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Post by spudbuddy on May 3, 2015 14:01:52 GMT -6
Which represents the transfer of wealth. Is not the vast majority of assets actually accumulated by the middle class based on the property they own? So a rentier class commands control over this asset, and rents it back out for profit. Many of those who used to own, now rent. And many more who would have owned....still rent.
There's a curious thing going on here in my little town. I live in a neighborhood where clusters of working class people rent as a matter of course. Most of them are not financially upwardly mobile, and probably never will be. This has repercussions not so much in what they live in - but what they drive.
I've never seen so many late model cars. They're everywhere. Mega-clusters of them. Most being paid for in 6, 7, 8 or more year repayment plans. The car payment has kind of become the "new mortgage", as it were.
A year or so ago, I attempted to try investigating and researching the Blackstone Group. So far I've found precious little real information on them - beyond what sprung out in the national consciousness 2 or 3 years ago. The men in black toting briefcases full of cash, buying up much of the collateral damage and flying debris and settling dust resulting from the blowup of the housing crash. That particulaar "ground zero" brought down far more than two tall buildings.
Wandering through various public forums, reading the discontent and frutstration of Blackstone renters, it became quickly apparent what had transpired. But what became of the Rental Derivative adventures on Wall Street? (a sordid attempt to create new exotic financial returns based on rent, not mortgages)
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Post by spudbuddy on Oct 13, 2014 15:50:26 GMT -6
Well-said yourself, Unlawful.
I remember a quote from Kevin Phillips: "Wealth isn't created, it is intercepted." It's now my understanding that when an economy becomes "financialized" wealth creation becomes an illusion for all except the fringe at the top (which has to have been their plan all along.) Wealth that no longer creates good jobs....here.
But even so, the repercussions of what this does to a society: that there is not only a loss of healthy economic relationships spread across the board of a truly homogenous and mixed economic order, but there is also a loss of pride.....in producing things of value - things you can see that are truly useful, things you can spend a whole lifetime getting better at. Just the fact that a quality product has a national stamp on it - creates a national pride, deep down in the guts of worker self-identity. That counted for something....and now it's faded into the meaninglessness of of post-industrial decay. They never replaced it with anything of lasting value.
Another thing: from what you describe, workers used to have options. They could re-locate, and pick up where they left off, with career-sustaing and retirement-sustaing work. The migration around the country had more life to it, a more productive and positive outcome. I recall blundering into a book put together by a photo-journalist team in the mid-80's. It told the story of what happened in the recession early in that decade, and how the crumbling of the rust belt drove so many people to the road, the wandering, the living in cars (scenes more reminiscent of the Great Depression.) It was a powerful book to me....because it was connected to my lifetime, my working life. I felt like I knew all those people in those pictures. They were very familiar, very real to me. (I was actually able to track down the author and thank him for his work.)
But isn't the upshot really, that Globalization was never going to be a positive outcome for the American worker? Techonology was supposed to save us. It didn't. It won't. Computerization and automation serves the owner class. The "soul destroying" drudgery of the work it supposedly saves us from......how can this be compared to the soul-destroying outcome of chronic unemployment, under-employment, zero-hour temping, and every other new invention of corporate squeezing?
When I was just 16 years old, I possessed the basic skills to work in a railway freight claims office. That was an economy that reached out to embrace what I had to offer. I was not "credentialled" at unaffordable expense. Or suspect from lack of experience. Or fighting with 500 graduates for a foot in the door. But since burger-flippers now have hungry kids at home to feed, the stakes are just that brutal.
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Post by spudbuddy on Oct 13, 2014 10:25:11 GMT -6
No economy for highly educated, over-educated indebted and indentured Americans. Including re-shuffled re-trained older Americans. Including every American who doesn't show up in any unemployed statistic, due to their "disappearance." Including every person who manages somehow to have some kind of income scamming someone else. Including all the workers who actually do increase the productivity of the business they work for, but do not reap any increase in rewards for their effort. (just lucky to have a job.)
This "wealthy" nation that struts upon the stage...apologetically kicking under the carpet the offensive dust and debris of a working class living on the edge - a precariat locked in a death struggle to sustain just enough of an even keel to not capsize straight into the downward spiral of financial decay. Schoolhouse to jailhouse 'stock' management. Educationally warehoused youth labor. (the illusion of non-credentials.) Technology that primarily serves an ownership class for the purpose of skimming profit. Technolgy as the lord and master of a literacy that grows ever more non-literate. (monkey-trained button-pushing.)
And all that must be bought and paid for....with what? Promises.
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Post by spudbuddy on May 5, 2014 9:28:49 GMT -6
So has Blackstone reinvented a mortgage backed security and brought it back for an encore as a rent backed security? Are these being bundled, sliced and diced and traded around the same way?
I've heard that renters of these properties have discovered that their "landlord" can be a distant and vague entity - no quick response in an emergency. Also, homes with cosmetic "improvements" that turn out to have serious structural damage. Rent payments that don't go through because of computer error, and a remarkably quick-response eviction notice shows up on the door. Agents swamped with work orders that go unfulfilled.
With Blackstone - houses are being bought by those who can afford them. But look at who the buyers actually are. A rentier class. It's still all about speculation. Then look at who is priced out of the market.
Curious, to compare the difference between what a traditional mortgage payment used to be, and what a rental payment now is. The blowup of the housing bubble in 2007 comes back and sifts through the settled dust to appropriate real estate as investor-only assets. So much for the American dream. Interesting - that Florida has become such a hotbed for this.
