ONE THING CAN BE DONE…pass off your feeling of impotence, and begin organizing mass boycotts. Corporate America only understands money. Take it from them by choice, and they will crumble.

Unless, of course, American people are comfortable with their role as “uninformed cattle?”

Prozac IndigNation

What Engels failed to understand was advanced capitalism’s deft wielding of complexity, the cloaking of risk, the originate-and-distribute ‘hot potato’ model, securitization as camouflage, the democratization of credit, the false hope of counter-partied and concentration risk, etc. Heck, who beyond a select few people understood it even nine months ago? Even now, the rationale of post-bubble fervor is hard to reconstruct. My guess is Engels would resist the anomalous language of ‘bubbles’ and argue that the so-called anomaly is simply the crisis-to-crisis nature of the capitalist system. He might also marvel at the financial capitalist’s ability to ‘feed at the socialist trough’ whenever it suits him. I know I
do. I suppose greed subscribes to the ideology of expedience. Or perhaps capitalism is institutionalized greed and not an ideology at all.

Anyway as the elite stole from the top via stock options, ridiculous salaries, acquiescent boardrooms etc., they simultaneously (and ingeniously) created credit models that augmented stagnant wages and sustained the workers’ consumption patterns against the Marxist cul de sac of overproduction. In short, cheap credit caused the worker to believe he was still keeping ahead and enjoying the fruits of his production. For a time it masked his real wage declines.

The Freddie/Fannie paper factory also benefited from an implied govermental (read: socialist) backstop which, as it turned out, was ultimately invoked; this aggressive credit creation relied upon the gumption of relatively less sophistocated and emergent capitalist markets (many prior Marxist-Leninist states ironically) that, for a variety of currency and developmental reasons, were happy to remain production-bound and vendor-oriented.

Like any Ponzi scheme, this dog-and-pony trick can only succeeed once. No one will be fooled again. Meanwhile the American worker is being unceremoniously dumped back into a classic Marxist overproduction trap as credit sources evaporate, home equity disappears, manufacturing jobs vanish and inflation looms. The new cars and houses are stacking up. Absent credit, no one can afford them. Which is to say, no one can afford them. When the deleveraging process completes itself, we will be back to ‘merely’ wages –and horrendous wage disparities– once again i.e. a more classic Marxist playing field.

The question to me is, when will the American pot finally boil over into meaningful social unrest? Or are Americans so naturally docile (and/or medicated) that outrage is not an available response? Is Prozac Huxley’s soma? If so, they sure as hell better find a way to keep the pills rolling.

review Warren’s video, the prices haven’t gone down as you stated, it’s just that people are spending less on those categories because they’re strapped with heavier financial burden in the fixed necessity areas. I think you’ll find that that is where the faultiness of your argument was.

Best to you.

I prefer to avoid interfering with others’ posts, but I didn’t see Deadbeat’s argument as valid based on what both you and Bev were saying. Ms. Warren’s data demonstrates that families are spending less on staples, not that the cost of those staples have risen, just that people are statistically spending less. Why? Primarily because they are strapped with mortgages that are bigger than they can handle, wanting to maintain a certain lifestyle that is impractical. Wages have been insufficient to keep up with major expenses such as this which is why less staples are being consumed. The math is not that complex, mortgage payments have to be made before buying excess food, clothes, appliances, etc. It’s a no brainer.

As you stated, our capitalist society produces way more shit than anyone needs or wants, all at the expense of further contaminating the planet. Have you seen the article examining the more than Texas-sized swath of accumulated garbage in the Pacific, most of it plastic? It’s disgusting. Meanwhile rivers, lakes, aquifers, soils and the atmosphere are being poisoned by the toxic by-products in order to continue producing all this crap that people don’t really need anyway. It’s a counter-productive waste, all for the production of worthless crap that keeps capitalism on a roll. There is no sense in this type of behavior, it is utterly frivolous and empty.

Best to you.

My statement above was brief and was not meant as an in depth analysis of anything. It was a straightforward statement.

If you think that much of the marketed goods shipped world-over is healthy, well, that’s your opinion. Behind what I said is an endless supply of data and analysis regarding American consumption and the economic system which is premised on it. I don’t think I need to lay all that out every time I post.

Singling out Beverly and me for what is done by all the posters here is an indication of a prejudice rather than clear headed analysis.

Ramsefall thanks for recognizing this from the start.

