America the Poor

Thanks to deliberate policies designed to create a permanent underclass, the situation in America is dire indeed:

Economically, America has descended into poverty. As Peter Edelman says, “Low-wage work is pandemic.” Today in “freedom and democracy” America, “the world’s only superpower,” one fourth of the work force is employed in jobs that pay less than $22,000, the poverty line for a family of four. Some of these lowly-paid persons are young college graduates, burdened by education loans, who share housing with three or four others in the same desperate situation. Other of these persons are single parents only one medical problem or lost job away from homelessness.

Others might be Ph.D.s teaching at universities as adjunct professors for $10,000 per year or less. Education is still touted as the way out of poverty, but increasingly is a path into poverty or into enlistments into the military services.

Edelman, who studies these issues, reports that 20.5 million Americans have incomes less than $9,500 per year, which is half of the poverty definition for a family of three.

There are six million Americans whose only income is food stamps. That means that there are six million Americans who live on the streets or under bridges or in the homes of relatives or friends. Hard-hearted Republicans continue to rail at welfare, but Edelman says, “basically welfare is gone.”

You can thank Bill Clinton and "triangulation" for this. I will just say it like it is. Both political parties are responsible for this mess and have no intention of reversing it.

Speaking of economic ruin, reporters Barlett and Steele over twenty years ago wrote about the declining middle class and how that was a result of deliberate Washington policies. They are revisiting their earlier work in a new book, The Betrayal of the American Dream.

Instead of its members being our servants, Congress is in fact the enemy of the American people:

Before today's workers reach retirement age, decisions by Congress favoring moneyed interests will drive millions of older Americans - most of them women - into poverty, push millions more to the brink, and turn the golden years into a time of need for everyone but the affluent.

For all of this you can thank the rule makers of Wall Street and Washington, who have colluded to rewrite the rules on retirement in ways that will harm millions of middle-class Americans for decades. Here is what they have done:

In addition to the 84,350 pension plans killed by corporations since 1985, companies have frozen thousands of other plans, meaning that new employees are barred from participating or benefit levels are frozen, or both. Freezing a pension plan is often the first step toward eliminating it.

The congressionally touted replacements for pensions - 401(k) plans - have insufficient holdings to provide a serious retirement benefit. This even though millions will depend on them.

As companies have killed or curtailed pensions for employees, executive pensions have soared, largely because they are based on executives' compensation - which has ballooned in recent decades.

This Inteview Says It All

The Billionaires and Newly Rich

former presidents get to engage in obscene displays of extravagance while the rest of the country burns.

They don't even hide their contempt for the masses. The irony, of course, as I mentioned below is the media despised the Clintons for not being part of the Beltway Mob, but oh, how times have changed.

Now comes the politicians’s daughter as celebrity. According to news reports, Chelsea Clinton’s wedding to investment banker Mark Mezvinsky on July 31 is costing papa Bill $3,000,000. According to the London Daily Mail, the total price tag will be about $5,000,000. The additional $2,000,000 apparently is being laid off on US Taxpayers as Secret Service costs for protecting former president Clinton and foreign heads of state, such as the presidents of France and Italy and former British Prime Minister Tony Blair, who are among the 500 invited guests along with Barbara Streisand, Steven Spielberg, Oprah Winfrey, Ted Turner, and Clinton friend and donor Denise Rich, wife of the Clinton-pardoned felon.


Before we attend to the poor political judgment of such an extravagant affair during times of economic distress, let us wonder aloud where a poor boy who became governor of Arkansas and president of the United States got such a fortune that he can blow $3,000,000 on a wedding.

Probably those speaking fees and sales from his various books.

It is No Surprise

the gangster class, also known as the rich, have stolen the economy, and the country is all but destroyed:

Bloomberg reports that Treasury Secretary Timothy Geithner's closest aides earned millions of dollars a year working for Goldman Sachs, Citigroup and other Wall Street firms. Bloomberg reports that none of these aides faced Senate confirmation. Yet, they are overseeing the handout of hundreds of billions of dollars of taxpayer funds to their former employers.

The gifts of billions of dollars of taxpayers' money provided the banks with an abundance of low cost capital that has boosted the banks' profits, while the taxpayers who provided the capital are increasingly unemployed and homeless.

JPMorgan Chase announced that it has earned $3.6 billion in the third quarter of this year.

Goldman Sachs has made so much money during this year of economic crisis that enormous bonuses are in the works. London Evening Standard reports that Goldman Sachs' “5,500 London staff can look forward to record average payouts of around 500,000 pounds ($800,000) each. Senior executives will get bonuses of several million pounds each with the highest paid as much as 10 million pounds ($16 million).“

It's the Economy, Stupid,

but of course our elected officials haven't a goddamned clue what to do about it, even though I believe it is relatively easy to fix.

