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Who’s to Blame for Death of the Middle Class in America?

By Rick Ackerman Posted on October 16, 2012, 12:01 am EDT Last Updated October 3, 2014, 9:52 am EDT

Who’s to Blame for Death of the Middle Class in America? [We occasionally publish guest editorials with which we disagree, but seldom have we disagreed more vehemently than we do with the praise the author has heaped on Ben Bernanke – a mountebank in our book  — for supposedly doing his job well.  Fortunately, it is not Bernanke that is the main subject of this essay, but rather, corporate greed and its role in impoverishing the American middle class. The writer is Shanghai entrepreneur and jazz pianist Mario Cavolo, an American expatriate and Rick Pick’s forum regular who usually manages to see the bright side of a darkening global economic picture without being a Pollyanna. RA]

Ben Bernanke is the only person who is doing the right thing at the right time under the right circumstances. Let’s thank him for doing the only thing he can do to save the slowing world economy. I have decided to print up 10,000 “We Love You Ben” stickers. Even better, let’s go with “Ben’s Got the Balls We Need Because No One Else Does”.  Rather than blame “Helicopter Ben” like everyone else, ask yourself what is really going on.  What is the bottom-line problem for the average American? Yes, start reading between the lines, because the masterful spin doctors and populist media-driven messaging are more deceptive and

whos-to-blame-for-the-death-of-the-middle-class-in-america

manipulative than ever. They’ve mastered getting you to look in all the wrong places for all the wrong reasons.  If you were in Ben’s position, wouldn’t you be offering the world billions in easing rather than letting the economic edifice collapse, creating global havoc and spreading social unrest?

Shall we compromise and say that you would do some parts the same and some parts different, but no matter what, you would have a supportive, accommodative, monetary policy if you were in his position? Let’s hope so, because while letting everything collapse and fail sounds good in a local bar chitchat or some world economic forum, in reality it would be devastating.  You think 8% unemployment, 20% underemployment and 50 million on food stamps is bad? Try 30% unemployment, 100 million on food stamps and the associated descent into social chaos–  which is where we would probably be right now if the unsupported S&P were back at the ominous 666 figure.  To blame Bernanke and friends for the problems of today is to be ignorant and naïve. It is too easy, too pat, and I implore you not think like populists and the mainstream media.

For now, let’s set that issue aside and instead ask, What is the real problem, the one that most directly impacts the typical lower/middle-class American, the heartland citizen of the country? The answer is that the people who are in charge, truly responsible for the good of American society, are not doing what they are supposed to be doing.  Is Ben your city’s mayor? Is he your state representative who’s supposed to be representing your interests and needs in Washington? Is he the boss at your company? It’s time to turn off the TV, stop reading newspapers and web-based news and start looking closer to home, the place where most Americans stare into the face of their biggest problem.  I think you will be surprised to find how easily we can identify the real culprits and how accessible they are.  And in fact, the solution doesn’t require any government involvement at all. Don’t jump to conclusions as to who they are, and don’t jump ahead of me.   Let’s first look at some blame-game favorites so that, by process of elimination, we can identify the real culprits.

Target #1: Blame ‘the Wealthy’

Historically true. The wealthy actually do run the show and make the rules to favor themselves. This past decade has given us the greatest wealth-grab ever.  Is this something new in history? No, it is not. And while it seems a convincing way to explain away the issues of the day, and while it does relate to the real problem, let’s move on to issues less vague and which speak more directly to the real problem in the American society and economy with an impactful solution that even a five-year-old can understand.

Target #2: Politicians

True – and pathetic. Abraham Lincoln is rolling in his grave. “Of the people, by the people, for the people” has been relegated to the trash heap of political and leadership irrelevance. Let me not bore you with what you already know:  The self-serving greed and corruption that causes you as a citizen of America to wince in disgust as you turn your gaze toward the world of politics. Obama’s presidential re-election campaign raised over $180 million just in September. How do we describe without harsh criticism a political system that has gone so far out of control and away from its sense of responsibility to its country rather than serving itself? Once again, as appalled as we are and should be, this is a separate world, like Mars, and not a direct part of the root problem the typical American family faces.

The Decline of Societal Values

Sadly true. As the third generation of an Italian-American immigrant family, I am appalled and saddened by what America has become. The deterioration and transformation of marriage and family values are a central contributor. While there are other cultural forces at work that we can discuss with respect to the deterioration of societal values, let me strongly suggest that the destruction of traditional marriage and family has made America one of the most emotionally dysfunctional and behaviorally twisted places in the world to live.  In the majority of cases, the emotional devastation to a child from a divorce, especially a typical American-style divorce in the American court and counseling system, has a much broader, negative impact on society than most care to admit or acknowledge because, frankly, it is just too painful. I can already feel the divided, rising anger of rationalizations on the subject.  For example, in today’s Catholic church, I know of typical cases where a young couple informs a parish priest they want to get married in the church, the response is far from the encouraging, happy talk the naïve couple is expecting. In fact, the priest will often hang his head in disgust and ask with sarcasm, “Why would you want to do that?”  already knowing that the couple haven’t a clue what a true marriage before God is and what they are undertaking. Admonitions to not take your vows if you don’t truly mean them and intend of living their vocation are heard, but not at all understood. How can they be when you live in a society surrounded by divorced people and your own parents are divorced?  The Catholic church is keenly aware it has been fighting a losing battle in this regard. Alas, this is a subject with far reaching — implications for further scrutiny by sociologists and theologians alike — but it still only leads us further down the path to the real problem.

Blame China and Related Globalization

True as well.  As a person who has lived in China for 13 years, in a marriage to a traditional northern Chinese wife with a one-year-old and mother-in-law, I have often been a defender of the anti-China bias which distorts people’s view of the many issues related to China. Ranging from supposed censorship vs. supposed freedom, to supposedly “freeing” Tibet (whatever that means), to communism vs. democracy vs. socialist market capitalism (huh?) ,  the mud-hurling never stops. And in this arena of issues, two things we know for sure are that big business sold out the American middle class to cheap labor overseas and likewise sold away its technology. Now we see the rise of Asia, led by China: the ones with all the cash coming back to America to save the day, for example, snapping up post-financial crash real estate bargains.  They are laughing all the way to the bank, and the big lie out of China is not exaggerating the stats to show things are better than they really are, but that they are in fact hiding how quietly well they actually are doing.  Many a  book has been written on China-related issues, most of them, especially by the populist doomsayer authors, getting it completely wrong, misguiding one into believing a false reality.  As we find this subject has overseas cheap labor at its core, I will hint that it is closer to the real problem. Let’s see what it is.

The Real Problem: Corporate Greed and Stagnating Wages

In-your-face true! The real problem is corporate greed and your wages. Surprised we’re not blaming something or someone that has to do with the government? What, Bernanke doesn’t sign your paycheck? Isn’t it great that S&P 500 company profits are at record highs? Doesn’t it make you feel more secure about having a job? But have you noticed anything odd about your paycheck over the past couple of decades, especially the past four years since the 2008 financial crisis? Do you spend money that you don’t have at the end of the month?  If you did have more money at the end of the month, wouldn’t that money make its way economically into the society? If you had more, wouldn’t you spend more? Of course you would. Wouldn’t having more of the money you deserve and have earned stimulate spending, investment, and then wouldn’t productivity go up due to increased demand from your spending and investment? The average American’s problem is S&P 500 corporate greed in the face of record profits and hoarding of cash. You need to talk to the boss, you need a raise, a raise you deserve, have earned and they can easily afford to give you. That’s the problem.