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Post by spudbuddy on Jul 10, 2013 19:37:26 GMT -6
Great post and right on the money. Far more jobs are temporary now than ever before. Even my own job as a physician is temporary. The work contract I'm on will expire within a year. At that time, I'll be looking for another--probably temporary job. Believe it or not, more and more physicians are being relegated to this role--essentially hired guns for organizations that can't keep, or don't want to keep permanent physicians. As a corollary, more temporary workers means less housing demand, since moving to a new geographic location is now part of many workers' career path. No reason to buy a home if you'll be living in another state within a year. Less demand for housing as you say - the increased mobility of a 'transient' working class, not by philosophy but by economic design. A different sort of Grapes of Wrath. Also - less demand for all kinds of consumer items, that would have been accumulated thoughout a more stable, reliable working career. Only problem is...historically, it was not a transient workforce that pumped the economy, it was the stay-at-home entrenched careerists who could plan out a 30-40 year working life (with a firm degree of certitude.) The traditional worker migratory pattern which used to include mainly blue collar tades, mfr. etc. (except for the executive relocations) now includes many professional class workers who once enjoyed far greater job stability. Such is the new fabric laid out, and we continue to reap the results.
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Post by spudbuddy on Jan 6, 2013 10:00:44 GMT -6
Jeff & Unlawful - Thanks for the replies.
1984 is close...but it's actually Brave New World (that was smitten with Soma) - in the same ballpark, though.
And intercepting wealth - alas, I cannot claim party to the intellect that created that notion. It was Kevin Phillips who came up with that gem. I remember when I read it some years ago...and instantly was reduced to tears of mirth by the concept of it - picture: suits on Wall Street with giant Holden Caulfield fielder's gloves, catching in the wry......not kids about to tumble over a real cliff, not a fiscal cliff - but simply catching million dollar bills, before they disappeared out there into a robust economy that re-invests in itself, its future, and most importantly - the ongoing future of its children, grandchildren and even great grandchildren. Imagine..........
And aboslutely right! Existing investment opportunities largely only benefit those who already have the big bucks. As Billie Holiday so elegantly sang with much charm: "Them that got, shall get"
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Post by spudbuddy on Jan 5, 2013 6:50:52 GMT -6
Teenage wasteland: At age 16 I knew the world was my oyster. Checked into the job market and snagged a job I was supposed to be minimum age 18 for. Freight insurance claims office. One month before my 17th birthday, snagged a double promotion that landed me a minor accounting postion whose occupant before me had been a 30-something married man with kids and a mortgage. At 17, I was engaged.
These opportunities don't exist anymore. Teenagers check out, not in - Considering all the 20-something college grads drowning in debt, boomeranging around, unemployed.... My first question has to be, how many younger siblings do they have? Taking notes and applying common sense - enough to avoid that quicksand.
Young people who do not meet, mingle, marry, procreate.................. (within a society that has taught them the rules of the dream: "You do not do this, dahlings...unless you can buy all the treats and tricks of middle class mesmerized mathematics: the home, the car, the kiddie toys, the college funds, etc ad nauseum.") Well, of course they can't. So one fine day in the future, someone either figures out an alternative, or they don't. If the 30's has become the new 20's it's all about debt. We're slipping down through age-defined inflation. Decades are being stolen from youth. I figure if they've been religiously indoctrinated to believe that their educational training promoted within them the idea that the world was indeed, their oyster - that no-one budges into upward mobility any way whatsoever except academically...........well, betrayals breed strange bedfellows. Some deep secret shame abides within the boomeranged child bedroom, no? How exactly to get on with a young life, when paying off the school loanshark?
The songs have not been written about this....................yet. (though "The Beast that Swallows its Young" is a good start.)
If the kids have been patted on the head while distracted by teckie-toys, bribed and placated with teckie-soma....eventually they wake up upon some distant yon birthday to discover they're not exactly kids anymore....yet the bleak infantalization of their sordid young lives became a sad sacrifice upon the altar of corporate fiscally-corpulent trough-noshing.
What I find the most darkly disturbing, is when they come to their senses and discover a generational divide not to their liking: their bleak overview uncovers that their lives' meaninglessness has been chowed down upon by their elders' lifestyle opportunities - in short: Just who the hell are all these shareholders that CEO's bow down to with sweeping genuflections: you know - the ones who actually profit from all the job destruction, off-shoring, outsourcing, lean and mean slicing and dicing, gorging upon the decimation of capital investment that used to create work for young folks. It doesn't create wealth anymore - it intercepts it. When they figure that out, I suspect some shite will hit the fan.
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Post by spudbuddy on Dec 1, 2012 0:33:57 GMT -6
US slowly dying, 1.9 birthrate America currently is slowly dying and propping up entrench banks while type 2 consumers, the lower 80% decline, put off having children, put off getting married, etc. If America fails to sweep away the entrench industries and fails to replace old technology with new production methods, then the doom will last 30 years as happened in 1870 to 1900 in America. An example of this currently is Japan's 23 and ongoing slowly dying culture and finances. No, I don't agree. Current technology is more than adequate to keep up with everything. Furthermore, those "dying" industries are not dying at all. They're being sent overseas to be performed by impoverished semi-slave labor that works for a fraction of what Americans make. You've bought into the popular myth that the American economy is sinking because of lack of skills and lack of innovation and reliance on "old" industries. Again, this is complete nonsense. Americans still buy all of the products of the "old" industries, and in the same amounts and proportions they did 30 years ago. It's just that our small and large appliances--our telephones, TVs, washing machines, dryers, air conditioners, power tools, cars, car parts, record-player equivalents (i.e. CD & DVD players,), ships, hand tools, office equipment, and damn near everything else are being made by cheap non-American labor. These are NOT dying industries. These are industries whose labor has been moved overseas--and have thus been forced into senescence by Global Feudalistic Corporate America. All of these industries are alive and well. But their production is occurring overseas (while the sale of their product is still occurring in the domestic American market to exactly the same degree and market share it was occurring at 30 years earlier. This does not indicating "dying" industries. It indicates stolen industries--industries stolen from American workers by the very Corporate American parasites who profiteer by shipping their jobs overseas. Our population is being replaced at far HIGHER rate than necessary to keep up with labor demand. We need less labor supply (i.e., a LOWER rate of replacement) and more labor demand. We now have over 101 million Americans over age 16 who are not working. We do not need to increase that number. Aye - that's a good and tasy bone to chew. If all those products were still being manufactured in America by American workers, what would our unemployment rate look like? More important: the sustainability of this production - would it not promote sustainable employment? And if the products were good quality and sold well as a result, at good prices (not bargain-basement) would this not produce the kind of employment that provided living wages? And if this were so, how many young people whose college careers have been utter failures, would instead be in circumstances far different...as productive workers, citizens, raising families and consuming the products they make (and being able to afford to do so!) Somehow (somebody somewhere once thought) we were all supposed to acquire expensive educations, and sit around and provide "service" by fiddling with technological apps, tapping computer keys and, I dunno...just wear white shirts and blouses and keep our fingernails clean. Somebody goofed. And that bill of goods has cost an awful lot of grief. As society has become somehow, more and more relentlessly pornographic (in its intent) fewer babies are born. That's an interesting fact, isn't it? People aren't having kids one way or another, because basically they can't afford them - for all kinds of lousy reasons. A socio-economic infrastructure that works very well for high-income earners, but not well at all for anyone else - is ultimately a fool's game on a national scale. The coporatistas and all their attendent handmaidens and henchmen who dreamed this up are wrecking the world. America may be the greatest, fattest canary in the coalmine. One the world would do best to pay attention to. When that canary stops singing, better run fast.
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Post by spudbuddy on Nov 12, 2012 17:49:49 GMT -6
A national slurpy sucking carnival for a relatively select few. (and for the rest, imitation is the sincerest form of battery) not flattery. Great thread, indeed. That blue Mount Everest of food stamps sure is invigorating - just like the actual climb itself. It was a long hard climb....however many angels can dance on the head of a pin - 15% of the population have a hard time balancing on top of that mountain. A $561 rent? I remember that - in the 1980's. I'd say for many, the percentage of income going for housing has climbed 15 or 20 points since then. Curious thing: It takes someone able to buy a new car to create a good used car (the kind the rest of us drive.) Still seems to be happening at remarkable levels (driven - on credit.)
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Post by spudbuddy on Nov 12, 2012 17:33:32 GMT -6
Not only higher than stated: but of dubious quality....in terms of providing people with anything designed to make their lives work on a conventional basis: that being, able to afford anything resembling a real life - affordability of durables, economic hardline indicators (housing, education, retirement, health care, high-value consumption.) How many of these (dubiously) employed live their lives like cash-strapped college students? I know - sounds like a broken record - but who's paying attention? (where it most matters.) Whatever 'new working reality' this is supposed to be (in someone's imagination) won't run the nation, on any level. It's all thumbs stuck in holes in leaky dikes. (praying away the next storm surge.) Disability fraud as the next growth sector.....sounds like top-down fraud to me.
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Post by spudbuddy on Nov 12, 2012 17:20:12 GMT -6
Whatever happened to capital investment? (The kind that actually creates jobs.) The kind of jobs that enable people to buy things. (other than the upscale trinkets most of us never could afford...) But on a sour note: energy-based economy that we are - does that graph not represent just what a canary in a coalmine is supposed to do? I dunno....I'm getting dizzy looking at that blue wavy line. But I'd still say the canary says recession. Lack of energy dependent activity? Or lack of energy cost vs profit margin.......
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Post by spudbuddy on Nov 12, 2012 16:56:34 GMT -6
Could it be that the Mutt's lapdawgs and porkers suddenly felt a little noivous? disappointed? That the gravy train missed the station? Maybe, just maybe, it won't quite be the bizness as usual they were counting on...
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Post by spudbuddy on Nov 12, 2012 11:11:37 GMT -6
Well, let's suppose they gave me the job of the "Dr. Phil" of educational mayhem, bedlam and otherwise various and miscellaneous fears and loathings. Let's just suppose they stuck me on tv, wound me up and let me go.
First thing I'd say is all upper class folks can turn the tv off. I only have one thing to say to youze - make sure you pay for your dear chile's education upfront. Now go away.
For all the rest:
From the day your kids graduate from high school, they are absolutely not allowed to take on one penny of debt, for any reason, but ESPECIALLY for education. Lobby all congresspersons and senators to make this a law. Broken on pain of death. Debt cannot exist until after they are educated in whatever way and are well and truly gainfully employed. (and even then, scarce as hen's teeth.) Bow down to that shrine and worship every single morning upon waking - the one that decrees: educational debt is NOT good debt. Repeat every waking hour.
Comes the hue and cry levied against the good doctor: how the hell can all the po' folks then afford education? Comes the sage reply: what the hell good is education when one is languishing in debt slavery? Well then, what to do? Between the age of 17/18 and 22/23 is just 5 sweet short years of a young life. Work. (at what?) Anything. For numerous reasons. To keep busy. To put dollars on the plus side of the ledger. To feel productive in any way imaginable. Inundate the job market (that's left) with all that youthful energy. And in the meantime: Educate yourselves in any way that's possible - for free or nearly so. How? Libraries. Online resources. Talk to people. Bug them, drive them nuts with all that youthful vigor and curiosity. But...but...but....
The most resourceful ones may even figure out how to save up for a wee bit of community college....blunder into some apprenticeship - or any other way of learning anything useful that doesn't steal the shirt off their back. All to the good.
And in the meantime: investors in educational debt jump ship like frightened rats. Educational institutions across the land tank (while reconsidering the real costing of what they do) and in the ensuing uproar, society is forced to deal with the repercussions. And in the meantime: a whole generation of young people slowly but surely begin to actually smarten up. Love that thought. And what do they do with those smarts? Relish and cherish them, I'd be bound. Feels good to be (however poor) but debt-free, don't it?
But we can't afford to buy.................... You can't anyway, when $800 of that lousy $1300 a month goes off to debt heaven, um? Instead of earning for yourself (whatever pittance) you're earning for Old Scratch. Education should not be a quick march down to the Crossroads and signing a deal with the devil.
And who knows? Maybe by the time the younger brothers and sisters come of age, things have changed somewhat. Maybe education becomes affordable again. Maybe it doesn't. Maybe they're smart enough to know that you can't put a cart before a horse and expect to get anywhere. An existing job market should fuel the education it needs to keep it going - not the other way around. Maybe by then we'll know that it takes capital investment to create jobs. This won't happen while capital is busy playing tiddly winks on Wall Street, instead.
A growing pile of educated folks pouring into a shrinking job market is a perfect recipe for the disaster that now exists.
But would exotic forms of dubious "alternative" education not be risky? I dunno - go ask the kid who dropped 150 grand on humanities and creative arts, who has been three years cast adrift like Robinson Crusoe, who lives in daddy's basement, and who takes home that pernicious $1300 a month, and who pays $1000 of that to Sallie Mae. And who will be doing this for donkey's years to come...How risky was that?
When college grads start resembling Vietnamese boat people, we know we got a mess of trouble of our hands.
But - how do we compete on the world stage? (Psst! call for the understudies! Quick!) How well are we competing now? Just relax and set a spell. Let all the rich kids go compete. Don't worry about it. Repeat ad nauseum: a young and tender life, no matter how fiscally challenged, should not begin firmly entrenched within debt servitude. Save up the air fare and go talk to some East Indian peasants perched upon the Pakistani border....the ones who build bricks to pay off Great Great Grandad's pittance of a debt....a debt THEIR grandkids will still be working to pay off a century from now.
It's not working, folks. And the ineptitude of the design is costing us our most precious resource: a generation of youngsters we look to - to take up the slack when we're too old and feeble to do it anymore. Personally, I sure wouldn't want only the sons and daughters of millionaires and billionaires to be running the show by then. I can only imagine what that would look like - it ain't pretty. But if in our current model, we can't afford ourselves - something's gotta give.
Thank you, Dr. Phil! (applause, hoots, hollers, catcalls, Bronx cheers, whistles, tweets and belches) fade to black.
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Post by spudbuddy on Sept 14, 2012 4:30:22 GMT -6
The unemployment rate is sort of like watching reality tv (something I never do actually, just occasionally like to listen to other people complain about.) Perhaps this statistic needs to be replaced with something else - something that actually measures accurately all the "phantom" citizens out there - the ones that sort of flit by your peripheral vision - the ones that don't really participate in anything anymore. They exist in the dark market buried down deep in that soft underbelly of disenfranchised and marginalized non-earners of anything measurable by fiscal reports. They get by somehow (otherwise their corpses would wind up littering the public spaces and cause a lot of talk and suspicion.) They don't really matter in a shrinking economy. They are an embarrassment to unaccountable politicians. If this were 1970 they could all kind of wander off to the Rockies somewhere and start up cults and communes. Heck, they can't even do that anymore, it seems. They're so lazy, apparently, that they've earned degrees in record numbers. Astonishing. If every one of them instantly and together decided to descend en masse upon every pork and chicken factory in the nation, every franchised cookie cutter service provider, every big box retail outlet - and conduct rousing sit-down strikes demanding fair work at fair pay....while singing at the top of their collective lungs all those good old Woody Guthrie, Sis Cunningham and Cisco Houston songs about what the dignity of work used to sound like....maybe we'd get somewhere. Maybe we'd even wind up with a statistic that meant something real, understandable. Something you could really sink your teeth into. Something you could take to the bank.
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Post by spudbuddy on Aug 5, 2012 16:28:25 GMT -6
Exactly.
The first 4 points reflect an obvious downturn in consumption. But point 8 reflects unrealistic consumption patterns...buying much of what cannot be afforded (especially the stuff shipped in from off shore manufacture.) The first 4 points represent the cornerstone of what "solid" middle class used to define. This is what people used to do. It is what they planned out all along, once their working lives had become set.
Reflecting back - when I was in this age grouping....the spread from 18 to 25 (post high school - university, college, apprenticeship, etc.) was a time of working out the kinks, youthful angst, job shifting.....until we all settled into (those first four points.) Paramount to that occurance - was income. It was a no-brainer precursor to adult independence (and all the lifestyle patterns that accompanied this.) I recall wild and crazy guys who suddenly shifted into solid family men at the mere announcement of the impending arrival of child #1. This is how it worked.
So what are we looking at? A future nation full of millions of young, and not so young people behaving like eternal 17 year-olds? (Not necessarily because this is what they want - but what alternative?) The alternative denied by the reality of the economy - paints them out as losers, deadbeats, fools - yet often enough we did not supply them with the tools to shift gears as much as they will have to - just to survive. And so when they become debt-indentured wage slaves - they'll contribute somewhat to an anemic economy, but will in no way become the solid backbone of a consumer middle class. (and they sure weren't raised to be "working class!") Not by their self-definition....aided and abetted by their elders.
You know what's sad, though? I talk to these guys all the time, at work. From the fresh-faced hopeful undergrads - to the haunted grad students....and they don't strike me at all as a bunch of happy party kids, oblivious to reality. Most of them - are actually trying as hard as they know how to jump through the hoops (if they qualified to get into my university, they had to have some level of smarts.) Why is it, that what they have to offer has become so.....unmarketable? Is it not that the jobs they would have inherited - have been thrown out on the garbage heap, and replaced by...what?
But most importantly - your point #8: Planning for the long term is the quintessential foundation of any generation. This is what always drove an economy, and was the cornerstone of society. We cannot suddenly dispense with this, and expect a society to just keep running along, anyhow. When planning for the long term means somehow escaping dad's basement by the age of 40.....and a manageable debt level by the age of 50......(and then what?) Marriage? Kids? If I'd had to long-term plan like that, when I was in my 20's...I think I would have escaped to New Zealand....(so long, baseball....) Beachcombing on Madagascar can be nice -
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Post by spudbuddy on Aug 5, 2012 15:50:27 GMT -6
I think this is the nail on the head: consumer spending - where does it come from, when it will no longer be supplied by endless "cheap" credit? No new bubbles to invent.
Sort of like a taxpayer revolt - when workers have had enough of the "hail Mary" risk.....it is perfectly natural for people to acquire an attitude of risk-aversion. Twice bit, thrice shy. Sooner or later, we wake up to the reality that if the reliable, sustainable income isn't there - we don't buy.
I recall back in the 1980's, employment situations that you describe.....but this did not reflect across a wide job spectrum - but rather, a very narrow one. The "new" career is supposed to be some self-actualized, entrepreneurial engagement with the Titans of finance...as if we will all morph into our own Corporate functionality - but we know real life doesn't work this way (for 99% of the population.) If workers are going to function in the manner of middle class consumption sustainably - they need reliable incomes that last for 30-40 years. Otherwise we're Jiminy Crickets, wishing upon stars hoping for some blue fairy to show up.
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Post by spudbuddy on Aug 5, 2012 14:18:12 GMT -6
Comparing all this by a 1970 definition: Middle class represented a relatively risk-free life, not represented in absolute terms of wealth. This included the affordability of children, education, health care, of home ownership, and a debt-free lifestyle (other than an affordable mortgage.) Just below this was "working class"......those who did all the same things, but often enough could not afford to own, but rather, rented. (plus cheaper versions of much everything else.) If one bases the contrast between the two on purchasing power (minus availability of credit, that in this case, didn't exist) then we could use as criteria, the ability to obtain a home mortgage loan....which in most cases, working class people could not do. By this definition - all the folks out there who can now not obtain mortgages....are working class, no matter what they earn. Curiously - working class was not the same as lower class - that was reserved for true wage slavery, lack of employability, bad unaffordable debt (as in loan sharking) etc. - (what many young college-educated people, and middle aged laid off people now endure.)
I think middle class is a definition that many still cling to, whether the reality of their working life can provide what used to be its basic tenets...or not. We can shift its definition...to mean lifestyle plus ownership plus total spending power, all represented by unsustainable debt. Possibly, by this definition....if the unsustainable debt were taken out of the equation...half the middle class would disappear. And using that criteria....if our middle class has shrunk to that degree, our working class has risen by the same amount.
In my city - ranking somewhere in the top ten most expensive in North America, middle class is unattainable with a family income of less that 100 thousand. Those who wish to do so can only achieve this by actually not living in the city....and of course, that's where the explosion of exurbia came from. There are now more people living around the city than in it. Middle class....is a dream clung to by not waking up to the reality of unsustainability (and that's a rather large and separate topic - though related.)
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Post by spudbuddy on Aug 5, 2012 0:05:04 GMT -6
Just what is a jobless recovery? A recovery for people who don't need "jobs?" Could they be the people whose income is not necessarily derived from actual wages? Could the inexorably growing lack of jobs have something to do with the exponentially skyrocketing wealth at the top? Should all these questions be rhetorical? I have never understood financial or economic ideology that supposes jobs are somehow not necessary. I'm not talking about the joe-jobs that non-skilled and uneducated people flounder around with...I'm talking about the jobs necessary to properly run a domestic economy. How was it that anyone with any sense was ever convinced that we could somehow do without them? Was it all just blind hail Marys, after all? Lousy income used to be fine when things were cheap. Now it just means many more people cannot afford ordinary things. It also means many more people simply resign from public life...hiding away as boomerangs, early retired, furtive re-schooled....and whatever other creative ways to hide from a brutal job market. Let's face it. The "job" market is not one of robust productivity necessary to run a thriving society. It is more like some great creeping plague....wheezing and gasping from continual viral attack. Our economy rolls over like some superwarmed arctic iceberg, caving in......or like some augly and horrific muscular atrophy....such as the self-feeding inward, that goes on when one is slowly starving to death. "Jobs" - such as what now passes for opportunity, stumbling out of the starting gate....are no longer careers. Careers are what used to be the foundation of a healthy middle class. That health is what used to drive an economy. Apparently now this can all be performed with financial hocus pocus - like pulling scarves out of a hat in a Vegas floor show.
