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# Chronic Unemployment

### Neoliberalism as the Cause of Chronic, Structural Unemployment in the USA

 News Over 50 and unemployed Recommended Links Chronic stress Computers eat people Underemployment Eroding Western living standards The neoliberal myth of human capital Perma Temps Adverse Selection Scapegoating and victimization of poor Productivity Myth and "Rising labor costs" hypocrisy Neoliberalism and Christianity The problem of inequality Neoliberalism as a New Form of Corporatism Corporatism Casino Capitalism If Corporations Are People, They Are Psychopaths Toxic Managers Office Stockholm Syndrome Learned helplessness Unemployment after graduation Fake Employment Statistics Destructiveness of GDP Mania Financial Sector Induced Systemic Instability Economics Pseudo Theories Notes on Republican Economic Policy John Kenneth Galbraith Invisible Hand Hypothesis Inflation vs. Deflation Lysenkoism Financial Humor Humor Etc
 Unemployment offices, homeless shelters,  hospitals, prisons and casinos. and are the only real growth industries of Obama Administration. In Jan 2010 35 millions, or one in eight Americans, were on food stamps. Obama's  biggest — and only major — jobs program is the U.S. military When I was a kid they told us that automation would "free" us from working long hours. What they didn't tell us what that they weren't going to pay us for all this leisure time we'd get.Mass unemployment is the primary indication of the collapse of a given form of society -- James Burnham

### Introduction

 "Unemployment" statistics has been the political advertising media for every Administration in modern timesFrom comment in The Rise of Invisible Unemployment  The Atlantic, Nov 9, 2014

Chronic unemployment is an immanent feature of neoliberalism, which requires the army of unemployed to suppress wages in order to increase share of profits for the top 1$and, especially, the top 0.01%. Another problem is secular (long-term) stagnation of the economy due to destruction of consumer demand, which comes with the deterioration of the standard of living and high level of unemployment. As Pope Francis noted: ...Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalized: without work, without possibilities, without any means of escape. Human beings are themselves considered consumer goods to be used and then discarded. We have created a “disposable” culture which is now spreading. It is no longer simply about exploitation and oppression, but something new. Exclusion ultimately has to do with what it means to be a part of the society in which we live; those excluded are no longer society’s underside or its fringes or its disenfranchised – they are no longer even a part of it. The excluded are not the “exploited” but the outcast, the “leftovers”. ... ... ... One cause of this situation is found in our relationship with money, since we calmly accept its dominion over ourselves and our societies. The current financial crisis can make us overlook the fact that it originated in a profound human crisis: the denial of the primacy of the human person! We have created new idols. The worship of the ancient golden calf (cf. Ex 32:1-35) has returned in a new and ruthless guise in the idolatry of money and the dictatorship of an impersonal economy lacking a truly human purpose. The worldwide crisis affecting finance and the economy lays bare their imbalances and, above all, their lack of real concern for human beings; man is reduced to one of his needs alone: consumption. The institutions of neoliberal capitalism, while promoting an expanded role in the economy for "market forces" (read "financial oligarchy") simultaneously transform labor relations. The “market” under neoliberalism certainly no longer refers to competition as a form of the production and distribution goods and services. Instead, it means something more along the lines of international financial monopolies protected by collusion between captured vassal state institutions (including neoliberal fifth column domination in the all major branches of government, especially executive and legislative branches, educational institutions and media) and multinationals, which pay money to sustain this social order. The term “Free markets” under neoliberalism means letting rich people do what they want, not promoting efficient allocation of resources through competition and the price mechanism. The core of the fifth column are local oligarchs and so called "Chicago boys": sons and daughters of local elite who are trained for and indoctrinated for this purpose in Western universities. As aptly noted Neoliberalism – the ideology at the root of all our problems ( The Guardian, April 15, 2016) We internalize and reproduce its creeds. The rich persuade themselves that they acquired their wealth through merit, ignoring the advantages – such as education, inheritance and class – that may have helped to secure it. The poor begin to blame themselves for their failures, even when they can do little to change their circumstances. Never mind structural unemployment: if you don't have a job it's because you are unenterprising. Never mind the impossible costs of housing: if your credit card is maxed out, you're feckless and improvident. Never mind that your children no longer have a school playing field: if they get fat, it's your fault. In a world governed by competition, those who fall behind become defined and self-defined as losers. Under neoliberalism labor relations assumes the form of full domination of labor by capitalists. Unions are officially suppressed and large part of middle class is brainwashed to hate using set of propaganda stories about unions corruption, welfare quinsy, lack of competitiveness in unionized industries (with Detroit as a prime story), etc. In this sense crushing by Reagan of the strike of air controllers was one of the first manifestation of this dominance. Workers again are downgraded to the role of debt slaves, who should be glad to get subsistence wages. And, for example, wages in Wal-Mart are really on subsistence level, no question about it (Making Change at Wal-Mart » Fact Sheet – Wages): Wal-Mart jobs are poverty-level jobs. Wal-Mart's average sale Associate makes$8.81 per hour, according to IBISWorld, an independent market research group. This translates to annual pay of $15,576, based upon Wal-Mart's full-time status of 34 hours per week1. This is significantly below the 2010 Federal Poverty Level of$22,050 for a family of four. The Wall Street Journal reported that the average Wal-Mart cashier makes just $8.48 an hour, far below the$11.22 national average for all cashiers.

This contrasts with the capital-labor compromise that characterized the state capitalism that existed several post-WWII decades and that was crushed by neoliberalism in 1970th. Neoliberalism also brought change in the relation between financial and non-financial capital: financial capital now again like in 1920th plays a dominant role dictating the rules of the game to manufacturing sector and controlling it via banks.

Under neoliberalism the wealthy and their academic servants, see inequality as a noble outcome. University professors of economics form the most corrupt part of intellectual elite – they are nothing more than employees of the financial oligarchy paid to administer intellectual anesthetic to those among debt slaves, who still have enough time to ask what’s going on. They want to further enrich top 1%, shrink middle class making it less secure, and impoverish poor.  That's an officially state goal. Then in 1992, when asked what Iran-Contra was really all about, Bush I replied that it was done for "...the continuous consolidation of money and power into higher, tighter and righter hands."

The upward redistribution of wealth requires high unemployment to weep prols into unconditional obedience.  In other words neoliberalism and high unemployment are twins.

Under the disguise of "free market" Newspeak  neoliberals promote a type of economy which is often called a plantation economy. In this type of the economy all the resources and power are in the hands of a wealthy planter class who then gives preference for easy jobs and the easy life to their loyal toadies. The wealthy elites like cheap labor: it's much easier to  dictate their conditions of employment when unemployment is high.

Keynesian economics values the middle class and does not value unemployment or cheap labor, so it is incompatible with neoliberal ideology and needs to be suppressed.  Neoliberals created the system which richly reward stooges of neoliberalism for their loyalty to the top 1%  bestowing on them an easier life than they otherwise merit. In a meritocracy where individuals receive public goods and services that allow them to compete on a level playing field, many neoliberal academic toadies would be losers who cannot compete.

One of the most important measures of the health of an economy is the following criteria: how many fulfilling, living-wage jobs are created or destroyed (most other economic factors can be distilled to this.). For example, widely used measure of economic growth, GDP is too influenced by financial masturbation and does not distinguish useful activity from harmful or irrelevant.

Under neoliberalism the elite revived Roman emperor Septimius Severus advice to his sons before he died at Eboracum (York) on  February 4, 211:

"Avoid infighting, pay well the soldiers, and ignore everybody else" .

So during the Great Recession Congress simply tuned backs to unemployed. With the implicit message you just need to die out folks ;-).

Military budget at the same time was greatly expanded and several unnecessary wars were launched.  Brainwashed American public eats all those neoliberal policies like real lemmings, demonstrating the level of groupthink and lack of critical thinking that is typical for high demand cults. So the myth about highly conscious "proletariat" that Marxists cherished remains a myth. Moreover quite opposite tendencies to creation of "enlightened lower classes" show their ugly face (Chris Hedges America is a Tinderbox naked capitalism):

ictus92, July 21, 2013 at 5:07 pm

To paraphrase Madeline Albright: “What’s the point of creating a totalitarian police state if you’re not going to use it?”

So where is the American totalitarian state going? If you look at the NDAA and the discussion around repealing the Posse Comitatus Act, the key words include quelling “domestic civil unrest”… So what are the “deep government” types anticipating so hysterically?

Well, the financial crisis keeps grinding away and is about to enter another phase of collapse as “quantitative easing” has run its course. Interest rates are rising, posing “technical insolvency” of the Federal Reserve itself. What this means is that time’s up for the 46 million in the Food Stamp Supplemental Program; 56 million getting Social Security retirement or disability benefits; and at least 20 million more needing full time employment. Obviously there’s some overlap, but the total number of people living on the margins of subsistence pushes 30% of the population.

For these, they face an immediate “Final Solution”… not exactly direct extermination, but death by deprivation, illness etc. Can work camps be far off for these tens of millions and the many millions more living paycheck to paycheck? This population and their sympathizers comprise the tinder for “civil unrest”. Hence the corollary to the famous “Collect it all” (communications) is “control it all” (civil disorder following further economic collapse).

Furthermore, prolonged neglect of key infrastructure will lead inevitably to severe food, water and electric power access shortages — another source of civil unrest potential.

Of course, overseas the totalitarian police state eliminates all expression of opposition that can change policies in the quest for “Permanent War” and “full spectrum” military dominance. This ends in global military confrontation… just as the financial crisis of the 30’s gave rise to another World War… only this time around world war will pitch towards thermonuclear war in short order. That’s how totalitarian regimes collapse into catastrophe, dragging the rest of us to an unpleasant demise.

Unfortunately, I don’t think there’s a damn thing any of us can do to arrest this beserk Levithan…

tongorad, July 20, 2013 at 3:21 pm

This is America, not Denmark. In this country, tens of millions of people choose to watch FoxNews not simply because Americans are credulous idiots or at the behest of some right-wing corporate cabal, but because average Americans respect viciousness.

They are attracted to viciousness for a lot of reasons. In part, it reminds them of their bosses, whom they secretly adore. Americans hate themselves for the way they behave in public, always smiling and nodding their heads with accompanying really?s and uh-huhs to show that they’re listening to the other person, never having the guts to say what they really feel. So they vicariously scream and bully others into submission through right-wing surrogate-brutes. Spending time watching Sean Hannity is enough for your average American white male to feel less cowardly than he really is.

The left won’t accept this awful truth about the American soul, a beast that they believe they can fix “if only the people knew the Truth.”

But what if the Truth is that Americans don’t want to know the Truth? What if Americans consciously choose lies over truth when given the chance–and not even very interesting lies, but rather the blandest, dumbest and meanest lies? What if Americans are not a likeable people? The left’s wires short-circuit when confronted with this terrible possibility; the right, on the other hand, warmly embraces Middle America’s rank soul and exploits it to their full advantage. The Republicans know Americans better than the left. They know that it’s not so much Goering’s famous “bigger lie” that works here, but the dumber and meaner the lie, the more the public wants to hear it repeated.”

“We, The Spiteful” by Mark Ames

Dave, July 20, 2013 at 8:18 pm

Please consider that the “right” is far more realistic in their assessment of human nature. The “left” wants things to be according to what they think it should be, mostly because of their left wing educators. The majority of humans are not perfectible.

Even Asians, with their highly socialized societies, have behaved very badly towards those outside their country.

This tendency of self-deception of "blue color America" and resonating of Republican Party ideas within "working poor" and lower middle class, two strata of the US society that typically votes against its own economic interests is analyzed in   What's the matter with Kansas  And to fight neoliberal machine is not easy as media dominance is total, and on a new technological level, which does not require silencing of opponents, just ignoring them, approach the level typical for the USSR or Nazi Germany.  And even if some people question the system, like (at the very beginning) Tea Party did, or later "Occupy Wall Street" movement did, they are mercilessly co-opted or crashed by well paid guard labor. The latter is one of the few  types of employment which prospers under neoliberal empire. See  The Rise of Guard Labor (dollarsandsense.org)

The reality is that many rich countries including the USA now face two problems. One is a shortage of jobs, especially middle class jobs.  The other is stagnant (or falling) wages for those outside top 1%.  This is not a temporary problem. Despite all the propaganda smoke this is an immanent feature of neoliberal regimes that now dominate in the USA and most other countries.  Neoliberalism requires high unemployment as a way to keep workers in check and prevent attempts to slow down redistribution of wealth toward the top.

As George Bush Sr . noted in November 1992 neoliberalism is "the continuous consolidation of money and power into higher, tighter and righter hands". The essence is  the consolidation of money and power to the top 0.1% or even 0.01%.  In a very deep sense our new lords from financial and political oligarchy are not that different from feudal aristocracy, may be only less educated, more prone to avoid military service and much more greedy.

Unlike Keynesian economy which put middle class in the center of society serving a buffer between rich and poor,  under neoliberalism  middle class is no longer needed as a buffer between aristocracy and proles, as repressive power of the state and regime of total surveillance (National Security State) makes an organized opposition practically impossible. The fate of "Occupy Wall Street" movement is nice illustration here.

On the other hand neoliberalism as an ideology, while discredited by event of 2008 still does not have any viable alternative.  Socialism was discredited by collapse of the USSR (which in reality was a neoliberal counterrevolution by Soviet nomenklatura including part of KGB).  Authoritarian versions of state capitalism does not look too attractive, despite being quite effective as was proven by economic progress of "Asian tigers".

Other important factors are also in play. Technology has stripped away the ability for many to hold a job and the trend continues.  In other words automation eats jobs. Outsourcing eats jobs too. Between those two trends almost no job growth left. This is a structural situation, not transitional caused by recession due to aftermath of 2008 financial bubble bust.  In other words jobs that disappeared will never return. And jobs in construction sector and finance were artificial and unsustainable in any case, crisis or no crisis (as in "what can't last forever eventually stops." )

We are in the midst of slow motion employment collapse. Eurozone unemployment recently reached 12%. The US has probably 20% rate of involuntary unemployment now. The official unemployment "rate" is lower, but that is because both 60-65 years old and 20 to 24 year olds are dropping out of the wage force.

Add to this "peak energy" problem and the situation looks really bleak. That's the funny thing about oil and modern civilization -- almost everybody in large western urban centers is dependent on mass produced technology (much of which was invented before we were born) and cheap oil (and generally cheap energy), Those who live in those urban centers no longer have any direct control or ability to produce own food or transportation energy or heating. those three activities are completely outsourced. See Peak Oil Demand is Already a Huge Problem.

Globalization is yet another problem. I was actually surprised by how many jobs large corporations managed to shred during 2008-2013 without negatively affecting  profitability.  The impression is that it is no low limit.  Usual wisdom is that if you shred too much, this labor shortage will bite you in a couple of years. This is no longer the case in the USA. No visible backlash at all.  Even consumption that should be suffering due to destruction of middle class in this process is no suffering much, because it was already mostly top 1% game and, as such, is recession proof. Here is one interesting comment form Krugman column Globalization and Macroeconomics - NYTimes.com

Floxo Australia

The analysis is flawed. The issue is not goods trade - on its own, this is relatively benign. The real problem is the associated capital drain. Owners of capital will transfer productive capital abroad for better returns. This process creates deep structural problems for all developed economies. Here are some basic predictions:

• Real wage stagnation. Labor is less productive having less capital to work with.
• Rapid rise in income by capital owners. The big winners in this scenario, not only do they earn higher rents abroad, they earn higher rents at home as capital is now more scarce there.
• Rise in inequality - obviously, from above.
• Slow growth. Capital formation is moderated by the constant capital drain so grows more slowly than otherwise.
• Increase in structural unemployment. Because capital transfer abroad is slower than internal capital transfer, the restructuring is long term as opposed to the short to medium term restructuring that occurs in goods trade.

Recessions are difficult to manage and may become protracted. In a downturn, capital formation dries up but the capital drain continues. This erodes the output gap. A fiscal stimulus now has less headroom for expansion. On top of that, an increase in domestic demand may be met by investment in productive capital abroad; the domestic investment response is missing. This may even cause a fall in labor productivity ( UK productivity puzzle?).

In short, globalization IS the problem.

### Unemployment and well being

Recessions generate inequality in both income and well-being: people who lose their jobs bear a disproportionate burden of the recession.  As Kathleen Geier noted the impact of unemployment on well-being it’s even worse than you thought

While reading this odd and meandering New York Times op-ed this morning, I stumbled upon a link to a fascinating study from last year on the impact of unemployment on non-monetary well-being. It was conducted by Stanford sociologist Cristobal Young, who discovered that unemployment has an even more catastrophic effect on personal happiness that we thought.

The study produced three major findings. The first is the devastating impact job loss has on personal well-being. Job loss, says Young, “produces a large drop in subjective well-being”:

Job loss into unemployment, however, is a different matter; this brings on deep distress that is greater in magnitude than the effect of changes in family structure, home-ownership or parental status. The distress of job loss is also hard to ameliorate: family income does not help, unemployment insurance appears to do little and even reemployment does not provide a full recovery [italics mine].

The second finding is that while unemployment insurance (UI) is successful as a macroeconomic stabilizer, it doesn’t make unemployed people any happier. UI, says Young:

is not central to their sense of well-being… [Snip] …[ I]t does little to support their identity, sense of purpose or self-regard.

Third, job loss has a strong, lasting negative impact on well-being that may persist for years:

[J]ob loss has consequences that linger even after people return to work. Finding a job, on average, recovers only about two thirds of the initial harm of losing a job. It is not clear how long it takes for the nonpecuniary effect of unemployment to heal.

Other research suggests that what Young refers to as “the scarring effect” of job loss can last from three to five years, or even longer. He also notes that “the more generalized fear of becoming jobless” may persist.

Young’s discussion of these findings stresses the inequality theme. He points out that “recessions generate inequality in both income and well-being: people who lose their jobs bear a disproportionate burden of the recession.” He suggests job-sharing as a way to reduce the concentrated misery of unemployment. That’s a great idea that unfortunately never seems to go anywhere. Employers today seem more interested in squeezing as much labor out of employees as possible for the lowest cost. They’re looking to shrink their payroll rather than expand it. And unfortunately, there are very few public policies that promote job-sharing, let alone do it effectively.

The sheer human misery created by the economic downturn has been stunning. The economic damage is, in some ways, the least of it. Another study shows that the long-term unemployed experience shame, loss of self-respect, and strained relationships with friends and family. They even suffer significantly higher rates of suicide.

Yesterday, Paul Krugman and others discussed the impact of economic inequality vs. unemployment on income. Krugman argued that inequality has had the greater impact, and I agree. Among other things, inequality is also the root cause of the unemployment problem. Special interests which have disproportionate power in our political system prevented more stimulus and inflicted an austerity agenda, which has had a disastrous effect on employment. Enacting an economic equality agenda will be huge political challenge, but it’s the only way I can see of ultimately resetting the priorities of our government so that it starts working on behalf of ordinary Americans again.

### Official measures of unemployment

There are two popular unemployment measured U3 (commonly cited as "official unemployment rate", which dramatically understates real unemployment) and U6, which is close to actual unemployment rate as was measured during the Great Depression. U3 is often as low as half of U6 (that's why it sometimes called 50 cents unemployment rate). As The Big Picture note in the entry Unemployment Reporting

• U3 is the "official unemployment rate" according to the BLS website. Due to this, it is the current measure of Unemployment that gets focused upon by most media, and therefore the public. It has, over the years, slowly excluded many of the factors that USED to go into how the US reported unemployment. Hence, there has been a gradual decrease in the Unemployment rate that has occurred regardless of what was happening in the Jobs market. U3 is now comprised in a way that merely repeating it without a slew of caveats borders on fraud.

• U6, on the other hand, is the broadest measure of Unemployment: It includes those people counted by U3, plus marginally attached workers (not looking, but want and are available for a job and have looked for work sometime in the recent past), as well as Persons employed part time for economic reasons (they want and are available for full-time work but have had to settle for a part-time schedule).

Its been pretty obvious for sometime that the Financial Media are doing a disservice to their readers by only reporting U3, given how dramatically it understates Unemployment. Indeed, consumer sentiment reports are at deep negative levels that only occur when Unemployment is much than what U3 has been saying. It is painfully obvious that U3 does not paint an accurate view of the Employment situation.

Here's the experiment I propose: Let's start reporting both, with appropriate descriptions of each. Report U3, add U6, provide monthly and year over year changes. Let the reader see the full picture, via BLS data.

### Factors that make the current unemployment structural

I would like to stress it again: many factors point to the fact that the current level of unemployment is mostly structural. In other words jobs eliminated will not be coming back. Among the most important factors we can mention:

1. Neoliberal ideology, which prevents strong government action and direct employment by government on infrastructure projects like during New Deal. Related to the dominance of neoliberalism the hypertrophy of financial sector lead to games with "Main street" after which high, self-sustainable (aka structural) unemployment for in now a destiny for millions. Making the whole society sick.

2. Outsourcing (which partially is due to much better communication channels available and computerized navigation)

3. Computerization (which directly "eats jobs" much like during industrial revolution in the UK).

4. High price of energy, which serves as strong depressing factor. If I remember correctly, a decade ago price of oil above $100 was considered an equivalent to permanent recession. This is never mentioned today, but still might be as true today as it was ten years ago: with the high price of oil the economic recovery is simply impossible. The only option, the only trajectory for economy is permanent stagnation. 5. Growth of "lumpen-proletariat". Narcoaddicts, alcoholics, single mothers from poor families with just high school diplomas, people with "generosity-based" high school (considerable part of Afro-Americans) and university diplomas from "diploma mills" (essentially fake diplomas), various categories of handicapped, people with criminal records (substantial part of Afro-American male population), etc. The first three factors changed the distribution of power between labor and capital in favor of capital; and those guys are not inclined to take prisoners, when there is a chance to fatten their pockets. None of the first three factors will probably be reversed soon, although neoliberal ideology is after 2008 entered a zombie state. Also computerization and Internet allowed capital and political forces behind it much better organize politically. So like in in previous human history well organized and wealthy minority dictates its will less-organized poor majority. I think that financial capital might eventually experience some setbacks. This bacchanalia of greed with those hedge fund which hack financial system left and right might come to an abrupt end with the rise of the price of oil. Even now price of oil indirectly pressure "masters of the universe". And remember famous slogan of 2008 "Jump suckers" ;-). It reflects the society attitude to financial oligarchy and as such entail certain dangers of "blowback" for all those derivatives games. Not under Obama watch as he is essentially a sock puppet of financial oligarchy. But eventually setback for "big finance" can happen. At the end of the day it is oil that is the real convertible currency and when oil production is diminishing or flat, financial oligarchy will be pushed back. Measures taken by political elite to save financial institutions after 2008 collapse means that unemployment is a part of a general political problem with neoliberalism as a social system. Under neoliberal regime the elite can't care less about long term unemployment. National Security State ensures the security of the neoliberal elite. Elections in the USA are a sham as two party system effectively blocks candidates outside the list approved by the current elite. The latter might even see sharp division of the society into "have" and "have nots" as a solution of oil depletion problem (Economist's View): bakho: Exactly. Monetary policy does not operate in a vacuum. Monetary policy operates in an economic system that includes fiscal and regulatory tools. It is a mistake to lock the fiscal and regulatory tools in a shed. Fiscal policy ALWAYS operates in a recession, at least in the form of automatic stabilizers, (UI, etc.) and sometimes in the form of additional stimulus. The meagre automatic stabilizers currently in place are enough for a mild recession, but are woefully short of what is needed in a recession like the recent one. The primary objection to fiscal policy manipulations is that fiscal policy is more easily politicized. This overlooks the fact that monetary policy is not only political, but bankers (who constitute a wealthy special interest) have an agenda that tilts monetary policy to their own self interests. The primary objection to using fiscal stimulus to address our unemployment crisis is POLITICAL. Wealthy special interests want pay less taxes and short term stimulus would interfere with their political agenda to roll back spending and reduce spending as a percent of GDP. Wealthy special interests have the upper hand at the moment because enough politicians are dependent on their campaign donations. However, this politicalization of fiscal policy, doing too little to address unemployment, is the prime force behind the Fed keeping interest rates low. If enough fiscal stimulus was enacted to quickly return to full employment and inflation at or slightly above the target, the Fed would not have to consider extraordinary measures. Anyone unhappy about extraordinary monetary measures should be urging Congress to fix unemployment now. This is not what our elites are doing. They are complaining about extraordinary monetary measures AND about additional stimulus. This suggests that these policy elites care nothing about social problems of long term unemployment, are content to have the US become a divided nation between haves and have nots and are content to oversee the creation of an underclass in order to concentrate wealthy upward. When one is saying that unemployment became a structural problem that means that it is immune to the business cycle. For example, during the last economic expansion (Jan 2002 -Dec 2007), the median US household income dropped by$2,000. In other words many Americans were worse off at the end of an economic cycle as jobs went outsourced to low wage countries due to wage arbitrage...

