The Permanent Dependency Class

The recent US presidential election found the Republican Party on the losing end of a political and economic argument. It was Mitt Romney’s contention, both privately and implicitly when he selected Ayn Rand enthusiast Paul Ryan as his running mate, that 47% of the electorate was dependent on government handouts and therefore had no intention of voting for any Republican who threatened to reduce government entitlement spending. Mitt Romney after the election “doubled down” on this statement, insisting that Obama voters were bought off by government largesse.

Romney was defeated handily in the public vote – he achieved, ironically, slightly less than 47.5% of the popular vote – and he was thrashed in the Electoral College vote, which is what really matters. These results are being interpreted by the press and the pundits as a repudiation of Republican policies, and a rebuke to Mitt Romney for his perceived insult to Obama voters that they are lazy and, like parasites, live off the hard work of others.

The problem with this view is that Romney was half-right: there is a dependency class in America, and they do tend to vote Democratic. He was wrong on his interpretation of the motives and work ethic of this dependency class. One man’s handout, after all, can be another man’s means of survival. He was also wrong on his campaign promise to fix this situation by creating millions of jobs so that the moochers and parasites will have no excuse but to find work when the entitlement payouts end. Obama was wrong on this as well; no politician can pretend that they have some magic tool to create millions of jobs and return entitlement payouts to more sustainable levels. Not only is this not possible, but as I will contend here, such thinking makes the problem worse. The dependency class in America is growing, and it is here to stay for many decades into the future. It is a consequence of decades of government and business policies that let such an infra-class arise, and it is a consequence of very long term economic and social forces that operate on a global basis and are beyond the control of any one country. The United States is turning into a third world country, complete with vast pockets of poverty and idleness, and a small elite that dominates wealth and income. A dependency class is a prime feature of third world countries, and the political party which most successfully caters to this dependency class is more than likely to enjoy decades of political power.

The Rise of the Dependency Class

The creation of the dependency class can be linked to the oil price shocks of the early 1970s. Up until this point, real personal income followed an upwards trajectory that was in line with productivity, which implies that labor was benefiting from improvements in productivity as much as corporations were. This link was broken around 1975. Productivity continued on an upwards path, but real personal income began to stagnate.

product real wiki

At the time, the productivity improvements were the result largely of the introduction of computers to the work force. Enormous numbers of man-hours spent on simple tasks, such as typing documents, organizing files, tracking sales orders, or managing cash accounts, were freed up for more useful and profitable purposes. As companies began to appreciate the magnitude of the profit opportunities that were opening up, they began to rethink where that profit should go. The long ingrained concept that companies worked to benefit customers, employees, and communities gave way to the idea, pushed aggressively by consultants, that companies should be working first and foremost for the benefit of the shareholders. The cult of the shareholder was born, along with the rather dubious theory that if management concentrated almost exclusively on creating shareholder value (meaning increasing profitability), overall success was assured. Conveniently for management, all this was happening at a time when executive stock options were being invented, which gave management a direct pocketbook interest in boosting the company’s stock price over anything else.

The average worker, who may have received small stock grants but did not participate in the executive stock option program, did not benefit very much from the productivity gains that were feeding into stock market performance and enriching executives. An unprecedented stock market boom, unseen in 200 years of stock trading in the US, began in 1982 and extended until 2000 at an annual growth rate of 16%. The stock market was reflecting the enormous improvements in productivity, enhanced by the “peace dividend” that the US enjoyed in the 1990s when defense spending was reduced as a response to the collapse of the Soviet Union. The stock market boom entered its final spurt upwards in the mid 1990s when the invention of the internet led to a frenzy in technology stocks.

The tech mania came to an end in 2000 with the crash of many of the dot.com stocks. The NASDAQ index, heavy with technology stocks, lost over 50% of its value in one year. White collar workers lost heavily in the market collapse because most had invested passively in the stock market through their 401k plans, which corporations were increasingly offering their workers as alternatives to the traditional pension plan that corporations were abandoning. The dot.com crash added yet another burden to the middle class worker, who was already coping with paltry salary increases and bonuses, plus cutbacks in benefits, that companies were imposing on the work force.

Causes of Dependency

If the stock market had been booming up until 2000, and if the economy had been growing healthily all throughout the 1990s, why was worker compensation stagnant? There was of course the fact that executive management enjoyed siphoning off the benefits of company profits to themselves - the relationship of compensation of executives to the lowest level of worker exploded during this period, from a ratio of 40:1 in the 1960s, to 400:1 by 2000. Second, in order to keep stock prices rising, executives felt obligated to ratchet up internal company profit targets. Return on equity targets were set at a minimum of 15% annually, but in many industries a 20% return was expected. This put tremendous pressure on corporations to keep costs low, because profits had to double every four or five years. White collar worker compensation was an easy target for cost cutting, as were blue collar costs where unions were weak or did not exist.

A third and very real pressure on corporate costs and compensation came from competition abroad, first from Mexico, then the former members of the Soviet Union after 1991, and finally from China (which became the manufacturing arm of the world) and India (which hived off white collar jobs from the West). Under the threat of globalization, companies engaged in manufacturing found it nearly impossible to continue production in the US given the high level of worker costs, the greater regulatory burden (especially for environmental protection), and the fact that overseas manufacturers were able to drastically lower prices by cutting back on product quality. It was a rare US worker in the 1980s and 1990s who did not have personal experience with job loss or compensation pressure due to globalization.

The stock market performance in the 1990s had been one of the pillars of strength still buttressing the financial health of the average US worker, given the fact that income growth was nil during the decade. The other pillar was growth in the value of housing stock for those workers who owned residential real estate. When the stock market crashed in 2000, all that was left propping up the middle class in the US was their largest asset – their home. Conveniently, or perhaps deliberately, a housing bubble erupted in 2002 when the Federal Reserve lowered interest rates to near zero to cope with perceived risks of deflation. Home prices began accelerating rapidly, fueled by flippers and other speculators who wanted to cash in on price increases of 15% annually in hot markets like California, Florida, or Nevada. Not surprisingly, this was the same rate of increase the stock market experienced at its peak, and not surprisingly, it could not be sustained. The housing bubble peaked in 2006 and burst in 2008 with the collapse of the Lehman Brothers brokerage house. With it went most of the major brokerage houses and many of the large banks heavily involved in the mortgage market, a financial collapse which rivaled the massive bank failures of 1933.