Yes, I love you, Ben Bernanke, for covering and protecting the losses of the greedy banking so that the economic system does not collapse. However, my more direct problem is my paycheck and the source of that problem lies squarely in the private sector, the company I work for.  So then, why has the government been so easy on its demands to the private sector, starting with the banking industry, while making the American taxpayer bear the burden?

For example, I’ve always wondered why doesn’t Bernanke offer to match rather than just give? “We’ll put up if you also put up.” Hmm, nice policy. Wouldn’t it make a lot of sense if Ben said “Yes, we’ll pledge $50 billion per month to cover the national bank’s bad debts and at the same time, corporate America will stop hoarding its trillions, which by the way is against the interests of the shareholders, agree to match that by releasing $50 billion per month more in wages to its employees.”  We’ll do our part as everyone else does their part too, working together for the good of the country. That is a powerful combination that will get the American economy humming again. We’ll provide quantitative easing.  But we require that the companies in the society make commitments too, that they will start distributing those record-breaking profits and hoards of cash to their employees who are way overdue for salary increases, while also stop paying their executives millions of dollars in annual compensation.  On these obvious and fair requirements, Washington fell silent to serve themselves. But this does not stop American workers from gathering together to address this issue with their bosses in the private sector.

Servitude

Yes of course those financial/banking excesses shouldn’t have been allowed to happen in the first place, which all started with the repeal of Glass-Steagall.  But far too much attention has been spent focusing on this popular American blame game.  We are not focusing on that problem here. The American economy needs more money in the pockets of the middle class who are the primary spenders and consumers. Instead, they are being slowly choked to death financially, into corporate employee servitude. Instead we see a trend alongside the other current societal and economic trends in which the middle class are more and more becoming slave laborers to the wealthy bosses who are taking sinfully high compensation for themselves as a reward for record profits while also hoarding that company cash rather than increasing wages to disseminate those profits appropriately down into the hands of the people who made those profits possible in the first place. Sounds like a trend back toward slavery to me.

American S&P 500 corporations are experiencing record profits and sitting on record levels of cash in excess of two trillion dollars.  Where’s yours? Where is your share of that? Why did your boss decide to stop fairly distributing those profits into employee paychecks? That is the core problem and it is not political. While myriad expenses and costs of living have been going up all around you, your wage has withered in the cold wind. So stop blaming Bernanke. Stop blaming Obama. Stop blaming Washington. Stop blaming the politicians. They are not your boss that you can go to and say “This company is hoarding is profits, we want a raise!” They are not in charge of the size of your paycheck. They are not the ones running your company that is hoarding the cash and not raising your wages appropriately for the past several years.  While the other problems cited here are far from simple and there is plenty to criticize, I’m thinking a few thousand employees need to head to the next shareholder meeting and start making a fuss where it counts. In China, there is a dearth of qualified workers amongst the multi-national companies. That is why wages have been steadily rising and loyalty is low.  In America, if the qualified, experienced workers rose up together in protest, would the company be able to replace them? What excuse does your boss have for his or her sinfully high salary while your own wage doesn’t even keep up with the rising cost of living? Why are American’s taking this state of affairs like beaten down sheep? Money needs to trickle back down into the economy to stimulate the economy.  I suddenly have a new respect for the idea of unions to try and help solve this issue, without overdoing it. What about the power of the shareholders of these companies to do something about this obvious problem?  This problem is the real problem, not a side-show or related issue, because unlike the others, it is the issue that most directly touches and impacts Americans in their daily lives.

***

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  • Marc Authier October 21, 2012, 10:01 am

    US neocons. Thats who.

  • EverNew EcoN October 17, 2012, 7:42 pm

    Dear R.A.:

    In case someone’s curious:

    http://evernewecon.weebly.com/

    (assuming mod deciding)

  • EverNew EcoN October 17, 2012, 7:40 pm

    In getting all who SOLD the bubble
    to buy it back and/or pay for it
    by way of helping pay
    for the loss sharing of the banks
    that created and BOUGHT it, and getting nothing on their proceeds,
    just as everyone reading this gets
    a real negative return on her/his savings at the bank
    presently, all that so the banks can be
    tided over till Bernanke buys the MBS’s at
    banks’ prices for Fed unwinding of same
    and/or sale back at market prices,
    with no one really checking what the banks
    are getting in the first place, actually
    there’s an international analogy.

    Just as the bubble created a carry trade,
    borrow yen cause of Japan’s recession/but
    Ice. Kr. once the folks in Reykavik were
    cleared to kite $100s billions in MBS’s,
    Congress’ enthusiasm to help the banks blame
    everyone/everything in sight: Social Security,
    Medicare, China, is potentially creating a
    carry trade wherein the U.S. becomes the
    equivalent of Japan and Iceland at each one’s
    worst moment: borrow dollars, buy yuan.

    Our Liquidity Trap is China’s dollar trap.

    They don’t call it a Liquidity Trap for nothing.

    Once rates (might-) rise, it takes less principal
    to earn a comparable return.

    The bank-beneficiaries themselves obviously
    are thinking that:

    http://www.bloomberg.com/news/2012-07-09/dealers-decline-bernanke-twist-bids.html

  • Tony Medler October 17, 2012, 12:07 am

    Wow! Seldom do I read through the entire thread of a posting but I did on this one. I would have to guess that Rick put this composition on site with tongue in cheek as the premises grate against the very fabric of his stock and trade. My surprise is amplified by the large number of comments and commentators who seemingly go along with the liberal, union based concepts included in the script. With passing along profits through wage increases maybe we should include price controls so that the wages go further? And start a website (if it doesn’t already exist) “Occupy America”.

  • BIG-BEAR October 16, 2012, 11:23 pm

    I am constantly amazed, of the little I know of ron paul,
    and how he is the only true last, yet dying, real american;
    throwback to another era, were words meant–something.

    I am amazed ron paul has not yet been killed, in some ‘accident’,
    as is the rule of law in american politics, ever since jfk was banged, good.
    ‘lone crazy killers’, freak ‘accidents’, pseudo-‘terrorist’ attacks’, have existed,
    since time inmemorial–it is the mark of all mankind, the ‘et tu brute’ moment.

    yet, with world as it is now, ron paul is just another ‘crackpot,’
    to be laughed at, sneered at, jester fool of the times, another jackazz ‘haha.’
    so no need to kill him, for no one listens, anyway. since all, are indoctrinated.

    http://www.youtube.com/watch?feature=endscreen&NR=1&v=XeCpLcjxOq4

    jeffersonian america is gone, not even a shadow left.
    all that is now, is a new world order. masters, slaves.
    and if you are reading this–guess which one you are.

    ———-

    clock is ticking.
    tick, tick, tick.
    end game.

    • Robert October 17, 2012, 12:51 am

      “jeffersonian america is gone, not even a shadow left.”

      – So long as I breathe, that is not an accurate statement.

  • j October 16, 2012, 10:48 pm

    Great read Mario!….my flippen brain hurts

    Imo, there are just too many people on planet earth and its effecting everything from weather to economic activity.

