Survey data exclusive to The Associated Press points to an increasingly globalized U.S. economy, the widening gap between rich and poor, and the loss of good-paying manufacturing jobs as reasons for the trend. [..]
As nonwhites approach a numerical majority in the U.S., one question is how public programs to lift the disadvantaged should be best focused – on the affirmative action that historically has tried to eliminate the racial barriers seen as the major impediment to economic equality, or simply on improving socioeconomic status for all, regardless of race.
Hardship is particularly growing among whites, based on several measures. Pessimism among that racial group about their families’ economic futures has climbed to the highest point since at least 1987. In the most recent AP-GfK poll, 63 percent of whites called the economy “poor.”
The host of MSNBC’s Now, Alex Wagner discussed the growing jobs, the middle class and bridging the gap in income inequality with Maya Wiley, Founder and President, Center for Social Inclusion; Jacob Weisberg, Chairman, Slate; and Jennifer Senior, Contributing Editor, NY Magazine.
At FDL News Desk, DSWright noted President Barack Obama’s admission in a New York Times interview that “he was worried that years of widening income inequality and the lingering effects of the financial crisis had frayed the country’s social fabric and undermined Americans’ belief in opportunity.” He sums up that the president is finally facing the facts:
Hope has its limits, eventually people want the eloquence of rhetoric to be matched by the eloquence of action.
So now the 99% are getting wise to the fact that the game has been rigged against them and that continuing on this course will only lead to poverty and stagnation – a realization that is scaring elites. People may be done hoping for change, they finally be understanding that power concedes nothing without demand.
The auto industry Big Three were loyal only to shareholders, not the people of Detroit. The city was gutted by that social choice
Capitalism as a system ought to be judged by its failures as well as its successes.
The automobile-driven economic growth of the 1950s and 1960s made Detroit a globally recognized symbol of successful capitalist renewal after the great depression and the war (1929-1945). High-wage auto industry jobs with real security and exemplary benefits were said to prove capitalism’s ability to generate and sustain a large “middle class”, one that could include African Americans, too. Auto-industry jobs became inspirations and models for what workers across America might seek and acquire – those middle-class components of a modern “American Dream”.
True, quality jobs in Detroit were forced from the automobile capitalists by long and hard union struggles, especially across the 1930s. Once defeated in those struggles, auto capitalists quickly arranged to rewrite the history so that good wages and working conditions became something they “gave” to their workers. In any case, Detroit became a vibrant, world-class city in the 1950s and 1960s; its distinctive culture and sound shaped the world’s music much as its cars shaped the world’s industries.
Over the past 40 years, capitalism turned that success into the abject failure culminating now in the largest municipal bankruptcy in US history.
Kicking off a series of speeches about the economy, President Obama told a crowd in Illinois on Wednesday that reversing growing inequality and rejuvenating the middle class “has to be Washington’s highest priority.” During his remarks, Obama failed to mention the bankruptcy filing by Detroit, where thousands of public workers are now fighting to protect their pensions and medical benefits as the city threatens massive cuts to overcome an estimated $18 billion in debt. Detroit’s bankruptcy “is an example of a failed economic system,” says economist Richard Wolff, professor emeritus of economics at University of Massachusetts
Conservatives want you to think high taxes drove people away. The real truth is much worse for their radical agenda
In the wake of Detroit’s bankruptcy, you may be wondering: How could anyone be surprised that a city so tied to manufacturing faces crippling problems in an era that has seen such an intense public policy assault on domestic American manufacturing? You may also be wondering: How could Michigan officials possibly talk about cutting the average $19,000-a-year pension benefit for municipal workers while reaffirming their pledge of $283 million in taxpayer money to a professional hockey stadium?
These are fair questions – and the answers to them can be found in the political mythology that distorts America’s economic policymaking.
As mythology goes, the specific story being crafted about Detroit’s bankruptcy is truly biblical – more specifically, just like the fact-free mythology around the Greek financial collapse, it is copied right from the chapter in the conservative movement’s bible about how to distort crises for maximum political effect.
Where the hell is the outrage? That is the question that senior fellow at Campaign for America’s Future and former executive at AIG, Richard (RJ) Eskow asks about the current state of the US econoomy:
From the first breath of life to the last, our lives are being stolen out from under us. From infant care and early education to Social Security and Medicare, the dominant economic ideology is demanding more lifelong sacrifices from the vulnerable to appease the gods of wealth.
