Plenty of Evidence Confirms the Shrinking Middle Class….
In part 3, I always help expose the myriad of economic problems, with the hope we can recognize & finally start addressing these issues.  For now we have a very disjointed economy, slanted dramatically in favor of investors over labor.  Granted, it’s capital that can finance building things & hiring people, but the pendulum has swung wildly in the direction against workers.  What should concern us is not that the economy is bad, but rather with the economy being relatively good, we still have the same old stubborn problems of stagnant wages with roughly half the population living paycheck-to-paycheck.  So I’d say it’s time to redefine what is really a good economy.  And if so many in the working class still struggle when the economy is purported to be good, what happens to them when we do have a downturn?  Also how about deficits, since if they’re spiking during this strong economy, how bad will the red ink get when things inevitably slow down?: republicans-leave-us-drowning-in-red-ink & also politicians-make-unproductive-gamble-on-productivity-growth.  Some of this shrinking middle class stems from a good many moving up the income scale, but we’re a society increasingly splitting into the haves & have-nots.  And as a society we’re doing a horrible job of creating an environment where the have-nots can lift themselves up.
Jumping right into the articles pulled from the newsfeeds, we start off with a good one!  This is a long piece about the book Tailspin by Steven Brill: baby-boomer-generation-america-steve-brill.  Below is just part 1 of 5 parts, so you can read the rest by clicking on the link.  It is very compelling reading, giving cogent observations why the American Dream has eroded for so many.  When we examine the evidence, it really does look like the system is rigged, being manifested in declining opportunity, stagnant wages, dead-end careers, reduced upward mobility, income inequality & widespread financial distress for the shrinking middle class:

Lately, most Americans, regardless of their political leanings, have been asking themselves some version of the same question: How did we get here? How did the world’s greatest democracy and economy become a land of crumbling roads, galloping income inequality, bitter polarization and dysfunctional government? As I tried to find the answer over the past two years, I discovered a recurring irony. About five decades ago, the core values that make America great began to bring America down. The First Amendment became a tool for the wealthy to put a thumb on the scales of democracy. America’s rightly celebrated dedication to due process was used as an instrument to block government from enforcing job-safety rules, holding corporate criminals accountable and otherwise protecting the unprotected. Election reforms meant to enhance democracy wound up undercutting democracy. Ingenious financial and legal engineering turned our economy from an engine of long-term growth and shared prosperity into a casino with only a few big winners.

 

These distinctly American ideas became the often unintended instruments for splitting the country into two classes: the protected and the unprotected. The protected overmatched, overran and paralyzed the government. The unprotected were left even further behind. And in many cases, the work was done by a generation of smart, hungry strivers who benefited from one of the most American values of all: meritocracy. This is not to say that all is rotten in the United States. There are more opportunities available today for women, nonwhites and other minorities than ever. There are miracles happening daily in the nation’s laboratories, on the campuses of its world-class colleges and universities, in the offices of companies creating software for robots and medical diagnostics, in concert halls and on Broadway stages, and at joyous ceremonies swearing in proud new citizens.

 

Yet key measures of the nation’s public engagement, satisfaction and confidence – voter turnout, knowledge of public-policy issues, faith that the next generation will fare better than the current one, and respect for basic institutions, especially the government – are far below what they were 50 years ago, and in many cases have reached near historic lows. It is difficult to argue that the cynicism is misplaced. From matters small – there are an average of 657 water-main breaks a day, for example – to large, it is clear that the country has gone into a tailspin over the last half-century, when John F. Kennedy’s New Frontier was about seizing the future, not trying to survive the present.

 

For too many, the present is hard enough. Income inequality has soared: inflation-adjusted middle-class wages have been nearly frozen for the last four decades, while earnings of the top 1% have nearly tripled. The recovery from the crash of 2008 – which saw banks and bankers bailed out while millions lost their homes, savings and jobs – was reserved almost exclusively for the wealthiest. Their incomes in the three years following the crash went up by nearly a third, while the bottom 99% saw an uptick of less than half of 1%. Only a democracy and an economy that has discarded its basic mission of holding the community together, or failed at it, would produce those results.