The US Slips Into Third World Status

From the period 1982 to 2008, times were tough for white collar and blue collar workers. Salaries and wages effectively went nowhere when inflation was factored in. Benefits, especially for health care, were cut back severely by companies, so that by 2008 the average person was paying $7,000 a year for health insurance, not counting any out of pocket costs for health care. Within this group of workers, most held equities (if they owned stock at all) in their passive retirement funds, which were devastated by the dot.com crash and came back only 50% by 2008. Housing values went up dramatically, allowing a lot of middle class workers to cash in on their rising home equity by taking on more debt and receiving cash for their equity. Unfortunately the housing crash of 2008 has wiped out enormous amounts of equity, so that around a third of homeowners are now “underwater”, meaning they owe more on their home than it is worth.

If you were among the few people in the executive class, times were wonderful. The stock market boom was a once-in-a-lifetime opportunity for wealth creation, and executives in particular were able to avoid the crash either by getting out early through inside information about what was to happen, or actually shorting the market to hedge their asset holdings or profit from the crash in 2000 (and again in 2008). The housing bust did hurt some of the wealthy over-invested in real estate, but the class as a whole kept amassing a greater portion of the nation’s wealth over this period. The George W. Bush tax cuts for the wealthy were a particular bonanza, transferring $1.3 trillion from the middle class to the wealthy by 2008.

Income inequality throughout this era widened tremendously. The OECD organization of developed nations measures income inequality for all 34 of its member states, and found by 2010 the US ranked among the worst, at 31st. The UN uses a similar measure, but for 146 of its member states, and in this ranking, the US was 77th. If you think these might be biased against the United States, the CIA’s own ranking of income inequality puts the US at 100 out of 140 countries. The company the United States is keeping when it comes to income inequality are the poorest of the developed countries (like Greece), and some of the better-off but struggling third world countries. The US is increasingly looking like Mexico and is moving further away from any resemblance to its other neighbor, Canada. In fact, in terms of income inequality, Mexico is a fairer society than is America.

In third world countries, most of the population is poor, and the middle class is fewer in number than the poor. This is the situation that is developing in the United States, though it is not there yet. Another characteristic of third world nations is that the large numbers of poor people are sustained with government handouts, for food, housing, and medical care. College education is often free, and energy costs are usually subsidized. None of these subsidies is enough to move people entirely out of poverty, but they are enough to keep social peace by preventing starvation, and giving most people an opportunity for some employment and a means of reaching that employment by automobile or public transportation. Health care is basic, but in many less developed countries it is free. Staples of food, such as wheat and rice, are kept under price controls.

To a degree, this situation has prevailed for quite some time for poor people in America. Especially in the inner cities among ethnic groups like African-Americans and increasingly Hispanics, food stamps are an essential for survival, bringing up to $700 a month for a family of four. Low income housing is available for poor people, and college loans are easy to get because the lenders receive a back-up guaranty for the loan from the federal government. Medical care is essentially free, because poor people are encouraged to go to hospital emergency rooms for care, since by law hospitals must treat any sick person who shows up. The rest of society pays the bills, which contributes to rising health care costs for everybody else.

What has happened since the 2008 depression arrived is that this safety net has been forced to absorb millions of middle class people as they slipped close to or into poverty. Food stamps are the most visible manifestation of this problem, having gone from 27 million users in 2007 to 47.1 million users in the most recent tally. As unemployment widened to a double digit rate, unemployment payments had to be extended twice by Congress, which allowed the unemployed to receive these benefits up to 99 weeks. The Heritage Foundation, a conservative think tank, charts what it calls the Dependency Index, which has risen inexorably higher since the onset of the depression. The Foundation says, regarding the most recent all-time high in the index:

 

Today, more people than ever before depend on the federal government for housing, food, income, student aid, or other assistance once considered to be the responsibility of individuals, families, neighborhoods, churches, and other civil society institutions. The United States reached another milestone in 2010: For the first time in history, half the population pays no federal income taxes.

 

 

It is the conjunction of these two trends—higher spending on dependence-creating programs, and an ever-shrinking number of taxpayers who pay for these programs—that concerns those interested in the fate of the American form of government.

The Heritage Foundation expresses its concern that fewer taxpayers are paying in to the federal government to support the entitlement programs that more and more Americans are using, but this situation is exactly what exists in many third world nations with tremendous concentrations of wealth. The wealthy become the only class of people with enough income to pay meaningful taxes, and the burden falls on them to support society’s poor. This is considered by the wealthy in these less developed countries to be a fair trade-off; the wealthy get to keep most of the nation’s resources while everyone else is in poverty, and the poor are granted a subsistence living through government subsidies, at just the right level to avoid social disruption or a revolution.

Third world conditions in the US lead to significant social problems. Around 15% of the population is now officially classified by the US government as living in poverty, according to the US Census Bureau, which said this is the highest level of poverty it has measured since beginning this survey 52 years ago. Not surprisingly, the number of Americans in poverty is very close to the number of Americans who are now relying on food stamps.

Children who live in poverty in the US are often subject to third world conditions. UNICEF reported that the US ranks near the bottom of developed nations in the health care, educational, and social services available for children in poverty. Looking at the overall level of health care in the US, the nation spends far more than any other country on health care per capita, but the benefits are heavily concentrated with the wealthy who can afford insurance or pay the costs directly for the most advanced treatments. Everyone else has to make do with a system that charges exorbitantly for even the most minimal care and the smallest of benefits. As a consequence, the US ranks first in health care spending, but ranks 39th in infant mortality, 42nd in adult mortality, and 36th in life expectancy. Again, numbers such as these, and the direction they have been taking, place America much closer to Mexico than to Canada.

Why the Dependency Class is Here to Stay

The general mood of policy professionals at all levels of government, in academia, and in the press, is that the conditions just described are temporary. Politicians talk constantly about getting America “back on track”. The Federal Reserve is pulling out every lever to recreate yet another bubble in order to spark consumption and revive the economy to its former state of glory, irrespective of the fact that the previous bouts of income growth were all created by financial bubbles which burst. Some politicians are calling for massive amounts of additional fiscal stimulus, but the greater impetus in Washington is to cut back on federal spending before the $16 trillion federal deficit engulfs the entire economy should long term interest rates rise. These are contradictory impulses but they both have an underlying theme in common: to restore America to its previous strength. None of these politicians or commentators recognizes the sea change, and the permanency of the change, that has hit America.

One observer who is seeing beyond the trees, and has taken a much longer perspective, argued in a recent paper that the age of growth for the United States was over. Indeed, Robert Gordon of Northwestern University, in his paper Is US Growth Over? argues that six trends will make it difficult if not impossible for the US to recover from the current low growth environment: “demography, education, inequality, globalization, energy/environment, and the overhang of consumer and government debt.” I’ve mentioned income inequality and globalization already in this paper, but let’s look at these other causes of a dependency class, and add a few more of my own.

