Submitted by Tyler Durden on 03/24/2016 09:02 -0400
If the four structural trends highlighted below don’t reverse, the middle class is heading for extinction.
Everyone knows the middle class is fading fast. I’ve covered this issue in depth for years, for example: Honey, I Shrunk the Middle Class: Perhaps 1/3 of Households Qualify(December 28, 2015) and What Does It Take To Be Middle Class? (December 5, 2013)
This raises an obvious question: what killed the middle class? While many commentators try to identify one killer cause (for example, the U.S. going off the gold standard in 1971), the die-off of the middle class is more akin to the die-off in honey bees, which is the result of the interaction of multiple causes (factors that increase the toxic load dumped on bees and other pollinators by modern agriculture).
Longtime collaborator Gordon T. Long and I discuss the decline of the middle class and other key topics in a new 29-minute video How did that work out for you?
So where do we begin this detective story? With the engine of all real prosperity, productivity. This chart reveals that wages stopped rising with productivity around 1980.
Here’s another look at the same phenomenon:
Productivity has been slipping since around 2003: Alan Greenspan:”Productivity is Dead”
Cause #1: declining productivity, which means the pie of real wealth is no longer expanding.
Exhibit #2: middle class wage earners have not received any of the gains. Wages as a percentage of GDP have been falling for decades, with occasional blips up in tech/housing bubbles:
Inflation-adjusted household income has dropped back to levels first reached in the 1980s:
More recently, wages have actually declined, regardless of educational attainment:
Income gains have all flowed to the top 10%, with most of the gains being concentrated in the top 5% and top 1%:
If the middle class didn’t receive any of the gains, who did? Corporate profits have soared to unprecedented levels:
Cause #2: all the gains in the economy have flowed to corporations and the top 10% of financiers, managers and technocrats.
But wait a minute–hasn’t the rising stock market enriched the middle class?Short answer: no. Middle class household wealth has absolutely cratered since the top of the housing bubble in 2007, and hasn’t recovered.
Why? Middle class wealth is based not in stocks but in the family home. The middle class does not own enough financial assets to have participated in the latest stock market bubble, while the majority did not recover the wealth lost in the housing bubble bust. This is the cost of allowing the financial sector to financialize housing and mortgages in the 2000s.
Cause #3: the middle class doesn’t own the “right” assets to benefit from systemic financialization and financial speculation.
How about rising costs? The federal agencies tasked with measuring inflation assure us inflation is near-zero. But these measures underweight big-ticket costs like healthcare and higher education, where costs have exploded higher, greatly increasing the burden on the middle class:
Cause #4: soaring costs of big-ticket expenses such as higher education and healthcare. Saving $10 on cheap jeans imported from Asia does not make up for 135% jumps in tuition and college fees, and $100 decline in the cost of a laptop computer does not make up for healthcare insurance and out-of-pocket expenses in the tens of thousands of dollars per household.
Correspondent Kevin K. submitted this article and accompanying note: Colleges with the biggest tuition hikes (my ala mater University of Hawaii-Manoa clocked in with an increase of 137% since 2004.)
“It looks like the article linked above didn’t do much research since:
University of California Davis
2004 in-state tuition $5,684
2015 in state tuition $13,951
Percentage increase 145.44 percent”
There is no way middle class households with declining real incomes can pay soaring costs imposed by state-enforced cartels and gain ground financially. If the four structural trends highlighted above don’t reverse, the middle class is heading for extinction, the victim of financialization, the glorification of financial speculation via central bank-central state policies, the decline of productivity and rising costs imposed by state-enforced cartels.
Gordon T. Long and I discuss the decline of the middle class and other key topics: [youtube https://www.youtube.com/watch?v=-BBL-fJd9Lo]
MARCH 01, 2016
(Washington, DC) – Judicial Watch announced a D.C. Court of Appeals hearing, scheduled for Wednesday, March 2, on a taxpayer lawsuit Judicial Watch filed against the District of Columbia Health Benefit Exchange Authority to stop Congress from participating in DC’s Obamacare “Small Business Exchange” (Kirby Vining v. Executive Board of D.C. Health Benefit Exchange Authority, et al. (No. 15-cv-242)). The benefit at issue is popularly known as Congress’s Obamacare exemption.
The lawsuit, which names the District of Colombia Health Benefit Exchange Authority and its officials as defendants, was filed on October 15, 2014, on behalf of D.C. taxpayer Kirby Vining in the Superior Court of the District of Columbia. D.C. law limits participation in the exchange to small businesses employing 50 or fewer full-time employees. Vining, a District of Columbia resident since 1986, seeks to prevent the Exchange Authority from allowing at least 12,359 members of Congress, congressional staffers, their spouses and dependents to purchase health insurance in D.C.’s Small Business Exchange.