Middle-class wages are stagnant. Unemployment is stalled at record levels. College education is leading to debt servitude and job insecurity. Millions of unemployed Americans have essentially been abandoned by their government. Poverty is soaring. Bankers break the law with impunity, are bailed out, and go on breaking the law, richer than they were before.
And yet, bizarrely, the only Americans who seem to be seething with anger are the beneficiaries of this economic injustice — the wealthiest and most privileged among us. But those who are suffering seem strangely passive.
As long as they stay that way, there will be no movement to repair these injustices. And the more these injustices are allowed to persist, the harder it will be to end them.
Where the hell is the outrage? And how can we start some?
He notes that Paul Krugman, too, is feeling grim about the possibility that high unemployment has become acceptable and that the “political and policy elite” see no need to find a solution, one that is staring them right in the face:
First of all, I think many of us used to believe that sustained high unemployment would lead to substantial, perhaps accelerating deflation – and that this would push policymakers into doing something forceful. It’s now clear, however, that the relationship between inflation and unemployment flattens out at low inflation rates. We can probably have high unemployment and stable prices in Europe and America for a very long time – and all the wise heads will insist that it’s all structural, and nothing can be done until the public accepts drastic cuts in the safety net.
But won’t there be an ever-growing demand from the public for action? Actually, that’s not at all clear. While there is growing “austerity fatigue” in Europe, and this might provoke a crisis, the overwhelming result from U.S. political studies is that the level of unemployment matters hardly at all for elections; all that matters is the rate of change in the months leading up to the election. In other words, high unemployment could become accepted as the new normal, politically as well as in economic analysis.
Eskow points to the factors why Americans have learned to live in a “quiet state of desperation” and offers a Action Plan for the solution:
1. Expand our avenues of political expression: First, we need to remind ourselves that electoral politics is not the only productive avenue for political activism -that we need strong and independent voices and movements.
2. Refuse to let politicians use social issues to exploit us economically: We also need to reject the exploitation and manipulation of progressive values by corporatist politicians who use social issues like gay marriage and reproductive rights exactly the way Republicans do — to manipulate their own base into ignoring their own economic interests. Politicians who don’t take a stand on economic issues should be rejected, up and down the ticket.
3. Explain what is changing — and contrast what is with what should be:We need to do a better job of explaining what’s happening, so that we can make people aware of the harmful changes taking place all around them.And it’s not just about “change”: It’s also about contrast – between economic conditions as they are, and conditions as they should be and could be, if we can find the political will.
4. Expand the vocabulary of the possible: The “learned helplessness” outlook says “the rich and powerful always win; we don’t stand a chance.” History tells us otherwise. From the American Revolution to the breaking up of the railroads, from Teddy Roosevelt’s trust-busting to FDR’s New Deal, from Ike’s Social Security and labor union expansion to LBJ’s Great Society victories, we need to remind ourselves of what we’ve accomplished under similar conditions.
5. Tell stories: And we need to tell stories — human stories.
Some of those human stories started 22 years ago when Bill Moyers began documenting the stories of two families ordinary families in Milwaukee, Wisconsin who had lost good paying factory jobs and how they have managed over the years. In a 90 minute special on PBS’ Frontline, Moyers revisits the the Stanleys and Neumanns anf their struggles to finding other jobs, getting retrained yet still finding themselves on a “downward slope, working harder and longer for less pay and fewer benefits, facing devastating challenges and difficult choices.”
This piece is a summary of a paper that I presented at the Left Forum in a panel organised by Geminijen. If you want to see a copy of the longer paper (which is being edited for English and clarity), send me a personal message here with your email and I will send it to you. Fran Luck who is the producer of the radio series “Joy of Resistance: Largest Minority” on WBAI was in the audience and asked us to appear on her show. If you would like to listen to Geminijen, Diana Zevala (who has written for the ACM on education), Barbara Garson and me, please click here: http://archive.wbai.org/files/mp3/wbai_130703_210001wed9pm10pm.mp3).