    Cheer$!

  • DK October 16, 2012, 8:43 pm

    Interesting article, Mario.
    I feel that the entire topic could have been summed up a bit quicker by pointing out what is at the center of all of this; The Fed and their glorious fiat.

    John Jay pretty much nailed it above as well.

    As Mava noted above, the only hat tip I can leave Bernanke with is the end result of his dealings.

    How many POTUS have been targeted for daring to oppose these unconstitutional systems?

    Jefferson famously said “I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”

    That pretty much sums it up.

    Rick, mega kudos for the Joanne Brackeen link and applause for the Bill Evans mention.

  • BigTom October 16, 2012, 8:14 pm

    Rick – not a big fan of jazz though can listen to it. Joanne Brackeen doing Bewitched, Bothered and Bewildered on ytube was very nice, to my perhaps tone deaf ears with so many years scuba diving and riding motorcycles – but thanks for the heads up….Hey mario, I mean no disrespect to anyone here, but jazz piano in China? It reminds me of back in the 60’s of local bands deep in mexico doing the Doors! ….you guys may not be interested in this stuff but bing…Christoph Eschenbach Orchestre di Paris doing Ravel Bolero on you tube…there are 2 parts. It is not jazz but still damn good orchestra to these old worn out ears…..!

  • Rick Ackerman October 16, 2012, 3:40 pm

    Sometimes you wish Tatum had slowed down more often so that he’d sounded more lyrical like…Oscar Peterson. Do you gents know the work of Joanne Brackeen? Monster chops! I’ve listened to her ‘Breath of Brazil’ album non-stop maybe a hundred times in the last couple of months. The happiest album I know of. If Bill Evans had gone on a Latino tear, this is what he’d have sounded like. I first heard Brackeen playing duets with Toots Thielemans. She was featured here a while back in a Rick’s Picks commentary that included a picture of her in concert and a YouTube link.

    • mario cavolo October 16, 2012, 4:00 pm

      Noted and thanks Rick!

      Now let me tell you both, I have a load of CD’s to compare and a pristine resolution pure sound system to catch every detail. (with Triangle Zerius 202 speakers, drivers hand made in France) THE #1 sounding disc I own by far in terms of space, position, openness, detail, is Oscar’s “We Get Requests”, which was recorded at RCA studios, New York 1964. Whatever the sound engineer did those two daysto capture the sound of the trio with Ray and Eddie for this recording, this disc stands alone. Concorde’s Ray Brown recordings come in a close second…Cheers, Mario

    • Sam October 16, 2012, 4:45 pm

      Thanks for the heads up Rick and Mario,

      There are many hidden geniuses & jems out there – sometimes (like this) I get put onto something/one I never heard of and enjoy a fresh contribution to music.

      I’d never heard of Joanne Brackeen and just checked out her bio and the Brazil album mentioned. Really nice stuff. Working with compositional material like that makes it much easier to sound good but that is a great sound regardless!

      I also hadn’t checked out ‘We get requests’ – thanks for that M. I’ll put in a request for that 😉

      I’m not too sure I can recommend anything specific as I’m often hovering between styles and genres in my taste but, based on your recommendations, I’d check out some Mulgrew Miller. Maybe Grew’s ‘The Sequel’ as something struck me as particularly skilful in the making of that recording – a little like the moments in Miles’s ‘kind of blue’. I’d also recommend Chick Corea’s ‘Now he sings, now he sobs’ but I have a feeling both of you will have made up your minds about that one already. That was a big fav of mine. Also, Blue Mitchell’s ‘Down with it’ (Chick on piano) and Peter Bernstein’s ‘Signs of life’ (with Brad Mehldau on Piano)

      When you’ve been playing music for years you have so many influences which inspired you and helped shape your understanding it’s hard to know where to begin when making recommendations. Bobby Timmons was a big influence on me in the early days and the Jazz Messengers records with Wayne Shorter and Lee Morgan always made me feel good (& still do)!

  • mario cavolo October 16, 2012, 10:39 am

    Dear All,

    I want to thank all of you for the excellent set of comments you have added to my recent article here at Rick’s. The idea for the article “popped” into my writer’s mind about ten days ago. It started as a comment and then as it kept flowing out, I realized it was turning into a full article which I checked through and edited a few and was done wihin the hour. Then I sent it to Rick, a bit wondering what the hell I had just done because I don’ usually write on such themes, and I did not read it again until Rick published it. As I read it online yesterday with a fresh eye, I thought of some minor changes and noted a couple of mistakes, but overall I still felt it is a good body of work to add to the online world of knowledge and ideas, and to make us all contemplate the issues of our times. My intention is that such writing clarifies issues and makes us think. Thankfully, everyone did seem to notice that my “…love Bernanke” theme served its rhetorical purpose as a redirect but wasn’t meant to be taken as an unreserved endorsement.

    Unprecedented times, no easy answers, deep concerns we all face. Thanks again to Rick for providing his excellent platform.

    Cheers, Mario

    • Sam October 16, 2012, 11:18 am

      Hi Mario,

      Thanks for your thoughtful essay. Really clear thinking in some of this. The ‘Bernanke bias’ is all the more pertinent because people are looking for someone to blame. It reminds me of a lecture by Alan Watts about ‘the world as a cosmic play’ (based on the Vedas) where everyone, filled with the spirit of universal consciousness, plays a part. You’re right, we’re always quick to simplify everything – but in truth, it’s a nebulous thing.

      Off topic; I wondered what musicians have influenced you as a jazz pianist? (I also play jazz piano). I have found the exposure to Afro-American music in China very limited – and all the working musicians I know tend to travel to play gigs in Shanghai/Hong Kong. What’s the story – Do we still have a long way to go until we have truly cosmopolitan cities in China?

      All the best,

      Sam

    • mario cavolo October 16, 2012, 11:46 am

      Hey Sam, best wishes to a fellow jazz pianist 🙂 My number one influence is definitely Oscar Peterson.

      China is way too “mono-ethnic” as a culture to have any truly cosmopolitan city I think. Actually though it seems the jazz scene is better here in Shanghai than it is even in Hong Kong. It seems most of the cats are based here the past 2-3 years. Lately, they’ve gotten much more strict making sure musicians here have the full working permits and Culture Bureau stamps to play in China and booted out if not. This past year, I was the hous pianist 2x/week at the new Kerry hotel, just wrapped up that contract and looking for something new besides one off gigs. I think I’m going to spend the month of February playing at the Shangri La in Ningbo, just to get out of Shanghai during that terrible month here weather-wise.

      With that said, JZ Club is well established and they have now established their annual jazz festival, but even that they have had to water down into more of a “music” festival rather than true “jazz” festival such as happen each year across the world. I went to the Umbria Jazz Fest in Perugia back in 2007, wow, what a great experience that was. Hey, are you here in China or around Asia?

      Cheers, Mario

    • Sam October 16, 2012, 12:47 pm

      Oscar Peterson – yeah man. He had so much down – bebop, swing, stride – and had such a great sense of rhythm. He was, in many way, a complete pianist. One of the best influences any player can have. I think only Art Tatum could top him for chops. I prefer Peterson’s playing though.

      As for me, I’m not good enough to emulate Peterson so I just do my kind-of, herbie/chick/bill evans stuff (style over technical ability). Actually, my first instrument is guitar so I’m not too down about not being such an advanced jazz pianist.

