|America's lumpen middle class...
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Yes, dear reader, the chattering classes are upset by "inequality." One man has a lot. Another has a little. Naturally, the man with little is jealous. And the fixers come forward with yet more fixes.
Jesus said that "the poor will always be with us." But do there have to be so many of them? And what about the middle classes? They seem to be disappearing; their share of national income has gone down shockingly.
Rich? Poor? We've been both. And we don't really give a damn. But everybody wants to be the hero of his own story. Our goal here on the ranch is to make the enterprise profitable...and to hire more people and raise wages. People will be better off, financially, and we'll be loved by one and all. Maybe the local people will erect a monument to "Don Bill"...or at least remember his name when he dismounts for the last time. We'll let you know how that works out over the next few years.
Meanwhile, let's moan together about the plight of America's lumpen middle class. But first, we will give you a 'heads up.' Unlike Thomas Piketty, we will not blame capitalism; the free market is merely the aggregated choices of free consumers, workers, producers, and investors. Nor, like Paul Krugman, will we blame hard-hearted Republicans; it is the soft heads of both parties whom we hold responsible. Yes..we lay the blame where it belongs...
...on the jackasses who created today's ever-expanding credit bubble. Johnson...Nixon...Reagan...Greenspan...Bernanke...
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The destruction of middle class incomes is just one of the miseries their policies wrought. Here's the Washington Post on the subject:
Wages aren't stagnating, they're plummeting
But wait. There's more. Ted Bauman reports:
Many economists have expressed concern that median wages have stagnated since the 1970s....
But it's actually worse than that. The best recent work on changes in male wages has been done by Michael Greenstone and Adam Looney of the Hamilton Project, and they have found that median earnings for men have actually declined since 1969:
... median earnings for men in 2009 were lower than they were in the early 1970s. And it gets worse. The decline shown above is actually too mild, because it doesn't take into account the massive exodus from the workforce of men since that period. Between 1960 and 2009, the share of men working fulltime fell from 83 percent to 66 percent, and the share not making formal wages tripled from 6 percent to 18 percent. When you take all men, not just those working fulltime, into account, the slight decline in the above graph becomes a plummet of 28 percent in median real wages from 1969 to 2009.
Last week, The New York Times lobbed a bombshell: the U.S. middle class is no longer the world's top earner. Many countries' middle classes now bring home more real income than ours. That includes our neighbor to the north, Canada (good news for Canada Day, July 1). The Dutch and Norwegians, who already earn more than the bottom 50% of Americans, are close behind.
Surely this is a great oddity too. The feds create a credit boom that adds $33 trillion to national spending (and debt) over the last 40 years. This is the greatest stimulation program of all time. And it is an economic disaster. Middle class incomes go down. Debt goes up. Real wealth deteriorates. Real capital disappears. Growth declines.
When we look at net worth per capita for the U.S. middle class, we find that it's not just the Canadians who beat us. Just about every developed country does. Middle class households in the U.K., Japan, Australia, and - get this! - Italy have more than doubled the wealth of their U.S. counterparts. Luxembourg, Belgium, Iceland, Singapore, Austria, Qatar and Kuwait are all also ahead of the U.S. Overall, we're 24th.
But the true picture is even worse than that. Calculations of per capita net worth for the U.S. include personal retirement plans like IRAs and corporate pensions. In most of the countries that are ahead of the U.S., citizens receive excellent public pension benefits, which aren't included in personal net worth. As a result, they tend to save a lot less for retirement than we do. And yet they still have greater net worth than us.
In other words, not only is the American middle class earning less than those of other countries - it's also getting poorer.
Result: people get poorer.
Reaction of the elite: criticize capitalism for causing 'inequality.' And demand more control by the feds!
Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.
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