This page has been archived and commenting is disabled.

Guest Post: Poverty In America, Part I

Tyler Durden's picture




 

Submitted by Charles High Smith from Of Two Minds

Poverty In America, Part I

Poverty is on the rise in America, and buying passivity with cheap bribes has limits when applied to a fraying middle class.

If jobs are not coming back, then we as a nation need a conversation about poverty in America. The Status Quo assumption is that this is just another garden-variety recession, and that employment will bounce back, along with the "animal spirits" that drive borrowing and spending.

As of August 2011, it will be three years since the global financial meltdown. In three years, the Savior State has borrowed and blown $6 trillion maintaining the Status Quo, and the Federal Reserve has printed almost $3 trillion and shoveled that vast sum into "risk assets" to keep housing on life support and the stock market rising. The Fed has also devalued and debased the dollar, stealing wealth from the citizenry and holders of U.S.-denominated debt in the process, to serve two goals: 1) spark inflation and thus avoid deflationary deleveraging of the nation's fast-growing mountain of debt, and 2) to enable servicing that debt with cheaper dollars.

None of these grandiose manipulations has healed the economy or fixed the structural problems which made the meltdown inevitable. The irony here (among many) is that so many people believe the Power Elites controlling the nation have some sort of god-like ability to maintain their grip on the levers of power.

While it's certainly true that the wealth of the Power Elites has increased as a result of the meltdown and Fed/Savior State response, ultimately the Financial and Political Elites' power depends on the passivity and complicity of the citizens. This means the Power Elites must buy off or co-opt the majority of citizens to keep them politically neutered and mallable.

The Status Quo has two basic methods of buying the citizen's complicity: a vibrant economy that supports a middle class that thus has a stake in maintaining the Status Quo, and cash bribes to everyone else to keep quiet, i.e. "social benefits" a.k.a. entitlements and welfare. This renders everyone either dependent on cash payments from the Savior State or a stakeholder in the Status Quo.

Corporate welfare is not a bribe but a mutually beneficial power grab. The Cartel Corporatocracy seeks to eliminate competition from below and guarantee low-risk profts via cartels and quasi-monopolies. It achieves these goals by purchasing the partnership of the Savior State, which smothers competition with thickets of regulations and greases the quasi-monopolies sought by the Corporatocracy. But it's hardly a one-way exchange; in extending its control over the economy and society to serve the Corporatocracy's interests, the Central State's own Elites gain more power, too.

Some observers see the middle class as the natural enemy of the State and Corporatocracy, but this misses the essential relationship of the Power Elites to their citizenry: the need of the Elites to buy complicity and passivity by the cheapest methods available.

It's certainly possible to use repression to keep a populace under control, but repression is expensive and it doesn't encourage productive "buy-in"; rather, it encourages opting out and resentful compliance. This leaves less for the Elites to skim off.

Over time, it's rather obvious that regimes that rely on heavy-handed repression tend to fall while those that offer a small, low-cost stake to citizens are much more profitable to the ruling Elites and also more stable.

The crumbling of the credit-bubble economy has mortally wounded the middle class, and this has created a serious problem for the Power Elites. In extending the credit-bubble economy--that is, "wealth" is created via exponential expansion of debt--to housing, the Power Elites undermined the multigenerational bedrock of middle class wealth.

With housing equity stripped away, the erosion of middle class income and non-housing wealth has now been exposed.

The Power Elites' other wealth technique, globalization, has also gutted the middle class below the top 10% level of technocrats, and decimated the working class that had aspirations of joining the middle class, i.e. the lower middle class.

We Don't Need No Stinkin' Jobs (in the U.S.) (February 9, 2011) Global Corporate America has decoupled from the American middle class; its interests are now international rather than domestic.

The Power Elites' response--borrow and blow trillions to prop up the engine of their own wealth, the banks, borrow trillions from future taxpayers to maintain the current Status Quo, and devalue the U.S. dollar--have all failed to reflate housing or middle class incomes. Rather, these actions only succeeded in enriching the top 10% who own the majority of stocks. The prop-job in stocks has yielded a propaganda coup, as the Status Quo has successfully identified a rising stock market as "proof the recovery is here," but this propaganda is starting to wear thin as 90% of the populace are realizing they are still poorer than they were three years ago.

Buying Off Washington To Kill Financial "Reform".

The Power Elites cannot understand why making credit cheap isn't creating jobs. Like decrepit generals fighting the last war, they keep sending waves of credit into the system to overpower deflation and reignite "animal spirits," but the waves of credit are being mowed down by deleveraging and the exhaustion of credit as a stimulus.

In other words, they are clueless to the reality that conventional economics has failed. They have no Plan B. Their only plan, such as it is, is to borrow more money and spend it propping up the current Status Quo. Unfortunately for them, the middle class is unraveling at the edges, and the surest evidence of that is the loss of middle class jobs.

Without good-paying jobs with benefits and rising housing equity, then the citizens have no stake left in the Status Quo.

That leaves entitlements and welfare as the cash bribes for keeping quiet. What's remarkable about the current pastiche of social benefits is how cheap it is to the Power Elites; extended unemployment ($158 billion), food stamps ($68 billion), Section 8 housing ($20 billion), and Veterans Administration medical care for vets ($47 billion)--all together that's $293 billion, a mere 7.7% of Federal spending.

(These statistics are drawn from
Is the Recovery "Self-Sustaining"? Here's a Test (March 22, 2011)
Social Welfare, Socialism and Healthcare (May 19, 2009)
Can We Please Stop Pretending the GDP Is "Growing"? (June 2, 2011)

And of course it's the taxpayers who will foot the bill for the deficit spending, not the Elites.

The ideological political-theater stages faux "combat" over welfare, but this is for show: outside the circus, cash bribes for complicity and silence work equally well for both flavors of the Status Quo political Elite.

The "Left's" concern for the poor is transparently phony; the "Left's" only concern is to keep the underclass fat, dumb and distracted while enriching its own private fiefdoms such as education: public school fiasco in Atlanta. What terrifies the "Left" is the same thing that terrifies the "Right"--that the citizenry might break free of the bonds of dependency on the Savior State and start demanding a real stake in the economy rather than just a cash bribe to keep quiet.

This is why welfare and middle class entitlements (in various flavors) have continued growing for decades, under both "Left" and "Right" regimes.

It's been quite a scam: the Savior State borrows immense sums from future taxpayers to bribe the current crop of citizenry, and these same citizenry pay the rising interest on that growing debt via their taxes.

In other words, the debt-serfs pay for the bribes that keep them complicit.

The problem is that the Status Quo has overshot systemic equilibrium. To keep the game going, the debt load is rising at almost $2 trillion a year at the Federal Level, and the Fed's manipulations are requiring a cool trillion a year in printed money shoveled into risk assets.

The interest on that skyrocketing debt will eventually crimp the borrowing binge, and the Fed's games are igniting not job growth but inflation, which further saps what's left of middle class purchasing power.

The Fed's manic manipulations are losing their effectiveness. Like insulin in a pre-diabetic patient, the Fed's massive injections of money are not stimulating jobs or productive investment; each new announcement of "easing" generates a smaller jolt of ever-shorter duration. At some point the economy will respond to the Fed's "easing" injection by going straight into diabetic shock.

There are two cultural issues in play as well. One of the key characteristics of the middle class is high expectations for future power and prosperity. The poor have lower expectations and so it's relatively easy to buy them off with small sums.

The middle class, however, is less satisfied with crumbs, and getting paid to stay home and watch TV does not appeal to their values or expectations of life in America.

The other issue is the destructive nature of dependence on the Savior State, a dynamic I explored in The Cycle of Dependency and the Atrophy of Self-Reliance (July 2, 2011).

Making people dependent on the Savior State is not "ending poverty"--it is creating a deeper, more pervasively destructive poverty of lost opportunity and shriveled enterprise. People naturally want to contribute to something meaningful and to be respected, and being paid to sit home watching TV does neither. What it does do is fuel a low-intensity resentment against dependency and a pathological incentive for victimhood, neither of which are healthy for the society or those reduced to dependency on the Savior State.

The Power Elites are slowly losing their grip on the middle class. Once people no longer have a stake in the Status Quo, then they might become dissatisifed with the cheap bribes to stay home and rot away, consuming Pringles and "entertainment" on the telly.

