The Poor Who Are Not With Us

America has a bad case of poverty denialism.

And no wonder. Being poor is stigmatized. In neo-Calvanist America, if you aren’t doing well, it must be the result of bad choices (like choosing the wrong parents) or not working hard enough. So many people in dire straits often feel compelled to underplay how bad things are for the sake of their dignity.

But as the gap between rich and poor has turned into a yawning chasm, the well off are even better able than before to distance themselves from the desperate. One of the ways that seems to happen more and more is to underscore how alien they are compared to urban elites.

Two articles that superficially don’t seem that closely connected but are different facets of this phenomenon are a Medium article (hat tip UserFriendly), Half of Americans Are Effectively Poor Now by Unair Haque and a Wall Street Journal story, The South’s Economy Is Falling Behind (hat tip Scott).

The Medium piece explains that poverty is widespread in America, once you define it correctly, as in not being able to afford necessities:

43% of American households can’t afford a budget that includes housing, food, childcare, healthcare, transportation, and a cellphone. Translation: nearly half of Americans can’t afford the basics of life anymore.

Does that take your breath away too? It should. And yet it might not come as a surprise. You might know it intimately. The statistics say there’s an even chance you’re…living it. What a grim and bizarre reality. Half of people are effectively poor in the world’s richest country…

The folks that did the study above call this new class of people ALICE, for “asset limited, income constrained, employed.” It’s a sharp way to think about American collapse. Let me translate this term, too: the people formerly known as the American middle class.

Let’s take each of those terms one by one. “Asset limited” means that these households don’t have the resources — the hard financial assets — to drawn down on anymore. That tallies with other research which says the majority of Americans now have a negative net worth. In short, “asset limited” is a polite way of saying: indebted for life, with no real way of ever not getting out of the trap. It’s a nice way of saying: broke.

The folks that did the study above call this new class of people ALICE, for “asset limited, income constrained, employed.” It’s a sharp way to think about American collapse. Let me translate this term, too: the people formerly known as the American middle class.

There are two basic kinds of financial poverty, after all. Not having much of an income, and not having any wealth saved up. Americans are poor in both ways now. That’s because their incomes haven’t risen to allow them to save, and their debts keep mounting, which eats up their meagre incomes. Hence (another shocking stat) most Americans now die…in debt…

Is this the 1300s? What do we call a population that live and debt “in debt”? We certainly don’t call them free in any real sense. They’re the modern equivalent of serfs or peasants — who are born owing, and who will die owing, a fictional, unplayable amount.

Representative Katie Porter gave a vivid example of this phenomenon when she grilled Jamie Dimon:

And as some commentators and many readers have pointed out, debt in an effective yoke, particularly in combination with intrusive and intolerant hiring checks, short job tenures and high levels of involuntary part-time employment. If you are desperate, the last thing you’ll do is rock the boat.

But as the gap between rich and poor widens, so does the need to rationalize this state of affairs. The new fad is to demonize rural and small town whites. After all, they didn’t get educated to escape loser communities. And better yet, they are presumed bigots.

Never mind that there is tons of poverty and near poverty in the shiny coastal cities. How many well off professionals think that the barista at Starbucks or busboy is probably barely getting by? The serving classes have to be pleasant, or efficient and unobtrusive, so as not to undermine the enterprise and their job along with it.

And how about tourist-dependent economies, like significant swathes of Maine, a poor rural state? Even in the tony coastal areas, most locals work two or three jobs during the summer to make enough to carry them through the year. The best situated are those who live in communities like Bruswick, where a local school (in this case Bowdoin) supports the town year round. Again, tourist-dependent areas have to put on a good face. The only time I ever heard local business people in tourist areas acknowledge how bad things were, and even the only in passing, was in Spain when unemployment was 27%.

The Wall Street Journal winds up unintentionally providing an example of treating economic distress as the result of “choices,” in this case of an entire region. We’ll note, as many readers did, that the data presented in the Journal account doesn’t even support its headline conclusion:

In fairness, the article zooms in on the post-crisis era:

If you go back to 1980, the South has held at roughly the same ratio of per capita income to the US average. You can’t say that about the West or Midwest. And that number isn’t very meaningful until you factor in the cost of living.

In fairness, the article zooms in on the post-crisis era:

The American South spent much of the past century trying to overcome its position as the country’s poorest and least-developed region, with considerable success: By the 2009 recession it had nearly caught up economically with its northern and western neighbors.

That trend has now reversed. Since 2009, the South’s convergence has turned to divergence, as the region recorded the country’s slowest growth in output and wages, the lowest labor-force participation rate and the highest unemployment rate.

The Journal tells a tale of a South that had sought to attract good manufacturing jobs but was losing them, just like the Midwest. It oddly fails to note that some of the old industries of the South, like cotton spinning and furniture-making in North Carolina, went offshore, when in the case of furniture, the economic case was questionable (this from the mouths of industry executives). It uses Natchez, Mississippi as a case study. Mississippi was early to implement what amounted to industrial policy in the 1930s. What was then Armstrong Rubber and Tire opened a plant in Natchez in 1939 which it shuttered in 2001. It depicts a small city trying to reinvent itself, having some success in luring tourists but lacking enough well-educated locals to attract high-end services jobs.

But a big problem with the piece is it uses very strokes to paint a region that included Virginia, Texas, Oklahoma, and Florida. I’ve seen uncomfortably rapid growth in Dallas over a period of a few years as major companies moved headquarters or important functions to Plano and nearby areas, in no small measure because housing prices were cheap. The article alos blames underinvestment in education on segregation, when cuts in Federal funding to state public universities also played a role. The comments on the piece were critical, and some were openly defensive, including ones that took the piece as a dig at Trump.

A sampling:

bryan davis
Nashville, Greenville, Charlotte, Huntsville, Atlanta, the triad of North Carolina all are booming southern urban hubs.

Small towns and rural America have been decline for a generation regardless of region.