Demography: The US population is rapidly aging as Baby Boomers are beginning to retire from the work force. Unfortunately, the Baby Boomers are seriously under - prepared for retirement; the average Baby Boomer has less than $50,000 in savings, and their asset, their home, has lost enormous value in the housing bust. Tens of millions of retirees are doomed to live in poverty, and within the next five or so years, the US will be forced to accept a permanently high level of food stamp, housing, and medical entitlements just to prevent a social disaster from occurring, including large-scale starvation among the elderly.

Energy/Environment: Commodity scarcity, including energy but more particularly for food, is about to meet up with climate change, forcing a potentially life-altering set of circumstances for the entire human species and most other species on the planet. The most dire scenarios project a virtually uninhabitable planet that will support human life only at the polar regions. Such models are usually classified by climate change critics as scare-mongering, but the problem has been that climate change is already occurring at a speed and at temperatures that exceed those projected in the mainstream models. For the US, recent modeling indicates that it is singularly exposed to damaging weather conditions on the east coast, and a loss of most of its food crops through persistent drought. Just about any of the scenarios presented in climate change models suggest that the US will find it very difficult to maintain its current living standards.

Consumer and Government Debt: The US is at debt levels that already exceed reasonable standards when measured against GDP. It has become absolutely essential for the US to continue with its zero interest rate policy (which imposes serious economic constraints on its own) if the country is going to continue to afford to pay interest on its government debt. Moreover, the Federal Reserve can only control short term interest rates; should the global bond market ever tire of owning US Treasuries, the economy will be devastated because so much of the tax revenues taken in by the federal government will have to go to paying interest on the debt.

Lack of Political Will for Change: The political system in the US is now geared to supporting the status quo, and it is highly unfriendly to change. President Obama has campaigned as an FDR populist, but he has governed to the right of George W. Bush on many issues, and is clearly a defender of the status quo. Politics at all levels is infested with money, which gives access exclusively to lobbyists, but also wealthy people and now corporations directly because of the Citizens United decision by the Supreme Court (vesting personhood rights on corporations). Poor people have virtually no constituency on Capitol Hill or in the White House, and there is a well-organized and well-funded campaign to reduce or eliminate all variety of entitlements for the poor and middle class. At the same time, the Republican Party is openly and arrogantly the defender of the wealthy, and has fought every step of the way to preserve the Bush tax cuts for the wealthy.

Rise of an Aristocracy: The most important tax any democracy can impose is the death tax. Traditionally in America the death tax has been set at high enough levels to be able to whittle down the largest fortunes over two or three generations. Today, after a deliberate campaign by wealthy people and the Republican Party, the death tax is set at am all-time low of 15% and might be eliminated altogether. This will guarantee the existence of a permanent aristocracy of very wealthy people. On the current list of the 10 richest Americans, six of them are heirs or heiresses to large fortunes. Most of these six, including Charles and David Koch (each worth $31 billion), and several children of Sam Walton of Wal-Mart (each worth about $26 billion), are substantial contributors to conservative causes, and are especially active in working for the elimination of the death tax. Another feature of an aristocracy is the rise of nepotism, which is becoming epidemic in American society, as the children of the wealthy and influential get plum positions in universities, in business, the media, entertainment, politics, and now even sports.

Deliberate Actions by Corporations: We have already cited how corporations are subject to the pressures of globalization. What is unappreciated is the degree to which corporations actively contribute to the creation of a dependency class in the US. No greater example exists than the largest employer in the US, Wal-Mart. This retailer keeps its employee expenses down to a very small number – around 10% of its total expense base. It does this by paying low wages averaging around $11/hour, and making sure that employees are not allowed to work more than 39 hours a week, so as not to trigger overtime. Consequently, the average pay for a Wal-Mart employee is $1,700/month, which is classified as poverty wages that make it impossible for a worker to support a family. Because Wal-Mart is very stingy with health benefits, it actively encourages employees to use hospital emergency rooms for their health needs. The result of this is that Wal-Mart employees are the single biggest users of Medicaid, which is health care for those in poverty. Also, Wal-Mart employees are the single biggest users of food stamps. On average, a Wal-Mart employee receives $1,000 a year of public aid from the federal government. Yet the children of Sam Walton – Christy, Jim, Alice, and Rob Walton – each of whom as mentioned inherited $26 billion after the death of their father – actively contribute to Republican politicians who want to cut back on Medicaid and food stamps because such services are used by poor people, whom they consider parasites on society.

The Collapsing Military/Industrial Complex: The US simply cannot afford its military/industrial complex when so much of its resources will be devoted to providing the basics of life for so many citizens. The US military is destined to go the way of the Soviet military – perhaps not to such an extreme extent, where the entire military simply collapsed. But the country will not be able to support 800 overseas bases, 2 standing armies, new armaments every five or ten years, private chefs and jets for celebrity generals, and a national guard armory in every Congressional district in the country. It will be hard enough simply for the country to meets its medical and pension obligations to the existing military forces. In fact, the admirals and generals will be able to keep their generous pensions ($200,000 a year or more in retirement), but the great majority of military retirees will find the government reneging on their pension promises, thus pushing these people into the dependency class as well.

Long Term Political Implications

Much has been made after the 2012 elections of the Republican Party’s problems with demographics. The white electoral vote is shrinking as a percentage of the total, and will be a minority by 2020. The voting population is becoming much more ethnic in composition, and much more inclined to vote Democratic, since the Republican Party has made a specialty since Richard Nixon of appealing to white voters on the basis of overt and covert appeals to racism.

This is all largely true, but the real problem facing the Republicans is not simply demographic. It is that the voting population is increasingly being made up of the dependency class, which is a group of people that the Republicans have lately made a target of ridicule. Mitt Romney did so in his infamous secret recordings of his comments about the 47% of the population who will never vote for him because they are bought off by entitlement spending from the Democrats. Rush Limbaugh, the spiritual leader of the Republican Party and conservatives in general, after the election derided the fact that the nation consists of a majority of people who want “free stuff”, which now has to be paid for by the minority of people (read, white people), who still pay taxes.

This theme of people relying on “free stuff” comes directly from the Republican commentariat, including organizations such as the Heritage Foundation, cited earlier. It is a theme that comes from the genetic makeup of the conservative movement and the Republican Party. Republicans adopted the mantra of defense of the country after World War II, when they learned that being isolationists (as they were before the war), did not pay off politically. Republicans became the party that marketed itself as best able to defend America against enemies, especially foreign enemies like Communists. When the Soviet Union fell in 1991 and China converted to unbridled capitalism, the Republicans had no enemies abroad to fight, so the party turned inward, looking for people to castigate and turn into the new enemies set to destroy America. They set their sights on liberals, feminazis, gays, abortionists, and various minorities, including illegal immigrants.

