The graph below I think reveals why there is so much anger and distrust of the people. Unfortunately there are those, like the Tea Party Libertarians, Anarcho-Capitalists and Ayn Rand die hards that are taking advantage of this situation to promote their own agendas. What is interesting is there is some overlap of agendas by these three groups in some of their philosophy.
This graph clearly shows how the top 1% of our population now controls the majority of the income in this country. It also indicates that they have acquired near total control of our democratic system. This becomes more and more obvious when we see the Supreme Court hand down ruling that favor corporations and not the citizens, when you see the many state governments passing draconian laws that inhibit voting, stripping labor unions, and in some cases stripping elected officials of their power and giving it to an appointed Czar.
These states are lowering taxes on the rich and corporations causing huge budget deficits that they use to justify privatizing public services, such as schools, fire service, emergency services, selling government facilities to private owners and then leasing them back at a higher cost and firing a large number of public servants. Example: Costa Mesa California just fired almost all of the cities employees. They were going to hire the county sheriff and fire to protect the city, but they are now looking at a company like Black Water to provide police and fire service to the city. The deal lowers the cost to the city the first couple of years, but then it climbs to way above current costs with huge penalty for early termination of the contract. Scary. Think about this, should a private corporate police officer get bonuses for making more arrests so that the city jail has more inmates, which mean more money the company can charge the city with little increase in cost because of economy of scale, what do you think will happen?
Back to the graph and wages, one of the interesting lines is Productivity. The majority of this increase is due to technologies that have replaced human labor; computers and robotics are the major factor. Higher productivity with fewer employees. So the ordinary, low to medium skilled worker is relegated to low paying jobs. And with the focus for nearly 30 years of prepping every high school student to go to college, rather than have a second track for highly skilled labor workers needed to operate these robots and computers, we are hearing from some manufacturers that they can't move it back to the US because we don't have the trained labor force and China, India and Germany do. So unemployment will continue at a high rate until we refocus education to include the skills the economy is requiring now.
It is time we the people start to exert our power at the ballot box and if that fails, then in the streets, to get our country focused again on WE THE PEOPLE and the WE THE RICH AND CORPORATIONS.
We are so close to loosing this great nation, it is butting a lot of fear in me and many who see the destruction occurring around us. But we see very little interest by so many to even attempt to understand the situation and then get involved to change things.
If this wages continue as indicated by this graph, then the working class will become surfs and subservient to those who hold the wealth, that 1%. That is not the America that was full of ideals of equality, fair wages for a fair day of work.
The current disparity between the top 1% percent of the nation and the 99% others today is even greater than during the roaring 20s leading up to the Great Depression. From about 1870 after a short panic in 1871, the economy grew at record rates with the second wave of industrialization. Real wages for workers also radically increased primarily with the development of craft unions in the Northeast starting at the same time. Up until the 1970's there was little hostility between labor unions and management, with a few exceptions. But starting in the 1970's job growth started to flatten, earnings were slowing for companies and hostilities started to emerge between unions and management. Then came the Reagan Revolution that hallmarked eliminating all labor unions. Today that process is nearly complete. That is why you see nearly flat wages since the 1970s.
Part of the problem is that we have too many workers for the number of real jobs available that pay anything close to a livable wage. Even if manufacturing returned to its prior peak, there would still not be enough jobs for all that need one. Again robotics and computers will fill the need of many jobs that use to be done by hand in manufacturing.
Nevertheless, it is important that business pay their workers a better wage and take less of the pie for themselves. They would have a more loyal and productive workforce by meeting their financial need and also stimulating the economy with their added wages which would be used to buy products and services these companies are in business for or put in savings that creates capital for businesses to borrow.
Why there are so many people who do not know these simple economic principles is very troubling. Their ignorance is going to be the downfall of this nation.
Example: the housing bubble started with the deregulation of the Savings and Loan industry by Reagan which then lead to corruption and the collapse of that industry. Fanny Mae and Freddy Mac were established to fill the gap of who was going to finance homes. Commercial retail banks didn't want to, it took too long to get a return and that is not their business model. Then the insurance and retail banking industry was deregulated and mortgage backed securities with default swap insurance issued against them without the reserves to cover the loss, the fraudulently rating of these new derivatives as AAA when they knew they would fail. Also the lack of screening mortgage applicants and not requiring large enough down payment on the loan, so people over purchased for the income they had. It also was under the assumption that wages would increase as they had in the historical past of the 50's and 60's, thus providing higher income to secure their mortgages as the rates would increase over time. But as you can see by the graph, wages did not increase dramatically, so the holders could not pay the higher payments scheduled in their mortgages, so they would naturally fail making payments and foreclosures would ensue. Once that happens, then you get the domino effect of collapsing home prices, turning other mortgages that were being paid on time up side down in value and the holder pulling the mortgage and more foreclosures.
This whole episode was great for the upper 1% because the had insurance backed investments of these and our government put up the trillions of dollars to insure their investment, when it should of been the insurance issuers not the tax payer. But they were too large to fail.
Actually nothing has really changed, mortgage back derivatives are still being created and sold, with the same unsecured default insurance that tax payers will again have to cover. The conservatives shout that they will not next time, but they owe their souls to these companies, so they will with the same excuse, their too big to fail.
Don't you find it telling that they rushed to the financial institutions aid (BTW they don't create outside jobs as does manufacturing), but held firm against loaning money, with interest, to the automotive industry that employs tens of thousands of citizens? Why? Labor is unionized and they wanted the unions eliminated, so by forcing these big players to bankrupt, the unions would fold.
Also labor unions is the last major democratic party donor and get out the vote drives and without unions, the Democratic Party can't compete with the conservatives and their large rich corporate donors. Thus securing as Karl Rove planned, a permanent conservative government.
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