### Collapse of Casino Capitalism and unemployment

The collapse of “casino capitalism” model in 2008-2009 was so profound that all sectors of the economy became depressed. As securitization mess exploded in the face of their creators as it became clear to everybody that the king is naked. Debt overhand of financial industry is tremendous and it was just socialized, not removed. Essentially it became the problem of the USA government debt. In many ways problems the USA faces now are more serious then the problems the country faced during Great Depression because economic crisis doubles as the crisis of dominant ideology -- the ideology of neoliberalism.  And the Great Recession, despite Economic Cycle Institute premature desire to bury it, is still with us. Five years in the making as of 2013.

Ideology on which FIRE sector dominance was based is now questioned and that creates additional problems both nationally and internationally, much more internationally. Internationally it means a substantial loss of the USA "soft power", the factor that played tremendous role in the decade of 1990-2000.  When other country laugh at the US financial oligarchy tribulations it is difficult to open new markets selling old neoliberalism doctrine. due to debt overhand the US dollar is replaced by currency swaps in national currency for several major trading partners of China such as Brazil and Russia.   First of all that makes the crisis even deeper and analogies between the USSR and the USA more sinister. As with Stalinists in USSR who destroyed the country economically, there is a powerful block of republican dead enders and democratic supporters of financial oligarchy (blue dogs) who  will continue to promote the current neoliberal course with its deification of "free markets" (free as in "free shooting zone"), oblivious to consequences of neoliberal policies which eat the society and protected by the size of their accounts. There is nothing new here. Oligarchic  democracies can commit suicide. Actually none lasted long. And with such a formidable political wrecking crew in action and gridlock in Congress even over minor reforms that became less probable.

For all practical purposes two party system actually works like one-party system: democrats were also captured by FIRE industries to the extent that they should not be considered an independent party, but as a slightly more moderate wing of the Republican Party. Similarly by all accounts Obama is a moderate Republican with the policies to the right of such Republican Presidents as Dwight Eisenhower and Theodore Roosevelt. In a way, Democratic Party perform the role of spoiler: it exists for the sole purpose of attracting disgruntled left-wing electorate away from more radical parties. Republicans play symmetrical role for right wing crazies. None can or want to became the agent of change. In this sense Obama electoral slogan "change we can believe in" was a nasty, cruel joke of political insiders over political outsiders.  Note how unceremoniously Obama dumped labor after his reelection, while courting it during his reelection campaign.

As private sector is still downsizing, and government can't be the employer of last resort due to dominance of neoliberal ideology, the whole situation looks more and more like Japanese lost decade. The only area where government can expand workforce are defense contractors (military keysianism):

Minsky, however, argued for a “bubble-up” approach, sending money to the poor and unskilled first. The government - or what he liked to call “Big Government” - should become the “employer of last resort,” he said, offering a job to anyone who wanted one at a set minimum wage. It would be paid to workers who would supply child care, clean streets, and provide services that would give taxpayers a visible return on their dollars. In being available to everyone, it would be even more ambitious than the New Deal, sharply reducing the welfare rolls by guaranteeing a job for anyone who was able to work. Such a program would not only help the poor and unskilled, he believed, but would put a floor beneath everyone else’s wages too, preventing salaries of more skilled workers from falling too precipitously, and sending benefits up the socioeconomic ladder.

It is important to understand that the USA is not just coping with the largest financial crisis in history, the USA is also going through a major restructuring of the American economy as well as the world economy due to plato in oil extraction. This transformation, which was postponed by two decades due the collapse of the USSR (which gave the USA companies half billion of new consumers and huge area to dollarize and buy assets for pennies on a dollar), will be very long, very painful and very slow. One additional factor that complicates the picture of "peak oil", is that it is  more properly can be called "end of cheap oil", as at higher prices more oil became economically available. So this is  not a peak but long plato.

As GDP is highly correlated with the energy consumption, the side effect of peak oil will probably be stagnant (close to zero after inflation) growth and with it speed up in permanent decline of the standard of living for middle class

Also complicating the situation is the status of baby boomers which lost significant part of their savings during last two bubble bursts and now need to retire or will be pushed out of workforce. Pensions are already cuts either directly or indirectly (via inflation). For example, defined benefit pensions almost disappeared outside of government job force. After housing crash middle class no longer has a realistic prospect to fund their retirement and need to work longer: that increases competition for jobs. For middle aged professionals who are unemployed now the odds of finding reasonably paid work are low and they create additional competition for young people entering work force from universities. People over 50 now face especially poor job prospects.

At the same time corporate executives became corporate aristocracy (with differences in pay raising from 10-20 to 100-200 more of average corporate salary; this is the differences close to what used to exist in feudal societies). Most corporations are taking a lazy way out of the crisis with relentless cost-cutting.  This is a self-defeating strategy as cost cuttings eventually returns back via supply chain and bite the corporation which performs it. But so far this did not happened.

In addition productive sectors of economy are now under pressure of rampant financial speculation which serves as a huge tax on productive sectors of economy. Financial system is controlled by small number of large firms that permanently shifted their main activity into gambling and hacking of the financial system. There is some justice that computers which fueled all this crazy gambling on the strength of global reserve currency led to outsourcing of IT professionals to the extent that this part of US economy was destroyed and became a shadow of its former self in just ten years (2000-2010).

Another important sign of stagnation is that new college graduates face extremely bad job market which squeezes out anybody without substantial experience so for them it's Catch 22. Only graduates form Ivy League colleges has real prospect to get a job after graduation. Plus those with good family connections. In a way education is no longer a guarantee for better paying job, the same situation what was typical for the USSR and other countries of Eastern block during Brezhnev's stagnation.

There is also an interesting transformation of the quality of the education that also parallel transformation  experienced by the USSR in post-war period, but in especially acute form, three decades before the collapse. Private education became more like subprime lending.  It's quality became fake, as the term "diploma mills" suggests.  This rat rate to the lowest possible quality (quality instead of quality) was the central tendency in Brezhnev's USSR.

In the USA in addition to devaluation of education caused by low quality "everything passes, everybody graduates, just pay" modus operandi of diploma mills, graduates from lower middle class families are now overloaded with debt, which creates for them really difficult situation and push many of them into low level service jobs like waiting. In other words excessive debt after college make getting into workforce using acquired specialty even more difficult as there is no space for long job search, relocation is more difficult and so on and so forth.

There is also huge criminal industry that flourished around people desperate attempts to find well paying jobs. Many educational scams like "we will make you an ultrasound technician in six month; 90% of our graduates found jobs that pay over $60K in the first month after graduation" or " software tester in four month; 100% of our graduates find jobs" are trying to capitalize of people desperate to find job, any job and getting into crushing debt trying to improve their chances in job market. Those criminals are not prosecuted. For more information see: ### The main source on new jobs is service sector and the lion share of new positions are McJobs The employment growth comes mainly from the service sector which feeds off of consumer spending. It was hit by outsourcing especially in such areas as IT. Manufacturing no longer create jobs – outsourcing and computers eat them and you no longer need more people to make more stuff. Peter Dornan at EconoSpeak has the following comment which perhaps looks deeper at why the elite is so indifferent to mass unemployment and growing poverty in the U.S. “…The process is more complicated: where one sits in society and the kinds of problems one typically has to solve leads to a way of thinking, and this manner of thinking then informs politics. For centuries, the finance perspective has played a central role in economic theorizing, and there is ordinarily a body of research to support it. What I am proposing is this: economic orthodoxy is regaining control over policy because it reflects the outlook of those who occupy the upper reaches of government and business….” IMHO to get the economy out of this mess, government should concentrate on direct job creation (like was the case with Roosevelt administration), not on propping zombie banks hoping that they will generate credit necessary for creation o new jobs. Growth of credit will not happen and if it will happen it will not generate new jobs: most of it is pushed into speculation. Spectacular rise of S&P500 in first half of 2013 is a pretty good illustration of the process. Long term high unemployment is a disaster for the country and disaster for the people, despite the fact that it is irrelevant for banksters, too busy playing in the huge casino they created. Failure to address this problem directly by Obama administration (which in economic terms is the second Summers-Bush administration making a joke in the slogan "change we can believe in") make Obama a real serial betrayer of people who elected him, the role he seems enjoy playing. ### Additional factors the complicates the picture There are several additional factors that makes addressing the problem of chronic, structural unemployment even more difficult: 1. The economic crisis coincides with deep ideological and political crisis. • Ideological crisis because for the past 30 years the financial and industrial lobbies have managed to literally brainwash both the elites and masses with the now bankrupt neoliberalism ideology with such slogans as "free markets does not need regulation because it will adjust the imbalance itself", "less government is better", "1 dollar of tax is 1 wasted dollar" and so on... • Political crisis because the financial lobby have reached such the pinnacle of influence and after subprime crisis lost legitimacy. • The economic strategy of the last two administrations was/is based on pushing wages down to make the economy more competitive with Chinese and other Asian economies. State explicitly refuse to protect well-being of the people beyond bare economic survival: • “Labor market conditions for 16-19 and 20-24-year-olds in the city of Chicago in 2009 are the equivalent of a Great Depression-era, especially for young black men.” • In 2008, a startling 91.6 million people — more than 30 percent of the entire U.S. population — fell below 200 percent of the federal poverty line, which is a meager$21,834 for a family of four.
• the proportion of American marriages in which the wife makes more money rose to 22% in 2007 from 4% in 1970.
• The "new poor" class of people living of unemployment insurance emerges. Millions of peoples who were accustomed to the comforts of middle-class life or at least stable paychecks who are now relying on public assistance for the first time in their lives and potentially for years to come. Many two income families become one income families. Especially hard hit are people in their 50th as well as less-educated people, who has only a high school diploma. "Maximizing shareholder value" often means replacing people with equipment and this process accelerates during recessions. The term "a jobless recovery" has a very menacing subtext as far as long term unemployment is concerned. More education and skills no longer is guarantee for a job. But without them your changes to hit the class of the new poor more then doubled.

One can't solve the current problems the US are facing without the reform of the political system and institutions. Power of lobbyists need to be curtailed. Senate needs to be reformed.  Republican Party probably should be dissolved or temporary prohibited like Communists after the dissolution of the USSR as it is unable to reform. As there is no political will for political changes the crisis is structural and little people have to suffer.

2. Real economy was damaged by excessive growth of  FIRE sector and associated "fictional" economy.  Real economy can't support the current size of FIRE sector and it needs now to downsized. There is no smooth, painless route back to the easy-money based false prosperity of Reagan-Clinton-Bush era (age of leveraging). A new economy needs to be created for sustainable recovery because the old, FIRE-based was unsustainable. In 2010 housing probably will decline further. Both commercial and residential construction continues to decline. States continue to cut back budgets creating negative feedback loop. Personal bankruptcies are up, more defaults are on the horizon. The U.S. economy needs to be re-structured, both on the "technical" and inter-sectoral level. That amounts to a collective, system-wide Chapter 11 re-organization. Obama administration has totally failed to sell the public on the validity of "stimulus", however named. Suspicion that this administration is a puppet of big banks had grown sharply. Trying to kick the can down the road will yield Republican Congressional majorities in both houses.
3. The USA is experiencing the process of separation of workforce into two-tiers, with an elite class of highly paid employees at top companies and a subclass of minimal wage and part time laborers who work for less pay, have less job security and receive fewer benefits.
• Permanent jobs became more rare. There is a steady stream of conversion of full-time jobs to self-employed/part time jobs. Freelancers, independent contractors, consultants, part-timers, contingent employees and the self-employed now make up 30% of the workforce. There are an estimated 42.6 million of them in the U.S., and the number is steadily growing. Independent workers do not qualify for the essential benefits, such as health insurance and retirement protections, that corporate employers have traditionally supplied. Most independent workers don't qualify for unemployment benefits. Many are burdened with unfair taxes.
• Outsourcing of US jobs continues ( albeit at slower pace ) and that shrinks the pool of an elite class employees, especially in IT. Almost ten times difference in salaries of IT workers in Asia and the USA makes outsourcing of various services (for example IT outsourcing) very attractive financially despite problems in a long run. Undocumented workers further distort the picture.
• Part time employment grows at the expense of full time employment and is becoming dominant labor model outside narrow class of elite jobs. Many part time employed are actually hidden unemployed as their earning does not provide for a living wage.
• There has been some evidence of a shift by employers to more temporary workers ("We are all temporary now!"). Increase of temporary workforce is the most trend that signifies a changing employment relations and social structure. Most recent research throw "cold water on the notion" that temporary workers turn into full-time workers. The notion that temp positions help low-skill workers to acquire experience and eventually join the permanent workforce in better long-term jobs. Actually opposite, very brutal process is happening. Many waiter/waitresses has a college degree and are pretty proficient in calculus and/or C language. The US workforce (and Japan's and Europe's) have been increasingly temporary for many years now.
• Even most 'permanent' jobs don't have the protections of seniority etc., and are basically temporary in nature. Due to capturing of the government it can block any significant reforms.
• Labor arbitrage is in full swing working both via outsourcing and undocumented workers/H1B holders. So both high and low wage sectors are under attack. Automation works the same way eating jobs in all sectors (the latest victims are cashiers in supermarkets). Children of baby boomer are about to enter workforce while baby boomers still cling to jobs to compensate for destroyed 401K balances and housing equity.

Essentially net job growth might occur only if three sectors: health, education and government related jobs. Municipalities are under tremendous financial stress and will start shedding jobs in late 2010 when Fed stimulus expires.

Nemesis:

Peak Baby Boomer demographic drag effects and the composition of household spending are structural factors underlying the "new normal".

The composition of household spending is shifting from growth-oriented high-GDP-multiplier spending for housing, autos, durables, and child rearing to maintenance/subsistence, low-multiplier spending for property taxes, house maintenance, insurance premia, out-of-pocket spending for medical services and medications, and utilities.

Moreover, the composition of the labor force is becoming increasingly feminized, if you will, as the fastest growing sectors, education and health care services, are composed of 80-85% female employees, even as the labor force participation rate for males age 24-54 continues a mutli-decade decline to under 90%. If the pattern of the 1930s to WW II and that of Japan from the early '90s to date repeats, males under age 30-35 and over age 50-55 will suffer the highest rates of labor force dislocation, unemployment, underemployment, and loss of occupational continuity.

Thus, as structural demographic drag effects bear down on the US labor force and economy, and males experience lower participation rates and higher unemployment and underemployment, females will become increasingly relied upon by households and by underemployed, unemployed, or retired males to bear a larger financial burden as the debt-deflationary depression persists well into the end of the decade and early '20s.

That females do most of the discretionary household spending, the increasing share of females' after-tax incomes required for household subsistence will further reduce discretionary expenditures for meals out, travel, gifts, apparel, jewelry, etc.

4. Foreign wars have substantial financial costs and are an important drag on the USA economy. In the book True Cost of the Iraq Conflict, Joseph Stiglitz was estimated he cost at three trillion dollars of which probably only one trillion was offset by looting of Iraq resources. Afghanistan is about  $2 billion a week, and unless all heroin trade is controlled by CIA there is little that can offset those costs. This is the longest ongoing conflict in U.S. history. And since Joseph Stiglitz book was written things became worse. The disability rates are higher. The cost of caring for the disabled are higher. Almost one out of two people coming back from Iraq and Afghanistan are disabled. This is an unfunded liability of—we calculate now to be almost a trillion dollars, over$900 billion. So, one of the big ways of reducing our deficit is a—is cut back some expenditures....

With Libya and Syria added to the list, the hidden costs of foreign wars will weight on weakened economics more heavily. Annual cost per soldier oversees is approximately $1 Million per year. • High Costs Weigh on Troop Debate for Afghan War The latest internal government estimates place the cost of adding 40,000 American troops and sharply expanding the Afghan security forces, as favored by Gen. Stanley A. McChrystal, the top American and allied commander in Afghanistan, at$40 billion to $54 billion a year, the officials said. • As Mish noted in his Hidden Cost of War post: Any expectations that Obama would show some sense of restraint about military spending have long ago vanished. "It is my intention to finish the job” translates to "I will blow another$3 trillion war mongering if that is what it takes". And of course Pelosi does not think war idiocy should be at the expense of domestic idiocy.

War mongers want war but they do not want to pay for it. Sadly, Obama, Bush, Pelosi are all alike. Thus, Congress and the Administration is committed to having military idiocy and domestic idiocy at the same time.

God do we ever need a balanced budget amendment and a sound currency. We should not fund a damn thing unless we are willing to raise taxes to pay for it. Virtually no one but the war mongers and the military beneficiaries would be in support of raising taxes to pay for this monstrosity.

5. Rent that hypertrophied financial sector  extracts from the rest of the society continues to be a serious drag on the economy. This drag adds to substantial drag caused by foreign wars and military bases as well as huge military industrial complex. While parasites are omnipresent in nature, two large parasites instead of one might spells trouble for the host. Moreover the ascendancy of the financial sector and the decline of manufacturing in the U.S. ("Casino Capitalism" ) has implications similar to consequences of an organized crime running the country.  The creation of tangible products whose utility/quality can be more or less objectively measured were phased out in favor of "financial products," whose utility/quality is much easier to conceal behind legal/technical jargon and junk economics. That created a huge new class of white collar criminals. While Blankfein is out claiming that GS is doing God’s work, the reality is quite different: it became a training ground for new type of ruthless criminals, much more dangerous then bank robbers. Killing of Glass-Steagall by Clinton and leverage obtained by financial sector operating without regulatory limit created prerequisites to the financial panic of 2008. Glass-Steagall enshrined two principles that were abandoned:

• The first is that there should be financial firewalls between institutions to contain the spread of a panic.
• The second was the that guarantees are limited to sectors with heavy accountability to regulators and with marked financial conservatism in their operations to assure solvency.

The violation of the second principle directly leads to a regulatory capture in which anything goes and a corresponding observed "need" to accommodate indiscretions, as with the Greenspan/Bernanke put. It perhaps should be identified as THE primary cause, since it left Wall Street with the well-founded (LTCM, Latin America debt crisis, etc. ) and since-proved belief that prudence and capital were quite unnecessary, and that reckless, sociopathic deal making is profitable. Four examples :

• Wall Street Bankers will sell any kind of crap to clients. They promoted the pipeline for sub-prime mortgages and manipulated the AAA ratings to move the toxic sludge.
• Finding sub-prime was extremely profitable but they decided to keep more of the profits by buying subprime lender so they could grow faster, manufacture and sell more sub-prime, reap bigger bonuses.
• Making more money than most people could ever dream of, Wall Street decided to leverage up and make five times as much. Push the leverage out to 30-1 and make more money. What Risk? In finance you usually can make mistakes and survive, unless you make mistakes with 30-1 leverage in which case it destroys you.
• Off Balance Sheet vehicles and company sponsored hedge funds was the ultimate Tri-Fecta for selling crap to clients, manufacturing more, and leveraging up. Bear Sterns, UBS, and CitiGroup all had highly publicized sponsored hedge funds which blew up. The sold toxic mortgages to the very best high net worth clients for the typical hedge fund 2%/ 20% profit maximization (banker profit that is) strategy.

