Tag Archives: healthcare

The Pandemic Is Accelerating Trends That Are Disrupting the Foundations of the Economy

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By Charles Hugh Smith

Source: Of Two Minds

The problem is the economy that’s left has no means of creating tens of millions of jobs to replace those lost as the 1959 economic model collapses.

Fundamentally, the economy of 2019 was not very different from the economy of 1959: people went shopping at retail stores, were educated at sprawling college campuses, went to work downtown, drove to the doctor’s office or hospital, caught a flight at the airport, and so on.

The daily routine of the vast majority of the workforce was no different from 1959. In 2019, the commutes were longer, white-collar workers stared at screens rather than typewriters, factory workers tended robots and so on, but the fundamentals of everyday life and the nature of work were pretty much the same.

Beneath the surface, the fundamental change in the economy was financialization, the commodification of everything into a financial asset or income stream that could then be leveraged, bundled and sold globally at an immense profit by Wall Street financiers.

This layer of speculative asset-income mining had no relation to the actual work being done; it existed in its own derealized realm.

For decades, these two realms—the structure of everyday life (to borrow Braudel’s apt term) and the abstract, derealized but oh so profitable realm of financialization–co-existed in an uneasy state of loosely bound systems.

If you squinted hard enough and repeated the mantras often enough, you could persuade yourself there was still some connection between the everyday-life economy and the realm of financialization.

The two realms have now disconnected, and the real-world economy has been ripped from its moorings, as patterns of work and every-day life that stretch back 70 years to the emergence of the postwar era unravel and dissolve.

The trends that are currently fatally disrupting retail, education, office work and healthcare have been in place for years. When I wrote my 2013 book about the digitized future of higher education in a low-cost union of high-touch and low-touch learning, The Nearly Free University, all these trends were already clearly visible to those willing to look beyond the models embedded in the economy for decades or even centuries.

Visionaries like Peter Drucker foresaw the complete disruption of the education and healthcare sectors as far back as 1994. Post-Capitalist Society.

The problem with this disruption is it eliminates tens of millions of jobs–not just the low-paying jobs in retail and dining-out, but high-paying jobs in university administration, healthcare, and other core service sectors.

The last real-world connection between everyday life and financialization was the over-supply of everything that could be financialized: the way to reap the big profits was expand whatever could be leveraged and sold. So retail and commercial space ballooned, colleges proliferated, cafes sprang up on every corner, etc.

Meanwhile, financialization’s unquenchable thirst for higher profits stripped everything of the redundancy and buffers required to stabilize the system in times of crisis. So hospitals no longer kept inventory because by the logic of financialization, all that mattered was maximizing the return on capital–nothing else could possibly matter in the derealized realm of speculative profiteering.

Now healthcare finds itself trapped between the pincers of financialization’s stripmining and the collapse of retail in-person demand–the financial foundation of the entire system. Under the relentless pressure of financialization’s stripmining and profteering, healthcare only survives if it can bill somebody somewhere a staggering amount for everything from office visits to procedures to hospital stays to medications.

Once that avalanche of billing dries up, the entire sector implodes: a sector that accounts for almost 20% of the U.S. economy.

Higher education is also imploding, and for the same reason: its output no longer justified its enormous cost structure. The same can be said of overbuilt retail and commercial space: the financial justification for sky-high rents have imploded and will never come back. The over-supply is so monumental and the collapse of demand so permanent, the gigantic pyramid of debt and speculative excess piled on all these excesses is collapsing.

A bailout by the Federal Reserve won’t change the fundamentals of the collapse of financialization; all the Fed can do is reserve scarce lifeboat seats for its billionaire banker-financier pals. (Warren, you know Bill, have you met Jamie, Jeff, Tim and the rest of the Zillionaire Rat-Pack?)

Despite the record highs in the stock market–the ultimate expression of financialization disconnected from the real-world economy–financialization is also imploding. Financialization still claimed a connection to the real world of income streams and the value of the collateral underlying all the speculative profiteering: the high rents paid by the restaurants on the ground floor and the businesses for office space above justified the high value of the collateral, the commercial building.

Foundational swaths of the real-world economy have been swept away, and so the collateral is largely worthless. Lots of people want their employer to start paying for business-class airline seats again so they can jet around the country on somebody else’s dime, staying in pricey hotels and attending conferences, but these activities no longer have any financial justification.

The economy of 1959 is finally expiring. The enormous time and money sinks of transporting humans hither and yon no longer have any financial justification.

The problem is the economy that’s left has no means of creating tens of millions of jobs to replace those lost as the 1959 economic model collapses. We all know that automation is replacing human labor, but the real change is the collapse of the financial justification for the enormously costly systems we now depend on to generate jobs: healthcare, retail, tourism, dining out, education, working downtown, and all the professions dependent on managing all this complexity.

While the elimination of low-skill jobs–a longstanding trend–is attracting attention, the implosion of the 1959 economic model and financialization will soon sweep away millions of high-paying professional jobs that no longer have any financial justification.

As the 1959 economy implodes, so does the tax system based on payroll taxes and property taxes. This article sketches out the perverse incentives for employers to invest in automation rather than hire workers: Covid-19 Is Dividing the American Worker (WSJ.com)

There are alternatives, but they require accepting the implosion of both the 1959 economic model and its evil offspring, financialization.

I sketched out an alternative way of organizing work, everyday life and finance in my book A Radically Beneficial World. There are alternative ways of organizing civilization other than the insanely wasteful and exploitive system we now inhabit.

A New World Is Being Born: What Will It Be?

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By Paul Craig Roberts

Source: PaulCraigRoberts.org

We are hearing from many that the world after Covid-19 will be different.  The question is:  Different in what way?  Will it be better or worse?

Elites are working to make it better for them, and worse for the rest of us.  About that the evidence is clear.  The Big Boys are being bailed out and their debts covered.  Everyone else, except those already marginalized and without a recent work record and fixed address, got a month’s rent and extended unemployment benefits.

Big Pharma sees massive profits in the virus, Government sees more power to control

But the disparity in economic benefits is only a part of it.  Powerful vested interests, such as Bill Gates and Big Pharma, are determined to vaccinate us all, and to control our movements with an internal passport called “vaccinated, health cleared” or other words to that effect.  New tracking procedures and technologies are to be put in operation reminiscent of the “mark of the beast” to police the access of varous categories of people to various areas and benefits.

Experts point out that just as we cannot be vaccinated against the common cold, except perhaps for the past year’s version we cannot be vaccinated against Covid-19 and other mutating viruses, but the experts are already being shouted down. No expert opinion is to be permitted to stand in the way of vaccination profits.

Neither will nutrition and vitamin advocates be allowed to get in the way.  Bill Sardi predicts that orchestrated scares generated by mandatory recalls of “toxic” vitamins await us ( https://knowledgeofhealth.com/modern-medicine-laid-bare/ ). Big Pharma is determined to acquire control over vitamins and homeopathic remedies, and the FDA is Big Pharma’s likely pawn.

