America’s Descent into Poverty

Originally published on Paul Craig Robertsrusted US flag

The United States has collapsed economically, socially, politically, legally, constitutionally, and environmentally. The country that exists today is not even a shell of the country into which I was born. In this article I will deal with America’s economic collapse. In subsequent articles, I will deal with other aspects of American collapse.

Economically, America has descended into poverty. As Peter Edelman says, “Low-wage work is pandemic.” Today in “freedom and democracy” America, “the world’s only superpower,” one fourth of the work force is employed in jobs that pay less than $22,000, the poverty line for a family of four. Some of these lowly-paid persons are young college graduates, burdened by education loans, who share housing with three or four others in the same desperate situation. Other of these persons are single parents only one medical problem or lost job away from homelessness.

Others might be Ph.D.s teaching at universities as adjunct professors for $10,000 per year or less. Education is still touted as the way out of poverty, but increasingly is a path into poverty or into enlistments into the military services.

Edelman, who studies these issues, reports that 20.5 million Americans have incomes less than $9,500 per year, which is half of the poverty definition for a family of three.

There are six million Americans whose only income is food stamps. That means that there are six million Americans who live on the streets or under bridges or in the homes of relatives or friends. Hard-hearted Republicans continue to rail at welfare, but Edelman says, “basically welfare is gone.”

In my opinion as an economist, the official poverty line is long out of date. The prospect of three people living on $19,000 per year is farfetched. Considering the prices of rent, electricity, water, bread and fast food, one person cannot live in the US on $6,333.33 per year. In Thailand, perhaps, until the dollar collapses, it might be done, but not in the US.

As Dan Ariely (Duke University) and Mike Norton (Harvard University) have shown empirically, 40% of the US population, the 40% less well off, own 0.3%, that is, three-tenths of one percent, of America’s personal wealth. Who owns the other 99.7%? The top 20% have 84% of the country’s wealth. Those Americans in the third and fourth quintiles–essentially America’s middle class–have only 15.7% of the nation’s wealth. Such an unequal distribution of income is unprecedented in the economically developed world.

In my day, confronted with such disparity in the distribution of income and wealth, a disparity that obviously poses a dramatic problem for economic policy, political stability, and the macro management of the economy, Democrats would have demanded corrections, and Republicans would have reluctantly agreed.

But not today. Both political parties whore for money.

The Republicans believe that the suffering of poor Americans is not helping the rich enough. Paul Ryan and Mitt Romney are committed to abolishing every program that addresses needs of what Republicans deride as “useless eaters.”

The “useless eaters” are the working poor and the former middle class whose jobs were offshored so that corporate executives could receive multi-millions of dollars in performance pay compensation and their shareholders could make millions of dollars on capital gains. While a handful of executives enjoy yachts and Playboy playmates, tens of millions of Americans barely get by.

In political propaganda, the “useless eaters” are not merely a burden on society and the rich. They are leeches who force honest taxpayers to pay for their many hours of comfortable leisure enjoying life, watching sports events, and fishing in trout streams, while they push around their belongings in grocery baskets or sell their bodies for the next MacDonald burger.

The concentration of wealth and power in the US today is far beyond anything my graduate economic professors could image in the 1960s. At four of the world’s best universities that I attended, the opinion was that competition in the free market would prevent great disparities in the distribution of income and wealth. As I was to learn, this belief was based on an ideology, not on reality.

Congress, acting on this erroneous belief in free market perfection, deregulated the US economy in order to create a free market. The immediate consequence was resort to every previous illegal action to monopolize, to commit financial and other fraud, to destroy the productive basis of American consumer incomes, and to redirect income and wealth to the one percent.

The “democratic” Clinton administration, like the Bush and Obama administrations, was suborned by free market ideology. The Clinton sell-outs to Big Money essentially abolished Aid to Families with Dependent Children. But this sell-out of struggling Americans was not enough to satisfy the Republican Party. Mitt Romney and Paul Ryan want to cut or abolish every program that cushions poverty-stricken Americans from starvation and homelessness.

Republicans claim that the only reason Americans are in need is because the government uses taxpayers’ money to subsidize Americans who are unwilling to work. As Republicans see it, while we hard-workers sacrifice our leisure and time with our families, the welfare rabble enjoy the leisure that our tax dollars provide them.

This cock-eyed belief, on top of corporate CEOs maximizing their incomes by offshoring the middle class jobs of millions of Americans, has left Americans in poverty and cities, counties, states, and the federal government without a tax base, resulting in bankruptcies at the state and local level and massive budget deficits at the federal level that threaten the value of the dollar and its role as reserve currency.

The economic destruction of America benefitted the mega-rich with multi-billions of dollars with which to enjoy life and its high-priced accompaniments wherever the mega-rich wish. Meanwhile, away from the French Rivera, Homeland Security is collecting sufficient ammunition to keep dispossessed Americans under control.

