Category: The New Depression

‘The pitchforks are coming’

~ susie ~ 7 Comments

Torches & Pitchforks

One of my friends just sent me this piece from Politico written by Nick Hanauer, a .01%er, “to my fellow zillionaires”:

But let’s speak frankly to each other. I’m not the smartest guy you’ve ever met, or the hardest-working. I was a mediocre student. I’m not technical at all—I can’t write a word of code. What sets me apart, I think, is a tolerance for risk and an intuition about what will happen in the future. Seeing where things are headed is the essence of entrepreneurship. And what do I see in our future now?

I see pitchforks.

At the same time that people like you and me are thriving beyond the dreams of any plutocrats in history, the rest of the country—the 99.99 percent—is lagging far behind. The divide between the haves and have-nots is getting worse really, really fast. In 1980, the top 1 percent controlled about 8 percent of U.S. national income. The bottom 50 percent shared about 18 percent. Today the top 1 percent share about 20 percent; the bottom 50 percent, just 12 percent.

But the problem isn’t that we have inequality. Some inequality is intrinsic to any high-functioning capitalist economy. The problem is that inequality is at historically high levels and getting worse every day. Our country is rapidly becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution.

And so I have a message for my fellow filthy rich, for all of us who live in our gated bubble worlds: Wake up, people. It won’t last.

If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It’s not if, it’s when.

Many of us think we’re special because “this is America.” We think we’re immune to the same forces that started the Arab Spring—or the French and Russian revolutions, for that matter. I know you fellow .01%ers tend to dismiss this kind of argument; I’ve had many of you tell me to my face I’m completely bonkers. And yes, I know there are many of you who are convinced that because you saw a poor kid with an iPhone that one time, inequality is a fiction.

Here’s what I say to you: You’re living in a dream world. What everyone wants to believe is that when things reach a tipping point and go from being merely crappy for the masses to dangerous and socially destabilizing, that we’re somehow going to know about that shift ahead of time. Any student of history knows that’s not the way it happens. Revolutions, like bankruptcies, come gradually, and then suddenly. One day, somebody sets himself on fire, then thousands of people are in the streets, and before you know it, the country is burning. And then there’s no time for us to get to the airport and jump on our Gulfstream Vs and fly to New Zealand. That’s the way it always happens. If inequality keeps rising as it has been, eventually it will happen. We will not be able to predict when, and it will be terrible—for everybody. But especially for us.
***
The most ironic thing about rising inequality is how completely unnecessary and self-defeating it is. If we do something about it, if we adjust our policies in the way that, say, Franklin D. Roosevelt did during the Great Depression—so that we help the 99 percent and preempt the revolutionaries and crazies, the ones with the pitchforks—that will be the best thing possible for us rich folks, too. It’s not just that we’ll escape with our lives; it’s that we’ll most certainly get even richer.

Sharing productivity gains? Don’t make me laugh

~ susie ~ 2 Comments

Most people I know who were lucky enough to get raises got only one or two percent:

NEW YORK (AP) — If you hope to get a raise that finally feels like one, it helps to work in the right industry.

Pay for all kinds of workers should be rising by this point in the economy’s recovery. But five years after the Great Recession officially ended, raises remain sharply uneven across industries and, as a whole, have barely kept up with prices. Overall pay has been rising about 2 percent a year, roughly equal to inflation.

The best raises have gone to workers with specialized skills in a few booming industries — energy, transportation, health care, technology. Those in retail or government have been less fortunate.

“If you’re in an in-demand field, with the right skill set, the chance of getting a raise is much higher,” says Katie Bardaro, an economist at PayScale, a pay-tracking firm.

10,000 suicides tied to recession

~ susie ~ 3 Comments

How can you be sure, how can you be certain?

Oh, come on! It only has important implications for policymakers if they want to stop them:

The lost jobs, sinking home values and stock market free-fall of the Great Recession led to a significant rise in suicides, according to a new study.

