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George Jung
01-18-2011, 05:24 PM
Any folks here read the Atlantic Monthly? Last months had an interesting bit on the Global Elite, making the argument that the uber rich have more in common with their international counterparts - and function as such - than they do with fellow countrymen. The gist, as I took it - isn't news, but perhaps provokes reflection - world middleclass will work for much less than will the middleclass of the west; that's where the jobs will go; our middleclass will shrink at the expense of others gains. And the elites feel that is fine, and as it should be.

A link:


If you happened to be watching NBC on the first Sunday morning in August last summer, you would have seen something curious. There, on the set of Meet the Press, the host, David Gregory, was interviewing a guest who made a forceful case that the U.S. economy had become “very distorted.” In the wake of the recession, this guest explained, high-income individuals, large banks, and major corporations had experienced a “significant recovery”; the rest of the economy, by contrast—including small businesses and “a very significant amount of the labor force”—was stuck and still struggling. What we were seeing, he argued, was not a single economy at all, but rather “fundamentally two separate types of economy,” increasingly distinct and divergent.
This diagnosis, though alarming, was hardly unique: drawing attention to the divide between the wealthy and everyone else has long been standard fare on the left. (The idea of “two Americas” was a central theme of John Edwards’s 2004 and 2008 presidential runs.) What made the argument striking in this instance was that it was being offered by none other than the former five-term Federal Reserve Chairman Alan Greenspan: iconic libertarian, preeminent defender of the free market, and (at least until recently) the nation’s foremost devotee of Ayn Rand. When the high priest of capitalism himself is declaring the growth in economic inequality a national crisis, something has gone very, very wrong.
This widening gap between the rich and non-rich has been evident for years. In a 2005 report to investors, for instance, three analysts at Citigroup advised that “the World is dividing into two blocs—the Plutonomy and the rest”: http://www.theatlantic.com/magazine/archive/2011/01/the-rise-of-the-new-global-elite/8343/


One line I recall, in the article - from one of the 'elite' making tens of millions each year (because he deserves it) was, 'perhaps Americas middleclass needs to lower their expectations, and work for much lower wages' as their overseas counterparts will.

Bob Adams
01-18-2011, 05:44 PM
What would have happened if the middle class hadn't turned their backs on American made products to save a lousy dime? Would companies continued to off shore products they couldn't sell? I blame the middle class Wal Mart shopping bargin hunters as much as anyone for cutting off the limb they were sitting on.

George Jung
01-18-2011, 05:46 PM
No disagreement on that point, except one. Given our 'international economy', where there is every incentive to move your business out of country, how do you reverse the tides?

I would say legislatively - but I'm not holding my breath. Did you happen to look at the $$ donated to our legislators?

Bob Adams
01-18-2011, 05:49 PM
No disagreement on that point, except one. Given our 'international economy', where there is every incentive to move your business out of country, how do you reverse the tides?

I would say legislatively - but I'm not holding my breath. Did you happen to look at the $$ donated to our legislators?

Can't. Pony is gone, too late to close the barn.

Bob Adams
01-18-2011, 05:51 PM
True Norman, but if you are a US manufacturer who CAN'T SELL you higher margin offshored item, is the higher margin of any use to you?

George Jung
01-18-2011, 06:06 PM
If you have the time, read the article (it's linked). I'd be curious your takes on it.

Bob Adams
01-18-2011, 06:57 PM
I'm not sure what you mean.... many common goods are now imported, under the label of manufacturers who used to build that stuff in the US.
It would have had to have been nipped in the bud, when there was still domesticly manufactured goods to be had, to this day, I still check the country of origin before I buy.

Bob Adams
01-18-2011, 07:24 PM
my mother was a strong pro union, working man, pro american business, but she would ALWAYS buy the cheap foreign junk (think 1970s, 1980s) rather than pay US/union prices.

suspect lots of folks are like that.

I rest my case.

SMARTINSEN
01-18-2011, 07:31 PM
Isn't this just what Tylerdurden had been saying in just so many words? :) :D

seanz
01-18-2011, 07:48 PM
I'm a subscriber... and I read the article... it was both disturbing, as well as in a minor sense, vindicating, since I've been yammering about income inequality for ages now, and mostly getting shelled for it (usually, accused of trying to wage a 'class war'.... which is kinda funny, because there's been a class war going on for the last three decades, it's been waged by the wealthy... and they're winning).

This one line sort of sums it up:



My take on the article: Americans don't need to, and shouldn't, lower their expectations. They may have to slow the acceleration of their expectations a bit, but unless/until we resolve the massive wealth inequity, by making work pay for the middle class, things are going to be progressively tougher.

Three decades? Just three?


Amazing.