The virtuous side of Republican philosophy is that it wants to give Americans the tools to avoid poverty in the first place. It preaches self-reliance, independence, limited government taxation and regulations, and great personal freedom (especially the freedom to own and use a gun). With such tools, any American who works hard can reasonably expect to participate in the American dream, including becoming a financial success. This philosophy ties into a strain of thinking that comes from the Ayn Rand wing of the party, which worships ultra-individualism, and which makes a fetish out of Rand’s fictional heroes John Galt and architect Howard Roark, men who with their entrepreneurial genius created what most benefited society, and then took what they wanted when they wanted it, because men of genius are entitled to act that way. Everyone else in Ayn Rand’s fictional world is a parasite, feeding off the work of the productive members of society.

This is how the white minority who constitute the base of the Republican Party often think of themselves: as the productive members of society increasingly asked to support the lazy, useless, degenerate, immoral idlers who feed at the government trough. There are several problems with this way of thinking, beyond the fact that demographics make it difficult for a political party to survive on the votes solely of the white voters. First, the 47% of the electorate Mitt Romney described as lazy and bought and paid for by entitlements are anything but lazy; many scramble for whatever odd jobs they can get to support themselves. Second, a huge amount of government largesse goes to big business. Consider just the bank bailouts in 2008, which amounted to trillions of dollars of loans and back door capital injections. Third – and this is the point of this article – the dependency class is here to stay. It is not only not going away, it is growing.

The dependency class will constitute probably the majority of the US by 2025. The country will still have Madison Avenue, Michigan Avenue, and Rodeo Drive – pockets of luxury here and there, next to gated communities. Less visible will be the extensive poverty, not just in the inner city, but in the suburbs and rural communities where roads, bridges, sewers, and other elements of the national infrastructure will be severely corroded. This American version of third world poverty won’t be as extreme as the poverty seen in the slums of Rio or Lagos, Nigeria. The US will look more like the former Soviet Union, or its former vassal states in eastern Europe. Parts of the country will look wealthy on the surface, because that is where the oligarchs will reside, but the rest of the country will look bleak and distressed, with much of the poverty hidden behind closed doors.

A fourth problem rests with the whole Ayn Rand philosophy of Objectivism, which is a core intellectual belief of the Republican leadership. It is generally unappreciated, or unnoticed, that Ayn Rand formed her philosophy from the 1930s to the 1950s, a period when the United States was in the ascendant politically and militarily, and in due course after the Depression, economically. It was an environment very conducive to entrepreneurial efforts, and Ayn Rand’s fictional heroes were molded on the assumption that this environment was permanent. It clearly wasn’t. Everything John Galt or Howard Roark did was accomplished nationally, in a country very much like the US. John Galt didn’t have to deal with the reality of Chinese competition, as has been the case in the real world of manufacturing. Howard Roark obtained all his architectural commissions locally, as did the real architect who was his inspiration, Frank Lloyd Wright. A modern architect, such as Frank Gehry, has been obliged to find most of his commissions in Asia, Europe, Latin America, as well as the US – any place with deep pockets. In a world prone to global recessions, the architecture business can dry up completely. The point of this is, Objectivism sounds interesting in a world of rising global expectations where one is working in an industrialized country. It is going to make no sense to voters in a country with a destroyed manufacturing base, where most people are dependent on the government for survival, and not for “free stuff.”

If the Republicans are the party of the Enemy, able to fight off foes domestic and foreign, and fight off the enemy of poverty by giving people the tools and the freedom to prosper on their own, then the Democrats are the party of the Victim. They are concerned with the people who fall through the net despite their best efforts. They see a world where hard times can befall anybody, often through no fault of their own. They are willing to help such people until good times return or the person can stand on their own two feet.

This is a philosophy tailor made for a permanent dependency class. The results are already evident in the 2012 election. The commanding electoral college lead that Barack Obama built up was concentrated in those states with substantial urban populations (even VP candidate Paul Ryan made this observation after the election). There are other correlations that have been uncovered, but one interesting one I noticed showed that states which went Democratic tended to have higher rental costs relative to the minimum wage. In other words, the more expensive it was for someone on the minimum wage to afford an apartment, the more likely that person, and therefore that state, was to vote Democratic.

rent obama vote

Correlation is not necessarily causation, but this does belie the Republican concept that people voted for Barack Obama because they wanted free stuff. Being able to afford a place to live, even on a rental basis, means being able to afford shelter, and that is the opposite of wanting free stuff – this is wanting a necessity of life.

The Democrats cannot just sit back and wait for demography and the establishment of a permanent dependency class to allow the votes to come flooding their way. The transition to a permanent dependency class is fraught with considerable social upheaval. The Democrats will have to convince people that permanent reliance on food stamps is not a matter of shame or personal failure. The current Obamacare health plan is going to have to be reformed to a government-sponsored national health care system, as this is the only cost efficient means of bringing basic services to the majority of the population. The rich are going to be forced to share the bulk of the burden of taxation for the country, and they will have to be convinced this is in their personal interest, unless they want the equivalent of a French Revolution to hit America.

Probably the greatest challenge will be managing the political system. Third world countries with a large dependency class are notoriously unstable politically. Crises between the government, the parliament, and the courts are regular features (see Egypt at the moment). Constitutional rights in third world countries are not guaranteed, and they have already been severely whittled down by George Bush and Barack Obama in the US. The ability to keep millions of people in poverty without complaining is a constant preoccupation for these systems, and governments which fail at this task are overthrown or subject to military coups. This is the lesson of the Arab Spring. The United States is entering a period when its democratic traditions will be tested and under ongoing strain. Such traditions may not survive if the political and military players make false steps, and given the challenges facing the US ahead, especially on the environment, it is easy to see how the wrong decisions can plunge the country into a political crisis that imperils democracy in America.

 

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Comments

3rd world nation

How to destroy the strongest middle class in history in just a few short years for dummies.

1. make the tax code regressive
2. create trade treaties designed by and for multinational corporations
3. chip away at social safety nets
4. create financial bubbles and sucker the people into putting their money into them
5. outsource the jobs
6. import cheap labor
7. eradicate pensions and replace them with stock market accounts called 401ks
8. fire people at random according to quarterly profit statements
9. move production overseas, esp. advanced R&D
10. make political bribery legal through a series of campaign finance laws
11. deregulate finance and enable capital to move freely around the globe

The greatest generation has been dying off and I imagine they are rolling in their graves. So many gave their lives for this nation to have it come down to this. Not what they fought for, I am sure of that.

