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April 13, 2008 – Comments (2)

Robert Reich has a piece that talks about how lowered standards of living and increased frustration leads to being able to rally people to the blame game.

He points out that America is richer, but the masses are not.  He doesn't directly say it, but it a look at the social implications of increased discrepancy of wealth. 

He points out the actions of the negative doctors for "politics of resentment" but if does make you wonder, where are the great leaders that unite a country?

The fixing of the books on the cpi, government debt and all the other lies out there probably started to down play the degree of a problem, but an unexpected consequence was that it was easy for business to point to the lie and keep wage increases down.  The real cost of living increases are about double what's reported, but how many have gotten those kinds of wage increases? 

And government shot themselves in the foot with the lies because at the same time they were suppressing the ability for wages to keep up, they were also suppressing the ability of tax revenue to increase.  It didn't make ends meet.  Honest accounting and changing the programs to fix the budget rather than falsely holding down the cost and suppressing disposible income was the correct route.

Single people with university degrees didn't have trouble making ends meet 20-30 years ago, they had huge spending power.  I remember a friend who had been a police officer before going back to school for law saying she never worried about buying anything. She wanted it, she bought it and it wasn't being paid for with borrowed money.

The thing here is things have been getting worse for a long and they are going to get worse because debt was being used to pay for the lifestyle my friend simply had without debt in the late 70s, early 80s.  People don't go without what they saw their parents with, only today people pay for it with credit.  And now credit is tightening so it isn't going to fuel that spending anymore.

Mish has a piece about how the reduced spending is already showing up in commerical real estate

These businesses have already pushed wages down to a level that people are barely living on, and now even demand for these jobs will be weak.

As Reich finishes:


Bitter? You ain’t seen nothing yet. And as much as people like Russert, Carville, Matalin, Schrum, and Murphy want to divert our attention from what’s really happening; as much as HRC and McCain seek to make political hay out of choices of words that can be spun cynically by the mindless spinners of the old politics; as much as demagogues on the right and left continue to try to channel the cumulative frustrations of Americans into a politics of resentment – all these attempts will, I hope, prove futile.

I lived in Britain and I was constantly wondering how civility had declined to such low standards and my conclusion was that it was about being in a declining economy for a lot more years.  The "top" has been leaving the "bottom" behind for at least 3 decades now, and daily life is in the midst of constant bitterness and frustration, at least where I was living.  It is playing out as a disaster for their children.  I lived in a house with 5 adults around age 30 and up sharing it, and that was simply a common lifestyle.

2 Comments – Post Your Own

#1) On April 13, 2008 at 6:38 PM, dwot (50.16) wrote:

Reads this and shakes head...

http://www.journalofcommerce.com/article/id27110 

Creating debt slaves is great for the economy... 

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#2) On April 13, 2008 at 7:41 PM, Tastylunch (29.33) wrote:

indeed wide gaps between top and bottom = social unrest. It's been shown time and time again.

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