Not a 'tin-foil-hat' moment, more like...."Who's that dumb kid with the bucket stuck on his head?"

bamamick
01-18-2011, 07:56 PM
Two things that are very quietly marching my family backwards (and I am sure that this is the case for a lot of families): insurance and student loan debt/tuition payments.

Everyone in this country wants to have good medical care and they want to send their kids to college. We (my wife and I) have both. All of our kids have undergrad degrees and we have a kid in grad school, and we have always had BC/BS coverage. For the last several years my cost of living raise has been countered exactly by the increase in insurance that we contribute. And college tuition in Alabama has risen at the rate of about 80% over the last five years (for public schools. I don't have a clue about private schools, though two of my kids graduated from private colleges).

I am not fussing. I have it better than 90% of the people in the world if not more. I have a safe, secure home, a good job, a family that loves me, a pile of silly dogs, and several interesting boats. I am not fussing at all, but I do understand where people are coming from. The American dream of the 1990's and beyond is either dead or on life support. But you know, I don't mind that, not even for my children. I never did understand how kids coming out of college could afford $300K mortgages with no down payment. Now we know that they couldn't, and shouldn't have ever even had that temptation thrown in their faces. My wife and I struggled like crazy to make the down payment on our first home, $35K in downtown Mobile, and we were so very proud. Now I live in a cabin in the swamp and they want to tell me that this place is worth 8 times what that first place was worth? Please.

Of course, none of that addresses the fact that the rich are getting richer, does it?

Mickey Lake

oznabrag
01-18-2011, 08:57 PM
Is that a societal wrong?

Yes and no.

No, because people can't be faulted for making money. Yes, because this trend, followed to its natural conclusion, ends in oligarchy/anarchy and the end of society as we know it. Any behavior that spells the end of society is, by definition, a societal wrong.

Dan McCosh
01-18-2011, 09:11 PM
FWIW, I was reading the Atlantic piece on the airplane today, and it seemed to focus mainly on the lifestyle, and lack of nationalism of the new oligarchs. I suppose the question is without a country, how do you manage to secure your wealth? The US is competing not so much with offshore labor, but with nations supporting strong industrial policies, sovereign wealth funds, etc. The notion that these offer an equal opportunity to all is a tad shortsighted, I would think.

oznabrag
01-18-2011, 09:18 PM
Where's that KMA emoticon, when I need it?

Canoeyawl
01-18-2011, 09:42 PM
Horse hockey.
You mean Polo?

TimH
01-19-2011, 12:27 AM
Donn wouldn't recognize the truth if it punched him in the nose. Of course he lives a comfortable life. Best to resist the truth of the average American if it doesn't directly affect you.

George.
01-19-2011, 08:31 AM
If I called my Mother a 'working man' she'd kick my tail.

What would she do if you corrected her grammar while she was speaking?

George Jung
01-19-2011, 11:13 AM
It's good to be King, I guess.

One tangent of that article (the one Donn can't be troubled to read:p ) was the spector of a poor/middleclass uprising - yes, even in the sedated US - if the disparity, and lack of even the hope of remediation, were to progress. One of the billionaires - Soros, I believe - commented how much easier it was to be wealthy in the US than it was in Europe. Europeans were envious; Ameericans, less so - they felt they had a shot at 'the dream', as well. If the dream is gone, so may be the tolerance.

paladin
01-19-2011, 12:31 PM
My mom would go shopping at Rears and Sawbuck or Monkey Wards, check the labels, and only buy U.S. made stuff....she would count the threads in the seams and other characteristics so that she knew that school clothes would last the year.

George Jung
01-19-2011, 02:47 PM
'Buying American' is a bit tougher than reading the labels, these days. Sometimes the only 'made' part of clothes is the label sewed in the garment. And even those seem difficult to find.

McMike
01-19-2011, 03:07 PM
Compensation for CEO's relative to the average worker in 1970 was 25 times, now it 260 times the compensation of the average worker.

In 2005, a CEO earned more in one workday (there are 260 in a year) than an average worker earned in 52 weeks. From here (http://www.epi.org/economic_snapshots/entry/webfeatures_snapshots_20060621/)


CPI up 450% in 35 years.


The median income saw a rise of 13% in the same time with inflation taken into account.


I don't understand why it has been ok for the wealthy to give themselves raises but say "horse hockey" when the middle class thinks they should receive the same courtesy.

I am honestly looking for a good reason, no need to be patronizing, I know I'm ignorant that's why I'm asking for an explanation.

TimH
01-19-2011, 03:14 PM
CEOs are worth it! everyone else is just overhead.

