Wednesday, August 8, 2007

The Middle Class Squeeze

The following string captures the pressures that are facing the US today and in turn the people of Dayton, Ohio. Unfortunately, due to homogeneous thinking, Dayton's leadership is following the US and State government like bleating sheep for the shearing. We need to step up and start building a local economy that utilizes all the skills of the citizens that surround the Miami Valley. We need manufacturing, wool making, public transportation, craftsmanship and quality. I am afraid of living in an era where our leadership sells out America, so the rich get richer. We should stop now.

The Oil Drum | DrumBeat: August 8, 2007
'The core of the issue is growing angst among wage earners in the US; their earning potential has stagnated - politicians are simply reflecting this real concern. Over the last several years, a striking new feature of the US economy has emerged: real income growth has been extremely skewed, with relatively few high earners doing well while incomes for most workers have stagnated or, in many cases, fallen. Just what mix of forces is behind this trend is not yet clear, but regardless, the numbers are stark. Less than 4% of workers were in educational groups that enjoyed increases in mean real money earnings from 2000 to 2005; mean real money earnings rose for workers with doctorates and professional graduate degrees and fell for all others. In contrast to earlier decades, today it is not just those at the bottom of the skill ladder who are hurting. Even college graduates and workers with non-professional master's degrees saw their mean real money earnings decline. By some measures, inequality in the United States is greater today than at any time since the 1920s. - Kenneth Scheve and Matthew Slaughter, Foreign Affairs July/August 2007 If true, this validates the view that US and Western workers not in the upper echelon income categories are bearing the brunt of enriching poor Asians. And the benefits of this are flowing disproportionately to the upper-echelon earners. So, the threat of MAD becoming reality is real - driven by real factors and fears. Rational individuals would avoid such a path. But the tug of events and circumstances sometimes take nations where they really don't wish to be.'

Response 1 - I don't think China is going let us leave them holding the bag (i.e., let us inflate away our debt). They will sacrifice their new middle class if necessary. Yes, they know it will cause civil unrest. They are prepared to deal with it.

Response 2 to 1 - 'They are prepared to deal with it.' I believe you are right, Leanan. I also believe that much of the Bush drive to garner more powers at the expense of our constitution is to position the US Government to 'deal with' domestic problems that will arise when the FWO (formerly well off) begin to feel frisky...Once they finally realize that they are the 'lobsters in the pot.'

Response 3 to 2 - Look at the USA from a similar outside perspective.

Maybe for the long term prospects of our country it makes sense for the Fed and Powers That Be (PTB) to allow the lower classes to be crushed in order for real wealth to be maintained at the very top (in order to start again).

Are there alternative options available to the Fed\PTB that would leave the USA in a better position to rebuild after the seemingly likely Financial Crunch?

Imagine we had leaders truly looking out for Everyone, what would their actions look like?

Response 4 to 3 - I am not sure if you have heard of the concept of globalization. Simply put, your PTB (Powers That Be) are not concerned about "your" country- they have more important things to worry about.

Response 5 to 4 - Right. They now look at countries the same way they look at businesses and product lines -- everything they need to know they learned in Marketing 101:

Pour investment capital into Rising Stars. That used to be the USA until around 1970 or so; China is the Rising Star today.

Milk the Cows. That has described the US, and what they have been doing to it, for the past quarter century or so.

Disinvest, sell out, and kill off the Dogs. This describes the new game plan for the USA, presently coming into full swing.

PUNCHLINE = Imagine we had leaders truly looking out for Everyone, what would their actions look like?

Instead of a trillion-dollar military occupation, we'd have a trillion dollars worth of PV panels on rooftops throughout the country. And we might be seeing some electric cars on the road by now.

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