5/9/2012 5:54 PM ET|
What the 99% are getting right
A global backlash is brewing as the masses revolt at rescues and bailouts for those at the top of the economic scale, and austerity for the rest.
Sure, life appears normal. Children are shuttled to school. Milk is on the shelves. Most who want to work are working. But beneath it all, tensions are rising.
We see preferential treatment -- from tax breaks to bailouts -- lavished on the wealthy and powerful while mere crumbs of policy support (stimulus checks, Cash for Clunkers, etc.) fall to the rest of us. We see growing income inequality and widening gaps of wealth while upward mobility becomes harder and harder. We see a frightening increase in corporate influence in politics.
We're not splurging. We're not reaching. We're coping. And we're angry about that.
Much of this anger is directed at the so-called 1%, the elites, in what's become a rehash of the old-time division between the aristocracy and the common folk. As an investment professional and a capitalist who came from nothing through hard work and scholarships, I'm wary of drawing such lines, as I believe anyone can still make the leap from one to the other.
But I'm starting to wonder if the 99% is on to something. If so, and if the unruly tide continues to rise, it will go way beyond college kids sleeping in parks or burning trash bins. It will have major implications for public policy, the economy and the markets in the years to come.
Fed up all over
Indignation was on display in Europe last weekend as French President Nicolas Sarkozy and the ruling coalition in Athens were given the boot by voters. This comes hot on the heels of the breakup of the Dutch government, one of the few remaining AAA-rated eurozone countries. That came amid a bitter debate on balancing the budget to comply with the new fiscal pact -- which forces deficits to be quickly closed -- championed by Germany, a country that's tiring of its role as the eurozone's savior.
In less than two years, 12 of 17 member states in the eurozone have seen their governments collapse or get voted out. The masses are tired of harsh austerity, crushing unemployment (Spanish joblessness sits at 24.1%) and a lack of pro-growth measures. Berlin is already pushing back against the French and Greek election results, with German Chancellor Angela Merkel saying the deal, which was signed with great fanfare by 25 countries back in December, is not negotiable.
I've written before -- in columns such as "Welcome to political chaos" -- that history shows that when leaders attempt budget austerity during times of vulnerability, social and political chaos result. That's exactly what's happening now. Kristen Cooper of Stratfor, a research outfit that's Wall Street's equivalent of the CIA, told clients recently that it's becoming clear that "traditional political elites are losing control of the system they once dominated."
There's been plenty of sound and fury here at home, too -- something I experienced firsthand on the streets of Seattle during May Day protests last week. I met a colleague for lunch in the financial district amid broken glass, vandalized banks, hooded vigilantes and hotel managers preparing to barricade doors, medieval-style. As the weather warms, the Occupy Wall Street movement that set up encampments around the country last year looks resurgent.
To be sure, while relatively few 99-percenters are out breaking windows or even demonstrating, there is plenty to be upset about. Things just aren't going well for most people.
You can see it in the workforce participation rate, which has fallen to levels not seen in more than 30 years; for men, it's fallen to record lows since the data started in the 1940s. You can see it in the way inflation-adjusted wages have flattened over the past five months, something that's never happened outside a recession before. You can see it in still-depressed measures of consumer sentiment, shown in the graph above.
The simple fact is, despite a "recovery" that's nearly three years old, the average person is still being pinched. You can see this in the precipitous drop in the savings rate, in the huge upswing in people relying on the welfare state via disability and food stamp benefits, in the way credit card usage is on the rise again while student loan debt explodes, and in the way this economic cycle has been led by products -- often pioneered by Apple (AAPL) -- that are in truth merely delivery devices for cheap entertainment courtesy of YouTube and Facebook. You can't put millions back to work in an economy obsessed with costless, mindless diversions.
Americans are used to bigger and better business cycles. This just won't do.
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Anthony, you are exactly correct:
"We're not splurging. We're not reaching. We're coping. And we're angry about that".
Plus, we are working more hours for less money than we did five years ago!
The Fed, Wall Street and the large corporations think we are all idiots. I know better, but what can we do except write blogs like this?
Oh, as I've said all along: REMEMBER: November 06, 2012
Elect ALL new members of our County, State and Federal elected officials!
Nice, the article says, "most who want to work, are working" but fails to mention that most who are working, and I mean the real sweat and blood work, are doing it for far less that they should. Nice of them to imply that most who are not working, do it by choice.
The class war has been around forever, it's nothing new, but the wealthiest have always tried to stop the middle class from advancing. The real problem is that once you obtain a certain amount of wealth, it practically breeds by itself unless you invest unwisely or blow it all foolishly. The elite are an exclusive club and don't want newcomers.
