The common denominator between now and the 1920s is a roaring stock bubble!
Let’s take a look at how the average consumer is doing. I’ll call this typical consumer “Bubba” because I just read an article that claimed “Bubba’s doing better today than at any time since before the Korean War.” It disgusted me because I found it to be such a disingenuous set of lies wrapped in half-truths, all contrived to pacify the trickle-down peasants as that philosophy continues to short-change the middle class with its fake promise.
First of all, who cares about how Bubba was doing before the Korean War? That’s going back an awful long time to find a day the present could beat. It’s before my days, and I’m a grampa now. If you have to look back that far to find a time when Bubba wasn’t doing as “well” as he is today, you’re chasing a false narrative because working-class Bubba wasn’t even alive back then. Those pre-Korean-war Bubbas retired long ago, and frankly they are much better off today in retirement than today’s working Bubba.
So, I’m going to compare Bubba to how things were when next-to-retire working Bubba was young. Bubba’s real wages have not increased since the 1970s when he first entered the workforce mowing lawns to buy a bike. Yet, the income of the rich, whose grounds Bubba now tends, skyrocketed … just like Trump hoped would happen for the whole US economy under Trickle-down 3.0!
That’s a fact, except for the dribble of an increase over the past year, but I do mean “dribble” when you compare it to what the 1% have once again gained and to how flat Bubba’s wages remained for decades while his benefits declined.
Have a look at the real overall picture of where things were going before Trickle-down 1.0 (Reaganomics) in the early 1980s and where they have gone for Bubba ever since:
That real wages figure is based on inflation, even as inflation is underestimated in the numbers the Fed goes by. That inflation rate is bubbaloney because it grossly underestimates Bubba’s housing costs using a bizarre method of determining his housing costs, and it eliminates fuel costs, a major portion of Bubba’s budget for running his F-250 and heating his home with oil.
Moreover, Bubba’s bubbabenefits have also gone down since the 1970s because his union was broken under Reagan or greatly weakened in the 80s. That’s also a fact. (Admittedly, the unions somewhat brought that on themselves with their notorious goldbricking habits.) During his early years, he never had the opportunity his Korean War father had of planning for retirement based on a guaranteed pension anchored to his ending wages unless he went career in the military; but his dad didn’t go career. Dad got that guarantee just from his union being a milkman.
Instead, Bubba was given the dubious benefit of being able to invest those retirement funds for himself. It sounded good at the time because the stock market was rolling high, but what it really did was let the corporation he worked for off the hook because the guaranteed benefits were something the corporation had to pay whether their retirement fund performed well or not, regardless of what the stock market did.
Because of this change in how retirement works, poor ol’ Bubba lost half of his 401K retirement funds when he was in his forties during the dot-com bust, just when he thought things were starting to look good for his retirement. When he finally recovered those losses, he lost as much again during the Great Recession.
Since then, he has finally managed to recover all of that, but that means he spent twenty of his retirement savings years just recovering losses. That now leaves him in dismal shape for retirement. Of course, he was not helped in all those years by a cabal of banksters known as The Federal Reserve Board, who made sure that his retirement fund also had no safe options that paid decent yields during the entire time he hoped to be making up the losses.
When he started out, Bubba hoped he’d have a couple million salted away by the time he retired. Instead, average Bubba — now sixty with only five years left to that date when he once hoped he would be able to retire — has, according to the Government Accountability Office, only $107,000 saved up for retirement! That will get Bubba through about four years of retirement before it is utterly exhausted, and that is only if he sells the F-250 to get out of payments. Maybe Bubba better buy a camper and sell the house, instead, and plan to live in the F-250. Or he could invest the money in an inflation-protected annuity, and retire on $350 a month for the rest of his life.
Ah, but he can’t. He lost the house during the Great Recession.
Meanwhile, the government has been taking a big chunk of Bubba’s money all of his life and salting it away for him because the government argued, even while it ended his guaranteed retirement through union-crushing laws, that having Bubba invest his social security money was not a safe bet. The government was right on that (based on the facts above), but the government didn’t do any better. It squandered the social security money after Reagan’s attempted rescue to where social security will be running low on funds just as Bubba hits retirement age (or what he once thought was going to be his retirement age) five years from now.
