Three hundred million Americans can take control of the economy and country
By Kevin Zeese
The Roman philosopher and statesman, Marcus Tullius Cicero said "Freedom is participation in power." By that standard Americans are not free. We do not participate in power. We do not even have power over our own economic lives, our elected "representatives" ignore us and listen to the moneyed interests sending the United States in the wrong direction on issue after issue. The American people know better , would govern better and need to participate in power.
When you dispassionately review the reality of the U.S. economy, it is a depressing state of affairs that screams out for Americans to get up, stand up and shout: "we can do better than the political and economic elites." The opportunity to stand up is here: October2011.org .
This article focuses on the domestic policies that are destroying the most powerful economy in history, but war spending, which makes up more than half of discretionary federal spending, is one of the root causes of the economic collapse. Nobel Prize winning economist, Joseph Stiglitz writes: " Today, America is focused on unemployment and the deficit. Both threats to America's future can, in no small measure, be traced to the wars in Afghanistan and Iraq." He and Linda Bilmes calculated America's war costs three years ago conservative at $3 trillion to $5 trillion -- these costs have escalated since then.
Domestically the brutal failure of government is evident in the way working Americans are treated. The high levels of unemployment are not the only story; four decades of stagnant incomes and decreasing share of the gross domestic product going to workers are long term trends; the fragility of peoples' personal finances, record foreclosure, high student debt and the lack of control over our economic lives all show the need for an economic transformation to a new, democratized economy.
Unemployment is persistently high. Roughly 31% of U.S. workers experienced unemployment or underemployment at some point in 2009. President Obama has never put forth a real jobs program instead preferring to tinker with corporate tax breaks -- a proven non-solution now resulting in zero job growth . The official unemployment rate greatly underestimates unemployment because it has been used as a political tool and has been changed over the years, e.g. in 1994 the government stopped counting discouraged workers who have given up looking for employment. At a time when an all-time high number of Americans are "not in the labor force" this manipulation of data has a dramatic impact. An apolitical analysis of unemployment, that counts the total number of people in need of employment, results in a current unemployment rate of 22.5%, an all-time record total of 34 million people are currently in need of work.
There are many examples of high unemployment, underemployment and people dropping out of the labor market, but one that got my attention most recently was a report from the Bureau of Labor Statistics , reporting that an astounding 51% of your are unemployed:
"In July, the employment-population ratio for youth--the proportion of the 16- to 24-year old civilian noninstitutional population that was employed--was 48.8 percent, a record low for the series" (The month of July typically is the summertime peak in youth employment.)"
Fifty-one percent of youth unemployed and even more underemployed is a very dangerous situation for the future workforce as it comes at a time when students are leaving school in greater debt than ever before. A recent report by Moody's Analytics found record borrowing by college students who are graduating without jobs. In an economy where people had power we would see free college education rather than cuts in Pell Grants and rapid tuition increases at state colleges.
In a Labor Day report, the Economic Policy Institute demonstrates that unemployment leaves long-term scars on families and communities. The pain caused by persistently high unemployment is not limited to workers who are currently unemployed but extends to the broader workforce and the country in general through lost wages, income and wealth, as well as higher poverty.
As one example of many, in California one in four families had trouble feeding their children, indeed 68.6% of students in schools in Fresno County and 65.6% in Los Angeles County were eligible to receive free or reduced-price meals in 2010. Nationwide, the National Academy of Sciences released a report that concluded 52,765,000 Americans, 17.3% of the population, lived in poverty in 2009. And, for children, census data shows a total of 15.5 million American children lived in poverty in 2009 -- 20% of all children. According to a 2011 report from the Children's Defense Fund, "every day in America 2,573 babies are born into poverty." All of these levels of poverty have worsened in the last two years since the Census Report, so they are underestimates.
The economic collapse resulted in the average U.S. household wealth declining by 28% . This represents a loss of $27,000 per household -- in households that make less money today than they did back in 1971. Currently, at least 62 million Americans, 20% of U.S. households, have zero or negative net worth. Indeed, a majority, or 64%, of Americans don't have enough cash on hand to handle a $1,000 emergency expense, according to the National Foundation for Credit Counseling.
An August 2011 report by the National Employment Law Project concludes jobs created since the recession officially ended are reducing worker income: 73% of the jobs created since the supposed recovery began have been low-wage jobs, where workers make between $7.51 (the national minimum wage) and $13.52 an hour ($15,621 to $28,122 a year for full-time). In contrast, 60% of the layoffs were in mid-wage jobs that made between $28,142 and $42,973 per year.
important reflection on Labor Day is: are we seeing the
death of the middle class? Are we in what Marx described as the self-destruction
of finance-dominated advanced Capitalism? Labor's share of the gross domestic product has
shrunk while the profits for capital have risen. The investor class knows their
wealth comes from reducing the cost of labor.
recently told their investors :US labor compensation is now at a 50-year low relative to both company sales and US GDP . . .reductions
in wages and benefits explain the majority of the net improvement in margins."
Indeed, according to JPMorgan, 75% of the increase in profit margins directly
correlates with the reduction in workers' wages.
The desire for excessive short profits is creating an irreversible economic decline because labor can no longer consume enough or borrow enough to keep the economy afloat with its cash and credit-based consumption. As David Cay Johnston puts it "A weak foundation cannot properly support a massive superstructure."
Further evidence of this advanced stage of finance-capital is on the other side of the equation, the concentration of wealth. The richest 400 people in the U.S. have as much wealth as 154 million Americans or 50% of the population. The wealthiest 1% of the U.S. population now has a record 40% of all wealth -- more wealth than 90% of the population. According to an extensive study by auditing and financial advisory firm Deloitte, U.S. millionaire households now have $38.6 trillion in wealth in addition to an estimated $6.3 trillion hidden in offshore accounts.