A cynic believes that only selfishness motivates human actions. As Gordon Gekko said “Greed is good”. I believe that the bonus structure led Wall Street to line up all the pieces for the clash as fast as they could. Stan O’Neal is the poster child. After presiding over all four of the steps above at Merrill Lynch he was paid $200 million to leave. Where is the clawback! 6. Capture of the government and the media by financial sector makes the necessary reforms unlikely. “Failed Regulatory Oversight” is a politically correct term for corruption. The latter was probably the second reason of the current high unemployment . See Toxic Sludge is Good For You: Lies, Damn Lies and the Public Relations Industry by John C. Stauber 7. Effects of coming CRE crash on unemployment and economy in general might be underestimated of official forecasts. The occupancy rate is the malls and commercial buildings is still declining. Many strip malls in the country are still are empty. Nice office buildings with signs "for rent" are feature of landscape in 2013. Many buildings, even large well designed buildings with datacenter infrastructure are vacant for years and eventually are demolished. A full scale commercial real-estate crash can also hurt the economy in a way similar to residential home estate crash. Loans that were made in 2005-2007 were refinanced for three years in 2009-2011. And again in 2012-2013. But eventually they will be coming home to roost. This also affects the construction sector. Only$400 billion of loans came due by the end of 2009, but nearly $2 trillion was refinanced by 2012. The collapse in the U.S. commercial real estate market is fought by the government will maximum force but government resources to fight the crisis are diminishing too. in 2011 state financial crises led to cuts in state budget. In addition, in June 2013 municipal bonds came under fire, making financing more costly. Commercial debt is approximately one third of the size of the total residential debt and it is concentrated in the same places creating double whammy. In Florida commercial loans, broadly defined, are bigger then residential. Unlike residential real estate, problem with commercial real estate are not solved by growth of population and creation of new families. Retail and white-collar positions will be directly impacted by CRE crash. As stores and offices close, mall and office building owners suffer from cuts in cash flow and severely limited prospects for new tenants. Insurance companies, hedge funds and regional banks are heavily invested in CRE and are next in line so some financial jobs will be lost too. Extend and pretend might work but the question is if there is enough liquidity to stretch loans. 8. Computers eat people jobs. Automation and the recent advances in robotic and computers make more and more workers redundant. The latest victims are cashiers in supermarkets. Manufacturing jobs continue to disappear not only due to outsourcing, but also due to new computerized technologies. The reality is that manufacturing employs a mere 11.5 million workers in the U.S.A., or 9% of the workforce and this percentage will never increase substantially. My feeling is that even in corporate IT after drastic cuts that were the standard game for large corporations in 2008-2009, additional cuts are possible. But the situation on the ground is somewhat paradoxical as real cuts runs deeper that you would assume from headcount: a lot of current IT personnel belongs to "untouchable" caste -- wives of somebody higher up in this or linked by the supply chain company, sons of somebody important and so on. I can't give you percentage, but probably 10%-20% of "untouchables" would be an educated guess. So removing of at least 10% of the current IT workforce means removal of 12% or more those who do actual work. Another factor is that cuts in IT are one way street as they stimulate replacing of people with technology and there are still tremendous potential for computerization of many areas including first of all IT itself. For example all this cloud initiatives are in disguise politically correct way to move things in the direction of higher automation and outsourcing because under the surface there is not much innovation in those "new" technologies. 9. Oil prices despite coming down in September 2011 are back to$85-$90 level. That level is putting additional stress on manufacturing, transportation and agriculture. Solid US growth of the past decade and earlier was dependent on two factors: • asset bubbles to fuel consumer spending • relatively cheap and abundant oil. With the rising oil all bets for re-inflating the economy (aka kicking the can down the road) are off. 10. Indirect job creation strategies via stimulus to businesses seized to produce meaningful job generation. Reaganomics has put the U.S. economy into a high-unemployment equilibrium when the high-rate of labor unemployment is reinforced by the shortage (or absence) of idle, but useful capital stock due to offshoring and outsourcing as well as chronically low consumer demand due to high level of debt. Only service sector and financial jobs can be generated with minimum capital infrastructure (for financial jobs internet connection and computer are almost all that needed). Automation of production lead to less and less workers. 11. Confidence is really low. Businesses have no confidence that customers ever return, therefore are not hiring much and scaling down the production. This chicken-egg-chicken-egg cycle has to be broken, but I am really puzzled how that is going to happen without large government role in the economy, which is big no-no for ideological consideration (the USA preaches neoliberalism as a "civil religion" similarly like USSR and other "communist" countries preached Marxism). Without large government projects employees have no confidence in their jobs, therefore are not consuming much. 12. In the face of growing unemployment the current administration proved to be as incompetent as Bush administration in case of Hurricane Katrina. And that means totally incompetent. ### Effects on population Unemployment is a very harsh condition, that traumatize the workers greatly (Sliding into the Great Depression) At first the unemployed searched eagerly and diligently for alternative sources of work. But if four months or so passed without successful reemployment, the unemployed tended to become discouraged and distraught. After eight months of continuous unemployment, the typical unemployed worker still searches for a job, but in a desultory fashion and without much hope. And within a year of becoming unemployed the worker is out of the labor market for all practical purposes: a job must arrive at his or her door, grab him or her by the scruff of the neck, and through him or her back into the nine-to-five routine if he or she is to be employed again. The USA as a whole is facing the worst labor market prospects since 1929. In terms of duration of elevated unemployment we already rival the early 80s. But in no way we can expect a steep decline in the rate of unemployment in the way that happened in 1983 when unemployment declined at a brisk 2%. And permanent high unemployment creates economic conditions that feel like the USA brought back slavery. The new reserve army of the unemployed drives wages down, while average productivity continues to rise, as a way to generate surpluses to be channeled into executive bonuses. The whole sectors like IT were decimated by outsourcing. Unfortunately given the current overcapacity and ample supply of qualified job seekers in many occupations, I certainly don't expect labor arrangements and employment conditions to become more favorable. Looks like 7% unemployment is going to become the "new normal". In any case government statistics is very suspect (see Fake Employment Statistics) and actually unemployment is higher. For example, the declining participation in work force means that actual unemployment rate is higher then reported. Obama-Bush administration saved banks waiting most of taxpayers money and piling up debt in hopes that they restore credit flow in the economy. But this was a fallacy: banks aren’t lending to prospective home buyers, small businesses and real estate developers because bankers recognize the obvious — many of those loans won’t get repaid. Of course, as bankers refuse to lend, the stagnation becomes a self-fulfilling prophecy. But since society is burdened with too much debt, piling on more debt would not be the solution in any case. There is no smooth, painless route back to the easy-money based false prosperity of Reagan-Clinton-Bush era (age of leveraging). We entered the age of deleveraging. Obama’s “you owe us” message to the banks is the height of naïveté’ and tells us a lot about him. In 2013 our problems are worse than they were in 2007 before the crisis. Peak credit is as dangerous for the economy as peak oil... ### Corruption of economic profession The inability of the economics profession to forecast unemployment in the short, medium, or long run would be downright comical, if not for the human tragedy involved. While the Occam Razor approach suggests incompetence as a culprit, I think it's a manifestation of the corruption of the profession by financial interests (with some "don't rock the boat" variations). First of all, economists much like elected officials and Wall Street executives have a vested interest in keeping the perception of a robust economy. The employment data announced each month are critical to this perception. That's why government "prints up jobs out of thin air" the same way the Federal Reserve prints money. This is economic propaganda and as such it is not that much different from the over-stated earnings practiced by companies of all striped and colors. The second problem is that fiscal policy cannot solve the problem of job creation in all circumstances, especially in deleveraging environment. Position of people like The Fed Can Help, But Fiscal Policy Is The Key To Job Creation ) is a step in right direction. But without something like Jobs Corps to get out of the current situation is very difficult. In 1982 SETH S. KING wrote in NYT (PROPOSAL FOR JOB CORPS RECALLS ROOSEVELT PLAN): Few of this city's recent celebrations of Franklin Delano Roosevelt's 100th birthday have passed without nostalgic references to the Civilian Conservation Corps, that President's cherished vehicle for getting thousands of jobless, hungry youths off the streets and putting them to work refurbishing the nation's parks and forests. With today's unemployment rate nearing a postwar high and new thousands of young people again unable to find work, Congress is preparing to wrestle with the Reagan Administration for money to start a new youth job training program and reconstitute the Job Corps, the pale copy of the old C.C.C. that emerged in the Carter days. But there is little in these plans that is likely to reproduce those Depression era pictures of sturdy, bare-chested young men planting trees, building bridges and saving the nation's battered farmlands. Nor is today's procedure-encumbered Washington, where a year usually elapses between idea and action, likely to duplicate the astonishing start on the C.C.C., which four months after being conceived had been approved by Congress and had more than 300,000 young men being clothed, housed, fed and paid$30 a month while they breathed all that fresh air.

In this crisis the main lesson was that theologically captured by free market fundamentalism government can destroy economy at a really staggering rate. This is "Back in the USSR" situation. Eight years of Clinton and eight years of Bush administration (see The Economic Consequences of Mr. Bush, by Joseph E. Stiglitz) are as good proof of this as one can ever get. Clinton and Bush regimes (especially Rubin-Greenspan alliance and "vice president from an undisclosed location" activities)  proved to be a real wrecking crew. But that does not mean that government cannot put it weight on easing the unemployment burden. Incentives such a investment tax credit matters. Not tax cuts for the rich, but direct investment credit. direct job creation which is anathema to market fundamentalism would be even better and less costly. Roosevelt administration did it, so why not capitalize on positive experience and develop it further ?

 In this crisis the main lesson was that theologically captured by free market fundamentalism government can destroy economy at a really staggering rate.

In any case socializing losses and privatizing gain (crony capitalism) should be downsized. Insurance for gambling by big banks should be cut.

As long as economists believe their report card is the rise in GDP (GDP Mania), we will remain in a failure mode. A country is not defined by GDP but by the quality of life of its citizens. And quality of life cannot be assessed by a simplistic, one-dimensional metric such as GDP. The key dimensions for well-being are: employment, earnings, wealth, health, infrastructure, and living conditions. In that particular order. With employment as the critical factor: the USA looks like an underdeveloped banana republic by the current measure of unemployment and in many respect has became such.

It looks like high persistent unemployment became the defining feature of this recession. Jobs creation prospect in 2014 look pretty grim -- there is no sector other then government that can absorb redundant workforce and automation in manufacturing makes sure that those who are unemployed right now will stay unemployed in the foreseeable future. Most jobs cut are permanent, not temporary, especially in such sectors as IT (structural shift). As Robert Reich noted:

...The basic assumption that jobs will eventually return when the economy recovers is probably wrong. Some jobs will come back, of course. But the reality that no one wants to talk about is a structural change in the economy that's been going on for years but which the Great Recession has dramatically accelerated.

Under the pressure of this awful recession, many companies have found ways to cut their payrolls for good. They’ve discovered that new software and computer technologies have made workers in Asia and Latin America just about as productive as Americans, and that the Internet allows far more work to be efficiently outsourced abroad.

This means many Americans won’t be rehired unless they’re willing to settle for much lower wages and benefits. Today's official unemployment numbers hide the extent to which Americans are already on this path. Among those with jobs, a large and growing number have had to accept lower pay... Or they've lost higher-paying jobs and are now in a new ones that pays less.

The current crisis also means that financial services and real estate (FIRE) economy, this gigantic casino that the US government was trying to build for the last 25 years is now in trouble and shed workers in vast numbers (although working condition in financial industry are still good or very good depending on your position in the food chain). But the profitability of large banks and can achieved only by oversees expansion and derivatives games with foreign assets. The most profitable essentially converted themselves into hedge funds, getting most profits from trading operations, not from the traditional banking activities.

The simplest and the most obvious solution in the current situation is to cut work week and hours of work (4 days six hours a day). That will put enough people to work to make unemployment bearable and it might slightly help entertainment and hospitality industries which now is suffering more that others. From the other point of view if lower standard of living is inescapable, why not to make the transition smoother and more fun by cutting work hours.

### Military Keynesianism no longer works

But that's not enough. The USA needs drastically cut military budget. Military Keynesianism no longer works as expected.  As John Maudin in his e-letter proposed (see Thoughts on the Economy- Problems and Solutions):

Mauldin: Unemployment is likely to continue to rise and last longer than ever before. We have to take care of the basic needs of those who want work but can't find it. Unemployment insurance should be extended to those who are still looking for work past the time for benefits to expire, and some program of local volunteer service should be instituted as the price for getting continued benefits after the primary benefits time period runs out. Not only will this help the community, but it will get the person out into the world where he is more likely to meet someone who can give him a job. But the costs of this program should be revenue-neutral. Something else has to be cut.

Mish: Can we deal with 15 million volunteers? Somehow I doubt it.

Mauldin: We have to re-think our military costs (I can't believe I am writing this!). We now spend almost 50% of the world's total military budget. Maybe we need to understand that we can't fight two wars and support hundreds of bases around the world. If we kill the goose, our ability to fight even one medium-sized war will be diminished. The harsh reality is that everything has to be re-evaluated. As an example, do we really need to be in Korea? If so, why can't Korea pay for much of the cost? They are now a rich nation. There are budgetary fiscal limits to being the policeman for the world.

Mish: Bingo. We can easily slash our military budget by 70% and still be the most powerful nation in the world. Moreover, it is time to declare the war in Iraq and Afghanistan over, pack our bags and leave. Gradually, over the next 5-8 years we should bring home all our troops from literally every county they are stationed.

This chart shows the absurdity of our spending.

Chart courtesy of Global Issues - World Military Spending.

By the way that chart does not include the latest increase in the US military budget. Please consider US lawmakers pass 680-billion-dollar defense budget bill

The US House of Representatives passed a 680-billion-dollar defense authorization bill on Thursday that includes funds to train Afghan security forces and more mine-resistant troop carriers.

Lawmakers defied President Barack Obama's veto threat and approved 560 million dollars to continue work on an alternative engine for the F-35 fighter jet built by General Electric and British manufacturer Rolls-Royce.

The compromise legislation would also raise military pay by 3.4 percent -- half a percentage point higher than Pentagon recommendations -- and assign 6.7 billion dollars for mine-resistant armored vehicles known as MRAPs, which is 1.2 billion dollars more than the administration had proposed.

Nearly $700 billion dollars of "defense" spending. The amount needed for actual defense is 20% of that at most, and more likely 5%. Balancing the budget is easy if you start here. Mauldin: Glass-Steagall, or some form of it, should be brought back. Banks, which are subject to taxpayer bailouts, should not be in the investment banking and derivatives-creating business. Derivatives, especially credit default swaps, should be on an exchange, and too big to fail must go. Banks have enough risk just making loans. Leverage should be dialed down, and hedge funds selling what amounts to naked call options in any form, derivative or otherwise, should be regulated. Mish: What we need to do is get rid of the Fed, FDIC, and fractional reserve lending. Regulation has failed every step of the way. Regulation created Fannie Mae, Freddie Mac, and the Fed. Regulation by the SEC anointed Moodys, Fitch, and the S&P as debt rating companies. We do not need more regulation, we need less regulation, a sound currency, and no Fed. Regulation is clearly the problem, yet the cries for still more regulation come from nearly every corner save the Austrian economists. Mauldin: Let me see, is there any group I have not offended yet? But something like I am suggesting is going to have to be done at some point. There is no way we can continue forever on the current path. At some point, we will hit the wall. The fight between the bug and the windshield always ends in favor of the windshield. The bond market is going to have to see a credible effort to get back to a reasonable deficit, or we risk a very difficult economic environment. The longer we wait, the worse it will be. Mish: "Is there any group I have not offended yet?" Yes. You failed to offend those on public pension plans. Not to fear, I did that myself in Five Major Pension Problems - One Simple Solution. Unsolvable Problems • Expecting 8% returns in a 4% world. When 30 year treasury bonds are yielding 4%, the dividend yield of the S&P 500 is 2%, and the S&P 500 PE is 140 (26 if you use operating earnings), 8% returns are from Fantasyland. • Pension benefits start too early. People are living longer. • Private employees do not receive these kind of benefits. Public employees should not either, especially at taxpayer expense. • Indeed, continuing to chase high-yield in a low-yield world is a guarantee those plans will blow up again down the road. • Pension plans are so underfunded that it is virtually impossible to catch up, no matter what risks the plan managers undertake. When asked how long it would now take for its investments to put the fund back on track, Ohio officials simply said: "Infinity."  Top Visited Your browser does not support iframes. Switchboard Latest Past week Past month ## NEWS CONTENTS ## Old News ;-)  Index 2017 2016 2015 2014 2013 2012 2011 2010 2009 #### [Mar 23, 2019] College admissions scandal Wealthy parents told to make deal or face more charges - Los Angeles Times ###### Mar 23, 2019 | www.latimes.com Federal prosecutors are seeking potential deals with some of the wealthy parents charged in the sweeping college admissions scandal as investigators continue to broaden the case, according to multiple sources with knowledge of the situation. One source said some of the parents are being given a short window to consider a deal or potentially face additional charges. It's unclear which parents prosecutors hope to seek out for cooperation, but sources said authorities were interested in getting a better picture of how the scam worked. The sources requested anonymity because they were not authorized to speak publicly on the matter. #### [Mar 22, 2019] America's Apartheid of Dollars ##### Notable quotes: ##### "... The divisions can always be jacked up. "My opponent is a white nationalist!" and so he doesn't just think you're lazy, he wants to kill you. Convince average Americans to vote against their own interests by manipulating them into opposing any program that might benefit black and brown equally or more than themselves. ..." ##### "... Listen for what's missing in the speeches about inequality and injustice. Whichever candidate admits that we've created an apartheid of dollars for all deserves your support. ..." ###### Mar 22, 2019 | www.theamericanconservative.com The birth lottery determines which of those three bands we'll sink or swim together in, because there is precious little mobility. In that bottom band, 81 percent face flat or falling net worths ( 40 percent of Americans make below$15 an hour) and so aren't going anywhere. Education, once a vehicle, is now mostly a tool for the preservation of current statuses across generations, to the point that it's worth paying bribes for. Class is sticky.

Money, not so much. Since the 9.9 percent have the most (except for the super wealthy at least), they have the most to lose. At their peak in the mid-1980s, the managers and technicians in this group held 35 percent of the nation's wealth. Three decades later, that fell 12 percent, exactly as much as the wealth of the 1 percent rose. A significant redistribution of wealth -- upwards -- took place following the 2008 market collapse, as bailouts, shorts, repossessions, and new laws helped the top end of the economy at cost to the bottom. What some label hardships are to others business opportunities.

The people at the top are throwing nails off the back of the truck to make sure no one else can catch up with them. There is a strong zero sum element to all this. The goal is to eliminate the competition . They'll have it all when society is down to two classes, the 1 percent and the 99 percent, and at that point we'll all be effectively the same color. The CEO of JP Morgan called it a bifurcated economy. Historians will recognize it as feudalism.

You'd think someone would sound a global climate change-level alarm about all this. Instead we divide people into tribes and make them afraid of each other by forcing competition for limited resources like health care. Identity politics sharpens the lines, recognizing increasingly smaller separations, like adding letters to LGBTQQIAAP.

Failed Georgia gubernatorial candidate Stacey Abrams, herself with presidential ambitions, is an example of the loud voices demanding more division . Contrast that with early model Barack Obama at the 2004 Democratic National Convention, who pleaded, "There's not a black America and white America and Latino America and Asian America; there's the United States of America."

The divisions can always be jacked up. "My opponent is a white nationalist!" and so he doesn't just think you're lazy, he wants to kill you. Convince average Americans to vote against their own interests by manipulating them into opposing any program that might benefit black and brown equally or more than themselves. Keep the groups fighting left and right and they'll never notice the real discrimination is up and down, even as massive economic forces consume all equally. Consumption becomes literal as Americans die from alcohol, drugs, and suicide in record numbers .

Meanwhile, no one has caught on to the fact that identity politics is a marketing tool for votes, fruit flavored vape to bring in the kiddies. Keep that in mind as you listen to the opening cries of the 2020 election. Listen for what's missing in the speeches about inequality and injustice. Whichever candidate admits that we've created an apartheid of dollars for all deserves your support.

** The author doesn't really drive for Uber but his conversation with the Spaniard was real.

Mr Van Buren. This piece nails it. The Democrats made a huge mistake focusing on race and LGBTQ instead of class. Their stated goal should be to replace race based affirmative action with class-based programs.

If there is serious violence coming to America it will come during the next major recession/financial crisis. The ARs will come out of the closet when, during the next financial crisis, the elites are bailed out (again), yet the riff raff lose their homes and pickups to foreclosure.

I am very pessimistic in this area. I believe the elites, in general, are agnostic to SJW issues, abortion, job loss, BLM, religious liberty, and on and on. The look at the riff raff with amusement, sparring over such trivial things. Meanwhile, the river of cash keeps flowing to their bank accounts.

Imagine if the digital transfer of money was abolished. Imagine if everybody had to have their money in a local bank instead of in an investment account of a major bank. Imagine if Americans saw, day after day, armored vehicles showing up at local banks to offload sacks of currency that went to only a few individual accounts held by the very rich.

Instead, the elites receive their financial statements showing an ever increasing hoard of cash at their disposal. They see it, but nobody else does. However, if everybody saw the river of wealth flowing to the elites, I believe things would change. Fast. Right now this transfer of wealth is all digital, hidden from the view of 99.99% of Americans and the IRS. And the elites, the banking industry, and the wealth management cabal prefer it that way.

It's easy to propose the ultimate goal of the elites is to have a utopian society to themselves, where the only interaction they have with the riff raff is with subservient technicians keeping it all running. Like the movie Elysium.

https://youtu.be/QILNSgou5BY

Oleg Gark , says: March 22, 2019 at 8:22 am
When feudalism comes to America, it will be justified by Libertarianism. With government defined as the bad guy, there's nothing to stop the 1% from organizing everything to their own benefit.

On the other side of the political spectrum, identity politics emphasizes people's differences and tribal affiliations over their shared citizenship. This prevents them from making common cause.

Fundamentally, these trends make the body politic so weak that it becomes susceptible to takeover by authoritarians that represent narrow interests.

Johann , says: March 22, 2019 at 8:31 am
"His skin was clearly a few shades darker than mine, though he pointed out that was only because my relatives came from the cold part of Europe and he came from the sunny part."

The Spanish in Europe got their color from the Moorish invasion, not the sun.

More of my annoying trivia that has little to do with the subject of an article.

John D. Thullen , says: March 22, 2019 at 9:15 am
Welp, the Democratic Party, by and large, believes all Americans regardless of class, race, religion, and gender should have guaranteed equal access to affordable healthcare, a substantial minimum wage, education and the rest.

Stacy Abrams wants these items too, along with equal access to the voting franchise.

"Until slavery was ended in the United States, human beings were legally considered capital, just like owning stocks and bonds today. But the Spaniard knew enough about history to wonder what reparations would be offered to the thousands of Chinese treated as animals to build the railroads or the 8,000 Irish who died digging the New Basin Canal or the whole families of Jews living on the Lower East Side of New York who were forced to employ their children to make clothing for uptown "white" stores. Later in the same century, wages were "voluntarily" cut to the bone at factories in Ohio to save jobs that disappeared anyway after the owners had wrung out the last profits."

That would be an excellent point if your inner Spaniard concluded reparations should be offered to the others as well, but ends up being merely tendentious if he contends that no one gets reparations.

But will you like it if the Democratic Party makes that part of their platform too?

I was born in Middletown, Ohio alongside the elegiacal hillbillies, who, by the way, didn't care for the blacks on the other side of the tracks anymore than my Armco-employed grandfather did, and certainly the business owners who disappeared the jobs and cut wages while voting for the so-called free traders were of the same ilk.

I didn't know any Democrats among any of my family's circle and, by the way, Middletown might as well have been south of the Mason Dixon anyway for all the white Democrats in town who gave not a crap about their fellow black citizens, certainly not the business owners who disappeared the jobs while voting for the so-called free traders.

It was the Republican Party (Larry Kudlow, I'm gunning for you) who championed creative destruction and the red tooth and claw of unfettered worldwide competition without asking, in fact jumping for joy, what the unintended consequences would be because the consequences were intended smash the unions for all, cut wages and benefits and hand the booty to shareholders, move operations to lower-tax, lower wage, environmentally unregulated parts of the globe to manufacture them thar high margin MAGA hats for the aggrieved.

What a beautiful grift!

Hello, Marianas.

That Democrats jumped on the bandwagon is no credit to them, especially while assuming the prone position as the republican party frayed the safety net.

True, the republicans laid off everyone, regardless of race, gender, and class and then cut everyone's benefits.

How equable of them.

TomG , says: March 22, 2019 at 9:44 am
As the Spaniard rightly understood, one can look way back into our history and see that the moneyed class has always used identity politics in economic control games to divide and conquer. That the Republicans rail on this as some evil creation of the modern Democrat is laughable at best. That the sheep who follow the party mouth pieces of the moneyed class in this media age can still be so easily manipulated is rather pitiful. Making common cause for the general welfare has never really sunk in as an American value.