The Banks and corporate elite decided long ago to stop allowing wages to go up at the same rate as their planned devaluation of our dollar(inflation) and instead, decided to just raise the credit limit of the working class and lend them more money so they could feel the illusion of success by affording to obtain nicer toys, while they in reality are just paying more for goods, making less money and making endentured servents of themselves.
There is no heart to big business. It has no empathy, morals or ethics and it is ran like a dictatorship. Now that they own our government, you can understand the problems within our government. They pretend to care about our citizens, while they plunder, overs spend, endorse and embrace the corporatism that wants to expand the Banking Cartels hold on the world economy, at any expense to us, including our lives, fighting illegal, unconstitutional wars.
What the 99% did wrong was trust that our government was working for us common men. Our checks and balances and constitution were destroyed by incompetance and greed.
What the 1% did right was use media and toys to distract us while they infiltrated our government and infuenced our leaders to opperate like a business instead of a governing system that is supposed to insure fairness and freedom to all.
Ron Paul is the only one who speaks of the real changes necessary to get us back on track.
But you can't hear him much since they shut him out of mainstream media.
Our government is not out of control, their doing exactly what they want, they're simply out of our control and in bed with corrupt greedy corporate warmongers who want to own and control the world.
When 80% og the population doesn't have "disposable income", demand for products and services drop. When they drop, people are laid off. If the 80% had more money in their pockets from the jobs THEY ARE WORKING AT, more jobs would be created, people would be back at work and things would start to turn around.
This isn't a problem for the government to fix. Companies have money. Companies pay their executives huge salaries. Companies are sitting on piles of cash because they don't know what to spend it on. How about this? Spend it on your damn employees!
Americans have watched as companies eliminated their pensions, fired their co-workers, raised their insurance premiums, reduced their time off and expected them to pick up the slack without compensation. Time for the American worker to grow a pair and demand their companies treat them right, with respect and pay them a wage that allows them to also enjoy their life to some extent.
Never thought of myself as a radical, but seeing how much the game is rigged against regular working people and how the wealthy just keep taking and taking and thinking they somehow deserve it has just about pushed me over the edge.
This is the first succinct article you have written that has real value in spelling out the current malaise of society on a global scale. I only hope and pray that the politicos world wide will heed the wakeup call being generated by the masses. Well done Anthony.
As Maggie Thatcher shared, socialism works until you run out of other people’s money. You now see the start of it i.e. Greece, they are a bad risk and if they want to borrow money they have to pay a huge risk premium and oh by the way their economy is primarily public sector so they create nothing, its left hand right hand. So austerity kicks in to reduce the deficit which shrinks the economy which brings in lower tax revenues which increases their debt to GDP which then fuels higher interest rates for them to borrow money to float their public sector economy - it’s the death spiral
America keep your eye on this slow train wreck, because we are on the same ride.
The need will overcome the greed. This is and has always been everyones planet. It was not built by the few but the many. It still is and will always be this way.
Obama says "Its not my fault, I inherited this from Bush". Yet, on his watch, he selectively bailed out Wall Street and forgot the american people - main street - and now he supports gay marriage because he is under pressure from his party to win more votes.
Bush bailed out Wall Street (TARP) in 2008 BEFORE his term was over. To hell with the stupid argument over civil vs. religious marriages. The US government should not recognize religious doctrine as law as stipulated in the US Constitution. If two people, or more for that mattter, want to form a social unit than they create a contract and that's that. Both political parties and all religions suck.
Nice sentiments, but totally irrelavant!
The 0.1% are globalized, not domestic. They are putting in Patriot Acts, surveillance cameras on streets, phone and internet trackers, while also increasing the police forces and providing bovine training to a public that re-elects their staged & paid legislators with uncanny regularity (and stupidity).
Orwell had it right, and we can just keep dreaming about the audacity of change...
By the way, the 0.1% are not "corporations". These are people who have names.
Most who want to work are working.
I think at least 9.9% of the 99% will disagree with you on this.
There is some truth here, but it's buried in the detritus. The OWS are on the right track, but it's not Wall Street that should be occupied, it's the officies of our elected officials. Protest what they are doing, bailing out the rich, adjusting the laws to suit the rich and not representing those people who elected them.
I've voted every year since I was 21, every election be it local, state or national. Not so much now. I look at the candidates in all parties, and say to myself, "It doesn't matter, nothing will change. They don't represent me." This year I'm going to write in Peter Griffith for President. Can't be worse than what we have now or have to chose from. I hope more people do the same.
Things to remember:
1) If they are to big to fail, they are to big to exist.
2) Of, by and for the people is now, of the rich, by the politicians and for the corporations.
3) Geithner (Secretary of the Treasury) had a big hand in the derivative mess
and spearheaded repeal of Glass-Steagall.
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