To save Bubba, the government raised his retirement age for social security funds. So, now he has to work a couple of extra years beyond what he would have had to work back in the 70’s. But that isn’t the end of it. The government is now trying to make Bubba feel guilty for thinking he should get his social security money back, even though it was originally his money and the government always told him, “We’re holding on to this for you because it is not safe for you to keep it and invest it for yourself.” They may have been right about the latter, but apparently it was not any safer with them.
They are making him feel guilty so they can balance the budget on his back by making “entitlement” a bad word. It used to be that Bubba was entitled to his house because he had a title to it, and he is the one who bought it with his money. Until that was stripped from him by the bank. It used to be that he was entitled to his car because he had a title to that, too, because he bought it with his own money. Bubba used to think that things he bought with his own money were things he was entitled to. So, when the government promised him, “We’re taking this money of yours away from you now in order to keep it safe for you’re retirement at age 65,” he believed it and actually thought he was entitled to get his money back at age 65 based on the government’s promise back when he first entered the workforce.
Poor Bubba. Now that he is just about there, the government wants him to feel like he is acting like a trust-fund baby for expecting the government to do what it always said it would do. The lazy politicians cannot think of a better answer. They all want to balance the budget on Bubba’s back because he’s the easy chump. It’s their course of least resistance.
There are, of course, plenty of better answers available that don’t require breaking the government with debt, but those would never enter the minds of the one-percenters or their pocket politicians. The politicians could, for example, end the cap on social security taxes that benefits only the 1%. Since the 1% have become fabulously wealthy through tax cuts created by those same politicians that went inordinately to the rich, the government could also impose a new cap on how much money the rich get back from social security and actually give Bubba a bump since he has been carrying the bull’s share of society’s load all along.
That’s right, the rich don’t pay a higher tax rate than Bubba as the trickle-down ear-ticklers have told poor Bubba; they pay a lower rate because they don’t get rich from ordinary income. The top bracket of income tax has always been mostly a smoke screen to convince Bubba they are paying a higher percentage. The only reason they pay 80% of the taxes is because of the obscene fact that they are making more than 80% of all the money made.
But the rich and their purchased politicians won’t think of that kind of social security salvation, and they desperately hope Bubba won’t either. They won’t unless Bubba fights them for it, but Bubba was looking forward to taking that F-250 out fishing. So, Bubba hasn’t got a lot of fight in him, especially given that he’s exhausted from working two jobs. What little fight he has, he was saving for that five-pound rainbow he’s been dreaming of landing. Regardless, if Bubba ever wants to see his own money back, he’s going to have to fight hard to claw it back. Since the rich own the reich, that’s going to be a hard fight.
Hubba Bubba is in fact, far worse off than he ever thought he would be back in the 1970’s when he entered the work force. Yet, the banksters who raped the world and Bubba’s retirement funds have more than doubled their personal net worth since they finished working Bubba over in the last crash when they took his house away from him but let him live there by paying rent to them. It’s a good thing he can fish and has the F-250 because they’ll be upping the rent whenever they can. When he was buying the house, he, at least, knew his payment would be fixed when he retired and maybe even that he would have the house paid off and be free of his largest expense.
Since those days when his house went underwater, Bubba had to work two part-time jobs to replace the one he lost. He did get a tidy $4,000 tax cut from Trump to help make up for some of his lost wages. His bankster’s taxes, however, are now lower by about half! That’s because the rich make their money on capital gains and indirectly from corporate earnings and by inheritance from daddy as entitlement babies … all of which have been seen their tax rates cut by yacht-sized amounts.
Bubba’s taxes, on the other hand, may have gone down 10% for which he is expected to be eternally grateful, but that’s only if he’s lucky enough to live in a state without high property taxes because he used to be able to write those off but no longer can. He used to be able to write off his mortgage interest payments, too, but no longer can. Well, come to think of it, that doesn’t matter anymore because we already established that Bubba lost his house in the last go-around.
But, hey, at least, he has his F-250 … until the bank repossesses it. After all, that truck cost him far more on a eight-year auto loan than what his father owed on a twenty-year mortgage back in the seventies when a twenty-year mortgage was the most common way to buy a home. Now it takes a thirty-year mortgage with a payment that has gone up more than Bubba’s wages. Maybe its a good thing the bank has taken that worry off Bubba’s hands.
Of course, under the Trump Tax Cuts, our boy, Bubba, got his standard deduction doubled, which is primarily where he comes up with that $4,000 tax cut, but his favorite bankster gets to have that, too, on top of lower rates for everything.