Those citizens who are paying the tab for the Power Elites' debt excesses are also seeing their stake in the Status Quo slip in value: being reduced to a tax donkey does not fulfill their expectations.

The bottom line is poverty on several levels is rising in America, and cash bribes are not a stable "solution," though they certainly are a cheap one to the Power Elites.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 07/13/2011 - 13:53 | 1452753 eureka
eureka's picture

Anyone who thinks they can separate social entitlements from rich-banker-military entitlements is an idiot - so don't blame bureaucrats and the poor.

Wed, 07/13/2011 - 14:02 | 1452794 toady
toady's picture

But thats what they continue to do...

I'm starting to think that they won't figure it out.

Wed, 07/13/2011 - 14:15 | 1452844 eureka
eureka's picture

Seems Mr. Charles H. Smith hasn't even figured it out.

I repeat, all money printing, bail-outs and ponzi exists solely for the sake of US Empire - that is to say: for the sole sake of the rich and their goons at the Fed & PentaGun. Everything else is trickle-down shut-up-money - and consequently it is moronic and irrelevant what the motives of "the left" might be etc etc etc  scape-goating ad nauseam.

Libertarians - including all zerohedge bloggers, readers and commentators must realize that the only solution to all US problems is complete dismantlement of US Empire.

Wed, 07/13/2011 - 14:24 | 1452888 mayhem_korner
mayhem_korner's picture

I hope you're not insinuating that all ZHers are libertarians.  That'd be a large miss.

Wed, 07/13/2011 - 14:28 | 1452904 Braindonor1
Braindonor1's picture

You should have read the article before commenting. The writers is addressing the 'shut up money' issue.

Wed, 07/13/2011 - 15:06 | 1453069 eureka
eureka's picture

My comments go way beyond the "shut up money" issue; that is, if one reads contextually.

Unlike I, Mr Smith, does not address the root cause issue: US Empire - because that, is taboo.

Most US citizens of any stripe love US empire, which is an expression of vacarious living; a collectivist, tribal substitute for individual, creative living.

All Empire, is an instinctive attempt to fill the void of an empty soul - subconsciously hoping to escape one's own individual ignorance, provicialism and anti-intellectual materialism, in a grand collectivist display of supremacy over other tribes/nations.

Just completing an incomplete analysis. That's all.

Wed, 07/13/2011 - 15:30 | 1453179 LFMayor
LFMayor's picture

you're damn right I love refridgeration, medical care and motorized transport.  Without this empire you decry the goddamn boots would have been on our throats generations ago.  You'd be hoeing arugula for the elites instead of pontificating on this electronic communication marvel.

The Empire, like any other bureaocracy, has ossified and is about to collapse under it's own weight.  Such developments are inevitable, because fucking weaklings get into the system and like termites erode it from within.  It's just he way it is, as natural as jacking off.

What we need to do now is set up another Empire.  Maybe we'll get another 150 or 200 year run out of it before it too collapses.  The reason the Romans took a 1000 years was the fact that their communication and transportation systems were more primitive.  Given the internet the Romans would have buckled within 300.  They get the 100 year punt because they didn't worry much about political correctness.

Wed, 07/13/2011 - 16:15 | 1453371 SWRichmond
SWRichmond's picture

This comment, and the one above it from eureka, move the discussion in an interesting direction.  I agree and disagree with parts of both.  Empire is not the problem; empire is merely a symptom of the problem.  Central banking is the problem.  And the problem with central banking is that it appears to work for awhile.  First, by providing funding of last resort, it introduces moral hazard into the financial system and starts the expansionist "bad decision making" ball rolling.  It enables the welfare / warfare state by directly and indirectly financing it.  Further, it allows, through credit, an economy to grow beyond its ordinary means and commandeer more resources than it otherwise would be able to.  And so, people like it, at first, and as long as the inherent problems with it can be effectively blamed on someone / something else.  People like it because it brings home the goods.  It necessitates empire, and funds it as well.

So, here's the problem as I see it: what happens to us if we delete central banking, but our enemies do not?  Will their economies grow faster than ours, enabling them to spend us into oblivion before they themselves blow up in a giant fractional-reserve leveraged printed-money credit derivative mushroom cloud?

 

It's the blow up part that people don't like.  They like everything else.  And if they can be induced merely to not understand it just enough, then it is here to stay.

Wed, 07/13/2011 - 19:18 | 1454081 Raymond K Hessel
Raymond K Hessel's picture

All this bickering about what is actually the real problem reminds me of the scene in Braveheart where the nobles are in a hall and they just won their first fight against the British and all the nobles cared about was who would ascend to the throne of Scotland.

 

Central banking, empire, welfare, warfare....it's like picking the king of Scotland.... who gives a fucking shit?

 

We should figure out a better way of living, a better way of organizing ourselves as a country.

Wed, 07/13/2011 - 20:44 | 1454407 Dugald
Dugald's picture

I just had a vision of Benanke being "Hung - Drawn - and Quartered.....what nice thought........

Wed, 07/13/2011 - 22:00 | 1454679 Rhodin
Rhodin's picture

He may deserve it,  but it is not a nice thought.  If there was still a position to fill, it might lower applications though.

Wed, 07/13/2011 - 19:50 | 1454207 MacGruber
MacGruber's picture

People often say that it's the fault of central banking but I think that too can be a scapegoat as much as any other. It does play a role in feeding the inequalities but mostly as an excellerant - speeding you down a path you are already on. The main cause is the capitalist system; a system that already tends towards concentration of money and power.

The basic concept of capitalism make the rise of monopolies, oligarcy and economic inequity preordained. Money begets more money and less money begets even less, it's a natural force. Just an example: if I have $1 million dollars and invest it at 5% and pay 15% capital gains, I have $42k to live off of if I choose to, this frees me or my money to do other things. If I have 2 million, I can compound the earnings of the 2nd and become even richer through time with zero productive labor of my own.

If on the other hand I MAKE $42k per year, I must work and I will never have any appreciable free money or time(a week vacation to FL to see your in-laws doesn't count) unless I save some of my current spending for the future (in essence a self tax). Through time my wealth will stay the same or progressively decline. Now you can say that the Fed giving the Elites leverage at 0% makes this incrementally more unfair, but the premise is still the same - capitalism creates the condition under which this inequity can breed.

I'm no pinko commie, I believe capitalism is the best we have. However, the only thing that can save this cascade of wealth inequity are purposeful controls on wealth. I know it's not popular here but regulation and taxation are the only countervail forces against the natural progression of capitalism. That said, I feel currently we are too far down the road, and a "reset" is needed to resolve the inequity that has already been created.

Wed, 07/13/2011 - 15:35 | 1453202 PaperBugsBurn
PaperBugsBurn's picture

Yep.

That's why it's gonna be sumpin to see when it all blows up!

Wed, 07/13/2011 - 15:14 | 1453104 blunderdog
blunderdog's picture

Most of the self-proclaimed "libertarians" who post here don't really believe in the libertarian core tenets.  Kinda like Ron Paul and his pro-life view.  If you don't go all in, you're not much of a libertarian. 

The real libertarian is committed to some pretty simple principles: open the borders, dismantle the welfare state, ditch all policies of government enforcement of social norms, and end aggressive militaristic policy.

Wed, 07/13/2011 - 19:21 | 1454088 Raymond K Hessel
Raymond K Hessel's picture

I junked you because pro-life and libertarianism aren't mutually exclusive.

In fact, holding abortion out to be murder is supported by the tenets of non-aggression.

Wed, 07/13/2011 - 19:33 | 1454137 blunderdog
blunderdog's picture

It's pretty hard to make any case that unborn babies can be viewed as moral agents, thus cannot be citizens, thus government has no legitimate authority to grant them "rights," thus pro-life LEGISLATION is unsupportable as a libertarian policy.

As a social norm, or desired moral imperative, or whatever, it's all fine.  But not as a legislated policy.  It all hinges on crafting an argument which makes unborn babies "people" in the eyes of the law.  And unless they can own property, good luck with that.

Wed, 07/13/2011 - 19:56 | 1454249 Raymond K Hessel
Raymond K Hessel's picture

That makes absolutely no sense.  It's a human being.  Don't kill human beings.  What the fuck are you talking about???