Vaccination has been elevated above cure, as Big Pharma and its shills such as CNN shout down the positive experience doctors report of successful treatments with Hydroxychloroquine and Azithromycin, and the effectiveness of Vitamin C, Vitamin D3, and Zinc in strengthening the ability of immune systems to fight off the virus.  Big Pharma-influenced medical orthodoxy cannot get out of the box it has been put into.  When new thinking and experimentation are needed, those capable of thought are hasseled and even blocked by FDA regulations and dogmatism.

The permanent government and its security agencies see in the population’s fear and confusion opportunities to put into place more tyrannical measures, more set-asides of Constitutional Rights, more impairments on free speech.  The ability of freedom to resist oppression is ever diminished.

Various descriptions of the expected dystopia are offered on the Internet.  But it does not have to turn out this way.  It is up to us. Demoralized and fearful, we can accept more government power as we did after 9/11.  Instead, we can collectively recognize the massive failure everywhere of Western leadership and construct a more liveable and sustainable society.

The failure of leadership is an opportunity for real change

CNN, the New York Times, and the rest of the controlled media tell us every day that President Trump represents the failure of leadership.  But the failure of leadership goes beyond all the leaders of the last 30 years and resides in the system itself.  Global, “self-regulating,” greed-driven, financialized, soulless capitalism cannot unite people into a sustainable community.

The failure of leadership resides in the long-term failure of leadership that made Western societies vulnerable by moving high-productivity, high-valued jobs offshore in order to raise corporate profits at the expense of domestic consumer incomes.  It means the movement offshore of the ability to produce medicines, N95 masks, and other needed resources for national survival.  It means dependency on foreign powers.  It means the inability to function without massive imports.  However you look at it, globalism is a death sentence.  Its only advantage is to the rich, and the advantage comes to them in the form of cheap labor that swells their profits while it shrinks domestic incomes and the purchasing power of the population.

Without incomes to drive the economy, the elites provided loans and expanded credit in order to provide spending power based in personal debt to absorb the offshored production brought home to sell in American markets. The cost of college education soared as its quality declined.  Education subsidies were cut and student debt substituted in its place.  Inflation was understated in order to deny Social Security pensioners cost-of-living increases. Medicare payments to health care providers were squeezed down.  The social safety net was ripped again and again. More and more people fell out, and homeless populations grew providing fertile breeding grounds for Covid-19.

The income and wealth distribution in the US went from fair to extremely unequal in a short time as the rich profited from the Federal Reserve pumping trillions of dollars into the prices of financial assets and from corporations buying back their own stock, thus decapitalizing the corporation while taking the company into debt, all for the temporary benefit of higher bonuses for executives and more capital gains for shareholders.  The elites killed the economy for short-run benefits to themselves.

These destructive polices were the work of greed-driven short-term thinkers—people whose only vision was “I want even more.”  And it is these unworthy people, not their victims, that Uncle Sam is now rescuing.  The massive unpayable debt bubble that already overhung the economy is being blown larger.  The Federal Reserve and the US Treasury are in the process of destroying the US dollar in futile efforts to save the super-rich from their own greed-driven misbehavior.

In place of this insane approach to the economic crisis, there is a sane approach.  The bailed out corporations and banks are in effect being purchased by the government.  Therefore, they should be treated as the nationalized corporations that they are.  Once nationalized, the government, unlike the corporations, can create the money to pay the salaries and health premiums. The predicted 30 or 40 percent unemployment can be avoided.  It is better to pay salaries than to pay unemployment benefits.  The psychological difference alone is worth a vast amount.

The inability of the high-cost American private health care system to cope with the present medical crisis is apparent.  A profit-driven health care system is the highest cost system to have.

Profit is built in at every level, which raises costs to levels that private insurance and Medicare refuse to reimburse.  The result is shrinkage, not expansion of the system.  Just look, for example, at the number of hospitals, especially in rural areas, that have recently closed.

Moreover, the coverage of a private system—and Medicare itself—has massive gaps.  The resistance to a nationalized health service is ridiculous, especially as a nationalized service can coexist with a privatized one.  Two are clearly better than one.

Nationalization has numerous benefits.  It permits the large unwieldly enterprises, created, for example, by the mergers of giant banks like Chase Manhattan and J.P. Morgan, to be broken up and to reestablish the separation of commercial from investment banking.  The repeal of the Glass-Steagall Act and the suspension of enforcement of the anti-trust laws were ignorant policymaking at its worse. Nationalization permits the government to bring home the offshored production of global US corporations and to put the US workforce back to work in middle class jobs.  It is win-win for the American people.

Once the giant monopoly corporations are broken up, they can be privatized and returned to private ownership on a fair value basis, not on the giveaway basis of a pennies on the dollar sale. The money the government receives from their sale can be used to retire government debt.

For individuals, the life- and economy-suffocating heavy debts should be written down to levels that can be serviced by their incomes.  Michael Hudson and I proposed a “debt jubilee” as a solution:  https://www.paulcraigroberts.org/2020/03/25/a-brady-bond-solution-for-americas-unpayable-corporate-debt/   Others have taken up our call:  https://truthout.org/articles/1200-only-goes-so-far-its-time-to-abolish-debt/?eType=EmailBlastContent&eId=98cb6aac-8ef8-4e0e-b80e-24a1d1f92ef6

Currently the Federal Reserve is socializing debt without writing it down.  This is nonsensical as it bails out debt by expanding it. 

In the US there is so much dogmatic prejudice against anything that has a tint of socialism, even as a temporary expedient measure, that thought and sensible action face strong barriers.  If we cannot overcome these barriers, we are destined for far more difficult times.

Can community be restored or will nationality degenerate into the clans and tribalism of Identity Politics?

The greatest challenge we face is to restore the concept of community.  There was a time when  the United States was a community, a unique one as it consisted of a multitude of ethnicities. As each wave of ethnic immigrants arrived, they passed a test on the Constitution, learned the national language, and became assimilated into the American community.

This community has been destroyed by a variety of forces, the latest being Identity Politics.  Identity Politics prohibits community by breaking down the population into mutually hostile groups by gender, sexual preference, race, and whatever classification can be invented or imagined.  The result is a Tower of Babel.  A Tower of Babel is not a community.

Instead of community, the US is a place where hatreds are cultivated with those claiming the status of victims doing the most hating and those assigned the status of victimizer being most hated.  Initially, white hetereosexual males were the primary hate objects, but lately we have the transgendered hating the feminists who say that a woman is a woman, not a man who claims to be a woman.  The transgendered attacks on well-known feminist leaders are violent in their language and are likely to progress into violent deeds.  Various unassimilated immigrant groups battle each other over who controls disputed territory.  Israel’s inhumane treatment of Palestinians has enraged Muslim immigrants against Jews.  Violent racial attacks on white people are becoming more common.

For decades Women’s Studies have taught hatred of men, and Black Studies have taught hatred of Whites.  This taught hatred is now supplemented by the New York Times 1619 Project.  In place of assimilation, we now have mutual hatreds.  How do we escape from this?