At least 10,000 more Americans and Europeans took their own lives from 2007 to 2010 than during the good economic times of the previous few years, the study found.

“It’s a fairly large and substantial increase over what we would have expected,” said Aaron Reeves, a sociologist and post-doctoral researcher at the University of Oxford in England, who helped lead the research. “There are, broadly speaking, large mental health implications of the economic crisis that are still being felt by many people.”

Suicide rates didn’t climb evenly. In Sweden and Austria, rates remained flat during the Great Recession, although those nations’ economies struggled as much as others did – suggesting that the link between recession and suicide is not inevitable, said David Stuckler, a professor and health economist at Oxford and the paper’s senior author.

“These economic suicides are avoidable,” he said.

Sweden had strong support for people who lost their jobs or were struggling financially, Stuckler said.

This finding has important implications for policymakers, said Abdulrahman El-Sayed, a doctor and assistant professor of epidemiology at the Mailman School of Public Health at Columbia University in New York City.

Mental health and the long-term unemployed

~ susie ~ 2 Comments

IMG_1901

I think of the many people I know who got knocked down and never got back up. I think about my friend Lyn, who just couldn’t take it. I know there must be thundreds of thousands in the same horrible place:

A comprehensive study of long-term unemployed published by Rutgers University’s John J. Heldrich Center for Workforce Development in 2011 found that the vast majority of unemployed workers experienced stress in their relationships with family and friends and that at least 11 percent reported seeking professional help for their depression within the previous 12 months.

One in two of the respondents in the two-year national study said they began avoiding friends and associates out of a sense of shame and embarrassment — a self-imposed isolation that hurt their ability to network to find work.

“Because of the persistence of high levels of long term unemployment there are millions of people who are suffering from mental health problems and many of them are going untreated by professionals,” Carl Van Horn, a professor of public policy and economics at Rutgers and head of the Heldrich Center, said this week.

“Losing a job is more than just a financial crisis for people,” Van Horn says. “It creates numerous other damage: stress, anxiety, substance abuse, fights, and conflicts in the family and feelings of embarrassment and depression.”

The plight of many of the long-term unemployed became even direr in late December after Congress allowed jobless benefits to expire for more than 1.6 million Americans. Senate Majority Leader Harry Reid (D-NV) vowed that renewing an extension of federal unemployment insurance benefits would be the first order of business when the Senate returned in January, but Republicans have blocked Democratic efforts to extend the program for those who exhausted their 26 weeks of state benefits.

“There are now 1.6 million unemployed Americans cut off and 2.3 million children affected,” said Sarah Ayres, a policy analyst with the liberal Center for American Progress. “This money is going to people who are going to spend it — they’re putting it right back into the economy. This is really a self-inflicted economic wound.”

The number of individual recipients whose benefits expire runs to about 70,000 a week.

The mental health crisis among the long term unemployed rarely gets much attention, although Van Horn has described the combination of long-term unemployment and diminished government support as “a silent mental health epidemic.”

Long-term unemployment frequently causes depression, drug and alcohol abuses, spousal abuse, divorce, and even suicide. Many of these unemployed Americans couldn’t afford to seek professional help because they lost their employer-provided health care insurance when they were laid off. At the same time, federal, state, and local governments cut back on spending for mental health clinics and outreach in response to budget crises spawned by the bad economy.

A 2013 Urban Institute study on the consequences of long-term unemployment found, “The long-term unemployed also tend to earn less once they find new jobs. They tend to be in poorer health and have children with worse academic performance than similar workers who avoided unemployment.”

Thanks to Patrick Rooney.

Our betters are getting nervous

~ susie ~ 2 Comments

Guillotine

But not enough yet to substitute public relations for substance:

Yesterday’s Conference on Inclusive Capitalism co-hosted by the City of London Corporation and EL Rothschild investment firm, brought together the people who control a third of the world’s liquid assets – the most powerful financial and business elites – to discuss the need for a moresocially responsible form of capitalism that benefits everyone, not just a wealthy minority.