Wed, 07/13/2011 - 20:00 | 1454267 blunderdog
blunderdog's picture

You're not prepared to have a legitimate conversation on the subject.  Disregard.

Wed, 07/13/2011 - 21:03 | 1454471 eureka
eureka's picture

Blunderdog wins this argument handily.

A merely weeks old brainless fetus is neither a human being nor a moral agent.

It's just that some pseudo Libertarians and some anti-Fed'ians still LOVE to tell other people and other countries what to do - and therein lies the rub of all US misery, empire and decay.

Wed, 07/13/2011 - 15:22 | 1453139 sgt_doom
sgt_doom's picture

Thanks to eureka for stating the obvious, and what should be obvious to anyone who understands the facts, the arithmetic, and especially the math!

I mean, Smith makes this assertion:

"The Power Elites cannot understand why making credit cheap isn't creating jobs."

Along with some others, which makes one wonder if he was born just yesterday???

I can't really improve upon eureka's comments, except to restate the obvious:

They (the Transnational Capitalist Class, power eiltes, senior dark pool owners, etc.) have offshored the production assets (factories, jobs, etc.), and offshored the capital assets (investments, federal stimulus, QE-up-the-wazoo, etc.).

End of story.

This is a really silly post of the ignorant for the ignorant.

Thu, 07/14/2011 - 03:38 | 1455219 Urban Redneck
Urban Redneck's picture

How and why have they moved production assets and capital assets? 

For the answer see the previous -

http://www.zerohedge.com/article/guest-post-heres-why-small-business-isnt-hiring-part-ii

http://www.zerohedge.com/article/guest-post-heres-why-small-business-isnt-hiring-and-wont-be-hiring

Claiming transnational capitalist class, power eiltes, senior dark pool owners, etc. (TBTF, MIC) are the entire US economy is rather large oversimplification.  

Wed, 07/13/2011 - 15:46 | 1453245 AnAnonymous
AnAnonymous's picture

Libertarians - including all zerohedge bloggers, readers and commentators must realize that the only solution to all US problems is complete dismantlement of US Empire.

 

As I stated many times, the US is not the solution. The US is the problem.

Wed, 07/13/2011 - 22:27 | 1454762 Rhodin
Rhodin's picture

the US is not the solution. The US is the problem

 

Yes and no. 

The banksters and cartels run well over 3/4 of the world now.  The US is the problem in about the way that muscle and assassins are problems, if you have a beef with a mafia.  US is chief enforcer.  If/when US collapses before a successor is prepared, likely a war will decide who is the next enforcer.  If we (humans) are very lucky, (worldwide financial collapse, jailed bankers, PM or commodity money, etc) there may not be a war or a successor, but no bet there. 

Wed, 07/13/2011 - 15:59 | 1453297 rufusbird
rufusbird's picture

If Congress addressed and responded the issues of their constituency instead of the bloated Lobby industry we would not have most of these unresolved issues we are discussing.

Wed, 07/13/2011 - 19:22 | 1454067 Raymond K Hessel
Raymond K Hessel's picture

I agree with Eureka, not Rufusbird.  He, I junked.

Wed, 07/13/2011 - 14:04 | 1452796 oddjob
oddjob's picture

bureaucrats

They are the worst of the lot, chronic enablers of the current system, just receiving a larger welfare cheque.

Wed, 07/13/2011 - 14:18 | 1452863 eureka
eureka's picture

Perhaps, but they are only in place to serve the rich. You must learn to hate the rich and the empire - or - accept the bureaucracy they control.

You must go to the root of evil: the rich - the originators of empire.

Wed, 07/13/2011 - 14:23 | 1452884 mayhem_korner
mayhem_korner's picture

Why can't one be rich without being corrupt?  Too many here like to pigeon-hole everyone irrevocably into classes.  That's not reality.

Wed, 07/13/2011 - 14:34 | 1452933 Vergeltung
Vergeltung's picture

(psst! don't confuse him with reality. he won't like that)

Wed, 07/13/2011 - 14:34 | 1452934 Almost Solvent
Almost Solvent's picture

When he says rich, I think he means uber-wealthy, the types that make billionaires look like chump-change.

 

And you might not see their names listed in Forbes every year . . .

Wed, 07/13/2011 - 14:41 | 1452948 toady
toady's picture

I like to make a distinction about the rich. There are many who create valuable things and get rich selling them: Bill Gates, Henry Ford, etc. Sure, they aren't saints, but they created something that made alot of money for them, and others.

Then there are 'the masters of the universe', the ones that push paper from point a to point b, all while ratholing percentages and saying how inovative thier scams are... These are the rich that have destroyed the world.

Wed, 07/13/2011 - 14:41 | 1452950 earnulf
earnulf's picture

The truth is that there are some who are well off, even rich by standards, who do give a damn about others and make an attempt to be a responsible human being.    That's about the same percentage as the top income earners in the US (about 1%).

It is far too easy to be seduced by the power of fiat money, it opens doors, it makes people do things for you and if you are rich enough, you can live better than 99.999% of the planetary population.    People who hit the lottery, or sign the sports contract/movie contract/etc, find themselves suddenly "rich and famous" without the grounding necessary to deal with wealth.   It's the old "I can't be overdrawn, I still have checks" syndrome where you party hearty until the money runs out, then wonder what happened.

Those who have either "gotten religion" or just come to their senses, can even be a strong positive force in the world, at least when it comes to their "pet" projects.   Our elected leaders on the other hand, haven't found the bottom of the (pork) barrell and don't realize that we ran out of money 14.3 Trillion and counting ago.

Just as you can't say all Republicans are conservative and all Democrats are Liberal, one can't lump everyone in with a label, although that tends to be the best way to separate opinions....But like someone said, Opinions are like a--holes, everyone has one.

Wed, 07/13/2011 - 15:06 | 1453067 Bitch Tits
Bitch Tits's picture

Hahahahahahaha. Rich, but not corrupt? Hahahahahahaha. Who is confused about reality?

Wed, 07/13/2011 - 15:41 | 1453227 fallout11
fallout11's picture

Because with wealth comes power, economic (and often political and social) power.

And power, as we know from Lord Acton's famous quote, corrupts.

Sociopaths crave power. Lots of sociopaths and would-be sociopaths in the upper echelon.  Plato discussed plutocracy (and the tendency for nation states to become one)some 2500 years ago. Not much changes, unfortunately.

Thu, 07/14/2011 - 00:09 | 1455006 Isotope
Isotope's picture

"In order to get power and retain it, it is necessary to love power. Love of power is not connected with goodness, but with qualities that are opposite of goodness, such as pride, cunning and cruelty."
- Leo Tolstoy

"Power intoxicates men. When a man is intoxicated by alcohol, he can recover. But when intoxicated by power, he seldom recovers."
- James F. Byrnes

Wed, 07/13/2011 - 18:28 | 1453927 smore
smore's picture

Eureka, you seem to be in the grip of some black and white dogma which I can't identify.

 

Rich = Bad = Originators of Empire?

 

Is this teenage Marxism, or are you just a huge George Lucas fan?

 

Thu, 07/14/2011 - 03:44 | 1455223 Urban Redneck
Urban Redneck's picture

Hatred is born of fear.

You present a false dichotomy.  Is it because of a sense of envy or inferiority to those you would have others hate, or because you are their loyal servant seeking to maintain their dominance.

Wed, 07/13/2011 - 14:56 | 1453023 Freddie
Freddie's picture

Hope & Change.

Thu, 07/14/2011 - 06:33 | 1455297 Tsukato
Tsukato's picture

Are you for real?! Are you a woman? Why not blame all the parasites which also include bureaucrats and the poor? You're a real piece of work. A product of leftie uni propaganda at its finest. Do you also lose sleep over the plight of blacks and hispanics?

Wed, 07/13/2011 - 13:53 | 1452756 max2205
max2205's picture

Didn't you hear Ben said he didn't spend one dime to pump the markets.....

Wed, 07/13/2011 - 13:58 | 1452778 baby_BLYTHE
baby_BLYTHE's picture

definitionally he is correct since the FED doesn't have real capital to 'spend', they create it out of nothing.