While in no way denying the impact of the introduction of austerity upon the working class, the disabled and the poor as a whole, there is no question that the impact of austerity on women is far greater. This is due to the job losses in the state sector where women’s labour is predominant, our historically lower wages due to the undervaluation of traditional women’s labour in a capitalist labour market leading to greater dependence upon the social welfare state, and our overwhelming responsibility for reproduction of the working class and how that impacts on our working lives. The failure of the state to provide completely for social reproduction especially in childcare and care for the infirm and disabled has resulted in women having: 1) discontinuous working lives; 2) and the predominance of our labour in part-time employment.
With incomes falling in the advanced capitalist world as part of general economic policy, women face greater threats than men due to our responsibility as primary caretakers of children, the disabled and the elderly. Women are facing lower incomes, lower pensions, and an increasing reluctance for the state to support women in the workplace through provision of child-care and after-school programmes and shouldering carer responsibilities for the elderly and infirm. Given the transformations in general employment possibilities towards increasingly underemployed and part-time labour, we will begin to face competition from men for the jobs we have normally held while benefits are increasingly run down.
We face increasing economic insecurity without sufficient state assistance to ensure that our children and families can have a decent standard of living provided through employment. Women can no longer depend upon the fact that our labour is of sufficient value to capitalists as men also face increasing precariousness in their employment, and in the absence of a strong labour movement or left-wing movements, can serve the same role of an easily intimidated low-paid work force.
The destruction of the public sector enabling the weakening of the last bastion of trade union organisation to force through even lower wages and a reduction in social subsistence levels of wages along with a further deterioration in working conditions on the basis of non-competition with emerging and peripheral economies is nothing less than a race to the bottom and women will be the first, but not the last, victims of neoliberal economics in the advanced capitalist world.
This piece will be divided into 3 parts. The first is composed of some general statements on austerity. The second part will discuss the women’s labour market in Britain and the impact of austerity. The third part addresses the attack on the universal social welfare state in Britain and its impact upon women.
Journalist David Cay Johnston, Sen. Sherrod Brown (D-OH) and MSNBC host Ed Schultz all agree that now is the time, and in some cases past time, to invest in the collapsing and crumbling bridges, road, rails and public buildings.
The I-5 disaster in Seattle reflects the dire state of our bridges and highways. But it may never be cheaper to replace these aging arteries than it is now.
“We cannot hope to have an A+ economy with a C-level infrastructure,” said James Chae, president of the (American Society of Civil) engineering society’s Seattle section. [..]
State and local governments spent $156 billion on highways in 2010, roughly a penny out of each dollar of America’s gross domestic product.
Right now, governments can borrow at the lowest interest rates in 700 years. Roughly 25 million people are involuntarily forced into part-time work, are looking for work, or have given up because they cannot find a job.
We must either update our infrastructure or face a future that is both more dangerous and poorer, as more bridges collapse, pipelines leak and explode, and the movement of goods and people becomes less efficient. We could increase our spending and reap big dividends in jobs and the taxes they generate, improved safety, and a more efficient economy.
Why put off until tomorrow what is cheaper to do today?
MSNBC’s Ed Schultz, host of “The Ed Show,” discussed the problem of cutting spending on rebuilding the nation’s infrastructure with Sen. Brown.
The majority of Senate Democrats running for reelection in 2014, including three running in red states, have broken with President Barack Obama and are opposing his effort to cut Social Security benefits, imperiling the austerity project known as the “grand bargain.” [..]
Democratic Sens. Kay Hagan (N.C.), Mark Begich (Alaska) and Mark Pryor (Ark.), all running in states won by Republican Mitt Romney in 2012, have publicly opposed the president’s effort, going so far as to co-sponsor a Senate resolution against chained CPI last week. Sens. Al Franken (D-Minn.), Jeff Merkley (D-Ore.), Jack Reed (D-R.I.) and Brian Schatz (D-Hawaii), running in bluer states, also co-sponsored the resolution. [..]
Other Senate Democrats up for reelection who didn’t sign the resolution were still unfavorably disposed toward chained CPI. Sen. Jeanne Shaheen (D-N.H.) opposes the cost-of-living cut, her office confirmed to HuffPost, and has said Social Security should be off the table in debt talks.
Sen. Chris Coons (D-Del.) has been open to the chained CPI cut, but insisted a “circle of protection” must be established for the most vulnerable Americans.