 

Meanwhile, the celebrated American economic-mobility engine is sputtering. For adults in their 30s, the chance of earning more than their parents dropped to 50% from 90% just two generations earlier. The American middle class, once an aspirational model for the world, is no longer the world’s richest. Most Americans with average incomes have been left to fend for themselves, often at jobs where automation, outsourcing, the decline of union protection and the boss’s obsession with squeezing out every penny of short-term profit have eroded any sense of security. In 2017, household debt had grown higher than the peak reached in 2008 before the crash, with student and automobile loans staking growing claims on family paychecks.

 

Although the U.S. remains the world’s richest country, it has the third-highest poverty rate among the 35 nations in the Organisation for Economic Co-operation and Development (OECD), behind only Turkey and Israel. Nearly 1 in 5 American children lives in a household that the government classifies as “food insecure,” meaning they are without “access to enough food for active, healthy living.” Beyond that, too few basic services seem to work as they should. America’s airports are an embarrassment, and a modern air-traffic control system is more than 25 years behind its original schedule. The power grid, roads and rails are crumbling, pushing the U.S. far down international rankings for infrastructure quality. Despite spending more on health care and K-12 education per capita than most other developed countries, health care outcomes and student achievement also rank in the middle or worse globally. Among the 35 OECD countries, American children rank 30th in math proficiency and 19th in science.

 

American politicians talk about “American exceptionalism” so habitually that it should have its own key on their speechwriters’ laptops. Is this the exceptionalism they have in mind? Perhaps they should look at their own performance, which is best described as pathetic. Congress has not passed a comprehensive budget on time without omnibus bills since 1994. There are more than 20 registered lobbyists for every member of Congress. Most are deployed to block anything that would tax, regulate or otherwise threaten a deep-pocketed client.

 

Indeed, money has come to dominate everything so completely that the people we send to D.C. to represent us have been reduced to begging on the phone for campaign cash up to five hours a day and spending their evenings taking checks at fundraisers organized by those swarming lobbyists. A gerrymandering process has rigged easy wins for most of them, as long as they fend off primary challengers–which ensures that they will gravitate toward the special-interest positions of their donors and their party’s base, while racking up mounting deficits to pay for goods and services that cost more than budgeted, rarely work as promised and are seldom delivered on time.

This is how goldman-sachs-us-fiscal-outlook-is-not-good begins, which the tax cuts certainly haven’t helped with aligning revenues with spending:

Leading investment banking group Goldman Sachs says the fiscal outlook for the U.S. “is not good,” with new economic forecasts predicting massive increases to the federal deficit. “An expanding deficit and debt level is likely to put upward pressure on interest rates, expanding the deficit further,” wrote the firm’s chief economist, Jan Hatzius, on Sundayaccording to CNBC. The economist notes that the ballooning deficit could spike interest rates, which would expand the deficit, and he predicted lawmakers, as a result, “might hesitate” in approving a high-dollar stimulus package to help with a future economic recession.

More clear signals of a shrinking middle class come from these excerpts in survey-nearly-half-of-americans-cant-cover-an-unexpected-400-expense where 40% can’t cover an unexpected $400 expense.  Keep in mind this is still happening when the economy is called strong:

About 40 percent of adult Americans would not be able to cover an unexpected $400 expense without selling a personal item or borrowing money, according to a new survey of U.S. households. A survey by the Federal Reserve finds that four in ten Americans “would either not be able to cover [an unexpected expense] or would cover it by selling something or borrowing money.” That figure has improved from last year, the survey notes, when 50 percent of Americans said they would be unable to cover a surprise expenditure. Other data in the survey found that more than 25 percent of U.S. adults avoided medical care in 2017 due to fears about unwanted costs. In addition, “over one-fifth of adults are not able to pay all of their current month’s bills in full,” the survey continues. Americans are more optimistic about their financial situation this year than they were a year ago, the Federal Reserve found, and now 75 percent of Americans say they are either living comfortably or doing OK financially, up from 71 percent in 2016. When it comes to planning for the future, however, that optimism fades. Less than two-fifths of Americans say their savings for retirement are on-track, while one-fourth of Americans do not have any retirement savings at all. The Federal Reserve survey was conducted between November and December of 2017, and was completed by 12,246 Americans, according to the Fed’s data. The survey did not state a margin of error.

