Sunday, July 27, 2014


We already knew this, but here's more evidence that the contemporary U.S. economy is an inequality production machine:
The Typical Household, Now Worth a Third Less

... The inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36 percent decline, according to a study financed by the Russell Sage Foundation. Those are the figures for a household at the median point in the wealth distribution -- the level at which there are an equal number of households whose worth is higher and lower. But during the same period, the net worth of wealthy households increased substantially.

The Russell Sage study also examined net worth at the 95th percentile. (For households at that level, 94 percent of the population had less wealth and 4 percent had more.) It found that for this well-do-do slice of the population, household net worth increased 14 percent over the same 10 years....
How does the right-wing blogosphere respond to this? Gateway Pundit: "OBAMANOMICS IN ACTION: Typical US Household Worth One-Third Less Than Under Bush." Scared Monkeys: "Obamanomics is Crushing America … Typical US Household Getting Poorer, Worth One-Third Less Than GWB."

Yes, that's the right-wing spin on this: it's all the result of too much liberalism. It's all Obama's fault.

Is what we're experiencing the result of "Obamanomics"? It's true that President Obama has been too deferential to Big Finance and conservative thinking -- there were no prosecutions of top bankers, there was too much too much talk of coming to "grand bargains," and efforts to provide mortgage relief after the housing crash were laughably inadequate. But the 2009 stimulus was whittled down by united Republicans and turncoat Democrats. The belt-tightening of the sequester came after Republicans pushed America to the edge of default. An Obama jobs bill has languished for years.

We elected what a lot of people assumed was a liberal government in 2008, but there's an embargo against liberalism in America. Republicans are wholly in thrall to the plutocracy, but Democrats are largely in thrall -- you can't go to D.C. as an elected official without raising massive amounts of money, and that means you can't ruffle the feathers of the folks who pay your bills. Democrat might get a little liberalism through the legislative process, but centrist Democrats will unite with Republicans and the right-wing media (usually with the mainstream media's assistance) to prevent this sort of thing from going too far. Now that the rich no longer fear that workers will go communist anywhere in the world, they have no incentive to maintain a strong, thriving middle class in the First World. So whenever liberalism threats to break out, they intervene. And so it's their economy.

Working to ensure that anyone elected as a liberal will fail to make life better for ordinary Americans is part of the effort to prevent liberalism from ever taking root again in America. The point is to persuade voters to reject politicians who propose activist-government interventions in the marketplace. It may be working, if we're to believe polls suggesting that the culturally liberal next generation is nonetheless skeptical of government and libertarian-leaning.

Inequality will increase until ordinary people find a way to break the embargo against liberalism and seize some power from the rich and the politicians the rich employ to enforce the embargo. I just wonder if any of us will live to see that happen.


Anonymous said...

Uh, I see a lot of George W. Bush years in that timeline, including, say, just randomly, 2008?

Anonymous said...

Apropos your final paragraph, her is Donald Boudreaux at Café Hayek:

"If ordinary people – spared lectures and long tomes by intellectuals – are blind in their daily lives to the vast inequalities in economic fortunes that intellectuals are constantly warning will trigger revolutionary anger in ordinary people, then the most plausible explanation for this blindness is that there is, in reality, nothing to see. Ordinary people aren’t blind; instead, “Progressives” are hallucinating. If ordinary people’s reactions (as reported by Porter) are evidence of economic reality, then everyday life in market-oriented societies is not marked by growing economic inequality of the sort that ultimately matters: inequality in people’s ability to consume. If professors must write 700-page books, and “Progressive” columnists must harp continually about growing economic inequality, in order for ordinary people even to begin to become aware of this inequality, then it’s quite implausible to maintain that modern capitalist societies are generating ‘terrifying’ degrees of economic inequalities."

So, keep on churning out your sermons telling people they really are poor - even if it is self-evident that most of them don't think they are!

David Duff

Steve M. said...

You lost me at "Hayek."

But seriously -- that's your argument? That if ordinary people don't see something, it doesn't exist? Does that extend to, say, the heliocentrism of the solar system? After all, ordinary people don't see the sun standing still while the earth revolves around it -- they see the opposite. So you're arguing, as a conservative, that the sun revolves around the earth?

As it turns out, the vast majority do see economic equality increasing, and want government intervention as a result.

Unknown said...

Why in the world are RWNJs so scared of "intellectuals" and "long books"? said...

I see a troll from Cafe Hayek came by to change the subject. Just a s quick reply. First, liberalism, and even social democracy, is not about revolution, but about tweaking the system. Most people working one and 1/2 jobs, long commutes, and taking care of kid don't have much energy for revolution, and besides, they want the system to pay their social security checks when they get old and used up. A revolution might mean those checks don't show up. Just because they not reenacting the October revolution does not mean they are happy. Most of that decline in wealth is the result of housing values crashing and only partially recovering and the millions who lost everything in foreclosure. If you had a $100,000 in equity in 2006 and ended up being in foreclosure or a short sale by 2009, you lost all that wealth. And Obama, reflecting the neoliberal capture of the Democrats in the late seventies and eighties, adopted policies that please the bankers and stuck it to the debtors. But the Democrats remain the lesser of two evils in the current system by a large margin.

Procopius said...

"Now that the rich no longer fear that workers will go communist anywhere in the world, the have no incentive to maintain a strong, thriving middle class in the First World." This is a point I don't see often enough. I've just started reading Arthur M. Schlesinger, Jr.'s "The Crisis of the Old Order," first of three volumes on the history of "The Age of Roosevelt." I hadn't realized, or had forgotten, how much social unrest there was in 1919. Granted, the Bolshevik Revolution got the international elites worried that revolution could be exported, but then the Depression caused a tremendous re-thinking of the social contract. I never realized until reading this why Hayek was so terrified of planning. Anyway, I'm afraid wa aren't going to see sufficient motivation until the 0.01% finish their job of tearing down the tattered social safety net and we have literally tens of thousands of people stopping garbage trucks in the streets to root through them for something that's still edible. The Great Recession was nothing compared to what was happening in 1930-31.