George Jones
This article shows why economists and statistics are both useless. Dead factories are all around the US, not just the South. Just take the Acela from DC to Boston you will see the dilapidated shells of former industries. And of course the answer is to invest more in education – put forth by university professors, shocker. Manufacturing went to China and Mexico because our politicians encouraged it through fiscal and tax policies, not to mention corruption.

TK Wallace
I just love articles on the “poor south” – yet, living down here, with children in states all over the area, I see a different picture. I see demographics at work, especially in the cities, where the preponderance of people with no desire to work drag the numbers – and the educational performance – down. And it is NOT because they are not given the opportunity.

Meanwhile, all these “rich people” up north ignore that little thing called “cost of living” – why do you think they all leave when they retire – it is way more than the weather.

Average BLS wage by state divided by cost of living:

NY – $45’593
CA – $42’646
CT – $47’966
OR – $39’634
WA – $54’256
DC – $53’971 – on an average salary of $87’920.

SC – $43’868
NC – $50’212
MS – poor Mississippi – $45’998
AL – $48’927
KY – $47’069

Note that CA and OR are below ALL the states listed, NY and CT just average, the two Washingtons leading the way.

Even though the article gave an oversimplified picture of the South by focusing on small town distress and not acknowledging that large and even many small cities are doing well, it’s hard to miss the subtext of “they need to pull themselves up by their bootstraps.” Yet one of the reasons poorer states became less poor was the leveling effect of net transfers from the Federal government. The reduction in Federal spending, particularly social spending, is curiously absent from this picture.

Yet again, rural poverty and distress is somehow not part of the brand image of the blue states, which are really states dominated by blue cities. California’s Central Valley has plenty of poverty. Upstate New York has been sliding into distress since companies like Kodak foundered. Western Massachusetts is also struggling and has an opioid crisis of its own. But somehow we here much less about the poor in our midst in the big cities (the homeless are safe because they are an obvious “other” to most people, as well as a NIMBY issue) and in the wilder parts of blue states.

It’s disturbing after seeing small town America put on a pedestal (think of 1960s television) to now see a backlash, as if the entire country could consist entirely of cities full of professionals. At our Birmingham meetup, a Democratic party operative said that the state party organizations in the Midwest and South were getting sick of the attitude and worst the policies that were based on the idea that those parts of the country existed to be sucked dry by the coastal cities. He intimated that the anger was reaching the boiling point. America is more divided and diverse than most people recognize, and Team Dem may find out it isn’t such a good idea to try to play that up.

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69 comments

  1. Sound of the Suburbs

    The West never did work out what was going on, but now the more developed Eastern economies are seeing the same thing and are looking into it.

    Richard Koo explains:
    https://www.youtube.com/watch?v=AtwxhT8e7xQ

    Richard Koo has discovered the assumption economists used when they said free trade would be a nett positive for any nation.

    Trade must be balanced, but the US runs a large trade deficit.

    The negative effects over a long period of time have brought Trump to power. Richard Koo notes nearly all the Hillary supporters were against free trade as well. The experience of NAFTA has left deep scars on the American public and they remember how the jobs disappeared to Mexico.

    The economists always knew there would be winners and losers from free trade and some redistribution would be required. The US didn’t bother too much with that.

    The losers from globalisation live in the middle and the winners just fly over them as they travel from the prosperous East coast to the prosperous West coast. The media are based in the prosperous areas and have just been flying over the poor areas as well, so no one in the prosperous areas has been aware of what has been going wrong.

    Higher returns on capital are affecting developed Eastern economies as they off-shore to places where they can pay lower wages for higher profits.

    China is now quite expensive as they have let their cost of living rise and the developed Eastern economies are off-shoring to places like Vietnam, Bangladesh and the Philippines causing wage stagnation.

    Richard Koo found American firms were looking to expand in Mexico, not the US, as they can pay lower wages and make more profit there due to its low cost of living.

    To maximise profit you really want to off-shore as much as possible from the West.

    This doesn’t affect the top end as the cost of living isn’t so important and most of the people you want are in the West.

    You can’t off-shore jobs that have to done locally, e.g. health, education, low paid service sector jobs.

    To keep unemployment figures down they have divided up old full time jobs into new part time jobs. It multiplies up the jobs in the economy artificially.

    94% of the jobs created by Obama were part time.

    The minimum wage is set at an hourly rate so this doesn’t pay a living wage in a part time job.

    Reply
    1. Susan the other`

      The arbitrage that goes on to allow this inequality is an arbitrage of the value of a currency. Which is nothing more than a mirage. That’s why currency is devalued to promote trade and perpetuate the imbalance that is inevitable in a globalized world of various currencies. And this is why so many countries are beefing up their stash of gold – to “back” their currency. It’s ironic because it is so unnecessary. It only exists because it makes those controlling currencies, payments and trade, rich by skimming off their percentage. A dollar should be worth an hour’s work here in this country. A yuan should be worth an hour’s work in China. There should be no arbitrage between the two. We are talking basic equivalence here. Basic equality.

      Reply
    2. animalogic

      “To keep unemployment figures down they have divided up old full time jobs into new part time jobs. It multiplies up the jobs in the economy artificially.”
      This is a great point. Casualisation has put lipstick on the piggish unemployment numbers. It has also undermined workers’ power/unions, benefits, wages, security & lives in general. It has radically enhanced general endebtedness. It’s the capitalist’s gift to the West that just keeps on taking

      Reply
  2. Amfortas the hippie

    “The new fad is to demonize rural and small town whites. After all, they didn’t get educated to escape loser communities. And better yet, they are presumed bigots.”
    one of my favorites…but, interestingly perhaps, i only see it in tv news”(and “news”,(60 minutes)) and on the web.
    actual people in a giant city(san antonio) that i have mingled with in the past 10 months to a person say that they wish they could live where i do.
    I’ve heard zero disdain for rural living in real life.
    small sample size, and all…but i’d say it’s a decent cross section of the town and region(sickness is still a universal)
    i wonder do people living in atlanta or new york city dream of a country existence?
    or is it a texas thing?

