The Rise and Fall of the American Middle Class: A Faulty Foundation.

Posted By: AZ Moderate
Posted on: Jun. 19, 2006 at 8:28 PM
 

 

While the New Global View (NGV) that took form at Breton Woods during the closing days of World War II was very far sighted, there was a blind spot in the visionaries’ eyesight.  This blind-spot led to a flaw in the foundation - a flaw that would not become obvious for a few decades. 
 
America and the world suffered through the Great Depression of the 1930’s.  It emerged from the Great Depression decade right into the Second World War.  In less than five years America emerged from World War II as the major world power still standing on its feet, and a world leader. 
 
The differences in the pre-war and post-war standard of living of the average American is staggering.  A formidable middle class was born, and it prospered.  For much of the rest of the war-torn world, the pre-war and post-war differences were none existent, or even negative.  
 
That gap between the average American’s standard of living and that of much of the rest of the world grew enormous in the two or three decades following WW II. 
 
The problem is that the planners and seers did not, could not, envision that unprecedented postwar American socioeconomic explosion, and that blindsided them.  Their vision was necessarily constricted by their own experience.  They based their predictions of what was possible in their post-war vision for the world on the model of their own pre-war experiences. 
 
You can see why if you can look at the situation through their eyes.  Their experience of the decade and a half preceding Breton woods was the foundation upon which they necessarily had to build their vision.  The blueprint of that foundation was that of world-wide depression leading up to the most disastrous war in recorded history.  It is little wonder that, despite their amazing foresight, they could not foresee what was to evolve in the post-war United States, Europe and Japan.
 
In the pre-war world, the socio-economic gap between the haves (America, largely rural, among them) and the have-nots in most of the rest of world wasn’t all that great.  That unexpected post-war yawning gap, a gap that was much smaller in the planners’ pre-war experience, is important because the NGV was predicated on the much smaller historic pre-war gap.  The laudable idea was that the whole world could be brought up to, or at least approach, the American standard of living in the post-war age.
 
Instead, in the decades following WW II, the “American Dream” that the rest of the world was encouraged to aspire to receded gradually into the distance for the world’s aspiring citizens as the American economy exploded.  And that was the crack in the foundation of the NGV.  That widening gap was to come back to haunt the NGV in about four decades. 
 
And the leadership that inherited the plan, and the problem, was unfortunately not of the same stature as the planners.
 
To be continued …
 
Reference: The Rise and Fall of the American Middle Class: The Big Idea. 


The Rise and Fall of the American Middle Class: The Big Idea.

Posted By: AZ Moderate
Posted on: Jun. 19, 2006 at 10:38 AM
    

There are a large number of hidden processes at work today that become visible from time-to-time through their effects.  The recent Dubai ports flap, the apparent lack of interest in protecting our borders against illegal invasion, the wholesale off-shoring and outsourcing of American production, research and jobs are just some examples.  
 
Taken individually, these events don’t seem to make any sense.  And they don’t seem to be related.  But they do make sense, and they are shown to be related, if viewed as a coherent paradigm for a New Global View (NGV) that has as its centerpiece the dissolution of the fifty year historical anomaly known as the American middle class.
 
This series explains the origins, evolution and looming endgame of this conspiracy that governs the rise and fall of the American middle class.  

1.  The Rise and Fall of the American Middle Class: The Big Idea.
2.  The Rise and Fall of the American Middle Class: A Faulty Foundation.
3.  The Rise and Fall of the American Middle Class: The Seeds of Destruction.
4.  The Rise and Fall of the American Middle Class: American Dream a Global Nightmare?
5.  The Rise and Fall of the American Middle Class: Trading Places - the American dream for a third world Level Playing Field.
 
Over half a century ago the leaders of the victorious allies, specifically the Western powers, had a big idea.  The manifestation of this big idea, the Breton Woods Agreement, emerged out of WWII (1945) to stabilize the world economy.  
 
The NGV took form at Breton Woods during the closing days of World War Two.  The thinking among the war weary leaders of the Western Allies was that global stability, and the avoidance of major future wars, would result from a world where most if not all people lived in economic equivalence, later to be referred to euphemistically as a level playing field. 
 
In the view of these leaders, the American homeland, unscathed by the direct effects of the war, would emerge from the war as the standard for stability and peace, and would be the standard for the world to follow in developing the New World View.   

  

Little did they know where that would lead.
 
To be continued …
 
Reference: The Rise and Fall of the American Middle Class: Secret Memos 

 

The Rise and Fall of the American Middle Class: The Seeds of Destruction.

Posted By: AZ Moderate
Posted on: Jun. 20, 2006 at 11:26 AM
 

 

So the economic standard envisioned for the New Global View (NGV) by the planners and seers of the day was naturally expected to be more like some kind of trade-off between the roaring twenties and the great depression of the thirties, which was the only life experience they had to draw upon.
 
In fact there was a very real concern as to how to avoid plunging back into a pre-war global depression once the millions of soldiers, sailors and airmen returned home.
 