      Nice to hear your thoughts on the worldly influences on the culture of China. It pretty much confirms what I observed. I’m currently in the UK but half my family is in Beijing. I’ll be back to visit Beijing around Easter 2013 I guess. I should check out Shanghai as the musicians I mentioned all play there and I hear it has the highest expat community in all of China.

      Interesting to hear about the culture bureau stamps. We don’t have that in the UK. The US used to have music union cards (a little like bureau stamps) in order to play during the 1930’s/40’s/50’s and from what I learned, during that time music went underground.

      I have never gone to the Umbria Jazz festival, but I have heard it’s great. Would love to see some more stuff like that but sadly have not got the time at the moment – I mostly keep up with things through a network of good musician friends over here in the UK.

      What’s up with February in Shanghai? I know throughout winter it gets terribly cold in Beijing but fortunately have never had to live through it. I presume it’s the same in Shanghai so any movement south is welcomed!

      Good luck with everything man. Maybe we will have a chance to play some music together when we are both on the same continent at some point in the future.

      All the best,

      Sam

  • Jill October 16, 2012, 7:04 am

    Mario, I do think that Bernanke means well & that what he is doing will eventually help the economy temporarily. I just think he doesn’t realize the long-term consequences of his actions. And he doesn’t realize that there is life outside of big banks.

    And you do have a point about “Try 30% unemployment, 100 million on food stamps and the associated descent into social chaos– which is where we would probably be right now if the unsupported S&P were back at the ominous 666 figure.”

    VonMises school of economics followers do have the luxury of critiquing what Bernanke does from afar, without having to worry about the consequences of their own preferred policies– because no one is following those policies. While it is easy to create a theory which theoretically leads to a wonderful world, once you try it out in reality, you could possibly get something very different.

    If I had Bernanke’s job, I wouldn’t be doing what he is doing. But then anyone holding that job & doing something other than what he is doing would likely be asked to resign soon.

    • mario cavolo October 16, 2012, 11:23 am

      Thanks for sharing your thoughts Jill!

      With “Try 30% unemployment, 100 million on food stamps and the associated descent into social chaos– which is where we would probably be right now if the unsupported S&P were back at the ominous 666 figure.” ….my intended meaning is to suggest there has been “some” benefit from the supportive monetary policies, that if they had NOT done it and the stock market companies had not been supported and gone up as they have, we’d now be in worse economic hell. So many more companies would have gone under, laid off hundreds of thousands more people, etc. I base this point on my understanding that when the 1929-30’s depression hit, they tightened credit and that made it worse and they shouln’t have. BUT these are just points and musings for discussion, I did not deeply study the matter nor am I an economics guru, so I don’t know I’m right. Many would say it would have been better to leave the markets alone to cycle up and down on their own.

      Cheers, Mario

    • Robert October 17, 2012, 12:47 am

      “If I had Bernanke’s job, I wouldn’t be doing what he is doing. But then anyone holding that job & doing something other than what he is doing would likely be asked to resign soon.”

      -If Ben Bernanke had any character- he would have already resigned long ago (like right after he said sub-prime was “contained” immediately before the whole thing went into a tailspin)

      These goons are so beholden to the system of corruption that they will maximize the common pain and misery index before they will admit that they are part of the problem and simply go away…

  • mava October 16, 2012, 4:42 am

    I can’t believe what kind of flaperoo I am reading on RA forum. Mario, no offense, but you don’t understand anything of all you wrote about. Stick to piano?

    And so many support this flaperoo!

    So, you are asking “Who’s to Blame for Death of U.S. Middle Class?” LOL!

    The democracy did, and it ain’t done yet. Because, as you all can see, most of you aren’t even nearly smart enough to make decisions.

    So, go ahead and cut another vein on America. So, that you can turn around later and ponder: “Who’s to Blame for Death of America?”

    I too, however like Ben Bernanke. I like him because he is destroying the FED, and the regime of the irredeemable game-points with it. One couldn’t have ask his enemy for more.

  • Anthony F October 16, 2012, 2:25 am

    The Real Republican agenda exposed (Gary Null website link)Monday, October 15, 2012 8:24 PM
    Forget about the debates… this is a better analysis…
    (I was waiting for this! )
    Enrich Billionaires at the Expense of Everyone Else…

    http://www.garynull.com/home/the-real-republican-agenda-exposed.html

  • BIG-BEAR October 15, 2012, 9:08 pm

    ok, back from happy mr. magoo mario’s ‘la-dee-da’ land.

    (wonder is this guy’s face matches t-shirt ‘smiley face’, in movie ‘forrest gump’).

    ok.
    after -trying, and failing- reading entire mario’s
    …article today, I felt like alvy singer,
    when he visited annie hall’s family home for 1st time—
    and specially, her suicidal brooding brother, duane:
    “Right. Well, I have to — I have to go now, Duane,
    because I, I’m due back on the planet Earth.”

    ———-

    only thing I agree with mario, is insider-pawn bernanke, is totally meaningless.

    bernanke is not at fault, for what he does. he just agreed, to play this role.

    he wanted to be part of 1% that ran world, so he was told what he would do,
    and he said, yes, I just want to be a powerful superstar, just like you all 1%ers.

    and so, he was given his 1% insider-bosses’,
    top ‘you-do-or-die-bennie’ agendas—

    1. save big banks, no matter what.
    destroy whomever, but save big banks.

    2. once the big banks are saved,
    then,
    feed them as many billions $ as possible, every day.

    and again, screw everybody except them, for bigbanks are us.

    so, get rid of their debts, bad mortgages, and pass them on to sheep populace.
    they’re now weak sheep anyway, they’ll accept whatever crumbs we give,
    weeping in thanks, believing we’re ‘trying to save them’–while we roast them.

    3.
    this is u.s.a.’s endgame, like roman empire was. designed as such for 2 centuries.
    so there’s no escape from this, there’s just extension after extension, in order
    to milk system long as possible, for ourselves, and loyal followers, like you.
    (bernanke here licks his 1% master’s feet appreciatively, to be -so- included).

    and when this megafraud ends (1% master continues), no one exactly knows—

    however, little bennie,
    you milk it for as long as you can, for our bankster crony friends, or, little bennie–
    you don’t want to know, what’ll happen to you, if you are so stupid, to not do.

    ————–

    thomas jefferson, constitution creator,
    and only north american I respect, said–

    “I believe that banking institutions
    are more dangerous to our liberties
    than standing armies.”

    ———

    so listen up, u.s.a. ‘superiorly entitled’ punks.
    there is zero escape, from current world situation.

    IT’S DEFLATIONARY DEPRESSION, DEAD AHEAD.

    could tell you million things more, what is happening worldwide,
    how switzerland and nato are trying to strengthen and train their armies,
    to deal with the soon forthcoming eu riot insurrections, in all eu nations,
    how all technical and sentiment bells are tolling, with uber-bull numbers,
    not seen since sleepy over-assured 2007, yet–you all would continue asleep.

