BUSH, HILLARY-BILLARY, BUSH, his war profiteer, and OBAMA DONOR, SEN. DIANNE FEINSTEIN, and OBAMA…. THEIR ONLY LEGACY: HANDING WHAT WAS LEFT OF THE AMERICAN ECONOMY OVER TO THE ALREADY RICH, AND WHAT WAS LEFT TO THE ILLEGALS, INCLUDING OUR JOBS!
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More than a year into the recovery, the economy is starting to show signs of improvement. The stock market has rebounded. Corporate profits are soaring. And yet, for millions of Americans, the lingering legacy of the Great Recession is a Great Slide, as job losses, declining home values and decimated retirement savings have knocked them down the socioeconomic ladder. For the formerly middle class, this slide plays out in big and small ways, from a loss of identity to the day-to-day inconveniences of life with less.
Tumbling from middle-class security, and struggling to regain it
By Annys Shin
Washington Post Staff Writer
Friday, January 14, 2011; 12:00 AM
Five years ago, an automated voice on the phone would not have reduced Sondi Moore to tears. But five years ago, she was not behind on her electric bill.
A couple of days after Christmas, Moore, 63, called Dominion Virginia Power to pay her bill, which was overdue - again. She was desperate to avoid having her power cut off, which is what happened in November after she racked up a tab of $1,026.
Not so long ago, Moore and her husband, Seymour, 46, made more than $200,000 a year, vacationed in Fiji and thought nothing of picking up a $400 dinner tab with friends. But then Moore left her property management job to set up a cat-sitting business, and her husband lost his job as an IT consultant nine months ago. They now scrape by on Sondi Moore's Social Security checks, her husband's unemployment benefits and a trickle of money from her nascent business. Total income for 2010: $30,000.
More than a year into the recovery, the economy is starting to show signs of improvement. The stock market has rebounded. Corporate profits are soaring. And yet, for millions of Americans, the lingering legacy of the Great Recession is a Great Slide, as job losses, declining home values and decimated retirement savings have knocked them down the socioeconomic ladder. For the formerly middle class, this slide plays out in big and small ways, from a loss of identity to the day-to-day inconveniences of life with less.
There is the single mother from Manassas who after losing her job and going on public assistance could no longer afford to pay her mother to watch her children and had to send her mother to child development and CPR classes to qualify for public child-care assistance. There is the laid-off TV repairman who 30 years ago received a degree after studying Greek, Latin and Hebrew and now, facing meager job prospects, regrets having chosen to work with his hands. There is the well-dressed couple who after losing their jobs in the auto industry pulled into a food pantry in Gaithersburg in a gleaming, gas-guzzling four-door truck they had bought for fun a few years ago and now wish they hadn't.
The recession exposed how precarious a hold many middle-class families had on their status. The housing meltdown and credit crunch wiped out nest eggs and the ability to maintain a credit-fueled lifestyle.
Now, as many Americans see work as the only way to dig out of debt, they're finding that jobs are scarce. The average duration of unemployment has reached record levels, as has the proportion of jobless people who have been out of work for more than six months. For those who have slipped a couple of income brackets, that means a long road back toward the middle class, said economist Heidi Shierholz of the Economic Policy Institute.
Bills overpower optimism
Seymour Moore has been trying to find his way back since his IT job at a local university ended in March. In 25 years, he had been out of work only once before.
"We thought, 'Any day now, we'll have a job,' " his wife said.
Even before Seymour joined the ranks of the jobless, bills had started piling up. During his previous spell of unemployment several years ago, he and Sondi burned through their savings and $100,000 they had parked in 401(k) savings plans. At the peak of the boom, aiming to clear their credit card debt, they took out a loan against a house in North Carolina that Sondi had inherited from her parents. When they could no longer afford the mortgage or utilities, they put the place on the market, praying that they could unload it, even for less than what they owed.
When the power at their Fairfax City house was cut off in November, Sondi and Seymour got used to seeing by flashlight, eating cold food and lingering at the houses of Sondi's cat-sitting clients just to be warm. The last time they had gone without electricity for that long was by choice, when they went diving on a private island in Fiji.
In November, Sondi Moore called Dominion Virginia Power seeking help and was referred to the county human services office. Within 10 days, she paid $600 of the power bill; a caseworker covered the rest by cobbling together small amounts from utility assistance programs.
