls for this kind of mass immigration just “blaming” the immigrants? And no, this is not from The Onion:
Our wealthy elite are clearly ever so jealous of Gulf elites who are able to access global cheap labor even easier than US elites are. But we dare not mention this lest we be accused of “blaming” the immigrants.
http://www.newrepublic.com/article/120179/how-reduce-global-income-inequality-open-immigration-policies
I know this is personally your most passionately held position around here, but let me try to explain why someone might disagree with you without wanting to screw the workers. Some of my family are Jews. They left Belorussia at the turn of the last century. If they had not come here, the Einsatzgruppen would have gotten them and their bones would be moldering in a field outside of Minsk. I also know the story of the SS St. Louis. This all has some resonance for me, personally. I have a great deal of trouble pulling up the gangplank because I am now safe. That seems unfair and, to use an old fashioned term, unmanly to me. I understand your argument and think it has much validity. But please don’t dismiss the other side as just being made up of stooges for the Oligarchy.
I don’t have such situations in my family background, but I can understand what you’re saying. That said, it’s unfortunately true that US corporations have long sought to bring in undocumented foreign workers to do the sh*t work, which works as a two-fer for them: 1) drives down wages overall (at least at the levels of work accomplished, including farm labor), and 2) when ICE comes a-knocking the undocumented workers get shipped back to wherever they came from courtesy of US, the US taxpayer (NOT the corporate head honcho, heaven forfend), plus the corporation usually doesn’t have to pay the last paycheck to the unlucky worker sent packing.
I don’t want to pull up the gang-plank on people truly in need, which may include all those kids recently streaming over our borders. That said, what I’d like see is for-real consequences for these various business owners who knowingly hire (whether they actively recruit them in their home countries or not; some do; some don’t) undocumented workers, who ultimately get busted by ICE.
It’s like now sometimes the “Johns” get busted along with the prostitutes in recognition that if you’re going to bust the hookers, you need to also bust those who purchase their services.
Simply busting undocumented workers while letting the bosses go scott free does nothing to address the perceived “problem” of undocumented workers.
It has been studied, I believe, how much of an impact that undocumented farm workers’ low wages have in terms of driving down US worker wages overall. I believe that the impact of that is minimal.
Where we see a real negative impact on US worker wages/salaries is H1(b) visa workers. That’s another story, though.
I could make a similar argument about abortion. If abortion had not been illegal back in the early sixties my tiny little prematurely formed bones would be right now buried in a landfill in Foster City California. I met my birthmother a few years ago and she was quite clear about this. But I’m not sure if my personal interests outrank those of say my birthmother who really did not want to give birth to me but was forced to. In any case I got lucky and won that round but for whatever reason I am just unable to take the next step from my good fortune and support making all abortion illegal, however logical it would seem for me to take that position.
In any case I appreciate you making an argument and I am sure I get carried away sometimes but I know people are honestly searching for the right answers in a very troubled time.
But in any case let’s go with this protective function of immigration and see where it leads. First off in looking at it we hit some American Exceptionalism with the implication that the US is some sort of protective cocoon for the oppressed people of the world. Now at some point that may have been true; although I suppose African slaves may beg to differ. But this safe haven function must be limited; there has to be a point of diminishing marginal returns; the more people you import and “save” the more unstable the supposedly “secure” cocoon becomes.
But this is where intent comes into play. My position is that the recent spat of immigration, far from being an act of charity or chivalry, is instead an act of intentional class warfare (along with many other related factors such as financialisation and off-shoring) that is destabilizing the US and slowly decaying and weakening the social structure of the cocoon. Like too many people scrambling for a limited lifeboat, eventually the cocoon will crumble and not only will the US no longer be able to protect new immigrants; ALL the inhabitants of the US will be at risk for the very type of genocidal violence they were fleeing. The US loses its Exceptionalism and fails and suddenly its population will be fleeing to find other safe havens.