George Jung
01-19-2011, 03:18 PM
Excellent question, I'd like to know, as well. One thing - if you look at the Board of Directors for any given Big Business, it's usually a cozy lil' club of the same folk; often, they serve on each others boards. IOW, the fox is guarding the henhouse. From that article, however, the argument is made that major competition for 'the best' CEOs is rewarded; it does matter who's robbing your henhouse, in terms of investor returns.

I'd like to know how one gets selected for that pathway. Education, yes. I suspect 'connections' is at least as important.

George Jung
01-19-2011, 03:55 PM
We can all have great intentions, Norman. But given that scenario, I'd have done the same thing.

Amazing we can't be competitive, at all, isn't it? 5-fold difference.

One of the sources I read made the comment that we, as American middle class, need to 're-tool' our expectations on income if we expect to be relevant.

TimH
01-19-2011, 04:02 PM
America is only relevant until the wealth transfer is complete.

George Jung
01-19-2011, 04:07 PM
Can you put that into context?

My take - the paradigm has changed, rapidly, and we're scrambling to catch up, especially in terms of mindset. I recall the years when Japan was going to rule the world economics. Things change. My expectation is the US will adapt to this, as well, and I'm interested to know the direction, the 'how', primarily as to how it will affect my children, GC, US and midwest economies and living.

George Jung
01-19-2011, 04:11 PM
I'll read that (I may have.... ); I'd agree with what you're saying. My brother used to tell me 'it's not what, it's who you know', and he was right. Meritocracy? I don't think so.

Unfortunately, growing connections is a skill unto itself, and not all of us have that skillset, or mindset.

We work with what we've got.

wardd
01-19-2011, 04:19 PM
as automation becomes more common and advanced the location of a factory will become increasingly irrelevant when the engineers and programmers don't ever have to set eyes on it

machine setup will be increasingly an auto function and material transport automated

I started out as a precision sheet metal model maker and then tool and die maker before the age of calculators and have seen the future

in the not too far distant future questions about who gets to work , how much and who owns the means of production will have to be addressed

you can get off the internet instructions to build a cnc mill that will make copies of it self

the navy is very interested in 3D printers that will make parts at sea as needed instead of having an inventory on board, just the raw materials

John of Phoenix
01-19-2011, 04:23 PM
George Jung:
My brother used to tell me 'it's not what, it's who you know', and he was right. Meritocracy? I don't think so.
Maybe you should get to know Donn a bit better. :D

George Jung
01-19-2011, 04:45 PM
Do you think it would help?

John of Phoenix
01-19-2011, 05:14 PM
Good question. Who knows.

I used to do business with a jeweler who was a former Brooklyn bookie - David, sour as hell when it came to people but he loved animals. He had a whole herd of rescue rabbits and a dozen rescue cats. I was in his store one day when this woman came in dripping with diamonds.

"DAAAAVID!" she crooned.

He moaned. "Scuze me. I gotta go talk to that bitty." A few minutes later he came back.

Dave: "God I hate people. I really do. I got this philosophy, see? 'If I don't know ya, I don't wanna know ya. If I DO know ya, I'm not sure I still WANNA know ya.' That's my philosophy."

Me: "No kidding? They say retail is a 'People Business'. You've heard the old saying, 'It's who you know' and all that. How's that square with your philosophy?"

Dave: ""Squares perfectly. I just hate people."

Dave passed several years ago but it's good to see he's found a channel.

purri
01-19-2011, 05:44 PM
Anyone read Marx and Engels?

johnw
01-19-2011, 05:49 PM
We may have to... but the statement alone could be considered highly self-serving, when said by the plutocrats.

We've been three decades in America where the fruits of tremendous innovation, and huge increases in productivity, went almost exclusively to those very same plutocrats. This isn't the America I bought into, at a young age... and it's not representative of the 'American Dream', a dream which has morphed into something far different than our parents understood it to be. I've recommended it before, but it's really worth a read: 'Outliers', by Malcolm Gladwell. He demonstrate which no less of a conservative free market type like Alan Greenspan will freely admit that success in America is largely a matter of luck... the luck of having been born to the right parents, had the right opportunities growing up, made the right connections, and so on... and that personal merit or initiative, while important, is not the exclusive ingredient to success.

As long as we cling to the myth of the 'self-made man', we will continue to perpetuate the myths about the 'American Dream'.
Funny thing, now we've got economists of the "Austrian school" who argue that people are unemployed because their labor a marginal productivity of zero (http://krugman.blogs.nytimes.com/2011/01/15/zirp-and-zmp/) -- essentially, if you're unemployed, it's because you're worthless. The fortunate few need to have pluck and luck, but if you have pluck and no luck you can still end up getting laid off.