Wed, 07/13/2011 - 13:55 | 1452763 kito
kito's picture

as reported on zh, import prices dropped...how does that jive with this?

http://ceridianindex.com/news/release/PCI-rebounds-in-June/

Wed, 07/13/2011 - 13:56 | 1452768 The Axe
The Axe's picture

Ben has made a profit on every trade, every purchase, every sale...not one loss....he is fucking amazing....not even the giant squid can approach his greatness..... 

Wed, 07/13/2011 - 14:20 | 1452870 eureka
eureka's picture

Who do you think Ben works for? He takes orders from Blankfein - his ex-roomie at Ivy-Ilk - who takes orders from the Rockefellers et al.

Wed, 07/13/2011 - 16:24 | 1453411 TruthInSunshine
TruthInSunshine's picture
by The Axe
on Wed, 07/13/2011 - 13:56
#1452768

 

Ben has made a profit on every trade, every purchase, every sale...not one loss....he is fucking amazing....not even the giant squid can approach his greatness.....

 

Give me license to mark my assets to whatever value I damn well please, and then give me a printing press to complete the process, and I can do a HELLUVA lot better than The Bernank!

Prepare to be amazed!

Wed, 07/13/2011 - 13:58 | 1452769 I only kill chi...
I only kill chickens and wheat's picture

 

You are receiving This As ur final warning congress To Obey the Debt ceiling increase& Thisis your last warning You Embecille,s.Sam The dOG

Wed, 07/13/2011 - 14:06 | 1452810 Doyle Hargraves
Doyle Hargraves's picture

+1

Wed, 07/13/2011 - 14:02 | 1452792 Vic Vinegar
Vic Vinegar's picture

Great stuff as always.

The Power Elites are slowly losing their grip on the middle class. Once people no longer have a stake in the Status Quo, then they might become dissatisifed with the cheap bribes to stay home and rot away, consuming Pringles and "entertainment" on the telly.

Cheap bribes, Pringles and the telly aren't so bad, however.  They really aren't.

Wed, 07/13/2011 - 15:23 | 1453146 Elliott Eldrich
Elliott Eldrich's picture

I'm starting to have a real problem with the term "elites" being used to describe those on the very top of this system. Their short-sightedness, their craven greed, their endless crimes of force and fraud, their utter refusal to admit to any error whatsoever, their complete inability to recognize or admit to any harm done by them and their reflexive willingness to blame the victims whenever possible makes me to want to come up with a better, more accurate term to describe them.

The best one I've come up with is "spoiled brats." I'm open to suggestions.

Wed, 07/13/2011 - 15:44 | 1453236 fallout11
fallout11's picture

Clinical psychology used to calls them sociopaths, although that term is now out (with the IV classifications)

Wed, 07/13/2011 - 22:45 | 1454815 ping
ping's picture

I prefer calling them 'cunts'.

Thu, 07/14/2011 - 02:06 | 1455140 TheBadgersSett
TheBadgersSett's picture

technical jargon

Wed, 07/13/2011 - 23:39 | 1454934 Hacksaw
Hacksaw's picture

How about Robber Barons?

Wed, 07/13/2011 - 14:04 | 1452798 Siggy
Siggy's picture

Back in the sane days the Fed used to take away the punch bowl just when the party was going good. Now, if the party starts to flag Ben forces grain alcohol down your throat.

Wed, 07/13/2011 - 14:14 | 1452848 MachoMan
MachoMan's picture

It's not alcohol that's getting crammed down our throats (nor our asses or back and forth between).

Wed, 07/13/2011 - 14:06 | 1452811 gwar5
gwar5's picture

As long as they never take my shit.  /s

Wed, 07/13/2011 - 14:49 | 1452988 Papasmurf
Papasmurf's picture

They already took your shit.  Well half of it anyway.

Wed, 07/13/2011 - 14:10 | 1452822 Doyle Hargraves
Doyle Hargraves's picture

Bread crumbs and circuses  side shows while the elite take all you will ever have and make us all slaves on the continent our forefathers conquered.

Wed, 07/13/2011 - 14:13 | 1452839 Sudden Debt
Sudden Debt's picture

If you think that shit is bad, come live in Europe where taxes go through the roof already and where they want to increase them with 20% to pay for the eurocrats stupidities...

 

Wed, 07/13/2011 - 14:15 | 1452849 monopoly
monopoly's picture

Sudden Debt, may I ask which country you reside in. Very colorful over there.

Thanks,

Wed, 07/13/2011 - 14:30 | 1452912 Confucious 222
Confucious 222's picture

My guess is Belgique, Flemish side?

Can't imagine sudden debt is Walloonish.

But who knows? It's mayo-a-mayo fighting over the fries in the streets over there.

Wed, 07/13/2011 - 16:38 | 1453484 Steaming_Wookie_Doo
Steaming_Wookie_Doo's picture

With great quality fries, beer and chocolate, why would these people fight at all?

Wed, 07/13/2011 - 14:32 | 1452923 eureka
eureka's picture

Hi Sudden - have you ever been to Europe?

Everyone in Europe has five weeks paid vacation, easy and low cost access to health care, universities and retirement - you know why?

Because Europe doesn't spend most of its money on military. US does.

That, is your cost of hegemony & hard-nationalist pride. Still like your empire?

Why not become humble? Why not love your republic - and drop your empire?

Can you do it? Can any US citizen let go of the itch - the illusion of "ruling" the world?

Wed, 07/13/2011 - 15:12 | 1453097 Bitch Tits
Bitch Tits's picture

" 'ruling' the world"?

Most US citizens have had to let go of the itch to educate their children, live in a decent house, pay their mortgage, buy groceries, etc., etc..

Most US citizens are not into ruling the world, we'd just like to get through a day without gut-wrenching worry and stress over the fact that we can't seem to stay even, let alone get ahead.

Wed, 07/13/2011 - 15:20 | 1453131 Lednbrass
Lednbrass's picture

And Europe will come apart even before we do. Yes we should get rid of the empire (even so, we will go broke due to the high parasite count in our society). However, the fact that the Eurozone is tottering after letting us pay for their defense for 40 years shows a level of stupidity and incompetence even worse then what we have.

 

Wed, 07/13/2011 - 15:50 | 1453261 Abiotic Oil
Abiotic Oil's picture

"Everyone in Europe has five weeks paid vacation, easy and low cost access to health care, universities and retirement - you know why?"

 

Right, like all the folks in Greece, Italy, Spain and Ireland.  Living the good life on the ever-stable euro.  /s

Wed, 07/13/2011 - 18:37 | 1453956 smore
smore's picture

Come to Europe, it's Paradise here!

 

We've enjoyed not spending money on our military for over 60 years now, the "stupid Americans" do that for us, so we can go on long holidays and feel endlessly superior.

 

Oh, sorry, that's about to end, cancel your ticket...

Wed, 07/13/2011 - 19:36 | 1454155 Raymond K Hessel
Raymond K Hessel's picture

Ehhh, I think you turned a corner here.  Europe doesn't spend on the military because the US does.  If Europe wants to avoid being a client state of Russia while giving the US a break on defense, then by all means, pay for NATO and leave us out of it.

Frankly, I agree with you that the US is too focused on being the world's police. 

Wed, 07/13/2011 - 23:37 | 1454929 Miss anthrope
Miss anthrope's picture

Eureka:

I want to officially unjunk you.  I didn't know there were 3 communists here on zerohedge but apparently i was wrong

 

Thu, 07/14/2011 - 04:02 | 1455227 Urban Redneck
Urban Redneck's picture

"Everyone in Europe has five weeks paid vacation, easy and low cost access to health care, universities and retirement"

"spend most of its money on military. US does"

It is rare to across a single post so wrong about both Europe and the US. 

Wed, 07/13/2011 - 14:34 | 1452930 TruthInSunshine
TruthInSunshine's picture

This is why they made sure to essentially outlaw firearm ownership for the bulk of those nations in the EU.

I'm surprised they even let any nations into the EU (when it was fashionable to want to join) whose citizenry were even allowed to possess hunting rifles.

 

by Sudden Debt
on Wed, 07/13/2011 - 14:13
#1452839

If you think that shit is bad, come live in Europe where taxes go through the roof already and where they want to increase them with 20% to pay for the eurocrats stupidities...

 

Wed, 07/13/2011 - 14:13 | 1452841 monopoly
monopoly's picture

Interesting that not one commentator, not one news person and not one govt. official has advised that the first step is for all in Washington to take at least a 10% pay cut and a 25% cut in expenses. Not one.