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Honestly, free market true

Honestly, free market true believers are simply political. They restrict the definition of dependency to the reliance of a person or a class of people who receive direct government aid, or social security (to which they've paid, remember?). We're all dependent on government. Developers of arms can't exist without government. Developers of housing subdivisions require government to tax people for the sewers and roads they build, and usually pay private contractors to do it. Research universities get federal grants to create and design better medicine and technology. You can't say the multi-million dollar salaries of CEO are earned independently of government, especially in these days when pressure little is made by hand from found resources. This notion of dependency is simply specious.

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One quibble

Thoughtful and sensible, but I'd argue with one point. Globalization is not an irresistible force of Nature. Governments can take several steps to counter its effects. Look at Turkey and Germany. Both are thoroughly involved in exporting and importing, and both have maintained large manufacturing sectors without "going cheap". It's a matter of shaping ALL gov't policies (trade, education, taxation) to FAVOR local manufacturing and DISFAVOR the parasitical financiers.

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Important point

There was no reason the United States had to go down this route exactly. Somehow the symbiotic relationship with China became too irresistible, and I think that is in part because the US entered into the relationship with an existing trade imbalance with Japan. It was already inured to running such balances and getting away with it for a variety of reasons (reserve currency of the world, global superpower, etc.). Germany never got itself into the trap of running trade deficits and didn't need China to act as its banker to finance German purchases of cheap Chinese goods.

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Credit

Sub-prime mortgages were partly a reaction to the problem of poor credit ratings. More people had health care collections on their credit reports. Few people had any money for a down-payments on a house or car. Credit card balances in the US were enormous compared to the rest of the world. Jobs were unreliable and short-term. The downward middle class existed in the middle of the "bubble and burst" economy that continues today. In Sacramento hedge funds are buying foreclosures in bulk. Good news is real estate prices are rising. Bad news is they will create slums. Hard to imagine any solutions when we play politics to the point of dysfunction. Good description of our recent history. In contrast my parents of the Depression never used credit.

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health care collections

Medical collections is getting away with murder too, as amplified in this article.

Typical figures in those buying existing homes are over a third are "investors" or cash buyers. They have been snapping up properties and to this day banks are illegally foreclosing on people who are actually paid up on their mortgage.

Depression era people didn't use credit because they couldn't get credit in part.

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Sub-prime also targeted immigrants

Just at the peak of the bubble I remember there was a new product introduced specifically to immigrants (even with no proven residency status) who didn't even have a credit rating. And you are right - Wall Street, including pools of rich investors, are buying up properties to flip them because they made some money doing that at the bottom of the market in Las Vegas and Miami when banks were dumping properties at below market prices. It doesn't seem like the uptick in housing prices we are now seeing is anything more than a dead cat bounce. One thing I am hearing from people in construction is that the flippers want only cosmetic work done and want to be out in 45 days at the most. This is certainly not going to promote neighborhood stability. Another thing I am seeing is that the banks are reaching again for poor credit risks, not just in housing loans, but auto loans and student loans. We are back a bit to 2006. Did you notice General Motors repurchased GMAC? Talk about deja vu all over again.

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illegal immigrants, subprime

I remember this all very well. BoA was specifically targeting illegal immigrants for bank accounts, money transfers and mortgages.

I'd love to have some accurate statistics but when it comes to anything dealing with illegal immigration, legal immigration, guest workers they repress facts with "you're a racist if you look at that".

But we remember very well, from 2002-2006 marketing in "Español" mortgages, subprime, to illegals. If one looks at bombed out areas of foreclosures, the maps, they really do overlay where there are high concentrations of people here illegally, but daring to look at the statistics, well, I sure haven't found enough to do anything with.

One of those, hmmmmm, isn't that interesting, collection of facts where are repressed.

On flippers, I noticed in Case-Shiller, Phoenix is up over 20% from a year ago in prices and existing home sales are at typical one third "cash buyers".

I did see that, corporate welfare bail out full circle to rinse, cycle, repeat.

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No improvement until good jobs are created - don't see it

Daily experience shows there are a decreasing number of jobs to even apply to. They simply aren't there, anywhere. And this includes the ability to travel anywhere, including overseas, at a moment's notice. Private, public, jobs in area trained for and jobs far afield. That's how ridiculous the situation is. No amount of lies or pep talk or "retrain, learn to become a short-order cook or brainsurgeon or space shuttle commander and relocate here or there for $10/hr." can change the fact that there are decreasing jobs. I knew nothing would change following the election, and nothing has. This endless fiscal cliff talk is a nice distraction both D & R enjoy so no one has to talk about unemployment and increasing numbers of hopeless Americans with no working future until the fiscal cliff is put off again in December or Jan. 2013. And then it will be endless talk about Iran or Syria or somewhere else, anywhere else but the US desperate workers. And the obsession in the media about housing starts or sales? Even assuming the stats weren't dubious or NAR wasn't trying to sell a house to everyone (even when most people are struggling or looking to find jobs and post-housing collapse), how do housing starts or sales matter when median wages are falling when people have jobs, increasing numbers of Americans can't find jobs no matter how many skills and degrees they have, and a house in this day and age is merely a debt ball-and-chain around someone as companies expect everyone outside the boardroom to move anywhere within 24 hours to serve their increasingly insane whims.

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People on TV talk like millions are not suffering/dying daily

Some economist on Bloomberg who is a resident expert or some other nonsense was speaking about unemployment and jobs created. Basically he said maybe 150,000 jobs created will be reported, perhaps 90,000. But that will last for a few months, improvement after. Same thing with some other talking head on Bloomberg, but "it's the trend that counts." His monotone voice, complete lack of concern was sickening. It's like he was talking about a fly he happened to step on.

TREND?! No, of course this can't be structural. This can't be outsourcing and visa abuses. No, of course not. Telling perhaps 30+ million Americans that are unemployed/long-term unemployed that jobs won't be coming back for many more months (mind you, this has been going on since 2007 - talk about f***ing denial and idiocy) in a tone in which one reports tomorrow's weather might bring sun or a slight drizzle is sick. People out here in the real world beyond NYC and LA TV studios can't find jobs for 5+ years. Jobs they do find with their PhDs and BAs and military or other experience pay $10/hr. Awesome! I missed the coverage of outsourcing and deathtraps in foreign countries brought to you by ABC or XYZ Corporation (incorporated in Del.), but I'm sure that will come on right after the Wal-Mart commercial.

These asshats in power and their puppets will continue denying we are purposely being destroyed from the inside out. If it's not Sandy's fault, it's the fiscal cliff. If it's not the fiscal cliff, it's uncertainty about the 2012 election. Also toss in the Chinese Communist Party leadership turnover. Before that, the 2010 election. Before that, the 2008 election. Iran, check. Syria, check. Iraq, Afghanistan, etc. And in 2020 they will announce "Wow, what happened? It's like the Roman Empire. Oh well, it can't be our fault."