    I am dead serious. buy tons of bullets, best barter item, better than gold, soon.
    door to bullets, guns will be closed soon in u.s.a., specially if obumba returns.
    so pray u.s.a. stockmarket crashes before elections, that way, obumba won’t win.

    romney is no panacea, he’s also 1%; yet, due to his republican pseudo-mandate,
    he will slow down the obumba accelerated move to totalitarian comunism,
    and help more the WORKING, STRIVING, family middle-class american,
    than current pres. ape, that is solely catering to his fellow free-loading apes,
    thus maybe, just maybe, america, the true america made by white europeans,
    won’t revert back to gorillas, and create new version of movie– ‘planet of the apes.’

    • Sam October 16, 2012, 11:41 am

      Hey BIG-BEAR,

      Nice to read your thoughts once more.

      As you state: It’s deflationary depression, dead-ahead. Too true.

      How could we doubt our ‘dear leaders’ sincerity? BB famously said he would ‘drop dollars by helicopter’ and has gone to some lengths to prove it. We have some 4 trillion of assets to be shed in Europe in 2013. US deficit is also over 4 trillion in 2013. No way are ‘austerity measures’ going to hold it back. They won’t pull the plug on the global economy – not yet – not unless it gets pulled by some arch enemy of the elites (who also does not want to see society collapse, as any enemy who has the power to pull the plug, is also part of the corporate elite)

      Twitter feed from Jim Rickards: “Here’s #Dudley speech where he says #Fed will not be “hasty” to remove stimulus http://bit.ly/RLQuee . Translation: Inflation – yeah baby!!” I expect many, many trillions down the road we would have just about kept up with deflationary pressure and then – suddenly – there may be a very real chance of hyperinflation.

      Just my two cents.

      Sam

      P.S. in the UK there are no guns or bullets (thankfully) although with the gang violence I see, there may be significantly more of them (albeit illegal weapons) appearing as things deteriorate further.

  • Jill October 15, 2012, 9:00 pm

    BTW, Nonplused, nothing happened to the idea that the “free market” could best price wages. That’s why wages are stagnant– because most folks believe that propaganda, all the way to the poor house.

    That’s the biggest reason I see for our problems. That propaganda works. There is an article on how well it works here– how incredibly easy it is, with enough money to research & spread propaganda, to convince people to act contrary to their best interests.

    The Lie Factory: How politics became a business

    http://www.newyorker.com/reporting/2012/09/24/120924fa_fact_lepore

  • Jill October 15, 2012, 8:54 pm

    I don’t believe that the “free market”, if there is such a thing, is some kind of magic genie lamp or magic wand that gets everything right.

    And government regulations and taxation could not possibly be the reason why companies don’t spend their cash. Corporate taxes are at a generational low & corporate regulation– at least on the huge corporations–is less than it was years ago when companies did spend their cash.

    The “free market” seems to be a concept now favored by huge corporations who actually practice crony capitalism and who own & control the government. In an actual free market, without their ownership of government in order to slant everything their own way, they would have been out of business a long time ago.

    One problem we have in the U.S. is that our values of individualism & self-sufficiency are taken to extreme. I value these too, but one can go overboard & end up denying the power of many people banding together to solve common problems. People think they have to do everything alone. But an individual can not safely go to their crony capitalist employer who controls the government & most everything else that they want to control, & demand a raise. They would simply be fired. They have to be a member of a union.

    But most workers can’t be members of a union now. because most unions have been destroyed. And corporate propaganda has been successful at convincing people that unions are a bad thing. According to the propaganda, the free market should not have unions. It should only have crony capitalist CEOs “earning” many millions of dollars per year for nearly bankrupting the entire economy in 2008 and continuing to act in ways that will likely bring that about again. And in the “free market”, apparently it’s fine for the crony captialists to own the government, which does the crony capitalists’ will.

    Although the “free market” is not supposed to bail out these banks, it ends up doing so anyway, to keep the TBTF’s from wrecking the economy totally. Because in “free markets” governments are not supposed to have the power to break up TBTF banks– or at least that’s what the successful propaganda says.

    • Buster October 15, 2012, 11:08 pm

      Nicely put Jill.
      That’s the point…..it’s just a free market on ‘their’ terms, which isn’t a free market at all, is it?. The main point to a real free market is that it allows people to make their own choices. Crony capitalism ties everyone up in rules devised to favour some feckless or greedy ahole somewhere, & doesn’t provide what society wants or needs. The free market is dead!
      You can’t even have a garage sale or trade vegetables with your neighbours without a swat team turning up!
      Thats the reality behind the grinning faces & BS cliches from our authoritive sounding polititions.

    • mario cavolo October 16, 2012, 11:17 am

      Even in free markets, again I can accept the idea of govt bailouts when supposedly deemed “needed”. Hell, subsidies, such as farmer’s subsidies are just as bad really. As above, but such money given to them from public coffers should come with a stringent list of matching / requirements on the folks receiving the money. That’s not happening.

      Cheers, Mario

  • John Jay October 15, 2012, 7:26 pm

    Chuck,
    Exactly.
    When I graduated college in 1972 my student loan balance was 6k for the four years, and I paid it off on schedule.
    Back then when gasoline was $.20 a gallon a $200 a week job gave you a decent lifestyle.
    $200 a week was $5 an hour.
    Gasoline has gone from $.20 to $4 a gallon since then.
    That’s a 2000% increase in 40 years.
    2000% of $5 an hour wage would be a wage of $100 an hour.
    That would be the pay for the top 2% of Americans now.
    What we instead have is an economy of $10 an hour jobs, or call it $15 an hour to be generous.
    $15 an hour is a 300% increase from the $5 an hour of forty years ago.
    2500% increase in gas prices.
    300% increase in wages.
    Pick an area, college tuition, health insurance, house prices, auto prices, postage stamps, and you get the picture of what Inflation and stagnant wages have done to us over time.
    This opening verse from an old “Grateful Dead” cover of “Dupree’s Diamond Blues” expresses the reality today’s young people face:

    When I was just a little young boy,
    Papa said “Son, you’ll never get far,
    I’ll tell you the reason if you want to know,
    ’cause child of mine, there isn’t really very far to go”

    • Jeff Weinstein October 15, 2012, 11:56 pm

      I’d say part of the problem in regards to the low hourly wage jobs is the types of degrees people are even going for in the first place. I got a computer science degree and it’s made me, let’s just say very comfortable. I know that in my line of work there is a major demand for comp. sci majors, so much so that salaries are on par with the tech bubble at some firms (Google, Amazon, etc).

      I think a more important longer term problem in addition to the cost of college is the types of degrees people are pursuing. Math/engineering related disciplines pay a much higher wage than psychology, English, etc. Here in Seattle there’s a massive demand for computer science/engineering, chemical/biological engineering, and various other engineering disciplines that’s not being filled because there’s not enough talent. I think the disparity between high and low wage earners is just going to continue to widen if this keeps up. Combine that with say an out of state or private school tuition and things will be in some nasty shape.

      Also Chuck, if you’re interested in a cost comparison, for me in 2002 when I graduated it cost about $25k a year out of state at UCSD. For my roomate who was a CA resident it cost him about $4k (this is just for tuition, no books/housing/etc).

      &&&&&&&

      Software engineers finished #1 in a WSJ survey of the 200 most desirable jobs (with journalism dead last). High starting pay, flexible work hours and plenty of demand were among factors considered. Actuaries, nurses and human resource administrators all placed in the top 10. RA

    • mario cavolo October 16, 2012, 11:14 am

      Great point Jeff,

      As the trends and technology developments are changing the word we live in, a job as “buggy whip” maker or “VCR” repairman are no longer needed. These changes are a bitch! People have to reconsider what areas of qualifications they need to develop in order to make a living, have a stable career. Its a big problem as more and more people who still need jobs have less and less choices of gainful employment.

