A joke is making the rounds which perfectly captures the spirit of America's decline.
An undocumented worker, a unionized public employee, a member of the Tea Party and a CEO are sitting at a table. In the middle of the table is a plate with a dozen cookies on it. The CEO reaches across and takes 11 cookies, looks at the Tea Party member and says, "Look out for those two... They want a piece of your cookie."
Yes, it's true—the victory of the obscenely wealthy owners of this country is nearly complete, and now they want you to fight over the table scraps.
From CNNMoney's How The Middle Class Became The Underclass. The average American's income has not changed much, while the richest 5% of Americans have seen their earnings surge. This chart includes capital gains.
You may have noticed that I have not commented on union-busting in Wisconsin and Ohio. I view these events as small, inevitable details in America's decline. State budgets balllooned during the "good times" of the Bubble Era (1995-2007). Now those same budgets must contract because bubbles (unwarranted asset price inflation) inevitably collapse. Everybody, including the public employee unions, thought they were rich during the Bubble Era. Laissez les bons temps rouler! But now in 2011 we know better. All the wealth created during those years went to the rich (chart above). The rest of us have been left holding the bag.
Each state is using different tactics to repair their balance sheets, but the bottom-line says the states can no longer afford to provide basic services like public education. I expect this tragic situation to continue indefinitely. As George Carlin noted, this country's owners are not interested in having an educated public. The fact that sociopaths like former Lehman executive John Kasich want to accelerate the rate of decay and make political hay at the same time is also a predictable outcome of America's decline.
The Columbus Dispatch reported this week that Kasich tried to persuade two state pension funds in 2002 to invest with Lehman Brothers while he was the managing director of the investment banking house's Columbus office.
The collapse of Lehman Brothers eventually cost Ohio's pensions nearly $500 million.
[My note: And let's not forget that the Good but Brainwashed people of Ohio elected John Kasich to be their governor.]
Poof — the money's all gone, it disappeared in a cloud of fraudulent smoke. Now let's consider Elizabeth Warren's view—
When Tech Ticker’s Aaron Task sat down with Warren in Washington last week, he asked about our recent interview with the president of the International Fire Fighters’ Association Harold Schaitberger. The union chief finds it galling that some Wall Street “single-year bonuses exceed the average life time benefits” of the average firefighter and paramedic. See "This is All About the Money": Pension Fund 'Crisis' a Red Herring, Union Chief Says.
Her response: “The middle class has been under assault now, really, for a generation.”
The middle class got hit by a "one-two punch" of rising daily living expenses plus flat wages, Warren tells Aaron in the accompanying clip. The world became a “far more dangerous” for American families when Congress “deregulated credit and turned the lender loose," starting in the 1990s, she continues.
As more people turned to buying the necessities with plastic — including health-care, college tuition and groceries — Americans became inundated with debt and “more of them started falling over the cliff financially,” she says. “We’ve got a middle class that is under assault from multiple directions.”
Union critics blame the public-sector for ballooning state deficits and lack of jobs. But, Warren says those arguments are simply not supported by the facts. Unions are one of the few institutions trying to strengthen America’s middle class by fighting for fair wages, Warren says.
“We should be in a world in which we all are a little better off when this country produces more, not that the part left over for those who work for a living keeps shrinking, while those who manage investments get an ever bigger piece.”
From 1976 to 2007, the top 1% of U.S. earners received 58% of all real income growth, according to economics professor Raghuramu Rajan of the University of Chicago's Booth School.
Unlike Warren, I am not able to give unions an unqualified endorsement. Are they really the only alternative to predatory capitalism? That's the verdict of history, but as with so many things human, the cure can be worse than the disease. I don't have time to dissect the problems with unions today, but Warren's basic story—the Middle Class has been under assault for a generation—is correct.
After the wealthy take eleven cookies off the table, there's only one left to fight over. Good luck getting your share of that one remaining cookie.
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