None of that even begins to factor in what is about to happen to Bubba during the presently building crash when his personal bubbankster will get Bubbailed out … again!
Bubba’s bubbarely employed even though he works more hours
Now that we’ve looked at how well off Bubba is compared to where he thought he’d end up, let us consider how the improving unemployment statistics and new jobs numbers constantly misrepresented and short-changed Bubba’s situation.
If you look at the unemployment rate that is touted as being great for Bubba, remember that it only counts those who are on the government’s unemployment roll. People drop off that list when 1) they quit looking for work because they give up or 2) their benefits run out because they couldn’t find work.
Those two factors were huge in the Great Recession because those who were near retirement gave up looking for work during those years when new jobs were few in number, and no one wanted to hire anyone near Bubba’s retirement age anyway. So, many people Bubba’s age retired early on substantially worse benefits than they would have had if they could have continued on a few more years to full retirement.
Many others found the job situation remained so poor for so long that they were unable to find a job before their benefits ran out. Their situation was so bleak, the government extended benefits under Obama for a short time until Republicans nixed that, sending millions of people off the “unemployment” list for good because their extended benefits ended. Many of those people also never returned to work.
Others did as Bubba did and cobbled together various part-time jobs to keep employed, but each of those part-time jobs counted as a new job under the statistics, so it looked like two or three people got a job when it was just Bubba getting 2-3 mediocre part-time jobs.
Those who gave up and retired early are not counted among the official unemployment numbers that you always see quoted. They are among the rarely mentioned walking dead who are no longer participating in the work force.
Bubba did what he did because the jobs that replaced the jobs that had been lost, particularly those lost in manufacturing, were largely lower-end jobs.
That meant they paid a lot less than Bubba was used to, so he had to make up the difference. The job stats make it look like Bubba now works fewer hours, but that is only because the replacement jobs are part time, and the stats are not noting that Bubba is working two of those jobs, so working more hours.
You see, Bubba lost his corporate job building boats like the little one he intends to take fishing and took a new job as a school custodian by night and a self-employed groundsworker by day, going back to the aforementioned trade of his old high-school days. To be fair, he only works four hours a day on the yard maintenance job he secured from the bankster on the other side of town. After all, he’s got to sleep part of the day, so he can pull the graveyard shift at the school when all the kids are gone.
Unemployment figures dropped because of these new jobs, but those getting the jobs are now working more hours for less per hour, often in fields that are beneath their former skill level. Many of the jobs were part-time, and the highly deceptive unemployment numbers as well as the “new jobs” numbers do not consider any of that. “New jobs” to be meaningful should be full-time equivalents.
Because many of the new jobs were part-time jobs that replaced full-time jobs, many of the people who took those new jobs were the same people counted twice, like Bubba. Many others were illegal aliens like the ones doing the yard of the stock broker who lives next to Bubba’s favorite bankster, who hit the grounds like a hive of bees once a week and are gone again in an hour. Bubba’s bankster has been noticing that and has been thinking recently about replacing Bubba with this gang of cheaper workers.
Bubba’s rage is starting to bubbubble over
Is it any wonder that talk of civil war is on the rise?
At a moment when the country has never seemed angrier, two political commentators from opposite sides of the divide concurred last week on one point, nearly unthinkable until recently: The country is on the verge of “civil war.”
First came former U.S. attorney Joseph diGenova, a Fox News regular and ally of President Trump. “We are in a civil war,” he said. “The suggestion that there’s ever going to be civil discourse in this country for the foreseeable future is over. . . . It’s going to be total war.”
The next day, Nicolle Wallace, a former Republican operative turned MSNBC commentator and Trump critic, played a clip of diGenova’s commentary on her show and agreed with him – although she placed the blame squarely on the president….
Fears that once existed only in fiction or the fevered dreams of conspiracy theorists have become a regular part of the political debate. These days, there’s talk of violence, mayhem and, increasingly, civil war.
That isn’t a “scientific poll,” but I’m pretty sure most people would agree that society in America appears to be drifting in that direction. And, with this unjust income/wealth gap intentionally created between the 1% and all the rest, why wouldn’t it be? No one is looking out for Bubba unless he looks out for himself, which certainly is not how he envisioned his retirement years would be.
Speaking to conservative pundit Laura Ingraham, diGenova summed up his best advice to friends: “I vote, and I buy guns. And that’s what you should do.”