A far better way to provide the protective cocoon function is for the bottom 50% to turn the tide in the class war by turning inward and rebuilding the societal cocoon through a healthy economy and a balanced distribution of wealth. In this way the US could then once again not only provide safe haven in exceptional circumstances for a limited few outside her borders; but better yet, she would provide a healthy example to other societies to emulate, thus reducing the possibility of genocidal violence outside the limited cocoon of the US. Whether this is Exceptionalism or just doing good, there are of course limits in a world of 7 billion people on how strong the shining beacon of 330 million people will be. But on the down side things can be different. The way things are going, the destructive power of the US elites is turning the US into a malignant cancer that, if not turned around, could very well destabilize and help destroy a good portion of those 7 billion in the rest of the world.
So we must accept mass migration, or we are condemning people to holocaust… the U.S. being the only refuge from an evil world. Nice.
I’m not blaming anyone. The oligarchs use the immigration issue to divide and conquer as they always do because Americans believe anyone who isn’t rich is trash even if they themselves are not rich–that’s the tragedy of this culture.
The oligarchs encouraged illegal immigration as the perfect way to break unions and impoverish the working class–then they funded right-wingers to blast the working class with anti-immigrant propaganda and lies.
One way to counter the falling household wealth is to inject liquidity into households.
Here is something blucollarAl wrote that caught my attention:
The American worker lucky enough to possess a decent paying skilled or semi-skilled union job was being taught to see their situation as morally “deserved” and to see newer aspirants to similar positions, whether recently arrived immigrants or members of racial-ethnic groups previously suppressed by law, custom and prejudice as threats/dangers/enemies of their own recently won status.
We are taught all the time about cause-effect and that we deserve something, but only because we work hard.
And that is why we can not imagine money can be created for the People to spend. Only someone or something more virtuous or maybe wiser than us is worthy of that money. Forget ‘we are all leaders.’ Forget ‘self-help.’ Forget ‘We are all divine or we all have Buddha nature and achieve enlightenment.’
So, we inject liquidity into banks.
Do we inject liquidity into households (not trickle down, but direct injection)? It’s failing. It’s too big as well.
Let me pull part of an article on Argentina economics and how it got there:
Duncan and Fogarty (1984) argued that the key difference lies in the contrast between the stable, flexible government of Australia and the poor governance of Argentina.[161] According to Platt and Di Tella (1985) the political tradition and immigration from different regions were the key factors, while Díaz Alejandro (1985) suggested that a restrictive immigration policy, similar to Australia’s, would have increased productivity encouraged by the relative scarcity of labour.[161]
More recently, Taylor (1992) pointed that the relatively high dependency ratio and the slow demographic transition in Argentina led to a reliance on foreign capital to offset the resulting low savings rate.[161]
Why did Argentina get to the way it was. Letting in large amounts of poor immigrant labor to work in various industries. These people also ended up having a large amount of children. This resulted in what they call a high dependency rate. A high dependency rate means that you have a large percentage of non-productive workers versus productive workers. Why do you thing Eva Peron was so popular in Argentina. “In 1951, Eva Perón announced her candidacy for the Peronist nomination for the office of Vice President of Argentina, receiving great support from the Peronist political base, low-income and working-class Argentines who were referred to as descamisados or “shirtless ones”.” Obama and the Democrats are channeling the Peronist. Check out how that ended. Eva wanted to provide for them and that started the printing presses.
In addition, let me tell you a big percentage of the people who Obama wants to legalize are basically criminals but just have not been caught. Check out the percentage of illegal aliens in prison in the southwest. Ninety percent of the murders in LA are between illegal aliens. I can tell you dreadful stories I hear about crimes involving illegal aliens.
In addition, the average child of an illegal alien never finishes 8th grade.
I have used the term “Libertard” before and people ask what does that mean. Let me explain. It is a person so liberal they are retarded because they believe in mutual exclusive ideas. For instance they are for protecting the economy but they want to flood the country with uneducated illegal aliens. There are limits to how many people this country can sustain and we have passed them. That is one of the reasons the economy is doing so poorly. Here is another some more libertard thinking — they the liberals were against building damns in California (which I kind of agree with) to catch more water to solve the water problems but they are open to people flooding into the state illegally which demand more water.