On that topic, this article as-u-s-economy-gains-millions-still-live-on-the-edge reveals the economic vulnerabilities of so many Americans & its repercussions: 

Nearly a decade after the 2008 financial crisis and with U.S. employment at its lowest rate in years, millions of Americans continue to struggle to make ends meet, according to new data from the Federal Reserve. While the findings show an overall improvement in financial conditions for most households around the country, they also point to enduring problems. Those range from inadequate retirement savings to evidence of the lethal opioid epidemic that has ravaged the U.S. Among the most troubling signs:

*Four in 10 adults couldn’t cover an emergency expense of $400, or would have to cover it by selling something or borrowing money

*Over 20 percent of adults aren’t able to pay all of their monthly bills in full

*Over 25 percent of adults skipped necessary medical care in 2017 because they couldn’t afford the cost

*Three in 10 adults have family income that varies from month to month, and 1 in 10 adults experienced hardship as a result

*One-sixth of workers have irregular work schedules imposed by their employer, and one-tenth of workers receive their work schedule less than a week in advance

*Less than two-fifths of working adults think their retirement savings are on track, and a quarter have no retirement savings or pension whatsoever

*About 20 percent of adults (and a quarter of white adults) personally know someone who has been addicted to opioids

Consequently, the generational advancements in standards of living we’ve come to expect & took for granted are actually regressing: apos-lost-generation-apos-millennials & also some-millennials-might-never-recover-from-the-great-recession & also millennials-are-in-a-deep-financial-hole-compared-to-past-generations.  For all generations, instead of secure lifestyles, way too many are stressed out saddled with record debt:american-debt-banks-are-targeting-the-most-vulnerable.  This next article reveals how Trump duped his working class base in favor of the ultra-wealthy, but neither party has come up with viable answers: trumps-curious-coalition-trump-dupes-white-working-class.

The echo-bubble is also defined by geography.  Rural areas are struggling economically, but a great leader (should we ever find one) would look to bridge those divides & find real solutions: why-politics-follows-geography.  We may have a relatively strong economy overall based on standard conventional metrics, but with these kinds of wide divisions it’s also a sick economy.  We’re never even going to begin touching on the core problems until as a nation we gain a recognition of what needs fixed.  This is a rather long article from americas-brand-of-capitalism-is-incompatible-with-democracy which even the title itself can spur controversy, but here are excerpts containing inconvenient truths we must begin to acknowledge:

American democracy is unwell; on this much, President Trump’s detractors can agree. But when they turn to the tasks of identifying our republic’s symptoms, naming its illness, and writing a prescription, different factions of “the resistance” produce divergent diagnoses. One group — comprised of comparative politics scholars, liberal pundits, and NeverTrump conservatives — have their eyes fixed on Donald Trump. They see the moral cowardice of a Republican elite that declined to deny an illiberal demagogue their nomination, or to abandon him in the general election, or to let the investigation into his campaign proceed unimpeded. They observe a president who relentlessly assails the independence of federal law enforcement, the legitimacy of adversarial media, and the veracity of official election results — and a conservative base that takes his lies to be self-evident. And, pulsing beneath it all, they discern the rise of a hyperpartisanship that’s leading each party’s elected officials to eviscerate informal constraints on their authority — and each party’s voters, to believe that the other side has no legitimate claim to power. In these complaints, the democracy movement (as my colleague Jonathan Chait has dubbed it) sees all the telltale signs of a bad case of norm-erosion. Democracies can’t live on laws alone; they also require adherence to certain informal rules that correct for the inevitable flaws in any Constitution’s design, and protect against the threat of charismatic leaders consolidating power. Thus, to heal our republic, and immunize it against future strains of the same virus,several liberal thinkers have called for the formation of bipartisan coalitions, united in defense of democratic norms and the rule of law. In their view, the threat that Trump poses is so grave and unique, ideologues on both sides of the aisle should now prioritize maintaining a rule-based order over winning policy battles, so as to safeguard their freedom to settle such disputes democratically in the future.