    Reply
      1. duffolonious

        I grew up in farm country, now live in the city (Minneapolis) – I like both. But I remember a friend (college student) from small town Dakota who HATED the city, did one year, and left. I don’t think she is alone (NC had an article about this phenomenon in Michigan), and so I think the Cosmo bootstrap crowd sees things like this, as well as the usual things (poverty, drugs) and think they simply can’t hack it.

        Reply
        1. Amfortas the hippie

          in my case, i lived in austin for 4 years, and hated it…too expensive, and far too busy. then after 15 years out here on a dead end dirt road, circumstances sent us to the barrio in our tiny one horse town. 7 years(more or less), and even that was too “city” for me,lol.
          some of us just aren’t built for close quarters and hustle and bustle…and that should be ok.
          “just move” used to be the Right’s answer to lack of jobs(which was always weird given their rhetoric about “community”, and such), but i hear it more from Team Blue, these days.

          Reply
          1. Hepativore

            I live near Rochester, MN, which is a few hundred thousand people and I do not like it. I have always liked very rural areas and small towns. The trouble is that many people who do not like urban areas often have no choice but to live near a large population center because that is the only place where they can find employment to support themselves on. Yet at the same time, we often cannot live anywhere in the city itself because the cost of housing forces people to live on the outskirts and drive more than a half-hour to work everyday. To add insult to injury, there is usually no public transportation to speak of in these sparsely populated areas, so owning a car is a necessity.

            If I had my way, I would move to a place like the northwestern corner of Michigan’s lower peninsula. It is very sparsely populated there, and even Traverse City only has a population of around 15,000. It is just as forested and remote as the upper peninsula and Michigan has just as many lakes as Minnesota, except Michigan also has some enclaves that get as warm as zone 6b during the winter. Traverse city and the surrounding areas sit in a rather large zone 6 bubble.

            If I could ever afford a house on a single income (Which I doubt, at this point) I could grow many interesting plants, like persimmons there. I wish I had a “work-from-home” job, but many of these positions are either scams, or are only temporary. Since I was born in 1984, Regeanomics was in full swing when I arrived, and so I do not know what it was like not living in the shadow of neoliberalism but I can dream I suppose.

            Reply
    1. Fiery Hunt

      This guy stuck in SF Bay Area has spent the last 2 years looking for land in further north California.

      I spend a significant part of every day dreaming about country living.

      Reply
    2. Chris Smith

      I abandoned NYC for Ithaca, NY. I like New York, and I loved living there, but it was too damn expensive to stay. Also, if you leave New York you immediately find yourself in Long Island (yuck) or Newark/Jersey city (yuck). There is something to be said about driving out of town and immediately being in rolling hills covered in green forests.

      Reply
    3. Joe Well

      Here in Boston there is a certain amount of anger toward rural places, especially northern New England, because of the guns. Also the governors of Maine and New hampshire have said pretty horrible things about Massachusetts, especially poorer urban communities, so even though they have far lower incomes and wealth they still manage to come off as the bad guys.

      Reply
      1. JohnnySacks

        I hold no grudge over guns, religion, etc. My grudge is more the judgmental nature each state has towards each other.
        The highways coming down from NH into MA are packed with cars in the morning because that’s where all the jobs are. NH slurs MA as ‘taxachusetts’ bleeding heart liberals because we have an income tax and legislative tolerance, then return from their MA employment to pay $10,000 a year property tax on a modest ranch home because property taxes are what funds the state.
        MA slurs NH as libertarian rednecks yet highways are packed going north weekends because it’s a accessible lakes/mountains/country escape with no sales tax on our consumer crap.
        I constantly daydream about relocating north when the time comes, but what purpose would it serve to trade one cost of living for another? The south? Never – broiling from June to October with worse on the horizon to save money is out of the question.

        Reply
        1. Kilgore Trout

          New Hampshire built its economy by poaching off the Rte.128 corridor, luring companies like BAE Systems to the state with the promise of low taxes and cheap land. Its Libertarian ethos conveniently overlooked the fact that government investment created the high-tech companies that in turn fueled the NH economy for 3 decades, and that will continue to do so long as “defense” [sic] spending continues to uptick.

          Reply
        2. todde

          I know a lot of people who have moved from the ‘inner city’ to rural areas.

          The rural people don’t care for us

          Reply
          1. Amfortas the hippie

            yup. I’ll always be a ferriner out here…even after 25 years and marrying into one of the old hispanic clans.
            but that low grade disdain(never overt, which would be impolite) is more about not being from here than being of the city(i’m country, but from east texas)
            and i have been rather disruptive, in spite of myself(i introduced organic/sustainable, “real food”, gourmet food and tankless water heaters) …and that sort of disruption is what they fear about newcomers, wherever they’re from.

            Reply
    4. rd

      I am getting pretty sick and tired about the whining about unaffordability of coastal cities. Nearly all of the country that is more than 50 miles from the coastal cities is quite affordable if you have a job. So that is about 99% of the country’s land mass.

      So move to the less expensive areas and be quiet. The companies can move those jobs and then stop whining about the high cost of labor as well because you can now pay your staff a bit less and they will still be better off. Your office/warehouse rents will be lower. Our coastal city staff are generally paid 10% to 20% more than our staff in fly-over country. I generally avoid using them because they reduce our profits on jobs as many of our projects have fixed hourly rates and the clients assume we are using less expensive staff form fly-over country.

      I live in an area where it takes 25 minutes to commute 15 miles to work – on a bad day it takes 30 minutes. I have a state park 1/4 mile from my house, and a third of the US population is within a 5 hr drive of our office. It is difficult to spend over $500k on a house here – you would need to buy in one of the exclusive areas and have either great waterfront property within commuting distance or several acres of land. As a fairly well paid professional, I know very few people whose houses are worth over $350k. We are saving money in our 401ks instead of over-paying for our houses.

