Assault on the American Middle Class

Here is a nice interview with Elizabeth Warren. She was chosen by Obama to set up the Consumer Financial Protection Bureau. She is an excellent person who has been pushed into a corner by the slicker, more power hungry poltical types in Washgington. This is a tragedy because she has real empathy for the American people.

She's in this video, but she shows up at 0:45 into the video:



The Republican "plan" in Wisconsin and other states is exactly the problem she is complaining about. The politics of the right has been to cut taxes for the rich by levering up hidden taxes for the bottom 90% of the population. And now the Republicans want to destroy the remaining public unions, eviscerate the school systems, and impoverish everyone. They want to create a two class system: the titans (those with "tiger blood") and the servants. Guess which group 99% of the people you will belong to!

Here is another talk, "The Coming Collapse of the Middle Class", by her at the University of California in March 8, 2007. This is more academic but gives a fuller picture. Elizabeth Warren starts talking at 4:45...



The really key bit to see is at 9:25 when she compares "incomes for a family between 1970 and 2005" and "incomes per worker" for the same period. Stagnant. This is the era of the Reagan "revolution" and the promises of unleashing the entrepreneur with Bush tax cuts, and all the other promises of "trickle down" economics.

She makes a very important point at 26:45 when she points out that the current 2 income family has less money left over after basic expenditures than did the 1 income family of 1970. That is a serious degradation in the standard of living. It makes it very clear that these families are caught on a treadmill that is forcing them to put more family members to work to "stay even" with the cost of living. This is the "trickle down" economics that Reagan delivered!

At 43:10 she points out that educating a child for the middle class went from 12 years of public paid for education, to 18 years where the public pays for 12 years but the parents pay for 6 years (2 years pre-school and 4 years college). This is an example of how families are much more precarious and under greater financial stress than they were a generation ago.

For an update on this "assault on education" for the middle class, here is Ed Schultz of MSNBC's "The Ed Show" giving all the details of how governor Walker of Wisconsin is removing money from the education system and redirecting it into goodies for the upper class via vouchers:



At 54:10 Elizabeth Warren makes the point that America is going from a "middle class" society to a two class society, the rich and the poor (the "underclass").

This is the world that the Republicans have delivered to the bottom 90% of the population! A world where the middle class works harder, earns slightly more, in much more in debt, is much more insecure, which sees more burdens put on it, and which sees education for their children becoming much more expensive.

US Taxpayer Pay the US Military to Tell Them Lies

This is an incredible story published in the Washington Times. The US military paid good money for a contractor to "discover" that the 2008 financial meltdown was the result of some mysterious foreign terrorist group. Incredible. Tax dollars are spent by the US military to create fiction:

Evidence outlined in a Pentagon contractor report suggests that financial subversion carried out by unknown parties, such as terrorists or hostile nations, contributed to the 2008 economic crash by covertly using vulnerabilities in the U.S. financial system.

The unclassified 2009 report “Economic Warfare: Risks and Responses” by financial analyst Kevin D. Freeman, a copy of which was obtained by The Washington Times, states that “a three-phased attack was planned and is in the process against the United States economy.”

While economic analysts and a final report from the federal government's Financial Crisis Inquiry Commission blame the crash on such economic factors as high-risk mortgage lending practices and poor federal regulation and supervision, the Pentagon contractor adds a new element: “outside forces,” a factor the commission did not examine.

“There is sufficient justification to question whether outside forces triggered, capitalized upon or magnified the economic difficulties of 2008,” the report says, explaining that those domestic economic factors would have caused a “normal downturn” but not the “near collapse” of the global economic system that took place.

Suspects include financial enemies in Middle Eastern states, Islamic terrorists, hostile members of the Chinese military, or government and organized crime groups in Russia, Venezuela or Iran. Chinese military officials publicly have suggested using economic warfare against the U.S.

With the US federal government groaning under a huge deficit, you would think that the US military would be making sure that every dollar spent was spent very wisely. Nope. Some nutcases in the Pentagon hired other nutcases as "consultants" to write up a fiction to satisfy their urge to find boogymen as "foreign" conspirators who caused the 2008 Great Recession.

As the article points out, if you consult with a sane academic you get this assessment:

Paul Bracken, a Yale University professor who has studied economic warfare, said he saw “no convincing evidence that ‘outside forces’ colluded to bring about the 2008 crisis.”