Perhaps the challenge from Covid-19 will force us to come together again in order to prevail over the virus, which in mutated versions might be with us forever.  A coming together would be helped by an economic bailout perceived as fair rather than as the one-sided approach that has been taken. A debt jubilee provides the necessary fairness.

The elites by thinking only of their interests are in the way of the opportunity that crisis provides to bring people together.  If we can’t be brought back together, we can forget about unity beyond the boundaries of our own victim or identity group.  In place of community, we will be organized in clans of seperate identities.  The absence of unity at home will make us a sitting duck for enemies abroad.

We know what the Dystopian Wish List is.  Can we come together with an anti-dystopian wish list as a mutually supportive community or have the elites succeeded in atomizing us into disparate tribal hate groups?

Financial Feudalism

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By Michael Krieger

Source: Liberty Blitzkrieg

“Happy 18th Birthday! Meet your new Daddy,” read one website advertisement. “Do you have strong oral skills? We’ve got a job for you!” cooed another.

A message on another billboard directed at the “daddies” was more blunt: “The alternative to escorts. Desperate women will do anything”…

SeekingArrangement was founded by Las Vegas tech tycoon Brandon Wade. Wade is apparently worth somewhere in the neighborhood of $40 million. His motto is, “Love is a concept invented by poor people”…

SA also markets itself as an antidote to student debt. In the U.S. and elsewhere, college students are enduring financial instability and hardship. Because of rising college fees and rent, and the lack of time available for work during studies, many women are extremely vulnerable to exploitation. “SeekingArrangement.com has helped facilitate hundreds of thousands, if not millions, of arrangements that have helped students graduate debt-free,” Wade boasts on the website. Promotional videos show young, beautiful women enrolled in “Sugar Baby University” — in classrooms, holding wads of cash, driving luxury cars, and discussing the pleasure and ease of being a sugar baby.

When signing up for an account, potential sugar babies are told, “Tip: Using a .edu email address earns you a free upgrade!”

– TruthDig: Sugar-Coated Pimping

When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it.

– Frédéric Bastiat

Watching politics unfold in the post-financial crisis era has been extraordinarily frustrating. While it’s been refreshing to observe the emergence of grassroots populism over the last few years, there’s a problematic lack of depth and clarity embedded in these burgeoning mass movements. Tens if not hundreds of millions of Americans now acknowledge that something’s deeply broken within the current paradigm, but we remain focused on identifying symptoms as opposed to understanding and rectifying the systemic nature of the problem.

Of course, there are numerous complexities when it comes to the administration of an imperial oligarchy, and our system didn’t emerge overnight. Perhaps the most fundamental mutation of the post WW2 era came in 1971 when the international convertibility of U.S. dollars into gold was severed. This is when the country began its long transformation from a largely industrial empire to a financial one. I’ve often highlighted how the purely fiat USD reserve currency is the most powerful weapon ever invented, and how the U.S. control of the global financial system is the true backbone of empire, but it’s equally important to understand how the predatory financial system is also used to subjugate Americans in their own country.

In order to understand how this works we need to dig into the most fundamentally important four letter word in any modern economy: Debt.

When most people consider the debilitating societal effects of excessive debt they tend to see it from one basic level. How the bottom half of the population essentially has no choice but to borrow in order to participate in the economy as constructed. This is because the cost of so many things has been inflated way beyond the capacity of most people to purchase them outright. Specifically, wage growth has failed to keep up with the soaring costs of fundamental things such as shelter, healthcare and higher education.

For instance, home prices have been rising faster than wages in 80% of U.S. markets, which means the higher cost tends to offset historically low mortgage rates. Low interest rates don’t really help such people, it just lets them maybe, barely purchase an intentionally inflated asset to live in by taking on a huge chunk of debt. An asset that could quickly become completely unaffordable should the economy turn down as it did a decade ago.

As such, you have multitudes taking on debt defensively just to keep going and avoid falling further down the socioeconomic scale. Debt doesn’t empower such people, rather, it turns them into modern day indentured servants endlessly stuck on a hamster wheel with little to no hope of getting off. This is not an accident, it’s a tried and tested tool which, when combined with incessant mass media propaganda, is an effective way of creating a submissive, confused and desperate underclass.

Many people understand this by now, but what’s far less understood, yet potentially more significant, is how the wealthy use debt.

When you own your primary home outright and you’ve got enough savings that healthcare premiums and paying for your kids college in cash doesn’t make a dent, debt becomes something else entirely. Debt’s no longer an albatross around your neck, instead it becomes a tool to increase wealth. Debt becomes leverage.

Much of the explosion in wealth inequality over the past several decades can be traced back to this systemic interclass weaponization of debt. If you’re very wealthy and connected, access to extremely cheap debt is virtually unlimited, and this access is used to make leveraged bets on all sorts of stuff, but primarily real estate and financial assets such as stocks and bonds. Hasn’t this always been the case you ask? Aren’t those with capital always extremely advantaged over those without it? Isn’t that the history of capitalism and America since the beginning? My answer would be yes and no.

The main difference between prior periods of history and, let’s say the 21st century, has been the vast increase in power of the financial services sector thanks to the Federal Reserve’s willingness to encourage and enable the insatiable reckless behavior of the speculator class. It’s no secret the Fed has been intentionally boosting assets across the FIRE sector such as real estate, stocks and bonds since the crisis. Those with the capital to ride the coattails of this irresponsible and undemocratic central planning rushed out to take on debt to buy these assets, thus multiplying the return on investment.

While the white-collar cubicle worker with enough extra income to diligently add to their retirement account over the past decade has done fine, bankers or hedge fund managers who took on massive leverage to amplify such bets made generational fortunes while creating nothing of value. It’s the way debt works for the financial services sector versus how it works for the average person in a world dominated by big finance and the central bankers who provide them unlimited welfare.

The same thing occurs within the corporate suite, as executives across industries have used access to extremely cheap debt to buyback stock and reward themselves handsomely despite creating nothing of societal value while doing so. It’s pure financial engineering. Nobody should become generationally wealthy this way, but it’s exactly what’s been happening. So you see, debt’s not just a means to subjugate a desperate bottom half of the population, it’s concurrently an effective tool to expand wealth and power at the top. 

Then there’s this.

When was the last time the bond market paid you to make an acquisition? As Max Keiser so eloquently puts it, this is interest rate apartheid.

But it’s even more pernicious than that. It’s still possible for regular wealthy people to take on too much leverage, make a mistake, and lose their fortunes — unless of course you’re an executive at major financial services firm. In that case you simply can’t lose, which was the primary lesson learned from the response to the financial crisis.

Not only were the titans of this industry not jailed, they walked away with their fortunes intact. The Federal Reserve and the U.S. government made this happen. It wasn’t an accident and it wasn’t to “save the economy;” that’s just nonsense talk for the confused masses. The entire point was to consolidate and further entrench the unaccountable power of those at the very top of the finance feudalism paradigm and signal they’ll also be bailed out for any future catastrophe they create.

