By Andrew Smolski
23 July, 2011 | Oilprice.com
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As noted by Richard Heinberg on June 22nd, 2011, the media has lacked the ability to connect the economic situations in the Middle East and their uprisings to what is happening in Europe. I would avoid the word “Revolution” in the case of the Middle Eastern uprisings, seeing as no dramatic systemic changes have taken place, only the ousting of dictators. Same as I would avoid the words of social upheaval in the case of European protests, which have been quite calm and only demanding to maintain the social safety nets produced through years of labor struggle. Rather, the odd occurrence is the ostensibly quiet population of the United States who are in many cases having the same economic problems and austerity based government solutions. This is a place where the media does want to ask the public the question, “Why aren’t you protesting?”
Effectively in the United States the labor movement has been dismantled over 30 years through multiple policies, the main one being “Right-to-Work” laws, which have left only 6.9% of private sector workers in unions, and 36.2% of public sector workers in unions. This has correlated as well to a 30 year stagnation in wages, which has barely kept pace with inflation, leaving many with the option of accumulating debt buttressed by a free flowing credit policy. That points to a problem when consumer spending accounts anywhere from 40%-70% of the economy (whether or not you wish to count government spending which is done through the aggregation of taxes from said consumers). Even if the low end number of 40% is the truth of the matter, it is large stake in the economy and plays a disproportionate role in the health of the economy as a whole.
The importance of wage and debt is linked to the economy having a large consumer component, which is basically like the gas to the engine, it keeps things in motion. According to the Federal Reserve, Household Debt is far greater than disposable income, basically at a ratio where consumers are maxed out. Connect this with the Weltanschauung (world outlook) of consumers at the moment, according to the Rasmussen Consumer Index, 61% of the US population see the economy as getting worse. Basically, you have a massive Molotov cocktail being thrown at the economy. The wage trend is not reversing, as noted by Paul Craig Roberts and Shadow Government Statistics, new jobs are typically in non-value added labor (service economy), with an industrial sector shedding jobs as they are outsourced to countries with cheaper labor and laxer regulations (or harsher authoritarian regimes).
When unemployment is calculated correctly it stands nearer to 16-17%, and high-value labor is not returning to employ most of these people, but only the non-value added labor. Without wages and jobs, how is 40% (roughly 5.9 trillion dollars) of 14.7 trillion dollars going to be maintained. Possibly through Citigroup’s idea of a Plutonomy, where the economy services only 20% of the population. However, wouldn’t that lead to political instability in a country that in a form stabilizes the world economy through dollar supremacy and also US treasury bonds (one of the safest investments).
With all this being the trend, and each recession taking longer to reach normal employment levels, where is the social reaction in the United States in comparison to Europe and the Middle East, which were experiencing (and still are) similar situations. A large part of the blame can be laid at the feet of the media who have downplayed protests calling for stimulus and national reinvestment from the grassroots and economists such as Paul Krugman, Josepsh Stiglitz, Robert Reich, and Mike Whitney. Stimulus having the point of proper regulations (neither over or under-regulated, but well regulated), and bringing back value-added jobs which maintain the advancement in Science & Technology. At the same time the media has overrated the Tea Party movement which has been calling for the implementation of the same policies which have been followed since Regean.
These were bad solutions to growth stagnation at the end of the 70’s and still are in the present. Cutting taxes and eviscerating regulation produced large mountains of government debt and has not increased the number of middle class workers (rather decreased that number). Those people, Tea Partiers and so-called Conservatives, do not understand the first thing about economics and are just rabid ideologues spouting words that make semiotics professors mouths’ water. But, not all the blame can be placed on the media, it also is a lack of political will on the part of the politicians, and large propaganda campaigns by corporate America. What has happened is a corporatization of American politics, especially after Citizens United case, but even before, as rampant individualism and greed have taken root into the American culture in a corrosive manner.
A quick glance at the historical record shows that when the elites begin to siphon off more and more of the surplus, social movements were typically the norm. This creates instability and opens doors to collapse of power and markets, the internal structure of a nation. The new rulers are the multi-nationals, and they are not nationalist. As they exist without borders, they are not worried about political or economic instability in a single country.
The new rulers do not have any real party affiliation, and neither party adheres to the political philosophy they claim, they are all corporatists now. And this is the fundamental reason why America is so silent. The people are behind history, they are standing in the trashed piled high by the Angel of History, which always progresses forward, not understanding their old paradigm does not operate properly anymore. They do not believe a government is meant to regulate an economy, that is for the markets. Yet they want a government, just not to impinge on their right to be greedy at all costs.
What then is left to this government that has no purpose within the economic sector?
Militarism and policing, which has never been good for a government to occupy all it’s time with. The other function has been for the government to siphon money through taxes (by having one of the highest corporate tax rates which can be avoided with a legion of lawyers), into corporations. This is shown by the revelations about GE. GE had American profits of $5.1 billion, paid 0% in taxes, and received a tax benefit of $3.2 billion, but I am almost certain it is using roads, electric and water systems, and other American taxpayer produced resources free of charge. So, yes Americans are going the Tea Party route, because they do not trust government, not recognizing that the line between Governments and Corporations have been obliterated over the last 30 years.
What does all this mean for political and economic stability in the U.S.?
It looks like a long brimstone filled road, unless somebody can grow a pair to start making a proper political discourse in that beacon of light on a hill, that republic from 1776. There are many people who are shareholders and need to recognize that collapse economically in the US, means a collapse in their portfolio. And stakeholders as well need to recognize that it is their tax dollars being turned into profits (money begetting money) rather than value-added goods and infrastructure development. These are the last people with any clout, because obviously the rap line is the only mantra left in the US, “Money Talks, Bullshit Walks.”
Otherwise as the system deteriorates even further, massive protests will happen, but with a narcissistic victim hood component where people are finding someone else to blame, ultimately not accepting responsibility for misunderstanding or being blatantly ignorant about the link between politics and economics. With money moving freely around the world, markets will react as markets like to react, dropping dollar supremacy, moving investments to other countries with a better “order”, and leaving a highly militarized and narcissistically angry society holding nothing but guns and their broken dreams.
Andrew Smolski is a Graduate Student and Teaching Assistant at Illinois State University studying in the Applied Community Economic Development Sociology Sequence Program at the Stevenson Center. As well as this sequence, Andrew is currently studying for his Master of Arts in Sociology and is working on his Peace Corps placement for the summer of 2012. He graduated from the University of Houston Summa Cum Laude with a Bachelor of Arts in Anthropology and Sociology May 2011.
His focuses are Sociology of Politics/Economics and Theory, as well as Cultural/Physical Anthropology. He is trained in qualitative research methods and currently studying quantitative research methods. He is a native English speaker, but is able to communicate, read, and understand Spanish enabling better research on Central and South America. Questions should be directed to da.smolski@gmail.com , and with time permitting he will be happy to allow anyone to argue with him, pick his brain, and praise him.
