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Social Unrest - Where is the battle going?

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October 06, 2010 – Comments (4)

This editoral piece by Michael Hudson was interesting to me.  Also read this piece on increasing inequity, basically half of all growth has gone to the top 10% of households and about half of that has gone to the top 1%.

My take on what has happened here is that unions have not increased their income share, but maintained it relative to non-union workers and non-union workers have taken all of the hit and the way the public is reacting is that the unions are the bad guys for their wages getting out of line.  But if you actually look at the buying power, I think even union jobs have lost some, just not much in comparison to non-union workers whereas all evidence is that many non-union workers have been hit so hard with relative wage loss and buying power, you have the massive increase in need for social programs.  It is the modern version of serfdom.

Anyway, these were interesting reading for me.

4 Comments – Post Your Own

#1) On October 06, 2010 at 10:20 AM, dwot (61.86) wrote:

Just an added note, I do think the union pensions are unsustainable and too rich, but not the wages.

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#2) On October 06, 2010 at 10:42 AM, BillyTG (29.42) wrote:

From Noam Chomsky:

If the borrowing in the last ten years had been used for constructive purposes -- say for investment or infrastructure --we'd be quite well off. But the borrowing was used for enrichment of the rich -- for consumption (which meant lots of imports, building up the trade deficit), financial manipulation and speculation. All of these are very harmful to the economy.

Our actual economic policy is a mixture of protectionist, interventionist, free market and liberal measures. And it's directed primarily to the needs of those who implement social policy, who are mostly the wealthy and the powerful.

There are serious issues here. First of all, we have to be careful in the use of terms. When someone says America is in for a long period of decline, we have to decide what we mean by "America." If we mean the geographical area of the United States, I'm sure that's right. The policies now being discussed will have only a cosmetic effect. There has been decline and there will be further decline. The country is acquiring many of the characteristics of a Third World society. But if we're talking about US-based corporations, then it's probably not right. In fact, the indications are to the contrary -- their share in manufacturing production, for example, has been stable or is probably even increasing, while the share of the US itself has
declined. That's an automatic consequence of sending productive labor elsewhere.

There are two important consequences of globalization. First, it extends the Third World model to industrial countries....[Second]So, when you have national economies, you get national states. We now have an international economy and we're moving towards an international state -- which means, finally, an international executive.

That's [globalization]a fancy way of saying that you export jobs to high-repression, low-wage areas -- which undercuts the opportunities for productive labor at home. It's a way of increasing corporate profits, of course.

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Check out these comments from Alan Greenspan:

“Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes. A substantial part of the confiscation is effected by taxation. But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bonds, to finance welfare expenditures on a large scale.

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold (Ed. – as was done in April 1933). If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”

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#3) On October 06, 2010 at 11:26 AM, Rehydrogenated (32.56) wrote:

The author of the first article brings up some good points. Banks have made it so that they make money off of any move that governments make. It should be unconstitutional for a government to borrow from a bank. If it doesn't make sense to print the money for what it needs, it makes even less sense to take out a loan for that money. Governments take out the most loans for wars, why should the banks make obsene profits from expensive wars? What a perverse incentive.

Complex financial transactions and derivitives also need to be heavily taxed because it would: (1) Effectively tax the super rich (2) Reduce the amount of trading in destructive financial instruments (3) Protect us from these derivitives destabilizing our economy.

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#4) On October 06, 2010 at 5:53 PM, Dow3000 (< 20) wrote:

Just abolish central banking...it is truly that simple

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