      We have poverty in the area because companies have moved away – most of those jobs vanished or went overseas. Some went to the South (and then went to Mexico etc.). However, many of the big plants that closed in the 80s and early 90s are now 50%+ occupied by small businesses that are doing well. We survived the GFC in good shape because nothing was over-priced and so nothing crashed – we had a bit of an uptick in unemployment.

      The key in our area is to have a job that pays $15/hr or more. If you have that, you can live reasonably comfortably. You can afford to buy a house if it is a full-time job paying $20/hr or more. So that is what we need to deliver to the bottom 50% of our population. That should be the focus of many of our politicians.

      Reply
      1. Anon

        …and a third of the US population is within a 5 hr drive of our office.

        110million people within 300 mile radius(avg. density of 8ppl/acre, including water)? Where is that?

        Reply
      2. Joe Well

        >>I am getting pretty sick and tired about the whining about unaffordability of coastal cities. Nearly all of the country that is more than 50 miles from the coastal cities is quite affordable if you have a job. So that is about 99% of the country’s land mass.

        So move to the less expensive areas and be quiet.

        Not sure if this is satire?

        As a resident of one of the most incandescently blue and expensive metro areas on this planet (Boston):

        1. I am from here. My family is from here. I have friends here. I attended a university here. After a few beers, the accent comes out even with people from other places. It is home in a way that nowhere else on earth will ever be, and I have lived in many other places.

        2. Umm…duh…those places are less expensive because there is less work that pays well. And fewer economic opportunities.

        I actually was a “digital nomad” for years, like many people of my “generation” from expensive metros. I lived in places with an incredibly high ratio of quality of life/cost of living. So I guess I took your advice to the extreme. I was/am self-employed, so I could do that.

        But the hub of my industry worldwide is in Boston so really it was a false economy. If I had suffered through sharing a three-bedroom/one-bathroom apartment with 2-4 strangers for a few years (what most 20-30-somethings do here), I’d probably be much further along in all areas of my life because of the relationships I could have made.

        And why should Boston and places like it be only for the rich? If you are an American who wants to discover a cure for a disease, decode the genome, publish textbooks, build robots, etc. etc. you pretty much have to be here at some point in your career. Why should only the children of the rich have that opportunity?

        Reply
    5. jrs

      also does anyone living in a big city really want more people to “escape their loser communities” and move there? No way, too many people anyway! And the grass is not usually all that much greener, the job markets mostly low wage, but the costs high, It’s just another form of hard. But one can embrace their hard, city or rural, because it is afterall their hard, until the point that they can’t anymore, and then people leave by necessity (not just rural areas, but many of our impossible-to-make-it-in cities as well).

      Reply
    6. DHG

      Amazing. I live in a really rural area and all I hear is how they have been shafted by everyone but of course themselves. The kids dont even stay around as soon as they graduate they are gone, well the ones with a reasonable GPA are.

      Reply
  3. Svante

    “I see demographics at work, especially in the cities, where the preponderance of people with no desire to work drag the numbers – and the educational performance – down. And it is NOT because they are not given the opportunity.”

    So make us work 2-3 part time, 1099 gigs, at boss-man’s convenience; since bussing and entitlements devolved CERTAIN demographics into a drag… I’ve watched this entitled wave engulf our nation (not JUST south to north, but also suburban to urban) over the last four decades. Demeaning, dismissing and demonizing one’s victims certainly wasn’t invented here. It didn’t become religious dogma here. But, it certainly became a very profitable, amalgamated and ubiquitous industry, here? Boo-rah!

    https://www.historyisaweapon.com/defcon1/zinnother10.html

    Reply
    1. a different chris

      “Demographics” — ah, another word for, um, “blah” people.

      That guy is an idiot. We have far too many of them.

      Reply
      1. Svante

        Shit, Bubba. I’m ’bout white as you can be, and still pee standing up. I have precious little inclination to WORK down there; W4, 1099, or Queen For A Day. There’s a prounounced overseer attitude among my ofay sisters & brothers that’d get a hellacious dental bill, up north. And nepotism makes The Dukes of Hazzard look like an abysmally subtle & nuanced documentary. I’ve worked all over the country with this guy’s inbred demographic; running from skip-tracker, POs, deputies, ex-spouses, repo-men, bail bondsmen and God’s smiting of our Theocratic Idiocracy is ALWAYS someotherbody else’s fault.

        Reply
  4. Polar Donkey

    I’m not sure when the rich will figure out that inequality will kill them too, but it is happening in Memphis at an alarming rate. Last August, the head of the chamber of commerce had a 22 year old walked up to him after a 5k charity race with people all around and shot him in the head. Friday night, some rich people were having a fancy fundraiser for St Jude at their mansion. The attendees parked at a nearby church and were shuttled to the mansion. Supposedly a guy walked up to one of attendees and shot him in the chest. There is no escaping the poverty and gun violence, even for the rich around here.

    Reply
    1. a different chris

      I am beginning to suspect the reason Yurp has gun control and we don’t is that the wealthy are generally much more isolated here.

      Reply
      1. Lukas Bauer

        That almost certainly one of the reasons, yes.

        In big European cities the poor and the rich lived pretty much door to door for centuries.

        If there are attempts to physically seperate them, it is a pretty recent development.

        Reply
    2. sd

      There’s an enormous amount of anger on Skid Row in Downtown Los Angeles (for those unaware, Skid Row is an actual place Main to Alameda, 3rd to 7th) That anger was not there just 10 years ago. I attribute it to the gentrification that favored high end development over a balance of mixed housing. It used to be that there were cheap SRO and one with the bathroom down the hall could be found for $250/month. Those same rooms are now “micro lofts” or “bistro lofts” and going for $800/month. There’s a reason the homeless population is exploding, they have no where to go.

      This just isn’t going to end well.

      Reply
    3. sleepy

      Outside of New Orleans, I have rarely encountered a city with as wide a racial economic gap as Memphis. I was born and raised there.