While it would not do much to trim this absurd debt, it would at least send a positive signal to the country that they care.

Sorry, what a dumb post. Forgive me.

Wed, 07/13/2011 - 15:16 | 1453117 Bitch Tits
Bitch Tits's picture

Hear, hear, monopoly.

Just goes to show you that rot starts at the top. There doesn't seem to be even one individual in government or big business who isn't a self-serving prick who just wants to steal your money and make it his own.

Wed, 07/13/2011 - 15:31 | 1453186 sgt_doom
sgt_doom's picture

Not a dumb post, monopoly, but perhaps a bit fanciful.

I mean, after all, if the US Supreme Court's salaries, and the US Congress' salaries and those guys in the West Wing's salaries, were all performance-based, I believe they would all be earning ZERO!!!

Wed, 07/13/2011 - 16:08 | 1453340 r101958
r101958's picture

At least it might portray that they are serious....and not just posturing.

Wed, 07/13/2011 - 14:15 | 1452845 TruthInSunshine
TruthInSunshine's picture

The elites understand all the cause and effect relationships happening.

They couldn't care less about sovereignty or nationality.

The entire world is their sandbox.

It matters not how they grow their wealth in their borderless world.

If you're American, Chinese, Mexican, or Indian, and their actions make you better or worse off, they gave no thought to your circumstances, so do not be narcissistic enough to think you were an intended beneficiary or someone singled out for punishment.

If they can grow their wealth as a result of a course of action that makes you and others like you princes or paupers, it will be done.

We are incidental or collateral in the game of global chess the elite play.

What did Greenspan say yesterday? Americans need to work as hard as 3 Chinese (and presumably for the same pay) if "economic growth" is to occur. Get it?

That "economic growth" is not so great for that American he speaks of, but it's massively beneficial to the elite.

And no, Goldman Sachs & JP Morgan executives and shareholders are not the elite. Some of them may feel this way, as they've 'incidentally benefitted' in terms of timing and other things, as the game of global chess is played out by the true elite, but they'll be decimated in a nanosecond, and as easily as slave workers, if this completely incidental process happens as a result of things that the elite can capitalize on.

 

Wed, 07/13/2011 - 14:31 | 1452919 cougar_w
cougar_w's picture

Goldman Sachs & JP Morgan executives and shareholders are not the elite.

Some very few might be, but no more than a handful.

The game you allude to does not have a lot of players. If I had to guess, this whole circus act is for the benefit of less than 100 individuals, from perhaps 20 countries, and mostly Europeans. They all know one another, and their families have known one another for going on 500 years.

Wed, 07/13/2011 - 14:53 | 1453006 Papasmurf
Papasmurf's picture

Sounds like an inexpensive problem to solve.

Wed, 07/13/2011 - 15:02 | 1453047 cougar_w
cougar_w's picture

Strictly by the numbers, you'd think so. But these people operate in such a rare realm of anonymity and isolation that you wouldn't even know where to start looking for them, let alone get anywhere close. Nobody knows who these people are. They keep a very low profile, allowing (maybe even encouraging) clowns like Donald Trump and The Bushes to be the big swinging dicks. They have so much money, the armies of soveriegn states are at their personal summons.

Not even sure if it's a good thing or a bad thing. Maybe the world really is too complex to allow the whole thing to be run by whim of The Masses. But it's the way it is, and I really hope they know WTF they are doing.

Wed, 07/13/2011 - 15:14 | 1453105 LFMayor
LFMayor's picture

Maybe we could do it like they hunted the cannibals in Leningrad:  Look for the rosy complexions.

Wed, 07/13/2011 - 15:19 | 1453123 Bitch Tits
Bitch Tits's picture

"and I really hope they know WTF they are doing."

 

Ahem. Obviously they do not.

Thu, 07/14/2011 - 04:06 | 1455230 Urban Redneck
Urban Redneck's picture

 

Rich men's sons are like blue horses- they rarely win races.

 

Wed, 07/13/2011 - 17:00 | 1453574 RockyRacoon
RockyRacoon's picture

Your description of the "elite" would preclude your ability to tell us who they are.

All these pitchforks and ropes going idle....

Wed, 07/13/2011 - 21:29 | 1454565 calltoaccount
calltoaccount's picture

Engaging fictional exploration of the subject:   http://www.amazon.com/Insiders-Thriller-Craig-Hickman/dp/1439216045/ref=...

Thu, 07/14/2011 - 04:29 | 1455242 Escapeclaws
Escapeclaws's picture

I don't know who these people you speak of are, either. However, I have met some Bilderbergers and Fortune 500 types, and I have a hard time thinking they are evil, as individuals. The ones I know are kind-hearted and concerned. That said, I eschew concentrated wealth and believe that the effects of concentrated wealth are pernicious for societies. Above all there should be a prosperous middle class in order to have a just society. This is what we are losing.

In terms of assets--yes, they have the money and the power that goes with that money.  However, we have the brains. We lose by being at each other's throats with these damn ideologies. In that respect, America has to be the most insane country in the world.

Wed, 07/13/2011 - 15:06 | 1453066 cougar_w
cougar_w's picture

dup

Wed, 07/13/2011 - 14:44 | 1452958 eureka
eureka's picture

Truth - you speak the truth. I would add though, that:

A) Hank Paulsen, Blankfein, Dimon and their peers are indeed part of the elite - and -

B) US Empire/Fed/PentaGun/Wall Street - is the still essential apparatus of the elite - which of course has full buy-in support from its pyramid of its henchmen and minion participants, with allegiance declining for every step lower in the pyramid.

Consequently, anyone who cares for the US as a nation and republic, and for the working and middle classes, without whom the nation will sunder, must speak out for the full and complete and final dismantlement of US EMpire and all its institutions, i.e. The Fed, US overseas military bases and any and all bail-oyts and tax-evasion priviledges to US global corporations.

Wed, 07/13/2011 - 15:24 | 1453152 TruthInSunshine
TruthInSunshine's picture

I'm not sure about who is connected, in reality, and who are just front men.

I do know that JP Morgan was assumed to be the wealthiest man in the history of the world for most of his adult life, yet the public reading of his last will & testament (in probate court, so as a matter of public record) revealed he owned a mere 19% of his own corporation, with a majority owned by...

...if you guessed the Rothchilds, you are today's big winner!

 

And as far as the Military Protection Racket for the Elite, you are accurate indeed.

Many people will claim we're 'conspiracy' driven, but I merely rely on facts and data when it's available.

When hard, quantifiable data is not available, I often defer, at least in part, to the opinions of people such as Smedley Butler:

War Is A Racket

 

Wed, 07/13/2011 - 15:35 | 1453198 sgt_doom
sgt_doom's picture

Perfectly said, TruthInSunshine, perfectly said!

The government of Pakisant, in the control of the oligarchs over there, doesn't give a rat's ass about their people, just as the government of the USA, in thrall to the banksters, doesn't give a mouse's ass about the people here, ditto Mexico, probably China (although they have invested in their own economic growth, while receiving those offshored production assets and capital assets from Amerika and elsewhere, plus that American federal stimulus principally went to them, as well), .....

Wed, 07/13/2011 - 19:47 | 1454178 Raymond K Hessel
Raymond K Hessel's picture

Where the fuck is Pakisant?

Also, government spending is not "investing".  China didn't invest in their own economic growth. China spent a bunch of their people's wealth to build skyscrapers, train stations, and airports no one uses.   Then they spend some more to knock some of them down to put up new ones.

Thu, 07/14/2011 - 04:31 | 1455244 Urban Redneck
Urban Redneck's picture

Pakistan is a trip- Benazir's first cousin once removed, Mumtaz Ali Bhutto, is definitely one of the chief Pakistani TPTB, as well as a feudal lord and oligarch, the likes of which hasn't been seen in Europe in over a century.  He is also no fan of her uppity usurping widower and current President Mr. 10% Zadari, who since Pakistan doesn't have a sophisticated fiat banking system, skims his wealth from MIC contracts for tangible assets and services (and that before he got the big desk in Islamabad and Barry O. started spending like a drunken sailor on his Central Asian adventure).  Oligarchy and TPTB sound very menacing, conspiratorial, and tend imply control as opposed to influence.  The truth tends to be more nuanced... 