Divide and conquer remains our true ethos. As the dole gets evermore paltry the only seeming options remaining are common cause for a common good or greater violence. One requires us to find a contentment beyond the delusional American dream of becoming that 1 to 10%. The other just requires continued anger, division and despair.

JoS. S. Laughon , says: March 22, 2019 at 10:12 am
Ironically the view that race/culture isn't at all important and should be disregarded in view of the class division (a "distraction"), is pretty much endorsing the classic Marxist critique.
ProletroleumCole , says: March 22, 2019 at 10:27 am
It's easy to notice divide and conquer when it's hate against those of the same class but are of a different culture/race.

But what's *difficult* to notice is identifying with the elites of your race in a positive way.
A lot of people, especially with the onset of realityTV, tend to think rich people are just like them (albeit a little smarter). The methods and systems to keep power aren't considered. They're made non-threatening. So many billionaires and politicians act effete today to stoke this image.

Lynn Robb , says: March 22, 2019 at 10:31 am
"Whichever candidate admits that we've created an apartheid of dollars for all deserves your support."

So we're supposed to vote for Bernie Sanders?

Connecticut Farmer , says: March 22, 2019 at 11:30 am
" Whether your housing is subsidized via a mortgage tax deduction "

This jumped off the screen. I wonder how many people even realize that. Probably the same number who still believe that social security is a "forced savings".

Connecticut Farmer , says: March 22, 2019 at 11:47 am
Not to put too fine a point on it but clearly we are wasting our time arguing. As long as the current system of government remains in effect it will be same old same old.

Many changes are in order–starting with this archaic remnant of a bygone era called "The Two Party System".

Lert345 , says: March 22, 2019 at 12:05 pm
Spaniards are indeed Hispanic. The definition of Hispanic relates to a linguistic grouping – that is, relating to Spain or Spanish speaking countries. Your friend would indeed qualify for all sorts of preferences according to the definition.

As to being a POC, I could not locate any definition as to what threshold of skin tone qualifies someone as a POC. I wager none yet exists but will be forthcoming.

Johann

As for the skin tone of Spaniards, many in the south have the Moorish influence,however, in the rest of the country skin tones range from light beige to very fair. Rather similar to Italians, actually.

Dave , says: March 22, 2019 at 12:18 pm
First, kudos to Van Buren for getting a Seamless delivery while driving. That's not easy to coordinate. Second, I look forward to more conservative policies addressing poverty, drug addiction and access to health care. This article adds to the 10-year rant against what Democrats have done or want to do.

Like nearly every Republican of the last 10 years, Van Buren offers none here. But I'm sure once the complaining is out of his system, they will arrive.

david , says: March 22, 2019 at 12:31 pm
" Whether your housing is subsidized via a mortgage tax deduction "

Sorry, not taking your money is NOT subsidizing!

I thought this is a "conservative" idea to begin with? Apparently, it is not true even here.

Jealousy that others can keep their money is driving the worse instinct of many republicans.

Sigh.

Vincent , says: March 22, 2019 at 12:32 pm
Your Spaniard friend also has it all wrong. The real division line is between those willing to initiate coercion for their own self-righteousness and those who refuse to. Anyone that supports government is one-in-the-same, regardless of color or class.
LouB , says: March 22, 2019 at 12:35 pm
Thirty years ago I'd be asking who printed the canned response pamphlet to give prepared talking points to enable anyone to provide quick sharp tongued witty criticisms of anything they may encounter that didn't tow the party line.

Sharp article, thanks.

JonF , says: March 22, 2019 at 12:42 pm
The Moors were a tiny class of invaders who left rather little imprint on the Spanish genome. That was true of the Romans and the Goths as well. Spanish genes are mostly the genes of the pre-Roman population: the Iberians in the south (who maybe migrated from North Africa), Celts in the north, and the indigenous Basques along the Pyrenees.
WorkingClass , says: March 22, 2019 at 2:27 pm
Yes. And thank you. It's a class war and the working class, divided, is a one legged man in an ass kicking contest.
Carolyn , says: March 22, 2019 at 3:36 pm
Outstanding piece!
Dave , says: March 22, 2019 at 3:39 pm
What happened to "a rising tide lifts all boats"? We've been promised for decades that the wealth generated by those at the very top would "trickle down." This was a cornerstone of Reaganism that has been parroted ever since.

There have been naysayers who say that that theory was fantasy and that all we would have is increased wealth disparity and greater national deficits.

How peculiar.

Peter Van Buren , says: March 22, 2019 at 4:06 pm
A rising tide lifts all yachts.
-- author Morris Berman

#### [Mar 18, 2019] Middle Class Once Meant Stability and Now Means Fragility

##### "... The British middle class seems to have been mostly people living on investments -- not in the manorial style, but with enough to have a flat, and a servant -- in a style that you might associate with Sherlock Holmes. A middle class that included people with jobs definitely seems post-WWII, and, of course, since the wage stagnation starting in the mid 1970's, it's mostly ended by now. ..."
###### Mar 18, 2019 | www.nakedcapitalism.com

By Alissa Quart, Executive Editor, Economic Hardship Reporting Project. Cross posted from the Institute for New Economic Thinking website

feel that being middle class is not what it once was and that we are all running in place as fast as we can to stay the same, to quote Alice in Wonderland's Red Queen," Brenda Madison, an art director and graphic designer in Laguna Beach (Orange County), told me. "Never did I think I would worry that Social Security and Medicare may not be available in my future or that a medical injury or unexpected repair would bankrupt us."

She and her husband, now in their middle years, "are not sure we will be able to retire in our home."

Patricia Moore is a single mother of three who lives in a two-bedroom apartment in Los Angeles and a licensed vocational nurse working in hospice about to take the licensing exam to be a registered nurse. Due to a shortage of space, she sleeps on the couch and is "still struggling to make ends meet." Her rent is $1,598 a month, her pay is about$3,200, and her student loan payback is $375 a month. Moore recently has had to resort to a GoFundMe campaign so she could stay home with her daughter during a monthlong health crisis, and has at times had to donate plasma. She said she is unable to provide "the extras for her kids." Moore began to enter her youngest son in focus groups in office buildings or hotels in neighborhoods like Beverly Hills. Sometimes he would make$75 an hour and the whole family would eat from buffets, the kind with cantaloupe, and maybe they'd also get a gift card. At first, he tested toys and then video games but also an MRI to map his brain. It was only because of these gigs that Moore could finally say, "Go buy yourself something," to her children.

The extreme cost of living has forced some California families to take unusual steps like this. As the Department of Housing and Urban Development recently reported, a family of four in the San Francisco metropolitan area making $117,400 a year qualifies as "low income." These were Americans for whom the meaning of middle-class life had altered from something stable to implied economic fragility. Their burdens were the price of health and child care, educational debt or a housing market gone berserk. They wanted job security, pensions and Social Security and unions, but these things seemed like a fantasy out of a mid-century American novel like "The Man in the Gray Flannel Suit." The middle class' long historical association with the status quo -- strongly identifying with institutions or corporations, rejecting restive discontent -- has made their new wobbliness all the more startling to them. But when did that vulnerability start? Toward the end of the past century into this one, there was a rise in what author Barbara Ehrenreich has called a "fear of falling," an anxiety among the professional-managerial class about downward mobility. I think of fear of falling as the opposite side of the coin of American individualism and its historic promise of social and economic progress. Since the 1980s, some members of the middle class have gone "from a kind of security to being reduced to the kind of economic unstable state that working-class Americans have had to experience forever," explained Caitlin Zaloom, an anthropologist at New York University who studies the middle-class financial experience. The office or academic job started to resemble the precarious work life that working poor Americans have long understood to be their lot, she said. And then there are the robots waiting in the wings to take their ostensible share of middle-class jobs, and soon. This new fragility is one theory to explain the 2016 election of Donald Trump. Trump voters were sometimes mistaken for all hillbilly elegiac or Rust Belt proletariat. In truth, an estimated 38 percent of white people with bachelor degrees voted for the man -- closer to "office worker elegy." Indeed, as much as Trump's messaging has been jingoistic or racist, he has also been addressing middle-class anxiety when he continually repeated that the system is "rigged." While some have protested that Trump's success has more to do with loss of status or rank bigotry, Johns Hopkins University sociologist Stephen L. Morgan has conducted studies that reveal one substantial motivator of the Trump vote was economic. He noted that a successful national Democratic candidate would be one who appealed "to people who have not fared well in the postindustrial economy," such as those in some once-prosperous areas of the Midwest. Ordinary middle-class people's struggles can be, of course, ameliorated by broad shifts, such as adopting a form of universal basic income or a flat monthly cash stipend for familial caregivers of their young or elderly kin. And we should at least explore adopting Medicare for all, to address rising health care costs. We also need to more effectively push for longer paid parental leave -- or, in many cases, any paid parental leave. But if we can't get relief from federal programs or our employers, we will need to craft local or state solutions. Retaining rent stabilization laws is key in our cities, as is building more affordable housing for, say, teachers and municipal workers, so they can continue to live in the places they serve. Finally, I saw when reporting my book that, when squeezed, people revealed their financial woes to others, they tended to then recognize that their obstacles were partially systemic. That, in turn, meant they didn't simply internalize their real-world burdens into self-punishment. They seemed more able to patch together personal solutions -- small-scale child care fixes like sharing pickup with their neighbors, for instance. Simply voicing hopes and difficulties, and making them audible for their leaders to name and address, is a small part of what must happen for things to change. Although for some, these needed transformations may seem to be coming too late. As Madison put it, "We are trying not to think too much about the future." This article was supported by the Economic Hardship Reporting Project and was first published by the San Francisco Chronicle . My ground level observations indicate that there is a lot of "denial" going on in the minds of the putative 'middle class.' One major barrier to the public 'conversations' about the economic malaise affecting America today is the still prevalent custom of shaming the victims of bad luck. I see this tying all the way back to the Calvinist theological concept of "Election," which is an aspect of "Predestination." In effect, one suffers in life because the Deity chooses to make it so. Thus, those who do well in life can "legitimately" look down on those who suffer. It is a perfect excuse for callousness of heart. We read Weber's "The Protestant Ethic and the Spirit of Capitalism" in class in my High School. Written around 1900, it still has merit as a descriptive and predictive tome. Old ideas die hard. marieann , March 18, 2019 at 9:44 am "The rich man in his castle, The poor man at his gate, God made them, high or lowly, And ordered their estate." Just so we know our place and stay there "Capitalism is a that system which has become that which the living are converted to the the living dead." Some of what is perceived as shaming, may just be understood as trying to understand how those with good professions etc. end up that way (and no I don't judge those without "good professions" – I don't think we choose our fate to any real degree see. It's just takes more to understand why is all). Now from the inside some good professions are not really, or have become so niche that that is the story but Acacia , March 18, 2019 at 5:11 am Mod: looks like some issue in the first paragraph Amfortas the hippie , March 18, 2019 at 6:31 am This:"Finally, I saw when reporting my book that, when squeezed, people revealed their financial woes to others, they tended to then recognize that their obstacles were partially systemic. That, in turn, meant they didn't simply internalize their real-world burdens into self-punishment. They seemed more able to patch together personal solutions -- small-scale child care fixes like sharing pickup with their neighbors, for instance." commiseration is new, in my experience. not too long ago, one didn't speak about economic difficulties in polite company at least in the middle class(poor people, oth, sometimes do) that they're finding such behaviour is worrying, as it means the precariousness is spreading which causes cognitive dissonance, since it's counterintuitive according the the Narrative we're all supposed to cling to. to wit, in my recent exposure to network tv in hotels and dr's offices, i note that -- like in the Matrix–a grand illusion of the late 90's is laid across the world. I hear locally upper middle class soccer moms having lunch, and it's oneupmanship all around everything's fine, and we went to the most wonderful resort, in our new suv, and our son married a doctor and they honeymooned as missionaries (!) but it's all nonsense, and everyone knows it.(the quick flash of panic in their eyes, "will the card work?") That was the norm not so long ago all the way down to the dregs of the former middle class. i see the rending of that pretension the misty veil of utopian just-worldism as what's at the root of so many of these dislocations an eruptions of late. "Believe Real Hard" just doesn't cut it any more, and those soccer moms don't know how to think about it. Per Ambrit's reference to Calvinism, at some point reality intrudes and one must climb down from the pillar. jefemt , March 18, 2019 at 9:03 am Becoming They and The Other. It can't happen to me -- I am a Exceptional! ™ (and white). Could Compassion be on the horizon– on the wax as more and more realize they are in the global Lemming-fall rat-race to the bottom ? kareninca , March 18, 2019 at 8:48 pm They're not attending/joining churches because that costs money and they don't have the money. Once there are more "churches" that only cost what people can afford, more people will attend. Just a prediction. Sadly first the great suffering must turn into the great awareness that it's not your fault than love oneself and compassion for all else it's not all illusions, a part of the population is doing pretty well, they take vacations and crap (who even has ANY paid time off anymore anyway? not me. even STAYCATIONS are off the table! Heck getting a cold is pretty much off the table ..). But others But yea the Big Lie Narrative of these times is that the economy is doing well, Trump's economic performance will get him reelected (this economy is total garbage, so F trump and the horse he rode in on), unemployment is low and other BS. The Rev Kev , March 18, 2019 at 6:32 am Lots of sad reading here. But seriously –$117,400 a year qualifies as "low income."? I know that it is true but at the same time that is so stupid on the face of it. I do have to admit here to a weakness for nostalgia – especially for places that I have never experienced but have read about. Sometimes out of idle curiosity I might flick through a few videos like that on America in earlier times and you can see one such clip at

Having said this, I sometimes wonder what would have happened if neoliberalism had spluttered out during the 1970s as a nonstarter of an idea and instead a different timeline had formed. In this one, instead of wages flate-lining back in the 70s, they had kept apace with GDP like they had the previous thirty years. People, more secure in their wages, would never have embarked on the credit boom like they did when wages dropped. In this timeline too the rich are still taxed at 70% which mopped up all the surplus that would otherwise have instead gone on to founding think tanks and money in politics. With an affluent population, there was never was a need to import so much from China and the unions were still strong enough to stop industries being shipped off to there. It would have been a completely different America.

But that is another timeline and we are instead in one where people will soon be in a position where they have nothing else to lose. And that is a very dangerous proposition that. And they still have potentially a very powerful weapon – their numbers. And their votes.

russell1200 , March 18, 2019 at 9:00 am

The 70s were going to be a very tough decade: The loss of our huge post-WW2 advantages in manufacturing, oil shocks, a very expensive war to pay for, and Watergate probably fits in their somewhere.

I am not sure what we did in the 70s and after was exactly neoliberalism, but any restraint shown in the face of the new realities (Carter and his sweaters, Bush breaking his tax pledge) were massively unpopular, and I think that was going to be the case in general – regardless of what path we went down.

The very idea that neo-liberalism was the cause (as opposed to an interaction with) of the root problems I think is indicative of over optimism about our situation. Contrary, I do think it is very reasonable to say that neo-liberalism made the problems worse.

The distinction is important, you can reject our current situation and policies, and still not be particularly convinced that the opposing voices are being more realistic.

After reading "Democracy in Chains" by Nancy MacLean, I'm leaning toward neoliberalism as a cause. It kicked into high gear with Reagan's election in 1980, and Bill Clinton made sure there was no stopping it.

In reference to this from the original post: "In truth, an estimated 38 percent of white people with bachelor degrees voted for [Trump]," I have to say, I think you call those people Republicans, and don't kid yourself. They will do it again.

Carla, thank you, exactly so. The technique of it all was quite insidious, as it was an appeal disguised and self righteous to greed to a two groups: baby boomers and their parents sociology primed for such pitches. Once that genie got out of the bottle there was no getting it back in.

polecat , March 18, 2019 at 1:12 pm

So, will the millenials kill-off the Genie for good .. or will they, in their turn, rub that lamp all the more, to parlay their 3 wishes towards other equally speciously sparklely endeavors ??

super extra , March 18, 2019 at 3:31 pm

we can't 'rub the lantern'; when those in power in 1981 set off down the neoliberal road, the conditions of their wish were fulfilled by debt-enslavement of everyone who came after them to support enriching those who clawed their way to the top.

the only millennial oligarch is Zuckerberg and I don't think anyone believes he is going to maintain his power even half as long as, say, Bill Gates. the only millenials who believe in neoliberalism are paid shills for the elite like Ben Shapiro or Charlie Kirk and by the same Zuckerberg:Gates ratio, they have less than half as much power as a Rush Limbaugh.

Neoliberalism is dead, we're in the gramscian interregnum, at this point I just hope and plead with the infinite that we get Bernie in 2020 instead of Cotton/Creshaw primarying Trump or something awful like that because the familyblogging Democrats refuse to pass the torch in favor of one more term of grift.

russell1200 , March 18, 2019 at 1:32 pm

Rev Kev, who I was responding to, correctly noted that the 1970s were when wages began to drop. Ronald Reagan and Bill Clinton of course come later. This doesn't mean that their policies were not problematic, but it does make it difficult to blame them as the causal agents of something that started in the 1970s.

If you want to blame Johnson/Nixon and their Vietnam War policies, that would make some sense, but they don't seem to me to be poster children for Neoliberalism with one being associated with the Great Society and the other the author of price controls to suppress inflation.

witters , March 18, 2019 at 6:48 pm

When things get a bit tough (and note that in the 70's for all the hype they were not in fact that tough – until govt policy of a NL kind stepped in) – then you have policy choices. If you go NL, then that is a choice, and causally so. (It was usual to hide this causality in TINA.)

scott 2 , March 18, 2019 at 9:15 am

Financialization of the housing market creates obscene rents, leading to less household formation, then the need to "do something" about population decline. Japan is 20 years ahead of us in that regard,

$117,400 a year qualifies as "low income"? Indeed it does here in the SF Bay Area. The surprise of it all is part of the denial – the wife and I look at our family income (usually 10-20% less than that) and are straight up perplexed that it doesn't go as far as it "should". We certainly have a pleasant enough middle-class life, but it feels precarious in a way that we never expected. And we only have that because we have subsidized housing (we live in a house the family has owned for years, so are paying well below the insane market rates). If we had to pay market rates we would be poor, or close to it. We certainly rant to one another about the systemic issues behind this situation, but there are a lot of California liberals who bitterly cling to questionable ideas like a balanced budget or Kamala Harris. I've been wondering when I'll hear a candidate advocating lower home and rent prices – where I live we absolutely need that if we're to keep a semblance of civilization and democracy. ambrit , March 18, 2019 at 11:53 am You have hit on a major 'disrupter' of the body social. "Civilization and democracy" are being willfully sacrificed to the Gods of Profit. That betrayal is a core part of neo-liberalism. Re; lower home and rent prices. For the last 40 years, as the prosperous Great Lakes region became the rust belt, we who live here have been constantly told: if you want a job, just MOVE to where the jobs are. Now are we allowed to say to the mortgage-or-rent-impoverished middle class folks who live on the coasts, "If you want lower house and rent prices, just move to where the lower priced houses and apartments are" ? We got plenty of room for y'all here, honest. And we're mostly midwest-nice, too. Altandmain , March 18, 2019 at 5:34 pm Unfortunately a candidate advocating for lower prices of housing will likely be defeated by thr NIMBY types. JBird4049 , March 18, 2019 at 12:04 pm But seriously –$117,400 a year qualifies as "low income."?

If you are very lucky, and I mean lucky , you might find an old junior one bedroom apartment for the low, low price of $1,500 a month. No patio, no dishwasher, no nothing except a parking spot. This is not exaggeration, sarcasm or humor, but reality. In some places in California it's closer to three thousand dollars. Most of us Californians do not make even fifty thousand and, if we do, we have to live closer to the cities where the well paying jobs are. I keep waiting for the housing bust to arrive for last time the rents dropped as much as thirty percent. Hopefully, I will still be in my apartment, or at least in an apartment when that happens. Another factor is cities not allowing for higher density housing. If somebody has a brownstone or something similar, they will fight tooth and nail against that 6 story apartment building that would allow a lot more people to live in the neighborhood. Under-investment in rapid mass transit also hurts workers commuting to jobs and forces far more cars on the roads and parking spaces. Was the American Middle Class a Cold War thing? pretzelattack , March 18, 2019 at 8:10 am it was certainly precarious in the great depression, seems to thrive in boom periods. the white middle class, and some of the black middle class did well in the 50's and early 60's. that was when the us was economically at the pinnacle of the world, and i think that was because most of the other first world economies were rebuilding from the rubble of ww2. Wukchumni , March 18, 2019 at 8:30 am The only item I can think of that was an import from the Soviet Union and on retail shelves for sale here during the Cold War, was Stolichnaya vodka, and as far as the Peoples Republic of China goes, fireworks. If I didn't finish the food on my plate, my parents would admonish me with tales of people starving to death in China, and indeed they were. ambrit , March 18, 2019 at 11:16 am For me as a child, the starvation place was Africa. I wonder about the psychological motivations that made our parents ignore the suffering right nearby in our own neighborhoods and focus instead on some far away place. Today, that starvation is all around us. I personally feel guilty now that we cannot give very much to beggars and homeless etc. due to our own straitened circumstances. The myth of "The Exceptional Ones" (TM) is still a strong part of the social narrative today. polecat , March 18, 2019 at 1:34 pm I try to do my infinitesmal part, ambrit .. by taking any surplus from the garden, when there IS a surplus that is .. and donate it to the local foodbank. Last year it was 5 full lugs of grapes fresh off the vine, a few yrs before that it was an over abundance of beets. This season it might be potatoes THATs My lifestyle ! All on less than a$35,000 yr combined income. But that means no trips to Cancun, no new Car every couple of years, no DeathCare expenditures, and no mortgage.

I feel humbled every time I make a delivery, especially when I see families in obvious distress w/ young children .. looking for sustenance that they cannot otherwise afford to buy .. it breaks my heart.

ambrit , March 18, 2019 at 4:23 pm

Yes to that. We got a bumper crop of 'volunteer' Muscadines last year. They made good jelly. I should build a trellis or wire support network for the vines this year. With this weather, we should get another good crop.
Living the 'prepper' life has it's compensations.

polecat , March 18, 2019 at 6:31 pm

Our's were primarily muscat as well, what we donated. I ended up canning the rest, turning them into muscat conserves half of which we've already given away to friends and aquaintances. The other grapes, the Mars variety, became raisins, for home consumption.

Everyone should learn how to can .. cuz you never know when just-in-time .. just STOPS !

John Wright , March 18, 2019 at 11:06 am

re: American Middle Class Cold War thing?

Possibly this was a major influence. When the USA had identified large foreign enemies that must be countered (Russia and China) there was an impetus to build in America and keep the USA population engaged with the Russian and "Red" Chinese threat.

The USA was also an oil exporter until 1971, which allowed some control of oil prices.

Globalization was not prominent and I remember the poor quality Japanese tools of the 1960's (and Chinese manufactured stuff rarely seen by me (firecrackers?))