      The economic chasm separating white East Memphis and black North and South Memphis is staggering.

      Reply
      1. Stratos

        Agreed.

        That chasm has existed for generations.

        My relatives in Memphis tell me that the city is run like a 3rd World Banana republic. It is rife with corruption, high taxes, slum lords and brutal violence workers police. The school system has been systematically destroyed over the past 40 years. Ditto for public housing.

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    4. Ford Prefect

      I am utterly baffled that the 1% are so focused on ensuring the poor have unlimited access to guns. They clearly don’t have time to read history books as those books would inform them that it is likely to be an unwise choice.

      Reply
      1. JBird4049

        I am utterly baffled that the 1% are so focused on ensuring the poor have unlimited access to guns.

        Several reasons. Isolation, money, and power.

        Which part of the 1% or even the 9.9%?

        The real money and hard power is in the 0.01 and above.

        The 0.01 have their own security, and almost guaranteed access to a concealed carry permit (Bay Area locals have a very hard getting one, but be a VIP or give bribes donations to the local sheriff’s campaign fund…) The people that associate with and the places that they go to are very, very well police. They probably also believe that the Best Military Ever! would protect them from the unwashed hordes.

        It is the remaining 1-9.9% that are actually vulnerable to gun violence and susceptible to the fear mongering actually have a very good case to make.

        Please note that much, but not all, of this fear mongering is spread to garner political support much like, for another example, the pro-life movement uses lies and hate to gain support. Most of California’s gun control laws are like the anti abortion laws that have recently been passed; political red meat to feed the base and make them crazy. The laws are not primarily meant to solve anything because the Elites are protected while the most political active are herded about with the issue du jour. The upper, upper middle class and above will donate, the middle class can virtue signal and vote, and everyone else is ignored.

        The powerbrokers like this situation. If they wanted to solve problems would have free guaranteed universal healthcare, or an actual economic policy besides more tax cuts, more unaffordable education, and shipping entire industries out of the country. After all most gun deaths are suicides, most mass shootings started somewhere with despair and ended in evil. Those deaths by guns, suicides, drug addiction, even, if you believe, abortion, are all so profitable to some. Like the Prison Industry and our War on Everything.

        There are true believers but like solving a problem like curing disease is unprofitable and the most powerful are the least vulnerable, which I guess are the answers to your question.

        Reply
        1. JBird4049

          Sometimes, it is just ignoring what is not hitting you in the face instead of active malice or greed, but wealth can make for a fine hockey mask and a very realistic all encompassing Potemkin Village.

          Reply
    5. animalogic

      “I’m not sure when the rich will figure out that inequality will kill them too….”
      Well, isn’t that the $ 64,000 question?
      I suspect that, the very wealthy, believe, given their inherent virtue, that they will escape a day of reckoning. Neoliberalism –40 odd years & counting.
      The whole power of the national security state behind them, & a general population floundering in insecurity, ignorance & apathy? Perhaps the wealthy are right to think they’ll just skate by the mess…?

      Reply
  5. notabanktoadie

    Half of people are effectively poor in the world’s richest country…

    No surprise there since our banking model is designed or has evolved to create wealth, not justly distribute it.

    In the past this was less of a problem because of the need for human labor but now with automation and soon with AI …

    Reply
  6. Carolinian

    Thanks for this and all the other interesting articles today. A recent LA Times article said that one third of the country’s homeless are now in California. In Los Angeles third world diseases like typhus are on the increase. Will the Black Plague be making a comeback next?

    As for the South, I live in one of the above named booming areas. Perhaps we are not so much sucked dry by the coastal vampire squid as flattering by imitation. The Advance America payday loan shark operation is headquartered here. But the New Urbanism isn’t doing much for the aging remnants of the cotton mill economy that came before, and many neighborhoods clustered around the now closed textile factories are rather grim.

    Reply
    1. sleepy

      Advance America is a division of Grupo Elektra, a Mexico City based financial services corporation which “offers its services to sectors that have been underserved by traditional financial institutions through Banco Azteca, Seguros Azteca, Afore Azteca, Advance America and Punto Casa de Bolsa.”

      https://en.wikipedia.org/wiki/Grupo_Elektra

      Globalization on steroids I guess.

      Reply
      1. Carolinian

        It is in his business career, however, where Johnson has made his most lasting mark. His executive board service includes seats on seven New York Stock Exchange boards: Extended Stay America, Norfolk Southern, Duke Energy, AutoNation, Inc., Boca Resorts, Advance America Cash Advance, and Blockbuster, Inc.

        He co-founded and directed two companies onto the New York Stock Exchange in the 1990s. At the time, Advance America and Extended Stay America represented two of only three Spartanburg-based companies on the NYSE.

        The company was sold to the conglomerate but the headquarters building is on our main square.

        https://www.johnsondevelopment.net/johnson-management

        Reply
  7. Norb

    Jamie Dimond’s response to Porters question is priceless- “I”ll have to think about that…” You do that, while the working poor get more desperate by the day.

    It is difficult not to become infuriated by these smug elites, but the transformation that is going on requires an attitude shift from the working poor. The working poor must find the strength to take their lives back.

    Jason Bradford recently wrote a report for the Post Carbon Institute-“The Future Is Rural, Food System Adaptations to the Great Simplification”. The report outlines the need to revert back to a sustainable rural way of life. The report is well worth a read and offers some truly hopeful, productive ideas for the future.

    The rural despair and the devastation in flyover country offers an opportunity- to borrow the phrase in an non-exploitative way, for this realignment to begin. All the anger building up must be channeled into rebuilding lives instead of cultural war or civil war. Cities need a productive rural population to supply them with, at the very least, food. If cooperative structures can be built that supply these needs, the diversity of cultures and interests could be peacefully moderated to achieve these multiple goals. Instead of being an exploitative relationship- urban areas draining rural areas dry of resources- a mutual understanding could be nurtured. The best of both worlds.