Meta: 

Comments

The Third Estate is eating grass and bark - how much longer?

Yes, both parties are political whores that serve their masters as long as they can be rented for their terms of office. The whoring begins when they first think about seeking office, lasts during office, and continues on in lucrative speech tours where they can sell-out even if the tickets aren't sold out (same with bullsh*t book deals - no one reads that crap, and why pay for some ghostwriter's work anyway).

Elections choose who will get rich off the public dime while also getting rich through selling their office. Why choose anyone to get rich through crime, that's not doing us any good. Anyone caught getting rich right before, during, or after their term of office (or friends or relatives or shadow corporations) goes to jail and is then banished like in ancient Greece (or life in prison). Right now we've got traitors making money by selling us out to foreign nations because NAFTA or the WTO or some other deal allows it? Excuse my idiocy, but how is it possible politicians and corporate boards can purposely sell out our national secrets, physical security, and purposely destroy our economic security only to be rewarded with more perks and money? Are we in a battle with drug cartels and Iran? Then shouldn't every single bankster that was caught profiting from our "enemies" be viewed as a criminal, and possibly aiding our enemies? How is that not treason?

If I call myself a politician and get rich off bribes and destroying my nation, is that now okay? Nope, f that. If someone wants to help America's enemies, is that okay if they incorporate themselves with other scoundrels, conduct some legit business on the side, and bribe the right politicians?

We all know the lies and propaganda about somehow the unemployed and 99% are lazy and stupid. I don't see the middle class or poor selling IP to China or destroying factories so wage slaves can make i-crap. I don't see the tough talking CEOs and politicians working for free in internships or outside in all weather conditions to make less than $8/hr. If getting rid of the minimum wage will create prosperity, then why, Stossel and others, are all these interns not relaxing on yachts but instead are relying on foodstamps and unemployment is now worse? No minimum wage = free labor. And the floodgates are now open.

The rule of law is dead. How about everyone is equal before the law - that's what matters in true democracies vs. banana republics. It starts with that. Bribe someone from patrol cop to White House, go to jail or prison. Sell national security out, go to prison - you are a traitor. You lobby/bribe Congress and lie about the lack of available Americans, you must be punished for perjury and go to jail for your attempt to flood us with more improper visa recipients or other foreign workers. You will be a social pariah to the 99% no matter how many "foundations" you set up in your name with ill-gotten wealth. If you are a politician and got rich in office or as a result of serving, you are corrupt, no two ways about it. Truman refused positions after serving because he said they wanted to buy the Presidential office, and it wasn't for sale. Bill, Hillary, and every other politician rolling in dough, why so rich? That money was made on our backs, not because you were busting ass 52 weeks a year in a mine or 50 stories up on a steel beam. Oh, and politicians (except for the Prez and his level), drop the armed guards and intimidation crap in your own country. You know who pulls the "I need armed guards" nonsense? Dictators and officials in completely corrupt countries. It's a sign of weakness. Why are you afraid of your own citizens and fellow countrymen? Why is JP Morgan's corporate board able to donate money to a police force? Conflict of interest says what? Are we that scary to you? You do realize you represent us, right? You serve us, not the other way around. Drop the armed guards, it's ridiculous. You want to be Robert Mugabe, fine, move to Zimbabwe. This is the USA, goons have no place here.

Media - do your jobs. Leave NYC and DC and LA and the Bay Area and visit the people with PhDs and experience in everything from STEM to logistics to the military to the law, to construction, etc. who are now homeless or can't get hired at 40 or know friends and family that killed themselves because they are "unemployable" to HR folks. Colleges and universities promote fraudulent career stats, and now people with skills and education are heavily in debt while administrators make $100,000 - millions of dollars off lies. Check out nursing, engineering, and law for starters. It's not that hard, 27 million people out here unemployed. You might piss off your corporate paymasters like Murdoch or GE, but risk it, show some balls, show some integrity. Be a puppet or be an adult, you can help solve the problem or continue to be less and less relevant.

To the rest of us, well, I look forward to our day. We won't be told to take any job by people who were handed their jobs by their daddies. We won't be told to just suck it up and disappear by people who have contributed nothing to bettering this world but only know how to steal other people's work in their quest for more power and riches. We won't be lectured to by people whose only values are abusing the weak, narcissism, nepotism, and cronyism. They are the ones who should be ashamed of their actions (if they had any shame) because their values aren't America's (the real America, not that espoused on corporate-owned TV or by Mr. Phone Hacking and Police Bribing Murdoch or Ailes on Fox or by GE or CNN). We should take advice from these scoundrels that are literally selling out what took 200 years to build for more wealth, more power? Never.