Well, a very astute promotion of two radically new ideas saved the day: living on credit (borrowing on one’s future worth); and creation of demand for manufactured goods and services for the sake of convenience.  It was an ingenious, and daring, new departure from traditional average American pay-as-you-go austerity, which had been reinforced greatly during the Great Depression and then the war years.  

Both credit and convenience have become intrinsic expectations, a birth-right even, for the American generations that have grown up in the last fifty years.  Credit has become a potential problem (See a backgrounder in The Confidence Game - Part 2 ) for our economy.  And convenience, which has spawned the throwaway culture, threatens our environment.  These expectations for the other 95% non-American population of the globe cannot be met, and therein lie the seeds of destruction for the NGV in it original form.
  
The rest is history for us.  We of course can see clearly the yawning gap between the new American middle class that emerged post-WWII as it raced ahead, and much of the rest of the world.  Hind-sight, as they say, is 20/20.
 
Unfortunately for the American middle class, today’s power elite sees them as an obstacle to leveling the playing in a way that is advantageous to it.

To be continued …
 
References:  

 
The Rise and Fall of the American Middle Class: The Big Idea.
The Rise and Fall of the American Middle Class: A Faulty Foundation. 
 


The Rise and Fall of the American Middle Class: American Dream a Global Nightmare?

Posted By: AZ Moderate
Posted on: Jun. 22, 2006 at 9:50 AM
 

 

About 1980 or so, a new crop of leaders here in America, heirs to that unique and tremendously successful accomplishment that is the American middle class, ibegan to inherit the charge from their forbears to move forward with the New Global View (NGV).  They were of a more recent generation and, unfortunately, of a much smaller caliber of leadership.  Most of them had never been tested in the crucible of war or economic hardship.  They were found wanting in wisdom, if not lacking in the inherited influence and wealth to nevertheless play with the levers of power. 
 
It was becoming apparent to this new crop of leaders that the playing field was tilting more in favor of the American middle class rather than leveling off globally.  This was not according to plan.  The plan was that the rest of the world’s economies would over the decades float up to the American level.  That wasn’t happening as the productivity of the American middle class increased and the demand for goods and services fueled the economy.  And it was about that time that the American citizen was replaced by the “Consumer”.    
 
And the gap would not be closing from the bottom up.  The American middle class consumed something like 35% of the worlds resources, and polluted about the same percentage or a little more, depending upon estimates.  With a U.S. population of 5% of the world’s people, it would take 1000% of the globe’s resources for China, India, Japan, Europe, South America, etc. to achieve the American middle class’ “standard of living”.  If you do the arithmetic, it turns out that the “American dream” becomes a global nightmare.
 
Hence the sharp turn by our elite leaders away from the idea of bringing the world up to the American middle class’ standard of living and toward the idea of pauperizing the American middle class to level its side of the playing field at the more sustainable second world, or even third world, elevation.  That lowering of the standard of living of course did not include the power elite who were at the helm as they turned the ship of state into much darker waters.
 
To be continued …
 
References:
The Rise and Fall of the American Middle Class: The Big Idea. 
The Rise and Fall of the American Middle Class: A Faulty Foundation.
The Rise and Fall of the American Middle Class: The Seeds of Destruction.  
 
 
The Confidence Game - Part 1 

 

The Rise and Fall of the American Middle Class: Trading Places - the American dream for a third world Level Playing Field.

Posted By: AZ Moderate
Posted on: Jun. 26, 2006 at 2:53 PM
 

The solution that our present “leadership” in this country has hit upon is to level the playing field, not by realizing the American dream globally, but by eliminating the American middle class by putting it in the poor house.
 
Of course the wealthy, powerful, corporate aristocracy will not only excuse itself from this process of pauperizing Americans, it will profit from it (as it always seems to manage to do).
 
The elements of the new model for the NGV are emerging for all to see:

o  Import illegal aliens to compete with legal Americans at the bottom of the economy;
o  Import skilled professionals to compete with legal Americans at the high end of the middle class; 
o  Outsource an increasing number Information Technology jobs to India via the undersea cable sold to India for penny’s on the dollar (our corporate masters are way ahead of the curve, aren’t they?);
o  Run back office jobs out of India via that same undersea cable; 
o  Offshore whole manufacturing and research facilities leaving (usually, anyway) a skeletal HQ structure here in the United States for tax advantage purposes when importing products back into the United States.
o  Flood the “American consumer” market with cheap stuff from China and Mexico (we have become consumer to the world while our decent paying jobs have been handed out to the world.)
o  open the floodgates, in collusion with the Mexican government,  to the invasion from our third world neighbor to;

    1.  allow wholesale identity theft, 
    2.  bankrupt the Social Security system,
    3.  overload and bankrupt welfare safety nets,
    4.  bring our education system to its knees,
    5  drive our overloaded hospitals to close their doors, 
    6.  wreak havoc with all middle class structures and programs.

o  serve up an endless war to:

    1.  generate continuous fear with trumped up straw men; 
    2.  suppress debate and legitimate political opposition to dictatorial intentions;
    3.  nibble away at our Constitution and Bill-of-Rights with wholesale indiscriminant illegal spying on the American public by  NSA/CIA and who knows what else.

o  allow foreign operation and ownership of our airlines, ports, shipping, etc., as payoff to global elite cronies.
 