    But for this to happen, one needs political leaders that are interested in more than just their own careers and wellbeing. Dimond is the poster child of a person who should NOT be in public life and service. While I appreciate Porter’s questioning of Dimond, instead of asking his advice for solutions to the current debacle, making his views and opinions irrelevant are what is needed. For working people, that is the only way forward.

    When the public debate about infrastructure spending comes up, to my mind, building sustainable rural/urban structures is what it should be about- the total transformation of our living and working arrangements. Without that, which takes bold leadership across party lines, the US will be investing billions in a lost cause, and the social and cultural animosities will only increase. For a smug, comfortable elite, that outcome is just fine. For working people, not so much.

    Reply
    1. crittermom

      Jamie Dimon doesn’t have to think about it and never will. Why should he? He has ‘his’.
      The fact that someone like him is able to bend Trump’s ear is even more disgusting. Two peas in a pod.

      I bet neither has ever considered how uncomfortable a suit of armor would be worn all the time either, to protect them from all those pitchforks yielded by those who far outnumber them.

      When Miss Porter asks him if that woman should take out a Chase cc I about choked.
      She should’ve asked him if that lady would be approved for one. Ha!

      She wouldn’t, due to her low income, working for that very bank.
      She can’t qualify.

      I’d describe him as a pompous a**, but I like the four-legged version too much to put them in the same class.
      It would be demeaning to the jackasses.

      Reply
    2. Amfortas the hippie

      re: a city/rural symbiosis….that social contract was broken long ago:
      just an anecdote: we currently have a bumper crop of peaches fixing to come off. but we’re not in the club(major state and non-state barriers to entry, even for many farmer’s markets). there’s nowhere to sell them, without being in somebody’s club…and even then, the prices we would get don’t justify anything but feeding what we can’t eat to chickens.
      in season peaches at the nearest big city(100 miles), or the nearest medium city(50 miles) will come from somewhere far away, instead.
      the way the Market is structured counts as “efficient” sending produce that could be grown within a 1/4 days drive 10,000 miles.
      instead of shelling out billions in public largesse to ADM and cargill for corn etc that we don’t need, why not use it to make fruits and veggies profitable for the farmer just outside the city, providing those bootstraps we hear so much about?
      “efficiency” as used in mainstream, conventional economic thinking needs a re-think.
      i’d rather see 10,000 small time egg producers, than 2 gigantic multinational egg factories.

      and…fer dog’s sake…can we stop sending our sheep to australia, passing their sheep coming here?

      Reply
      1. sierra7

        In “my day” most large cities were indeed surrounded by multitudes of small farmers growing, harvesting and marketing their crops in those cities to thousands of small restaurants, markets and caterers, and including “peddling” to the wealthy in their “upper class” neighborhoods. And, most made a decent to good living. It was hard but it was productive. All that changed with the advent of the, “American Dream”….cars, homes, etc. The advent of suburban living and the growing grocery chain stores throttled the rest of that economy. So much of some of the most precious farm soil has been overlain by concrete and asphalt. Someday we may pay dearly for that desecration.

        Reply
        1. Amfortas the hippie

          that’s how it was living in far orbit around houston in the 80’s.
          mom had a pretty good part time living on her hobby/obsession(I’ve been playing in rich, organic earth since I was 4)
          higher end restaurants and hotels, a farmer’s market here or there(informal/ad hoc in those days).
          of course, it is not lost on me that one of the reasons for this was the oil and gas money sloshing around down there(hippies feeding oilmen), but still…
          that’s also pretty much the original French Intensive…a ring of farms around paris, fed by abundant horseshit.
          artificially low fuel prices enable this, and may be the biggest thing rendering this ridiculous 3000 mile tomato nonsense economically viable at all.
          we should tax the hell out of air freight and use the proceeds to grow more small farmers.

          Reply
          1. JBird4049

            The Greater San Francisco Bay Area was this. Fruit especially lemons and nectarines from orchards in the Santa Clara Valley, beef, chicken, pork, milk, and eggs from the ranches all over Bay, including places like Marin County, seafood from San Francisco or the other smaller coastal towns plus vegetables and rice from the Central Valley. All going to the then individual cities like San Francisco and San Jose or the then small towns like Oakland, Richmond, and San Rafael.

            It is as if Santa Clara County and the City of San Jose just could not pave over all the farmland fast enough or that San Francisco wanted to destroy its port, warehouses, shipbuilding, and anything else even resembling light industry. I wonder, if the fact that that was all heavily unionized, even large department stores, was an incentive? No port, no port workers union, and a great weakening of the rest of the unions. Oakland at least rebuilt it port for container shipping.

            Reply
  8. William Hunter Duncan

    I think it was a Bloomberg piece posted in the links lately, that said the 40% of Americans who can’t pay a $400 emergency is a myth – somehow surmising that because 85% of those could pay it with a credit card or borrow from friends or family (take on more debt), is reason they aren’t actually poor.

    Somehow I think a lot of this stems from our Puritan origins, and generally the unholy alliance between American Christianity and American Empire, and the equating of wealth accumulation with moral uprightness, as if the wealthier you are the more righteous you are. That is obvious enough in Republican ideology, but I see it also in many a Liberal and Dem, lionizing the likes of Bezos, Musk and Buffet, because of course they only have everything they have because they did Everything RIGHT, and if you just did it RIGHT too, you would be rich.

    I keep telling my Liberal and Dem friends, and my wealthier Republican friends, Trump arose because “educated” Americans abandoned working people, sucking up to the wealthy, corporations and banks, and if we don’t remedy that, a lot worse than Trump is coming. The working poor in this country outnumber the “educated” by a long shot, an increasing number of “educated” people are effectively destitute, and should they unite under a charismatic who turns it around and effectively demonizes the wealthy, it could get very bad for the self-satisfied elite of America.