But there is a second opinion. Several social democratic (and/or, democratic socialist) thinkers, examining the patient from a few steps to the democracy movement’s left, have had their eyes drawn to a different set of symptoms. They see state and federal legislators who routinely slash taxes on the wealthy, and services for the poor, in defiance of their constituents’ wishes; regulatory agencies that serve as training grounds for the firms they’re meant to police; a Supreme Court that’s forever expanding the rights of corporations, and restricting those of organized labor; a criminal-justice system that won’t prosecute bankers for laundering drug money, but will dole out life sentences to small-time crack dealers; a central bank that has the resources to bail out financial firms, but not the homeowners whom they exploit; a Pentagon that can wage multitrillion-dollar wars that exacerbate the very problems they were supposed to solve — and still get rewarded with a higher budget — even as the Housing Department asks the working poor to pay higher rent for worse accommodations; and, seething beneath all of these defects, disparities in the distribution of private wealth so vast and consequential, the nation’s super-rich have come to enjoy an average life expectancy 15 years longer than its poor. In these grisly conditions, social democrats see a textbook case of malignant capitalism. Democracies cannot survive on norms alone. When markets are left under-regulated — and workers, unorganized — the corporate sector becomes a cancerous growth, expanding until it dominates politics and civil society. An ever-greater share of economic gains concentrates in ever-fewer hands, while the barriers to converting private wealth into public power grow fewer and farther between. Politicians become unresponsive to popular preferences and needs. Voters lose faith in elections — and then, a strongman steps forward to say that he, alone, can fix it. All this contraindicates the democracy movement’s prescription: If our republic’s true sickness is its inegalitarian economic system, then that illness won’t be cured by cross-ideological coalitions. Quite the contrary: What’s needed is a movement that mobilizes working people in numbers large enough to demand a new deal from capital. Thus, if the liberal intelligentsia wishes to save American democracy, it should devote the lion’s share of its energies to brainstorming how such a movement can be brought into being — and what changes that movement should make to our nation’s political economy, once it takes power.

Not all of these obstacles to popular sovereignty are rooted exclusively in economics. But the most formidable and consequential are. One doesn’t need to believe that capitalism, as such, is incompatible with democracy to accept that a certain threshold of economic equality is a prerequisite for the latter. In fact, it is doubtful that any genuine supporter of democracy believes that no such threshold exists. Imagine a United States in which 99.9 percent of citizens had to labor 70 hours a week just to keep their families housed and fed (and then, just barely). Imagine that those citizens rarely knew exactly what their work schedules would be, and thus, had to constantly renegotiate child-care arrangements — and that all this put an enormous strain on their mental health and personal relations, leaving them bereft of the time and energy necessary to keep up with the news, or join community organizations, or attend town hall meetings, or cast a ballot in the middle of a Tuesday. Would you say that the economic system of such a nation was compatible with democracy? If not, then how is a system that condemns a smaller — but still substantial — percentage of the demos to such conditions compatible with it?

Even just the increase in gas prices have already wiped out the meager wage increase the working class got from the tax cuts: an-increase-in-gas-prices-easily-outpaces-the-benefits-of-the-tax-bill-for-lower-income-americans.  And anything shipped by truck, which is lots of stuff, is going up in price: america-doesnt-have-enough-truckers-and-its-starting-to-cause-prices-to-rise.  I don’t know what the overall answer is to reverse the disturbing trend of a shrinking middle class, but we’d better put lots of ideas on the table: jobs-programs-are-also-wage-programs & also heartland-wage-subsidy-rust-belt & also america-needs-a-workforce-with-technological-skills-for-our-future.  We’re fast moving headlong into a high-tech world with unprecedented disruption: the-end-of-employees.

Of course, the fastest rising cost of all is health care.  In the GOP’s exuberance to keep the promise to their base & rescind/cut back on Obamacare, what they’ve managed to do is raise premiums: trumpcare-will-hurt-people-next-year & also republicans-succeeded-at-raising-insurance-premiums-for-too-many.  They should leave well enough alone till they find a suitable replacement.  All these programs are incredibly expensive, which until we find some way to dramatically reduce costs, we’ll just keep piling debt upon debt at both the governmental & personal level: it-costs-685-billion-a-year-to-subsidize-u-s-health-insurance.  Structural changes are badly needed: if-we-want-better-health-care-at-a-lower-cost-primary-care-must-become-a.  The future trends show there’ll come a day we’ll have far fewer workers to support the (entitlement) system:the-recession-is-long-gone-where-are-the-babies & also hat-looks-good-slug-birth-rates-us-falling-reasons-why-family-policies.  Here’s interesting info on other life forms: human-race-just-001-of-all-life-but-has-destroyed-over-80-of-wild-mammals-study