How many liberals have told me that we could stick all the population of the US in Texas and give them 40 acres. Well who ever thinks that has never been to Texas or the Southwest. They have never been on the Llano Estacado or the Staked Plains which starts in West Texas (I was born there) and is one of the biggest geological features of the world. This is what Coronado said about the Llano:
“I reached some plains so vast, that I did not find their limit anywhere I went, although I traveled over them for more than 300 leagues … with no more land marks than if we had been swallowed up by the sea … there was not a stone, nor bit of rising ground, nor a tree, nor a shrub, nor anything to go by.”[1][7]
and what a US surveryor in the 1800’s said:
“When we were upon the high table-land, a view presented itself as boundless as the ocean. Not a tree, shrub, or any other object, either animate or inantimate, relieved the dreary monotony of the prospect; it was a vast-illimitable expanse of desert prairie …. the great Sahara of North America. it is a region almost as vast and trackless as the ocean — a land where no man, either savage or civilized permanently abides … a treeless, desolate waste of uninhabitable solitude, which always has been, and must continue uninhabited forever.”[11]
This covers a big part of the US western US. One word for it — uninhabitable. In addition, the uninhabitable part of this country is growing. Sure just keep increasing the population of the US. We probably already have double the population that this country can sustainably support.
Argentina’s economy.
What, no mention of the IMF ?
https://www.mtholyoke.edu/courses/sgabriel/argentina.htm
Flora — so I guess your point is maybe that the IMF caused the problem. Funny and shows a total lack of history with Argentina. In the 40’s there was a military coup and ultimately Juan Peron came to power. The following below is a time line of problems in the 60’s per Wikipedia. Please note the mention of monetary expansion ie money printing. The problems raged from the sixties into the late 80’s when the IMF became involved. They were only involved for a short period at that point because Argentina was always wanting money but would never follow through with policy. Please note their current government is also referred to as Peronists. Once you start flooding your country with poor ignorant people who have a high birth rate and you appease them with money printing you are screwed. Argentina has never recovered from these policies of the Peronists starting in the 40’s. By the way, Argentina did not have to turn out this way. Buenos Aries was called the Paris of the Western Hemisphere in the 30’s. Argentina had a large amount of natural resources. I look at the US and see that we are firmly on this path.
In May 1969, discontent with Krieger’s economic policies led to riots in the cities of Corrientes, Rosario and Córdoba.[109] Krieger was removed, but the Onganía administration was unable to agree on an alternative economic policy.[109] By 1970, the authorities were no longer capable of maintaining wage restraints, leading to a wage-price spiral.[106] As the economy started to languish and import substitution industrialization ran out of steam, urban migration slowed.[91] Per capita income fell, and with it the standard of living.[91] Perón’s third term of office was characterized by an expansive monetary policy, which resulted in an uncontrolled rise in the level of inflation.[92]
Stagnation
Starting with the Rodrigazo in 1975 inflation accelerated sharply, leading to several redenominations of the Argentine currency.