      Cheers, Mario

    • Robert October 17, 2012, 12:43 am

      “Software engineers finished #1 in a WSJ survey of the 200 most desirable jobs”

      Should have read:

      “Experienced, qualified Software Engineers finished #1 in a WSJ survey of the 200 most desirable jobs”

      There are precious few Software Engineering positions available for raw graduates… in fact, most companies are no longer bestowing the Software Engineer or Systems Architect job titles on anyone with less than 5 years experience in the IT workforce.

      College grads can expect to be hired as a pager wearing, 24×7 on-call System Support Analyst, where they have to prove their technical mettle, before they get any chance to break into more lucrative IT positions.

  • nonplused October 15, 2012, 6:15 pm

    Wow. What ever happened to the idea that the free market could best price wages?
    I don’t want to address what happens at the executive level; we all know that it is corruption 6 ways to Sunday. So let’s leave the criminal CEO’s out of the discussion for now (nobody is worth $10,000,000/year, not even elite athletes, and CEO’s contribute a lot less than they say they do).
    Talking about just the rank and file, how do we come to a free market opinion that companies are “obligated” to pay them more? Should we argue also that consumers are “obligated” to pay more for goods and services in order to facilitate these higher wages? And if so, haven’t we just gone full circle? How is anybody ahead? You can double my wages if you like, but if I have to pay double for gas I am actually behind after taxes.
    What should happen is the companies should distribute or spend the cash as they see fit. It won’t be horded forever. Sooner or later it will go into capital investment or be distributed as dividends, or be used to retire debt. Whichever path each individual company chooses, the money will return to the economy. At that time the economic activity should increase labor demand and thus put upward pressure on wages.
    The real question we should be asking ourselves is “why don’t companies invest the money?” Isn’t that what the wily CEO’s are being paid $10,000,000 / year to do? Maximize return? Well, if they think the maximum return they can get on the cash is to leave it in cash, that says something.
    In a world of negative real rates, maybe there is nowhere to invest at a positive return that hasn’t already suffered overinvestment via excess leverage?
    Maybe regulation and taxation has finally reached the point where the corporate world has finally thrown in the towel. Maybe they just can’t do business anymore, so they won’t. Maybe Obamacare was finally a bridge too far, and there is nothing more corporate America can do besides sit idly by as they are bleed to death and finally close the doors for good? You can’t have a milk cow and eat it too.
    Maybe the political risk that some procedure like fracturing that an industry has been doing for 60+ years is suddenly going to be politicized is just too great?
    Maybe it has finally gotten to the point where it just isn’t worth it to bribe all the politicians, obtain all the permits, push through all the hearings, bribe all the environmentalistas, pay all the taxes, pay all the insurance, allow for all the political risk, and so on that we’ve literally just suffocated the golden goose?
    These are just some ideas, I don’t know why the corporate world is hoarding cash, maybe it is different for each company. But I do know if there was a better spot to put the money, the board of directors has a responsibility to fire the CEO if he doesn’t get busy. But yet, he’s not fired. What does that mean?
    But arbitrarily just giving everyone a raise? The market decides wages. Unions can distort wages, but usually only with government support, which is why most successful unions are either representing civil servants (which should be a crime) or in government sponsored industries. (Rail, auto, air, etc.)

    • mario cavolo October 16, 2012, 11:11 am

      Right and thanks for your ideas! Ok, so if they don’t have any place to invest it, what degree of obligation do they have invest it by distributing it into the hands of their employees at a ratio that is the same as in the past? Then that money will make its way back into the economy rather than sit on their books earning nothing anyway. That’s the point, wages have stayed the same while a company has achieved record profits and is hoarding the cash, while their purchasing power has declined. A private sector COMPANY makes those choices, not the market and nothing to do with the government at all. They have made the choice to hoard cash, keep record profits, overpay their executives, but are they or are they NOT distributing enough of it down to the wage earners in the company?

      Cheers, Mario

  • DG October 15, 2012, 5:51 pm

    Thanks, Mario.

    I think blaming corporate greed is silly. I think that is like blaming a lion for being hungry when eats a lamb. “if the lion just were not so hungry…”Greed is not necessarily good, but it IS. It is human nature. It is horribly destructive when it is allowed to be nurtured and controlled by folks who are likely sociopaths….like those that are at the helm of the system: the corporate operatives, the lobbyists, and the politicians. It is not greed, it is the system. Congress should have an approval rating of 3% from corporations and 60% from the people. It should be a very confrontational relationship, with congress constantly representing the property rights of the people. Instead, Congress and the so-called regulatory bodies are generally all on the same boat as the corporations. The pay is much better.
    Corporations thrive on the tax code. Income is punished and capital gains are encouraged. I am a stark raving mad capitalist. The current capital gains tax code encourages investment in the next new thing, with an exemption of all capital gains tax for angel and vc investment…..but, I don’t think it benefits mankind to treat the stock of Berkshire or Coca-Cola the same as a start-up that is creating new disruptive technology. All Coke will do is force executive pay to be treated as long term capital gain and encourage them to seek more profits by carving up the cost structure (off-shore, cheaper sources of sugar, etc.) Nothing that benefits the system, just the management.
    The tax code needs to change.
    Regulators need to really regulate, not facilitate corporate interests (BTW, the argument that there is too much regulation is partially true…..take the tax code -it has so many holes in it that the thousands of GE accountants and lawyers can whittle it down to little benefit for everyone else and maximum for them – the regulation has back-fired. We would be better off with ZERO regulation and a wild west of buyer beware….as it is, you feel protected, but your feeling is a pretty veneer on an ugly reality – example: more people die from FDA approved meds than illegal drugs…more people OD on prescription drugs in America than die in car accidents! We are from the govt and we are here to help. huh? Over 20,000 people die each year from OD-ing on Oxycotin and other derived opiate painkillers than heroin! Marijuana OD’s are zero. Yet the protective govt will administer the Oxycotin through medicare and incarcerate you for smoking a joint!!! It is nuts. (I have been told by my local police buddies that oxycotin, approved by fda, facilitated by medicare, is often the precursor to teen use of heroin….??? more nuts!

    The meme that “we just need more government” is flawed. The current system does not work and making it “more” would make it just a larger flawed system. The meme that “if we could just eliminate human greed” is unrealistic.

    What we need is government that is not an agent of the corpotacracy. It would be leaner and much meaner. It would not “help” citizens or corporations, but it would protect and serve citizens. There would be a DOJ that was divorced from corporate interests. A tax code which was simpler, and flatter would hopefully encourage corporations to focus more on quality and less on bean counting, and the income statement would shine bright light on money mismanagement and waste.
    Oh, and Ben Bernanke is an agent of, by, and for the banks. And if consumers have had any benefit, it pales to the benefit the banks have received…..and my 2c on that is that the entire bailout of the banks was so the bankers could be victors, thereby avoiding the “warcrime tribunals”. No failures, no criminals….it is a joke….and the man on the street is the punchline.