Wed, 07/13/2011 - 15:35 | 1453201 sgt_doom
sgt_doom's picture

Perfectly said, TruthInSunshine, perfectly said!

The government of Pakisant, in the control of the oligarchs over there, doesn't give a rat's ass about their people, just as the government of the USA, in thrall to the banksters, doesn't give a mouse's ass about the people here, ditto Mexico, probably China (although they have invested in their own economic growth, while receiving those offshored production assets and capital assets from Amerika and elsewhere, plus that American federal stimulus principally went to them, as well), .....

Wed, 07/13/2011 - 15:35 | 1453203 sgt_doom
sgt_doom's picture

Perfectly said, TruthInSunshine, perfectly said!

The government of Pakisant, in the control of the oligarchs over there, doesn't give a rat's ass about their people, just as the government of the USA, in thrall to the banksters, doesn't give a mouse's ass about the people here, ditto Mexico, probably China (although they have invested in their own economic growth, while receiving those offshored production assets and capital assets from Amerika and elsewhere, plus that American federal stimulus principally went to them, as well), .....

Wed, 07/13/2011 - 14:21 | 1452875 youngmanU2
youngmanU2's picture

Phenomenal Post. Great links as well.

What terrifies the "Left" is the same thing that terrifies the "Right"--that the citizenry might break free of the bonds of dependency on the Savior State

Indeed. 

Wed, 07/13/2011 - 14:23 | 1452877 youngmanU2
youngmanU2's picture

Sorry for the Dup post. 

But to add to the former - hypocrisy knows no bounds! 

Wed, 07/13/2011 - 14:23 | 1452882 Traianus Augustus
Traianus Augustus's picture

Clearly, this is all transitory. /s

Wed, 07/13/2011 - 14:24 | 1452889 cougar_w
cougar_w's picture

The Power Elites are slowly losing their grip on the middle class.

This is the crux of the matter, and points to the end-game.

The Power Elites are parasites. The middle-class is their host. Something bad happens to a parasite when the host has had enough of their blood sucking. And while the host may or may not die in the struggle, the parasite dies either way.

Wed, 07/13/2011 - 14:25 | 1452892 Mad Marv
Mad Marv's picture

Prepare while you can; eliminate debt, reduce costs of living, invest in things that matter, and get the fuck out of any big city.

Wed, 07/13/2011 - 14:38 | 1452942 Vergeltung
Vergeltung's picture

+7.62x39

Wed, 07/13/2011 - 15:01 | 1453040 Papasmurf
Papasmurf's picture

another precious metals bug

Wed, 07/13/2011 - 14:47 | 1452947 cougar_w
cougar_w's picture

I hear that same admonition a lot here. It's not a bad list, but I don't see how any of that will matter:

1) Debts will be eliminated by economic collapse. No action required.

2) Cost of living will become meaningless in a barter society. No action required.

3) Invest? Nothing that exists today might remain standing. Or none of the things we think are valuable today may have much value in the future. You can't eat gold comes to mind, though I suppose it can't hurt to hold some. You think you buy what you need? You won't. I won't sell you my hard-won produce if I might go hungry later. You can use gold to raise an army and buy friends ... but you just became my enemy.

4) Leave the city. That sort of makes sense, if you intend to work the land and become self-sufficient. But here's a clue for all you erstwhile farmers; it's hard work, the payoff is poor much of the time, and any group of people more desperate than you are who wants your land can take it in less than a minute. And all the John Wayne movies not withstanding, if you don't quickly run out of nerve at all the killing then you will run out of bullets.

I don't know what it means to "prepare". I think a huge part of preparation is letting go of things that will hold you back when the time comes to make a fast move. Learning how to do basic and important things like raise vegetables, sew clothes, tend animals. Skills in carpentry, herbal medicine, metal working and construction will probably serve one well, and might be leveraged to monetary gain when nothing else pays. And more than anything else ... flexibility. Have no blind spot, suffer no illusions, keep an open mind, build community with whom you are with, pull together, find alliances where they are offered.

There is no formula. There is only wariness and constant motion.

Wed, 07/13/2011 - 14:47 | 1452974 earnulf
earnulf's picture

The Boy Scouts motto is "Be Prepared".   That takes planning which may not always turn out as one expects.   The ability to react may be the most important preparation along with the wisdom to make the right choice at the right time.

Wed, 07/13/2011 - 15:12 | 1453092 LFMayor
LFMayor's picture

Invest:  I could see 12 gauge, .223 and .22 long rifle becoming a type of currency. at least until it calms down after the great die off.  Heirloom seed packets?  Bicycle tires/tubes and those pull behind kiddie hauler carts?  Calcium Hypochlorite packaged for convienient 1 gallon purification dosages,  free milk jug if you trade for 10?
Lots of tangibles will be worth a great deal to people. 

++ for your advice on skills or on manuals to impart those skills.  And Networking.

Wed, 07/13/2011 - 14:36 | 1452938 Caveman93
Caveman93's picture

Excellent post! Well written and easy to comprehend!

Wed, 07/13/2011 - 14:44 | 1452966 the left behinds
the left behinds's picture

It is time for those complaining about other people on unemployment

to instead take a look at where your 'TAX' money is REALLY going, not where CNN tells you it is going!

Wed, 07/13/2011 - 18:39 | 1453962 JW n FL
JW n FL's picture

Tarp $800 Billion..

 

Cost of Un-Employment Benefits.. $1 Billion per Month per 10% Un-Employed.

 

So, TARP.. not TALF, POMO and or other(s).. just TARP would cover Un-Employment Benefits for 30 plus years.. $800 Billion ='s 30 Plus Years of coverage for working Americans who no longer have a Job because TARP and TALF and POMO cost TRILLIONS!

Wed, 07/13/2011 - 15:00 | 1453037 DCFusor
DCFusor's picture

Of course, what's called middle class has changed quite a lot over my own lifetime.  As a child, in late 50's and early '60's, we were considered middle class.  Both my parents worked (unusual at the time), both had degrees, got decent pay, bought a house within our means -- about 1k sq foot, tiny lot (for then) of about 1/3 acre, two cars that ran, bikes but no go-karts for the kids (3 of us).  It was alright, we ate a lot of mac and cheese, which Mom apologized for, but we kids loved -- and due to being true conservatives (not right wing-nuts), when my parents died they left us quite a stash -- all us kids were millionaires after that (I was before, having followed much the same path in life).

 

Now, on MarketWatch, there's a video of what they are calling middle class, and to me that's not middle -- it's not uber rich but gawd, those people are living in a palace, new cars all around, infinite toys, and acording to them "doing real well" with about 100k income between them, but worried as what they do for a living isn't real secure work just now.  If that's not just a huge pile of debt, I'd love to know how they got there on a "mere" $100k/yr.  Never mind my parents did well on a lot less, before inflation made the buck so worthless and did wind up living in such a palace near the end of their lives, one that had gone up almost 10x during their ownership of it and which sadly had to be sold when they died, none of us could afford the upkeep and taxes, being, well, conservative types.

 

If this is who's doing the whining -- just let me remind you that what defines middle class has certainly changed a lot, and these people complaining about having to go down the the standard of living I grew up in don't impress me a heck of a lot.  We did fine from that point.

http://www.marketwatch.com/video/asset/in-deficit-dilemma-pain-looms-for...!F051E28C-6F93-420E-8777-F296DD1C26D4

 

Wed, 07/13/2011 - 15:34 | 1453194 TruthInSunshine
TruthInSunshine's picture

Critical point:  To live a middle class lifestyle in the U.S. in the 1950s to about 1982 (lag effect from Bretton Woods getting smashed in 1971), it was commonly done with one wage earner per household, and the accrual of little to no debt.

By middle class, I am admittedly using a broad descriptor, but I associate this with quality housing, quality food, quality medical care and quality education, as well as being able to meet transporation and retirement needs without going into debt.

Today, while the houses may be larger, there are more motor vehicles, electronics and accessories, the price paid to rotate into this new era has been two incomes per household while racking up record levels of household debt (barely off recently made highs circa 2007).

Debt slavery has fueled the clinging on of the notion of a large middle class.