The Mexican Aristocracy is more than cooperative in this assault on the American middle class by our own traitorous CorporaStocracy. 
 
Sit back and look at all of the seemingly mindless disjointed things that are going on inside the Beltway, and I would be surprised if you did not come away with the stench of the death of the American middle class at the hands of our own “leadership” in your nostrils!
 
References:
The Rise and Fall of the American Middle Class: The Big Idea. 

The Rise and Fall of the American Middle Class: A Faulty Foundation. 

The Rise and Fall of the American Middle Class: The Seeds of Destruction.

The Rise and Fall of the American Middle Class: American Dream a Global Nightmare?  

The Confidence Game - Part 3   

   

   

 

The Rise and Fall of the American Middle Class: Epilogue – A World View

Posted By: AZ Moderate
Posted on: Jul. 3, 2006 at 4:29 PM
 

The Economist came out with a Special Report: Inequality in America in the last issue.  It is interesting because the timing coincides with the end of the series The Rise and Fall of the American Middle Class here at Voice of Arizona.   

  

 

Even more importantly, it reinforces the theme of that series in no uncertain terms.  And this is a view from the outside looking in at us, rather than us simply introspecting.   

  

 

“During the 1950s and 1960s, the halcyon days for America's middle class, productivity boomed and its benefits were broadly shared. The gap between the lowest and highest earners narrowed. …. A few years later, at the start of the 1980s, the gap between rich and poor began to widen.”  (The rich, the poor and the growing gap between them, June 15th 2006)    

   

 

Yeah?!?  I wonder why??  Perhaps a review of the series The Rise and Fall of the American Middle Class would throw some light on this statement by The Economist, and furnish a perspective that the magazine just kinda nibbles at around the edges.     

   

 

“Economists have long debated why America's income disparities suddenly widened after 1980. The consensus is that the main cause was technology, which increased the demand for skilled workers relative to their supply, with freer trade reinforcing the effect. Some evidence suggests that institutional changes, particularly the weakening of unions, made the going harder for people at the bottom.”    

   

 

The Economist does an excellent job of analysis, some of which I want to share with you in a follow-on article.  But it p**** foots around the changes to the original blueprint for the New Global View (NGV) by the current crop of power brokers and examines the construction material (principle of which is Globalization) instead.  Whether this is out of ignorance, or caution, is a question that might be asked.    

   

 

In any event, the prognosis is not good in the view of The Economist.  “Whichever explanation you choose for the signs of growing inequality, none of the changes seems transitory. The middle rungs of America's labour market are likely to become ever more squeezed.”     

   

 

Perhaps there is a more satisfying meta-explanation?  We here at VofA have the advantage now of being familiar, courtesy of The Rise and Fall of the American Middle Class series, with the background for that which is materializing in our lives today.     

    

 

“But during the 1990s, particularly towards the end of the decade, that gap stabilised and, by some measures, even narrowed.”    

   

 

Apparently Bill Clinton and his band of merry liberal Democrats were not in on the change of plans for the NGV.  They were playing from the original hymnal, and the middle class benefited mightily from that under his benevolent and enlightened administration.    

   

 

But George W. Bush and his Dark Side Minions were determined to sing from the new revised NGV hymnal, and that with a vengeance.    

 

 

“After 2000 most people lost ground, but, by many measures, those in the middle of the skills and education ladder have been hit relatively harder than those at the bottom.”    

   

 

Not to panic, however.  Our elite leadership is safe.  Their boat is floating ever higher.    

   

 “The one truly continuous trend over the past 25 years has been towards greater concentration of income at the very top. The scale of this shift is not visible from most popular measures of income or wages, as they do not break the distribution down finely enough. But several recent studies have dissected tax records to investigate what goes on at the very top.  

         

 “The figures are startling. According to Emmanuel Saez of the University of California, Berkeley, and Thomas Piketty of the Ecole Normale Supérieure in Paris, the share of aggregate income going to the highest-earning 1% of Americans has doubled from 8% in 1980 to over 16% in 2004. That going to the top tenth of 1% has tripled from 2% in 1980 to 7% today. And that going to the top one-hundredth of 1%—the 14,000 taxpayers at the very top of the income ladder—has quadrupled from 0.65% in 1980 to 2.87% in 2004.”  

  

It seems that “The fruits of productivity gains have been skewed towards the highest earners, and towards companies, whose profits have reached record levels as a share of GDP.”  

    

The average middle class salaryman and wage-earner are running harder in place while the Big Boys turn up the speed on the productivity treadmill.  

     

The Average American has a vague sense that something is not right with this picture.   

    

 “According to the latest Gallup survey, fewer than four out of ten think it is in “excellent” or “good” shape, compared with almost seven out of ten when George Bush took office.”   

     

But George is serene   … “The White House professes to be untroubled.”   

     

According to The Economist he may have some in-house disagreement.  “Eventually, the country's social fabric could stretch. 'If things carry on like this for long enough,' muses one insider, 'we are going to end up like Brazil'—a country notorious for the concentration of its income and wealth.”    

   

How’s your Portuguese my friend?