Furthermore we had two large countries that economically were not as advanced as the USA and were not viewed as particularly successful with their flawed Communist systems.

Effectively, China and Russia were playing the game with one hand tied behind their back.

This may also have allowed USA unions to be strong, increasing wages for union and non-union workers.

Perhaps the USA is currently making some other countries focus inwardly on their countries as the USA did in the 1950's and 1960's.

By forcing sanctions on various countries (Iran, Russia, Venezuela) the USA may make them less dependent on global resources and more like the more self sufficient USA of the 50's and 60's.

Very, very possibly. Thanks to Project Gutenberg, I'm reading a lot of fin de siècle novels and literature, e.g. Booth Tarkington.

The British middle class seems to have been mostly people living on investments -- not in the manorial style, but with enough to have a flat, and a servant -- in a style that you might associate with Sherlock Holmes. A middle class that included people with jobs definitely seems post-WWII, and, of course, since the wage stagnation starting in the mid 1970's, it's mostly ended by now.

Harold , March 18, 2019 at 1:53 pm

Middle class always had servants because cost of labor was low. Middle class households sometimes had boarders & often elderly or unmarried relatives.

MisterMr , March 18, 2019 at 9:00 am

"While some have protested that Trump's success has more to do with loss of status or rank bigotry, Johns Hopkins University sociologist Stephen L. Morgan has conducted studies that reveal one substantial motivator of the Trump vote was economic. He noted that a successful national Democratic candidate would be one who appealed "to people who have not fared well in the postindustrial economy," such as those in some once-prosperous areas of the Midwest."

But this is circular reasoning, why would people in the "middle class" think that Trump's policies are better for them than Clinton's policies?

It's not like Trump is a sort of middle class guy himself, in facts H. Clinton is probably more "middle classey" than Trump.

Plus, what does the term "middle class" mean specifically? How are these people different from "working class" or small bourgoise?

Wukchumni , March 18, 2019 at 9:08 am

Middle class to me growing up, meant that the school custodian across the street and 3 doors down from us, could afford to buy a home, or you played little league with the son of a gas station owner, who made enough from his 2 service bays always full (cars weren't nearly as reliable in the 60's) to also own a home.

MisterMr , March 18, 2019 at 1:10 pm

My doubt about the middle class is this: it is a term that various schools/sociologists/economists used to mean very different things, so when someone speaks of the middle class it's difficult for me to understand what he/she is speaking about.

For example:

1) In marxism it generally means the small bourgoise, meaning the small shopkeeper, the farmer who owns his land etc;

2) at times, it just means people of the working class who have good jobs, that is different from the definition (1). The disappearence of the middle class just means the disappearence of good jobs;

3) sometimes (wrongly IMHO) "workers" are supposed to be only blue collar and only without high education, so "middle class" means people who have a degree and are white collars;

etc.

At times these categories can somehow mix but the class interest of someone who is a small business owner is different from the class interest of someone who has a good employee job which might be different from the interest of someone who could have a degree and a sucky white collar job.

So this very general idea of middle class is very confusing IMHO.

@MisterMr -- I think that because EVERYTHING in the good ole US of A is about money, the understanding of a term like "middle class" becomes just about money, too.

When I was young (yes, a long time ago), I was given to understand that "middle class" meant basically people with white collar jobs or jobs that required some professional accreditation: teachers, nurses, lawyers, accountants, etc. "Working class" meant people with blue-collar jobs, even if some of them regularly made more money than a teacher or, say, a nurse. "Upper class" included high-earning professionals, CEO's, and of course those with inherited wealth. Poor, then as now, was the one thing you definitely didn't want to be.

But, as I said, money has obliterated all those fine distinctions of snobbery. Now there is only one: $. JBird4049 , March 18, 2019 at 7:34 pm The label of "Middle Class" in America can be used as either for the social class or for the economic class with the white collar workers generally being both and the blue collar workers being, before the 1950s, working class with working class wages. For about two decades the high and low ends of the income range collapsed with most people being squeezed into the economic middle class regardless of social class. Now, income disparity has destroyed the economic middle class and the classic pyramid shaped map of the social and economic system reappearing. The tiny wealthy elites; the slightly larger service and professional class providing what the elites want; the small number of bureaucrats, lawyers, doctors, mechanics, religious workers and so that any large societies need just to function at all; the greatest numbers are the laboring class, and I don't mean the working class. The mental map of most Americans is stuck on the almost flat pyramid of 1970 in which all classes were getting wealthier collapsing together economically, with the exception of the wealthy not gaining wealth at the same rate as the bottom 99%. Even the poorest blacks finally started to improve economically. That picture is buried somewhere deeeep in our collective heads where the only real differences was what type of job you were going to have and where mistakes, failure, and disaster did not mean poverty. At worst, it meant a change of work or a temporary set back or a change of social class but not economic class. Find that image in your head, yank it out, put a stake in its heart, burn it, and scatter the ashes. That picture died around 1973. Whatever the truth of that image it is long dead. But too many people are trying to pretend that we are not living in a zero sum game of winner take all. John Wright , March 18, 2019 at 11:17 am Trump had the advantage that he was not tagged, directly or indirectly, with Bill Clinton's NAFTA, welfare reform or supporting "Free trade" that seemed to only work well in economists' minds (TPP). Clinton also supported the Iraq War, Libya and other military adventures, and Trump couldn't vote for/against these operations that directly affected their communities. Campaigning Trump called these wars "mistakes" while Hillary C would not. Someone summed the election as "With Hillary you know you are screwed, with Trump you might not be." MisterMr , March 18, 2019 at 1:12 pm Thanks, however it is a fact that a situation of bad economy and increasing inequality, that ideally is supposed to be the main reason to vote left, is causing an upsurge in right-leaning populism instead. And not only in the USA. john Wright , March 18, 2019 at 3:02 pm One could argue that the USA reluctantly moved left in the Great Depression while Nazi Germany and Italy moved right. In the USA, recently the left has been cast as weak and ineffectual. The left doesn't "bring home the bacon" in the minds of many. Bernie is popular, but the knives are out from the establishment pols (of both parties) to do him in. In the USA, moving to the populist right, to me, seems quite understandable. there is no populist right that brings home the bacon in the U.S. either as far as I can see. Theoretically there could be, but theoretically a lot of things, including much more plausibly and likely the rise of a left that brings home the bacon. IOW the trains don't even run on time now. Trump's economy is scarcely better than Obama's (depends on which year though, in the worst of the Great Recession only then was it worse). So if it's really about the economy: then Trump will lose the next election. MisterMr , March 18, 2019 at 1:14 pm IMHO it IS about the economy, but not in the direct sense we mean: if the economy goes on as it is, Trump will be able to spin it as good, whereas a democrat would be toast. But I expect a recession to hit earlier, in which case I think Trump will not be re-elected. Whenever I read articles illustrating the dawning awareness of the middling classes to their extreme precarious social status, I can't help but marvel at the audacity of elites jumping to the front of the protest line proclaiming their desire to "lead" the distraught masses. Even more so, those same distraught workers giving their oppressors the opportunity to do so. That is the definition of a dysfunctional society- rewarding failure. The elites might think themselves clever, and exceptional, for dreaming up such scams, but that dynamic alone goes a long way to explaining the rapid decline of America's prominence in the world. America is consumed by a cynical rot that has firmly entered into the body politic. There is no easy way to excise this cancer, but the answer must lie in some form of national mission. The current American leadership have chosen a militaristic vision of conquest for the nation masked with a marketing program of bringing democracy to the world. This contradictory scam will not work, and there is ample evidence showing just how destructive and impotent this strategy truly is. The rest of the world is moving on, and if Americans don't wise up to the the destructive nature of their system, they will be left behind. Corporations must be in the service of the nation, not the other way around. Corporations must be allowed to die and change, the nation, and its people must prevail over time. It is an obscene contradiction that the American system is reversing this dynamic. The people are allowed to die, while the corporations, and those that control them are allowed to persist. As a working class American, my only desire at this point is for an American elite leadership that has a vision larger and broader than worshiping a bank account. If American workers don't demand a better leadership, history will show them to be worse than peasants, they will be proven to be willful consumerist dupes. America is in an identity crisis- a cultural crisis. That does not bode well for the nation and makes it ill equipped to deal with other nations and the world's problems- let alone our own. Summer , March 18, 2019 at 10:16 am "The current American leadership have chosen a militaristic vision of conquest for the nation masked with a marketing program of bringing democracy to the world." That train officially left the station around 1898. agree although the date closer to 1620 when the militaristic conquest of nations began. Summer , March 18, 2019 at 2:25 pm "masked with a marketing program of bringing democracy to the world." For the USA, those thoughts didn't get put into action until post Civil War "There is no easy way to excise this cancer, but the answer must lie in some form of national mission." here lies the way to better angels and there is no shortage of things that must be done diptherio , March 18, 2019 at 1:36 pm As someone on social.coop said the other day, "they're not 'elites,' they are 'the predatory class'." Joe Well , March 18, 2019 at 10:31 am Thank you for posting this. 1. The author doesn't really explore how rent extraction through housing is the single biggest destroyer of American household wealth, with housing costs outpacing wages almost everywhere. 2. "Explore" Medicare for all? Build "affordable" housing, but only for certain deserving individuals like teachers? It's disappointing that the author chooses to end this with such centrist Dem proposals. There needs to be a right to housing, which means a right to build housing: abolish any zoning that excludes dense residential development. Seize land by eminent domain if necessary. Jerry B , March 18, 2019 at 1:55 pm ===There needs to be a right to housing, which means a right to build housing: abolish any zoning that excludes dense residential development. Seize land by eminent domain if necessary=== Thanks Joe. While I am not an expert in housing, the lack of affordable housing seems to be tied to: 1. As you say zoning laws that exclude dense residential development. 2. Land Use regulations which are probably tied to #1 above. 3. The high costs incurred by residential developers in navigating the byzantine and bureaucratic maze of permits and regulations at the federal, state, and local levels. 4. The speculative nature of the housing market i.e. IMO the housing bubble is driven by monetary policies and the actions of "behind the scenes" lever pullers. If housing is treated as a commodity by the finance sector then the machinations of Wall Street can impact housing prices as they did in the 2008 crash. 5. To my point above, in the far northwest suburbs of Chicago there is a lot of empty office space and light industrial space. So excess supply would tell you that the prices for these properties should go down. Not the case. They are still expensive. If a homeowner is trying to sell their house they will lower the price until it is sold or not sell it. But the same rules do not apply to businesses. To #5 above, again if we "believe" what we are told in Econ 101 about free markets and supply and demand then an excess supply should result in a downward price drop until the excess supply is cleared. God help me! I just typed the previous sentence from memory as if verbatim from my Econ 101 class 30 years ago!! #head on desk! So if office and industrial prices are not dropping then someone has to be holding the "bank notes" as is not concerned about if or when they sell. Basically in short it seems zoning issues and cost issues are the big obstacles in dense residential development. I am not an advocate of relaxing regulations which could result in shoddy and unsafe construction but maybe there is a middle ground. Something needs to be done. polecat , March 18, 2019 at 3:16 pm It's not just dense housing, it ALL housing .. in terms of livability (environs with nature as an active component), and Affordable design/construction with energy efficiency in mind .. on a large enough scale to benefit the public ! There is, for all practical purposes none of that to be had. As it currently stands, you have to be richer than God to do ANYTHING other than the unimaginative and wasteful development that has been built up to this point. So instead of "Where's My flying car??" .. the question might now more accurately be "Where's My passive solar, earthen-berm, strawbale, rammed-earth, or cob house/apartment???" super extra , March 18, 2019 at 3:45 pm 4. The speculative nature of the housing market to expand and maybe add onto this, AirBnb/vacation rentals + rental 'business as income' (at institutional eg Berkshire Hathaway and the associated securitized offerings as well as individuals and small biz creating the 'income stream' via LLC pass through) is a major driver affecting the speculation. What happened to all the foreclosures from a decade ago? They were turned into rentals, they still exist. I am all for an affordable housing mandate, but not in an Obamacare fashion by building tons more housing at crappy inflated prices with some means-tested voucher all so the rentiers can keep their profits. Destroy the rentiers and make housing right, make it a policy that is enforced with regulations and limits on numbers of rental units. Jerry B , March 18, 2019 at 6:49 pm Thanks Super. ==AirBnb/vacation rentals + rental 'business as income' (at institutional eg Berkshire Hathaway and the associated securitized offerings as well as individuals and small biz creating the 'income stream' via LLC pass through) is a major driver affecting the speculation=== To your point there was a recent article on NC that discussed your comment above. Across the street from the townhouse subdivision where my wife and I live is a subdivision of$275K – $350K houses. One of the more expensive houses was sold a year ago to a company that uses it for a rental. I talked to the previous owner frequently while walking our dog, and he sold the house after it had been on the market for only about a month. As far as the previous owner was concerned the house sold for close to his asking price so he was happy. He had no concern about selling the house to a company that was going to use it for a rental. The previous owner had been living in that house in that neighborhood for 25 years and seemed to know most everybody in his subdivision. He and his wife raised their two sons in that house and also put a lot of time and effort into the landscaping around the house. The rental company that bought the house does the absolute minimal landscaping of the house and barely mows the lawn on a semi regular basis. The company clearly does not have any regard for the "appearance" of the house or the neighborhood. Which is a shame because the other houses near it are well maintained which, due to the lack of landscape maintenance, makes the "rental company" house an eyesore as far as grass, weeds, etc. are concerned. I do not begrudge the previous owner for selling to the rental company. His asking price was met so he was happy. And in the last few years, other houses in that subdivision have taken 1-2 years to sell. What I have an issue with is these vulture rental companies acting as mercenaries and treating houses and the neighborhood as so much fodder on a balance sheet. One could also make the argument that without the rental company sticking it's nose where it does not belong, the (ahem, cough, cough) free market would have been allowed to work somewhat. By that I mean if this particular house had also taken a long time to sell like the others in that neighborhood, and had subsequent price reductions in order to sell it, then maybe the average housing price in that neighborhood/town/suburb would have gone down helping affordability. justsayknow , March 18, 2019 at 11:03 am From the Business Insider published today: "In fact, the typical CEO made a whopping 312 times their median employees' salary in 2017, according to the Economic Policy Institute." Note that is vs median salary not lowest paid. The self serving disconnect between the management class and labor class is truly amazing. Work is not valued. And the contribution to productivity is extracted and given to ownership. It's not income inequality we should emphasize but simple fairness. Let's call it Income Fairness. anon y'mouse , March 18, 2019 at 11:35 am "fairness" is too vague and insubstantial a concept around which to base any kind of rights, much less what some should get or we should do as a society. we once thought it was "fair" as a society to enslave people. after we stopped that (and not because it wasn't "fair", but as a political move), we thought it was "fair" to continue to deny them many of their rights because they weren't "white". huge numbers of us still think it is fair that people die from various issues caused by their "unwillingness to work" or "unwillingness to work smarter". how many times do people say "if you don't get more education, you can just shut up about earning enough to live on. working at McDonald's, you are slacking and therefore can not demand anything. go to school, fool!" people argue all of the time that a "living wage" is not fair, because a person who does low-value jobs isn't making enough money for their employer to justify the wage (basically, profit produced by that employee would either be nil or zero). and that is perfectly "fair" to these arguers. fair is the idea that some deserve more and some less, due to something being "earned" by someone. it is a nice idea to teach children. real world morality is much more complicated than that, and a society of justice and laws and policies and bureaucracies can not be based around that. waaay too nebulous, and open to interpretation. everyone -knows what "fair" is- when they see it, because everyone's definition of "fairness" is different. as some kind of lofty ideal, it is fine. in practice, it is meaningless. Robin Kash , March 18, 2019 at 11:57 am Is this simply a Rip van Winkle account of the middle-class situation that has been well-reported and vigorously commented upon for some time? What am I missing? ambrit , March 18, 2019 at 12:32 pm The shift came when ol' Rip realized that the rumbling sound he heard was not the sound of the ghostly sailors bowling but the sound of distant cannon fire. Another Amateur Economist , March 18, 2019 at 2:04 pm The middle class stands upon the floor provided by the working class. And that floor is failing, as the human capital of society is gradually, but with increasing rapidity, plundered, from the bottom up. The poor used to have more than they do now, and be less dependent on government redistributions of income. Even the middle class owns less productive capital, as the small business owners who used to populate the main streets of American towns have been driven out of business by the Walmarts. Those businessmen were the social elites of their communities, giving those communities leadership, shape, structure and dimension. Owning less productive capital, their communities pretty much hollowed out, the middle class have lost much of their self sufficiency, and have become increasingly dependent on the whims of distant oligarchs. First the Walmarts. Now the Amazons. And there will be even fewer resources available to support the necessary services local communities provide. The middle class are right to be afraid. The distant oligarchs and their bankers will only allow so much debt before they pull out the rug. Too bad no one paid attention what was happening to the working poor. Long ago, the 1% used to command 7% of the nation's income. Now they command 21%. That 14% had to come from someone. With almost 40 years of work under my belt, I have been passing along some advice to my kids to help them navigate the current "middle class conundrums": 1. Owning a home is unlikely to make you wealthy. With just a few major city core exceptions, don't expect it to go up by more than inflation over the decades. So buy or rent just what you need and do real analysis of what you need and why. 2. Only live in a big expensive city if you need to for your chosen career. The smaller cities have a lot of opportunity for people with good work habits, even in the "Rust Belt" and the living costs are far lower. 3. College degrees are useful. Getting them with large debt loads is a bad idea though. Don't take on more student debt than about 2/3 of your expected starting salary for a four year degree and take on little or not debt for a 2-year degree. 4. Going to a name-brand school is worthwhile if you don't have to rack up significant extra debt. Otherwise, pick college and university by major and cost. Your internal traits make a far bigger difference than the school you went to. 5. Only go to graduate school if your desired career path requires it. Otherwise, you are losing years of earning power while incurring costs and debt. If you want a grad degree just for the joy of it, do it as night school as a hobby. 6. Start a Roth IRA with monthly contributions early, even if it is only$50/month. It builds habits and over the years will likely ensure you are in the top 25% in assets.

7. We are in a golden age of investing right now compared to 30 years ago. You can have worldwide, multi-asset class diversified investments at an annual expense ratio of 0.25% which was unheard of at the beginning of my career. So inexpensive Target Date funds or similar vehicles from companies like Vanguard mean you can do fire-and-forget investing while you focus on the rest of your life.

8. Don't assume the full value of a company or state pension will be there when you retire. These are rife with deliberate and accidental mismanagement and partial defaults are likely with many of them. Instead save so that you are not reliant on them for a basic acceptable standard of living.

8. You don't need financial advisors for investing, just to help you with personal finance instead. But that is not what they are usually selling, so 99% of the purported financial advisors are to be avoided as they are hazardous to your finances.

10. Try to get a positive cash flow in your life as early as possible to dramatically reduce stress. That is difficult if you have kids, large student loans, or large mortgage/rent costs, so those are the big decisions you need to make on life-finance balance.

Regarding Social Security, it is currently structured to provide 75% to 80% of its current benefits starting in 2034. That is still a significant safety net, but would require Congress to act to get it back to around 100%.

Medicare is just part and parcel of the US healthcare cost issues. If the US can get down to less than 14% of GDP in healthcare expenditures while providing universal coverage, then the Medicare/Medicaid funding issue effectively goes away. This is not impossible as the US is the only developed country that is above 14%.

Elizabeth Warren had a good speech at UC-Berkeley. She focused on the middle class family balance sheet and risk shifting. Regulatory policies and a credit based monetary system have resulted in massive real price increases in inelastic areas of demand such as healthcare, education and housing eroding purchasing power. Further, trade policies have put U.S. manufacturing at a massive disadvantage to the likes of China, which has subsidized state-owned enterprises, has essentially slave labor costs and low to no environmental regulations. Unrestrained immigration policies have resulted in a massive supply wave of semi- and unskilled labor suppressing wages.

Recommended initial steps to reform:
1. Change the monetary system-deleverage economy with the Chicago Plan (100% reserve banking) and fund massive infrastructure lowering total factor costs and increasing productivity. This would eliminate
2. Adopt a healthcare system that drives HC to 10% to 12% of GDP. France's maybe? Medicare model needs serious reform but is great at low admin costs.
3. Raise tariffs across the board or enact labor and environmental tariffs on the likes of China and other Asian export model countries.
4. Take savings from healthcare costs and interest and invest in human capital–educational attainment and apprenticeships programs.
5. Enforce border security restricting future immigration dramatically and let economy absorb labor supply over time.

Video of UC-B lecture:

Jerry B , March 18, 2019 at 5:26 pm

As I have said in other comments, I like Liz Warren a lot within the limits of what she is good at doing (i.e. not President) such as Secretary of the Treasury etc. And I think she likes the media spotlight and to hear herself talk a little to much, but all quibbling aside, can we clone her??? The above comment and video just reinforce "Stick to what you are really good at Liz!".

I am not a Liz Warren fan boi to the extent Lambert is of AOC, but it seems that most of the time when I hear Warren, Sanders, or AOC say something my first reaction is "Yes, what she/he said!".

#### [Mar 18, 2019] College-entrance-exam cheating scandal exposes corrupt aristocracy (Video)

###### Mar 18, 2019 | theduran.com

RT CrossTalk host Peter Lavelle and The Duran's Alex Christoforou take a quick look at the college admissions scam revolving around William Rick Singer, who was running a for-profit college-counseling program, where according to federal prosecutors, has a goal focused on helping "the wealthiest families in the U.S. get their kids into school."

Arrest warrants for Hollywood stars, Lori Loughlin and Felicity Huffman, were delivered on Tuesday following their alleged involvement in a college-entrance-exam cheating scandal.

According to CNN, the women were two of around 50 people who were the subject of federal indictment following an extensive FBI investigation named "Operation Varsity Blues."

Loughlin's husband, Mossimo Giannulli, was also implicated, and was arrested early on Tuesday morning.

TMZ reported that Huffman was arrested by seven armed FBI agents. Her husband, William H. Macy, has not been charged in connection to the case. Loughlin, Giannulli, and Huffman are all facing charges of felony conspiracy to commit mail fraud and honest services mail fraud.

Huffman is accused of spending $15,000 on an organization that allegedly helped her daughter cheat on her SATs. Loughlin and Giannulli are accused of paying$500,000 to get their daughters into University of Southern California as recruits for the crew team for which neither of Loughlin's daughters rowed crew.

All three were recorded by the FBI on phone calls discussing their plans to alter or lie about their children's college applications.

Via Zerohedge

Is there anything left in this country that has not been deeply tainted by corruption?

By now you have probably heard that dozens of people have been arrested for participating in a multi-million dollar college admissions scam. Enormous amounts of money were paid out in order to ensure that children from very wealthy families were able to get into top schools such as Yale University, Stanford University, the University of Texas and the University of Southern California. And as The Economic Collapse blog's Michael Snyder writes, we should certainly be disgusted by these revelations, but we shouldn't be surprised. Such corruption happens every single day on every single level of society in America. At this point our nation is so far gone that it is shocking when you run into someone that actually still has some integrity.