Significantly, financial feudalism isn’t just interclass, it’s also intergenerational. The stock market and real estate crash of a decade ago was the market’s attempt to reset those assets more in line with median incomes, but central banks would have none of that. They determined asset prices needed to be re-inflated as much as possible as fast as possible, and these unelected banker stooges went about implementing this major policy decision of central economic planning with zero public debate. Young people entering the workforce had no savings and poor wage growth, so a generation was quickly priced out of homeownership while simultaneously stuck with an enormous pile of student debt. The results of all this are unsurprising.

The crisis facing this country is simmering and metastasizing under the surface of misleading aggregate economic data and record stock markets. While it’s tempting to focus on the symptoms, we’ll never confront and tackle any of this properly unless we understand the structure and how the game is really played. The system you’re living in isn’t capitalism or socialism, it’s financial feudalism. 

Costs Are Spiraling Out of Control

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By Charles Hugh Smith

Source: Of Two Minds

And how do we pay for these spiraling out of control costs? By borrowing more, of course.

If we had to choose one “big picture” reason why the vast majority of households are losing ground, it would be: the costs of essentials are spiraling out of control. I’ve often covered the dynamics of stagnating income for the bottom 90%, and real-world inflation, i.e. a decline in purchasing power.

But neither of these dynamics fully describes the relentless upward spiral of the cost basis of our economy, that is, the cost of big-ticket essentials: housing, education and healthcare.

The costs of education are spiraling out of control, stripping households of income as an entire generation is transformed into debt-serfs by student loan debt. The soaring costs of healthcare are a core driver of higher costs in the education complex (and government in general), and to cover these higher costs, counties raise property taxes, which add additional cost burdens to households and enterprises as rents rise.

Rising rents push the cost structure of almost every enterprise and agency higher.

Then there’s the asset inflation created by central bank ZIRP (zero interest rate policy) which has inflated a second echo-bubble in housing that has pushed home ownership out of reach of many, adding demand for rental housing that has pushed rents into the stratosphere in Left and Right Coast cities.

The increasing dominance of monopolies and cartels has eliminated competition in sector after sector. Monopolies and cartels skim immense profits even as the value, quality and quantity of their products and services decline: The U.S. Only Pretends to Have Free Markets From plane tickets to cellphone bills, monopoly power costs American consumers billions of dollars a year.

Thanks to their political influence, monopolies and cartels have legalized looting, raising prices and evading anti-trust regulations because they can pay whatever it takes in our pay-to-play political system.

Let’s look at a few charts that illustrate the relentless rise in costs:

Do you reckon these two charts are connected–soaring costs and ballooning administrative payrolls?

Student loan debt is soaring above $1.5 trillion, guaranteeing profits to lenders and debt-serfdom to the students exiting with degrees that are in over-supply, i.e. possessing little scarcity value in an over-credentialed economy:

The echo housing bubbles in many locales exceed the nosebleed valuations of the previous bubble:

And how do we pay for these spiraling out of control costs? By borrowing more, of course:

Even at low rates of interest, the cost of servicing skyrocketing debt increases, leaving less net income to support additional borrowing.

What will it take to radically reduce the cost basis of our economy? A fundamental re-ordering that breaks up all the cartels and monopolies that push prices higher even as they deliver lower quality goods and services would be a good start.

This holiday season, American workers have little to celebrate

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By Danny Haiphong

Source: Intrepid Report

Every year, much of the U.S. population celebrates Thanksgiving and Christmas to show appreciation for their families and friends. Thanksgiving normalizes the colonial origins of the United States and erases the brutality of the English settlers who massacred indigenous people to prepare the land for capitalist accumulation. Christmas is the annual holiday of big business. On no other day are workers more encouraged to spend their wages on the latest consumer product to gift to their loved ones. The holidays bring with them a deep pressure to be merry. Yet on this holiday season, workers have little to celebrate.

A new study by Brookings Institution provides a snapshot into the devastation wrought on the working class by American capitalism. Forty-four percent of all workers between the ages of 18-64 are employed in low-wage sectors and earn an average of $16 or less per hour. The study excluded workers who logged over 98 hours per week over the last year as well as certain sections of the college-educated population such as those living in dormitories and attending graduate school. Had these groups of workers been counted, the percentage of low-wage workers out of the total population would likely be even higher. This verifies prior datasets which proved that around half of the U.S. population makes less $30,000 per year.

The growing poverty of the American worker is a major contributor to the growth of toxic stress and mental illness. Half of all U.S. adults will develop a mental illness over the course of their life. Serious mental health conditions afflict nearly ten million people in the United States and over a quarter of these individuals live below the official poverty line. Suicide rates are at a thirty-year high. An obvious connection exists between rising poverty and the worsening mental health of the American worker.

Workers in the United States see no future under the current stage of capitalism. They struggle to afford rent in a nation where the federal minimum wage cannot pay for a two-bedroom apartment anywhere in the country. They indebt themselves in the trillions to attend college and obtain healthcare. They work in redundant, service sector jobs where hours are long and mistreatment, abuse, and injury are all too common. The American worker is increasingly alienated from themselves and each other. Union density rates in the U.S. have fallen to just ten percent of all workers since World War II.

The shrinking labor movement has followed a larger trend in U.S. society. Privatization has decimated the public sector. Workers have few places to socially convene independent of the machinations of consumer capitalism. Workers are competing for fewer jobs, most of which are not worth competing for at all. Homelessness, mass incarceration, and endless war remind workers that they can easily be turned into cannon fodder if they step out of line. In such an environment, addiction and self-destruction is encouraged while organizing for justice is discouraged.

Economic insecurity and alienation place more pressure on families to make up for stagnant wages and exorbitant amounts of debt. More young workers are living with their parents than at any other time in the last one hundred years. Older workers are not only forestalling retirement but also finding themselves without family or community support as siblings and adult children chase the highest paying jobs and the lowest rents and property values. Couples feel compelled to remain in toxic relationships for economic reasons. A strong link exists between domestic violence and poverty.

Contrary to the messages in Hallmark cards or the corporate media, the holidays are far from a time of celebration. Many workers view the holiday season as a harsh reminder of the loss, alienation, and despair that they’ve experienced over the course of their lives. Holidays place added pressure on workers to dismiss the ills of capitalism and the personal stressors associated with them. It should come as no surprise that most workers already struggling with mental health conditions report that the holidays only worsen their symptoms. Instead of embracing humanity, the holidays encourage workers to embrace rampant commercialism and the nuclear family.

To break from a culture steeped in the profit motive, workers will need to create their own traditions based upon solidarity and social transformation. Not everything about the holidays needs to be thrown out in the process. Spending time with family and friends during a day off from work can and should be rewarding to the psyche and to society. The conditions of capitalism prevent the holidays from serving a social purpose. Holidays under capitalism breed despair but brand themselves as moments of pure joy.