I fear the next depression will be nothing like the last. I'm sure many out there know this - whether they know their history or not, they can feel it in their bones. Think of it. In 1933, a gallon of gas was a nickel. Anything that paid a dollar a day kept a roof over your head and a sandwich readily on the plate....even in "expensive" cities. Micro-employment is so profoundly unaffordable now, that millions of young people laugh in the face of ridiculous educational debt, in order to not have to face it (for at least 4 years.)
Perhaps this creeping "invisible" depression is having a hard time declaring itself because it is still surrounded by so much opulence. I can drive through any subdivided suburbia within 50 miles of me, and as I survey through my windshield the endless vistas of oversized McMansions with 3 car garages and 6 car driveways and wonder to myself....what in the name of God pays for all this? (And I know that all I'm really looking at is a mountain of debt.) In no way shape or form, does it represent the true earnings of the occupants. This great shrieking, howling gracelessness....cannot handle the poverty of a real depression. And though the wick burns sharp and bright, we'll not whisper a word until the bomb goes off.
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Post by spudbuddy on Jul 23, 2012 22:37:09 GMT -6
My point is that it would increase overall purchasing, because the less affluent would use a higher fraction of their income to purchase goods. Thus overall demand would rise, without any increase in income.
The increased demand would create jobs--by increasing the demand for goods, thus increasing the demand for workers to produce them.
The biggest benefit of a downward redistribution of wealth is not about "fairness", it's about economic growth. Increasing overall purchasing and demand--even with a fixed amount of total income & wealth--would help the economy, produce economic growth, and stimulate job creation.
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That's exactly it - no point in arguing "fairness" at all.....but instead, the true needs of a sustainable economy. I still believe somebody somewhere got caught with their pants down (and no boxers underneath) when the shyte hit the fan in 2008 - and "suddenly" it became painfully obvious that the economy had been gorging on an orgy of hallucinated wealth that didn't exist (except in the pockets of the 1%.) I recall busting my brains trying to imagine what kind of legistlation could possibly reward job creation here (good jobs - the kind that induce long-term risk-taking)....without the proverbial tax breaks that always seem to do nothing but kick the crap out of social programs that are never more needed than when the economy tanks. I remember the Tobin tax.......designed to tax no-one but the financialistas...didn't fly, not surprised.
But as you say - increased demand for workers to produce goods....that feels almost like a nostalgic trip down memory lane. I suppose this leads to the obvious - when examining the increased percentage of the "take" in the top 1% (and especially the top tenth of 1%) But as I've read countless times over the past half dozen years - investment doesn't create jobs anymore - it demands quicker and higher returns than the old model of investing in production....(which would require workers, to produce.) The "means" of production is not the machinery of old-time capital. So how to introduce reinvestment and counter the "disinvestment" in the domesic worker? (FDR knew a thing or two about that - but then, he had a world war to help him along...)
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Post by spudbuddy on Jul 23, 2012 9:38:50 GMT -6
Sooner or later consumers are going to have to have the income to back up their consumption. Or perhaps to put it more bluntly - the consumption patterns that more accurately adhere to their actual incomes. While bureaucrats bluster about percentages, definition of terms, moral hazards et al........... the writing is really there on the wall.... incomes reduced - by any definition of a race to the bottom - job contraction - lack of benefits -....when enough people finally get fed up taking on debt that can't be paid back - when the risk just isn't worth it. If a sizeable portion of the concentration of wealth at the top were redistributed, would this level out purchasing power? I say not. Job creation in terms of sustainable income required to hold up an economy.....it's been so long since we've had this, it's almost like we've forgotten what it looks like. If "plum" jobs are competed for at a ratio of 5-1, or greater...it means that the "winners" are expected to consume at a rate far beyond what they can realistically do so. Multiply this out across the population, and it follows a reductionist model (observed in a bedroom community on the outskirts of my city) where a half-dozen related adults are pooling resources to buy McHouses. Within their cultural norm, this works (it worked in the old country) but still doesn't solve the greater problem. What would have been three different households, is now one. Ultimately, if the wealth at the top has been the result of job destruction (by whatever means) then that wealth itself becomes suspect. Wealth not created (for a common good) but instead - intercepted (for narrow and privatized means.) As any individual consumer knows - when debt is utilized to pick up the slack, sooner or later income is required to settle it. When consumer complacency is replaced with consumer refusal to take on this risk - consumption itself will race to the bottom. Investors can buy up only so much real estate, for example. The lion's share goes begging.
So this Nero-fiddling with percentages? OMG! - there aren't enough "rich" people with enough wealth to fly an economy? Poor us. What to do? (that the answer isn't obvious defies logic.)
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Post by spudbuddy on Jul 4, 2012 9:34:20 GMT -6
So the top 20% drives 40% of retail sales. I wonder what this chart would have looked like 40-60 years ago? A Henry is the new target, the dream personified? I figure we've always had Henries......just that they were never so critical to tipping the pinball machine as now. How many Henries have negotiated their way (by the grace of a hope and a prayer) into that slot but have no intention of ever assuming they'll stay there? (Oh yes- I forgot to mention the hard work and effort - not to mention high educational debt and job-maintenance costs.)
But at any rate, I figure a Henry is now what middle class used to be (I"m sure they don't feel too upper, in their scared little doggie hearts. I wouldn't.) Which leaves everyone else working class. Sometimes I think we still struggle with old traditional definitions of what this "class" thing used to be - and what cuts a wide swath straight through the socio-economic lanscape. When I was a kid, a middle class family had an earner who was going to retire from somewhere after a 40 year career, earning a wall plaque, a pension and a gold watch. In other words, job sustainability. The Henries of that time....only with job security. The rest of the various stratified layers of humanity below that were plain working class. A much smaller number and percentage of working people than today. They mostly didn't buy new houses, (if any at all), new cars, foreign vacations, private educations, or conspicuous consumption - all because they couldn't afford those things, and credit wouldn't allow them to even consider taking the plunge. In short - middle class used to represent financial security and sustained consumption. (Riding the Ferris Wheel and the Carousel.) Working class was a ride on a roller coaster. Seems that coaster is taking over the midway.