The "mastermind" behind this college admissions scam was a con man named William Rick Singer. He had been successfully getting the kids of wealthy people into top colleges for years using "side doors", and he probably thought that he would never get caught.

But he did.

There were four basic methods that Singer used to get children from wealthy families into elite schools. The first two methods involved bribes

Bribing college entrance exam administrators to allow a third party to facilitate cheating on college entrance exams, in some cases by posing as actual students,' is the first.

Bribing university athletic coaches and administrators to designate applicants as purported athletic recruits – regardless of their athletic abilities, and in some cases, even though they did not play the sport,' is the second.

Because many of these kids didn't even play the sports they were being "recruited" for, in some cases Photoshop was used to paste their faces on to the bodies of real athletes

In order to get non-athletic kids admitted to college as athletes, Singer often had to create fake profiles for them. Sometimes this involved fabricating resumes that listed them having played on elite club teams, but to finish the illusion Singer and his team would also use Photoshop to combine photos of the kids with actual athletes in the sport.

A number of college coaches became exceedingly wealthy from taking bribes to "recruit" kids that would never play once they got to school, but now a lot of those same coaches are probably going to prison.

The third and fourth methods that Singer used involved more direct forms of cheating

'Having a third party take classes in place of the actual students, with the understanding that the grades earned in those classes would be submitted as part of the students' application,' is the third.

The fourth was 'submitting falsified applications for admission to universities that, among other things, included the fraudulently obtained exam scores and class grades, and often listed fake awards and athletic activities.'

Of course the main thing that the media is focusing on is the fact that some celebrities are among those being charged in this case, and that includes Lori Loughlin from "Full House"

It was important to "Full House" star Lori Loughlin that her kids have "the college experience" that she missed out on, she said back in 2016.

Loughlin, along with "Desperate Housewives" actress Felicity Huffman, is among those charged in a scheme in which parents allegedly bribed college coaches and insiders at testing centers to help get their children into some of the most elite schools in the country, federal prosecutors said Tuesday.

Despite how cynical I have become lately, I never would have guessed that Lori Loughlin was capable of such corruption.

After all, she seems like such a nice lady on television.

But apparently she was extremely determined to make sure that her daughters had "the college experience", and so Loughlin and her husband shelled out half a million dollars in bribes

Loughlin and Giannulli 'agreed to pay bribes totaling $500,000 in exchange for having their two daughters designated as recruits to the USC crew team – despite the fact that they did not participate in crew – thereby facilitating their admission to USC,' according to the documents. As bad as this scandal is, can we really say that it is much worse than what is going on around the rest of the country every single day? Of course not. We are a very sick nation, and we are getting sicker by the day. William Rick Singer had a good con going, and he should have stopped while he was ahead William "Rick" Singer said he had the inside scoop on getting into college, and anyone could get in on it with his book, "Getting In: Gaining Admission To Your College of Choice." "This book is full of secrets," he said in Chapter 1 before dispensing advice on personal branding, test-taking and college essays. But Singer had even bigger secrets, and those would cost up to$1.2 million.

But like most con men, Singer just had to keep pushing the envelope, and in the end it is going to cost him everything.

The ironic thing is that our colleges and universities are pulling an even bigger con. They have convinced all of us that a college education is the key to a bright future, but meanwhile the quality of the "education" that they are providing has deteriorated dramatically. I spent eight years in school getting three degrees, and so I know what I am talking about. For much more on all this, please see my recent article entitled "50 Actual College Course Titles That Prove That America's Universities Are Training Our College Students To Be Socialists" .

I know that it is not fashionable to talk about "morality" and "values" these days, but the truth is that history has shown us that any nation that is deeply corrupt is not likely to survive for very long.

Our founders understood this, and former president John Adams once stated that our Constitution "was made only for a moral and religious people"

Avarice, ambition, revenge and licentiousness would break the strongest cords of our Constitution, as a whale goes through a net. Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.

Today, we are neither moral or religious.

What we are is deeply corrupt, and America will not survive if we keep going down this path.

#### [Mar 15, 2019] Patriots Turning To #YangGang In Response To Trump, Conservatism Inc. Failure by James Kirkpatrick

##### Notable quotes:
##### "... Yang promises a universal entitlement, not dependent on income, that he calls a "freedom dividend." To be funded through a value added tax , Yang claims that it would reduce the strain on "health care, incarceration, homeless services, and the like" and actually save billions of dollars. Yang also notes that "current welfare and social program beneficiaries would be given a choice between their current benefits or $1,000 cash unconditionally." ..." ##### "... Yang is justifying the need for such a program because of automation . Again, VDARE.com has been exploring how automation may necessitate such a program for many years . Yang also discussed this problem on Tucker Carlson's show , which alone shows he is more open to real discussion than many progressive activists. ..." ##### "... Indeed, journalists, hall monitors that they are, have recognized that President Trump's online supporters are flocking to Yang, bringing him a powerful weapon in the meme wars. ..." ##### "... it is ominous for Trump that many of the more creative and dedicated people who formed his vanguard are giving up on him. ..." ###### Mar 15, 2019 | www.unz.com The dark horse candidate of the 2020 Democratic primary is entrepreneur Andrew Yang , who just qualified for the first round of debates by attracting over 65,000 unique donors. [ Andrew Yang qualifies for first DNC debate with 65,000 unique donors , by Orion Rummler, Axios, March 12, 2019] Yang is a businessman who has worked in several fields, but was best known for founding Venture for America , which helps college graduates become entrepreneurs. However, he is now gaining recognition for his signature campaign promise --$1,000 a month for every American.

Yang promises a universal entitlement, not dependent on income, that he calls a "freedom dividend." To be funded through a value added tax , Yang claims that it would reduce the strain on "health care, incarceration, homeless services, and the like" and actually save billions of dollars. Yang also notes that "current welfare and social program beneficiaries would be given a choice between their current benefits or $1,000 cash unconditionally." As Yang himself notes, this is not a new idea, nor one particularly tied to the Left. Indeed, it's been proposed by several prominent libertarians because it would replace the far more inefficient welfare system. Charles Murray called for this policy in 2016. [ A guaranteed income for every American , AEI, June 3, 2016] Milton Friedman suggested a similar policy in a 1968 interview with William F. Buckley, though Friedman called it a "negative income tax." He rejected arguments that it would cause indolence. F.A. Hayek also supported such a policy; he essentially took it for granted . [ Friedrich Hayek supported a guaranteed minimum income , by James Kwak, Medium, July 20, 2015] It's also been proposed by many nationalists, including, well, me. At the January 2013 VDARE.com Webinar, I called for a "straight-up minimum income for citizens only" among other policies that would build a new nationalist majority and deconstruct Leftist power. I've retained that belief ever since and argued for it here for years. However, I've also made the argument that it only works if it is for citizens only and is combined with a restrictive immigration policy. As I previously argued in a piece attacking Jacobin's disingenuous complaints about the "reserve army of the unemployed," you simply can't support high wages, workers' rights, and a universal basic income while still demanding mass immigration. Yang is justifying the need for such a program because of automation . Again, VDARE.com has been exploring how automation may necessitate such a program for many years . Yang also discussed this problem on Tucker Carlson's show , which alone shows he is more open to real discussion than many progressive activists. Yang is also directly addressing the crises that the Trump Administration has seemly forgotten. Unlike Donald Trump himself, with his endless boasting about "low black and Hispanic unemployment," Yang has directly spoken about the demographic collapse of white people because of "low birth rates and white men dying from substance abuse and suicide ." Though even the viciously anti-white Dylan Matthews called the tweet "innocuous," there is little doubt if President Trump said it would be called racist. [ Andrew Yang, the 2020 long-shot candidate running on a universal basic income, explained , Vox, March 11, 2019] Significantly, President Trump himself has never once specifically recognized the plight of white Americans. ...He wants to make Puerto Rico a state . He supports a path to citizenship for illegal aliens, albeit with an 18-year waiting period and combined with pledges to secure the border and deport illegals who don't enroll in the citizenship program. He wants to create a massive bureaucratic system to track gun owners, restrict gun ownership , and require various "training" programs for licenses. He wants to subsidize local journalists with taxpayer dollars... ... ... ... Indeed, journalists, hall monitors that they are, have recognized that President Trump's online supporters are flocking to Yang, bringing him a powerful weapon in the meme wars. (Sample meme at right.) And because many of these online activists are "far right" by Main Stream Media standards, or at least Politically Incorrect, there is much hand-waving and wrist-flapping about the need for Yang to decry "white nationalists." So of course, the candidate has dutifully done so, claiming "racism and white nationalism [are] a threat to the core ideals of what it means to be an American". [ Presidential candidate Andrew Yang has a meme problem , by Russell Brandom, The Verge, March 9, 2019] But what does it mean to be an American? As more and more of American history is described as racist, and even national symbols and the national anthem are targets for protest, "America" certainly doesn't seem like a real country with a real identity. Increasingly, "America" resembles a continent-sized shopping mall, with nothing holding together the warring tribes that occupy it except money. President Trump, of course, was elected because many people thought he could reverse this process, especially by limiting mass immigration and taking strong action in the culture wars, for example by promoting official English. Yet in recent weeks, he has repeatedly endorsed more legal immigration. Rather than fighting, the president is content to brag about the economy and whine about unfair press coverage and investigations. He already seems like a lame duck. The worst part of all of this is that President Trump was elected as a response not just to the Left, but to the failed Conservative Establishment. During the 2016 campaign, President Trump specifically pledged to protect entitlements , decried foreign wars, and argued for a massive infrastructure plan. However, once in office, his main legislative accomplishment is a tax cut any other Republican president would have pushed. Similarly, his latest budget contains the kinds of entitlement cuts that are guaranteed to provoke Democrat attack ads. [ Trump said he wouldn't cut Medicaid, Social Security, and Medicare . His 2020 budget cuts all 3 , by Tara Golshan, Vox, March 12, 2019] And the president has already backed down on withdrawing all troops from Syria, never mind Afghanistan. Conservatism Inc., having learned nothing from candidate Donald Trump's scorched-earth path to the Republican nomination, now embraces Trump as a man but ignores his campaign message. Instead, the conservative movement is still promoting the same tired slogans about "free markets" even as they have appear to have lost an entire generation to socialism. The most iconic moment was Charlie Kirk, head of the free market activist group Turning Point USA, desperately trying to tell his followers not to cheer for Tucker Carlson because Carlson had suggested a nation should be treated like a family, not simply a marketplace . President Trump himself is now trying to talk like a fiscal conservative [ Exclusive -- Donald Trump: 'Seductive' Socialism Would Send Country 'Down The Tubes' In a Decade Or Less , by Alexander Marlow, Matt Boyle, Amanda House, and Charlie Spierling, Breitbart, March 11, 2019]. Such a pose is self-discrediting given how the deficit swelled under united Republican control and untold amounts of money are seemingly still available for foreign aid to Israel, regime change in Iran and Venezuela, and feminist programs abroad to make favorite daughter Ivanka Trump feel important. [ Trump budget plans to give$100 million to program for women that Ivanka launched , by Nathalie Baptiste, Mother Jones, March 9, 2019]

Thus, especially because of his cowardice on immigration, many of President Trump's most fervent online supporters have turned on him in recent weeks. And the embrace of Yang seems to come out of a great place of despair, a sense that the country really is beyond saving.

Yang has Leftist policies on many issues, but many disillusioned Trump supporters feel like those policies are coming anyway. If America is just an economy, and if everyone in the world is a simply an American-in-waiting, white Americans might as well get something out of this System before the bones are picked clean.

National Review ' s Theodore Kupfer just claimed the main importance of Yang's candidacy is that it will prove meme-makers ability to affect the vote count "has been overstated" [ Rise of the pink hats , March 12, 2019].

Time will tell, but it is ominous for Trump that many of the more creative and dedicated people who formed his vanguard are giving up on him.

#### [Mar 14, 2019] Blain Global Reset Looms As Inequality Bonfire Burns Out Of Control

###### Mar 14, 2019 | www.zerohedge.com

Blain: Global Reset Looms As "Inequality Bonfire Burns Out Of Control"

by Tyler Durden Thu, 03/14/2019 - 09:05 30 SHARES Via Shard Capital's Bill Blain,

"Education is the most powerful weapon which you can use to change the world.. "

In the headlines this morning: https://www.morningporridge.com/stuff-im-watching

So much stuff going on.. it's shaping up to be a very interesting weekend.

There is a story of the Great Scottish King – Robert the Bruce. Having been defeated by the English multiple times, his family captured and executed, (or in the case of his daughter, left suspended in an open cage thru the winter), his army was scattered, the clans turned against him, on his own and without any support - he was on the verge of giving up. As he contemplated a bleak future, he watched a spider struggle to construct a web in the dank cave he was hiding in. The beastie failed again and again.. Finally, Bruce reached his decision. If the Spider succeeded, he would carry on.

He went on to become Scotland's Greatest King.

Try, Try, Try again ? Perhaps Scotland will pull an unlikely win at Twickenham on Saturday? She-who-is-now-Mrs-Blain did warn me not to " bore everyone about Brexit ", but needs must.

Even though a No-Deal Brexit is ruled out in the short-run, where do we go from here?

Or, perhaps, Theresa May is set to surprise us all. She really doesn't know when to give up. The scuttlebutt round Westminster is she's going to take her Brexit agreement back to the House for a third time – and is currently scaring the Rees-Moog loonies with the threat of a long extension leading to NO-Brexit and second referendum, and the Remoaners with the threat of a short-extension leading to No-Deal Brexit. At least 70 Labour MPs want to avoid a second referendum and could, perhaps, vote with her.

Of course, my above simplistic analysis ignores the EU.

"It is a very grand plan, but what about the Germans?" asked a famous Polish General in WW2...

How the EU reacts to the likely request for an extension is going to be fascinating..

Meanwhile, there is a bit of a political stramash brewing in the US after a number of fund managers and "actresses" (heaven forbid) were arrested for fraudulently bribing universities to give their kids places. Some of my more "right of centre" US correspondents are full of righteous indignation that such obvious Democrats - on the basis the whole of Hollywood are goddam-lefty-commies - are dishonestly getting their kids opportunities they don't merit. Bribery, criminal corruption, hidden influence, the haves and have nots. Oops I think one of their heads just indignantly exploded.

But this is important stuff. Firstly, isn't it obvious that any society with an ounce of common sense would make education the core of its development strategy? It's the single most important factor likely to improve an economy and raise the prospects of its population. Yet, here in the UK, the government has seen fit to chain students to years of debt and penury for pretty average university courses? Its madness. In the States, its gone a step further – another way for the rich to raise themselves higher.

The fact the monied and the wealthy across US society think its somehow acceptable to pay-to-play for the top educational places and they advantages these confer for life, sums up a moral corruption and is yet another symptom of the entitlement and pernicious income inequality now at the core of the "Land of the Free". As a chum told me yesterday.. "its last stage empire" stuff. Its neither a Democrat or Republican thing – although it doesn't help when the President is such a clearly negative role model. If its ok for the boss to lie and cheat.. then what I do wrong?

(You could argue nepotism is the ultimate and absolute corruption – the rich ensuring the rich get the best of everything and deny deserving poorer folk places they've earned. But, where does guilt begin? What's so different from those of us who paid over expensive school fees to give our kids the best chance in life? I could just about afford it. Single Parent in Brixton could not. My kids got a better start. Whether the Brixton kid now runs past them is entirely their responsibility now )

Its stories like this that are stoking the inequality bonfire. If it burns out of control then markets will have nothing to say as the global reset is pressed!

#### [Mar 11, 2019] The university professors, who teach but do not learn: neoliberal shill DeJong tries to prolong the life of neoliberalism in the USA

##### DeJong is more dangerous them Malkin... It poisons students with neoliberalism more effectively.
###### Mar 11, 2019 | www.nakedcapitalism.com

Kurtismayfield , , March 10, 2019 at 10:52 am

Re:Wall Street Democrats

They know, however, that they've been conned, played, and they're absolute fools in the game.

Thank you Mr. Black for the laugh this morning. They know exactly what they have been doing. Whether it was deregulating so that Hedge funds and vulture capitalism can thrive, or making sure us peons cannot discharge debts, or making everything about financalization. This was all done on purpose, without care for "winning the political game". Politics is economics, and the Wall Street Democrats have been winning.

notabanker , , March 10, 2019 at 12:26 pm

For sure. I'm quite concerned at the behavior of the DNC leadership and pundits. They are doubling down on blatant corporatist agendas. They are acting like they have this in the bag when objective evidence says they do not and are in trouble. Assuming they are out of touch is naive to me. I would assume the opposite, they know a whole lot more than what they are letting on.

urblintz , , March 10, 2019 at 12:49 pm

I think the notion that the DNC and the Democrat's ruling class would rather lose to a like-minded Republican corporatist than win with someone who stands for genuine progressive values offering "concrete material benefits." I held my nose and read comments at the kos straw polls (where Sanders consistently wins by a large margin) and it's clear to me that the Clintonista's will do everything in their power to derail Bernie.

polecat , , March 10, 2019 at 1:00 pm

"It's the Externalities, stupid economists !" *should be the new rallying cry ..

Keynes' "animal spirits" and the "tragedy of the commons" (Lloyd, 1833 and Hardin, 1968) both implied that economics was messier than Samuelson and Friedman would have us believe because there are actual people with different short- and long-term interests.

The behavioral folks (Kahnemann, Tversky, Thaler etc.) have all shown that people are even messier than we would have thought. So most macro-economic stuff over the past half-century has been largely BS in justifying trickle-down economics, deregulation etc.

There needs to be some inequality as that provides incentives via capitalism but unfettered it turns into France 1989 or the Great Depression. It is not coincidence that the major experiment in this in the late 90s and early 2000s required massive government intervention to keep the ship from sinking less than a decade after the great unregulated creative forces were unleashed.

MMT is likely to be similar where productive uses of deficits can be beneficial, but if the money is wasted on stupid stuff like unnecessary wars, then the loss of credibility means that the fiat currency won't be quite as fiat anymore. Britain was unbelievably economically powerfully in the late 1800s but in half a century went to being an economic afterthought hamstrung by deficits after two major wars and a depression.

So it is good that people like Brad DeLong are coming to understand that the pretty economic theories have some truths but are utter BS (and dangerous) when extrapolated without accounting for how people and societies actually behave.

Chris Cosmos , , March 10, 2019 at 6:43 pm

I never understood the incentive to make more money -- that only works if money = true value and that is the implication of living in a capitalist society (not economy)–everything then becomes a commodity and alienation results and all the depression, fear, anxiety that I see around me. Whereas human happiness actually comes from helping others and finding meaning in life not money or dominating others. That's what social science seems to be telling us.

Oregoncharles , , March 10, 2019 at 2:46 pm

Quoting DeLong:

" He says we are discredited. Our policies have failed. And they've failed because we've been conned by the Republicans."

That's welcome, but it's still making excuses. Neoliberal policies have failed because the economics were wrong, not because "we've been conned by the Republicans." Furthermore, this may be important – if it isn't acknowledged, those policies are quite likely to come sneaking back, especially if Democrats are more in the ascendant., as they will be, given the seesaw built into the 2-Party.

The Rev Kev , , March 10, 2019 at 7:33 pm

Might be right there. Groups like the neocons were originally attached the the left side of politics but when the winds changed, detached themselves and went over to the Republican right. The winds are changing again so those who want power may be going over to what is called the left now to keep their grip on power. But what you say is quite true. It is not really the policies that failed but the economics themselves that were wrong and which, in an honest debate, does not make sense either.

marku52 , , March 10, 2019 at 3:39 pm

"And they've failed because we've been conned by the Republicans.""

Not at all. What about the "free trade" hokum that DeJong and his pal Krugman have been peddling since forever? History and every empirical test in the modern era shows that it fails in developing countries and only exacerbates inequality in richer ones.

That's just a failed policy.

I'm still waiting for an apology for all those years that those two insulted anyone who questioned their dogma as just "too ignorant to understand."

Glen , , March 10, 2019 at 4:47 pm

Thank you!

He created FAILED policies. He pushed policies which have harmed America, harmed Americans, and destroyed the American dream.

Kevin Carhart , , March 10, 2019 at 4:29 pm

It's intriguing, but two other voices come to mind. One is Never Let a Serious Crisis Go To Waste by Mirowski and the other is Generation Like by Doug Rushkoff.

Neoliberalism is partially entrepreneurial self-conceptions which took a long time to promote. Rushkoff's Frontline shows the Youtube culture. There is a girl with a "leaderboard" on the wall of her suburban room, keeping track of her metrics.

There's a devastating VPRO Backlight film on the same topic. Internet-platform neoliberalism does not have much to do with the GOP.

It's going to be an odd hybrid at best – you could have deep-red communism but enacted for and by people whose self-conception is influenced by decades of Becker and Hayek? One place this question leads is to ask what's the relationship between the set of ideas and material conditions-centric philosophies? If new policies pass that create a different possibility materially, will the vise grip of the entrepreneurial self loosen?

Partially yeah, maybe, a Job Guarantee if it passes and actually works, would be an anti-neoliberal approach to jobs, which might partially loosen the regime of neoliberal advice for job candidates delivered with a smug attitude that There Is No Alternative. (Described by Gershon). We take it seriously because of a sense of dread that it might actually be powerful enough to lock us out if we don't, and an uncertainty of whether it is or not.

There has been deep damage which is now a very broad and resilient base. It is one of the prongs of why 2008 did not have the kind of discrediting effect that 1929 did. At least that's what I took away from _Never Let_.

Brad DeLong handing the baton might mean something but it is not going to ameliorate the sense-of-life that young people get from managing their channels and metrics.

Take the new 1099 platforms as another focal point. Suppose there were political measures that splice in on the platforms and take the edge off materially, such as underwritten healthcare not tied to your job. The platforms still use star ratings, make star ratings seem normal, and continually push a self-conception as a small business. If you have overt DSA plus covert Becker it is, again, a strange hybrid,

Jeremy Grimm , , March 10, 2019 at 5:13 pm

Your comment is very insightful. Neoliberalism embeds its mindset into the very fabric of our culture and self-concepts. It strangely twists many of our core myths and beliefs.

Raulb , , March 10, 2019 at 6:36 pm

This is nothing but a Trojan horse to 'co-opt' and 'subvert'. Neoliberals sense a risk to their neo feudal project and are simply attempting to infiltrate and hollow out any threats from within.

There are the same folks who have let entire economics departments becomes mouthpieces for corporate propaganda and worked with thousands of think tanks and international organizations to mislead, misinform and cause pain to millions of people.

They have seeded decontextualized words like 'wealth creators' and 'job creators' to create a halo narrative for corporate interests and undermine society, citizenship, the social good, the environment that make 'wealth creation' even possible. So all those take a backseat to 'wealth creator' interests. Since you can't create wealth without society this is some achievement.