"It was the first time we'd ever had to turn to people for help," she said. "It was hard to admit we were drowning without a lifeline."
Then, after Christmas, when Moore called five numbers and spent an hour on the phone to Dominion trying to avoid losing her power again, an automated voice informed her that she had to pay a $3.95 fee to settle her bill by phone. But she could not get the machine to tell her how much she owed. Moore called back, hoping that the phone system would kick her to a human being. Instead, a pleasant, mechanized voice told her to please hang up and dial again.
"I just want to pay my electric bill," she said, her voice cracking. "How many hoops do I have to jump through?"
An hour later, she tried again, got through and paid. The power stayed on.
'Everything snowballs'
Shortly after she and her husband, Shawn, lost their jobs within two weeks of each other in 2009, Katherine Thorne, 29, found herself waiting in line to fill out applications for welfare and food aid in Prince William County. In the course of a summer, that double whammy dropped the Thornes from a combined income of about $80,000 to public assistance. She had been an office manager for a Federal Aviation Administration contractor in Herndon; her husband was manager of a Foot Locker store that closed.
"Once one thing happens, everything snowballs," she said. "We went from living comfortably and happy to everything was wrong."
As they entered financial free fall, the couple split up. She stayed in their townhouse with their three children, now 13, 3, and 2, struggling to pay the $1,300 rent. One by one, the utilities were cut off. She fell behind on the rent and soon found herself staring at an eviction notice.
Thorne visited the human services office in Manassas Park for the first time and took a number. She ended up receiving food stamps, Medicaid and Temporary Assistance for Needy Families. A local nonprofit group gave her transitional housing.
She also got help with child care, but not without some doing. When she was working, she paid her mother $600 a week to watch her two younger children. But for Thorne to get assistance with child care, her mother had to be certified and take child development and CPR classes.
The hassle of paperwork and waiting in lines was nothing compared with the long hours at home without the structure or security that a job can provide.
"The stress on me made it harder with the kids," Thorne said. "I was so stressed out. I would say, 'Mommy doesn't want to play right now.' "
She spent her time looking for a job and found work at a dollar store as a stock clerk, then became a dispatcher for a plumbing and heating company, where she makes a little more than half of her former salary. She is also pursuing a degree in business administration and human resources, hoping to qualify for a higher-paying job. Her husband, who provides child support, found work as a manager at a nearby Bob Evans restaurant. She and her children still rely on food stamps, Medicaid and TANF, but those payments were recently cut from $300 a month to $50 because her $11-an-hour job means she makes too much to qualify for most aid.
Little indulgences
When Tawana Eason lost her administrative job with a large federal contractor six months ago, she went from making $60,000 to eking by on $400 a week. She has downsized from a $1,300-a-month townhouse in Germantown to a $600-a-month apartment in Laurel that is half the size of her old place.
Eason, 44, no longer shops at Nordstrom and Lord & Taylor, although she likes to window shop sometimes at the Mall in Columbia. She has traded down from the Grill from Ipanema to Olive Garden and had to content herself with giving her sister a CD for Christmas, a far more modest gesture than the cruise she sent her mother on a few years ago.
Despite these changes, her identity as a middle class person is intact. "Do I go into the stores and walk around? Sure," she said. "Just to kind of see. . . . Like I said, this is temporary. I'm not 'woe is me.' I know there's somebody out there whose situation is worse."
Sondi Moore still feels like a member of the middle class, even though she has also had to give up nearly all of the small luxuries she once took for granted. She and her husband cut out cable long ago. They splurged on rabbit ears, and instead of watching "Real Housewives," they make do with "Russia Today." Her stove is broken. If something doesn't fit in her toaster oven, she doesn't eat it.
When she was a property manager of high-end apartment buildings such as the Watergate, designer duds were practically her uniform. She'd think nothing of spending $250 on a pair of shoes or buying a new blouse every week. Now, if she dons a silk blouse, it's hidden under a dark sweat shirt and paired with sweat pants. She can't afford to keep her hair frosted blond anymore. And since she had cataract surgery three months ago, she has been walking around with one lens missing from her glasses because she doesn't have $100 to replace it.
