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Let’s Understand Why We’re So Finished Economically
How ya’ doing? I mean money-wise. Too much? Maybe not enough?
So let’s listen to economist Paul Krugman explain why we are so screwed. Not we will be screwed, or maybe things will go that way, or we will in the future. Nope, it already happened, though most of us haven’t yet figured it out.Krugman, and the economist he discusses, Thomas Piketty, paid attention in math class, and the other classes, too. That’s why they understand this stuff and I’m still trying to suss out why no matter how many hours I stay on the job and how much I save, it is never enough.
In case you’re reading this on your 15 minute break at Target, I’ll try to summarize.
The American Dream (Patrimonial Capitalism)The myth of the American Dream is the dominating factor in keeping people mostly complacent in the United States. You know it — work hard, and your life will improve. Well, maybe not your life, but your kids’, or at least your grandkids’. If that doesn’t work, it is the fault of the Irish immigrants, or the darn Chinese, or those welfare freeloaders. Ask Donald Trump how it all works.
The thing that makes the myth so powerful is that the tiny percent that is true sounds better than the 99 percent which is a lie. As long as near-constant growth could be assured, enough pieces would fall to the the lower and middle classes to make the Dream seem real. It helped that a kindly media would promote the heck out of every exception, whether it was the shoeshine boy in the late 19th century who went to college, or the plucky guys who invented some new tech in their garage and became billionaires. See, you can do it too, just like if we run hard enough, everyone can be in the Olympics. It’s just a matter of wanting it, believing in yourself, having passion and grit, right?
The Undeniable Reality of the NowThe bulk of the industrial jobs are gone and never coming back; ask Detroit, or the people in Youngstown and Weirton. People have been talked out of most union jobs, convinced somehow that organizing was not in their own interest, and now they find themselves accepting whatever minimum of a wage they can get. Food stamps and other need-based programs are finding more and more middle class users, as suburban people who once donated to charities are now lining up out front of them. Health care paid for by our own taxes is seen as a give away to lazy people. This is the stuff Bernie Sanders talked about.
Like with gravity, the universe doesn’t care if you “believe” it or not; it is just true, independent of what you “think.” That you have been taught this all is something you can choose to believe or not is the weight that holds us all down.
Drilling Down Into Our Miserable LivesIn case you have a few more minutes on your break, or if you’ve been laid off since starting this article, here are some more things happening out there whether you believe in them or not. You can read more about all of this in Thomas Piketty’s book, Capital in the Twentieth Century.
— Our income inequality rate is higher than it ever has been in our own history, is growing, and is higher than in countries in Western Europe and Canada.
— The inequality is driven by two complementary forces. By owning more and more of everything (capital) rich people have a mechanism to keep getting richer, because the rate of return on investment is a higher percentage than the rate of economic growth. This is expressed in Piketty’s now-famous equation R > G. The author claims wealth is growing at six-to-seven percent a year, more than three times faster than the size of the economy.
— Wages are largely stagnant, or sinking, driven by factors in control of the wealthy, such as automation that eliminates human jobs and the not-adjusted-for-inflation minimum wage more and more Americans now depend on for their survival.
— All of this is exacerbated by America’s lower tax rate on capital gains (how the rich make their money) versus wages (how the 99 percent make their money.)
— Because rich people pass on their wealth to their relatives, the children of rich people are born rich and unless they get really into fast women and cocaine, will inevitably get richer. They can’t help it. The gap between the one percent and the 99 percent must grow.
— Social reforms, such as increased education opportunities and low-cost health care, are incapable without tax changes significantly affecting income equality. The only people who can change society are those who profit from it not changing. That’s the big reveal on why we are in so much trouble.
FUN FACT: Until slavery was ended in the United States, human beings were also considered capital, just like owning stocks and bonds today.
Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.
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John Poole said...
1Gastric bypass surgery is one approach for the morbidly obese. A similar type of surgery -think a large plummeting blade- may be the only cure for the morbidly rich.
08/3/16 9:09 AM | Comment Link
chuck said...
2“The inequality is driven by two complementary forces”. The bought for D and R corporate partie$.
08/3/16 10:22 AM | Comment Link
chuck said...
3Todays poll results of myself. This just In…As of today 100% of my vote is… Write in for J. Assange. What country is he a citizen, and where does he live? Why? TRUTH.
08/3/16 12:32 PM | Comment Link
Helen Marshall said...
4Human beings are still regarded as capital by the private prison firms, including the ones run by ICE thanks to the US Congress mandating that 30,000 beds must be filled every day.
08/3/16 12:42 PM | Comment Link
chuck said...
5Am I a serf…er! Make waves…ripples at first if needed.