Its because of them that we live in a world where the most important economic idea is protecting people like Kochs business and personal interests and making sure government is not 'impinging on their freedom'. And the corollary a fundamental anti-human narrative where ordinary people and workers are held in contempt for even expecting living wages and conditions and their access to basics like education, health care and living conditions is hollowed out out to promote privatization and become 'entitlements'.

Neoliberalism has left us with a decontextualized highly unstable world that exists in a collective but is forcefully detached into a context less individual existence. These are not mistakes of otherwise 'well meaning' individuals, there are the results of hard core ideologues and high priests of power.

Two thumbs up. This has been an ongoing agenda for decades and it has succeeded in permeating every aspect of society, which is why the United States is such a vacuous, superficial place. And it's exporting that superficiality to the rest of the world.

VietnamVet , , March 10, 2019 at 7:17 pm

I read Brad DeLong's and Paul Krugman's blogs until their contradictions became too great. If anything, we need more people seeing the truth. The Global War on Terror is into its 18th year. In October the USA will spend approximately $6 trillion and will have accomplish nothing except to create blow back. The Middle Class is disappearing. Those who remain in their homes are head over heels in debt. The average American household carries$137,063 in debt. The wealthy are getting richer.

The Jeff Bezos, Warren Buffett and Bill Gates families together have as much wealth as the lowest half of Americans. Donald Trump's Presidency and Brexit document that neoliberal politicians have lost contact with reality. They are nightmares that there is no escaping. At best, perhaps, Roosevelt Progressives will be reborn to resurrect regulated capitalism and debt forgiveness.

##### "... So strikes will work -- which is why they are forbidden. And maybe it is time to get truly creative with shopping strikes and boycotts–Starbucks and Amazon would learn from being shunned or, even better, forced into bankruptcy. ..."
###### Feb 27, 2019 | www.nakedcapitalism.com

The Rev Kev , February 27, 2019 at 6:04 am

I sometimes wonder if our elite have taken to heart this section from George Orwell's "1984"-

But the purpose of all of them was to arrest progress and freeze history at a chosen moment. The familiar pendulum swing was to happen once more, and then stop. As usual, the High were to be turned out by the Middle, who would then become the High; but this time, by conscious strategy, the High would be able to maintain their position permanently.

And that is the real purpose of all this surveillance in our lives. The reason why the governmental and commercial sector is silencing dissent by banishing it from all social media. The sidelining of all democratic participation in western countries and entities like the EU. To cement their overlordship.

It won't work. Why? Because of Newton's third law – For every action, there is an equal and opposite reaction. Historically, the more repression there is, the bloodier the reaction and the French revolution is the best example of this. Here is a good lesson for our elites. Never cheat a person that has nothing to lose. That's good advice that.

The Rev Kev , February 27, 2019 at 6:14 am

Forgot to add. If any are looking for a copy of that "The Gilded Age: A Tale of Today" book mentioned near the beginning of this article and do not want to fork over the hard stuff to Bezos, you can find it also at Project Gutenberg in several different formats here-http://www.gutenberg.org/ebooks/3178

When inequality reaches its zenith it will be in parallel with many other disasters that we know are coming: climate change with all of its severe storms and warming of the planet, toxic plastic pollution, resource depletion, environmental degradation, loss of arable land, loss of animals and fish, insect depletion, super bugs and antibiotic resistance, threat of nuclear war and other wars, climate refugees, rising sea levels, and on and on and on. The thing is that we may not live long enough to revolt against wealth inequality!

Yves Smith. Great article from the always insightful Nomi Prins. The figures on household income and general indebtedness are something to commit to memory for the next time one of our earnest upper-middle friends goes on and on about retraining and relocating. How? When the average yearly salary is $31K? There is no disposable income, as that astounding collective debt figure attests. The note up top from YS is sobering indeed: "Keep in mind that historically, the levelers of inequality have been war, financial crises, protracted battles by workers to get better incomes and workplace protections, and, of course, revolutions." Which is the least painful and most effective? Strikes. And general strikes. Now that everything in the U S of A is on-line, monetized (including us), and dollar denominated, the only recourse we have is to withhold labor. (Or to stop shopping.) So strikes will work -- which is why they are forbidden. And maybe it is time to get truly creative with shopping strikes and boycotts–Starbucks and Amazon would learn from being shunned or, even better, forced into bankruptcy. #### [Feb 27, 2019] Survival of the Richest by Nomi Prins ###### Feb 26, 2019 | www.unz.com Like a gilded coating that makes the dullest things glitter, today's thin veneer of political populism covers a grotesque underbelly of growing inequality that's hiding in plain sight. And this phenomenon of ever more concentrated wealth and power has both Newtonian and Darwinian components to it. In terms of Newton's first law of motion: those in power will remain in power unless acted upon by an external force. Those who are wealthy will only gain in wealth as long as nothing deflects them from their present course. As for Darwin, in the world of financial evolution, those with wealth or power will do what's in their best interest to protect that wealth, even if it's in no one else's interest at all. In George Orwell's iconic 1945 novel, Animal Farm , the pigs who gain control in a rebellion against a human farmer eventually impose a dictatorship on the other animals on the basis of a single commandment : "All animals are equal, but some animals are more equal than others." In terms of the American republic, the modern equivalent would be: "All citizens are equal, but the wealthy are so much more equal than anyone else (and plan to remain that way)." Certainly, inequality is the economic great wall between those with power and those without it. As the animals of Orwell's farm grew ever less equal, so in the present moment in a country that still claims equal opportunity for its citizens, one in which three Americans now have as much wealth as the bottom half of society (160 million people), you could certainly say that we live in an increasingly Orwellian society. Or perhaps an increasingly Twainian one. After all, Mark Twain and Charles Dudley Warner wrote a classic 1873 novel that put an unforgettable label on their moment and could do the same for ours. The Gilded Age: A Tale of Today depicted the greed and political corruption of post-Civil War America. Its title caught the spirit of what proved to be a long moment when the uber-rich came to dominate Washington and the rest of America. It was a period saturated with robber barons, professional grifters, and incomprehensibly wealthy banking magnates. (Anything sound familiar?) The main difference between that last century's gilded moment and this one was that those robber barons built tangible things like railroads. Today's equivalent crew of the mega-wealthy build remarkably intangible things like tech and electronic platforms, while a grifter of a president opts for the only new infrastructure in sight, a great wall to nowhere. In Twain's epoch, the U.S. was emerging from the Civil War. Opportunists were rising from the ashes of the nation's battered soul. Land speculation, government lobbying, and shady deals soon converged to create an unequal society of the first order (at least until now). Soon after their novel came out, a series of recessions ravaged the country, followed by a 1907 financial panic in New York City caused by a speculator-led copper-market scam. From the late 1890s on, the most powerful banker on the planet, J.P. Morgan, was called upon multiple times to bail out a country on the economic edge. In 1907, Treasury Secretary George Cortelyou provided him with$25 million in bailout money at the request of President Theodore Roosevelt to stabilize Wall Street and calm frantic citizens trying to withdraw their deposits from banks around the country. And this Morgan did -- by helping his friends and their companies, while skimming money off the top himself. As for the most troubled banks holding the savings of ordinary people? Well, they folded. (Shades of the 2007-2008 meltdown and bailout anyone?)

The leading bankers who had received that bounty from the government went on to cause the Crash of 1929 . Not surprisingly, much speculation and fraud preceded it. In those years, the novelist F. Scott Fitzgerald caught the era's spirit of grotesque inequality in The Great Gatsby when one of his characters comments: "Let me tell you about the very rich. They are different from you and me." The same could certainly be said of today when it comes to the gaping maw between the have-nots and have-a-lots.

Income vs. Wealth

To fully grasp the nature of inequality in our twenty-first-century gilded age, it's important to understand the difference between wealth and income and what kinds of inequality stem from each. Simply put, income is how much money you make in terms of paid work or any return on investments or assets (or other things you own that have the potential to change in value). Wealth is simply the gross accumulation of those very assets and any return or appreciation on them. The more wealth you have, the easier it is to have a higher annual income.

Let's break that down. If you earn $31,000 a year, the median salary for an individual in the United States today, your income would be that amount minus associated taxes (including federal, state, social security, and Medicare ones). On average, that means you would be left with about$26,000 before other expenses kicked in.

If your wealth is $1,000,000, however, and you put that into a savings account paying 2.25% interest , you could receive about$22,500 and, after taxes, be left with about $19,000, for doing nothing whatsoever. To put all this in perspective, the top 1% of Americans now take home, on average, more than 40 times the incomes of the bottom 90%. And if you head for the top 0.1%, those figures only radically worsen. That tiny crew takes home more than 198 times the income of the bottom 90% percent. They also possess as much wealth as the nation's bottom 90%. "Wealth," as Adam Smith so classically noted almost two-and-a-half-centuries ago in The Wealth of Nations , "is power," an adage that seldom, sadly, seems outdated. A Case Study: Wealth, Inequality, and the Federal Reserve Obviously, if you inherit wealth in this country, you're instantly ahead of the game. In America, a third to nearly a half of all wealth is inherited rather than self-made. According to a New York Times investigation, for instance, President Donald Trump, from birth, received an estimated$413 million (in today's dollars, that is) from his dear old dad and another $140 million (in today's dollars) in loans. Not a bad way for a "businessman" to begin building the empire (of bankruptcies ) that became the platform for a presidential campaign that oozed into actually running the country. Trump did it, in other words, the old-fashioned way -- through inheritance. In his megalomaniacal zeal to declare a national emergency at the southern border, that gilded millionaire-turned-billionaire-turned-president provides but one of many examples of a long record of abusing power. Unfortunately, in this country, few people consider record inequality (which is still growing) as another kind of abuse of power, another kind of great wall, in this case keeping not Central Americans but most U.S. citizens out. The Federal Reserve, the country's central bank that dictates the cost of money and that sustained Wall Street in the wake of the financial crisis of 2007-2008 (and since), has finally pointed out that such extreme levels of inequality are bad news for the rest of the country. As Fed Chairman Jerome Powell said at a town hall in Washington in early February, "We want prosperity to be widely shared. We need policies to make that happen." Sadly, the Fed has largely contributed to increasing the systemic inequality now engrained in the financial and, by extension, political system. In a recent research paper , the Fed did, at least, underscore the consequences of inequality to the economy, showing that "income inequality can generate low aggregate demand, deflation pressure, excessive credit growth, and financial instability." In the wake of the global economic meltdown, however, the Fed took it upon itself to reduce the cost of money for big banks by chopping interest rates to zero (before eventually raising them to 2.5%) and buying$4.5 trillion in Treasury and mortgage bonds to lower it further. All this so that banks could ostensibly lend money more easily to Main Street and stimulate the economy. As Senator Bernie Sanders noted though, "The Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else." The economy has been treading water ever since (especially compared to the stock market). Annual gross domestic product growth has not surpassed 3% in any year since the financial crisis, even as the level of the stock market tripled , grotesquely increasing the country's inequality gap. None of this should have been surprising, since much of the excess money went straight to big banks, rich investors, and speculators. They then used it to invest in the stock and bond markets, but not in things that would matter to all the Americans outside that great wall of wealth. The question is: Why are inequality and a flawed economic system mutually reinforcing? As a starting point, those able to invest in a stock market buoyed by the Fed's policies only increased their wealth exponentially. In contrast, those relying on the economy to sustain them via wages and other income got shafted. Most people aren't, of course, invested in the stock market, or really in anything. They can't afford to be. It's important to remember that nearly 80% of the population lives paycheck to paycheck. The net result: an acute post-financial-crisis increase in wealth inequality -- on top of the income inequality that was global but especially true in the United States. The crew in the top 1% that doesn't rely on salaries to increase their wealth prospered fabulously. They, after all, now own more than half of all national wealth invested in stocks and mutual funds, so a soaring stock market disproportionately helps them. It's also why the Federal Reserve subsidy policies to Wall Street banks have only added to the extreme wealth of those extreme few. The Ramifications of Inequality The list of negatives resulting from such inequality is long indeed. As a start, the only thing the majority of Americans possess a greater proportion of than that top 1% is a mountain of debt. The bottom 90% are the lucky owners of about three-quarters of the country's household debt. Mortgages, auto loans, student loans, and credit-card debt are cumulatively at a record-high$13.5 trillion .

And that's just to start down a slippery slope. As Inequality.org reports, wealth and income inequality impact "everything from life expectancy to infant mortality and obesity." High economic inequality and poor health, for instance, go hand and hand, or put another way, inequality compromises the overall health of the country. According to academic findings, income inequality is, in the most literal sense, making Americans sick. As one study put it , "Diseased and impoverished economic infrastructures [help] lead to diseased or impoverished or unbalanced bodies or minds."

Then there's Social Security, established in 1935 as a federal supplement for those in need who have also paid into the system through a tax on their wages. Today, all workers contribute 6.2% of their annual earnings and employers pay the other 6.2% (up to a cap of $132,900 ) into the Social Security system. Those making far more than that, specifically millionaires and billionaires, don't have to pay a dime more on a proportional basis. In practice, that means about 94% of American workers and their employers paid the full 12.4% of their annual earnings toward Social Security, while the other 6% paid an often significantly smaller fraction of their earnings. According to his own claims about his 2016 income, for instance, President Trump "contributed a mere 0.002 percent of his income to Social Security in 2016." That means it would take nearly 22,000 additional workers earning the median U.S. salary to make up for what he doesn't have to pay. And the greater the income inequality in this country, the more money those who make less have to put into the Social Security system on a proportional basis. In recent years, a staggering$1.4 trillion could have gone into that system, if there were no arbitrary payroll cap favoring the wealthy.

Inequality: A Dilemma With Global Implications

America is great at minting millionaires. It has the highest concentration of them, globally speaking, at 41%. (Another 24% of that millionaires' club can be found in Europe.) And the top 1% of U.S. citizens earn 40 times the national average and own about 38.6 % of the country's total wealth. The highest figure in any other developed country is "only" 28%.

However, while the U.S. boasts of epic levels of inequality, it's also a global trend. Consider this: the world's richest 1% own 45% of total wealth on this planet. In contrast, 64% of the population (with an average of $10,000 in wealth to their name) holds less than 2%. And to widen the inequality picture a bit more, the world's richest 10%, those having at least$100,000 in assets, own 84% of total global wealth.

The billionaires' club is where it's really at, though. According to Oxfam, the richest 42 billionaires have a combined wealth equal to that of the poorest 50% of humanity. Rest assured, however, that in this gilded century there's inequality even among billionaires. After all, the 10 richest among them possess $745 billion in total global wealth. The next 10 down the list possess a mere$451.5 billion , and why even bother tallying the next 10 when you get the picture?

Oxfam also recently reported that "the number of billionaires has almost doubled, with a new billionaire created every two days between 2017 and 2018. They have now more wealth than ever before while almost half of humanity have barely escaped extreme poverty, living on less than $5.50 a day." How Does It End? In sum, the rich are only getting richer and it's happening at a historic rate. Worse yet, over the past decade, there was an extra perk for the truly wealthy. They could bulk up on assets that had been devalued due to the financial crisis, while so many of their peers on the other side of that great wall of wealth were economically decimated by the 2007-2008 meltdown and have yet to fully recover . What we've seen ever since is how money just keeps flowing upward through banks and massive speculation, while the economic lives of those not at the top of the financial food chain have largely remained stagnant or worse. The result is, of course, sweeping inequality of a kind that, in much of the last century, might have seemed inconceivable. Eventually, we will all have to face the black cloud this throws over the entire economy. Real people in the real world, those not at the top, have experienced a decade of ever greater instability, while the inequality gap of this beyond-gilded age is sure to shape a truly messy world ahead. In other words, this can't end well. Nomi Prins, a former Wall Street executive, is a TomDispatch regular . Her latest book is Collusion: How Central Bankers Rigged the World (Nation Books). She is also the author of All the Presidents' Bankers: The Hidden Alliances That Drive American Power and five other books. Special thanks go to researcher Craig Wilson for his superb work on this piece. As Ernest Hemingway said, "Yeah, the rich are different from the rest of us. They have more money." Aryan Racist , says: February 26, 2019 at 9:17 pm GMT I read a stat in Mother Jones magazine that 90% of Americans have an average income of$31,000 a year and the richest .1 percent have an average income of $27 million dollars. So how does one pay all these living expenses and various debts with$26,000 after taxes? The Trump tax cuts just exacerbated the problem by giving more money to the wealthy and practically nothing to the 90% (at the bottom, which is almost everyone else). A good book on the subject of wealth inequality is "Billionaire's Ball."

#### [Feb 26, 2019] THE CRISIS OF NEOLIBERALISM by Julie A. Wilson

##### "... While the rise of hyper-right neoliberalism is certainly nothing to celebrate, it does present an opportunity for breaking with neoliberal hegemony. We have to proceed, as Gary Younge reminds us, with the realization that people "have not rejected the chance of a better world. They have not yet been offered one."' ..."
###### Oct 08, 2017 | www.amazon.com

Quote from the book is courtesy of Amazon preview of the book Neoliberalism (Key Ideas in Media & Cultural Studies)

In Chapter 1, we traced the rise of our neoliberal conjuncture back to the crisis of liberalism during the late nineteenth and early twentieth centuries, culminating in the Great Depression. During this period, huge transformations in capitalism proved impossible to manage with classical laissez-faire approaches. Out of this crisis, two movements emerged, both of which would eventually shape the course of the twentieth century and beyond. The first, and the one that became dominant in the aftermath of the crisis, was the conjuncture of embedded liberalism. The crisis indicated that capitalism wrecked too much damage on the lives of ordinary citizens. People (white workers and families, especially) warranted social protection from the volatilities and brutalities of capitalism. The state's public function was expanded to include the provision of a more substantive social safety net, a web of protections for people and a web of constraints on markets. The second response was the invention of neoliberalism. Deeply skeptical of the common-good principles that undergirded the emerging social welfare state, neoliberals began organizing on the ground to develop a "new" liberal govemmentality, one rooted less in laissez-faire principles and more in the generalization of competition and enterprise. They worked to envision a new society premised on a new social ontology, that is, on new truths about the state, the market, and human beings. Crucially, neoliberals also began building infrastructures and institutions for disseminating their new' knowledges and theories (i.e., the Neoliberal Thought Collective), as well as organizing politically to build mass support for new policies (i.e., working to unite anti-communists, Christian conservatives, and free marketers in common cause against the welfare state). When cracks in embedded liberalism began to surface -- which is bound to happen with any moving political equilibrium -- neoliberals were there with new stories and solutions, ready to make the world anew.

We are currently living through the crisis of neoliberalism. As I write this book, Donald Trump has recently secured the U.S. presidency, prevailing in the national election over his Democratic opponent Hillary Clinton. Throughout the election, I couldn't help but think back to the crisis of liberalism and the two responses that emerged. Similarly, after the Great Recession of 2008, we've saw two responses emerge to challenge our unworkable status quo, which dispossesses so many people of vital resources for individual and collective life. On the one hand, we witnessed the rise of Occupy Wall Street. While many continue to critique the movement for its lack of leadership and a coherent political vision, Occupy was connected to burgeoning movements across the globe, and our current political horizons have been undoubtedly shaped by the movement's success at repositioning class and economic inequality within our political horizon. On the other hand, we saw' the rise of the Tea Party, a right-wing response to the crisis. While the Tea Party was critical of status-quo neoliberalism -- especially its cosmopolitanism and embrace of globalization and diversity, which was perfectly embodied by Obama's election and presidency -- it was not exactly anti-neoliberal. Rather, it was anti-left neoliberalism-, it represented a more authoritarian, right [wing] version of neoliberalism.

Within the context of the 2016 election, Clinton embodied the neoliberal center that could no longer hold. Inequality. Suffering. Collapsing infrastructures. Perpetual war. Anger. Disaffected consent. There were just too many fissures and fault lines in the glossy, cosmopolitan world of left neoliberalism and marketized equality. Indeed, while Clinton ran on status-quo stories of good governance and neoliberal feminism, confident that demographics and diversity would be enough to win the election, Trump effectively tapped into the unfolding conjunctural crisis by exacerbating the cracks in the system of marketized equality, channeling political anger into his celebrity brand that had been built on saying "f*** you" to the culture of left neoliberalism (corporate diversity, political correctness, etc.) In fact, much like Clinton's challenger in the Democratic primary, Benie Sanders, Trump was a crisis candidate.

Both Sanders and Trump were embedded in the emerging left and right responses to neoliberalism's crisis. Specifically, Sanders' energetic campaign -- which was undoubtedly enabled by the rise of the Occupy movement -- proposed a decidedly more "commongood" path. Higher wages for working people. Taxes on the rich, specifically the captains of the creditocracy.

Universal health care. Free higher education. Fair trade. The repeal of Citizens United. Trump offered a different response to the crisis. Like Sanders, he railed against global trade deals like NAFTA and the Trans-Pacific Partnership (TPP). However, Trump's victory was fueled by right neoliberalism's culture of cruelty. While Sanders tapped into and mobilized desires for a more egalitarian and democratic future, Trump's promise was nostalgic, making America "great again" -- putting the nation back on "top of the world," and implying a time when women were "in their place" as male property, and minorities and immigrants were controlled by the state.

Thus, what distinguished Trump's campaign from more traditional Republican campaigns was that it actively and explicitly pitted one group's equality (white men) against everyone else's (immigrants, women, Muslims, minorities, etc.). As Catherine Rottenberg suggests, Trump offered voters a choice between a multiracial society (where folks are increasingly disadvantaged and dispossessed) and white supremacy (where white people would be back on top). However, "[w]hat he neglected to state," Rottenberg writes,

is that neoliberalism flourishes in societies where the playing field is already stacked against various segments of society, and that it needs only a relatively small select group of capital-enhancing subjects, while everyone else is ultimately dispensable. 1

In other words, Trump supporters may not have explicitly voted for neoliberalism, but that's what they got. In fact, as Rottenberg argues, they got a version of right neoliberalism "on steroids" -- a mix of blatant plutocracy and authoritarianism that has many concerned about the rise of U.S. fascism.

We can't know what would have happened had Sanders run against Trump, but we can think seriously about Trump, right and left neoliberalism, and the crisis of neoliberal hegemony. In other words, we can think about where and how we go from here. As I suggested in the previous chapter, if we want to construct a new world, we are going to have to abandon the entangled politics of both right and left neoliberalism; we have to reject the hegemonic frontiers of both disposability and marketized equality. After all, as political philosopher Nancy Fraser argues, what was rejected in the election of 2016 was progressive, left neoliberalism.

While the rise of hyper-right neoliberalism is certainly nothing to celebrate, it does present an opportunity for breaking with neoliberal hegemony. We have to proceed, as Gary Younge reminds us, with the realization that people "have not rejected the chance of a better world. They have not yet been offered one."'