Begich plans to introduce the Protecting and Preserving Social Security Act and the Social Security Fairness Act of 2013 when he returns to Washington, DC next week. He says his plan has three points. The Protecting and Preserving Social Security Act would remove a cap on high income contributions. The cap is now at 113,700 dollars. Removing the cap would make high income earners pay into Social Security just like everyone else, he says. [..]
The second part of that bill would revise how SS payments are adjusted to better reflect how America’s senior spend their income. Currently, payments are based on a Consumer Price Index model that does not accurately reflect higher costs seniors pay, for medications, for example. The bill would create a CPI – E for elders.
The Social Security Fairness Act would remove penalties that are now placed on retirees who worked more than one job, paid into Social Security, but then retired under a different retirement system. Under current law, they are denied their Social Security benefits Many government workers and some teachers in Alaska fall into this category.
It’s about time the Democrats stood up to the Republican in the White House.
Paul Krugman wrote about the human tragedy of the economic policy failures of the Obama administration which has prioritized deficit reduction over putting people back to work. The impact of those failures can be seen in New York City where, as reported in the New York Times, the racial wealth gap has widen since the recession:
The Urban Institute study found that the racial wealth gap yawned during the recession, even as the income gap between white Americans and nonwhite Americans remained stable. As of 2010, white families, on average, earned about $2 for every $1 that black and Hispanic families earned, a ratio that has remained roughly constant for the last 30 years. But when it comes to wealth – as measured by assets, like cash savings, homes and retirement accounts, minus debts, like mortgages and credit card balances – white families have far outpaced black and Hispanic ones. Before the recession, non-Hispanic white families, on average, were about four times as wealthy as nonwhite families, according to the Urban Institute’s analysis of Federal Reserve data. By 2010, whites were about six times as wealthy.
The dollar value of that gap has grown, as well. By the most recent data, the average white family had about $632,000 in wealth, versus $98,000 for black families and $110,000 for Hispanic families.
The two factors that contributed to the gap were the housing downturn and loss of retirement savings that hit black families the hardest due a number of elements: predatory lending in minority neighborhoods; a higher proportion of their wealth invested in the home; higher unemployment rates and lower incomes among blacks; and the need to borrow out of retirement finds in a depressed market, “leaving them out in the cold as the market recovered.”
An article written by the editors of The Nation pointed out this chilling fact:
Here is New York in 2013: a city of dazzling resurrection and official neglect, remarkable wealth and even more remarkable inequality. Despite the popular narrative of a city reborn-after the fiscal crisis of the ’70s, the crack epidemic of the ’80s, the terrorist attack of 2001, the superstorm of 2012-the extraordinary triumph of New York’s existence is tempered by the outrage of that inequality. Here, one of the country’s poorest congressional districts, primarily in the South Bronx, sits less than a mile from one of its wealthiest, which includes Manhattan’s Upper East Side. And here, a billionaire mayor presides over a homelessness crisis so massive that 50,000 men, women and children sleep in shelters each night. More New Yorkers are homeless these days than at any time since the Great Depression.
The numbers tell the story. Between 2000 and 2010, the median income of the city’s eight wealthiest neighborhoods jumped 55 percent, according to the Fiscal Policy Institute. Meanwhile, as the cushy precincts got even cushier, median income dipped 3 percent in middle-income areas and 0.2 percent in the poorest neighborhoods. [..]
The money pouring in at the top of the income brackets has simply pooled there, without trickling down to the bottom or even the middle. This great pooling has occurred as median wages have fallen, the cost of living has increased, and the poverty rate has risen to 21 percent-as high as it was in 1980. As a result, America’s most iconic city now has the same inequality index as Swaziland.
The article goes on to say that this isn’t entirely NYC’s fault with the economic shift over the last thirty years to finance but it also pointed out that Mayor Michael Bloomberg’s policies were a largely contributed to the problem.
[..] the stewards of New York City-its mayor, legislators and other influencers-could have made choices to counter this trend: “New York City’s government is significant enough in its breadth…that the policy tools exist and the wherewithal exists to do something at the margins to lessen inequality.” The choices, however, that might have corrected some of the skew-within education, economic development, labor rights, poverty policy, budgeting-have largely been ignored in favor of creating a very different model of metropolis. [..]