While workers may have little to celebrate this holiday season, there are reasons for the working class to be optimistic in the years to come. Teachers in cities such as Chicago and Los Angeles have won key gains in 2019 by using the most powerful weapon at the disposal of organized labor: the strike. At the beginning of the year, the Los Angeles Teachers won smaller class sizes and more support staff. The Chicago Teachers Union massively increased the number of nurses in the school district by forcing the city to hire nurses rather than continue the inefficient and harmful practice of hiring private contractors. The UAW’s strike of General Motors (GM) earlier this Fall made global headlines even if it was unable to win every demand that the workers put forth. These strikes reflect a growth of class consciousness in the United States. The continued growth of class consciousness will be critical toward building the kind of struggle capable of bringing about massive political and economic change for the working class.

Furthermore, workers around the world are leading the way in the struggle against class inequality and foreign-sponsored wars. Massive protests in Haiti, Chile, Honduras, and Algeria are just a few of many occurring around the globe. The protests have mainly targeted repressive U.S.-backed governments and their neoliberal economic agenda. China is leading the world in poverty reduction. Cuba is the most sustainably developed nation in the world. A vast majority of workers around the world want to see an end of the miseries imposed by global capital and are actively fighting to make their demands a reality.

The question is whether workers in the United States can decisively break from the despair, the racism, and the extreme alienation shaping their current condition. Being determines consciousness. At this moment, the neoliberal race to the bottom has rendered most workers too fearful, disorganized, and full of self-blame to fight back. However, millions of workers have rallied behind the political campaign of Bernie Sanders. Labor unrest is likely to continue as neither political party appears interested in implementing Bernie Sanders’ social democratic agenda. Workers in the United States are in desperate need of a revived labor movement to quench their thirst for a better life. Putting our energies into building this movement will go a long way toward shaking the Holiday Blues and giving workers something to really celebrate: a society run by workers, in the interests of workers.

The Erosion of the Middle Class — Why Americans Are Working Harder and Earning Less

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By John Liberty

Source: The Mind Unleashed

“I don’t have to tell you things are bad. Everybody knows things are bad. It’s a depression. Everybody’s out of work or scared of losing their job. The dollar buys a nickel’s worth, banks are going bust, shopkeepers keep a gun under the counter. Punks are running wild in the street and there’s nobody anywhere who seems to know what to do, and there’s no end to it.” — Howard Beale

Howard Beale, the main character in the 1976 film Network, became a part of cinematic history when he uttered the line “I’m mad as hell and I’m not gonna take it anymore.” That one line expressed a growing rage among America’s shrinking middle class at a time when Americans were reeling from years of war, political scandals and economic downturn.

In the four decades that have followed, little has improved for the average American. We’re still ‘mad as hell’ and the middle class is being eroded right in front of our eyes. When adjusted for inflation, many Americans are working longer hours and earning less than they did in 1976. So, how have we gone from vibrant middle class to the working poor in a matter of decades?

Median Incomes Are Stagnant

Despite increases in the national income over the past fifty years, middle class families have experienced little income growth over the past few decades. According to U.S. Census data, middle class incomes have grown by only 28 percent from 1979 – 2014. Meanwhile, a report from the Congressional Budget Office (CBO) shows that the top 20 percent of earners has seen their incomes rise by 95 percent over that same period of time.

Contributing to the stagnation of wages is a notable decrease in the workforce participation rate. According to the Brookings institute, “One reason for these declines in employment and labor force participation is that work is less rewarding. Wages for those at the bottom and middle of the skill and wage distribution have declined or stagnated.” Historical data from the Bureau of Labor Statistics backs up these findings, showing a steady decrease in workforce participation over the last two decades.

The Erosion of the Minimum Wage & America’s Purchasing Power

Anyone who has read a comment thread on the internet about minimum wage laws knows the debate is currently one of the most highly contentious political topics in America. In the halls of Congress, the debate has turned into a nearly decade long impasse. As a result, workers at the low end of the wage scale have watched the purchasing power of their wages decrease from $7.25 in 2009, to $6.19 in 2018 due to inflation. In 2018, you need to perform 47 hours of minimum wage work to achieve the same amount of purchasing power as 40 hours of work in 2009.

The inflation-adjusted minimum wage value has been in steady decline since 1968, when the $1.60 minimum wage was equal to $11.39 (in 2018 dollars). Since then, lawmakers have reduced minimum wage increases relative to the rate of inflation. As Christopher Ingraham reports:

“Recent research shows that the reason politicians — Democrats and Republicans alike — are dragging their feet on popular policies such as the minimum wage is that they pay a lot more attention to the needs and desires of deep-pocketed business groups than they do to regular voters. Those groups tend to oppose minimum wage increases for the simple reason that they eat into their profit margins.”

To be clear, the erosion of the purchasing power of everyday Americans is hardly a new phenomenon. According to data from the U.S. Bureau of Labor Statistics, the purchasing power of the U.S. Dollar has plummeted by over 95 percent since 1913, the year the Federal Reserve was created. The Bureau’s Consumer Price Index indicates that prices in 2018 are 2,436.33% higher than prices in 1913 and that the dollar has experienced an average inflation rate of 3.13% per year during this period.

The Rich Get Richer

While the outlook may be grim for low-wage workers, this is fantastic news for large corporations. Data from the U.S. Bureau of Economics shows that corporate profits are approaching all-time highs. But it’s not just workers who are feeling the effect of growing income inequality. The contrast is also being felt on Main Street. An analysis of the S & P 500 and the Russell 1,000 & 2,000 indexes by Bloomberg revealed a growing gap between America’s largest employers and smaller businesses.

A report from the Institute for Policy Studies entitled Billionaire Bonanza: The Forbes 400 and the Rest of Us echoed these findings when it revealed that America’s 20 wealthiest people — a group that could fit comfortably in one single Gulfstream G650 luxury jet –­ now own more wealth than the bottom half of the American population combined.

Although the Trump administration continues to tout stock market and labor force increases as signs of economic prosperity, numbers show that the wealthiest 10 percent of Americans own 84 percent of all stock. A study conducted by the Economic Policy Institute found that wage growth remains too weak to consider the economy at full employment and that stagnant wage growth has contributed to the growing level of income inequality in America. The study noted that while wages have recovered from the 2008 recession, the gap between those at the top and those at the middle and bottom has continued to increase since 2000. As the study’s author, Elise Gould writes:

“We’re looking at nominal wage growth that is still slower than you would expect in a full employment economy, slower than you would expect if you thought there were any sort of inflation pressures from wage growth.”

The Decimation of the American Dream

Comedian George Carlin once said, “The reason they call it the American Dream is because you have to be asleep to believe it.” For millions of middle class Americans Carlin’s statement has proven eerily accurate. Stagnant wages and decreased purchasing power has put the prospects for middle class children in a tailspin as upward mobility trends have reportedly fallen by over 40 percent since 1950.

A poll conducted by the Pew Research Institute corroborates this claim. According to Pew, only 37 percent of Americans believe that today’s children will grow up to be better off financially than their parents. That means more Americans think that today’s children will be financially worse off than their parents than those who believe they will be better off.

The sentiments expressed by millions of middle class Americans appear to be wholly justified due to the fact that middle class families are becoming more fragile and dependent on two incomes. A report from the Council of Economic Advisors found the majority of the income gains made by the middle class from 1979 to 2013 were a result of increased participation in the workplace by women. The report also noted the fragility of two income families amidst a decline in marriage and a drastic rise in single parent homes in recent years.