Here in northeast Ohio after seeing generations of job losses & shuttered factories in the automobile industry, I can certainly empathize with their plight.  The middle class lifestyles that once defined the industrial towns around here have long since disappeared.  I applaud Trump is the only leader to ever really try to address the devastation, but I don’t trust his knowledge or judgement in figuring out what to do about it: senate-gop-sounds-alarm-over-trumps-floated-auto-tariffs & also analysts-trump-doesnt-get-auto-industry-tariffs-hurt-consumers.  In this brave new world, China is blowing right past us economically, which it doesn’t help when we have a broken government.  China has the ability to think long term, which our leaders practically never do.  The Chinese also steal our intellectual property.  Infrastructure is a big category where they’re way ahead of us: china-united-states-future-2025-2050-infrastructure-trade.

Dealing with Trump is like kicking at moving goal posts.  He has no core beliefs, doesn’t have the depth of knowledge on any issue, then changes his mind (especially after getting redirected by Fox News & the rest of his hardcore base).  The end result is usually a hodgepodge cluster mess with a trail of broken promises, both domestically & internationally: trump-almost-always-folds.  He’s really more of a shyster salesman: trumps-true-talent-isnt-negotiating-its-marketing & also see president-trump-is-a-better-dealbreaker-than-dealmaker.  In the constant confusion Trump has perfected The Art of the No-Deal, which Rubin concludes here from aim-bluff-lose-the-art-of-not-making-deals:

  

Rather than solve problems (expensive health-care premiums, theft of intellectual property) he creates new or bigger ones (even higher premiums, a trade war). His staff is forced to rush to rationalize and do damage control when he behaves impulsively, as he did in agreeing to a face-to-face summit with North Korea without understanding fully what he was doing. Trump acts rashly, and advisers rush to keep up and rationalize the outcome they didn’t expect and may not have supported. (The Post reports, “The biggest problem comes, experts [in Seoul] say, from Trump’s fundamental misunderstanding of North Korea’s interests. The regime in Pyongyang has never said it was prepared to unilaterally give up its nuclear program but has instead repeatedly made clear that this would have to be part of a ‘phased and synchronous’ process that would involve rewards for North Korea along the way.” Oops. That sounds like a rather large deal.) Trump, the spin goes, likes to operate in chaos. That’s a convenient excuse for someone who has no idea what he thinks or what to do. The chaos certainly doesn’t stop at the Oval Office door. Creating confusion in lieu of sound strategy may work in reality TV or real estate or even on a campaign. Voters learn the hard way that it does not work in governing.

Here’s another idea for fixing partisan gerrymandering, which we can eliminate this undemocratic monstrosity if we can find the courage & political will: how-to-end-partisan-gerrymandering.  We’re seeing sanity fighting back, as rational centrists push back against the radicals in the Freedom Caucus: gop-centrists-threaten-to-use-conservatives-weapon-against-them.  And the stalemate on issues like immigration has gone on for way too long: politics/house-republicans-rebellion-immigration & also republicans-immigration-freedom-caucus.  There are now so many disparate political factions who refuse to reach outside their own tribe, no wonder we have broken government: for-12-billion-taxpayers-should-get-more-than-congresss-trial-balloons.  The GOP has become so extreme & so fractured & so broken, it’s a golden opportunity for the Dems if they can get behind a message: democrats-heres-a-better-message-oust-the-gops-wimps-and-weaklings & also trump-2020-reelection-campaign-poll.  Rubin is also hopeful from john-kasichs-unusual-commencement-speech that voters will be open to an alliance of sanity that aspires to something better.  Also see attacks-on-mueller-korean-summit-failure-darken-gop-midterm-prospects.

Make The World Go Away

With the holiday weekend, I’m hoping it becomes a relatively slow news weekend.  Maybe it’s time to unplug from all the world’s problems & spend quality time with family & friends.  As with the nature of this president, another major headline story is always just around the corner, but if things do get more serene through Memorial Day, I’ll just post one set of messages next week to wrap up the month of May (I normally do two weekly in three parts on Tuesdays & Fridays).  So during this brief respite, maybe for a short while we can just make the world go away….  

https://www.youtube.com/watch?v=BdWEbweX1rQ

https://www.youtube.com/watch?v=6UCC1dFaiGI