Purposely being sold out. STEM visas just today approved by the House for foreigners. Because Lord knows US citizens are just some dumb bastards that can't add 2 and 2. Naked Capitalism showed that 70% of the jobs being created today in the US don't even require college degrees, but the corrupt traitors say they simply need more foreigners to take jobs we can't fill. Sold out, sold out, sold out. Oh well, it's that season for Bill O' to collect his paycheck from the Hacker-in-Chief/Police-Briber-in-Chief and distract people by talking about a "War on Christmas." A war on Americans by foreign and American corporate interests - nah. And on the D's-controlled channels, same old thing. Punch and Judy had more brains, and they were literally puppets.

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my October unemployment report prediction

We might even see a negative in payrolls and assuredly an increase in the unemployment rate. The other indicators from Sandy's effects should show up also in the monthly unemployment report for October. Even though Sandy hit on the 29th, it's showing up in October figures.

Bloomberg man, now there reporting on large events is very good, such as their coverage on bail outs, financial crime and so on, but on economic reports, uh, not so much. They pre-announce "crapola from space" all of the time. They have gotten more than one statistical release dead wrong as well.

I'm working on an article about STEM employment, that is real B.S. and goes to show ya Congress only cares about it's donors, this is demanded by corporate lobbyists. There is no shortage and this will displace U.S. STEM workers.

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Corporate Welfare one Definition

Just incredible the Waltons are subsidized by our tax money:

"Because Wal-Mart is very stingy with health benefits, it actively encourages employees to use hospital emergency rooms for their health needs. The result of this is that Wal-Mart employees are the single biggest users of Medicaid, which is health care for those in poverty. Also, Wal-Mart employees are the single biggest users of food stamps. On average, a Wal-Mart employee receives $1,000 a year of public aid from the federal government. Yet the children of Sam Walton – Christy, Jim, Alice, and Rob Walton – each of whom as mentioned inherited $26 billion after the death of their father – actively contribute to Republican politicians who want to cut back on Medicaid and food stamps because such services are used by poor people, whom they consider parasites on society."

Something is seriously wrong here. As this aristocracy regains control it will be more and more a nightmare for our citizens.

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I have puzzled over this self-defeating behavior

I think it comes from the very definition of an aristocrat- someone of the "landed gentry" who inherited his fortune who may or may not be equipped to manage it well. The first born son of a noble, after all, was not necessarily the best choice to run the family manor and estates, and in situations like England where title passed to the eldest son if there was one, it was quite possible for the estate to fall into dissolution under incompetent or wasteful management.

In the case of the Waltons, we are one stepped removed even from that situation. They weren't expected to take over the family business, or at least Sam didn't see any of them having his ability to do so. A technocratic leadership at Wal-Mart was allowed to take over - faceless men who ruthlessly exploited the company's cost cutting culture and had none of Sam's paternalistic concern for his workers. His four children sat on the sidelines, each of them incredibly wealthy, but now several steps removed from the management of the company. They cared about their dividends and the stock price most of all. It is possible for them not to see the irony in their actions to eliminate the death tax, which are quite aggressive on the part of some of them. Instinctively they seem to have taken on the concerns of aristocracy to keep the aristocracy going. By the way, some of the other big players in this attack on the death tax are the Koch brothers and the successors to the Mars candy fortune.

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Democratic traditions... worth saving?

There are a few leftist historians out there who have observed that the US was designed and intended from the start to be an aristocracy with two classes of people: those with important wealth and those without, the latter subdivided into free and slave. Those with skin in the game got an official say in the workings of Federal government; those who don't, didn't.

One lesson of the past 100 years or so is that the extension of the voting franchise to a larger segment of the population has not significantly opened up access to the levers of power or increased the influence which the median citizen can exert on policy. Those standing for national election, or appointed to offices, have generally been of the aristocracy, though we have had the good fortune that some of them have not forgotten _noblesse oblige_. Merely opening the vote has not actually opened the boundaries of political discussion much, because the group of constituencies with effective veto power over a candidate has expanded and strengthened. In particular, the importance of money as a veto point has increased drastically, as public election financing has fallen out of favor and statutory limits on private financing have been constrained by a Supreme Court that favors money as speech. Without a commitment to making affordable and available other social goods, such as health care or transit or post-secondary education or a fair share in productivity gains or a sustainable natural environment or the ability to run for public office on a reasonably even footing with anyone, how can one vote *against* wealth in a first-past-the-post voting regime?

So, is the Constitution permanently fixable, even in theory, even if there were an informed, thoughtful, and willing electorate? Is there enough tar to patch all the holes of unearned privilege structurally conferred on the wealthy by the Constitution and a Supreme Court that has been tolerant at best of the rights of the underclass? Or would it be better to start over, with a charter that would make access to public goods, both enumerated and unenumerated, both tangible and not, a practical right?

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My thought is to limit donations only to individuals

For example, a candidate for a House seat may raise no more than $1,000 per year from individuals who are adult residents of the district. That would provide about $200,000 available to fight a general election. A Senator could raise $1,000 a year from constituents in that state, so in California about $20,000,000, or double that if the candidate starts raising money in previous years. It would be a felony to accept funds from anyone outside the district or state, from any PAC, corporation, lobbyist, political party, etc. - from anyone not in the district or state, or any entity whatever. Presidential candidates would have the same rules, but on a national level, giving them a potential generous kitty of $100,000,000.

The objections?

1. How to enforce this? You would need watchdogs with investigative and enforcement power - a bureaucracy really, on the federal level.

2. The whole primary extravaganza would have to be curtailed somehow and the general election campaign shortened.

3. What to do about in-kind donations? Someone in that district volunteering to go door to door for the candidate can not be objected to, or manning phones or GOTV efforts. But paying for air time for the candidate? That has to count against the $1,000.

4. Television stations would scream to the heavens. That's probably a good thing, but for sure they have become dependent on this two year advertising bonanza that comes their way.

5. Lobbyists and wealthy interests could still influence voting once a candidate wins an election. That brings us back to limiting lobbying somehow. Maybe you make it okay for a elected representative to meet with corporate or lobbying interests, as long as they don't accept any money or in-kind donations or free trips, etc. That would make it at least as important for the politician to meet with an actual constituent as anyone else.

Somehow we have to look to the British parliamentary system for some answers. They manage to keep the entire campaign period down to a month and expenditures well under control. We simply must do the same, even if it takes a Constitutional amendment to put some of this in place.