Just because Bernanke says there is a "recovery," it doesn't matter if huge numbers of people are unemployed, perhaps as many as twenty percent:

If measured according to the methodology used when I was Assistant Secretary of the Treasury, the unemployment rate today in the US is above 20%. Moreover, there is no obvious way of reducing it. There are no factories, with work forces temporarily laid off by high interest rates, waiting for a lower interest rate policy to call their workforces back into production.

The work has been moved abroad. In the bygone days of American prosperity, CEOs were inculcated with the view that they had equal responsibilities to customers, employees, and shareholders. This view has been exterminated. Pushed by Wall Street and the threat of takeovers promising “enhanced shareholder value,” and incentivized by “performance pay,” CEOs use every means to substitute cheaper foreign employees for Americans. Despite 20% unemployment and cum laude engineering graduates who cannot find jobs or even job interviews, Congress continues to support 65,000 annual H-1B work visas for foreigners.

In the midst of the highest unemployment since the Great Depression what kind of a fool do you need to be to think that there is a shortage of qualified US workers?

Congress really is the enemy. They are on the take, every last one of these people.

Just When Will People

wake the hell up and realize they aren't the ones who are running the country?

Probably never.

A brief snip:

Have a look at economic policy. It is being run for the benefit of large financial concerns, such as Goldman Sachs.

It was the banks, not the millions of Americans who have lost homes, jobs, health insurance, and pensions, that received $700 billion in TARP funds. The banks used this gift of capital to make more profits. In the middle of the worst economic downturn since the Great Depression, Goldman Sachs announced record second quarter profits and large six-figure bonuses for every employee.

Is There Any Economy

left to recover?

The “New Economy” was based on services. Its artificial life was fed by the Federal Reserve’s artificially low interest rates, which produced a real estate bubble, and by “free market” financial deregulation, which unleashed financial gangsters to new heights of debt leverage and fraudulent financial products.

The real economy was traded away for a make-believe economy. When the make-believe economy collapsed, Americans’ wealth in their real estate, pensions, and savings collapsed dramatically while their jobs disappeared.

The debt economy caused Americans to leverage their assets. They refinanced their homes and spent the equity. They maxed out numerous credit cards. They worked as many jobs as they could find. Debt expansion and multiple family incomes kept the economy going.

And now suddenly Americans can’t borrow in order to spend. They are over their heads in debt. Jobs are disappearing. America’s consumer economy, approximately 70% of GDP, is dead. Those Americans who still have jobs are saving against the prospect of job loss. Millions are homeless. Some have moved in with family and friends; others are living in tent cities.

Our public officials still have their heads in their collective asses, however, so nothing is going to happen.

Paul Craig Roberts

hits it on the head about our worsening economic situation:

Except for Lou Dobbs on CNN, the US TV and print media have so far ignored the astounding story. Where are the headlines: “US Jobs: No American Need Apply”?

Chances are high that economists will ignore the story also. Economists have made fools of themselves with their hyped claims that jobs offshoring is a great benefit to America and that any attempt to stop it would bring hardship, failed companies, and lost American jobs. When a profession gets egg all over its face, it closes ranks and goes into denial.

Unlike the post-depression generation of US economists, recent generations of economists have been indoctrinated with confidence in business. They believe that business knows best and that the free market will prevent or correct any mistakes. Many economists today are well-paid shills for special interests. Others, simply careless, have assumed that statistical measures of high rates of US productivity and GDP growth were indications of the benefits that offshoring was bringing to Americans.

Only a few economists, such as myself and Charles McMillion, noticed the inconsistency between alleged high rates of productivity and GDP growth on one hand and stagnant real median incomes and rising income inequality on the other. Somehow the US economy was having GDP and productivity growth that was not showing up in growth in the incomes of Americans.

Thanks to economist Susan N. Houseman and the March 22 issue of Business Week, we now know, as I reported in the print edition of CounterPunch (June 1-15, 2007) and online at VDARE.com and Online Journal, that much of the growth in US productivity and GDP was an illusion created by statistics that mistakenly attributed productivity gains achieved abroad to the US economy.

With the ladders of upward mobility for Americans dismantled by offshoring and work visas, with the very real problems in mortgage and housing markets, with the very real stress put on the US dollar’s reserve currency role by Bush’s trillion dollar war that is financed by foreigners, with the downward revisions in US GDP and productivity growth that are now mandatory, and with a variety of other problems that I haven’t the space to deal with, the fabled US economy is a thing of the past.

John Edwards needs to hammer on this theme and hammer it hard. The powers-that-be will try to silence him, but the truth needs to be told.