She still drives a sports car, her 1997 Mazda Miata with more than 200,000 miles on it, holes in the roof, a window that no longer rolls down, and no heat or air conditioning.
The one little luxury she has maintained is a manicure. She goes once a month, rather than weekly, as she used to. Her hands and her diamond necklace are the remaining hints that not too long ago, she led a much different life.
In her new life, ordering pizza is an indulgence, one she appreciates in ways she never could before.
"It tastes better," she said. "Everything tastes better when you go without."
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The Middle Class in America Is Radically Shrinking. Here Are the Stats to Prove it
From The Business Insider
Editor's note: Michael Snyder is editor of theeconomiccollapseblog.com
The 22 statistics detailed here prove beyond a shadow of a doubt that the middle class is being systematically wiped out of existence in America.
The rich are getting richer and the poor are getting poorer at a staggering rate. Once upon a time, the United States had the largest and most prosperous middle class in the history of the world, but now that is changing at a blinding pace.
So why are we witnessing such fundamental changes? Well, the globalism and "free trade" that our politicians and business leaders insisted would be so good for us have had some rather nasty side effects. It turns out that they didn't tell us that the "global economy" would mean that middle class American workers would eventually have to directly compete for jobs with people on the other side of the world where there is no minimum wage and very few regulations. The big global corporations have greatly benefited by exploiting third world labor pools over the last several decades, but middle class American workers have increasingly found things to be very tough.
Here are the statistics to prove it:
• 83 percent of all U.S. stocks are in the hands of 1 percent of the people.
• 61 percent of Americans "always or usually" live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.
• 66 percent of the income growth between 2001 and 2007 went to the top 1% of all Americans.
• 36 percent of Americans say that they don't contribute anything to retirement savings.
• A staggering 43 percent of Americans have less than $10,000 saved up for retirement.
• 24 percent of American workers say that they have postponed their planned retirement age in the past year.
• Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.
• Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.
• For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.
• In 1950, the ratio of the average executive's paycheck to the average worker's paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.
• As of 2007, the bottom 80 percent of American households held about 7% of the liquid financial assets.
• The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.
• Average Wall Street bonuses for 2009 were up 17 percent when compared with 2008.
• In the United States, the average federal worker now earns 60% MORE than the average worker in the private sector.
• The top 1 percent of U.S. households own nearly twice as much of America's corporate wealth as they did just 15 years ago.
• In America today, the average time needed to find a job has risen to a record 35.2 weeks.
• More than 40 percent of Americans who actually are employed are now working in service jobs, which are often very low paying.
• or the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.
• This is what American workers now must compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.
• Approximately 21 percent of all children in the United States are living below the poverty line in 2010 - the highest rate in 20 years.
• Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.
• The top 10 percent of Americans now earn around 50 percent of our national income.
Giant Sucking Sound
The reality is that no matter how smart, how strong, how educated or how hard working American workers are, they just cannot compete with people who are desperate to put in 10 to 12 hour days at less than a dollar an hour on the other side of the world. After all, what corporation in their right mind is going to pay an American worker 10 times more (plus benefits) to do the same job? The world is fundamentally changing. Wealth and power are rapidly becoming concentrated at the top and the big global corporations are making massive amounts of money. Meanwhile, the American middle class is being systematically wiped out of existence as U.S. workers are slowly being merged into the new "global" labor pool.
What do most Americans have to offer in the marketplace other than their labor? Not much. The truth is that most Americans are absolutely dependent on someone else giving them a job. But today, U.S. workers are "less attractive" than ever. Compared to the rest of the world, American workers are extremely expensive, and the government keeps passing more rules and regulations seemingly on a monthly basis that makes it even more difficult to conduct business in the United States.
So corporations are moving operations out of the U.S. at breathtaking speed. Since the U.S. government does not penalize them for doing so, there really is no incentive for them to stay.
What has developed is a situation where the people at the top are doing quite well, while most Americans are finding it increasingly difficult to make it. There are now about six unemployed Americans for every new job opening in the United States, and the number of "chronically unemployed" is absolutely soaring. There simply are not nearly enough jobs for everyone.
Many of those who are able to get jobs are finding that they are making less money than they used to. In fact, an increasingly large percentage of Americans are working at low wage retail and service jobs.