You must have Javascript enabled to use this form.

both parties are proposing more Visas

It's unbelievable, instead of helping U.S. citizens start new businesses, they want to turn our university system into a glorified green card ATM by giving any graduate, or some proposals limit to STEM or MS and PhD, a green card.

This is when half of new graduates cannot get a job and there are estimated 2 million people with STEM backgrounds who are not being hired or enabled to do start-ups.

I can really relate to Roberts post. I don't recognize America today at all. Images from the real America are basically onto to sell us sugar water and bad drugs.

You must have Javascript enabled to use this form.

3 seconds of business news shows who these politicians cater to

While gulping my anti-nausea medicine, I quickly turned on Bloomberg/Anti-soda bankster TV and saw some oligarch puppet candidate for some office (I think it was the Presidency) talking about fixing (i.e., eliminating) Dodd-Frank. I think he was also talking about lowering taxes for his puppetmasters too. And in the next clips publicly-bailed out oligarchs Dimon and Blankfein were talking about fixing Dodd-Frank. I thought Dimon would be in jail for breaking sanctions with Iran, for bribes in Alabama, and taking money from Corzine during the MF Global $1.2 billion theft, but that was only a dream I once had.

So, that's the oligarchs' priority, and obviously their puppets in all parties. Worrying about the oligarchs' agenda so Dimon can lose $2-$20 billion more on bad swap bets (heads this time, Dimon, heads) and the banking cartel can raid more customer funds, hide more material facts from their customers, and manipulate LIBOR, silver, gold and aluminum while laundering money with no problems. Toss in the word "uncertainty" at least 500 times by these morons of the universe and job destroyers and we're all set for US of Nothing but Corruption.

With close to 30 million people unemployed, this is what these tools focus on. Public servants serve the oligarchs. Glass-Steagall came during the Depression and helped lay the groundwork for financial health. I don't think FDR really gave a crap what the guys who destroyed the economy cared about. And I don't think the media was focusing on their sob stories vs. the migrant farmers and people in soup lines - but now that's all they cover.
Close to 30 million people unemployed, but that's an afterthought to national conventions as oligarchs party on. Really, every politician should be weeping for America and its CITIZENS they swore to serve and taking every second of their days to make sure US citizens can find jobs with living wages. And the media isn't interviewing and talking about the tens of millions of average citizens that are dipping into retirement to survive or are struggling in jobs (or trying to find one) that no one can live on? Don't care about the folks that built Silicon Valley, but what banksters want is important? Maybe to a fraction of idiots, a mere fraction that depended on us to bail their dumb asses out.

You must have Javascript enabled to use this form.

both parties...again

will describe, do "I feel your pain", know exactly what the economic problems are, then turn around and try to sell us snake oil on a host of MNC policy agendas that will only hurt America and the middle class more. It's disgusting.

You must have Javascript enabled to use this form.

Excellent article! Many

Excellent article! Many points are described clearly to open so many blind eyes. However the many blood suckers will continue to rob unscathed.... I believe that people revolt is not too far away. extremist? May be, bu too many are struggling for those corrupted lies loving politicians tha you now till nov, then they do not you ny longer for many years. Poor America,,,, our Founders mus be turning over and over in their graves

You must have Javascript enabled to use this form.

Both parties are so pathetic - today it's Gore's "Current TV"

Happy Unemployment Day aka Labor Day! The struggle continues while those making money through labor arbitrage and corruption will enjoy their weekends in the Hamptons or Tahiti or the Riviera.

Gore's DNC front/Current TV is upset because Clint Eastwood said 20+ million Americans were unemployed. Okay, that's right according to everyone that understands U-3, U-6, BLS numbers, labor participation rates, and reads non-MSM talking points (MSM points brought to you by your friends at the Fortune 500, Koch, Soros, and the RNC, DNC, and PRC). Because they want to help this President and fellow Democratic politicians, of course, unemployment must be minimized. But if that's the case, isn't the GOP House doing well then? But if the GOP House is bad, then unemployment is also bad. Damn it, these inconsistencies! Let's make it easier, they both suck.

Of course Current TV, Gore, Spitzer (equal before the law, including attempts to avoid reporting suspicious activities under US money laundering laws - Morgenthau Manhattan DA failure to prosecute and feds unwillingness - CORRUPT) want it both ways, unemployment is bad, but 1/2 the political puppet show isn't responsible. Yeah, right.

Don't blame NAFTA, or the WTO, or the elimination of Glass-Steagall, or Clinton, or Barney Frank, or Chris "SOPA + movies and banking pay so well" Dodd or Rangel or Pelosi. It's all this party or that party. "Uh, well, I have to be corrupt, the other guy is more corrupt. Oh, sure I destroyed 10 million American jobs, but the other guy destroyed 11 million, so vote for me."

