Saturday, July 21, 2012


Capitalism can not satisfy dream of the people for rising incomes and expanding opportunities.  The future that lies ahead for the majority of working Americans is a drop in their living standards. Even before the financial crash, real wages for the typical American worker had been stagnant for 30 years. Still, workers continued to spend. While hourly wages flattened, overall family income rose because more women went to work. And cheap and accessible credit fueled everyone’s purchasing power. Today, with more women than men now employed, gains to family income from sending the wife to work are about exhausted. So, now the trajectory of American incomes and living standards is a downward slope.

The trade and investment deregulation have pushed American workers into a brutally competitive global labor market for which they were unprepared. There has been a relentless war on unions that began with the election of Ronald Reagan in 1980; and the erosion of the social safety net for low wage workers and the unemployed.

 The extraordinary gap between America's rich and poor has been laid bare yet again, as it emerges that the poorest 50 per cent of U.S. households possesses just one per cent of the nation's wealth. The top ten per cent of American households owns 74.5 per cent of the nation's wealth and the wealthiest one per cent of American households increased their share to 34.5 per cent in 2010 revealed the report

 Even with the most optimistic assumptions – e.g., that there will be no new double-dip recession, Europe avoids the collapse of the Euro, and the big US banks remain solvent -- there is little prospect for a sustained boom in the demand for American labor sufficient to overcome the downward pressure on workers’ share of the economic pie. Cost cutting has become the central strategy for most American business, and for most of them the easiest cost to cut is labor. The squeeze is not limited to workers in export or import-vulnerable industries. Wages and salaries are now falling across the board, in services and manufacturing sectors, among women and men, young and old. Health and pension benefits are being slashed and businesses are getting their work done with part-time and temporary workers, often supplied by labor contractors whose own survival depends on hiring labor at the cheapest rate possible.

A college education is no longer the escape route for the vast majority of young people without elite connections or rich parents. The Bureau of Labor Statistics projects that between 2010 and 2020, nine out of 10 of the largest and fastest growing occupational categories will not require a college education. And the tenth, which includes medical professionals and college teachers, are likely to suffer dramatically in the coming age of fiscal austerity. The bright college graduates working as retail clerks at the Apple Store for $12 an hour are beginning to sense that their jobs do not represent a pause on the way up the professional ladder, but rather are a taste of their long-term future.

Whether you think Obama is a willing tool of Wall Street or a political saint hi-jacked by the right-wing, the fact remains that he could or would not engage in all-out battle for the economic transformation he so eloquently promised. He took up the Bush plan for no-strings Wall Street bailouts, expanded unregulated trade, cold-shouldered his union base, and has now adopted fiscal austerity as his economic priority. Obama, if re-elected, will certainly not have a greater congressional majority than he had in 2009. Moreover, given the massive campaign contributions he will have had to raise from Wall Street and the rest of Corporate America, the elite investor class will play an even more influential role in his victory. Add in the bipartisan commitment to budget austerity, and chances of a significant progressive shift in Washington’s economic policies over the next presidential term become virtually zero.

The mantra of both Obama and Romney is, “Jobs, jobs, jobs.” What they leave out is that job growth depends on driving labor costs lower loser and lower to attract business investment. This is the heart of the leveraged-buy out system that Romney offers to bring to the White House. And when Barack Obama cites an expanded GE plant in Kentucky as an example of the rebound of private sector jobs, the press release does not mention that workers who used to make $22 an hour are now making $14.

The majority think that the next generation is going to be worse off, but they expect that they themelves, personally, and their kids will be okay. A PEW poll last fall reported that by a margin of 63-21 Americans believed that, “although there may be bad times every now and then, America will always continue to be prosperous and make economic progress.” So, while they might agree with the points made by the Wall Street Occupiers, it’s not worth their effort to join the protest. Until Americans face that they and their kids will not be okay they will continue on the road toward lower wages, falling living standards and forlorn hopes. If we are going to have a protest movement where hundreds of thousands of people are involved, we need to make it about something with substance. Socialists must confront the complacency of our fellow workers. The real owners of America, the big wealthy business interests that control things make all the important decisions. Forget their paid for and bought politicians. The politicians are put there to give you the idea that you have freedom of choice. You don’t.

Adapted from here

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