08/3/16 1:35 PM | Comment Link
rich bauer said...
6“You know it — work hard, and your life will improve. Well, maybe not your life, but your kids’, or at least your grandkids’. If that doesn’t work, it is the fault of the Irish immigrants, or the darn Chinese, or those welfare freeloaders.”
Wait, what? The USA isn’t the greatest country on earth? Well, some of Hillary’s people would disagree.
https://theintercept.com/2016/08/03/gary-locke-ambassador-to-china-house-sale-chinese-tycoon/
08/3/16 2:56 PM | Comment Link
rich bauer said...
7Peter, you are such an optimist. If Trump is elected then let’s understand why we are finished. Period.
https://www.washingtonpost.com/blogs/post-partisan/wp/2016/08/01/theres-no-stopping-a-thin-skinned-president-trump-from-going-nuclear/
08/3/16 3:58 PM | Comment Link
rich bauer said...
8Even Putin doesn’t want to see Trump with the nuclear codes.
08/3/16 4:07 PM | Comment Link
John Poole said...
9Bauer- Trump has no issue with Putin. Hillary will want to “man up” and go after Putin in Syria. Obama says Hillary is his heir. After his folly in Libya he is reticent about going after Putin in Syria. So is Hillary the man Obama wishes he could be? Probably.
08/3/16 6:03 PM | Comment Link
bloodypitchfork said...
10hmmmm. I see a quandary of geometry that defies the human mind to find the intersection points of inequality and the plane of free enterprise.
08/3/16 6:39 PM | Comment Link
bloodypitchfork said...
11ps..I’d kill for an edit button.
this should have said…
“I see a quandary of geometry that defies the human mind to find the intersection points of THE PLANE OF inequality and the plane of free enterprise.”
They exist on two different planes of reality.
Which essentially means.. when push comes to shove, NO ONE will EVER solve it. Because.. it is impossible. Period. After all.. Marx tried. The plane of Capitalism will never intersect the plane of inequality. They reside in different universes.
08/3/16 6:47 PM | Comment Link
bloodypitchfork said...
12ps..untill..the ENTIRE secret movement of Income taxes is finally disclosed, and how the WHOLE US/Federal Reserve/create money out of thin air/Congress spending it/ … we are fucked. This whole program was designed BY THE BANKERS, FOR THE BANKERS in 1913. Nothing has changed but the names of those scum sucking .1% who run it. I challenge YOU…. try to follow where your Income tax goes. At the end of your journey.. tell me what you found. Mine ended at Purto Rico Trust 62.
08/3/16 7:27 PM | Comment Link
bloodypitchfork said...
13Meanwhile, our good ole government just handed over
$400,000.000 of our hardworking taxpayers money to Iran. But lord knows what the REAL truth is about WHY.
http://www.cnn.com/2016/08/03/politics/us-sends-plane-iran-400-million-cash/
My guess.. to buy more weapons from some pig fucking Lord of War arms dealer.
08/3/16 7:32 PM | Comment Link
John Poole said...
14Pitch- I think money given out comes back to the MIC. Iran probably wanted to buy something fancy and the US government obliged. It’s pretty crooked of course. Not much chance of it changing in our lifetime.
08/3/16 10:00 PM | Comment Link
Anonymous said...
15I like your columns but this one has a lot of vague generalities
– like health care- in the usa it’s 17.1% of the entire gdp. compare this to france (11.6) or australia (9.4) or the UK (8.8%). [http://www.commonwealthfund.org/publications/issue-briefs/2015/oct/us-health-care-from-a-global-perspective]. the cost of healthcare here in the usa is brutal, and it’s only increasing. rather than raising taxes, why not control spending and hospital costs? I think I read somewhere that 28% of all health expenditures occur in the last 6 months of life on old people, on un-necessary procedures, that only extend their lives for a short while longer. part of this is partly for legal reasons, doctors don’t want to get sued, but it’s also cultural: we want what we want, when we want. americans spend way more on health care than anywhere in the world.
– another issue- globalisation and industrial jobs disappearing – not disputing what you’re writing, because it’s true that these jobs are gone and not coming back -but why blame rich people only? anybody remember Ross Perot and “the giant sucking sounds” of Nafta? who was supporting outsourcing of jobs? Wasn’t it the current presidential contender’s husband and the the father of our last president? The elite class and the bourgeoisie supported it because they never thought it would affect them, rather only the dirty working class jobs that create pollution, like heavy industry, yeah let them do that in China or Mexico or whatever, right?
