Category Archives: The destruction of the middle class

As Dow Sprints to New High, the Middle Class and Manufacturing Languish

It’s hard to fathom the celebratory mood in the US markets, save that the moneyed classes are benefitting from a wall of liquidity reminiscent of early 2007, when risk spreads across virtually all types of lending shrank to scarily low levels. Then the culprit was not well understood, although Gillian Tett discerned that CDOs were a huge source of leverage, and in April 2007, an analyst, Henry Maxey at Ruffler, LLC, did an impressive job of piecing together how levered structured credit strategies were driving market liquidity.

Now it’s a lot easier to see what is afoot.

Minimum Wage Households That Get Pay Increases Typically Increase Their Borrowing Even More

The debate around Obama’s proposed minimum wage increase (when he had promised to deliver an even bigger wage rise in his first term) focuses mainly around how much economic stimulus it will provide and whether it will simply lead employers to cut worker hours (given how obscene corporate profits are, most companies have plenty of room to pay their employees more, even if their kvetching would lead you to believe otherwise. Remember, companies used to share the benefits of productivity gains with workers; it was in the later 1990s they started keeping the upside all for themselves). But a look at that question reveals what low wage workers do when they get pay increases.

Is the Eurozone Nearing a Make or Break Point?

One of the dangers of trying to understand what is going on in the Eurozone if you are a hapless but interested American isn’t simply that you’d have to be fluent in a lot of languages to keep on top of the media, but the media themselves are, as NC readers know well, not exactly reliable. Look at how much dictation from business and political leaders masquerades as news in the US. And we have a less controlled press than, say, Italy does.

So I will give readers some fresh data points and let you duke it out.

Student Loan Bubble So Big It’s Trumping Credit Cards as a Spending Driver

It turns out Lambert’s mother-in-law research is pretty good.

Germans and Eurocrats Throw Hissy Fits Over Italian Elections

It’s unlikely that the destabilizing of the political calculus in Europe resulting from impressive showing of anti-austerity candidates in Italy will end prettily or nicely. However, Europe had already put itself in the position of having only bad choices. So the question is who suffers, and the public in periphery countries are starting to rebel against being broken on the rack while Eurocrats and pampered German and French bankers feel no pain.

Richard Wolff Discusses the Failure of Capitalism with Bill Moyers

The fact of this talk is telling in and of itself: that a mainstream commentator would devote an entire segment to the idea that capitalism isn’t working. While that idea may seem obvious to many NC readers, it was supposed to remain relegated to the sphere of deviance (see Daniel Hallin’s spheres of discourse for more detail).

Why Obama Refuses to Kill the Sequester

The game of chicken both the Republicans and Democrats are playing with the sequester and the budget/deficit talks is striking. One of the truly bizarre elements is that neither side is signaling the faintest interest in dealmaking of any kind. As I indicated the week before last, the lack of any sense of urgency was obvious: Congress had a holiday last week, and there were no real negotiations or even an exchange of proposals, virtually guaranteeing the sequester would take place as scheduled.

Disposable Workers: Why Throwaway Employees are Bad Policy

The media increasingly appears to define the state of the economy based on corporate bottom lines and the experience of the upper echelon, reflected in the way it glosses over the anxiety and distress outside the top 1% of the population.

NC Crowdsourcing! Whither the Deficit Cliffhanger?

I’m obviously removed from the action, but I’m surprised at the complacency in DC and in the markets over the fact that the sequester is a comin’ soon. Next week Congress is out of session, and the media messaging from both sides at this point lacks the sense of urgency (in particular, front page reports of intense pow-wows) that I’d expect if a deal were to be done by the sequester deadline of early March.

So I have these questions for the NC commentariat: