Recession and Austerity Good for the Rich

This Real News Network interview with James Henry gives yet another vantage on our have versus have-not economy. Henry comments on a new Pew study that found that in the early stages of the “recovery,” from 2009 to 2011, the net worth of the top 7% in the US increased while those of the rest of the public fell. And it continues to be striking how much those at the top are divorced from the rest of the population. For instance, I’d hazard that the reason so many economists over-estimated last quarter’s GDP growth was that they don’t have enough contact with the people who are struggling. The folks at the top of the heap are doing just fine, so that must be true generally, right?

But you can see more signs of stress even in the more insulated parts of New York City. Retail vacancies are up, even on the well-trafficked shopping streets, the worst since the post-2009 period. More restaurants seem to be taking a hit too, which suggests that non-expense-account diners are cutting back. And if ZIRP-supported NYC is looking a bit less robust, how well can the rest of the country be faring?

Update: in keeping with the spirit of this video, the New York Times reports, Wealth Gap Among Races Widened Since Recession. Key extracts:

Millions of Americans suffered a loss of wealth during the recession and the sluggish recovery that followed. But the last half-decade has proved far worse for black and Hispanic families than for white families, starkly widening the already large gulf in wealth between non-Hispanic white Americans and most minority groups, according to a new study from the Urban Institute.

“It was already dismal,” Darrick Hamilton, a professor at the New School in New York, said of the wealth gap between black and white households. “It got even worse.”…

The Urban Institute study found that the racial wealth gap yawned during the recession, even as the income gap between white Americans and nonwhite Americans remained stable. As of 2010, white families, on average, earned about $2 for every $1 that black and Hispanic families earned, a ratio that has remained roughly constant for the last 30 years. But when it comes to wealth — as measured by assets, like cash savings, homes and retirement accounts, minus debts, like mortgages and credit card balances — white families have far outpaced black and Hispanic ones. Before the recession, non-Hispanic white families, on average, were about four times as wealthy as nonwhite families, according to the Urban Institute’s analysis of Federal Reserve data. By 2010, whites were about six times as wealthy.

The dollar value of that gap has grown, as well. By the most recent data, the average white family had about $632,000 in wealth, versus $98,000 for black families and $110,000 for Hispanic families.

More at The Real News

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  1. Aussie F

    Orthodox economics, playing Marie Antionette to our corporate Bourbons.
    Never mind, every Ancien Regime gets its Bastille Day in the end.

    1. charles sereno

      All it takes to get on a roll is a good first comment on a good Yves summary. Aussie F gets a 10+3 (in the the ’30’s, that was a gold medal mark in school).

    2. Raymonde

      The Ancien Regime in France was replaced by the Napoleonic despotism which fell to a restoration of the remnants of the Bourbon aristocracy. The main reason and cause for this chain of events to unfold was in great part due to the counter-revolutionary forces genterated by the on going state of war that France that maintained with the larger and smaller powers of the surrounding political entities. Milatarism, in our situation would surely triumph,leaving in place a powerful dictatorship which would quash any consideration for a realistic rendition of representative, constitutional democracy ever taking control. The downfall of the current regime (from FDR to Obama)will most likely leave us worse off.

      1. from Mexico

        Raymonde says:

        The downfall of the current regime (from FDR to Obama)will most likely leave us worse off.

        Really. The current regime is doing such a bang up good job we couldn’t possibly do better.

        That’s what the royalists told the American revolutionaries back in 1776 at least.

      2. tongorad

        “From FDR to Obama,” I like that, it pretty much says it all, for Obama is certainly the anti-FDR.
        However, I fear that Obama is just the warm-up for what’s next to come.

  2. Klassy!

    By the most recent data, the average white family had about $632,000 in wealth,

    I’m assuming median wealth is quite a bit lower. That 632K average really highlights how screwed things are.

      1. Klassy!

        The figure I’m finding is 77K for all races. This is 2010. I assume there have been some gains since then d/t the housing “recovery” (as transitory as it may be) and the rebound of the market, but I don’t think this would change the disconnect between avg and median.

      2. sleepy

        Yep, and if the average for black families is $98,000, you can only imagine how low the median is, given the corresponding drop-off from average to median for white families.

        I recall reading somewhere awhile back, that the median for black families was something on the order of perhaps $10,000.

      1. Jim Haygood

        A mean average is highly misleading when applied to a skewed distribution such as wealth.

        Take 999 people with no net worth, and one who’s a billionaire. On average (the mean average), all one thousand people in the group are millionaires.

        Pretty cool, huh?

        But the median for the group is zero. (Boooo ….)

        1. alex

          Or expressed as an old (but meaningful) joke: Bill Gates walks into a bar with nine other people, all of whom might have enough to pay their bar tab. The average wealth of a person in that bar is now $5B.

  3. from Mexico

    Americans are absolutely clueless as to what the transnational capitalist class has in store for them, or how bad things can, and will, get.

    Here’s how Naomi Kline said one Argentinian put it:

    We are the mirror to look into.

    The mistake to avoid.