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Post by spudbuddy on Jul 4, 2012 9:07:20 GMT -6
Can the percentage of foodstamp users coincide with the percentage of lazy jobless? A Hostess Twinkie is the moral equivalent of child abuse? (while we ponder what percentage of American children are being kept alive on stamps.) This rising and outrageous scam, this abused "right" (benefit?) staggers like a drunk out of a corner bar (while policies of prohibition breed gangster opportunisms) and the righteous population belches some species of moral indignation over misspent pennies (after all the dollars flew away.) When the "real"economy flies south (or east) the black market shows up and breeds revenue opportunities according to the imaginations of desperate people. The pumps don't work 'cause the vandals stole the handles. Only this time the vandals have kids to feed. But this is um, moral decay, so they say. The rot discovered out back on the compost heap (horrors) offends sensitive nostrils - meanwhile the rot distributed within the minds of Party banquet diners goes un-noticed. (If you can't smell it, it don't exist.) Depends on what sense is deployed.
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Post by spudbuddy on Jun 21, 2012 9:29:03 GMT -6
If fuel consumption reflects economic activity (and recession produces contraction) then this would produce less driving. One can wonder, while sitting in the same old morning rush hour traffic.....can such a thing be possible? Perhaps it can, if the reduced driving is somewhat invisible - people still drive the miles they absolutely have to (the commute to work) but back off on the excess or surplus miles. Also unemployment rates...........all those trips to work that don't happen because there's no work to drive to. Less people and goods moving around. If fuel consumption falls off a cliff - would this not be a far better indicator of the economy than Wall Street numbers? The bottom line is that gas costs money - and if money needs to be saved for other things, or just isn't there in the first place....something has to give. I always cringe watching people pay for gas with credit cards. Groceries and gas are always things I pay for with cash. Credit used for either commodity just gives me the creeps. I think a lot of people have started to take a good hard look at their 400/500 per month gas bills......(mine is a quarter to a third of this - but then, I live, work and shop local.) Those bills reflect how and where they drive.....(long distance commute, lousy fuel economy, and fast!) - 75mph sucks lots more fuel than 55........relatively, 45 more than 30. And high performance quick zippity doo-dah driving may look and feel sexy, but it certainly comes with its own price tag. (just like replacing 100w light bulbs with 60w.)
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Post by spudbuddy on Jun 21, 2012 9:01:40 GMT -6
In the city of Vanvouver, Chinese money has been driving the real estate market for years - pushing up prices and increasing the bubble. Meanwhile recent grads are leaving the region in droves...because they know they'll never be able to buy where they grew up. I recall back in the 1980's - when Japan basically bought Hawaii.......the irony of it - what they couldn't do with planes, ships and bombs in WW2 - they just did with yen. Lord knows what kind of wave of brain drain and money will wash up on our shores if the Chinese economy takes a serious dip. They will come flooding in waves to communities already established here (can't blame them.) A social saftely net (such as whatever can still exist) will look awful attractive....plus other perks - air that doesn't kill you, water that doesn't dry up, deserts that don't encroach cities.....autopia that they will never achieve there (too late to the party.) Ironic too - that massive foreign investment has flooded in........while their individually earned wealth floods back out in the other direction. What happens when that foreign investment dries up, and there is no domestic investment to step in?
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Post by spudbuddy on Jun 19, 2012 9:23:09 GMT -6
Great Recession erased nearly 40% of family wealth Los Angeles Times Washington— The Great Recession took such a heavy toll on the economy that the typical American family lost nearly 40% of its wealth from 2007 to 2010, shaving the median net worth to a level not seen since the early 1990s. "... The fall came with the collapse in the housing market and massive layoffs that slashed people’s incomes, and the pain was felt by families across the board -- young and old, well-educated and less so, with children or not. But the biggest impact was felt by young middle-age families, those headed by people ages 35 to 44. For this group, the median net worth -- total assets minus debts -- fell a whopping 54% in the three-year period to $42,100 in 2010. Such was their financial hardships that only 47.6% of these families said they had saved money in 2010; that was the lowest among all age groups, where an overall average of 52% of families saved some money that year. .... www.latimes.com/business/la-fi-mo-economy-wealth-20120611,0,5418853.story If the middle class is shrinking, what's rushing into the vacuum to replace it? A working class. Middle class is what used to be gainfully employed (and reliably employed) enough to accept risk - on consumption of big ticket items, higher-end services, and of course, real estate. I recall when a real and true definition of working class was the absence of credit.....which meant that any major purchase had to be saved up for. Things took a long time to be acquired, if at all. If middle class has operated on leverage for the past 3 decades - and leverage increasingly doesn't work for growing numbers of people (for lack of reliable employment at workable levels of return) then more people will operate the way the working class always traditionally has... What else is our recession other than a massive wealth transfer? The interesting thing is that even a lot of rather well-off people have lost a lot of wealth - yet still the system has to be protected. I'm always fascinated by the stories now, of struggling upper income earners....those in the top 20%. Seems a family with two six-figure incomes are more at risk - unable to afford what their incomes are "supposed" to provide. (gated communities, debt-free college graduated kids, proper health benefits, adequate retirements, private services...) I think what they really can't afford anymore is to imitate their betters. Is this a class clash? No doubt. We were led to trust the de-industrialization and financialization of our economy. Yet services reflect a rather small portion of world trade. The lion's share is still represented by moving "stuff" around the planet. Any grade school kid who's pretty sharp at math could figure this out. Yet the "trust us" mantra has lingered. We didn't necesarily trust at all, but we accepted (the inevitable?) What could we expect when investment doesn't create jobs (as a byproduct of creating wealth) - but that instead, wealth is just intercepted at upper levels before it ever creates such a thing as a good reliable job, at all. When High Finance is peopled with grads from elite colleges (and fierce competition resides there, too) then are not these drawn battle lines rather obvious? Our classnessness (much hailed 40-50 years ago) has taken a great shift. In the 1950's, a star baseball player was economically the equivalent of a very successful small middling businessman. Today, he surpasses the equivalent of a Humphrey Bogart. Don't Bogart this joint, my friend.....pass in on down the line. (a little bit.)
