So, reading this book is making me ponder what separates Third World countries from Developed countries. The answer is rather simple: the middle class. A thriving, healthy, stable middle class separates the two.
So, where is the United States? Or rather, where is the United States heading?
Without a doubt, the middle class is shrinking. Not only is it shrinking, it has become incredibly unstable. My parents' generation had planned on getting a job, and keeping it until they retired. That was their plan, that's what they expected. My parents' generation also saw something we don't see anymore - hard work paying off. You know, the American dream? Where anyone could work their way into the middle class, and then work their way into upper middle class if they worked hard enough. This was back when there was middle management - somewhere between the top and the bottom-of-the-middle. This was back when you could get a job that paid the bills out of high school. This was back when America produced something. We stopped being citizens and became consumers somewhere along the line. Today, the American dream isn't based off of hard work. The American dream has become more of a lottery ticket - based off of luck and chance. Today a child of a middle class home with a college education has a smaller chance of gainful employment than a child from the top 20% of earners with no college at all. This is a time where the rich get richer, the poor get poorer, and the middle class gets out sourced. What the hell happened? What will happen? Does anyone in power care enough to do anything? What do I think? I think it time to start looking for jobs in Canada and Europe, that's what I think. Here's a little to think about while you make your decision.
Capitalism - the invisible hand that screws us all
So if you know me, you know I'm not a fan of this already. If you don't know me, you probably aren't reading this... yet. When communism fell as a government, it was because it didn't work. Most of everyone involved in it eventually admitted it, or was killed before hand. When our economy failed horribly, capitalists still said it worked... in fact they said it needed less regulations. They still cling to an ideology that in practice, does not work. As capitalism continues, as Mr. Marx once said, it contains the seed of it's own destruction. So, when that seed blows up on all of us, what did we do? We said plant another seed, but let it grow more freely - make sure it takes EVERYTHING with it. If there was not a huge difference in information distribution and access difference among everyone involved, it wouldn't be so bad. It isn't the access to money that's the issue. Before everything went to hell, most of America had money. The issue wasn't money, it was access to resources and information that destroyed us all. Someone said "if all the money in the US was distributed evenly to everyone, there would still be rich and homeless people." Well, yes. Now I pose the question: if all the knowledge and resources were distributed evenly would there still be rich and homeless people? If people knew how to get a job, keep a job, and invest their money appropriately, would that help? If people didn't have privileged information about how things work, would it make a difference? If we all had equal access to education, vocational training, life skills coaching, health care, and professional training would it make a difference?
Hey, you say to me, we all have equal access to those things already! Hey, I say to you, no. There are levels of these things that only the privileged have access to. The upper parts of it. How would a person without a college education fair better than the person with a college education? Easy, their parents were wealthy. That's not some silly idea I just made up, that's how it works in the US today. There are numbers, real numbers, that you can look at and say, "hey, that number is bigger than that number." It's true that blue-collar Dad can beat up white-collar Dad. However, white-collar Dad can fire your blue-collar Dad and send his job to Mexico and make a PO Box in the Caymans so that blue-collar Dad does not, and will not, have a job to support you and the rest of your family.
Outsourced - not just a TV show. Look around. It's happening to you.
"They took our jobs (or Jerbs if you watch South Park)!"
No, no they didn't. "They" had nothing to do with your job going to Mexico, Indonesia, or China. "They" did not come over through a coup de tat overthrow the CEO and force him to send your job over to "their" place. That's like saying the Africans jumped on one of our boats and said, "Hey, we're your slaves, and you won't ever work your own tobacco farm again." Everyone blames the wrong people in this situation. Why? Probably because it's easier to blame the idea that you have the least control over. There is no possible way for the person whose job has been sent somewhere to control what the workers in Indonesia are doing, or how they feel, or whether they get "your" job. I'm sure "they" were hoping to do your job for an 8th of the pay you received. I'm sure "they" are thanking their lucky stars to be able to make your John Deere hydraulic system for 2 bucks an hour for 80 hours a week with no overtime or benefits. How dare "they" do this to us?