Leading financiers referred to statistics on rising global inequalities and the role of banks and corporations in marginalising the majority while accelerating systemic financial risk – vindicating the need for change.

While the self-reflective recognition by global capitalism’s leaders that business-as-usual cannot continue is welcome, sadly the event represented less a meaningful shift of direction than a barely transparent effort to rehabilitate a parasitical economic system on the brink of facing a global uprising.

Central to the proceedings was an undercurrent of elite fear that the increasing disenfranchisement of the vast majority of the planetary population under decades of capitalist business-as-usual could well be its own undoing.

The Conference on Inclusive Capitalism is the brainchild of the Henry Jackson Society (HJS), a little-known but influential British think tank with distinctly neoconservative and xenophobic leanings. In May 2012, HJS executive director Alan Mendoza explained the thinking behind the project:

“… we felt that such was public disgust with the system, there was a very real danger that politicians could seek to remedy the situation by legislating capitalism out of business.”

Well, we can’t have that, can we?

The Initiative for Inclusive Capitalism’s recommendations for reform seem well-meaning at first glance, but in reality barely skim the surface of capitalism’s growing crisis tendencies: giant corporations should invest in more job training, should encourage positive relationships and partnerships with small- and medium-sized businesses, and – while not jettisoning quarterly turnovers – should also account for ways of sustaining long-term value for shareholders.

The impetus for this, however, lies in the growing recognition that if such reforms are not pursued, global capitalists will be overthrown by the very populations currently overwhelmingly marginalised by their self-serving activity. As co-chair of the HJS Inclusive Capitalism taskforce, McKinsey managing director Dominic Barton, explained from his meetings with over 400 business and government leaders worldwide that:

“… there is growing concern that if the fundamental issues revealed in the crisis remain unaddressed and the system fails again, the social contract between the capitalist system and the citizenry may truly rupture, with unpredictable but severely damaging results.”

There’s more, go read it.

Hanging by a thread

~ susie ~ 3 Comments

Times are Hard

This guy did everything “right,” in the world according to wingnuts. Business degree, not a humanities major. Right-thinking Republican who identifies as libertarian. Guys like this remind me of the right-to-lifers who never actually realized that changing the legal definition of life to the moment of conception meant that women who had abortions would have to be sent to jail for murder. They never bother to think things through to the logical conclusion: Voting for Republicans guarantees you will get shafted when you most need help:

Before the recession hit, Russ Holton was making more than $100,000 a year at his sales job with a Cincinnati information technology company. Today, the 45-year-old Mason man is on food stamps and barely scraping by on income from a part-time maintenance job — a contract position that’s about to end.

Holton is one of about 62,000 Ohioans who have lost their unemployment benefits this year — and who watched anxiously as Congress debated, and then deadlocked, over an extension of that financial assistance for the long-term unemployed.

For Holton, the weekly unemployment checks he received until the end of December — about $400 per week for him — were a lifeline. He was using the money to pay his rent, put gas in his car, and buy food while he took night classes to start a new career. In November — if all goes as planned — Holton will earn a certificate from the Warren County Career Center in network administration, putting him back on a path to a good-paying job overseeing computer networks.

But Holton is not sure how he’ll get to November.He’s already borrowed money from his parents and can’t ask them for more. His friends have helped him with utility bills and a few other basics. He is managing to keep afloat right now, earning about $320 per week doing housing repairs, but his contract will end next month.

“I’m living paycheck to paycheck and every penny I’m accounting for,” Holton said.

He never expected to be in this position. He studied business management at the University of North Carolina. Although he did not complete his degree, he found work in the mortgage industry. Holton moved to Cincinnati with his wife about 10 years ago. He got a job at Fifth Third Bank before moving into sales. In 2007, he said, he and his wife earned $225,000.