    Reply
    1. Kurtismayfield

      I think it was a Bloomberg piece posted in the links lately, that said the 40% of Americans who can’t pay a $400 emergency is a myth – somehow surmising that because 85% of those could pay it with a credit card or borrow from friends or family (take on more debt), is reason they aren’t actually poor.

      So they don’t have $400 cash on hand. How is this not poor? I know that if I didn’t have a small emergency fund set aside I would be anxious about every little expense popping up.

      Reply
      1. JBird4049

        The propagandist, and I am using this precise word because it is propaganda, is using the same playbook during the last thirty as has been used by think tanks and politicos to down play the increasing poverty years; calculators, cellphones, and computers are so cheap and everyone has a bathroom and a refrigerator in their home unlike poor third world people, so the American poor are not poor! Soothing garbage to quiet the troublesome.

        Reply
    2. Summer

      “Somehow I think a lot of this stems from our Puritan origins, and generally the unholy alliance between American Christianity and American Empire…”

      And a pox on all the Papal Bulls too…

      Reply
      1. Adam Eran

        Turning a religion that celebrates compassion into a bunch of intolerant “church ladies” has been a long-standing project, possibly since the churches were the nexus of social action in the civil rights movement, maybe earlier.

        Nevertheless, one cannot find an endorsement for “salvation by works” (earning one’s social position, wealth, etc.) in orthodox Christianity, no matter what denomination. Orthodoxy says it’s “salvation by grace”. The idea that our gifts are just that–gifts–is one that’s hard for people to accept. Even if we were born on third base, we’ll try to act as though we hit a triple.

        The idea that we “earn” and deserve things is refuted constantly throughout the Hebrew Bible and the New Testament. The prodigal son doesn’t earn his welcome back party, for one of many.

        In the Hebrew Bible, it’s pretty clear who owns property–ultimately, the land belongs to God. Try to get title insurance for that!

        Reply
        1. witters

          “Nevertheless, one cannot find an endorsement for “salvation by works” (earning one’s social position, wealth, etc.) in orthodox Christianity, no matter what denomination.”

          True. They all decided to ignore the Letter of James: “faith without works is dead.” (2:24)

          Reply
  9. Off The Street

    Neo-Calvin Kleinist, chasing echoes of old fads instead of having a coherent and consistent life goal.

    Go ask ALICE, when she’s 10 feet tall. Boomer reference to Jefferson Airplane lyrics, reflecting the hallucinogenic aspect of what has become sad reality for so many. Rub one’s eyes, the images persist.

    Reply
  10. teacup

    ‘Weapons of Math Destruction’ by Cathy O’neil comes to mind….there are alternatives of course, yet most media channels (airwaves are economic land) are paid to look elsewhere, the FIRE sector being a finely tuned propaganda machine to deny their is any such thing as a free lunch. Futurist Michael Hudson is a closet Georgist and wrote this back in 2001- https://michael-hudson.com/2001/10/the-methodology-of-real-estate-appraisal-land-residual-or-building-residual-and-their-social-implications/
    A basic income funded by a gradually phased in economic rent (land) tax is a major first step.

    Reply
    1. Adam Eran

      Better, rather than a BIG, the Green New Deal’s job guarantee.

      As for funding: No tax revenue funds federal programs. Where would people get the dollars to pay taxes if government didn’t spend them out into the economy first? Dollars don’t grow on billionaires.

      For sovereign fiat money creators (with a floating foreign exchange rate), taxes make the money valuable. Nothing else.

      Reply
      1. jrs

        The job guarantee seems to have a ton of contradictions, it’s supposedly to leave a lot up for local control, but how can you do that and actually implement green policy, the spending priorities need to be federally regulated to do that. Some are for a more federal GND and at least that doesn’t get stuck in that particular trap of pining for local control which seems destined to fail.

        Reply
    2. WheresOurTeddy

      Reading Hudson leads one to the conclusion that some things should not be for profit, and housing is certainly one of those things.

      In America, unfortunately, we only care about the speculators.

      Reply
  11. Oregoncharles

    ” housing, food, childcare, healthcare, transportation, and a cellphone. Translation: nearly half of Americans can’t afford the basics of life anymore.”

    Does that list of “basics” seem a little strange to anyone? It’s an odd mixture of true necessities like shelter and food with purely modern “basics,” like a cellphone. Even the ones that are truly basic, like healthcare or childcare, are monetized where they weren’t before. The greedy grabbing all the money is only half the problem; the other half is that life has become vastly more expensive. That’s one of the ways the looting happened.

    This is an odd point coming from a lefty “progressive,” but J.M. Greer had a case: sometimes our ancestors had it right, and we were damn fools to give up the solutions they had worked out – or at least, not to consider what we were giving up and how we were going to make up for it. Depending on each other is fine and necessary, until that gulf between classes opens up and we’re actually depending on the greedheads (aka plutocrats).

    Reply
    1. jrs

      So it used to be a landline 30 years ago (and was NOT at the time considered a luxury by anyone – “oh wow you have a landline in your house, your so rich” said noone then). And maybe it was a shared line with a rented telephone, I don’t know, 70 years ago. But it was phone access nontheless. A dumb cell phone plan is cheaper than a landline now.

      Imagine getting a job with no way for anyone to even phone you, especially as 80% of first interviews are phone interviews in my experience. Getting a job without internet access is also near impossible of course. Day labor, oh sure maybe could get that without phone or internet access.

      Reply
    2. Yves Smith Post author

      Many schools require parents to have a cellphone to communicate with them, like send messages about closures and other notices. In some, the kids are required to have cells so the teachers communicate with them.

      You have to have a cellphone or landline if you work, and today, the “basic” phone is a cell.

      Reply
      1. JBird4049

        Strangely enough I find a ultra budget cellphone cheaper than even the “cheapest” landline. Add in the lowest Internet plan I can get and there’s a very large difference. I suppose I could drop the Internet, but I am a college student, and find accessing the college’s subscriptions for whatever journal I can whenever I can very useful and almost a necessity.