I think we're going back to something like the Gilded Age, and the rich are developing an ideology to justify their good fortune. Last time around it was social Darwinism. What do you think it will be this time?

Nicholas Scheuer
01-19-2011, 05:57 PM
Well, lots of people have guns, and the dealers can't sell more fast enough. When the folks who are getting the short end of the stick get mad enough, it might become dangerous to be wealthy.

The guy in the camo hat, and the lady in the bad skirt think Sara Palin can save them.

McMike
01-19-2011, 08:37 PM
Blessed are the poor, woe to the rich. Who said that?

George Jung
01-19-2011, 09:29 PM
Good question. Who knows.

I used to do business with a jeweler who was a former Brooklyn bookie - David, sour as hell when it came to people but he loved animals. He had a whole herd of rescue rabbits and a dozen rescue cats. I was in his store one day when this woman came in dripping with diamonds.

"DAAAAVID!" she crooned.

He moaned. "Scuze me. I gotta go talk to that bitty." A few minutes later he came back.

Dave: "God I hate people. I really do. I got this philosophy, see? 'If I don't know ya, I don't wanna know ya. If I DO know ya, I'm not sure I still WANNA know ya.' That's my philosophy."

Me: "No kidding? They say retail is a 'People Business'. You've heard the old saying, 'It's who you know' and all that. How's that square with your philosophy?"

Dave: ""Squares perfectly. I just hate people."

Dave passed several years ago but it's good to see he's found a channel.


I didn't know you were funny.

Looks like an offering for 'best quotes'.

Captain Blight
01-19-2011, 10:33 PM
I haven't got enough time left on earth... And it keeps ticking away, a second every second, making all the rest of us very happy.

George Jung
01-19-2011, 11:02 PM
That was pretty impressive, Capt.

You sure you're not Republican?

bobbys
01-19-2011, 11:17 PM
Donn is a big hero of mine, Sure not as much as Magneto and Titanium man but more then Gunnery sergeant Vince Carter. but only cause i do not know if Donn was a Sergeant.

shamus
01-20-2011, 03:32 AM
Early in this thread there's a suggestion of fixing the problem 'legislatively' which I interpreted as a call for protectionism (I could have that wrong!)
If i had that right, I urge you to remember that in the glory days of American manufacturing, it was not just your domestic market which was being supplied. American goods were sold to the world. In fact it's only very recently (five years or so) that Amerca lost top spot in imports of manufactured goods to my country, for instance. So it we be odd to object to some other country doing what you had been doing successfully for decades, in my view.

Japan and now China have moved into your territory, just as America killed off Britain in our economy.

Washing machines are made in Australia, but I happen to have an American one. It's very well built. From the point of view of successful exports, it might be, like "The Imperishable Seamless Whaleskin Boot"- just a little bit too durable for its own good.

Canoeyawl
01-20-2011, 10:57 AM
That was pretty impressive, Capt.

You sure you're not Republican?

If he was Republican he would be dangerous.

Michael D. Storey
01-20-2011, 11:30 AM
About that:

Rich folk tend to marry their station, resulting in super-rich folk, what with two 250k + incomes, etc. When I was a kid, a college-educated woman was earning less than a high-school drop-out man. Not so now. I feel that this is the way that wealth gets concentrated. It's not so much race any more, it's class.
Also, things like an extension of super-hire inheritance tax exemption, supported mainly by people who will never benefit from it, and will have to pay for it. Also, calling the Health Care Law a job-killing bill, something that is done by people who have a far superior health care package, paid for by the people that they choose to deny this health care package. There is more like this, but the big thing is the resistance to re-distribute the wealth in this country in a fair way.

johnw
01-20-2011, 02:37 PM
About that:

Rich folk tend to marry their station, resulting in super-rich folk, what with two 250k + incomes, etc. When I was a kid, a college-educated woman was earning less than a high-school drop-out man. Not so now. I feel that this is the way that wealth gets concentrated. It's not so much race any more, it's class.
Also, things like an extension of super-hire inheritance tax exemption, supported mainly by people who will never benefit from it, and will have to pay for it. Also, calling the Health Care Law a job-killing bill, something that is done by people who have a far superior health care package, paid for by the people that they choose to deny this health care package. There is more like this, but the big thing is the resistance to re-distribute the wealth in this country in a fair way.
Funny thing, when we didn't have an inheritance tax, we had a rentier class. Not working was a sign of status, because it showed you were part of the rentier class. It was largely this group that Thorstein Veblen labeled the leisure class.

oznabrag
01-20-2011, 02:39 PM
And now we have a renter class.

McMike
01-20-2011, 03:46 PM
And now we have a renter class.

There's always been a renter class, lets not confuse decent housing with owning a house.