Max

once again, Ms. Warren’s info is pertinent, I’m glad you’ve shared it. I don’t blame anyone for wanting a home, but I have met hundreds of customers when I had my own enterprise who were completely strapped from purchasing a house that was really over their heads, economic metaphor, mortgage sacrifice took an entire monthly salary of one worker. That’s not practical, but I think that the US has been subsided by impracticality for a long time. It’s for that exact reason that staples are out of reach as Bev pointed out. Sacrifices have to be made to meet that mortgage, the extra car for living so far from work, credit card debt from that new plasma, Johnny’s braces and Sally’s dance classes, and so forth. You know what I’m saying. Nobody forces anybody to live beyond their means, and that therein lies a big part of the problem as well. And based on insensible behavior such as this, living well beyond one’s means, we could indeed say that the behavior is most frivolous.

Obviously there are other factors and the system is truly sick and twisted; privatization isn’t helping a damn thing except making the elite wealthier, all part of the grand scheme.

Taxes is a discussion left on its own.

Thanks for qualifying your stance.

Best to you.

The point of my critique of Beverly and Max and response it that they response was not based on analysis but based on assumptions. The right makes the same kind of fallacies in their rhetoric. I would hope that the Left would not engage in such similar behavior. The assumption Beverly made is that staples have become out of reached for most workers and Max assumed that American are making frivioulus purchases. Warren analysis backed up by research and data shows the assumption made by Beverly and Max to be fallacious.

I agree with your response but has some difficulty with the following…
But by looking at the spread of suburbia around the nation, families spending an excessive amount for houses they really don’t need does seem very frivolous, as does leasing posh autos. Consumer trends go through a transition along with society, and when people start biting off more than they can chew, strapping themselves financially to appease their insatiable appetite for comfort and image, we see the data as presented by Elizabeth.

I don’t think the American people can be faulted for wanting to own a home. Shelter and security are necessities. In addition finding a good school for children is dependent upon the neighborhood which inflate demand and thus housing prices.

IMO RENT SHOULD BE A TAX DEDUCTION. If the Left took up this concrete issue imagine how many workers it can get to join the ranks.

Urban/Suburban planning and raising home prices forces many families to have to commute great distances and therefore need two cars which has skyrocketed in prices.

Divorce, alimony and child support also creates huge financial stress has the government has shifted the burden of the Big 5 fixed purchases onto parents.

I would have a lot more empathy towards workers who have been sold a bill of goods. In fact I would advocate Deadbeatism since the system put all of these burdens into workers. Workers need to become more conscience and stop blaming each other and start blaming the system.

Overall I think the Left needs to better address the concrete issues articulated by Ms. Warren as a matter of course to help increase it ranks.

the link to Warren’s seminar is quite informative, I appreciate it. Her presentation was given on March 2007, and since then economic conditions have deteriorated, but it’s relevant nonetheless. I am able to see your argument as more transparent now, yet continue to believe you somewhat misinterpreted their thread. Regardless, shame on me.

After cross referencing her info with what you responded to Bev and Max, not considering the enormous difference between housing, insurance, education, automobile and child care costs versus the cost of staples; food, clothing, appliances, flexible purchasing, is the problem. Categorically they aren’t relatively comparable, fixed vs flexible.

Bev is pointing out that wages have lagged, which they have, especially for men at the tune of $800/year in 2003 when compared to 1971. Not just lagged but dropped, according to Warren’s data. Couple that with an overall rising cost of living in effect from the Big 5 fixed expenses. Spending 76% more on housing, 74% more on health insurance (for a healthy family), 52% more on autos, and 100% more for child care, than just one generation ago is astronomical, it’s no wonder the country is broke.

Wages have not kept up with the climb of the Fixed 5, as families now allocate 75% of their income with mom and dad both working while 30 years ago they spent 50% of their income with mom at home. As economically oriented as this is, it’s reflected in social behavior as you point out. But by looking at the spread of suburbia around the nation, families spending an excessive amount for houses they really don’t need does seem very frivolous, as does leasing posh autos. Consumer trends go through a transition along with society, and when people start biting off more than they can chew, strapping themselves financially to appease their insatiable appetite for comfort and image, we see the data as presented by Elizabeth.

I’ll check out your link first next time.

Best to you.

as an English teacher who works with young Colombian polyglots, I’d have no option but to fail their text comprehension skills if they responded to Beverly and Max’s posts as you’ve done by somehow misinterpreting their plainly written contributions.

Beverly’s assertion is that wages haven’t kept up with rising cost of living; bloated insurance premiums, utility expenses, food, clothing, etc. Wages have stagnated comparatively to what they were 10-15 years ago, costs haven’t. I don’t see the inaccuracy in that.