Wed, 07/13/2011 - 15:55 | 1453284 AnAnonymous
AnAnonymous's picture

it's not uber rich but gawd, those people are living in a palace, new cars all around, infinite toys, and acording to them "doing real well" with about 100k income between them, but worried as what they do for a living isn't real secure work just now.

 

Dont ever imply on this site that the US has grown richer since the 50s, that the middle class is living lavish life style, that globalism has largely improved US standard of life.

On this site, the middle class must be struggling, must be ripped off by the rest of the world and its standard of living  been plummeting.

Wed, 07/13/2011 - 16:32 | 1453446 TruthInSunshine
TruthInSunshine's picture

AnAnonymous, your idiocy truly knows no bounds.

If you manage this (difficult for you) task, check out these simple charts (simple is good speed for you) and see if you notice anything peculiar and/or worrisome about them:

http://www.oftwominds.com/photos2011/household-debt.png

http://pl-mgroup-akamai.powerlineblog.com/admin/ed-assets/2011/07/debt-p...

http://static.seekingalpha.com/uploads/2009/7/21/421452-124818735723224-...

 

Thu, 07/14/2011 - 04:45 | 1455250 Urban Redneck
Urban Redneck's picture

As much as I deride the notion that debt is wealth, I'll give AnAnonymous points for progress towards reality, he used rich (wealth) once and standard of living/life twice.

Over the past decades the standard of livingin the US has increased measurably (house sizes, closet sizes, cars, garbage volume, electronic and communication devices).  However, the standard of living is not wealth, it is consumption.  When growth of the standard of living is financed by relatively increasing debt as opposed to relatively increasing income or wealth, it becomes very easy to mistake increasing poverty for increasing prosperity.

Wed, 07/13/2011 - 15:03 | 1453050 jemlyn
jemlyn's picture

I agree with most of what Smith says, the part about how and why we got here, but in looking at our current crop of young people, I'm not so sure they wouldn't rather stay home and sit on the couch. 

Wed, 07/13/2011 - 15:05 | 1453061 jemlyn
jemlyn's picture

I agree with most of what Smith says, the part about how and why we got here, but in looking at our current crop of young people, I'm not so sure they wouldn't rather stay home and sit on the couch. 

Wed, 07/13/2011 - 15:06 | 1453065 Stuck on Zero
Stuck on Zero's picture

The power elites know one thing only - keep trillions of dollars rolling around through the program in any manner whatsover and they can take their 10% off the top.  Whether it's trade deficits, M&A, bankster loans, liquidity injections, bankruptcies, credit cards, or any other manner of financial phooey just keep it going.  The power elites live off of the movement of money through their institutions.  The job of the middle class is to keep all of their money out of the hands of the power elite.  Cash in your IRA, buy a rental property.  Cash in your MMF and buy PMs.  Cash in your CD and buy a Glock.  Get everything out of NY.

Wed, 07/13/2011 - 22:12 | 1454715 TheMerryPrankster
TheMerryPrankster's picture

+365

Wed, 07/13/2011 - 15:12 | 1453082 DCFusor
DCFusor's picture

dupe, board software issues.

Wed, 07/13/2011 - 15:14 | 1453103 Ricky Bobby
Ricky Bobby's picture

"Global Corporate America has decoupled from the American middle class; its interests are now international rather than domestic."

Can you say Empire.

 

 

Wed, 07/13/2011 - 19:01 | 1454031 gall batter
gall batter's picture

Empire.

Wed, 07/13/2011 - 15:16 | 1453113 Oh regional Indian
Oh regional Indian's picture

Not sure how many know that the US has one of th ehighest poverty rates in the world, by any definition. I've driven the length and breath of the country, I can attest first hand. Lot's of pathetic lives in the world's richest country. Trailer Trashing and Inner City Hooding on SNAP and Drugs is no life either.

So, I actually find the tone here defeatist. Everyone is clamouring for jobs to come back. What shit. Jobs don't come back.

you out innovate them. Leave them bag-holding 20th century tech. Smartly.

All this waaaah waaaah Indo-China stole our jobs BS. if there was ever a time to innovate, it's now. Forget this virtual, silly-con valley definition of innovation. It's an oxymoron.

Basics. sustainable housing, transport, food and life style/substance.

Everything from the humble bicycle, that testament to a poor to pathetic understanding of bio-mechanics, all the way to flight and everything in between.

The post carbon, bio-mimicing world is upon us.

Embrace it. Don't look for the old to return. 

As some multinational surely says, do the new.

;-)

ORI

http://aadivaahan.wordpress.com/2010/12/31/a-big-part-of-what-this-here-place-is-about/

Wed, 07/13/2011 - 18:52 | 1454003 smore
smore's picture

It's not that "Indo-China stole our jobs", it's that the US gave away the farm, or rather, allowed the corporations to do it.

Remember Perot's "big sucking sound"?  It didn't come from Mexico, it came from China, otherwise, he was exactly right.

The attitude that all you have to do is keep innovating is bunk.

Germany didn't give away its manufacturing sector, it just refined it and kept the jobs.  Innovation fills your basket, outsourcing is the equivalent of a hole in your basket.  Why desperately innovate, and then give away the benefits as fast as you can?

 

Wed, 07/13/2011 - 19:07 | 1454046 gall batter
gall batter's picture

sold a piece of gold jewelry.  worried about it for a few days.  pd debts.  enough left over to buy a bike.  i don't buy groceries the way i did when i had more money.  but i'm not hungry.  life for me is what i'm thinking about at any given time of the day.  and it's all relative.  i'm better off than people who live in tent cities.  better off than people who live in war-torn countries. better off than people who live near fukushima. 

Wed, 07/13/2011 - 15:17 | 1453119 Steak
Steak's picture

When I try to convey to my friends the future that awaits the country a phrase that catches their attention and is wholly accurate given the convergence of developing and developed country incomes...I say that soon more than half of Americans will be Africa Poor.

But of course with everybody in this country believing they are above average, nobody thinks it will happen to them.

Wed, 07/13/2011 - 15:35 | 1453200 LFMayor
LFMayor's picture

well, it HAS been hotter than Africa around here this past week or so...

Wed, 07/13/2011 - 22:19 | 1454739 TheMerryPrankster
TheMerryPrankster's picture

As the price of oil rises, the return of serfdom grows ever closer.

The social bonds have been broken, most don't know their neighbors, the bedroom communitys are just places to sleep and park a car. The real world receded long ago, big fat americans like beached whales struggling to find a bigger SUV to get their fat gut behind. It would be funny if it weren't tragic.

When historians discuss what killed america, I doubt any will realize it was suicide.

 

Wed, 07/13/2011 - 15:21 | 1453135 Bitch Tits
Bitch Tits's picture

I think I may begin cheating on my taxes.

This is obviously only one way to get ahead of the game, but it seems like a no-brainer one, if our Congress is any example.

Wed, 07/13/2011 - 15:22 | 1453141 sbenard
sbenard's picture

Yup! That just about sums it up! Thanks, Charles! I think you've nailed it!

Wed, 07/13/2011 - 15:26 | 1453166 anony
anony's picture

You're ignoring the simple tactic of gradually taking the lower parts of the middle classes and making them poorer so that as you state,  "the poor can be bought off with smaller sums".

The use of creeping (de)incrementalism is certainly in play.  I see it every day all around me.  And it's not just beginning now, it has been happening for at least a decade or more with lowered expectations all 'round.

 

Wed, 07/13/2011 - 15:48 | 1453251 walküre
walküre's picture

Good article. Looking forward to "Poverty in America Part 2"

How about a good old fashioned round of wealth confiscation from the elite, the truly elite by a large group of former so called middle class citizens? Try tax increases first before resorting to plain and simple theft second. It's really not that difficult. You have a small group of very wealthy individuals who control everything and you have a growing number and already sizeable group of poor individuals who have little or nothing and who certainly do not exercise any form of control. It's been done before and was for the most part always successful. At least it turned life and control upside down, made room for something new and at the end of the day there was typically some type of progression.

The elite needs to understand that the disgruntled and discouraged are not looking for welfare or hand-outs, they're looking for the whole enchilada. It's time for real change and then there can be hope that our kids and their kids are not just going to wilt away in a life of debt slavery all the while those born with the proverbial silver spoon can enjoy all the fruits of someone else's labor.