As a result of the slow growth in wages, over half of Americans now receive more in Government transfer payments (Medicare, Medicaid, food stamps, Social Security) than they pay in federal taxes. An analysis of all 50 states also found that in 42 states the cost of living is higher than the median income.

The rising cost of healthcare is also putting the pinch on the wallets of many Americans. As Jeffrey Pfeffer noted in his book Dying for a Paycheck, healthcare spending—per capita—has increased 29 fold over the past 40 years, outpacing the growth of the American economy.

While many Americans continue to look to the government to fix problems like wage stagnation, income inequality and rising healthcare costs, the sad truth is that we live in a time when 1 in 3 households has trouble paying energy bills and 40 percent of Americans face poverty in retirement at the exact same time the Federal Government has admitted that they lost $21 trillion. Not only did they lose $21 trillion (yes that’s TRILLION with a T), but the Department of Defense indicated in a press conference that they “never expected to pass” the audit to locate the missing taxpayer money.

John Emerich Edward Dalberg Acton famously proclaimed in 1887:

“Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men.”

Perhaps it’s time for the millions of Americans who are quietly ‘mad as hell’ to start expressing their rage at the corrupt institutions of power that are decimating their livelihoods rather than expecting those very same institutions to fix the problems they created.

 

America’s Social Depression Is Accelerating

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By Charles Hugh Smith

Source: Of Two Minds

We need to value honesty above optimism. Once we can speak honestly, there is a foundation for optimism.

Beneath the rah-rah statistics of “the greatest economy ever,” the social depression is accelerating. The mainstream is reluctantly waking up to the future of the American Dream: downward mobility for all but the top 10% of households. A 2015 Atlantic article fleshed out the zeitgeist with survey data that suggests the Great Middle Class/Nouveau Proletariat is also waking up to a future of downward mobility: The Downsizing of the American Dream: People used to believe they would someday move on up in the world. Now they’re more concerned with just holding on to what they have.

I have been digging into the financial and social realities of what it takes to be middle class in today’s economy for years: Are You Really Middle Class?

The reality is that the middle class has been reduced to the sliver just below the top 5%–if we use the standards of the prosperous 1960s as a baseline.

The downward mobility isn’t just financial–it’s a decline in political power, control of one’s work and income-producing assets. This article reminds us of what the middle class once represented: What Middle Class? How bourgeois America is getting recast as a proletariat.

The costs of trying to maintain a toehold in the upper-middle class are illuminated in these recent articles on health and healthcare–both part of the downward mobility:

Health Care Slavery and Overwork

How a toxic workplace could, literally, destroy your health

We’re afraid our work is killing us, and we are right

This reappraisal of the American Dream is also triggering a reappraisal of the middle class in the decades of widespread prosperity: The Myth of the Middle Class: Have Most Americans Always Been Poor?

Downward mobility excels in creating and distributing what I term social defeat: In my lexicon, social defeat is a spectrum of anxiety, insecurity, chronic stress, powerlessness, and fear of declining social status.

Downward mobility and social defeat lead to social depression. Here are the conditions that characterize social depression:

1. High expectations of endless rising prosperity have been instilled in generations of citizens as a birthright.

2. Part-time and unemployed people are marginalized, not just financially but socially.

3. Widening income/wealth disparity as those in the top 10% pull away from the shrinking middle class.

4. A systemic decline in social/economic mobility as it becomes increasingly difficult to move from dependence on the state (welfare) or one’s parents to financial independence.

5. A widening disconnect between higher education and employment: a college/university degree no longer guarantees a stable, good-paying job.

6. A failure in the Status Quo institutions and mainstream media to recognize social recession as a reality.

7. A systemic failure of imagination within state and private-sector institutions on how to address social recession issues.

8. The abandonment of middle class aspirations by the generations ensnared by the social recession: young people no longer aspire to (or cannot afford) consumerist status symbols such as luxury autos or homeownership.

9. A generational abandonment of marriage, families and independent households as these are no longer affordable to those with part-time or unstable employment, i.e. what I have termed (following Jeremy Rifkin) the end of work.

10. A loss of hope in the young generations as a result of the above conditions.

The rising tide of collective anger arising from social depression is visible in many places: road rage, violent street clashes between groups seething for a fight, the destruction of friendships for holding the “incorrect” ideological views, and so on. I Think We Can Safely Say The American Culture War Has Been Taken As Far As It Can Go.

A coarsening of the entire social order is increasingly visible: The Age of Rudeness.

Depressive thoughts (and the emotions they generate) tend to be self-reinforcing, and this is why it’s so difficult to break out of depression once in its grip.

One part of the healing process is to expose the sources of anger that we are repressing. As psychiatrist Karen Horney explained in her 1950 masterwork, Neurosis and Human Growth: The Struggle Towards Self-Realization, anger at ourselves sometimes arises from our failure to live up to the many “shoulds” we’ve internalized, and the idealized track we’ve laid out for ourselves and our lives.

The recent article, The American Dream Is Killing Us does a good job of explaining how our failure to obtain the expected rewards of “doing all the right things”(getting a college degree, working hard, etc.) breeds resentment and despair.

Since we did the “right things,” the system “should” deliver the financial rewards and security we expected. This systemic failure to deliver the promised rewards is eroding social mobility and the social contract while generating frustration, anger, etc.

We are increasingly angry at the system, but we reserve some anger for ourselves, because the mass-media trumpets how well the economy is doing and how some people are doing extremely well. Naturally, we wonder, why them and not us? The failure is thus internalized.

One response to this sense that the system no longer works as advertised is to seek the relative comfort of echo chambers–places we can go to hear confirmation that this systemic stagnation is the opposing political party’s fault.

We don’t just self-sort ourselves into political “tribes” online– we are congregating in increasingly segregated communities and states:.

Americans are moving to communities that align more with their politics. Liberals are moving to liberal areas, and conservatives are moving to conservative communities. It’s been going on for decades. When Jimmy Carter was elected in 1976, 26.8% of Americans lived in landslide counties; that is counties where the president won or lost by 20% of the vote.

By 2004, 48.3% of the population lived in these counties. This trend continues to worsen. As Americans move to their preferred geographic bubbles, they face less exposure to opposing viewpoints, and their own opinions become more extreme. This trend is at the heart of why politics have become so polarizing in America.

We’re self-sorting at every level. Because of this, Americans are only going to grow more extreme in their beliefs, and see people on the other side of the political spectrum as more alien.”

Part of the American Exceptionalism we hear so much about is a can-do optimism: set your mind to it and everything is possible.

The failure to prosper as anticipated is generating a range of negative emotions that are “un-American”: complaining that you didn’t get a high-paying secure job despite having a college degree (or advanced degree) sounds like sour-grapes: the message is you didn’t work hard enough, you didn’t get the right diploma, etc.