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Post by spudbuddy on Jun 9, 2012 9:19:18 GMT -6
If working conditions remain this way through a major portion of a working adult's lifetime, when do we hit the tipping point of massive refusal to risk any kind of longterm financial obligations? (including marriage, kids, real estate purchase, other big ticket consumer purchases, education, etc.) Could the biggest difference between current times and the 1930's be the availability of credit?
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Post by spudbuddy on Jun 2, 2012 9:33:49 GMT -6
I get it. In spite of the fact that in many regions the cost of a house has come down considerably, and mortgage rates have fallen to the level of luscious tease....household incomes plus debt ratios have fallen suit. I think there's another factor, as well. If purchasing a house = a vote of confidence in the future (in the conventional sense, as a family home, and ultimately, a long-term investment in which to park the majority of a family's real wealth) - there is no confidence....that a job will appear, or remain long-term. No confidence that an earned university career will pay off, much less pay back the debt incurred gaining it. There are a lot of twenty, thirty or forty-somethings out there who no longer have this confidence. What are the current national stats on the percentage of the total number of properties bought by investors? For cash? No mortgage means no underwater risk, just earned income as a landlord. Housing as investment commodity, only. Delightful investment opportunities for those who happen to have a few millions lying around with nothing to do. Interesting viewing that debt to income chart - chugging along for almost 30 years right in line, and then taking off in the late 1980's. (Houston, we had lift-off) When everything else beside housing began becoming unaffordable (except cheap "stuff" in big boxes.) Leverage. Give me a proper lever and fulcrum, and I can move the world...much less a single national economy.
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Post by spudbuddy on Jun 2, 2012 3:57:08 GMT -6
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Post by spudbuddy on May 15, 2012 16:00:24 GMT -6
•Many of America's youth prefer to live places where they can easily walk, bike, and take public transportation. According to a recent study by the National Association for Realtors, young people are the generation most likely to prefer to live in an area characterized by nearby shopping, restaurants, schools, and public transportation as opposed to sprawl. [end quote]
Totally agree. I live in the urban heart of a greater urban area of some 6 million people - whose population demography comprises about 80% true suburban and exurban. Young people swarm the city core, living, working, residential and recreational. Why? They're too poor to settle down, marry, buy houses and have kids. There's absolutely nothing for them in suburbia - without the means to 'adultify' themselves (in the true sense) they remain eternally collegiate in their lifestyles. This is not only perhaps an astute decision on their part (for wonderfully esthetic reasons) it's also about the only option they have. The higher cost of living downtown is virtually nullified by much lower transportation costs. (a $500 bike vs a $50 thousand glamour car.)
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Post by spudbuddy on May 15, 2012 9:19:42 GMT -6
Jobs Outlook “Most of the improvement in credit is a function of the explosion student loan debt,” said Neil Dutta, an economist at Bank of America Corp. in New York. “The reason student loan debt is exploding? Because the youth population is having difficulty finding work. Hardly a good reason for credit extension.” [end quote]
Ah yes. I've long suspected this. A great way to hide out from a lousy job market. Coming in on a wing and a prayer, in the fervent belief that it will make a difference, somehow. The only thing worse is the retraining of people well past the prime of middle age. While educationistas make out like Pancho Villas, amigos. Illiteracy and ignorance are terrible things...a kind of strait-jacket of the soul, the mind, the intellect......prozac for the social dissemination. As with any little upward bump in the economy, we stubbornly march down the same old dead end boulevards. Of broken dreams and high anxiety. When anger breeds like plague mosquitoes, and rent-a-cops grow restive. Consumer confidence, the belle of the ball, the prima donna'd prom queen....the one that lurks behind every private wet-dreamed fantasy of every stock-watcher - but she's just the kid next door, about to come up to her eyeballs, in unpayable, undischarcheable debt. Perhaps we ain't seen nothin' yet.
And so we become a captive market. Still under the same old thumb. Still just as unlearned. In my university library, I read about this stuff all the time - in books I check out and renew, over and over again. No-one else ever puts a hold on them. No-one else ever reads them. Years go by.....what are they reading? Das Kapital? Mein Kampf? The Wealth of Nations? Pilgrim's Progress? Harlequin Romances??? Lost in the soft melt, the slow freeze, the sick sweet of butterscotched carmel-dance. With any real nasal sensitivity, you can pick up the smell of burnt ochre....and hear the faint echo of a fiddle....taste the fear in the air....along with all that furious, nervous thumb dance upon cellular buttons. The casino is still booming. They can't leave it alone...moths to a flame.
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