Max’s point is that most of the stuff produced is just crap that isn’t worth buying anyway, wasted production at the expense of the environment, worthless, over-marketed garbage as he puts it. He is precise. How much crap can one country produce; plastic toys, gadgets, packaging, disposable goods for a disposable society. That’s not a faulty assumption, it’s called hitting the nail on the head.

Neither of their comments trivializes the working class, but your comment blatantly misinterprets their message, you’ve missed the beat, Deadbeat.

I return Stateside twice a year for the past 3+ years, and each time I do, I notice that costs are definitely rising; food, clothing, fuel (although I’m aware it took a recent plunge that hasn’t corresponded with the 70% drop per barrel), natural gas for home heating, services, etc. Considering that, while having not yet seen Ms. Warren’s video, I’d say she’s wrong. But then again, if you’ve misinterpreted what Beverly and Max were saying, maybe you’ve misinterpreted what Elizabeth said.

Is English your first language?

Best to you.

great post, they certainly didn’t put him on the the trendy lay-away plan, he has been bought and paid for in full, now it’s time to serve his masters.

Best to you.

Elizabeth Warren on You Tube

Where prices have gone up and hit the hardest has are housing, health care, child care and education. These are items that are necessities and whereby the burden has been shifted onto families with children. What has happened is that the burden of raising the next generation has been PRIVATIZED. For example as Ms. Warren points out to raise a child into the middle class say two generation ago it was entirely “socialized”. K through 12 education that garnered a high school diploma was entirely financed through the public sector.

Today in order to achieve “middle class” status you now need pre-school and college. These pre-school and college has remained in the private sector and has force students and family to take on more debt.

We all know what has happened to housing and health care — two very important necessities.

I think it is important for the Left NOT to trivialize the working class as both Beverly and Max did with their incorrect assumption about their behavior. Such faulty assumptions borders on elitism and will only alienate the very group that the Left must attract and build solidarity.

I love your posts and think this one is basically no exception, except one point (and perhaps you’ll agree even though you’ve stressed it’s importance): “What good are low interest rates and easy credit if one has no money to buy and make payments in the first place?” Much of the “stuff” isn’t worth buying and the problem is not just that people don’t have money to buy it, most of this stuff is worthless over-marketed garbage that’s destroying the planet while pivotal to the predatory capitalistic system that produces it ad nauseum.

I do however think your next sentence about necessities is right on the mark!

Outstanding insights about Obama!

Now SEEMS to be Wall Street’s lackey? A look at the members of Team Obama throughout the campaign was enough to convince any non-kool aid drinker that the man was bought and paid for by Wall Street long ago.

Feel free to hope and pray but don’t waste too much time expecting a miracle. The warning signs about what to expect from President Obama – admiration for Reagan’s foreign policy and clean up of 60s/70s “excesses;’ stump speeches long on shallowness, short on specifics; advisory team full of neolibs and free trade cheerleaders – have been abundant for the past 2 years.

As for raising questions, such should have been done long ago.

“ . . . neither Professor Romer nor President Obama can devise remedies . . . for the great crisis of our capitalism unless they know the real causes of the crisis.”

Pontificators and politicians like Romer and Obama know full well the real causes of the crisis. However, to address the root problems would require changes that the corporate power structure would never stand for so its lackeys in the media and political arena avoid all talk of the real issues.

“The real problem is people do not earn enough to . . . to buy what capitalism produces.”

Never has a more accurate statement been written. This is the main reason for our (and the world’s economic woes). What good are low interest rates and easy credit if one has no money to buy and make payments in the first place? Further, it’s not all about buying homes and cars on credit. People lack funds to buy food, clothing, services, and other basic staples – items that don’t generally require a loan.

Notice how the lag of wages behind the cost of living, along with outsourcing of jobs, are rarely mentioned when pundits and politicians prattle about the economy. Ignorance of these issues? No. Just ignoring the real causes of economic malaise like their corporate benefactors instructed them to do.

Which leads to the second question: Where once the Investment Banks were the daring (ie stupid and greedy) brothers of the staid Banking Cartel, they have now been enfolded into the Cartel to spare them the shame and emotional hurt of bankruptcy. Are they not in reality a private cartel– including the Fed itself– with actual control over the monetary system? Are not the bankers and owners of these institutions the primary Creditor Class in the country, the backbone of the 1% financial elite?

third, easy credit, lending at super-low interest rates encouraged greedy to people to take big risks (with other peoples money. And got us into this mess.
Now the Fed by absorbing the bad debts, insuring against losses is doing more of the same, putting the debt onus on the US taxpayer.
“Bernanke is lowering interest rates to avoid deflation, which encourages savers to seek higher yield by investing in riskier paper. Compounding the problem, the Feds insure all of it, removing any incentive for investors and investment managers to carefully consider risks.” And how much of our savings are insured by the FDIC, with assets of $40 Billion? Oh not to worry! Private taxpayer losses will be covered by Public taxpayer tax-dollars.