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Third world north america

When you import a “third world” population you become a “third world” nation. The economic integration of North America will mitigate some of the worst aspects of this problem, but some trends are emerging
1. Corporations and the wealthy are absenting their money and sometimes themselves to avoid taxes
2. Private security companies are becoming a land office business guarding rich areas from poor areas
3. Prison populations continue to explode
4. Police forces continue to militarize (Mexico’s ‘drug war’ is the future of Canada and the USA)
5. Non-tradable low wage services jobs are being created in large numbers to insure that the working poor don’t become the idle poor
6. Large numbers of American and Canadian middle class and wealthy individuals (over 6 million to date) are buying homes and investing in Mexico
7. Politics is joining sports and other entertainment industries as meaningless distractions for ‘the masses’ economics (resources control) is what matters and government is becoming a side show to that
8. Mexico’s new president is promising to turn Mexico into the North American sweat shop for repatriated jobs from Asia
9. Robots are becoming the workers and soldiers of the future.
I could go on but why bother?

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Die Gedanken sind frei

I was taken aback by this article and one blogging member’s taken on his/her view that we now have a Dependency Class here in the United States.

It is not that is there was a large grain of truth to what the writer said, it was that the writer used words and framing that confuse the issue and to a very large extent play into the frames the right wing uses to distort debate in this country and the world at large, as to who is really responsible for what has gone down the last forty odd years and why it happened at all.

Why are so many millions and millions of people dying in a very real sense because they lack jobs, food, housing and medical care?

That this process of depravation is global and trans-national is just happenstance result that trans-national corporations and banks actually restrict economic development on a massive scale world which is due in large part because American élites set about looting capital out of the United States and shipped everywhere else and then invented a cover story that somehow this capital flight would raise the economic boat of the entire world.

Jesus fucking Christ is it not clear now that tale is more bogus than Santa Clause?

To describe the results of what has been inflected on the United States the last forty odd years has resulted in a dependency class without a very detailed, if short explanation, as to why this group of people has grown and how it is indeed very different from a third world countries that never had much industrial development to begin with, is to miss the point of the last forty years of history and begs the question as why are so many progressives seem to hold their punches and appear clueless and willing to let elites define the terms of the debate? Dependency is a resulting outcome, that sould not be termed that way at all.

People have been robbed on a massive scale and use short and to the point language to make the point, rather than focus on the passive reframe we are all now dependant. Its OK to get angry about all this and say so.

The ugly truth is a couple hundred CEOs at a couple of hundred major corporations in the United States set out in the 1970s to destroy the New Deal not roll it back. At first they were not sure as the way to proceed or if they could pull it off at all.

No matter the current excuse pundits of all kinds currently use to obscure the nature of why this whole global construct was shoved down the throats of millions of Americans and the rest of the world it should be pretty fucking clear this global economy is a total fraud and only serves the interest of much less than 1% of the worlds population.

The Global economy we have been told for years was only meant to rid the US of in-efficient old style blue collar industries, tell that to the millions of young Americans who will never have a shot at a decent job and then tell them they should get use to it while your at it. This strikes me a more mindless leftist sophistry.

If China and India have reaped a temporary illusion of economic development now imagine how poised off they will be when they realize the Western powers who supplied the capital for their development turn if it off and tell them to fuck off because they can, and will be forced to by the financial Armageddon climate change will heaped upon the rest of the world’s problems….

It was a given in American board rooms back in the late 1970s that the Union Movement must be destroyed as complete as possible and that it be done in an under handed way as not to start a revolt among millions of working people.

This conclusion came about because the early to mid 1970s saw almost as many labor strikes as the 1930s as millions of working Americans exercised their right to strike and recap earnings that were being lost to inflation largely due to the fact no sitting president had raised taxes to pay for the twenty year insane war in Indo-China against the Communist hordes.

In the late 1970s CEOs of American based big business could have gone the same route used in many third world countries and used death squads and a slow motion version of what so many working people were subjected to in countries like those in South America and Latin America in the 1950s and 1960s.

But for reasons that would be obvious to an astute observer, they knew that had they to proceeded with caution or it would have become obvious what they were up to, and millions of Americans would have resisted. That is why this policy was a forty year project; it only needed a good cover story.

So they evolved the great con job ever told, a cover story, of what and the why of what they were really doing. This cover story was one called free trade and rising new global economy that would replace a functioning global economy that had been in place all along.

This new global economy we were told had new operating principles, needed new trade laws and would usher in a new global age of trade and prosperity.

It should be obvious by now this whole rush to create this shinning new global economy it utter rat rubbish whose only real driving principle was at first to destroy unionized industry here in the U.S.A. and unions and Social Democracy in Western Europe in those countries where the ruling class was just as greedy and driven as their American counter parts.

That after the first ten years or so the de-industrialization in the U.S. took on a life of its own and became a head long rush driven by hedge funds and other economic parasites is the single most important reason the United States is broke, so to speak, beyond the fact that thousands of the elite very rich park their money in tax havens and utterly refuse to support civilization of any kind. The big clue here is they refuse to support even the defense spending from which so trans-national companies draw their life blood . . . .

Authors like Nicholas Shaxson who had written a book titled Treasure Islands exposes that at least twenty trillion, maybe as much as thirty trillion dollars is hidden in off shore accounts by corporations and the world’s 1%.

Other authors have pointed out a mere ½ of one cent tax on derivatives could put most of Western Europe and the United States governments in the black and erase with in a matter of years all debate on whether we are “broke”.

The sad truth is far too many even liberal people and progressives have bought into this hogwash of the global economy and the language which it has fostered and the bogus ideas that it has brought to life, like dependency is a given fact of life or worst we should not try to bring back some form of industry and how this might be done.

There has always been a global trading system and global trade, what was different was the reason why the CEO class of American corporations decided to de-invest in the United States.

Short of an open declared war on organized labor there was no other way to destroy the union movement in the United States and the political power it had, and by virtue of historical accident, the political power the Democratic Party enjoyed as a result.

Hence with allies in Wall Street; the happenstance appearance of early forms of Hedge Funds willing to supply the means, and the fluke of history computers had made capital mobile one way or another thousand of factories across the United States were closed for good and those industries interested still in continued production were moved overseas to any country where workers rights are just a cruel joke.

WTF, do any remember here that the un-employment rate in the US was already approaching a permanent 6% before 9/11 reared its ugly head?

If I wanted to be to be even more of a pain in the ass, I would venture that un-employment in the US has been a constant 6% from the late 1970s through the goldn years of Clinton and only got worst when thirty years of de-investment played out under the weight of two wars and banksters getting wishes granted by both Clinton, Bush and a congress of paid off whores.....