But you can't raise a family on what you make flipping burgers at McDonald's or on what you bring in from greeting customers down at the local Wal-Mart.
The truth is that the middle class in America is dying -- and once it is gone it will be incredibly
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THE LOOTING OF AMERICA… continues under OBAMA!
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Les Leopold is the author of The Looting of America: How Wall Street's Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It Chelsea Green Publishing, June 2009.
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POVERTY RISES AS WALL ST. BILLIONAIRES WHINE!
These guys profited from puffing up the housing bubble, then got bailed out when the going got tough. (Please see The Looting of America for all the gory details.) Without taxpayer largess, these hedge fund honchos would be flat broke. Instead, they're back to hauling in obscene profits.
These billionaires don't even have to worry about serious financial reforms. The paltry legislation that squeaked through Congress did nothing to end too big and too interconnected to fail. In fact, the biggest firms got even bigger as they gobbled up troubled banks, with the generous support of the federal government. No bank or hedge fund was broken up. Nobody was forced to pay a financial transaction tax. None of the big boys had a cap placed on their astronomical wealth. No one's paying reparations for wrecking the US economy. The big bankers are still free to create and trade the very derivatives that catapulted us into this global crisis. You'd think the billionaires would be praying on the altar of government and erecting statues on Capital Hill in honor of St. Bailout.
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While 43.6 million Americans live in poverty, the richest men of finance sure are getting pissy. First Steve Schwartzman, head of the Blackrock private equity company, compares the Obama administration's effort to close billionaires' tax loopholes to "the Nazi invasion of Poland." Then hedge fund mogul David Loeb announces that he's abandoning the Democrats because they're violating "this country's core founding principles" -- including "non-punitive taxation, Constitutionally-guaranteed protections against persecution of the minority, and an inexorable right of self-determination." Instead of showing their outrage about the spread of poverty in the richest nation on Earth, the super-rich want us to pity them?
Why are Wall Street's billionaires so whiny? Is it really possible to make $900,000 an hour (not a typo -- that's what the top ten hedge fund managers take in), and still feel aggrieved about the way government is treating you? After you've been bailed out by the federal government to the tune of $10 trillion (also not a typo) in loans, asset swaps, liquidity and other guarantees, can you really still feel like an oppressed minority?
You'd think the Wall Street moguls would be thankful. Not just thankful -- down on their knees kissing the ground taxpayers walk on and hollering hallelujah at the top of their lungs! These guys profited from puffing up the housing bubble, then got bailed out when the going got tough. (Please see The Looting of America for all the gory details.) Without taxpayer largess, these hedge fund honchos would be flat broke. Instead, they're back to hauling in obscene profits.
These billionaires don't even have to worry about serious financial reforms. The paltry legislation that squeaked through Congress did nothing to end too big and too interconnected to fail. In fact, the biggest firms got even bigger as they gobbled up troubled banks, with the generous support of the federal government. No bank or hedge fund was broken up. Nobody was forced to pay a financial transaction tax. None of the big boys had a cap placed on their astronomical wealth. No one's paying reparations for wrecking the US economy. The big bankers are still free to create and trade the very derivatives that catapulted us into this global crisis. You'd think the billionaires would be praying on the altar of government and erecting statues on Capital Hill in honor of St. Bailout.
Instead, standing before us are these troubled souls, haunted by visions of persecution. Why?
The world changed. Before the bubble burst, these people walked on water. Their billions proved that they were the best and the brightest -- not just captains of the financial universe, but global elites who had earned a place in history. They donated serious money to worthy causes -- and political campaigns. No one wanted to mess with them.
But then came the crash. And the things changed for the big guys -- not so much financially as spiritually. Plebeians, including me, are asking pointed questions and sometimes even being heard, both on the Internet and in the mainstream media. For the first time in a generation, the public wants to know more about these emperors and their new clothes. For instance:
• What do these guys actually do that earns them such wealth?
• Is what they do productive and useful for society? Is there any connection between what they earn and what they produce for society?
• Did they help cause the crash?
• Did these billionaires benefit from the bailouts? If so, how much?
• Are they exacerbating the current unemployment and poverty crisis with their shenanigans?
• Why shouldn't we eliminate their tax loopholes (like carried interest)?