Between 1975 and 1990, real per capita income fell by more than 20%, wiping out almost three decades of economic development.[71] The manufacturing industry, which had experienced a period of uninterrupted growth until the mid-1970s, began a process of continuous decline.[110] The extreme dependence on state support of the many protected industries exacerbated the sharp fall of the industrial output.[111] The degree of industrialisation at the start of the 1990s was similar to its level in the 1940s.[110] In the early 1970s, per capita income in Argentina was twice as high as in Mexico and more than three times as high as in Chile and Brazil. By 1990, the difference in income between Argentina and the other Latin American countries was much smaller.[71]
Starting with the Rodrigazo in 1975, inflation accelerated sharply, reaching an average of more than 300% per year during the 1975–1991 period, increasing prices by a factor of 20 billion.[71]
When Martinez de Hoz assumed power as finance minister prices in the previous month had increased at an annual rate of 5,000% and output had declined sharply.[112] In 1976, the era of import substitution was ended, and the government lowered import barriers, liberalized restrictions on foreign borrowing, and supported the peso against foreign currencies.[7] This opening exposed the fact that domestic firms could not compete with foreign imports, in part because of the overvalued currency, but also because of long-term structural problems.[111] A financial reform was implemented that aimed to liberalize capital markets and link Argentina more effectively with the world capital market.[112]
After the relatively stable years 1976–78, fiscal deficits started to climb again and the external debt tripled in three years.[113] The increased debt burden interrupted industrial development and upward social mobility.[114] Beginning in 1979 the rate of exchange depreciation was pre-fixed with a tablita, an active crawling peg based on a timetable which announced ahead of time a gradually declining rate of depreciation.[112][115] These announcements were repeated on a rolling basis so as to create an environment where economic agents could discern a government commitment to deflation.[112] Inflation responded to this policy and gradually fell throughout 1980 to below 100%.[112] But gradually, during 1978 and 1979, the real exchange rate appreciated because inflation consistently outpaced the rate of depreciation.[112] The overvaluation ultimately led to capital flight and collapse of the financial system.[112]
The failure of Banco de Intercambio Regional in March 1980 led to runs on other banks.[116]
Growing government spending, large wage raises, and inefficient production created a chronic inflation that rose through the 1980s, when it briefly exceeded an annual rate of 1,000%.[7] Successive regimes tried to control inflation through wage and price controls, cuts in public spending, and restriction of the money supply.[7] Efforts to stem the problems came to naught when in 1982 Argentina came into conflict with the United Kingdom over the Falkland Islands.[113]
Timeline of Argentine exports from 1975 to 1989
In August 1982, after Mexico had announced its inability to service its debt, Argentina approached the International Monetary Fund (IMF) for financial assistance, as it too was in serious difficulties.[113] While developments looked positive for a while, an IMF staff team visiting Buenos Aires in August 1983 discovered a variety of problems, particularly a loss of control over wages affecting both the budget and external competitiveness, and the programme failed.[113] With the peso quickly losing value to inflation, a new peso was introduced in 1983, with 10,000 old pesos exchanged for each new peso.[7]
In December 1983 Raúl Alfonsin was elected President of Argentina, bringing to an end to the military dictatorship.[113] Under Alfonsin, negotiations started on a new programme with the IMF, but they led to nothing.[113] In March 1984, Brazil, Colombia, Mexico and Venezuela lent Argentina $300 million for three months, followed by a similar amount by the United States, providing some breathing space as it was not before late September 1984 that an agreement was reached between the IMF and Argentina.[113]
In 1985 the currency was redenominated again, with the Austral substituting the discredited peso.[113] In 1986, Argentina failed to pay the debt for several months until ultimately the debt was renegotiated with the creditor banks.[117] During 1986 and 1987 the Austral Plan faded away, as fiscal policy was undermined by large off-budget spending and a loose monetary policy, again falling out of compliance with an IMF programme.[113] A new IMF arrangement was reached in July 1987, only to collapse in March 1988.[113]
The next move by the authorities was to launch the Plan Primavera in August 1988, consisting of a package of economically heterodox measures that foresaw little fiscal adjustment, and this time the IMF, in the absence of firm policies, refused to resume lending to Argentina.[113] Six months after its introduction the Plan Primavera collapsed, leading to hyperinflation,[113] and riots.
@Ishmael: “Ninety percent of the murders in LA are between illegal aliens.” Source, please?
“I can tell you dreadful stories I hear about crimes involving illegal aliens.” I can tell you dreadful stories I hear about crimes committed by white American males: family homicide, rape, pedophilia, mass shootings, and so on.
Source — how about LA times.
In California something like 40% of the prison population is illegal alien. Arizona and New Mexico has an even higher percentage.
Carla — denial is not a river in Egypt.
Ishmael — how about some links? (You know, date, page number, title, author.) Your opinions are interesting, but I’m not seeing the evidence. And denial cuts both ways.
Even if you factoid is true, and you provide no evidence, it’s separately well known that the US prosecutes, convicts, and sentences blacks and Hispanics at greatly disproportionate rates.