    • mario cavolo October 16, 2012, 11:05 am

      Thanks much DG… a government that serves and protects its citizens sounds lovely, would move there in a heartbeat…

      Cheers, Mario

  • RichardB October 15, 2012, 5:26 pm

    Interesting take on things. Are you also of Fabian bent? That philosophy has been operating for well over 100 years with consistent fruits. If you plant a fig, you will get a fig tree.

    Pogo said, I have seen the enemy and it is us. The middle class dream (and it was always a dream for most) works because the average voter is too stupid to vote reliably. Power corrupts and absolute power corrupts absolutely. The greed in the hearts of joe-average turns inward. (None of us think we are average BTW! Ask yourself if you are making more than the median income. If so, you are the rich you rail against!)

    I will be OK but I wonder about my beautiful 1 year old granddaughter and what she will say when she is my age. Shame on us all!

    • mario cavolo October 16, 2012, 11:03 am

      Hi Richard, thanks much,for me its my one year old boy Vincent. What a joy and lightning rod to make me figure out what the hell I can do about the future for him…Cheers, Mario

  • John Jay October 15, 2012, 4:16 pm

    Mario,
    Lots of good points and I have said before that ZIRP is better than collapse.
    But ZIRP has only delayed the collapse, it is still going to happen.
    The corporate takeover of the US Government means the delay will be used by the oligarchs to unload the last of their bogus MBS paper at par to the Fed.
    When the US Dollar finally gives up the ghost, the oligarchs will orchestrate it, and will come out on top.
    They will direct the switch to the replacement currency and come out on top when that happens.
    The only thing that will change is how they count their wealth, instead of being worth so many billions of “Dollars” they will now be worth so many billions of “New Currency.”
    As far as what destroyed the US Middle Class, the simplest way to look at is that Inflation destroyed it.
    Post JFK every President and every Congress did nothing as silver coins were pulled, the Gold backed Dollar of Bretton Woods was pulled, and the government lied more and more to the electorate about what was happening to them.
    The Middle Class started running faster and faster to stay in the same place.
    People started taking second jobs, everyone’s Mom went to work to attempt to keep up.
    The American Family began to slowly disintegrate.
    Casino Gambling and State Lotteries suddenly appear.
    The debt explosion began to compensate for the shrinking wages, Credit Cards appeared for the masses.
    When wages started to go up due to competition for workers, that was stopped by the oligarchs real fast.
    Manufacturing was sent off shore, the Immigration laws were changed, and Open Borders and Free Trade commenced.
    If you seek the legacy of US Inflation look around you.
    Anyone of us over 55 0r so remembers the days of $20,000 houses, $2,000 cars, $.03 postage stamps and $.20 gasoline.
    All this was replaced by the Petro Dollar, oil embargoes and gas lines.
    Defined pension plans were looted by Corporate Raiders and the 401K was born.
    The oligarchs gamed the Inflation and FIRE replaced manufacturing.
    When it started to implode, the Greenspan Fed started looking for excuses to implement low rates to create bubbles.
    Y2K, Dot Com bubble, Housing bubble, right up to Ben Bernanke and ZIRP forever.
    Economists can write lengthy tomes stuffed with charts and equations to account for what has happened to the former US Middle Class, now the US Muddle Class.
    But just apply the KISS principle to it all.
    It was Inflation.
    Inflation is the elephant in the US economy that the Fed says is “contained” and “transitory.”
    It is neither of those things.
    The Fed ignores the accumulated effect of almost 50 years of Inflation enabled by their Fiat Currency and a Debt Explosion.
    Real wages started shrinking around the 1970s or so.
    The result, no more Middle Class here, just debt junkies squatting in the ruins of our once World Leading Economy.
    And, more and more, young Americans who have no idea of how things used to be here before the Great Inflation.

    • Chuck October 15, 2012, 6:59 pm

      I paid my way through college…..can you imagine what these kids have to deal with to get a college degree. No wonder most of them give up before they graduate. in 1983 Maryland state schools where under $1000 a semester for full tuition…..books and room/board separate of course. What else has increased 7 or 8x?

    • jazzmaniac October 15, 2012, 7:45 pm

      Exactly, John Jay. It’s been a slow motion train wreck that has proceeded imperceptibly at times and with great acceleration at other’s. Now as we approach final impact it’s becoming apparent to all that the game is up.

    • mario cavolo October 16, 2012, 11:01 am

      Spot On JJ, it hurts to read it…

      Cheers, Mario

  • Andrew Gutterman October 15, 2012, 3:04 pm

    Mario,

    Interesting viewpoint. I do not disagree with the corporate hoarding concept, but I think you are missing much larger issues that are currently impacting society and the economy. Two of them come to mind:

    1. Debt. Private debt is at an all-time high, both in relative amounts and any ratio to the economy you want to use. We’ve been here before, and the solution to this problem is not pretty in most modern economies.

    When debts cannot be repaid you get debt defaults. Paying higher wages won’t help the economy because any extra funds the consumer gets their hands on is mostly going to pay down debt. And even with that there is not enough cash on corporate balance sheets to do much of anything about the debt. Most of the middle class and below are maxed out. Asset values falling, debt rising is a formula for disaster. Its only a matter of when, not if.

    An interesting solution is one that has been tried multiple times over the last 6000 year. Yes, debt overload is nothing new.

    Been there, done that: http://tinyurl.com/9h5yz7o

    How to implement such a program is something for another discussion.

    2. Demographics. Baby boomers are in retirement mode. We are either trying to retire or are trying to hold onto jobs so we can pay the bills while we hope to retire eventually. There are 80 million of us doing that. This is putting downward pressure on the economy because we have stopped increasing debt to buy things. All we want to do is downsize, downsize, downsize. Hard to do if the value of the McMansion is less than the debt owed.

    Add to that the anemic growth or even outright decline of the labor force. A growing labor force is what really propels economic growth. Witness the labor force growth of the 70’s and 80’s and what that did for the economy. Ditto for China. Growing labor force translates into more demand.

    Demand today is static to falling, hence the 1.3% GDP numbers, which are probably wrong anyway. I think we are going to slide into another Depression no matter what Washington does. And Benanke? Nothing he can do about it at all, other than make the eventual recycling of the economy much worse.

    Got to go back to work for myself. Don’t have a stash of cash to pay myself more money, have to work for it.

    Andy

  • Buster October 15, 2012, 2:21 pm

    Some good points there Mario. I think the documentary ‘Capitalism-A love story’ by Michael Moore paints a similar picture. (-although I think it should have been named ‘Corporate Fascism-a love story’, as we’ve seldom really had free market capitalism IMHO, & let’s not forget that it’s only been by controlling government that this corporate dominance we are suffering under has taken shape.)
    So I would be wary of trying to oversimplify the situation. There are many dots that connect all the other possible answers that you cite, plus a lot more besides. Being someone generally psychologically predisposed to finding what is wrong with any situation, rather than what is right (naturally negative you might say), I feel well qualified to say that the whole bloody lot stinks!! Personally, I think it is safe to say that if a powerful, wise & just being with compassion for the whole human race came down to Earth from on high to sort the whole mess out they’d have a field day. I don’t think much of our world system would escape the chop.
    It all boils down to a just judicial system being necessary to prevent predatory characteristics in man from ruining the purpose of life for everyone, ie. Happiness.
    That’s as far as I can see, anyway, ….& I think that is the correct simplification.