According to the article above, 40% of Democrats are convinced the Right will rebel in armed insurrection. However, a good number of Republicans (about 25%) are convinced the Left has already beat them to that through Antifa.
Looking back at thirty-five years of Trickle-down economics that never trickled, it’s not hard to see how we got here. I think we’ve also lost a lot of our former social commonality that helped us get along.
The Economist Intelligence Unit’s Democracy Index, a measure widely cited by political scientists, demoted the United States from “full democracy” to “flawed democracy” in January 2017, citing a big drop in Americans’ trust for their political institutions. Similarly, Freedom House, which monitors freedom and democracy around the world, warned in 2018 that the past year has “brought further, faster erosion of American’s own democratic standards than at any other time in memory.“
As Bubba mulls over his retirement options under increasing awareness of how desperate is growing his hope for the grand success of MAGA (or his certainty that it would never be a success, depending on which side of the political divide he started out on), 2020 should become an interesting year for politics as even the Bubbas box it out.
Here’s why Bubba’s getting a little hot under his blue collar:
Back when there was a lot of Republican-orchestrated talk about the big bonuses Bubba was getting under the Trump Tax Cuts, I stated that would prove to be a one-off. The tax benefits were showing up as small bonuses, not wage hikes, so they would never have to be repeated again. That has proven to be true. Here, now, is the interesting fact on that:
Most Americans say they didn’t get a pay raise at their current job, or start a better paying job in the last 12 months, according to a Wednesday survey from Bankrate.com. 62% of Americans report not getting a pay raise or better paying job in the past year – up from 52% last surveyed last year….
As Marketwatch notes, meanwhile, the average CEO at the largest 350 companies in the US received a 17.6% increase in pay in 2017 – clocking in at an average of $18.9 million, according to an August study from the Economic Policy Institute.
In other words, the pay-raise situation got worse in 2018, not better. Here’s another fun-filled fact about the disparity between Bubba’s hope and reality:
The blue line is the expectations; the green is reality. With dashed expectations like that, is it any wonder Bubba is getting a little bubbled up over the trickle-down lie? And that’s when we are considered to be at “maximum employment.” Of course, we just talked about that lie.
And, thus, we now see headlines like this:
The 400 richest Americans … have tripled their share of the nation’s wealth since the early 1980s…. Those 400 Americans own more of the country’s riches than the 150 million adults in the bottom 60 percent of the wealth distribution, who saw their share of the nation’s wealth fall from 5.7 percent in 1987 to 2.1 percent in 2014.
Is that evidence that trickle-down is trickling down?
What’s more, with the rich hiding much of their wealth offshore, these numbers are likely understated, for who really knows how rich the rich really are, except the rich?
Or consider this headline from MarketWatch:
It’s not fashionable to wear flapper dresses and do the Charleston, but 1920s-style wealth inequality is definitely back in style.
This is, of course, because trickle-down tax cuts funnel all money back into financial assets, not into new factories. As I’ve said a number of times, why would you build a new factory when you will have to pay higher taxes on that income if the factory ever makes a profit when you can be guaranteed lower taxes by just going another round in stocks? Trickle-down tax cuts have assured an endless feedback loop. Since the rich are the only ones with enough disposable wealth to do any serious speculation, they are the ones who have enjoyed this upward spiral. Bubba’s too bubbusy trying to buy bread for the kids and keep gas in the 250 to play in that casino.
The common denominator between now and the 1920s is a roaring stock bubble!
However, when things get this far out of balance, they break up. The rich have no one left to sell to, so their factories and stores and malls start to close. Sound familiar? Greed contains the seeds of its own destruction and eventually burns itself out, but it has to get way out balance, as it clearly is now, before spontaneous combustion occurs. As the rich burn out in factory and store closures and stock-market crashes, they also tend to ignite a very dangerous social conflagration.
Eventually, the peasants get stoked enough about the injustice they perceive that they revolt and start calling for wealth grabs. Perhaps righteously so when you consider that the wealth disparity was created by unbalanced tax laws made by purchased politicians on a broken promise that the wealth would trickle down.
This revolt is where we are now as the anger is fomenting the rise of politicians like Elizabeth Warren and Bernie Sanders … and Donald Trump. As we’ve seen around the world for decades, the move against this corrupted form of crony capitalism usually swings toward socialism — something I began covering earlier in the year and will probably turn back to when we get into the true election year in 2020.