Stock prices and wage gap. That invisible hand that keeps screwing us... that's what you should be angry about. CEOs and other executives at the top of big companies make 150% more than their lower employees. During my parents' generation, it was close to 33%. So, the rich are getting richer... at an exponential rate. What are they doing with their new wealth? Playing with our money. They pass it around, put interest on it, and make more of it - for them. Also, they are keeping more of their money than we are of ours. Warren Buffet noted in 2007 that his receptionist paid 30 percent of her income in taxes, while he paid only 17.7 percent on his taxable income of $46 million. They also keep more of their money by putting a PO Box off shore... places like the Cayman islands. The Caymans are a tax haven - no taxes - for commercial businesses. Here's some numbers for you to look at from the Government Accountability Office (GAO).
83 of the 100 largest publicly traded companies in the country had subsidiaries in tax havens. Of those 83, 74 received contracts in 2007.
More than 18,000 companies are registered at a single address in the Cayman Islands.
Morgan Stanley had 273 subsidiaries in tax havens
Citigroup had 427
Bank of America had 115
Goldman Sachs had 29
Wells Fargo had 18
KBR/Halliburton (see also Dick Cheney) listed 10,500 Americans officially employed by a two companies that "exist in a computer file on the fourth floor of a building on a palm-studded boulevard here in the Caribbean." This means a few things: no medicare or social security taxes were paid by these workers. It also means that when they are fired, they do not qualify for unemployment insurance or other benefits - seeing as how they never officially paid for any of it.
So, as we tax payers foot the bill for these companies (GM has several off shore tax-friendly places like Bermuda and the Cayman Islands shielding them from paying taxes) due to them being "too big to fail" they are not paying taxes... These corporations paid very, very little in taxes, actually. In 2004, U.S. multinational corporations paid roughly $16 billion in taxes on $700 billion in foreign active earnings. For those who hate math, that makes their tax rate around 2.3 percent. Sure, 16 billion is a lot, but if you had 700 billion, would it make much a difference in your day-to-day habits? Would you be suffering like those losing their homes?
It's just the low-skilled jobs leaving, why should I care? I have a degree in engineering after all.
Wrong! AT&T and IBM have nearly 50 percent of their technology development teams (engineers and such) outsourced. Guess what... more white-collar high-skilled jobs are on their way out, too. Why are these jobs leaving the United States? To be blunt... we're dumb. Since we do not value education, but do value that piece of paper - the diploma - many people are getting that paper and not the education. So we have plenty of people with special pieces of paper, and very few people with the skills to do a job. Well, another shocker: other countries have skilled people. Since they value education in other countries, and we live in a global economy, our jobs are going to other countries. It isn't our education system that's broken. It's our population. We put so much value on the dollar, we forget how to get the dollar, and what to do with the dollar once we have it. The privileged who operate the invisible hand know what to do with that dollar, and how to make sure they control it - and you.
The Financial Industry is 40% of our economy... what?
The United States used to produce stuff. Tangible things that you could touch, drive, live in, eat, play with, etc. Today, the United States doesn't really make anything. Currently we make money... somehow. Some how we produce money without producing anything to sell or buy. The industry that is supposed to be an intermediate factor in our economy is becoming our economy. From credit cards to student loans to mortgages, it's all passing pretend money around. So the big banks sell this pretend money to other people, and some how that makes more money. However, that doesn't work if everyone is treated fairly. So, we have these big banks' little minions running around telling the middle class how great this loan is, telling the undergraduate college student how low this card's interest rate is, when they know... no, they ensure that it's all very, very bad. Balloon payments, variable interest rates, limits set at the banks' discretion... Credit card agreements are now over 30 pages long! 30 pages! College students rarely read 12 pages of an assigned reading. You think they're going to study 30+ pages of fine print and financial jargon? No. That was the plan. So, these little minions are out and signing people up to fail. Their boss tells the big bank about all this incoming money. The big bank sells these packaged loans to each other, ensuring each one is crap. The big banks now have this huge crap-trade going on and then... everything falls to shit. But. Before the shit storm (which the banks were well aware of) happened, they made sure they hit up their lobbyists in congress to make these things happen: The bankruptcy bill that President Bush passed in 2005
make it harder for average people to file for bankruptcy protection,
make it easier for landlords to evict a bankrupt tenant
make it more difficult for small businesses to reorganize, while opening new loopholes for the Enrons of the world
allow creditors to provide misleading information
And: did nothing to rein in lending abuses that all too frequently turned manageable debt into unmanageable crisis.
So, they set us up. Not only did they set us up, they made sure we would fall, and they would be kept safe. The shit storm rained on us. After it rained on us... we then forked over our money to clean it up.
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