“There were outside players in the market” for unregulated credit default swaps, Mr. Bracken said in an e-mail. “Foreign banks and hedge funds play the shorts all the time too. But suggestions of an organized targeted attack for strategic reasons don’t seem to me to be plausible.”

But I guess that the Pentagon was so "successful" at capturing Osama Bin Laden and bringing "democracy" to Iraq with the 2003 invasion, that they needed to turn their critical eye to "terrorists" who they are sure must have brought down the US economy in 2008.

If this is the level of "expertise" in the Pentagon, the US should disband its current military and rebuild it from the ground up!

Similarities between China and the US

I found the following bit from an article by Victor Shih is associate professor of political science at Northwestern University and author of ‘Factions and Finance in China’ (Cambridge University Press) to be quite interesting:

During a round table with business leaders during Chinese President Hu Jintao’s visit to the United States in January, US President Barack Obama stated optimistically that ‘With China’s growing middle class, I believe that over the coming years, we can more than double our exports to China and create more jobs here in the United States.’ To be sure, that is a reasonable expectation. When other Asian economies like Japan and Korea grew toward the GDP per capita level of $10,000, sizable middle class populations did indeed emerge.

However, when looking under the bonnet at China’s economic engine, it’s clear that a growing middle class with rising disposable income and consumption is missing. Instead, there’s an economy that is still dominated by state owned firms and state-led investment, as well as by rapidly rising inequality. Instead of an enlarging urban middle class, China is increasingly splitting into a small upper class that spends freely on luxury goods, and a remaining population whose earnings and savings are eroded by inflation and state confiscation.

The underlying dynamics are clear in a recent statistical release by the government. First, real urban disposable income rose a comparatively tepid 7.8 percent in 2010, despite economic growth of nearly 10 percent. However, urban retail sales of consumer goods grew 14.5 percent. While the growth of consumption is good for China's economy, the pattern of this growth suggests rising inequality.

The biggest growth in consumption included jewellery (46 percent), furniture (37 percent), cars (34 percent) and construction material (34 percent). Essentially, these are items related to the spending of the upper class. These ‘consumer’ goods also made up 33 percent of all retail consumption in China. The large size and strong growth in luxury items implies that grey income was substantial in 2010, as suggested by a Credit Swiss report authored by Prof. Wang Xiaolu.

In this report, released last year and based on a survey of urban households in 2009, Wang found nearly 1.5 trillion dollars in grey income unreported in the official household income numbers. He further found that over 60 percent of this grey income accrued to the top 10 percent of households. The latest numbers also suggest that while income of normal households likely grew at around 8 percent, the top 10 percent of households may have seen income growth above 25 percent.

A growing middle class is also absent among recent college graduates. According to the Ministry of Education, only 68 percent of college graduates in 2010 were able to find permanent employment. Even among those who found employment, wages were often no better or sometimes even worse than those for migrant workers in factories. Unlike the rest of the world, however, China enjoyed a spectacular 10 percent growth rate. This impressive growth, however, didn’t translate to high paying jobs for college graduates. In major cities, many college graduates live as an ‘ant tribe,’ packed tightly in small dormitory rooms with four or more roommates.

When I read news out of the US about the Wisconsin governer breaking unions and read the statistics about growing income inequality, the high unemployment, and stagnant income then I realize that China and the US are converging into mega-states organized to accommodate their ultra-rich while grinding down the middle class to join one big class of oppressed at the bottom of a two caste system.

Charlie Sheen Feels Slimed and Trapped

I imagine Charlie Sheen -- after his various rants this week -- feels somewhat like the following:



A normal person view themselves as their own worst enemy and feel "slimed" and "trapped" and about to be "feasted upon" by this velvet worm. But Charlie Sheen is a cricket, standing tall, talking about
"tiger blood" and being an "Adonis".

He doesn't realize that something worse than guys in white suits with butterfly nets are coming to get him... He has been slimed by the Giant Velvet Worm (the media) that is now feasts upon him!

I don't know Charlie Sheen, but he needs some help. He needs real friends and not the two bimbos, the "goddesses", that are hanging out at his house. He needs to listen to his lawyer. He needs to get psychiatric help. He needs to realize that he is as trapped as that cricket in the above video.

US Military Fights Its Own Soldiers Better than Its Real Enemies

It has now been just over 9 years that the US military was given the instruction to "get Osama Bin Laden dead or alive". It has failed miserably.

But when it comes to protecting women inside the army from rapes by other soldiers the US military, the organization is incompetent. Women face far more hazards from their fellow citizen soldiers than they do from "the enemy".