It can’t be the system that’s failed, right? I discuss this in my book Why Our Status Quo Failed and Is Beyond Reform: the top 10% who are benefiting mightily dominate politics and the media, and their assumption is: the system is working great for me, so it must be working for everyone. That’s the implicit narrative parroted by status quo mouthpieces.

The inability to express our despair and anger generates depression. Some people will redouble their efforts, others will seek to lay the blame on “the other” (some external group) and others will give up. What few people will do is look at the sources of systemic injustice.

Perhaps we need a national dialog about declining expectations, rising inequality and the failure of the status quo that avoids the blame-game and the internalization trap (i.e. it’s your own fault you’re not well-off).

We need ways to express our resentment, anger, despair, etc. that are directed at the source, the complex system we inhabit, not “the other.” We need to value honesty above optimism. Once we can speak honestly, there is a foundation for optimism.

National (In)Security In the United States of Inequality

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By Rajan Menon

Source: Unz Review

So effectively has the Beltway establishment captured the concept of national security that, for most of us, it automatically conjures up images of terrorist groups, cyber warriors, or “rogue states.” To ward off such foes, the United States maintains a historically unprecedented constellation of military bases abroad and, since 9/11, has waged wars in Afghanistan, Iraq, Syria, Libya, and elsewhere that have gobbled up nearly $4.8 trillion. The 2018 Pentagon budget already totals $647 billion — four times what China, second in global military spending, shells out and more than the next 12 countries combined, seven of them American allies. For good measure, Donald Trump has added an additional $200 billion to projected defense expenditures through 2019.

Yet to hear the hawks tell it, the United States has never been less secure. So much for bang for the buck.

For millions of Americans, however, the greatest threat to their day-to-day security isn’t terrorism or North Korea, Iran, Russia, or China. It’s internal — and economic. That’s particularly true for the 12.7% of Americans (43.1 million of them) classified as poor by the government’s criteria: an income below $12,140 for a one-person household, $16,460 for a family of two, and so on… until you get to the princely sum of $42,380 for a family of eight.

Savings aren’t much help either: a third of Americans have no savings at all and another third have less than $1,000 in the bank. Little wonder that families struggling to cover the cost of food alone increased from 11% (36 million) in 2007 to 14% (48 million) in 2014.

The Working Poor

Unemployment can certainly contribute to being poor, but millions of Americans endure poverty when they have full-time jobs or even hold down more than one job. The latest figures from the Bureau of Labor Statistics show that there are 8.6 million“working poor,” defined by the government as people who live below the poverty line despite being employed at least 27 weeks a year. Their economic insecurity doesn’t register in our society, partly because working and being poor don’t seem to go together in the minds of many Americans — and unemployment has fallen reasonably steadily. After approaching 10% in 2009, it’s now at only 4%.

Help from the government? Bill Clinton’s 1996 welfare “reform” program , concocted in partnership with congressional Republicans, imposed time limits on government assistance, while tightening eligibility criteria for it. So, as Kathryn Edin and Luke Shaefer show in their disturbing book, $2.00 a Day: Living on Almost Nothing in America, many who desperately need help don’t even bother to apply. And things will only get worse in the age of Trump. His 2019 budget includes deep cuts in a raftof anti-poverty programs.

Anyone seeking a visceral sense of the hardships such Americans endure should read Barbara Ehrenreich’s 2001 book Nickel and Dimed: On (Not) Getting By in America. It’s a gripping account of what she learned when, posing as a “homemaker” with no special skills, she worked for two years in various low-wage jobs, relying solely on her earnings to support herself. The book brims with stories about people who had jobs but, out of necessity, slept in rent-by-the-week fleabag motels, flophouses, or even in their cars, subsisting on vending machine snacks for lunch, hot dogs and instant noodles for dinner , and forgoing basic dental care or health checkups. Those who managed to get permanent housing would choose poor, low-rent neighborhoods close to work because they often couldn’t afford a car. To maintain even such a barebones lifestyle, many worked more than one job.

Though politicians prattle on about how times have changed for the better, Ehrenreich’s book still provides a remarkably accurate picture of America’s working poor. Over the past decade the proportion of people who exhausted their monthly paychecks just to pay for life’s essentials actually increased from 31% to 38%. In 2013, 71% of the families that had children and used food pantries run by Feeding America, the largest private organization helping the hungry, included at least one person who had worked during the previous year. And in America’s big cities, chiefly because of a widening gap between rent and wages, thousands of working poor remain homeless, sleeping in shelters, on the streets, or in their vehicles, sometimes along with their families. In New York City, no outlier when it comes to homelessness among the working poor, in a third of the families with children that use homeless shelters at least one adult held a job.

The Wages of Poverty

The working poor cluster in certain occupations. They are salespeople in retail stores, servers or preparers of fast food, custodial staff, hotel workers, and caregivers for children or the elderly. Many make less than $10 an hour and lack any leverage, union or otherwise, to press for raises. In fact, the percentage of unionized workers in such jobs remains in the single digits — and in retail and food preparation, it’s under 4.5%. That’s hardly surprising, given that private sector union membership has fallen by 50% since 1983 to only 6.7% of the workforce.

Low-wage employers like it that way and — Walmart being the poster child for this — work diligently to make it ever harder for employees to join unions. As a result, they rarely find themselves under any real pressure to increase wages, which, adjusted for inflation, have stood still or even decreased since the late 1970s. When employment is “at-will,” workers may be fired or the terms of their work amended on the whim of a company and without the slightest explanation. Walmart announced this year that it would hike its hourly wage to $11 and that’s welcome news. But this had nothing to do with collective bargaining; it was a response to the drop in the unemployment rate, cash flows from the Trump tax cut for corporations (which saved Walmart as much as $2 billion), an increase in minimum wages in a number of states, and pay increases by an arch competitor, Target. It was also accompanied by the shutdown of 63 of Walmart’s Sam’s Club stores, which meant layoffs for 10,000 workers. In short, the balance of power almost always favors the employer, seldom the employee.

As a result, though the United States has a per-capita income of $59,500 and is among the wealthiest countries in the world, 12.7% of Americans (that’s 43.1 million people), officially are impoverished. And that’s generally considered a significant undercount. The Census Bureau establishes the poverty rate by figuring out an annual no-frills family food budget, multiplying it by three, adjusting it for household size, and pegging it to the Consumer Price Index. That, many economists believe, is a woefully inadequate way of estimating poverty. Food prices haven’t risen dramatically over the past 20 years, but the cost of other necessities like medical care (especially if you lack insurance) and housing have: 10.5% and 11.8% respectively between 2013 and 2017 compared to an only 5.5% increase for food.

Include housing and medical expenses in the equation and you get the Supplementary Poverty Measure (SPM), published by the Census Bureau since 2011. It reveals that a larger number of Americans are poor: 14% or 45 million in 2016.

Dismal Data

For a fuller picture of American (in)security, however, it’s necessary to delve deeper into the relevant data, starting with hourly wages, which are the way more than 58%of adult workers are paid. The good news: only 1.8 million, or 2.3% of them, subsist at or below minimum wage. The not-so-good news: one-third of all workers earn less than $12 an hour and 42% earn less than $15. That’s $24,960 and $31,200 a year. Imagine raising a family on such incomes, figuring in the cost of food, rent, childcare, car payments (since a car is often a necessity simply to get to a job in a country with inadequate public transportation), and medical costs.