While I think Mr Page’s analysis is on the money (haha), he ought to mention the next, primary level– the private Federal Reserve in charge of creating money instead of the US government.

Thanks for emailing me.
My comment was not directed at you but to “None”
Thanks for your polite question

(I had to post here because your mail blocked me)

Cheers

First off, a few disclaimers from the beginning. I am a caucasian male of Irish and English decent born and raised in Stamford, CT in Fairfield county, a relatively large and economically diverse city (2006 pop. est. 124,000) in CT and suburb of NYC, from middle class parents. I have been a registered Democrat my whole adult life, despite being married for 22 years to a staunch Republican, my beautiful and industrious Romanian immigrant wife, but proudly admit that I have always voted for the candidates I believed in and felt best up to the challenge and needs at the time and on many occasions, as demonstrated time and time again by crossing established party lines in local, state and national elections. I also consider myself a loyal and hard working financial advisor in the recently much aligned and beaten up financial services industry, working for the same well respected insurance company for the past nearly 30 years, serving the needs of my hundreds of diverse clients including both individuals, as well as, many small and medium size business owners over the years, spreadout among many industries and companies and in many different income levels and economic and ethnic backgrounds, perhaps my own little microcosm of America.

Lastly, in terms of disclosures, I have been a proud and public supporter of President Elect Obama for the past 22 months believing all along that he was the right person at the right time for the United States of America and for that matter, to help us fight and lead us out of our global problems from the ever present terrorism acts and threats to our global economy and dependency on one and other for trade, as well as, helping the U.S. develop a more mutual respect and decency attitude around the globe vs. our prior “we know what’s right attitude for everyone else”. It’s obvious by now that we haven’t done such a great job at home regarding our own economy and people.

My major point in all this is I believe we have to better learn to look at both sides of the coin at all times and allowing Wall Street to go bankrupt will just make our problems at home and around the globe more severe and would in all likelihood, lead us right into a Great Depression II, just like allowing the auto industry to go bankrupt is a similar sin and wrongdoing. There are far too many jobs and industries that are interconnected and tied to Wall Street, which is also tied to Main Street, since the money does trickle thru the economy in so many ways such as housing, real estate, mortgages, banking, the trades tied to construction and housing, insurance, investment firms and other financial service providers, as well as, countless other industries.

In a similar fashion, our automobile industry, while it is hurting like never before, is tied to an additional estimate of 2.5 million jobs with related providers of service, parts, etc. and has been the backbone of the American manufacturing industry for the past approximately 100 years (I just learned November marks the 100th anniversary of the Ford Model T). The unmeasurable loss of pride, the mental anguish and pain that comes with loosing one’s job, the untold psychological damage from huge layoffs from large scale bankruptcies on Wall Street or Main Street from the auto industry are too damaging to calculate and are clearly avoidable if Government does what it needs to and should do at this time.

I think it was a wake up call for me regarding the auto industry, when several weeks ago, while driving on a busy local road to my local Y for a workout, in an instant that I took my eyes off the road, I rear ended another vehicle, so much so, that I feared I had potentially severely injured the passengers in the front seat of the vehicle I rammed from the rear. In the middle of this global financial crisis, thoughts immediately came to mind how could I have acted so irresponsibly and potentially injured two innocent individuals, not to mention the thousands of dollars of damage that I estimated I had caused, insurance deductible worries, etc. Perhaps in a message sent from the Almighty above, I immediately learned the two individuals, thankfully, were not injured and were fine, not even upset. Their auto, if not obvious by now, was a good old Ford van and my very reliable GM Buick Rendevous both were spotless and undamaged. The bumpers on both vehicles were so strong and resilient that there was absolutely no damage visible to the three sets of eyes that looked closely for several minutes. I can only imagine the damage had we been driving any number of economcial or expensive foreign cars.