• Should their sky-high incomes be taxed at the same levels as during the Eisenhower years?
• Can we create the millions of jobs we need if the billionaires continue to skim off so much of our nation's wealth??
• Should we curb their wealth and political influence?
How dare we ask such questions! How dare we consider targeting them for special taxes? How dare we even think about redistributing THEIR incomes... even if at the moment much of their money comes directly from our bailouts and tax breaks?
It's true that the billionaires live in a hermetically sealed world. But that doesn't mean they don't notice the riffraff nipping at their heels. And they don't like it much. So they've gotten busy doing what billionaires do best: using their money to shield themselves. They're digging into their bottomless war chests, tapping their vast connections and using their considerable influence to shift the debate away from them and towards the rest of us.
We borrowed too much, not them. We get too much health care, not them. We retire too soon, not them. We need to tighten our belts while they pull in another $900,000 an hour. And if we want to cure poverty, we need to get the government to leave Wall Street alone. Sadly, their counter-offensive is starting to take hold.
How can this happen? Many Americans want to relate to billionaires. They believe that all of us are entitled to make as much as we can, pretty much by any means necessary. After all, maybe someday you or I will strike it rich. And when we do, we sure don't want government regulators or the taxman coming around!
Billionaires are symbols of American individual prowess and virility. And if we try to hold them back or slow them down, we're on the road to tyranny. Okay, the game is rigged in their favor. Okay, they got bailed out while the rest of us didn't -- especially the 29 million people who are jobless or forced into part-time work. But what matters most is that in America, nothing can interfere with individual money-making. That only a few of us actually make it into the big-time isn't a bad thing: It's what makes being rich so special. So beware: If we enact even the mildest of measures to rein in Wall Street billionaires, we're on the path to becoming North Korea.
Unfortunately, if we don't adjust our attitudes, we can expect continued high levels of unemployment and more people pushed below the poverty line. It's not clear that our economy will ever recover as long as the Wall Street billionaires keep siphoning off so much of our wealth. How can we create jobs for the many while the few are walking off with $900,000 an hour with almost no new jobs to show for it? In the old days, even robber barons built industries that employed people -- steel, oil, railroads. Now the robber barons build palaces out of fantasy finance. We can keep coddling our financial billionaires and let our economy spiral down, or we can make them pay their fair share so we can create real jobs. These guys crashed the economy, they killed billions of jobs, and now they're cashing in on our bailout. They owe us. They owe the unemployed. They owe the poor.
Dwight D. Eisenhower was no radical, but he accepted the reality: If America was going to prosper -- and pay for its costly Cold War -- the super-rich would have to pony up. It was common knowledge that when the rich grew too wealthy, they used their excess incomes to speculate. In the 1950s, memories of the Great Depression loomed large, and people knew that a skewed distribution of income only fueled speculative booms and disastrous busts. On Ike's watch, the effective marginal tax rate for those earning over $3 million (in today's dollars) was over 70 percent. The super-rich paid. As a nation we respected that other important American value: advancing the common good.
For the last thirty years we've been told that making as much as you can is just another way of advancing the common good. But the Great Recession erased that equation: The Wall Streeters who made as much as they could undermined the common good. It's time to balance the scales. This isn't just redistribution of income in pursuit of some egalitarian utopia. It's a way to use public policy to reattach billionaires to the common good.
It's time to take Eisenhower's cue and redeploy the excessive wealth Wall Street's high rollers have accumulated. If we leave it in their hands, they'll keep using it to construct speculative financial casinos. Instead, we could use that money to build a stronger, more prosperous nation. We could provide our people with free higher education at all our public colleges and universities -- just like we did for WWII vets under the GI Bill of Rights (a program that returned seven dollars in GDP for every dollar invested). We could fund a green energy Manhattan Project to wean us from fossil fuels. An added bonus: If we siphon some of the money off Wall Street, some of our brightest college graduates might even be attracted not to high finance but to jobs in science, education and healthcare, where we need them.
Of course, this pursuit of the common good won't be easy for the billionaires (and those who indentify with them.). But there's just no alternative for this oppressed minority: They're going to have to learn to live on less than $900,000 an hour.
Les Leopold is the author of The Looting of America: How Wall Street's Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It Chelsea Green Publishing, June 2009.
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