The pendulum doesn’t have to swing to socialism. Republicans who orchestrated the trickle-down plan could just admit it didn’t work and claw some of the ill found gains for the one-percenters back. But they won’t. Since Trump tripled down on trickle-down, that will remain the Republican plan.
Bubba will have a choice between continuing the Trumped-up version of a failed philosophy that has served the establishment so well for thirty-five years … or all-out socialism. And that is why the blue-collar Bubbas will be fighting each other as they cling to their ideologies for comfort.
Which brings us to torches and pitchforks.
Back in the 70s when Bubba was growing up, the houses of most of the rich and most of the rest were not that much different. The homes of the rich in most towns were maybe half again as big and were made of brick and had brick backyard barbecue, while the homes of the middle class were made from sticks and had barbecue that looked like a saucer sled on spaceship legs. The rich doctor or lawyer or banker in town had a single maid, while the middle-class mom had to work full time taking care of the home.
The disparity felt about right: you get a good education, work diligently, and you get ahead. “Ahead” meant you became comfortably well off, and people were fine with that. Gated communities were, for the most part, the rare luxury of places like Hollywood.
It is now getting increasingly likely that the rich are going to need those gates. Imagine what happens at the next downturn when Bubba loses half his retirement again, and his working wife, Bubbalene loses half of hers. The rich are no longer just imagining it; they’re planning for it! They have upped their game and purchased missile-silo mansions for self-preservation. Such conversions became a booming cottage industry during the present decade.
It looks now like these formerly Soviet-Socialist-targeted mansions may become necessary. That is why people like rich Ray Dalio are worried about social revolution if the disparity problem is not resolved:
For somebody who has a dedicated speaking gig at Davos every year, Ray Dalio is sure is starting to sound a lot like a socialist (the technical term is champagne socialist, we think). For a little over a year now, Dalio has been warning any journalist who will listen that the looming market crash and economic downturn, which always seems to be between a year or two years away, will stress the fraying fabric of our disintegrating capitalist system to the point where it simply breaks apart….
Dalio [now] kicks his fearmongering approach up to ’11’, surpassing redistributive rhetoric of Bernie Sanders and Alexandria Ocasio-Cortez and going straight for Vladimir Lenin.
Because capitalists hoarded their gains at the top (and socialized their losses), and because, as a group, they are a small horde (1% you know), they’re in trouble. Clawback of these ill-gotten gains may be a just solution since they were bought with a social lie, but will it happen civilly? Can it?
You might want to consider that those socialist programs being coughed up by the rich and their personal politicians right now are not about solving Bubba’s problems. They are about solving the problem the rich now see storming their way. They are about keeping Bubba and the masses from clawing back the ill-gotten gains of the rich. They are about socializing that cost of wealth preservation, just as they did with their bank failures, on the backs of future tax payers via more government debt so the rich can hang on to their gains.
You see, it wouldn’t take a socialist revolution to revise tax laws so the benefits start flowing back to Bubba for awhile, such as by removing that Social Security cap on the rich and capping any benefit they can get back from social security. That’s an easy Social Security fix, but hard politically because the rich own the politicians, and they will fight it with rhetoric that keeps Bubba convinced this would be wrong. He’d be greedy if he came after them like that, but it’s not wealth redistribution because the wealth was redistributed when the plan was first made and gave the rich a cap that Bubba never got to wear!
Clawing the wealth back is, fortunately for the rich, still anathema to Bubba, who always wanted to build his own way to the top and doesn’t want to feel he is taking it away from someone else just out of envy. And he still dreams of getting those special tax breaks himself if he ever makes it up there. Once he realizes, however, that he bought into a lie, he may feel angry at himself for believing the lie, and that will make him angry at those who sold it to him.
Dalio sees that day coming right away. His Davos friends, on the other hand, mostly hope to keep Bubba just happy enough with his F-250 and camper to avoid that day. Elizabeth and Bernie, on yet another hand, are banking their career moves on tapping into Bubba’s anger, just as Trump has been doing, but with their socialist solutions of free medicine and guaranteed wages even if you don’t work hard like Bubba.
Bubba was raised to hate socialism and to work hard for his money, but forty percent of Americans now embrace some form of socialism because of the rapacious greed that was baked into the lie fed to Bubba. With all the leading candidates tapping into that heat, 2020 could be a Bubbalicious year!
As I am writing, I think I hear the soft zing of files stroking the tips of the tines of pitchforks.