And to be quite honest, why would an company owner want to have their factories here when they can be on the other side of the border in El Paso or Tijuana and not have to deal with ridic and rising health care costs, rampant litigousness, and the kind of bureaucracy that entails years of environmental testing and other hurdles & costs to even build the factory. hoover damn never get built in today’s political climate, and neither do iphones and other consumer for the same reasons.
i’m not against taxes, heck i think that apple and google don’t pay their fair share, but doing business in the usa is rough.
08/4/16 12:11 AM | Comment Link
teri said...
16Pitch and John,
Part of the negotiation and treaty Obama just signed with Iran (to get them to quit making the nukes they weren’t making) involved giving back to them the $2 billion dollars that the US government stole (confiscated) from them years ago. We held this money (illegally, in an act of economic warfare) throughout the years as part of our (illegal) sanctions against Iran.
The money just returned to Iran was a small part of their own money that we had stolen. And it appears that Obama is going to reneg on giving them back the rest, thanks to pressure from assholes in Congress, who seem to think that we should be allowed to keep everything we steal from everyone, no matter what means we used to obtain it and that we should simply dishonor any promises made as part of any “deals”, “agreements”, or “treaties” if we decide later we’d just rather not uphold our end of the bargain.
“They [US government] made us many promises, more than I can remember, but they never kept but one; they promised to take our land and they took it.” – Red Cloud (Mahpiya Luta), Oglala Lakota chief.
08/4/16 4:13 AM | Comment Link
teri said...
17Re: Krugman,
So now he’s going to tell us the truth of how things are? He seemed to have misplaced his mind about 8 years ago, and spent the entire length of the Obama administration telling us how “robust” the “recovery” was with Oblahblah in charge. Krugman loves the ACA (he doesn’t have to use that piece of shit for his healthcare, after all), talks about the rebounding jobs market (thanks to Obama!) and touts the unemployment numbers (we’ve regained all the lost jobs under Obama’s leadership!) as though he had no clue that they are completely massaged bullshit (the labor force participation rate, as opposed to the “official” numbers, shows 1/3 of the working age population is unemployed), and as though he actually thought the part-time/temp/crappy jobs are any replacement for all the full-time, well-paying jobs with benefits we lost since ’08 (the latest reports show that all the “new jobs created” since ’08-09 downturn have been low-pay part-time jobs).
He’s also repeating ad nauseum “the Russians are coming to kill us all” trope now because he supports Clinton. And – who knows? – maybe he’s one of those economists who thinks war is good for the economy.
Piketty’s good, though.
08/4/16 4:32 AM | Comment Link
teri said...
18PS, in one of Krugman’s latest columns, available from the link in your article, he actually points to the “rebounding” stock market as a sign of fiscal health.
Good Lord.
08/4/16 4:38 AM | Comment Link
rich bauer said...
19“(Krugman) actually points to the “rebounding” stock market as a sign of fiscal health.”
Goldman Sacks, the boss of Hillarious, sees people as a depreciable asset and a net drag on the economy. Until GS can totally neutralize its voting power, “people” will still be a threat to its bottom line.
Speaking of the bottom line, Trump just hit it:
http://www.philly.com/philly/news/politics/presidential/20160804_Poll__Convention_boosts_Clinton_to_11-point_lead_over_Trump_in_Pa_.html
08/4/16 8:27 AM | Comment Link
John Poole said...
20Krugman has always been a clever double agent. He works the populist angle but is clearly in the castle with the eilte far from the moat where most of us have refined our treading skills.
08/4/16 8:35 AM | Comment Link
rich bauer said...
21Trump is finished economically
Speaking of bottom lines, Trump likely got into the race to get publicity for his businesses. That may be working out for his Russian plans, but in the US, not so much. If Trump were to drop out, it would be this bottom line that worries him:
http://nypost.com/2016/08/04/trumps-presidential-run-may-be-ruining-his-businesses/
08/4/16 8:39 AM | Comment Link
John Poole said...
22The $400 million cash flight to Iran got me to thinking. Maybe the MH370 lead pilot got wind that there was $500 million in cash on board headed for Taiwan and bailed with it in a duffle bag before he ditched his plane in the ocean far from where anyone would ever search.
08/4/16 8:43 AM | Comment Link
rich bauer said...
23$400 mill? Hell, that’s chump change for the military theft in Iraq.
08/4/16 8:52 AM | Comment Link
chuck said...
24Is this weeks powerball 4oo million in Iraq?
08/4/16 9:02 AM | Comment Link
John Poole said...
25Chuck- you won chuckle of the week.
08/4/16 9:26 AM | Comment Link
Nic108 said...
26Krugman is a neoliberal propagandist and Corporate Dembot.
08/5/16 8:47 PM | Comment Link