Date: Wednesday, March 2
Time: 9:30 am ET
Location: D.C. Court of Appeals
The lawsuit first exposed fraudulent applications filed by the U.S. House of Representatives and Senate with the D.C. Exchange Authority. The applications, which were obtained through a Freedom of Information Act (FOIA) request, show that the House and Senate claimed to have only 45 employees each. They also show that the House and Senate attested to having “50 or fewer full-time equivalent employees.” Congress employs upwards of 20,000 people. The applications also falsely state that the House and Senate are “local/state governments.” The “electronic signature” section of the application includes the following language:
I’ve provided true and correct information to all the questions on this form to the best of my knowledge. I know that if I’m not truthful, there may be a penalty.
The actual names of the signatories were blacked out by the D.C. Exchange in the documents Judicial Watch obtained. The taxpayer lawsuit seeks to prevent at least $77 million in District funds from being used to help Congress violate the restrictions imposed on it by the Obamacare law. The fraudulent Obamacare applications filed by Congress resulted in an U.S. Senate investigation led by Senator David Vitter (R-LA). (Separately, Judicial Watch, Citizens Against Government Waste, and eight other public interest groups filed an ethics complaint with the Senate Ethics Committee.)
On January 7, 2015, the D.C. government admitted that the law does not allow for Congress to obtain benefits on the Exchange, but also argued that the Office of Personnel Management could override the District’s law. The case was dismissed on February 25, 2015, despite the continued fraudulent use of D.C. monies to provide special health benefits to Congress.
In its appeal, Judicial Watch argues that the D.C. Exchange Authority has knowingly allowed Congress to participate in the Small Business Exchange, despite the fact that Congress employs thousands of individuals:
Since November 2013, the Exchange Authority has allowed the U.S. House of Representatives … and the U.S. Senate … to use the Small Business Exchange to provide health insurance to some (but not all) congressional employees, including members of Congress and these employees’ spouses and dependents … At all relevant times, Defendants have known that the House and the Senate were participating in the Small Business Exchange to provide health insurance to some (but not all) congressional employees … As of February 9, 2014, at least 12,359 congressional employees and their dependents had obtained health insurance through the Small Business Exchange. These 12,359 persons represent approximately 86 percent of the 14,289 persons enrolled in the Small business Exchange between October 1, 2013 and September 9, 2014.
Judicial Watch also argues that in light of the district’s use of municipal funds to pay for the D.C. small business exchange, Kirby Vining, a longtime D.C. resident, has standing to file a grievance as a D.C. resident and taxpayer.
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Today the DOW is up over 200 points…the MSM talking point is “Putin stands down”. Yesterday the DOW was down 160 points…the MSM talking point “Putin to invade the Ukraine”.
Last week it was the Fed that moved the market…the week before it was the employment numbers…tomorrow it will be the Fed again…next week it will be the Putin again…the week after that the weather…the week after that some other totally irrelevant event.
In reality…it’s all controlled on a computer program in the basement of the US Treasury. It has been since the 1960’s. Every move, every tick, every boom, every bust…programmed into a computer and with a click of a mouse the markets go where they are programmed to go. Then they invent the story of WHY the market moved and the Sheeple swallow the whole thing hook, line and sinker.
Computer market rigging is easy to prove. The proof is in the VOLUMES of trade. Every few days the total amount of shares issued by a public company for each individual stock is “traded”. All of it…every few days. Sometimes there are days when the entire float trades in a single day, in a single hour, in a single millisecond!
Same goes for gold and silver. Well over 100 Billion electronic “ounces” of silver are traded on the COMEX and LBMA every year.
100 BILLION OUNCES!!
It’s a con my friends. And it has sucked 99.9% of the population in and it CONTROLS us beyond any other method of emotional control. You can’t help it. When Silver goes up 5% in a day you jump for joy thinking “THIS IS IT!”. When it dives 10% you think “THOSE DAMN MARKET RIGGERS!”
It is a ride that “they” control. They manage. They manipulate,
Currently, the gold and silver markets are steered by Treasury Secretary, Jack Lew. His agenda for your emotions since he took office in Feb 2013 has been DESTROY HOPE. Keep pressing down the prices until there is nobody left to be bullish…and then press them down some more. Press the prices down all the way to the END.
But then it does END. Everything ends my friends so you’d better be ready for it. The end of silver and gold manipulation has consequences and that’s when you want to be positioned properly. Positioned for the END GAME. My advice has always been…be the last man standing with physical gold and silver in your own possession. Everything else will be washed out to sea with the Derivative Monsoon!
On the Road to Roota I’ve shown you WHO started this computer rigging game. I explained their intent to drag it on for as long as possible. I’ve showed you how the end will come. And finally…I’ve showed you what is planned to take it’s place.
The destruction of the global financial system is unavoidable but losing everything is not.
Prepare now for the end of manipulation – the end of the fiat system.
The end of “their” control of us is approaching fast.
May the Road you choose be the Right Road.