Wed, 07/13/2011 - 16:50 | 1453537 adr
adr's picture

If a mid sized company had the guts to quit witholding tax from thier workers paychecks and got others to follow, thus creating a nightmare for the IRS, the power base for the Elites would come crashing down. 

The insanity is that you are far better off on welfare than trying to get a readily avialabe minimum eage job. Poor saps like me that make $70k are stuck paying $700 a month in various insurances, $1000 in gas and food, and the other garbage that eats up my entire paycheck.

The Elites can't fathom how the middle class doesn't have any money to invest. They seem to fail at even the simplest forms of math. 

Wed, 07/13/2011 - 16:54 | 1453548 AldousHuxley
AldousHuxley's picture

You think this is poverty?

Ha, aren't you in for a little surprise undereducated Americans...Exactly why it will get worse before it will get better.

AMERICANS DON'T KNOW HOW BAD THINGS CAN GET.

It is going to be fun fellas!

 

 

Wed, 07/13/2011 - 17:31 | 1453719 ex VRWC
ex VRWC's picture

A littlt truth, if you please, set to music:

Globalize

This song tackles many of the themes from this article, especially what global corporations have done to our societies.  Finally got it professionally recorded and got a video done.  Well worth a listen.

Wed, 07/13/2011 - 17:38 | 1453747 barnaby33
barnaby33's picture

Since when is a cash bribe not a real stake? I'd agree that it creates dependence but it is a real stake. Articles like this make out "Elites" as if there were some sort rarified club of grifters with a secret handshake and shared ethnic background.

How about we talk about how all of us voted to allow tax policies that incentivized debt over savings and finance over production? We do actually still have elections once in a while. I know we are all to cynical to believe in them, but hey if a black community activist from Chicago can get elected president, why couldn't a ZH'er get elected to congress or The House?

 

Wed, 07/13/2011 - 20:16 | 1454308 Buck Johnson
Buck Johnson's picture

Poverty in America is fast coming to these shores, and eventually we will see large parts of this nation turned into third world conditions.

Wed, 07/13/2011 - 21:59 | 1454672 Chuck Walla
Chuck Walla's picture

Brilliant analysis.

Wed, 07/13/2011 - 21:59 | 1454675 aerial view
aerial view's picture

America does not stand for truth, justice or equality as the empire has reached absolute power which corrupts absolutely. Each state must secede, become independent and set up it's own system of checks and balances to have any chance of reversing this trend.  50 states each creating it's own new and improved system gives Americans 50 choices as to what kind of government they want. The best will rise to the top and can serve as a template for others.

Wed, 07/13/2011 - 22:12 | 1454713 WhackoWarner
WhackoWarner's picture

it is so easy to see who is American here. Libertarian. pro-life; Republican; democrat; who gives a damn?

So busy dividing over nothing.

Wed, 07/13/2011 - 22:23 | 1454751 TheMerryPrankster
TheMerryPrankster's picture

Difficult to jump off the treadmill with that tasty carrot dangling just out of reach.

Wed, 07/13/2011 - 22:56 | 1454847 linrom
linrom's picture

So CHS, the follower of the great deceiver Pete Peterson proves that 'Saviour State's is largely  a myth, an invention of doublespeak to convince Americans that they get something for nothing like Social Security benefits! Americans get almost nothing for the taxes they pay in return from the state. The little that they get is financed by bankers' debt. Saviour State is a Slave-State. Each US dollar bill should read "Debt Will Set You Free." There is no Saviour State.

Wed, 07/13/2011 - 23:22 | 1454902 automato
automato's picture

Say 100,000,000 Americans receiving $25,000/yr each would require an outlay of

two and a half Trillion dollars a year.(Call it bare subsistence welfare).  

Thu, 07/14/2011 - 00:04 | 1454992 Daphneisfedup
Daphneisfedup's picture

There are some parts of the article I like - the idea that the middle class wants a stake in a country, the underclass just wants bread and circuses.

The author makes it sound like the powers that be are chess masters moving us pawns, thinking ahead and trying to see how little will buy the middle class and under classes off.  There I disagree.  The powers that be are the equivalent of five year olds that have learned the basic moves of chess.  They don't look ahead past their next bonus or next election bid.

I also agree with the poster who said that our fundamental problem is the nature of capitalism.  As the wealth increases and corporations get bigger, much more money goes to corporations.  They are inherently sociopathic - they must pursue profits only, or their profits will be subpar and management will be out before too long.  Corporations have discovered the easiest way to maximize returns is to bribe congressmen.  This they are doing with abandon.  I don't know of any realistic and peaceful way out of this cycle.

I will say that the powers that be should be at least a little wary about how many americans have guns, and that a literate and somewhat-educated army is unlikely to turn on it's own population even if ordered.  Supposedly a lot of bankers ended up hanging from light posts in the 1873 depression.

Thu, 07/14/2011 - 03:49 | 1455222 Escapeclaws
Escapeclaws's picture

CHS makes very good points and has a writing style, particularly with bold-facing the first sentence of each paragraph, that makes for easy reading. However, he misses the point in as much as what we are seeing is just that our chickens are coming home to roost.  The same policies that we applied to our brown skinned neighbors in the rest of the world, particularly to the south of the US, are now being applied to guess who? This whole perspective is developed by Naomi Klein in her book, The Shock Doctrine--Disaster Capitalism. Essentially we in the US and Europe are getting Milton Friedmannized. This amounts to deliberately crashing the economy, putting everyone in a state of shock so that they lack the conceptual apparatus to truly understand what is happening, setting up fascist dictatorships or a concealed version thereof, and asset stripping the country. At this point, as you can imagine, Disaster Capitalism is becoming a best seller in Greece. Just study what happened in Chile under Pinochet if you want to read tea leaves.

The US definitely seems to be heading in the direction of becoming another Argentina. The best advice on how to prepare for this comes from Ferfal--google that name and you'll get his website. Contrary to raising and slaughtering your own animals, which seems to be the shortest path to death by torture for you and your family, he recommends you stay in the city.

The asset-strippers are coming. They want your land, businesses, gold, highways, public utilities, etc, for cents on the dollar. They want you to pay a toll on the air you breath and the light that comes in through the windows of your home.

 

Thu, 07/14/2011 - 03:51 | 1455224 darkstar7646
darkstar7646's picture

1) I think we are having the discussion about poverty in America -- as in, do those in poverty still have any real rights whatsoever, and have the productive (which see, The Tea Party) basically been paying for this country to go far past productive population?

The fact is that the people in poverty, if the checks are ever cut off, WILL go violent and ARE, in fact, already starting to do so. There just are few enough incidents that the status quo has been maintained.

Obama has pretty much begun the countdown to when that stops.

2) The meltdown is, now, QUITE inevitable. We've reached a point where there are enough people who believe they can take whatever they want and enough people who believe that the unproductive should die that the two cannot coexist. (This is one of the reasons our discourse -- political and otherwise -- has become so testy!)

3) The Status Quo, hence, can no longer be maintained. One has to accept the benefits for what they are -- bribes to keep the poor quiet. There are more than a few people who believe I am in that case -- and they are probably right!

4) The Power Elites are losing grip on far more than the Middle Class -- see the flash-mob robbers.

Thu, 07/14/2011 - 05:18 | 1455262 suckerfishzilla
suckerfishzilla's picture

You want a discussion?  Those people are screwed.  You couldn't tell them anything 10 years ago and you can't tell them anything today.  I don't care if I am sounding pompous.  Alot of the middle class got stung after tarp with a big balance on their revolving credit cards. All of the banks raised the interest on those accounts and applied them to that balance midstream.  Lots and lots of people got stuck that way for one.  I know a few. Let there borrower nor lender be.  You couldn't tell them that the house they were buying had appreciated a thousand percent since it was constructed and might not be a good buy but they signed for an adjustable rate mortgage and bought it anyway.  The ones who are holding on to those homes today are valued under what they paid for it. You couldn't tell them that PM's were undervalued and convince them to buy any but they could afford to pay 1000 percent markup on well drinks at their sh*tty dive bar while they are tipping their bartender.  Those same f*ckers will go to their local grocery store broke afterwards and bitch about the price of a 24 ounce beer under 2 bucks.  Boo f*ckin hoo to those retards. 

Do NOT follow this link or you will be banned from the site!