Bloomberg himself expressed this vision in a March 2012 piece in the Financial Times bearing the title “Cities Must Be Cool, Creative and In Control,” in which he wrote:
For cities to have sustained success, they must compete for the grand prize: intellectual capital and talent.
I have long believed that talent attracts capital far more effectively and consistently than capital attracts talent. The most creative individuals want to live in places that protect personal freedoms, prize diversity and offer an abundance of cultural opportunities.
Then he added, “Economists may not say it this way but the truth of the matter is: being cool counts.” [..]
In essence, Bloomberg’s is a vision of the city forged primarily around the care and feeding of thought leaders, professionals and strivers-with little concern, and sometimes active contempt, for the ones who do the care and feeding. (In 2011, 400,000 New York workers, many of whom toil in service sector jobs, were not paid enough to hoist themselves out of poverty.) This is a fundamentally two-tier style of urbanism, one in which a cool, creative and well-managed metropolis glitters like something lovely, its radiance drawing attention away from the dimmed surroundings.
But you can see more signs of stress even in the more insulated parts of New York City. Retail vacancies are up, even on the well-trafficked shopping streets, the worst since the post-2009 period. More restaurants seem to be taking a hit too, which suggests that non-expense-account diners are cutting back. And if ZIRP-supported NYC is looking a bit less robust, how well can the rest of the country be faring?
h/t to Yves for the video
The rich get richer and the poor get poorer, but ain’t we got fun?
Income inequality is growing in the United States. Occupy Wall Street brought the income gap between the 99% and the 1% into the light and changed the conversation. Bill Moyers explores what happened in Silicon Valley where the homeless problem has grown 20% in the last two years and tent cities are common place among the million dollar mansions. Poverty shows no sign of abating despite the market thriving.
“A petty, narcissistic, pridefully ignorant politics has come to dominate and paralyze our government,” says Bill, “while millions of people keep falling through the gaping hole that has turned us into the United States of Inequality.”
Upward redistribution of income – what we’ve been calling the “looting of the economy” by the billionaire CEO class – is responsible for at least 43% of the projected Social Security shortfall for the next 75 years.
Let that sink in. This is yet another way that the looters want the victims to pay for their victimhood and hold the looters lossless. The CEO class has worked for three decades to create an economy where working people have a far less share of the economic growth than they used to have. One of the results of that inequity was an unexpected shortfall in the income collected by Social Security.
Think about it – everyone could see that the big demographic shift, the baby-boom generation, would show up on schedule. They could see that in the 1950s. But who knew 30 years ago (1983, if you’re not subtracting quickly), when the last Social Security adjustment occurred, that Reagan, Clinton, Bush and Obama would create a bipartisan consensus around handing all the fruits of productivity to the “rich and famous” set that you’re not a part of? That was not part of the calculation in those golden Reagan Days, and the Social Security Trust Fund has suffered ever since.
The rise in New York City’s poverty rate as a result of the recession has apparently eased, but not before pushing nearly half of the city’s population into the ranks of the poor or near-poor in 2011, according to an analysis by the Bloomberg administration.
That year, according to the city’s measure, about 46 percent of New Yorkers were making less than 150 percent of the poverty threshold, a benchmark used to describe people who are not officially poor but who still struggle to get by. That represents a rise of almost two percentage points since 2009, when the nation’s recession officially ended. [..]
Though more New Yorkers were working in 2011 than the year before, larger shares of children and working adults were classified as poor in 2011, and the proportions of Asians, noncitizens and Queens residents – overlapping groups – each rose by more than four percentage points since 2008.
Former Greek Prime Minister of Greece George Papandreou inherited a failing economy when he was sworn in on October 9, 2009. He resigned two years later during failed talks of a bailout with the “troika” of the International Monetary Fund (IMF), the European Central Bank and the European Union. Mr. Papamdreou discussed the cost of austerity with Chris Hayes, the host of “All In,” economics journalist Chrystia Freeland, managing director and editor of Consumer News at Thomson Reuters, and economics professor Radhika Balakrishnan, executive director of the Center for Women’s Global Leadership at Rutgers University.