This circus wouldn't amuse a 2 year old, it's predictable, lame, and highly overpriced. And these clowns honestly get paid by us in addition to the bribes they collect? It's safe to say GOP and Democratic politicians are going to be drinking Dom and eating at luxury beachside resorts this weekend with their fake "opponents" and mocking us at every turn. And then the puppet show and phony differences can begin anew for the public's consumption.

You must have Javascript enabled to use this form.

what we don't hear about

offshore outsourcing, bad trade deals, immigration, foreign guest workers and how it all implodes U.S. job markets for U.S. citizens.

We even have a massive amount of spin out there trying to say up is down, the opposite.

I'll have to put together a table like form with policies boiled down to one sentence, comparison/contrast of the one two parties.

You must have Javascript enabled to use this form.

Save your time - it's all 1984 and Goebbels-like now

Save the energy, as zerohedge keeps pointing out, we are in 1984 and Goebbels territory now. Applicable quotes:

"Think of the press as a great keyboard on which the government can play." - Goebbels

"Those who are too smart to engage in politics are punished by being governed by those who are dumber.” -
Plato

"In politics stupidity is not a handicap." - Napoleon

"If you tell a lie big enough and keep repeating it, people will eventually come to believe it." - Goebbels

"In a time of universal deceit - telling the truth is a revolutionary act." - Orwell

"How can we expect fate to let a righteous cause prevail when there is hardly anyone who will give himself up undividedly to a righteous cause?” Sophie Scholl

"The real damage is done by those millions who want to 'survive.' The honest men who just want to be left in peace. Those who don’t want their little lives disturbed by anything bigger than themselves. Those with no sides and no causes. Those who won’t take measure of their own strength, for fear of antagonizing their own weakness. Those who don’t like to make waves—or enemies. Those for whom freedom, honour, truth, and principles are only literature. Those who live small, mate small, die small. It’s the reductionist approach to life: if you keep it small, you’ll keep it under control. If you don’t make any noise, the bogeyman won’t find you. But it’s all an illusion, because they die too, those people who roll up their spirits into tiny little balls so as to be safe. Safe?! From what? Life is always on the edge of death; narrow streets lead to the same place as wide avenues, and a little candle burns itself out just like a flaming torch does. I choose my own way to burn.” Scholl

You must have Javascript enabled to use this form.

Ryan etal

Paul Ryan is a traitor to the United States.
On the evening of January 20th, 2009, Paul Ryan and many other elected Republicans officials, conspired at a Washington DC restaurant for 4 hours.

It was the evening of Barack Obama’s Presidential Inauguration.
Newt Gingrich described the meeting as “the night when the seeds of 2012 were sown”.
During that meeting the Republicans pledged to block and/or filibuster any bill proposed by President Obama that would help the American people.
Paul Ryan and the Republicans have sabotaged America.
Paul Ryan and the rest are traitors to the United States of America!
Mitt Romney said at the Republican Convention that he had had “great hopes for President Obama”. What a phony liar Mitt Romney is.
The Republicans are nothing but disciples of Adolf Hitler who wrote in Mein Kampf , that the bigger the lie the more that the gullible public will believe it as long as you repeat it over and over again.
Fox News is their Ministry of Propaganda.
For our grand children’s sake, we can’t get fooled again…can we?

You must have Javascript enabled to use this form.

The Third Estate is eating grass and bark

Yes, both parties are political whores that serve their masters as long as they can be rented for their terms of office. The whoring begins when they first think about seeking office, lasts during office, and continues on in lucrative speech tours where they can sell-out even if the tickets aren't sold out (same with bullsh*t book deals - no one reads that crap, and why pay for some ghostwriter's work anyway).

You must have Javascript enabled to use this form.

Elena

Kurtz - is there an echo? My words seem familiar to me

I'm glad I said the same exact words a few days ago. They say imitation is the sincerest form of flattery, but my exact words? Oh well, I understand our diet of grass and bark does take a toll.

You must have Javascript enabled to use this form.

30% of NJ Residents Live Below the Poverty Line

A new report called ALICE (116 pages;Asset Limited, Income Constrained, Employed) details the plight of New Jersey's working poor.

http://www.nj.com/news/index.ssf/2012/09/new_report_puts_a_harrowing_fa....

I suggest you look at the report at the end as well as the interactive graphic.

You might there is no engine for growth in New Jersey because there are no apartments. Almost all the apartment complexes in NJ (pick a county any county) are filled with illegal aliens (mostly Indian).

It came as quite a shock when I realized that it would be near impossible for any company to start up in NJ! I am not exaggerating when I say that there are likely no more than a few hundred empty apartments in the entire state. Many complexes are almost 80% Indian (not Chinese, not European, not anything else but Indian). You might note that this justifies the higher NFP employment numbers vs the household survey. Indian computer programmers working illegally in company owned apartments.

This is real, this is now.

You must have Javascript enabled to use this form.