        I think that the “costs” for information and communication is rising far ahead of providing it; it is a captive market, and whereas basic telephone and snail mail was affordable along with the library was almost the only thing that we had back with with the service good and costs fairish, now it is getting too expensive along with its increasing necessity.

        Increasing cost to purchase, increasing need for it, decreasing cost of providing it, decreasing quality, and an increasingly concentrated captive market. Interesting that. The Free Hand of the Rigged Market under our benevolent American Kleptocracy.

        Reply
  12. Jon Claerbout

    Many of our poor have low-end jobs. Dems and Reps want to undercut their wages with impoverished foreigners. My heart goes out especially to our blacks.

    Reply
    1. Scott

      My guy . . . “our blacks.” I’m just gonna drop some updated nomenclature here in case anyone is interested.

      POC
      marginalized populations
      minorities
      historically exploited and oppressed segments of society
      African Americans

      Reply
  13. Temporarily Sane

    The new fad is to demonize rural and small town whites. After all, they didn’t get educated to escape loser communities. And better yet, they are presumed bigots.

    This is why identity politics is madness. Read the Guardian and the self-consciously liberal media and sometimes it seems they literally blame every problem in the world on white people, particularly white men. Do they not realize that they are creating a hierarchy of virtue and worthiness based on gender and ethnicity? That is exactly what the white supremacists do. It’s called racism.

    When people are sharply divided along ethnic lines and a serious crisis hits, violence is almost inevitable. Every time I hear one of those blissfully ignorant, tone-deaf and narcissistic SJW’s ranting about how “whiteness” and masculinity are at the root of every problem and acting all tough and shouting profanities at people, I think to myself the only reason they can do that is because rule of law prevails. But what happens when civil society breaks down and there is no police force around to protect them?

    Sometimes this shit is just too depressing. Is it really happening? Are we on a trajectory to a hell on earth we can’t even imagine yet?

    Reply
    1. animalogic

      “Do they not realize that they are creating a hierarchy of virtue and worthiness based on gender and ethnicity? That is exactly what the white supremacists do”
      So-called progressive causes have long been
      co-oped by neoliberalism & neoconservativism.
      TPTB don’t care if women, non-whites, or non-heterosexual people climb the greasy rope. Why should they? As long as the status quo remains largely intact…. And — the added advantage? With people frothing at the mouth fighting over “cultural” issues they’ll never realise that there’s only one real issue; CLASS.
      The original sincere demands for justice by the PC’have largely boiled down to a new scholasticism & (nasty,
      petty) piety.
      It’s reminds me of the 16th & 17th C’s. Now it’s your career & reputation burnt at the stake.

      Reply
      1. Svante

        Since monopoly media, then blog aggregators tend to use young, affluent, white-flight kids from the BEST schools. Any issue, confronting any amalgam of demographics is solely presented from a 10% (1%) perspective (if it can be made contentious, scary or annoying enough to garner clicks, sell RAM trucks or liver destroying pharmaceuticals) and these folks are deeply in debt, entitled, subliminally obsequious, craven to K Street & speciously oblivious to cognitive dissonance. Ayn Rand’s version of “His Girl Friday!”

        Reply
  14. JBird4049

    Yep, it is the white poors according to one side and those blacks and the illegals who are to blame for their problems by the other side, which somehow makes those people with the least amount of power the most at fault, instead of those in the smaller part of the population who have the greater part of the power.

    Reply
  15. witters

    Well, as David and PK have reminded us with the US and its “allies” – a lot of the time it is the less powerful pushing the powerful around so that they have no choice but to do what the weaker party wants (TINA from below). Perhaps that mindset is in play here too.

    Reply
  16. Heraclitus

    I thought the WSJ article left out much that is historically significant about Natchez and Mississippi. In 1850, Mississippi had the highest per capita income in the United States (probably ‘per capita’ meant white capita) and Natchez was home to 25% of American millionaires.

    The author’s lament on the unwillingness of southerners to raise taxes and invest in education was grating to this native southerner. I remember how good (and inexpensive) our town’s schools were fifty years ago. They are still quite good–I live in one of the boom towns, near Charlotte–but much more expensive, thanks, I believe, to the demands of northern immigrants. (Every ten years, the percentage of the population that makes over $100,000 a year doubles.) The high schools are like private colleges. The kids have majors. Every graduating high school student in our state has to have four years of math, including a year of statistics. We are a southern Lake Woebegone. Except that I don’t believe the students necessarily absorb the mathematics, the language requirements, and the science requirements. If we made it a requirement to derive the quadratic equation before one could cross the stage at graduation, graduation rates would fall to single digits. The educational edifice seems to me, in short, a Potemkin Village, designed to placate the parents (and taxpayers), and to keep them paying.

    Rural areas in my state (SC) are in bad shape, but not necessarily because of a lack of relevant courses. As I mentioned, the entire state is required to teach four years of math and statistics in high school. To every student. It is difficult to get teachers to live in rural areas. You’d have to double their salaries to change that, and this is not likely. One sees that rural kids, even academically successful ones, generally use the military as a way to get out of small town life. Or they go to the local technical school and become nurses (instead of doctors), or in some way lower their aspirations. The internet was supposed to equalize that, but hasn’t had the impact we’d hoped for in education.

    Reply
    1. JBird4049

      Well, yes getting people to work somewhere usually requires paying them and in a public job that means paying taxes. It is a common thing to whine among too many Americans even in Blue states, but especially in the Red states, about paying taxes. I really have neither respect or sympathy for fools who expect something for almost nothing and then complain when they get what they pay for. Which was nothing.

      The South’s political economy has mostly been that of exploitation and extraction with a classic pyramidal class system of a very large, very population of black slaves or blacks and whites in debt peonage or laborers and a very modest middle class usually focused on serving the small wealthy oligarchy. The whole corrupt system is maintained by force, in the past often lethally violent force. The system has been in existence for over 350 years and it looks like it is not changing much anytime soon.

      Reply

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