About the same time I spent several hours on one of the Big Three’s websites resarching the company and marveled to make my own judgments about quality, their stock price, their survivability, etc. The technological advances of their product line and the vehicles I chose to explore further were amazing, not to mention the user friendliness of their website. I also viewed a CNBC special on GM at 3 a.m. one recent morning when I, like millions of Americans, layed awake and restless, in the middle of this crisis, worrying about my clients, our finances and our son’s future, who is about to hopefully graduate this coming spring from college. When I quickly realized that 1 of every 8 car buyers in China were buying GM, as well as, similar sales successes in other Asian countries, I said that’s it, enough is enough, similar to the old classic 1976 movie, “Network”, something like, “I’m as mad as hell and I’m not gonna take it anymore!” .

Point is, there is quality today in the Big Three and many Americans are unaware or possibly just disgusted having moved away from Detroit vehicles, sometime in the past 2 decades, after like me for a number of years believing FORD really meant “fix or repair daily” or any number of other acronyms. I honestly believe this is far from the truth today. Quality is back and we cannot afford the pain and economic loss of millions of jobs tied to the auto industry in America. I realize the unions at one time played an important role in American industry, but I like many Americans today don’t think we need or want unions today, especially at the price of being uncompetitive in the extremely competitive auto industry market today. For that matter, show me any industry today that does not have healthy competition or there are excessive salaries throughout, (how about the hedge fund industry overall and professional athletics for that matter) and I’ll show you a failing industry or one currently under great stress at the moment. You know greed is in almost every industry today and far too rampant in our society. When people put themselves first in any industry or business, there is more harm done to the “little guy”, which is the ultimate customer and on occasion, the employees. If the customer doesn’t come first in any business, if the employees don’t come next and if the business entity doesn’t come last, there are likely problems galore or well camouflaged and hidden too long before something errupts. Eveyone needs to make a buck, but no one party should be on the short end of the stick all the time.

The auto industry or better yet, their executives have too suffered from the fat catism or capitalism today that Mr. Page has pointed out as well as, Wall Street and many other industries. No better example recently than the much talked about AIG luxury trips after the Government bailout, Wall Street bonuses this year that Goldman Sachs and others Wall Street firms nearly paid themselves, or as recent as two weeks ago, when the Big Three top execs showed up after being shuttled from Detroit in their corporate jets with their palms up and hands extended and with no business plan to boot.

For sure, I agree with Mr. Page on many things, including the fact there are an abundance of Americans, as well as, citizens of the world, that work hard every day and/or are willing and able to work hard today who seek employment.

What I believe is missing in all this mess is a few important principles and some good old fashioned values that need to embodied in every business today and hung on a real or imaginary neck chain around every corporate executive today…..How about a sense of doing what is right and fair from now on. Earning it the old fashioned way thru hard work and fair play. How about recommending what you would recommend if it was your mother or father or family. How about the old saying of taking care of the masses and less fortunate in society first. What ever happened to the checks and balances in everything we do? I guess it is not sheek or doesn’t always impress Wall Street or public company analysts or the news media. Shouldn’t some informed outsiders sit on corporate boards today to voice the dissenting opinions? Makes alot of sense to me that President-elect Obama announced last week that his new Economic Advisory team will include folks outside Washington in business and industry, active and retired, that will have a say in economic policy making and be independent and non-partisan. Shouldn’t all boards have this type of representation?

Although, there are many points that I agree wholeheartedly with Mr. Page, regarding the somewhat diverse and extreme differences and objectives at times between the top 1% of wage earners many of which include the Wall Street crowd, as well as, other affluent citizens, who are most frequently business owners, otherwise known as capitalists in only his somewhat derogatory terms that he refers to and the 95% of the population that make up the middle, lower and poverty income classses, I don’t believe that condeming everyone on Wall Street and allowing investment banks and bankers to be cast aside like unwanted terrorists is the right course of action either.

Nor do I believe that Wall Street should not forced to pay some price for its actions. The recent Government loan of an additional $20 billion to Citigroup, seems to have helped Citigroup for the moment, their remaining employees and to somehwhat help stabilize the roller coaster stock market of the past few months.

Remember though, Government makes the rules and laws or in some cases has overlooked the needed the laws to inforce the needed regulation that has been missing. Also, there are plenty of Americans that have purchased homes with no down payments, when perhaps they should have rented for a while longer and saved up a down payment, there are plenty of Americans that bought gas guzzling trucks and sport utilility vehicles, financed new autos with little or no money down, borrowed on the credit cards to the max, increased their home equity lines of credit each time that something they wanted, but didnot necessarily need, went on sale, etc. , etc..

So, I think many of us are at fault to some degree and many of us have acted like capitalists by coming along for the ride. Point is we are in this together and together we will rise again, hopefully, sooner than later.