Then the economic meltdown hit, he got divorced, and his sales income began to drop.

“The markets just changed with the recession, and it was hard to get people to open their checkbooks,” Holton said. Last April, he was laid off. A friend gave him temporary work installing home entertainment systems but that work dried up in July.

He applied for unemployment and started receiving $396 a week. And he enrolled in the network administration program at WCCA through a federal workforce training program. The program allowed him to keep receiving unemployment benefits and focus on his studies without having to actively look for a new job.

Then he realized the federal unemployment benefits — enacted by Congress amid the recession and extended several times during the slow recovery — were set to expire on Dec. 28. Holton, who said he is a registered Republican with libertarian leanings, soon found himself glued to the TV for the latest news out of Washington, where Senate Democrats had vowed to push through an extension.

At first, Holton said, “I thought it would only be a matter of weeks” before Congress approved legislation to renew the benefits. But “as I started watching, it got increasingly frustrating,” said Holton.

Economic recovery surges ahead for CEO pay…

~ Boohunney ~ 1 Comment

Median CEO pay packages hit the 10.5 million mark in 2013…

Propelled by a soaring stock market, the median pay package for a CEO rose above eight figures for the first time last year. The head of a typical large public company earned a record $10.5 million, an increase of 8.8 percent from $9.6 million in 2012, according to an Associated Press/Equilar pay study.

Last year was the fourth straight that CEO compensation rose following a decline during the Great Recession. The median CEO pay package climbed more than 50 percent over that stretch. A chief executive now makes about 257 times the average worker’s salary, up sharply from 181 times in 2009.

These “brainiacs” must really be worth it…

From 1978 to 2011, CEO compensation increased more than 725 percent, a rise substantially greater than stock market growth and the painfully slow 5.7 percent growth in worker compensation over the same period.

Last year was a record breaking year for corporate profits. After taxes, it was $1.68 trillion.

But, hard work hasn’t really paid off for most workers…

EPI labor economists looked at wage trends in all income levels and found that Americans earning at or below 60 percent of the distribution of wages in the U.S. — a vast majority of working Americans — saw no gains in their wages between 2000 and 2012. At the same time their productivity increased nearly 25 percent.

And the quality and wages of new jobs has declined that many workers must supplement their income by assistance…

Low-wage, part-time jobs in the retail and service sectors have made up the bulk of job growth since the recession. Though these low wages help businesses reduce their labor costs, taxpayers usually pick up the slack; workers are increasingly turning to public benefits like food stamps and Medicaid to make ends meet.

Even with low labor costs, many businesses are fighting a minimum wage increase that could lessen the persistent gap between productivity and compensation. Studies show that the minimum wage, if it had kept pace with productivity gains over the past 30 years, would have been $21.72 last year – a far cry from President Obama’s recent proposal of $10.

Aside from the new CEO pay record; these are pretty well known common facts. Just a reminder if you didn’t have anything else to be depressed about today. What I am trying to understand is how ‘merica can have a successful consumer based economy if these conditions persist. I just predict a lot of debt for the declining middle class.

Giving up

~ susie ~ 2 Comments

Be Your Way (2014) ...item 3.. Burger King Scrapping "Have It Your Way" Slogan (May 19, 2014) --- The Idiot • What you be say? ...

I know so many people who have stopped looking, so this doesn’t surprise me:

Some 47% of unemployed Americans say they’ve given up on looking for work, according to a poll commissioned by staffing firm Express Employment Professionals.

More than half say looking for work has been more difficult than expected; only 2 in 10 currently receive unemployment benefits.

Among the rest, nearly a third aren’t eligible and 30% never applied, according to the data, which was collected by Harris Poll from April 9 to 21 from among 1,500 unemployed adults.

The jobless rate nationwide dropped to 6.3% last month — the lowest level since 2008 — as the nation added 288,000 jobs, according to the government.