    • mario cavolo October 16, 2012, 10:58 am

      “It all boils down to a just judicial system”

      This is where I am MOST pissed off at the current scheme of things. I can live with the leaders deciding to support the banks, QE in a reasonable way for important reasons. What is DESPICABLE is how they offer it without specific cutback requirements. If my billion dollar pizza company got run into the ground due to bad investment choices, and the govt deemed my pizza restaurant chain such a high core need in the society, they might decide to bail me out with what is ultimately taxpayer money. Ok, fine. BUT if my salary as owner and operator was 1.5 million and they did NOT ask me to take a HUGE pay cut as part of the deal to save my ass, as I said, that’s DESPICABLE. That cuts right to it.

      Cheers, Mario

  • Tech-trac October 15, 2012, 2:15 pm

    To wit
    a study done a few months/years back revealed that the last time corporate profits slid 90% it took 30 some years to return to that peak level.

    This cycle it took corporate America less than 2 years to accomplish.

    ” Show me the $$$ !” seems like a reasonable demand but we know where it is alright but lack any leverage in prying it away from our corporate masters.

    Declining union membership can be overlaid onto govt measurements of the Wage & Compensation component of economic statistics. and we’re covering decades not political cycles.

    and yet unions are viewed by the majority of Americans in an unfavorable light.

    I thought once the blue-collar workers wre thinned and decimated during the Post Industrial Rust-belt of the 80’s that white collar workers would be shocked & sympathetic to their fellow Americans & come to their defense but it never happened.
    In this new century, the raid on the labor whorehouse has come for the rest of the whores and herded them into the paddy wagon.
    It’s irreversble now. Demand more $$$? How through strikes? Get real. Americans can probably never experience an “Arab Spring” style reaction. 9/11-#2001 has seen to that.

    • mario cavolo October 16, 2012, 10:53 am

      I’m not sure on your “how” question. As I asked, if the workers of a certain company gathered together to demand or walk out, could they be replaced with qualified workers? Here in China, the answer is NO, and that is why salaries are on the rise. All the qualified people are employeed, have zero loyalty, switch jobs often for pay raises and more experience with a new company on their resume. Job hopping every 3 years is regarded as smart strategy here and the demand is higher than the supply of qualified managers.

      Cheers, Mario

  • Wayne Siggard October 15, 2012, 9:50 am

    Don’t listen to the media? You’re darn right. The media is full of praise for Ben Bernanke. If he had any cajones, he would raise the interest rate to 5 per cent and incentivize savings instead of spending. We seemed to do just fine in the ’50s and 60s with high savings rates.
    Force businesses to spend $2trillion in savings on wages? You seem to forget that the government pisses away that much in a little over a year. Anyone who isn’t putting away a little savings will find out the consequences really soon. That amount is a pittance, and any business that doesn’t have some capital in reserve will not be here in a year. There is a reason that business owners are sending messages to their employees that if they vote for Obama, they are voting themselves out of a job. Did W do a good job? Heck no. He spent 300billion, which turned out to be 1.3trillion, and why? So he could take the drug benefit off the table as a Democrat talking point. Corzine is not even being investigated for stealing 1.2billion of client money because he is an Obama bundler.
    In Arizona, Obama shipped OSHA inspectors from the NE to Arizona because the Governor wagged her finger at her. As a result of the new rules, the increase in residential construction costs has increased 15% with no concomitant rise in productivity – just extra make work.
    Will Romney do any better? I can only hope he is lying to us, because attrition is not fast enough. We need to lop off the take of the government to 20% overnight and pay the consequences. If we wait to pay later, the price will have compounded to a point we can’t pay it.
    Unions as the answer? Look at SEIU. Pay twice the private sector with benefits, and who on earth can claim that government service is better than private industry?
    The future is here now in California. With tax refunds paid in vouchers you can’t cash, what do you think is going to happen when welfare, rent subsidy, child care subsidy, food subsidy, free cell phone, and other subsidy checks won’t clear the bank – coming soon. The state is just waiting to see if Obama gets elected and can send them 30 billion to bail them out. This time, South Centralites won’t be going to Koreatown to steal a TV when the store owners are waiting with shotguns, they’ll head two miles further to Beverly Hills. You can guess what will happen then. Conflagratory chaos. Hope is just about gone. Prayer may be all we have left.

    • mario cavolo October 16, 2012, 10:50 am

      Hi Wayne, thanks, I suspect more and more Americans in the future are going to be obtaining the goods they need with some form of paper or credit which is not a USD.

      In fact, here in China, medical benefits are often in the form of employees given a medical “credit card” with a monthly amount they can spend as they wish at any pharmacy or hospital. Many pharmacies are more like grocery stores where a variety of home sundries can be purchased; soaps, shampoos, OTC medicines, balms, etc. but also other foodstuffs including some drinks, snacks, teas…

      Cheers, Mario

  • DarkestKnight October 15, 2012, 7:38 am

    Mario, Mario, Mario -Minchia!

    You are correct in saying that the position USA finds itself in today is not to be blamed on BB.
    Yes, everyone has a part of it, from Clinton repealing the Glass-Steagall, to corrupt & selfish corporate America, to the householder using rising house prices to fund a lifestyle they really could not afford.
    I do have a smidgeon of sympathy with BB & Obama, as the right thing to do would likley have been political suicide. Giving the big finger to the banks ala Iceland; initiating a wave of financial chaos & disaster. Now THAT would have taken real balls.
    But these two buffoons have simply magnified the inevitable looming disaster many fold. By which time it will be someone else’s problem.
    Privatising profit and publicising debt cannot be the right path, neither morally nor financially.
    $16 trillion deficit?…sshhhh.

    • mario cavolo October 16, 2012, 10:46 am

      Thanks Darkest Night, hey I had to look it up…

      minchia [ˈminkja]: Italian – the same meaning as cazzo (penis) but notably a feminine name, it originates from Sicilian language;[10] nowadays it is common anywhere in Italy, where t is also used as exclamation of surprise, or even appreciation. It is used in the expression “testa di minchia” (see testa di cazzo).

      minchia f
      1.(slang) dick, penis
      2.An interjection often used to mean surprise, disdain or appreciation. Minchia! Mi futteru la màchina! My God, they stole my car!
      3.(slang) A stupid person.

      Cheers, Mario

    • Sam October 16, 2012, 11:56 am

      Minchia – LOL

      A southern Italian friend of mine told me about this word. It’s used a bit like ‘Caralho’ in Portuguese (means much the same thing and is used in the same context)

      Here’s Zappa’s take on it: (‘Tengo na Minchia Tanta’ “I have a big ‘Minchia’ – you can use it on a chicken”) http://www.youtube.com/watch?v=d–nSm-wshk

      Sam

  • Jill October 15, 2012, 7:24 am

    Wow, Mario. Fascinating article. Most articles about the economy, I feel like I’ve read all the ideas before. But this is unique. Thanks so much for contributing it.
    It gives me a lot to think about, & I will probably comment further when I have had a chance to think it through.

    My first thought is that perhaps Americans are at least as passively submissive to authority– at least at work— as anyone in some country whose citizens we may think of as being beaten down by an authoritarian regime. Although we may express outrage against the government at every turn, as consumers & employees, we constantly bend down & kiss the feet of our corporate masters.


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