Politics

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Education and the Class System

America has so many social problems it’s hard to know where to begin. The Katrina disaster showed us the third world nature of our attitude toward poverty. And now there’s this news about education:Financial Aid and the Poor

All the evidence points to the fact that America is developing a class system based around education: each generation sees more and more of the nation’s higher education dollars spent on children whose parents were themselves college graduates. this leaves ever decreasing amounts for children of poor families where the parents had no such education.

The result is that the chances of moving up the economic ladder are being reduced: studies have recently shown that America has less upward mobility than most other western countries despite the legendary American Dream. This is damaging the aspirations of the poor and causing a permanent underclass to develop.

That will have serious political and social consequences down the line.

Meanwhile we need to shed the idea that discussions of class are somehow “un-American”. They are not. At least not if you’re poor.

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Economic Stagnation

I hate it when the headline writers try to be upbeat when the whole gist of the subsequent story is downbeat. The New York Times falls into that trap with today’s story about personal incomes: Census Reports Slight Increase in 2005 Incomes – New York Times

Now if you look quickly at the headline you’d think there is a pretty good story to tell. Not great, but definitely upbeat. The trouble is that’s not the case. The only reason that incomes rose at all in 2005 was the fact that people were working more and thus getting more hours worth of pay. Wages per hour actually fell.

This is just the kind of gloss that the Bush regime likes to put on its dismal record. After years of growth, productivity improvements, and profits, the average family in America is worse off than before Bush arrived on the scene. The distribution of incomes is increasingly skewed away from wage earners towards stockholders and towrads the very few at the top of the heap.

The Republican squeeze on the middle class is showing just the kind of results you would expect, and the middle class response is to work longer hours to try to keep up. It is not a triumph that incomes rose because we worked more hours. Those hours are lost to family time, to leisure, to community activities and to keeping informed. The American public already overworks. It has notoriously few holidays, and works ridiculous weekly hours.

No wonder no one has time to keep up with the news and to remain fully informed about the Republicans failure at economic management.

Then again maybe that’s part of the plan too!

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Rumsfeld is an Idiot

Dear old Rummy. Remember him? He’s the one who sent us into Iraq undermanned, underplanned, and underarmored. Well he’s re-emerged as the hit man for the Bush regime’s last gasp at making us all scared. He says that we shouldn’t appease the “Islamofascists”. The New York Times has his comments here: Rumsfeld Lashes Out at Bush’s Critics

Frankly he should shut up and go away. He failed. His advice was appalling. His incompetence is astonishing. America has sunk into international disrepute on his watch. He over stretched our military. He ignored the advice of his generals. We are less safe. And Iraq has slipped into civil war. The guys a bozo. No one should take him seriously.

Get out Rumsfeld! You owe it to America to make way for a real patriot.

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Budget Woes

This analysis, by the Center on Budget and Policy Priorities, highlights the hole the Republicans have dug for us over the past few years: Budget Deterioration from 2000-2006
One of the Largest Ever

The deterioration in America’s budget is both startling and historically huge. Yet the public rarely focuses on it. The year on year damage is bad enough, but the comparison with the 1990’s is downright depressing.

The rhetoric that “the tax cuts pay for themselves” is blown away by study after study. Even the Treasury’s latest effort which you can find an anlysis of here: Analysis of Tax Cuts shows that, at best, only 10% of the tax cuts will ever be paid for by economic improvements resulting from those same tax cuts. On the contrary the evidence is overwhelming that unless the tax cuts are paid for immediately by offsetting cuts in government spending they end up hurting by reducing employment and investment levels later on.

There is no other way to put it: the Republican policy of the last few years has been an unmitigated disaster.

Our kids will look back at these years and ask why we hated them so much that we voted for Bush and his cronies.

And why do the Republicans hate the middle class so much?

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Where Have the Wages Gone?

Well I am back from my summer break and what do I find? This depressing news in the New York Times: Real Wages Fail to Match a Rise in Productivity

Wages, as a percentage of the economy, have reached a lowpoint of 45.3% and have given back all the gains of the late 1990’s. Part of the reason is that benefits such as health care costs, which are considered part of total compensation, have risen so quickly that employers have diverted cash that could have been used for wage increases into paying for them. So workers get a “pay raise” even if the cash they take home doesn’t rise. This draining away of cash is just another effect of America’s failed health care system. Runaway inflation in health care costs is strangling the potential for wage increases. This leaves workers with less for other things, and more to the point it means that they fall progressively further behind inflation.

Grim though this is, it is not the whole story: productivity has growen strongly, but the benefit of that improvement has gone almost entirely to stockholders, not to workers. This is unusual. One of the key drivers of wage gains has traditionally been an increase in productivity. Now, it appears, corporate owners are keeping the benefit for themselves and are not passing it along. They are not even sharing it a little. The share of the economy taken up as profits is at its highest for forty years, which is not surprising in a Republican era, but which is still a little eye popping when the rhetoric of the Republicans is considered. After all they are constantly beating the drum for cuts in corporate and dividend taxes so as to encourage investment. Surely a record share of the economic pie is enough of an incentive to invest already? Plus the benefits of this record share of wealth held by profits eventually flows to the Republican contituency: the wealthy who hold the vast majority of the stock of American companies.

It is statistics like these that can be depressing. The plutocracy has regained control of America and the heyday of the middle class is over for now. Look at these numbers in the context of the massive divide in the distribution of income and wealth. The success of the Republican agenda to destroy the middle class is ever more evident.

Remember that the American middle class is a phenomenon of the post war years. The distribution of income that was radically altered and tilted away from the rich by the New Deal, and the prolonged post-war boom when America had no serious economic competition were the two pillars of the expansion of the midddle class. Then came complacency and a post-war generation that did not realize the value of the social programs that underwrote their position. That generation saw social programs as a cost, as a burden, rather than as an insurance. They bought into the apparent, and surface, dynamism of the “market knows best” mantra spewed out by the Republicans. They bought into tax cuts for the rich. They bought into gutting programs for the poor. They really thought they could defy economics 101 that teaches that without government intervention the rich will always dominate and work to exclude the masses. They also forgot that the middle class is part of the masses, a privileged part perhaps, but inexorably a part. When the plutocracy wants to squeeze more wealth for itself it cannot turn to the poor: there is nothing there to squeeze. No. The people to squeeze are the middle class.

Numbers like these wage figures show just how successful the plutrocrats have been.

Like a boiled frog the middle class just keeps on voting for Republican economics unaware that it is killing itself. Maybe that will change. Maybe not.

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