And to add to the idiocy, here is the US military "piling on" poor Bradly Manning. From an MSNBC news report:

Following an intensive seven-month investigation, the Army on Wednesday filed 22 additional charges against Pfc. Bradley Manning, accused of illegally downloading tens of thousands of classified U.S. military and State Department documents that were then publicly released by WikiLeaks, military officials tell NBC News.

The most serious of the new charges is "aiding the enemy," a capital offense which carries a potential death sentence.

Not only have they cruelly put him into isolation, they now want to kill him. He didn't "give aid to the enemy". He was pointing out the incompetence and lies and hypocrisy within the military and the supposed goals of the US administration. The first big leak was over a case where the US military murder -- yes outright murdered -- civilians and some Reuters news people in a trigger-happy helicopter attack. The US military refused to release any material. Sure. It shows the incompetence and murderous intent of US soldiers who have no respect for life. But that was a war crime and the US military should have stood up and taken the hit. Instead, they blame Bradley Manning for releasing the material.

Bottom line: I blame Barack Obama for this latest moral outrage!

Fox News Plants Palm Trees in Wisconsin

Here is a "news" report with Bill O'Reilly getting the "facts" on the "violent" union protests in Wisconsin. In the background you see people battling and tall, tall palm trees. Funny... I don't recall ever seeing a palm tree in Wisconsin. Maybe Fox "news" knows something that the rest of us mere mortals don't know...



Oh... and what happened to all that snow on the ground in Wisconsin? This clip is wierdly missing the snow. Could it be that Fox "news" decided it needed to "illustrate" what it calls the "news" with some clip of violence from elsewhere so that it could "sell" its message of "violence" by Union protesters in Wisconsin? Could Fox "news" step that low?

You betcha! (in the immortal words of Sarah Palin, chief demi-god of Fox "news")

America the Beautifully Debt-Ridden

Here is a bit from a recent post by Robert Reich hammering home the point that the crisis in government budgets in the US comes from the fact that the rich has creamed the income for the last 30 years and refuse to pay taxes. So they have grown incredibly wealthy while governments are in deficit and in crisis:

The explosion of income and wealth among America’s super-rich, the dramatic drop in their tax rates, the consequential devastating budget squeezes in Washington and in state capitals, and the slashing of public services for the middle class and the poor.

It is not a complicated story. Begin with what’s happened to the typical American, whose wages have been stagnant for thirty years. Today’s typical 30-year-old male (if he has a job) is earning the same as a 30-year-old male earned three decades ago, adjusted for for inflation. (Although women are doing better than they did 30 years ago, their wages still trail men’s.)

The bottom 90 percent of Americans now earn, on average, only about $280 more per year than they did thirty years ago. That’s less than a 1 percent gain over more than a third of a century. Families are doing somewhat better but that’s only because so many families now have to rely on two incomes.

But wait. The American economy is more than twice as large now as it was thirty years ago. So where did the money go? To the top. The richest 1 percent’s share of national has doubled – from around 9 percent in 1977 to over 20 percent now. The richest one-tenth of 1 percent’s share has tripled. The 150,000 households that comprise the top one-tenth of one percent now earn as much as the bottom 120 million put together.

Given this explosion of income at the top you might think our tax system would demand a larger share from them. But you’d be wrong. You’re not taking account of the power of the super rich. As income and wealth have risen to the top, so has political power. As a result, their taxes have plummeted.

There is more to Reich's post. Go read the whole thing.

The following graph clearly shows the cuts in the tax rates for the rich:
Click to Enlarge
Reich's bottom line:

Here’s what Democrats should be saying:

Hike taxes on the super-rich. Reform the tax code to create more brackets at the top with higher rates for millionaires and billionaires. Absurdly, the top bracket is now set at $375,000 with a tax rate of 35 percent; the second-highest bracket, at 33 percent, starts at $172,000 for individuals. But the big money is way higher.

The source of income shouldn’t matter – salary, wages, capital gains, other unearned income – all should be treated the same. There’s no reason to reward speculators. (Don’t penalize true entrepreneurs, though. If they’re owners who have held their assets for at least twenty years, keep their capital gains low.)

And while you’re at it, raise the ceiling on income subject to Social Security taxes. And bring back the estate tax.

Do this and we can afford to do what we need to do as a nation. Do this and you prevent Republicans from setting the working middle class against itself. Do this and you restore some balance to a distribution of income and wealth that’s now dangerously out of whack.

Do this, Democrats, and you have a chance of being relevant again.