6/13/2012 5:57 PM ET|
Washington vs. the middle class
Wage-earners are about to take it on the chin, again. And our choices in November are a president who has done too little to help the economy and a challenger who wants to do still less.
There's nothing like an election to bring out the worst in our politics. Especially one in the midst of a terrible balance-sheet morass. People are desperate. They're angry. And they're realizing the politicos in Washington just don't get it.
Witness the recent backlash and Republican foaming at the mouth over President Barack Obama's comment on Friday that the private sector, which has created 4.3 million jobs over the past 27 months, was "doing fine" (compared with the public sector, which has lost more than 1 million jobs).
Behind the perceived insensitivity, Obama had a valid point. Government workers are being purged, adding to the unemployment rolls. Yet it seems this is what people want.
You can feel the tide turning as those stung by the globalized economy (manufacturing workers, for example) turn on their brothers and sisters in the tax-fueled economy that is the government payroll. Voters are saying, "How dare they get raises and a good retirement!" instead of asking why the rest of us don't.
Wisconsin's union-busting governor, Scott Walker, made headlines last week by winning his closely watched recall election. Voters supported his actions to cut public worker benefits and collective-bargaining rights. Similar efforts are under way in California; both San Diego and San Jose voted to tighten pay and benefits for public workers.
But this is a scorched-earth approach, focusing on what we can take away from others instead of how to make things better for everyone. We're talking reallocation of resources, not fresh growth or new jobs. Republican presidential hopeful Mitt Romney illustrated this view with his own gaffe, complaining that Obama wants "more firemen, more policemen and more teachers."
In other words, we're inviting our political leaders to rain fire on yet another sector of the already bloodied middle class. The war has already begun, and the middle class is losing. It's about to get much worse as Washington pushes us off a fiscal cliff.
Down, and nearly out
First, consider our current predicament. Here's a list of middle-class miseries that comes courtesy of Gluskin Sheff economist David Rosenberg, who compiled most of it. I added a few items:
- Forty-five million Americans (one in seven) are on food stamps.
- One in seven is unemployed or underemployed.
- The percentage of those out of work defined as long-term unemployed is the highest (42%) since the Great Depression.
- Fifty-four percent of college graduates younger than 25 are unemployed or underemployed.
- Forty-seven percent of Americans receive some form of government assistance.
- Employment-to-population ratio for 25- to 54-year-olds is now 75.7%, lower than when the recession "ended" in June 2009.
- There are 7.7 million fewer full-time workers now than before the recession, and 3.3 million more part-time workers.
- Eight million people have left the labor force since the recession "ended" -- adding those back in would put the unemployment rate at 12% instead of 8.2%.
- The number of unemployed looking for work for at least 27 weeks jumped 310,000 in May, the sharpest increase in a year.
- Just 14% of high-school graduates believe they will have a more successful financial future than their parents.
- The male unemployment rate for ages 16 to 19 is 27%; for ages 20 to 24, it is 13%.
- Because of structural problems such as negative home equity (which keeps people from moving for work) and skills erosion (from long-term unemployment), UBS economists estimate that the economy's natural unemployment rate has increased from 5.7% before the recession to 8.6% now. This acts as a speed limit on potential economic growth.
- Between 2007 and 2010, median family net worth fell nearly 40%, while median inflation-adjusted incomes before taxes fell nearly 8%.
Ugly stuff. And it's about to get a lot worse.
Voting for recession
I wrote in this April column that the country is facing a looming fiscal cliff, and you've certainly heard the phrase since.
Approaching is a collection of tax increases and spending cuts worth, according to Bank of America Merrill Lynch, $720 billion, or roughly 4.6% of the U.S. gross domestic product, if you include things like tax increases to fund the new health-care bill. They include the expiration of the Bush tax cuts, automatic spending cuts agreed to in the last budget deal, and more.
The math is simple: If these things happen, they will slash nearly 5% off the growth rate of an economy expanding at a pitiful 1.9%. And they're all set to happen as the calendar flips to 2013 -- unless Washington does something.
Also in the mix is a debt-ceiling increase, which is needed to avoid a government shutdown unless -- again -- Washington acts. I'm not holding my breath.
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For one, let the Bush tax cuts end and whatever happens happens. The nation needs a fresh influx of revenue and a reduction in spending. The superavit Clinton left for Bush to dilapidate ocurred because we all felt very patriotic Americans and endorsed the Iraq invasion, that was the beginning of the recession and then, the financial crisis. The total system went bankrupt but it was bailed out by all of us. Still, CEO's got their obscene bonuses
You don't even want to consider living through what I have gone through since 2007, and yet I am financially secure. If I can do it, and survive the death of my wife of 35 years, than so can you......sans unemployment, food stamps, or any form of govt assistance.
A pox on both parties. They're killing the middle class, the foundation of this country. Let the budget deal go into effect as it currently stands. It'll be worth it to kiss off the Bush tax cuts.
Wake up People! There is no fixing a terminally broken economic system. The failure of our current economic system was inevitable from its onset. We live in a consumer based economy. If people aren't consuming, the system breaks down. We can only consume so much. Our resources are finite, and the only people who benefit from such a system are the 1%. The idea of profit only benefits those 1%ers. It's time to change the "economic" system. There is no reason that humanity can not benefit from the resources available to us, and do so by distributing the resources where needed.
Our technology has taken over the jobs available to the common worker and the profit driven corporate structure is not going to make those jobs available to us again. In the 1930s, some 57% of America worked in agriculture. Now, due to technology and the need to profit, only 3% of the population works in agriculture. That is but an example of how profit outweighs the publics need to survive, and how the "corporatocracy" is destroying our means to make a living. The alternative to these problems is to take money and profit out of the equation, and resort to a "resource based" economy. It would be advantageous to all, for a litanny of reasons. To learn more about this, go on youtube and watch the 3 "Zeitgeist" movies(Zeitgeist, Zeitgeist: Addendum, and Zeitgeist: Moving Forward). If you have the open-mindedness and foresight to understand these movies, you may realize there is a better way than the one we've been sold for so long. It will not happen overnight, but the resulting social benefit will be felt by all.
I can't believe these republican people did you see them with Jamie dimons nuts in their mouth today how can anyone be so stupid as to follow them any where especialy a broke mofo.
Look for a big recovery after the election, no matter who wins. Probably bigger if Romney somehow pulls it off at some huge cost per vote, much of it given to many of those same corporations.
What we need is an economy that grows quickly and strongly. Strong enough to create jobs that can accommodate the less skilled and new graduates. Green jobs won't do it. Running huge government debts won't do it. Kicking the can down the road until the road ends won't do it.
"And our choices in November are a president who has done too little to help the economy and a challenger who wants to do still less."
Once again we are offered a choice between the lesser of two evils. There are other parties to vote for. Maybe we should be looking for an alternative to the two major parties.
I'm still counting on the Communist Chinese to bail us out, maybe since they own so much of our debt they will think we are to big to fail...lol
If both the Dems and the Republicans had not been falling all over themselves to help corporations ship every living wage job over there we might still have a middle class. They say it is a Representative Style Democracy they never mention that they never represent the working or Middle Class. Is anyone even noticing that we are a Corpocracy now and the country is being run by Wall Street and the corporations!
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