It is bad enough that what was just done to Hostess Twinkie workers is basically old as the hills and what the CEO class has been doing now for more than forty years in plain sight.

But if one really thinks the resulting un-employment has created a Dependency Class and then just leave it at that --- is even doing justice to what has been shoved down the throats of the world the last forty years one might as well then just call all social programs entitlements, and then agree with right wing nuts Hitler was a socialist, and Stalin did indeed kill 60 million Russians before Hitler invaded, (not 5 to 8 million realistic estimates that still do not excuse these crimes), and that the there are indeed dead aliens in a bunker somewhere the shadow government refuses to bring to a UFO conventions.

What I ma trying, most likely in vain, to get across is that people tend to latch on to the first ideas that come along without much forethought and it was my duty to try to snip in the bud that the language of a Dependency Class not become common usage in what might be loosely termed progressive, or the 9% movement, or even, gasp, left wing circles because if there is an dependency at all that should be rooted out ---- it is the one where the thousands of dissenters do the ruling elites a huge favor and adopt language that only makes their work in progress easier to pull off.

Go buy a Twinkie and then ponder the reality of our situation, de-industrialization and the outright fraud and theft of American wealth from every family in this country except a very few, should be the starting point of all discussion and to be very frank pounded into the heads of every progressive, populist or “lefty” who is trying to de-construct and explain what has gone down the last forty years, let alone the fact that the recent melt down of the market and the debt crisis we hear from the media all trace back to a global economic system which is house of lies built on sand because of the willingness of so much of the MSM to slack off.

It comes down to knowing the two phrases that were the watch words that infuse, enliven and bring into clear relief so much awful history of the last century:

Die Gedanken sind frei

and

Arbeit macht frei.

And then knowing who said what and why to whom. Words and framing are important because they presage the actions that take life from the words, and mostly because so many words are used to obscure what is really going down.

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Much of what you say is true

Where we may differ is in the motivation of the elites who presided over the past 40 years of de-industrialization in the US and other western countries. Having worked in quite a few board rooms with many corporate executives, and having met my share of multimillionaires and a few billionaires, I never got the sense in the conversations I heard that anyone was purposefully out to destroy factories, throw people out on the streets without a job, turn the middle class into the poverty class, and render the US into a third world country. The executives I know believe in capitalism fully, as the best possible economic system, especially in relation to all others. They view themselves as decent and honorable people, operating businesses in tough times where difficult decisions have to be made due to forces beyond their control. Some of them waited long after their competitors had moved operations to Mexico or China before they finally gave in to the "inevitable", as they saw it (do as the others do or your company will die, in other words). They didn't like it when they had to lay off people but they felt they were paid to make difficult decisions. To ameliorate the pain, or some would say soothe their conscience, they set up corporate out-placement programs, giving people access to counseling, administrative help, networking programs, office space, etc.

The hedge fund people I've met believe fully in the nobility of their profession. They think their labor is to take faltering and weak companies, make hard decisions, and return them to health so they can once again be listed as a public company. That they might make tens of millions of dollars doing this is to them proper compensation for the enormous risks they take in this endeavor. I'm sure Mitt Romney has always felt that way about the work he has done at Bain Capital, just as I'm sure Lloyd Blankfein is sincere when he says that Goldman Sachs is doing "God's work".

I've come across a few sociopaths in the CEO world; men who are very charming, believe fully in their own genius and the right to success, and have zero emotional connection to the people around them. There has been a tendency the past 30 years for men like this to prosper, and that speaks very poorly about the fact that American business has lost its ethical groundings of the 40s and 50s, some of which came from hard lessons learned from the Depression.

What is interesting is what happens to these men when they leave the corporate world. Many of them have a transformation, and begin to look differently on the company and industry they left behind. We've seen both John Reed and Sandy Weill admit they were wrong about banking industry consolidation, and now believe the big banks should be broken up. Some of this is perhaps expressing anger at their successors who have botched up the bank they left them, but still it takes some rethinking to come out publicly and announce you were wrong about the most fundamental thing you did in your career. Similarly, some equity buyout guys who are retired now look back and see the greed that underlay their actions, and the real damage it did to people. At the time all they could think about was maximizing their investors' returns and maintaining a very high rating for their fund, year after year.

What this says is that the corporate world is filled with group think, and only until you are out of that world can you see things differently. That group think does not involve "let's move all our factories to China, enslave all of our workers, destroy all the unions, and then default on all the bonds China will buy from us." Executives were not meeting on golf courses to plot out the destruction of the middle class. They might have been plotting out with other companies how to maximize their respective profits, but that gets into illegal territory with a lot of risks for price fixing and anti-competitive behavior. And yes, some of them did engage in such behavior and we certainly do not have a government in the US anxious to bring such players to justice.

I don't want to take away from the many justifiable things you have said in your comments. There is indeed every reason for workers to feel angry, and without that anger we aren't going to get a change in attitude that will bring about a completely different political climate. As for the Dependency Class, the right has been latching on to this phrase for a year or so, and I wanted to grab hold of it before they fully owned it. To me, it represents a failure not of the people who are in this situation, but of the economic and political system that put them there. The Republicans are going to do everything possible to put the blame on the poor. Putting some more gentile word to use, such as Entitlements Class or Lower Middle Class will not stop the campaign to blame individuals for this. Similarly, such words help leftists soften the impact of what has happened. People are dependent - for their survival, not so they can sit around and watch TV all day.

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why we fail

Thank you for your article and I agree. I may be the only person here who has gone down the rabbit hole of "becoming a dependent". My crime is one most Americans commit but is seldom addressed as crime as it surely must be considering my life has been systematically destroyed to insure I'm dependent for all time.
The crime? Why trying to use my medical benefits from my job at a hospital for a back injury. This was NOT a work injury. Needless to say like most Americans I'm a victim of Congress who has allowed the insurance company to write their own laws thus insuring more dependents. So my ONLY choice was to apply for disability. If you think paying someone for disability is expensive you ought to look into the process and see how much the gov't actually pays to keep people off. They bribe doctors (as seen 60 minutes) and much worse. In the meantime the applicant is not allowed to work for the 3 yrs it takes to get each case to court. Hence why so many die waiting. In the meantime the gov't agencies you have never heard of enter the picture and virtually torture the patient into suicide. In Colorado there is a %20 suicide rate for pain patients.

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Great Piece Numerian

So very glad I found you here..., looks like a great site as well. Will be checking in regularly. You are absolutely right..., the first step..., or maybe high hurdle is a better description..., is recognizing and acknowledging the fact that there is going to be a shortage of jobs for a good long while. We have reached the end of growth as an economic engine these days and we can't fix a problem until we admit that we have a problem. Right on partner..., write on.

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