The problem facing the working poor isn’t just low wages, but the widening gap between wages and rising prices. The government has increased the hourly federal minimum wage more than 20 times since it was set at 25 cents under the 1938 Fair Labor Standards Act. Between 2007 and 2009 it rose to $7.25, but over the past decade that sum lost nearly 10% of its purchasing power to inflation, which means that, in 2018, someone would have to work 41 additional days to make the equivalent of the 2009 minimum wage.

Workers in the lowest 20% have lost the most ground, their inflation-adjusted wages falling by nearly 1% between 1979 and 2016, compared to a 24.7% increase for the top 20%. This can’t be explained by lackluster productivity since, between 1985 and 2015, it outstripped pay raises, often substantially, in every economic sector except mining.

Yes, states can mandate higher minimum wages and 29 have, but 21 have not, leaving many low-wage workers struggling to cover the costs of two essentials in particular: health care and housing.

Even when it comes to jobs that offer health insurance, employers have been shifting ever more of its cost onto their workers through higher deductibles and out-of-pocket expenses, as well as by requiring them to cover more of the premiums. The percentage of workers who paid at least 10% of their earnings to cover such costs — not counting premiums — doubled between 2003 and 2014.

This helps explain why, according to the Bureau of Labor Statistics, only 11% of workers in the bottom 10% of wage earners even enrolled in workplace healthcare plans in 2016 (compared to 72% in the top 10%). As a restaurant server who makes $2.13 an hour before tips — and whose husband earns $9 an hour at Walmart — put it, after paying the rent, “it’s either put food in the house or buy insurance.”

The Affordable Care Act, or ACA (aka Obamacare), provided subsidies to help people with low incomes cover the cost of insurance premiums, but workers with employer-supplied healthcare, no matter how low their wages, weren’t covered by it. Now, of course, President Trump, congressional Republicans, and a Supreme Court in which right-wing justices are going to be even more influential will be intent on poleaxing the ACA.

It’s housing, though, that takes the biggest bite out of the paychecks of low-wage workers. The majority of them are renters. Ownership remains for many a pipe dream. According to a Harvard study, between 2001 and 2016, renters who made $30,000-$50,000 a year and paid more than a third of their earnings to landlords (the threshold for qualifying as “rent burdened”) increased from 37% to 50%. For those making only $15,000, that figure rose to 83%.

In other words, in an ever more unequal America, the number of low-income workers struggling to pay their rent has surged. As the Harvard analysis shows, this is, in part, because the number of affluent renters (with incomes of $100,000 or more) has leapt and, in city after city, they’re driving the demand for, and building of, new rental units. As a result, the high-end share of new rental construction soared from a third to nearly two-thirds of all units between 2001 and 2016. Not surprisingly, new low-income rental units dropped from two-fifths to one-fifth of the total and, as the pressure on renters rose, so did rents for even those modest dwellings. On top of that, in places like New York City, where demand from the wealthy shapes the housing market, landlords have found ways — some within the law, others not — to get rid of low-income tenants.

Public housing and housing vouchers are supposed to make housing affordable to low-income households, but the supply of public housing hasn’t remotely matched demand. Consequently, waiting lists are long and people in need languish for years before getting a shot — if they ever do. Only a quarter of those who qualify for such assistance receive it. As for those vouchers, getting them is hard to begin with because of the massive mismatch between available funding for the program and the demand for the help it provides. And then come the other challenges: finding landlords willing to accept vouchers or rentals that are reasonably close to work and not in neighborhoods euphemistically labelled “distressed.”

The bottom line: more than 75% of “at-risk” renters (those for whom the cost of rent exceeds 30% or more of their earnings) do not receive assistance from the government. The real “risk” for them is becoming homeless, which means relying on shelters or family and friends willing to take them in.

President Trump’s proposed budget cuts will make life even harder for low-income workers seeking affordable housing. His 2019 budget proposal slashes $6.8 billion(14.2%) from the resources of the Department of Housing and Urban Development’s (HUD) by, among other things, scrapping housing vouchers and assistance to low-income families struggling to pay heating bills. The president also seeks to slash funds for the upkeep of public housing by nearly 50%. In addition, the deficits that his rich-come-first tax “reform” bill is virtually guaranteed to produce will undoubtedly set the stage for yet more cuts in the future. In other words, in what’s becoming the United States of Inequality, the very phrases “low-income workers” and “affordable housing” have ceased to go together.

None of this seems to have troubled HUD Secretary Ben Carson who happily ordered a $31,000 dining room set for his office suite at the taxpayers’ expense, even as he visited new public housing units to make sure that they weren’t too comfortable (lest the poor settle in for long stays). Carson has declared that it’s time to stop believing the problems of this society can be fixed merely by having the government throw extra money at them — unless, apparently, the dining room accoutrements of superbureaucrats aren’t up to snuff.

Money Talks

The levels of poverty and economic inequality that prevail in America are not intrinsic to either capitalism or globalization. Most other wealthy market economies in the 36-nation Organization for Economic Cooperation and Development (OECD) have done far better than the United States in reducing them without sacrificing innovation or creating government-run economies.

Take the poverty gap, which the OECD defines as the difference between a country’s official poverty line and the average income of those who fall below it. The United States has the second largest poverty gap among wealthy countries; only Italy does worse.

Child poverty? In the World Economic Forum’s ranking of 41 countries — from best to worst — the U.S. placed 35th. Child poverty has declined in the United States since 2010, but a Columbia University report estimates that 19% of American kids (13.7 million) nevertheless lived in families with incomes below the official poverty line in 2016. If you add in the number of kids in low-income households, that number increases to 41%.

As for infant mortality, according to the government’s own Centers for Disease Control, the U.S., with 6.1 deaths per 1,000 live births, has the absolute worst record among wealthy countries. (Finland and Japan do best with 2.3.)

And when it comes to the distribution of wealth, among the OECD countries only Turkey, Chile, and Mexico do worse than the U.S.

It’s time to rethink the American national security state with its annual trillion-dollar budget. For tens of millions of Americans, the source of deep workaday insecurity isn’t the standard roster of foreign enemies, but an ever-more entrenched system of inequality, still growing, that stacks the political deck against the least well-off Americans. They lack the bucks to hire big-time lobbyists. They can’t write lavish checks to candidates running for public office or fund PACs. They have no way of manipulating the myriad influence-generating networks that the elite uses to shape taxation and spending policies. They are up against a system in which money truly does talk — and that’s the voice they don’t have. Welcome to the United States of Inequality.

 

Rajan Menon, a TomDispatch regular, is the Anne and Bernard Spitzer Professor of International Relations at the Powell School, City College of New York, and Senior Research Fellow at Columbia University’s Saltzman Institute of War and Peace Studies. He is the author, most recently, of The Conceit of Humanitarian Intervention