In the news today, Greek Finance Minister Yannis Stournara announced that Greece had reached an agreement on economic measures for the release of €2.8bn in the coming weeks, followed by a further €6bn in May. The cost to bail out the banks: some 15,000 employees would be fired by 2015 with 4,000 redundancies by the end of the year.
Greece’s unemployment rate reached a new record of 27.2 percent in January, new data has showed, reflecting the depth of the country’s recession after years of austerity imposed under its international bailout. [..]
The jobless rate has almost tripled since the country’s debt crisis emerged in 2009, and was more than twice the eurozone’s average unemployment reading of 12 percent. [..]
Unemployment among youth aged between 15 and 24 stood at 59.3 percent in January, up from 51 percent in the same month in 2012.
Despite the “happy talk” from Prime Minister Antonis Samaras about this deal showing that the six years of austerity was paying off, the people of Greece are not very optimistic and are still suffering under the weight of EU demands for more austerity.
As Washington lawmakers pushes new austerity measures, economist Richard Wolff calls for a radical restructuring of the U.S. economic and financial systems. We talk about the $85 billion budget cuts as part of the sequester, banks too big to fail, Congress’ failure to learn the lessons of the 2008 economic collapse, and his new book, “Democracy at Work: A Cure for Capitalism.” Wolff also gives Fox News host Bill O’Reilly a lesson in economics 101.
AMY GOODMAN: Professor Wolff, before we end, I want to turn back to the crisis in Cyprus and relate it to what’s happening here. Bill O’Reilly of Fox News warned his audience last week that Cyprus and other European countries are facing economic hardships because they’re so-called “nanny states.”
BILL O’REILLY: Greece, Italy, Spain, Portugal, Ireland, now Cyprus, all broke. And other European nations are close. Why? Because they’re nanny states, and there are not enough workers to support all the entitlements these progressive paradises are handing out.
AMY GOODMAN: That’s Bill O’Reilly of Fox News. Richard?
RICHARD WOLFF: You know, he gets away with saying things which no undergraduate in the United States with a responsible economic professor could ever get away with. If you want to refer to things as nanny states, then the place you go in Europe is not the southern tier-Portugal, Spain and Italy; the place you go are Germany and Scandinavia, because they provide more social services to their people than anybody else. And guess what: Not only are they not in trouble economically, they are the winners of the current situation. The unemployment rate in Germany is now below 5 percent. Ours is pushing between 7 and 8 percent. So, please, get your facts right, Mr. O’Reilly.
The nanny state, you call it, the program of countries like Germany and Scandinavia, who tax their people heavily, by all means, but who provide them with social services that would be the envy of the United States-a national health program that takes care of you, whether you’re employed or not, and gives you proper healthcare. In France, for example, the law says when you go to work, you get five weeks’ paid vacation. That’s not an option; that’s the law. You get support when you’re a new parent for your child care and so forth. They provide services. And they are successful in Germany and Scandinavia, much more than we are in the United States and much more than those countries in the south.
So they’re not broken, the south, because they’re nanny states, since the nanny states, par excellence, are doing better than everyone. The actual truth of Mr. O’Reilly is the opposite of what he says. The more you do nanny state, the better off you are during a crisis and to minimize the cost of the crisis. That’s what the European economic situation actually teaches. He’s just making it up as he goes along to conform to an ideological position that is harder and harder for folks like him to sustain, so he has to reach further and further into fantasy.
For all its vaunted efficiency, capitalism has foisted wasteful inequality and environmental ruin on us. There is an alternative
What’s efficiency got to do with capitalism? The short answer is little or nothing. Economic and social collapses in Detroit, Cleveland and many other US cities did not happen because production was inefficient there. Efficiency problems did not cause the longer-term economic declines troubling the US and western Europe.
Capitalist corporations decided to relocate production: first, away from such cities, and now, away from those regions. It has done so to serve the priorities of their major shareholders and boards of directors. Higher profits, business growth, and market share drive those decisions. As I say, efficiency has little or nothing to do with it.
Many goods and services once made in the US and western Europe for those markets are now produced elsewhere and transported back to them. That wastes resources spent on the costly relocation and consequent return transportation. The pollution (of air, sea and soil) associated with vast transportation networks – and the eventual cleaning up of that pollution – only enlarges that waste.
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