    Argentina is the waste that remains of a globalized country.

    We are where the rest of the world is going.

    But as Kline continues:

    But what we saw in Argentina was a country trying to learn from is mistakes.

    As the election runoff draws near, anger at Menem and all he represents [neoliberalism] resurfaces. It’s too strong for him to beat. The great majority of Argentines understood that Menem’s model was exhausted. Menem realized he was going to lose the second round, because the people were saying no to him and “the model.” So he dropped out.

    Argentina and Latin America are light years ahead of the US and Europe on the learning curve, because they were the first victims of neoliberalism. But eventually, Americans and Europeans will learn too.

    1. Jim Haygood

      Don’t you wish you lived in a country where the black market dollar trades at an 80 percent premium to the official rate, because the government forbids people to escape from its collapsing, inflationary currency without permission?

      Freedom, comrade. Too much of it is bad for you. Nanny knows best!

      1. from Mexico

        All I can say, Jim Haygood, is that you have one really screwed up sense of priorities.

        Argentina, and the anti-neoliberal polices implemented by your hated Kirchners, provide one of the best counterfactuals to the hard money lunacy and the solitary obsession with inflation which you daily proselytize on these threads.

        Granted, since Argentina defaulted on its debt back in 2002, inflation has been quite high by many standards. The yearly clip has varied between 6.1% and 41%.

        But in spite of this, GDP growth has been robust, around 9% per year except in the depths of the GFC, when in 2008 to 2010 it registered 6.8%, 0.9% and 7.5%. In 2011 it rebounded to 8.9%.

        The population below the poverty line has fallen from 37% in 2001, which was the last year under the old neoliberal regime, to 30% in 2012.

        The unemployment rate has dropped from 25% in 2001 to 7.2% in 2011.

        Industrial production growth has also been robust, racking up health gains between 4.3% and 16.2% every year except 2009, when it fell 1.2%.

        And perhaps just as important, none of this is being financed by foreign hot money. Externnal debt has fallen from $155 billion in 2003 to $136.8 billion in 2012. From 2004 to 2011 Argentina ran a positive current account balance.

        Here are the charts:

        1. Massinissa

          I honestly dont see how Haygood can refute this, honestly. High inflation is totally worth putting almost a fifth of the population back into employment.

          Its almost like Haygood is saying Kirchner didnt go far enough jumping over a building and she should have jumped over the moon instead.

        2. Marcel

          To me that sounds like that GDP is something that has lost quite a lot of it’s value (or did it have any value to start with?). Now I’m no expert, but things are NOT peachy in Argentina. If you have some sort of capital controls in place (restricting the holding of foreign currencies), grab money from pension funds and an upcoming default (yet again), I’m not impressed.

          I really want to see a country succeed, but the Kirchners are not a role model. It’s the mirror image of Latvia I guess; touted as a (role)model, but a closer look reveals lots of problems.

          We should quit thinking in right or left-oriented politics; at the end it’s the politicians messing things up for their own short term gain.

          1. from Mexico

            Marcel, just like Jim Haygood, you’re not making any sense whatsoever.

            To begin with, I cited several metrics other than GDP, such as unemployment, percent living below the poverty line and growth in industrial production. All have show miraculous improvment. And yet, despite this, you zero in on the weakest metric, GDP, like a june bug on shit, as if the other metrics counted for nothing. Now why is that? Why do you engage in these rhetorical fallacies, other than you’re just one more neoliberal hack?

            Then you commit a number of drive-bys like “If you have some sort of capital controls in place (restricting the holding of foreign currencies), grab money from pension funds and an upcoming default (yet again).” Missing is any discussion as to what might be causing these things. So one must ask again: why the distoritions and partial-truths that fail to inform the reader?

        3. skippy

          @Mexico… all Jim and his cohort hold dear is numerical values of future expectations banked.

          The planet or humanity either facilitate these transactions (good) or they are an impediment (bad). Nothing else matters~

          If you have to… you kill them (bad), this can be done indirectly or directly. It has been my sad experience that they actually prefer the latter, not for efficacy, but, how it makes them feel. Powerful, Swarthy, Secure, Non Fearful… Better than…

          Skippy… as denoted in this tread, neoliberalism was an attempt to un-anchor individuality from religion. Yet for all its attempts, it has become nothing more than what it tried to avail its self… a religion of death… with out a hell in the after life… as hell is here today.

          1. from Mexico

            Yep. For a tiny minority of speculators and finance capitalists it’s all about the price of stocks and currency exchange rates. For the vast majority of us, however, it’s about the price of beans, whether we have a job or not and whether we can pay the rent this month.

    2. Moneta

      Why should Westerners keep on living the way they do?

      Considering telecommunications has done a great job of flaunting our Western material decadence to the rest of the world and we have gotten emerging markets to produce a lot of our material goods, why shouln’t Western wealth get redistributed globally?

      I don’t believe the planet can tolerate much more than 1-2 billion living the Western lifestyle… but why should these billion hedonists happen to be in the Western world, why shouldn’t they get redistributed a little bit around the planet?

      Something tells me that even if the elite decided to share, material lifestyles would still need to shrink drastically.

      1. from Mexico

        @ Moneta

        Now you are trotting out what I call the BIG LIE. I call it the BIG LIE because, of all the lies told by the neoliberals, it is probably the biggest whopper of all.

        It’s always spun something like this: US workers must learn to live on less so that workers in places like Mexico can have more.

        The reality, however, is something altogether different. Because if workers in the US lose 5% of their purchasing power, workers in Mexico lose 50%. The only benificiary of neoliberalism is the transnational capitalist class. There are no other winners. None. Zero. Zilch. The workers of the world — all of the world — lose, and capital wins. That’s the way the game is rigged. There are no exceptions.

        Here’s how the Mexico Solidarity Alliance puts it:

        For the past four decades, the US-Mexico relationship has been the most important laboratory for the neoliberal model, a sort of proving grounds for corporate-centered globalization. The implications of this experiment will be felt for generations to come, both North and South. The neoliberal era began four decades ago on the US-Mexico border with the Border Industrialization Program, a “free trade zone” that ushered in the era of maquiladoras. Factories that paid decent wages in the US moved south of the border, where wages are typically less than $1 an hour, labor laws are lax, and environmental standards are not enforced. The result is huge profits for transnational corporations, but declining standards of living for the Mexican and the US working classes, and an environmental disaster that affects both sides of the border. The maquiladora/free trade model is now the predominant economic development model throughout Latin America.

        1. Moneta

          Sorry. I don’t believe the whole planet can live like Americans without completely destroying it.

          Am I a neoliberal for believing the environment can’t support it?

          1. from Mexico

            @ Moneta

            Do you believe that moving production to countries that have no environmental laws or don’t encorce the ones they have helps to save the planet?

          2. Moneta

            No. I believe we need to shrink our consumption of material goods.

            I believe we don’t need 3000 square foot houses for 2 people.

            I believe we should reduce our dependency on the car.

            I believe we in Canada should stop heating our pools until November.


          3. from Mexico

            @ Moneta

            You know, Moneta, I’m from the working class, so I actually know something about which I speak.

            Maybe in Canada working class people have 3000 square foot homes with swimming pools. But in my entire lifetime, I can’t recall a single working class person who had a 3000 square foot home with a swimming pool. Not a single one.

          4. Moneta

            In Canada, the ones with the 3000 square foot homes are the ones who benefit from the money printing:
            – those with guaranteed pensions
            – those in finance
            – those in the construction business
            – those who can’t count
            It’s a mish mash.

            The value of everything is completely distorted. The way I put a value on anything is by measuring how much energy it takes to make it and maintain it. This goes from my life, to my community, to my country… then I evaluate if it is sustainable and if so for how long.

            Energy is a country’s most important asset. Countries will never cut their consumption of energy unless they are forced to. If they do, another country will use it to get some competitive advantage.

            Over the next few decades, many countries will implode because of their lack of control on a source of energy… look at the ones that have just imploded and their relationship with oil.

            A growing percentage of our manpower will be going into the production of energy to the detriment of everything else… health care is very energy intensive while the military helps protect the control of energy sources.

        2. Moneta

          Purchasing power is an abstract concept which does not incorporate externalities.

          At the end of the day, Americans consume an outsized share of global resources and energy.

          Entitlement leads to laziness and bad decisions these lead to poverty.

          From rags to riches to rags in 3 generations.

    3. nonclassical

      from Mejicon, translation;

      ..when everyone KNOWS they’ve been LIED to, they hold “leaders” accountable…

      TRUTH is like that..Naomi Klein is fully aware…as is William Blum…

  4. jake chase

    Austerity and recession are not good for anyone but insiders in manipulated markets, executive looters, and those holding down well paid positions in the propaganda machine.

    Being rich used to mean a person could live off the income from secure investments. ZIRP makes this impossible.

    More than half the people you characterize as rich are long past retirement age and now live by consuming capital. I do not suggest anyone should feel sorry for this rentier group, but you ought to recognize it is being screwed too.

    1. sleepy

      I am 62 and lost my job 2 years ago, and am consuming my “capital” (read: retirement savings) in order to pay the light bill and buy groceries. Thankfully, I have enough to do that, along with a wife who still has a job with good health insurance.

      This “member” of the rentier class looks forward to medicare and social security.

    2. Paul P

      Not just the insiders and market manipulators.
      Anyone with a lot of money benefits from austerity: you get a crash and buy up a lot of stocks at a discount.

    3. denim

      ZIRP may affect ones FDIC government insured capital savings, but compare tax free municipal bond ETFs with the S&P 500 ETF. Only the faint of heart are losers…. and the dividends are not even included in the graphs which is currently about 4%.

  5. Jim in SC

    Jake Chase is right. Many of the ‘rich’ are past retirement age and are consuming their capital. ZIRP kills them. Also, many of them became rich through frugality and careful saving. Do we want to discourage that going forward through this relentless criticism? Perhaps more imitation and less criticism is the ticket.

    1. from Mexico

      Jim in SC says:

      Jake Chase is right. Many of the ‘rich’ are past retirement age and are consuming their capital. ZIRP kills them. Also, many of them became rich through frugality and careful saving.

      This is undoubtedly true. But to argue that the United States is a merit-based society seems to fly in the face of ever-mounting evidence to the contrary. We live in an era when more and more of the rich have become rich either through inheritance, sheer luck, or clever insider dealing (read stealing), and there are fewer and fewer pathways to riches outside those limited methods.

      It is an era not unlike the “decaying ruins of a senile and impotent” Roman Empire described by William Manchester:

      The interregnum [between the fall of the Roman Empire and the birth of Medievalism] was the worst of times for the imaginative, the cerebral, and the unfortunate, but the strong, the healthy, the shrewd, the handsome, the beautiful — and the lucky — flourished.

      –WILLIAM MANCHESTER, A World Lit Only By Fire

      The inconvenient truth is that for every one of the dwindling few who, like you say, became rich “through frugality and careful saving,” there are an ever-increasing multitude like those described in one of todays’ links:

      The rest of us for the most part become fodder for corporate interests or for the military.

      We see how that socialization works for corporate fodder. Work hard and keep your nose clean, and maybe you can make a decent living. Or maybe we’ll fire you because we want to make more money or because we don’t like you. Or because we checked your credit score and we didn’t like it. Or because you didn’t wear enough flair. The random outcomes keep people off-balance, and working harder and harder, like perseverating pecking pigeons.

      Perhaps you thought your technical and professional skills would protect you, but that’s not true, as all too many excellent computer coders, engineers, accountants and lawyers have learned. It’s no different for many professionals in private practice, and even for middle level administrators. The plain fact is that your success or failure doesn’t depend on your skills, but on whether you get lucky in your selection of a career and an employer.

      1. banger

        I think increasing numbers of people are grasping the truth that the corporate elite and the various level of governments may not really care about us. They don’t, clearly.

        In the past, like in many other societies, people had extended families, clans, and communities that they were a part of. These communities provided security for individuals–non-achievers, crazy uncles, aunties who talked to themselves could all contribute by making minor repairs, cutting vegetables or providing amusement. People were valued because they were a part of something. You see this if you visit so-called “underdeveloped” countries with wide kinship ties that enable them to weather major disasters that would cause each of us to crumble into a heap.

        We are alone, no one cares–we’ve achieved “individual” freedom just at a time when neuro-science has proven that we are hard-wired to connect with others. Most of our moral and practical failings come from our inability to connect with others and nature itself as displayed by our steadfast refusal to deal with climate-change. We cannot believe in connections at this point in our history. C.S. Lewis described Hell as radical isolation and were driving there at ever increasing speeds.

        1. Adam Noel

          The most disturbing part of it all is those who will see this problem of isolation and conclude we just need to find a new “killer app” to deal with it. We just need more innovation… more profit margins… new markets to replace what we already had. I joked before that once we destroy our communities we’ll create rental communities and all of us can compete in a market to be an integrative part of a person’s community.

          1. Massinissa

            Rental communities?

            We already have one: Its called Facebook. You pay by having tons of advertisements thrown at you.

          1. bhikshuni

            This important point has yet to be analyzed and discussed sufficiently.

            Much of the current troubles IMHO can be traced to the ILLUSION of increasing wages due to an ever-decreasing cost of consumer goods resulting from outsourced labor.

            American public sold itself out, due to its own inherent greedy desire to have more for less, not realizing it was digging its own grave.

            Of course, Wall St, MSM, “public” representatives, et al choreographed the whole thing, but until each member of the public wakes up and takes responsibility for his/her own complicity, I am afraid things will get worse before better.

            Case in point: why are Americans still using Chase and BOA banks, after their economy-cannabilizing-corruption (among countless others) is now a well-documented fact?

            To end on an forward looking note, interesting to see the Green Party Shadow Government open!



      2. jake chase

        Luck is critically important. One of history’s most incisive economic thinkers was New York Giant second baseman Eddy Stanky. When some critic claimed Stanky couldn’t hit, run or throw, and must have been lucky to get to the Big Leagues, Stanky famously said, ‘I’d rather be lucky than good!’

  6. Can't Help It

    Hm, I would say QE is helping the rich. Take QE away, and deflation would have taken hold. Some people are truly rich while others are “rich” due to leverage. When deflation truly takes hold, presumably we would see a lot of the later jumping off buildings since their ability to service their liabilities rapidly goes down as well.

  7. allcoppedout

    I’ve been convinced revolution is the answer for a long time. The problem comes when you look at real examples – one authority is deposed and another, remarkably similar, replaces it while we suffer the Russian curse of living in interesting times. WB Yeats described this in a very long time ago. I can remember a very long paper in the Harvard Law Review saying that the legal-commercial paradigm was collapsing (in Lakatosian decadence)in 1974.
    Hurrah for revolution and more cannon-shot!
    A beggar on horseback lashes a beggar on foot.
    Hurrah for revolution and cannon come again!
    The beggars have changed places, but the lash goes on.

    The idea, presumably, is to avoid being actors in the poem. What we are talking about is giving up on an economic system that provides royal jelly to a few. If we were bees, this would be a shift change in the way we replicate our genes. QE and the rest strike me as a desperate royal jelly production when workers are not bringing enough resources back to the hive. If bees evolved super workers there would be no more ordinary workers – surplus to requirements they would die off. In fact, human economics is this cruel (more people die of starvation after natural disasters because they are not redeployed to work and cannot buy available food).
    Bees cannot survive without their queens. Humans seem to find it hard to organise society without the filthy rich – a group now looking aptly described as welfare queens. They claim to be as vital to us as the queen in the hive.

    The crisis we face is one of leadership – I’m thinking of a book by Barbara Kellerman (The End of Leadership) – and our lack of awareness of the biological structuring of hierarchy and apparent obsessional demands of followership for leaders to dish resources and even cruelty out (Freud, Jung). Nearly all leadership literature from business schools is “heroic” – I suspect we can’t get the kind of society we want with this kind of queen and what amounts to financial apartheid.
    The role of biology is widely misunderstood in economics and politics. The idea should be to understand more of what we are biologically in order not to be biologically determined. Rationalities, as Foucault pointed out, are less rational than we think and to a considerable extent people-made and hence subject to change by us.
    Francis Bacon once said human society should learn from the busy bee. In fact, bees spend most of their time encumbent, doing as little s possible. Too many remain obsessed with keeping us as busy bees – indeed there are many signs we are over-working bees to death.
    The revolution we need might well be biological change (I don’t mean gene-splicing)shaped by institutional change and respect for work done. I suspect we are carrying the rich as a redundant organ like the appendix.

    1. from Mexico

      Classical and neoclassical economists have not advanced their science one iota for over 300 years. It’s like they’re caught in some time warp, stuck in the early 18th century. The classical and neoclassical faithful still unquestioningly defend the highly simplistic, reductionist and speculative formulations of Bernard Mandeville and Adam Smith. Can you imagine any other field of supposed scientific endeavor still frozen in the early 18th century, having advanced not a scintilla for over 300 years?

      If you haven’t seen it, you might find this paper interesting:


      In 1705 Bernard Mandeville published a humorous allegory in verse portraying human society as a bee hive in which every individual is motivated by personal greed but the effect is to make the society hum along as a unit. The following passage conveys the general tone.

      As Sharpers, Parasites, Pimps and Players,
      Pick-pockets, Coiners, Quacks, Sooth-Sayers,
      And all those, that, in Enmity
      With down-right working, cunningly
      Convert to their own Use the Labour
      Of their good-natur’d heedless Neighbour:
      These were called Knaves; but, bar the Name,
      The grave Industrious were the Same.
      All Trades and Places new some Cheat,
      No Calling was without Deceit.

      Mandeville’s fable of the bees, along with Adam Smith’s metaphor of the invisible hand, has long been used to convey the idea that a well-functioning society can be forged out of individual self-interest.1 This idea has become such a tenet of modern thought that for many it is an unquestioned axiom and for decades it has served as the foundation of formal economic theory.

      Since Mandeville wrote his fanciful tale, an authentic scientific theory has arisen that explains how beehives and other adaptive animal societies evolve. This theory has much to say about human societies, but it fundamentally challenge the concept of individual self-interest as we know it. In this essay I will update the fable of the bees based on modern evolutionary theory. The updated version retains Mandeville’s emphasis on self-organization, in which an adaptive society can operate without any centralized intelligence. However, it rejects the concept of self-interest as an adequate description of either the thoughts or actions that enable individuals to self-organize into adaptive societies.

      1. banger

        The whole “individualist” meme came out of the 18th century enlightenment which was a reaction to the craziness of the brand of religion that dominated the west, aka the religion of the Grand Inquisitor whether Catholic or Protestant (with some minor exceptions). The West, with it’s exposure to foreign cultures, its love of rationality wanted to create something new and radical–and that was not so much “democracy” but the cult of the individual as unconstrained by family, clan, culture as possible. The ultimate of course was the Marquis de Sade some aspects of Nietche and, of course, in full flower with Ayn Rand. Selfishness is now a virtue and compassion a vice for many Americans. Yes, our husbands and wives and children are nice but first me, then me and then maybe someone else particularly if they can make me look good. At least that’s the trend in the culture of narcissism that is broadcast at us 24/7 in every way imaginable.

        That culture has been useful–it broke us out of a destructive religion opened up learning and science. But now, we are at the stage of diminishing returns–it is destroying our culture and the natural world and we now have the information and technology to move in the direction science has indicated–towards connection with others and with the natural world. We have the technology today that can create sustainable communities with little need to “work” in the sort of soul deadening drudgery we think of as work–or for a minority who use work as a way to dominate and lord it over others to make up for the lack of connection they feel. The reason we don’t do use the technology we have right now is because the oligarchs are addicted to being dominators.

      2. Moneta

        As long as we value stuff over people, nothing will change.

        Population growth leading to increasing scarcity should help us continue on the same path.

    2. banger

      People tend to not understand “leadership.” They think that it is about some guy getting up and just being powerful and telling people what to do etc. No, that’s not at all it. It comes from being deeply rooted and connected to a community. We lack leaders today because we lack communities—we all want to be independent contractors in life–it’s all about me. I call this the culture of narcissism. No change can come out of this culture–if you want a revolution you will never get it as long as you align yourself with the ideas of individualism–they are false and logically inconsistent. It is not the way human beings ever lived until really recent times. We are hard-wired for connection with others–for alignment not independence–our approach is perverse and it is costing us through stress, fear and anxiety.

      If we want change connect to community. It’s hard because the forces that thrive right now need us to be isolated–it is a requirement. Those forces want us to be fearful and anxious for a whole variety of obvious reasons. Until we realize that the system will continue to be gamed for the oligarchs who will, one day, eat us for breakfast and we’ll cheer for them in their audacity.

    3. Moneta

      The crisis is one of excess materialism.

      We are 7 billion people on this planet and our economic system, based on the Anglo-Saxon model, is trying to bulldozer the entire planet to keep the hedonists happy.

      Too many people still believe in wordl peace. That if all countries practice democracy, adhere to free markets and work efficiently, that the American ways of life will prevail globally.

      The Western lifestyle can only last if we keep on exploiting 5-6 billion people on this planet.

      1. allcoppedout

        The story is indeed old Mexico and Banger. In biology (not what I do now) we take a tripartite view on what the individual is.
        The introduction starts
        ‘ An untutored but attentive survey of almost any part of the living world reveals an incredibly diverse variety of individuals. At ground level, we see ants, beetles, moles, marmots, alligators, ivies, mushrooms, algae blooms, and ostriches. Through magnification, we see or infer flagella-propelled protists, tRNA molecules, prions, and bacteria of many kinds. At larger or collective scales, we can find herds of zebra, sweeping and astonishing coral reefs, biofilms made up of many different species of organisms, and even fungus complexes several hectares in area and with masses greater than an elephant’s. Each of these entities is a candidate for exemplifying some kind of biological individual, and each has been treated as such in one or another part of the biological sciences. Those sciences recognize several kinds of biological individual as they attempt to discover generalizations, provide explanations, and make predictions about the biological world.’

        There are probably over 20 categories of individual we consider. I still find economists trying to advance something better than homo economicus – some frankly based on school biology of the brain. Suggestions on how economics might progress on brain science can be found here.

        There is so much to say – not possible here. The ever present danger is that we allow science-technology as competitive advantage for those who can buy it. Most economics is still scholastic and approved by the rich – as Aristotle was ‘god’s philosopher’.

        My view is that economics generally allows varieties of sleight-of-hand – much as Mexico’s poem above. The results of much economic experiment are hideous,occurring over and again – yet we must try no alternatives other than niche chattering groups to discuss.

  8. TomDor

    Appropriate taxation would help enormously.

    Tax economic rent at high levels.

    Discussions may be well helped if the introduction of Tax education – it’s role in the private sector and implications for competitiveness on the global arena. Also, I think, an understanding of property prices, bubbling in property prices (speculation) and its contribution or detraction on demand and its contribution to higher prices of every widget made upon property.
    Producing wealth requires Industrial capital (machines etc.) Labor and a place to conduct said business (property expense).
    Remember that currency is a representation of capital and, not capital in itself. Nor is money wealth – it is a representation of wealth and should never be a monopoly nor confused with real wealth.
    Lets also remember compound interest and its vacuum effect upon, and its contribution to misallocation of investment….its huge contribution to income inequality and neglect of the common good.

      1. Adam Noel

        I understand that taxation may be a necessity but I do not feel that ANY policy will succeed in enforcing that taxation. Any attempts to capture rent from the rentier class will ultimately fail. We cannot tax them… only throw them off the boat.

  9. AbyNormal

    thought i’d let my fingers do some walkin…backed into a ‘debate’ site questioning ‘Is a couple making $250,000 a year considered rich anymore considering how fast costs are rising?’

    ex: our future is screwed by self-absorbed people who don’t realize NO ONE truly earns $250,000/year in a bubble. You ride the backs of all the people who show up to work every day, year after year for much much less. But I guess all the teachers, police officers, truck drivers, daycare providers, cooks, farmers, ministers, fishermen, and firemen should realize their paycheck reflects their worth to our society, relative to the poor $250,000/year club members who “earn every penny” they take. Get a grip…

    1. Moneta

      Here in Ontario, a couple of grade school teachers earn 240K between the too of them.

      The first thing people must understand is that tax reduction replaced with money printing without any sort of scrutiny has completely destroyed the value of all work.

      1. from Mexico

        Moneta says:

        Here in Ontario, a couple of grade school teachers earn 240K between the too of them.

        That sounded fishy to me, so I thought I’d do some checking. And sure nuf:

        Minimum salary grade school teacher in Ontario: $37,043

        Maximum salary grade school teacher in Ontario (with graduate study): $73,472

        The average salary for a K-12 grade school teacher in Ontario is $49,747

        1. Moneta

          Here in Ottawa, if you are over 45 and have been teaching for 15-20 years, you are making over 80-90K with benefits and a full pension. In Quebec it’s around 70K with beneftis and pension. I know, I’m surrounded by teachers!

          Those lower incomes are those ones of the young teachers who can’t get permanency, benefits and a pension.

          1. skippy


            Teachers vs CEOs et al and banksters.

            Hell I would happily pay taxes that would afford teachers 100K+ over the latter maniacal lot ripping society and the world apart.

            You get what you pay for… right.

            Not to worry though, the mental crack being cortex injected into kids heads these days, to mental strip mine another generation, just to fill these manics need for validation… will come home to roost.

            Skippy… Well informed parents and teachers are trying to ban this rubbish… from the schools – to the home… I have. No more social media, gaming, Faceborg, Apps, any dehumanizing electronic device. This is war…

        2. Moneta

          “At the outset, the government identified teachers’ salary grid – which allows an almost automatic rise to nearly $100,000 annual pay in the first 10 years of employment – as the most important target for structural savings. The initial plan was to freeze the grid for a couple of years, during which it would be restructured. Then, in striking an agreement used as a template for those imposed on other unions, the Ontario English Catholic Teachers’ Association traded a few unpaid days off for continued grid movement”
          My SIL, 36, is a teacher in Qc and income >70K
          Lady sitting next to me at X-Mas dinner party in her mid 40s and making > 70K as a teacher in Quebec.

          My daugher’s teacher in mid-40s making >90K in Ontario.

          Maybe your social net in the US has already collapsed but here in Canada there is a huge divide between the young and the old.

          The DBs are still holding up for the 50+ while closed for the young. The 50+ are permanent while the young contractual. University tuition fees are rising fast. Our real estate is in a bubble and housing is unaffordable for the young. They just recently announced that old age security was pushed off to 67 from 65 but the 50+ are spared. They are talking about increasing CPP contributions to 14% (our SS)from 9%.

  10. NC

    Yes, but what would the gap be if one removed the 7% at the top from the equation? Or even just the top 1%? Or adjsuted for the age difference between whites and blacks (whites are something like 9 years older on average)? I’m thinking the gap would be at the least a whole lot smaller.

  11. Susan the other

    Mr Henry seemed pretty cheerful in the face of all this misery. I’d prefer to hear Jeffrey Sachs expound on all the crooks in Wall Street because it is the irrefutable evidence that we have no politics. We are bananas. And there is no difference between us and the EU’s 2%/7% solution. Cutting expenses on the backs of the poor and unemployed keeps inflation off the radar. That’s an accounting trick. It’s flat-out treasonous, but the rich have always used it. It keeps the currency strong and funnels money into rich pockets. It’s so goddamn blatant I can’t believe anyone can discuss it pleasantly. Under MMT this would not happen here or in Europe. There would be no more fake trickle down.

  12. MikeNY

    The New Yorker had an interesting piece on “depression literature and reporting” this last week, making the case that there is no coherent narrative or story on the left to foment mass action, which is why Occupy failed. It was (an appositely) a depressing read.

    We’re going to need an economic crisis bigger than the last one for anything to change.

  13. Working Class Nero

    Looking at the numbers from 2007 to 2010 gives one a pretty limited view. Obviously a good portion of the “wealth” people held in 2007 was chimerical, due to the housing bubble there was always going to be a correction towards reality. And as usual, breaking things down racially only tends to obscure the real trends.

    Edward Wollf studied household wealth and income trends since 1983. His paper is linked to at the bottom. The money chart is Table 4 on page 60. In it you can see that since 1983, the real winners have been the top 20%, especially the top 10%. Interestingly the rate of wealth growth for the top 1% was actually less than that of the next 9%. Overall the top 20% (wealthy class) did really well; the next 20% (upper middle class) made some gains but nothing spectacular. In the loser’s column was of course the bottom 60%, with the 40-60% quintile (the middle class) taking a good hit, but with the bottom 40% (working class and poor class) getting annihilated.

    So these trends have been apparent for more than 30 years. These trends also coincide with the rise of Neoliberal globalization and its subsequent attack on the nation state. One way to disguise the obvious economic harm to the bottom 60% brought on by the orgy of off-shoring good jobs and in-shoring cheap labour was through the granting of easy credit. The housing bubble that ended in 2007 was just the latest in a string of attempts (credit cards, student loans, dot-com boom) to camouflage the economic damage over the past 30 years.

    1. nobody

      As has been pointed out here repeatedly, a large portion of the so-called middle classes are in reality comprised of essentially working class people who’ve been given a PR makeover.

      To my eye, the wealthy class is not “the top 20%” — it’s more like the top 0.1% or maybe at most the top 0.5%. The upper middle class is the rest of the top 5%, give or take a couple of points. The middle class is the rest of the top 20-30% or so. What you are calling “the middle class” (“the 40-60% quintile”) is more working class than middle class, and the bottom 40-50% is split among the working poor, the poor, and the bottom-out-of-sight.

  14. washunate

    Yep, the stock market crash was one of the great acts of equality in this country. (which of course is why it was such a great emergency for TPTB)

    However, I continue to take issue with the semantic/rhetorical usage of ‘austerity’. It doesn’t mean anything, and so I think it distracts from understanding the situation.

    The reason wealthy connected insiders have done so well over the past four years is because they have been lavished with government spending and protected from civil and criminal litigation, not because government spending has been cut.

    1. MikeNY


      The whole economic theory is fuddup and in defense of the plutocracy: we pump up asset prices with gov’t money, supposing the trickle-down “wealth effect” creates growth and jobs — rather than actually investing something in our economy (infrastructure, anyone?) to create jobs.

      And the Fed is 100% complicit.

  15. clarence swinney

    Barbara Bush said it.
    In the past, she placed her sons’ problems on Cheney and Rumsfeld.
    The day after inauguration Cheney was heard telling Rumsfeld “Prepare to Invade Iraq”
    GW Bush was not qualified to be President.
    He was a poor education student in High School and College.
    He admitted to 20 years of hard drinking.
    He dodged the draft.
    His record as President will be recorded as one of the worst in history.
    Two unnecessary wars.
    Increased Spending by 90%.
    Increased Debt by 112%
    Increased Deficit surplus to 1400B Deficit.
    Created 3785,000 jobs per year lowest since the Great Depression
    Created the Great Recession
    It has been well documented that he and 11 staffers told 935 LIES in 2100-2002 to convince the people and Congress that Iraq had Weapons of Mass Destruction.
    He alienated `1500 Million Muslims by killing their brethren.
    We will suffer more bombings due to that hatred.

    1. Massinissa

      We get it we get it, Bush was bad.

      You have at least a few posts like this every week dont you?

      Is it really necessary to tell us again and again and again?

      Or is this supposed to be some way of making Obama look less terrible because ‘Gawsh, the other guy was a bit worse, be thankful!”

  16. xrayd

    By the most recent data, the average white family had about $632,000 in wealth …!

    Wow, I had no idea things were so good for the “average” white family!

  17. Doug Terpstra

    A critical mass must reach the a critical realization that inequality is not at all an unintended consequence of the GFC but rather both a means and an end in itself. It’s more likely the disaster capitalists planned the GFC — just as they did the Global War of Terror. The latter is not about ending terrorism, defending America or protecting freedom at all but rather it is about maximizing profit and power. The GFC is the GWOT’s complement in implementing Shock Doctrine and achieving a decisive victory in the class war. Mission accomplished.

  18. RBHoughton

    We did fairly well from trickle down in the run-up to 2008. Now we are being lined up to carry the can for future collapses.

    I think the basic problem is the quantity of money floating around – its far too much.

    When I was young a millionaire was as rare as a Martian. Not any more. Partly that’s due to approved inflation of 2-3% that every government allows, halving the value in 20-odd years, but the major factor is the use of the same money for both genuine exchange and speculation. I think that is where dissidents should focus their attention.

  19. Jim Shannon

    Journalists continue to avoid the REAL issue and sole cause of all the World’s economic problems!
    Everyone refuses to even consider doing what needs to be done to throttle the socially corrupting power of Real Money now ruining the world!
    The “little people” world wide have been taking a TAX CODE beating since the early 60’s! A beating delivered by a bunch of elected “goons” all working for the now legions of CentaMillionaire$ created by the TAX CODE. All Hell bent to find new ways to USE the “little people” for profit!
    NO GOVERNMENT anywhere EVER existed to benefit the “Little People” – the cradle to grave poor! 6.5 Billion people world wide!
    All Money / Wealth is fungible! Money has been allowed to travel the globe in pursuit of the cheap labor provided by “Little people”! Modern day wage slaves!
    Money is clearly the foundation upon which ALL Governments exist!
    Taxing ALL CentaMillionaire$ out of existence will solve ALL the world’s economic problems!
    It is a topic that no society will consider! The ability to make Hundred$ of Million$ even Ten$ of Billion$ now defines Capitalism.
    Capitalism created and now permits all the CentaMillionaire$ to now write and use the TAX CODE to keep the “Little People” poor ! A TAX CODE which clearly destroys opportunity for all but the CentaMillionaire$!
    The nearly TAXED to death “Little people” have no power and all the benefits are simply handed to the CentaMillionaire$!
    There is nothing new about history’s Class Warfare, always caused by the individual attainment of unconscionable wealth literally taken from the poor!
    TAX away all that wealth and cap all wealth at $10,000,000 and the world WILL change!

    What’s the First Rule About “CentaMillionaire$ Club”.
    Don’t talk about TAXING ALL CentaMillionaire$ out of existence!

    What’s the Second Rule About “CentaMillionaire$ Club”.
    Don’t talk about TAXING ALL CentaMillionaire$ out of existence!

    What’s the Third Rule About “CentaMillionaire$ Club”.
    Don’t talk about TAXING ALL CentaMillionaire$ out of existence!

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