Mark Fisher, the author of Capitalist Realism, put it this way:

The long, dark night of the end of history has to be grasped as an enormous opportunity. The very oppressive pervasiveness of capitalist realism means that even glimmers of alternative political and economic possibilities can have a disproportionately great effect. The tiniest event can tear a hole in the grey curtain of reaction which has marked the horizons of possibility under capitalist realism. From a situation in which nothing can happen, suddenly anything is possible again.4

I think that, for the first time in the history of U.S. capitalism, the vast majority of people might sense the lie of liberal, capitalist democracy. They feel anxious, unfree, disaffected. Fantasies of the good life have been shattered beyond repair for most people. Trump and this hopefully brief triumph of right neoliberalism will soon lay this bare for everyone to see. Now, with Trump, it is absolutely clear: the rich rule the world; we are all disposable; this is no democracy. The question becomes: How will we show up for history? Will there be new stories, ideas, visions, and fantasies to attach to? How can we productively and meaningful intervene in the crisis of neoliberalism? How can we "tear a hole in the grey curtain" and open up better worlds? How can we put what we've learned to use and begin to imagine and build a world beyond living in competition? I hope our critical journey through the neoliberal conjuncture has enabled you to begin to answer these questions.

More specifically, in recent decades, especially since the end of the Cold War, our common-good sensibilities have been channeled into neoliberal platforms for social change and privatized action, funneling our political energies into brand culture and marketized struggles for equality (e.g., charter schools, NGOs and non-profits, neoliberal antiracism and feminism). As a result, despite our collective anger and disaffected consent, we find ourselves stuck in capitalist realism with no real alternative. Like the neoliberal care of the self, we are trapped in a privatized mode of politics that relies on cruel optimism; we are attached, it seems, to politics that inspire and motivate us to action, while keeping us living in competition.

To disrupt the game, we need to construct common political horizons against neoliberal hegemony. We need to use our common stories and common reason to build common movements against precarity -- for within neoliberalism, precarity is what ultimately has the potential to thread all of our lives together. Put differently, the ultimate fault line in the neoliberal conjiuicture is the way it subjects us all to precarity and the biopolitics of disposability, thereby creating conditions of possibility for new coalitions across race, gender, citizenship, sexuality, and class. Recognizing this potential for coalition in the face of precarization is the most pressing task facing those who are yearning for a new world. The question is: How do we get there? How do we realize these coalitional potentialities and materialize common horizons?

HOW WE GET THERE

Ultimately, mapping the neoliberal conjuncture through everyday life in enterprise culture has not only provided some direction in terms of what we need; it has also cultivated concrete and practical intellectual resources for political interv ention and social interconnection -- a critical toolbox for living in common. More specifically, this book has sought to provide resources for thinking and acting against the four Ds: resources for engaging in counter-conduct, modes of living that refuse, on one hand, to conduct one's life according to the norm of enterprise, and on the other, to relate to others through the norm of competition. Indeed, we need new ways of relating, interacting, and living as friends, lovers, workers, vulnerable bodies, and democratic people if we are to write new stories, invent new govemmentalities, and build coalitions for new worlds.

Against Disimagination: Educated Hope and Affirmative Speculation

We need to stop turning inward, retreating into ourselves, and taking personal responsibility for our lives (a task which is ultimately impossible). Enough with the disimagination machine! Let's start looking outward, not inward -- to the broader structures that undergird our lives. Of course, we need to take care of ourselves; we must survive. But I firmly believe that we can do this in ways both big and small, that transform neoliberal culture and its status-quo stories.

Here's the thing I tell my students all the time. You cannot escape neoliberalism. It is the air we breathe, the water in which we swim. No job, practice of social activism, program of self-care, or relationship will be totally free from neoliberal impingements and logics. There is no pure "outside" to get to or work from -- that's just the nature of the neoliberalism's totalizing cultural power. But let's not forget that neoliberalism's totalizing cultural power is also a source of weakness. Potential for resistance is everywhere, scattered throughout our everyday lives in enterprise culture. Our critical toolbox can help us identify these potentialities and navigate and engage our conjuncture in ways that tear open up those new worlds we desire.

In other words, our critical perspective can help us move through the world with what Henry Giroux calls educated hope. Educated hope means holding in tension the material realities of power and the contingency of history. This orientation of educated hope knows very well what we're up against. However, in the face of seemingly totalizing power, it also knows that neoliberalism can never become total because the future is open. Educated hope is what allows us to see the fault lines, fissures, and potentialities of the present and emboldens us to think and work from that sliver of social space where we do have political agency and freedom to construct a new world. Educated hope is what undoes the power of capitalist realism. It enables affirmative speculation (such as discussed in Chapter 5), which does not try to hold the future to neoliberal horizons (that's cruel optimism!), but instead to affirm our commonalities and the potentialities for the new worlds they signal. Affirmative speculation demands a different sort of risk calculation and management. It senses how little we have to lose and how much we have to gain from knocking the hustle of our lives.

Against De-democratization: Organizing and Collective Coverning

We can think of educated hope and affirmative speculation as practices of what Wendy Brown calls "bare democracy" -- the basic idea that ordinary' people like you and me should govern our lives in common, that we should critique and try to change our world, especially the exploitative and oppressive structures of power that maintain social hierarchies and diminish lives. Neoliberal culture works to stomp out capacities for bare democracy by transforming democratic desires and feelings into meritocratic desires and feelings. In neoliberal culture, utopian sensibilities are directed away from the promise of collective utopian sensibilities are directed away from the promise of collective governing to competing for equality.

We have to get back that democractic feeling! As Jeremy Gilbert taught us, disaffected consent is a post-democratic orientation. We don't like our world, but we don't think we can do anything about it. So, how do we get back that democratic feeling? How do we transform our disaffected consent into something new? As I suggested in the last chapter, we organize. Organizing is simply about people coming together around a common horizon and working collectively to materialize it. In this way, organizing is based on the idea of radical democracy, not liberal democracy. While the latter is based on formal and abstract rights guaranteed by the state, radical democracy insists that people should directly make the decisions that impact their lives, security, and well-being. Radical democracy is a practice of collective governing: it is about us hashing out, together in communities, what matters, and working in common to build a world based on these new sensibilities.

The work of organizing is messy, often unsatisfying, and sometimes even scary. Organizing based on affirmative speculation and coalition-building, furthermore, will have to be experimental and uncertain. As Lauren Berlant suggests, it means "embracing the discomfort of affective experience in a truly open social life that no

one has ever experienced." Organizing through and for the common "requires more adaptable infrastructures. Keep forcing the existing infrastructures to do what they don't know how to do. Make new ways to be local together, where local doesn't require a physical neighborhood." 5 What Berlant is saying is that the work of bare democracy requires unlearning, and detaching from, our current stories and infrastructures in order to see and make things work differently. Organizing for a new world is not easy -- and there are no guarantees -- but it is the only way out of capitalist realism.

Getting back democratic feeling will at once require and help us lo move beyond the biopolitics of disposability and entrenched systems of inequality. On one hand, organizing will never be enough if it is not animated by bare democracy, a sensibility that each of us is equally important when it comes to the project of determining our lives in common. Our bodies, our hurts, our dreams, and our desires matter regardless of our race, gender, sexuality, or citizenship, and regardless of how r much capital (economic, social, or cultural) we have. Simply put, in a radical democracy, no one is disposable. This bare-democratic sense of equality must be foundational to organizing and coalition-building. Otherwise, we will always and inevitably fall back into a world of inequality.

On the other hand, organizing and collective governing will deepen and enhance our sensibilities and capacities for radical equality. In this context, the kind of self-enclosed individualism that empowers and underwrites the biopolitics of disposability melts away, as we realize the interconnectedness of our lives and just how amazing it feels to

fail, we affirm our capacities for freedom, political intervention, social interconnection, and collective social doing.

Against Dispossession: Shared Security and Common Wealth

Thinking and acting against the biopolitics of disposability goes hand-in-hand with thinking and acting against dispossession. Ultimately, when we really understand and feel ourselves in relationships of interconnection with others, we want for them as we want for ourselves. Our lives and sensibilities of what is good and just are rooted in radical equality, not possessive or self-appreciating individualism. Because we desire social security and protection, we also know others desire and deserve the same.

However, to really think and act against dispossession means not only advocating for shared security and social protection, but also for a new society that is built on the egalitarian production and distribution of social wealth that we all produce. In this sense, we can take Marx's critique of capitalism -- that wealth is produced collectively but appropriated individually -- to heart. Capitalism was built on the idea that one class -- the owners of the means of production -- could exploit and profit from the collective labors of everyone else (those who do not own and thus have to work), albeit in very different ways depending on race, gender, or citizenship. This meant that, for workers of all stripes, their lives existed not for themselves, but for others (the appropriating class), and that regardless of what we own as consumers, we are not really free or equal in that bare-democratic sense of the word.

If we want to be really free, we need to construct new material and affective social infrastructures for our common wealth. In these new infrastructures, wealth must not be reduced to economic value; it must be rooted in social value. Here, the production of wealth does not exist as a separate sphere from the reproduction of our lives. In other words, new infrastructures, based on the idea of common wealth, will not be set up to exploit our labor, dispossess our communities, or to divide our lives. Rather, they will work to provide collective social resources and care so that we may all be free to pursue happiness, create beautiful and/or useful things, and to realize our potential within a social world of living in common. Crucially, to create the conditions for these new, democratic forms of freedom rooted in radical equality, we need to find ways to refuse and exit the financial networks of Empire and the dispossessions of creditocracy, building new systems that invite everyone to participate in the ongoing production of new worlds and the sharing of the wealth that we produce in common.

It's not up to me to tell you exactly where to look, but I assure you that potentialities for these new worlds are everywhere around you.

#### [Feb 22, 2019] Opioid Crisis Shows How Economic Inequality Kills

###### Feb 22, 2019 | www.nakedcapitalism.com

Opioid Crisis Shows How Economic Inequality Kills Posted on February 20, 2019 by Yves Smith By Lynn Parramore, Senior Research Analyst at the Institute for New Economic Thinking. Originally published at the Institute for New Economic Thinking website

Pharmaceutical pushers like Purdue Pharma "couldn't have done their dirty work" without America's increasingly unbalanced economy

America's growing rate of economic inequality is more than a numerical ratio that worries economists or a trendy political talking point. The phenomenon has been linked to human tragedies ranging from higher murder rates to growing gaps in life expectancy .

Add death by opioids to the list.

In recent years, social scientists have been debating why more people have been dying from drug overdoses. Does the increased availability of highly addictive opioids fully explain the rise? Not entirely, it turns out.

Sociologist Shannon Monnat is author of a new study with the Institute for New Economic Thinking that examines county-level drug deaths in the U.S. Her research reveals that while overprescribing doctors, pharmaceutical pushers and illegal dealers are highly significant, a big part of what makes a community susceptible to the opioid scourge is recent patterns of economic distress -- the kind inflicted by decades of bad policy.

A recent flurry of headlines about the billionaire Sackler family, whose members own Purdue Pharma, the company that created the powerful opioid painkiller OxyContin, highlights the ugliness of drug sales representatives promoting dangerously high doses to boost profits. "Supply is certainly important," says Monnat, "but Big Pharma couldn't do its dirty work without America's increasing economic inequality."

Monnat's research examines U.S. drug fatalities from 2000-02 and 2014-16, two-thirds of which were caused by heroin, fentanyl, and prescription opiates. She concentrates on non-Hispanic whites because other than American Indians, that group has suffered the highest drug mortality rates of anybody over the last two decades.

Several of her findings complicate the common media narratives. Despite the characterization of opioids as "hillbilly heroin," most deaths and the biggest increase in fatalities among whites since 2000 were actually in urban counties. Rural areas saw fewer deaths overall, but the rates varied widely from one region to another. Some rural counties have the highest opioid mortality rates in the country, while others enjoy the lowest.

Why would opioids be raging through some predominately rural states, like Maine and Kentucky, but not others, like Idaho and Iowa?

Among non-urban counties, drug mortality rates appear to spike in two types of places: economically beaten-down communities centered on mining and distressed areas where people increasingly depend on service jobs. In these corners of America, economic anxiety matters more in terms of how many will die from opioid overdoses than supply factors, which tend to drive death rates more around big cities.

Monnat explains how despair builds in areas like Appalachia, where residents have seen mining jobs disappear and there are fewer ways for people without a college degree to make a living. In regions where manufacturing jobs were once abundant, like Pennsylvania, people have to rely on badly paid service jobs that offer few benefits.

Communities facing these challenges begin to implode. The best and brightest young people tend to leave to find jobs elsewhere. Families break apart. The tax base shrinks and social services disappear. Economic policies that support disinvestment in the public sphere, along with those that disfavor workers and allow corporations -- like greedy pharmaceutical companies -- to run roughshod over communities make everything worse. Distress spreads across generations.

On the other hand, rural areas where people are more reliant on farming or where there are a wider variety of jobs tend have a lower rate of death from opioids. The quality of labor markets matters, it turns out. Monnat also thinks that that greater social cohesion in these communities may help people stay more resilient when economic strains develop. Having a more robust social safety net helps, too. Elsewhere, she has shown that places where religion and sports are more of a focus also tend to have lower rates of drug fatalities. Maybe going to church or rooting for the local team gives people meaning and a sense identity, which helps them cope better when other sources of these human needs disappear.

The opioid crisis is really a "tale of two rural Americas," says Monnat. In places where economic inequality has thrown more lives into chaos, a greater number of lives will be snuffed out by this deadly strain of drugs. (Methamphetamines, she notes, cause slower deaths, so we may not have the full story of their impact on drug fatalities yet).

Her findings suggest that no matter how well intentioned the efforts to limit supply or provide treatment to the addicted, places where the economy isn't working for most people may continue to see high opioid fatalities.

Research like hers underscores the reality that policymakers in both political parties are going to have to move beyond the neoliberal framework popularized in the Reagan era that promotes corporate deregulation, shrunken social safety nets, and trade and labor policies that hurt ordinary workers. Such policies were meant to spark growth, but instead they have only made a thin slice of people wealthy and socked America with inequality that has disproportionately hit certain regions of the country.

Pro-worker policies, investments in public services like health and education, fairer tax systems, and re-establishing sensible rules for how companies do business are all part of a much-needed prescription for a healthier society.

We have a vicious circle going on here: the rich create drugs and in order to increase profits from year to year describe the drugs as non-addictive, which proves false. The rich pharmaceutical inventors and other distributors of drugs want more profits so they sell more drugs again insisting on their non-addictiveness. The poor, who no longer have good-paying jobs because these jobs have been moved overseas so that the companies can save money and make bigger profit by paying overseas workers less, are filled with despair and depression and are prescribed the "non-additive" drugs in order to maintain some degree of normality of being. Hence, the pharmaceutical developers sell more and get richer and the drug users die a miserable death too early. Nice, hey?

thesaucymugwump , February 20, 2019 at 12:25 pm

The opioid crisis is only one consequence of allowing selfish, ignorant libertarians to make policy. Anyone older than 50 remembers a pre-Walmart country where most things were made in the US. When most jobs are part-time, low-paid ones with no benefits, despair grows.

thesaucymugwump , February 20, 2019 at 3:00 pm

Alan Greenspan, Phil Gramm, Paul Ryan, and Christopher Cox, just to name a few, not to mention the Cato Institute the members of which said things like:

Daniel J. Ikenson: "In fact, since China joined the WTO in 2001, U.S. exports to China have more than doubled. And the notion that importing from and offshoring to China is hollowing out American manufacturing is not supported by the facts."

Doug Bandow: "The silliest argument against PNTR is that Chinese imports would overwhelm U.S. industry. In fact, American workers are far more productive than their Chinese counterparts Moreover, Beijing's manufacturing exports to the United States remain small, about half the level of those from Mexico."

Deroy Murdock professing that PNTR "will pressure China from inside and out" and that "Americans will enjoy more Chinese-made apparel and appliances at reasonable prices if PNTR passes."

Census Bureau data clearly shows that in 1985, the year data first became available, trade with China became negative and never looked back.

Joe Well , February 20, 2019 at 12:44 pm

I wish I had more time to read more on this. I wonder how deep the authors go in their emphasis on "inequality" rather than "poverty" or "low incomes." I'm from the Boston area, where the opioid crisis has hit hard, and there is low poverty but high inequality.

One thing about high inequality that I wish got discussed more here: it drives up the cost of housing (and to a lesser extent, most other things), which totally undercuts the buying power of wages. Massachusetts is moving toward a $15/hour statewide minimum wage (it's at$12/hour now). I strongly suspect that residential rents will rise to suck up a large part of that unless we have the kind of downturn that pushes luxury apartments into the lower rungs of the market.

Jerry B , February 20, 2019 at 4:07 pm

====One thing about high inequality that I wish got discussed more here: it drives up the cost of housing (and to a lesser extent, most other things), which totally undercuts the buying power of wages====

Thanks Joe. I agree with your comment completely. The cost of living drum is one I have been banging on in comments on NC. In this country and the world we have a income and wealth redistribution problem.

The solutions to the problem need to be addressed on multiple fronts. The fight for a higher minimum wage, higher income taxes on the upper classes, and a wealth tax, etc, are important but we also have to stop the soaring increase in cost of living. If we do not begin to contain soaring prices for things such as housing, healthcare, transportation, college, food, etc. where does it end?

In 1979 the average monthly rent in Chicago was $279. In 2019 the average rent in Chicago is roughly$1200. Ten years from now when the average rent in Chicago is $2000 are we going to raise the minimum wage to$20, $30?$30,000 for a new car, $40,000 for a new pickup truck,$25,000 per year for college tuition and room and board, and soaring healthcare costs that bankrupt many people.

To borrow concepts from I think Marx. What we are paying in the US for many basic needs is exchange value and not use value. My father used to say that a car is something to take you from Point A to Point B and it just depends on how much you want to pay. I live in the far northwest suburbs of Chicago and I see a lot of GMC Yukons/Chevy Suburbans usually with one person in it. A 2018 GMC Yukon is $50,000. That is obscene. Even if a person could afford it, by paying it they are enabling the car manufacturers to charge what they want. When I was in high school in the 70's you could buy a beater car for a couple thousand dollars. Now?? Go to any used car lot but bring smelling salts with you. I would venture that the supply of used cars far outstrips demand so something else is keeping car prices high. I am no economist or finance expert so I am light on solutions but something has to change or the bubble will burst. As Lambert, Thomas Franks, and other have pointed out, many in government are part of the affluent, credentialed, elitist upper classes so as I am not optimistic for solutions from the government anytime soon. And I do not think socialist type price controls are an answer but as I said that is out of my knowledge area. Thanks again for your comment Joe! The other half of the inequality equation, costs of living, needs to be addressed. There is a good book called Dream Hoarders that discusses some of what I mentioned above. Joe Well , February 20, 2019 at 7:08 pm I will definitely check out that book. I thought I was the only one banging this particular drum in comments. This problem is invisible to many because it disproportionately affects the young (but is by no means limited to the young! I just listened to an NPR interview with a retired woman who has to live with her brother! She cant even get subsidized housing for retirees). The cost of cars in inflation adjusted dollars is controversial because cars are just so much more reliable now, apples and oranges comparisons are almost impossible. But the national policy of encouraging SUV and pickup ownership is one of the most absurd aspects of our national mismanagement. Imagine if you told someone in 1977 that the average car in the 21st century would be just as fuel inefficient (OK, not sure about the exact numbers). As for rent control, what we had in Greater Boston before 1995 was both market driven housing construction with few impediments to development and rent control. So there was plentiful supply at reasonable cost. But rent control was abolished through a campaign funded by small landlords who then took the opportunity to fight new construction so they could rent gouge. Any incumbent fights competition and small landlords are no different. The insidious thing was they mastered the language of community, preservation, smart growth, etc. that appealed to the racist and classist sensibilities of many residents of affluent places like Cambridge while giving them progressive cover. Tomonthebeach , February 20, 2019 at 1:00 pm Basically, this is a rehash of Monnat's little study which is far from convincing and seems to be cherry-picking to support Case and Deaton's despair hypothesis. Case and Deaton are more convincing. If I was reviewing Monnat's paper, I would recommend major revisions to better explain how slicing up her data pie does not render degrees of freedom impotent as far a significance goes. So you can find both urban and rural counties with lots of ODs, and alas many more with not so many – so what? That hardly justifies expounding on how economic factors cause ODs. William Hunter Duncan , February 20, 2019 at 1:07 pm This is why I condemn liberal/Dem ideology as much or more than Republican. Two major parties to sell out Americans and America to corporations, banks, billionaires and an eternal privatized war machine. Growth and progress ideologies building on and reinforcing the pathological and ecocidal. So god damned sure of themselves, so arrogant and condescending. Contempt does not even begin to describe what I feel about the leadership of this empire. Even now I can hear liberals and Dems justifying the economics that leads to such destitution for so many. "It's okay when we get bad results. We're the good guys, we use the right words, and we meant well." *shudders* run75441 , February 20, 2019 at 2:17 pm In 1980, this particular letter to the editor was published in the NEJM. Two doctors authored it. Everything said in it is true. I would not contest it. "Addiction Rare in Patients Treated with Narcotics Recently, we examined our current files to determine the incidence of narcotic addiction in 39,946 hospitalized medical patients who were monitored consecutively. Although there were 11,882 patients who received at least one narcotic preparation, there were only four cases of reasonably well documented addiction in patients who had no history of addiction. The addiction was considered major in only one instance. The drugs implicated were meperidine in two patients, Percodan in one, and hydromorphone in one. We conclude that despite widespread use of narcotic drugs in hospitals, the development of addiction is rare in medical patients with no history of addiction. Jane Porter; Herschel Jick; MD Boston Collaborative Drug Surveillance Program, Boston University Medical Center, Waltham, MA. It was cited a few times from 1981 to 1988 each year."In 1989, the numbers of citations doubled and at certain points tripled. From 1981 to 2017, this letter was cited 608 times. 72.2% (439) of the citations, quoted the letter or used it as evidence addiction was rare in patients when treated with opioids such as oxycodone. 80.8% or 491 of the citations failed to note the patients described in the letter were hospitalized at the time they received the prescription." The median number of citations for a NEJM letter is 11 times. OxyContin was introduced in 1996 by Purdue Pharma and aggressively sold to doctors. Sold as a less-addictive alternative to other painkillers as it was made in a time-release formulation, allowing for a slow onset of the drug, and not a hit all at once which is more likely to lead to abuse. When used as prescribed, Oxycontin was safe. When ground up, it's slow release characteristics were marginalized. Shortly after 1996, Porter and Jick's letter citations doubled and continued to be cited in a positive fashion with few negative citations and a failure to mention the hospital setting where the drugs were administered. In 2007 in the pharmaceutical industry, "the manufacturer of OxyContin and three senior executives of Purdue Pharma plead guilty to federal criminal charges that they misled regulators, doctors, and patients about the risk of addiction associated with OxyContin. Even then the lobbying to restrict state laws regulating opioids continued. From 2006 to 2015, pharmaceutical companies spent$880 million in lobbying state and federal legislatures and contributing to campaigns to prevent laws restricting Opioid prescriptions. Their lobbying expenditures has outstripped those advocating for greater controls on prescriptions by 200 times giving them greater influence at the state level.

In 2018 law makers questioned Miami-Luken and H.D. Smith wanting to know why millions of hydrocodone and oxycodone pills were sent (2006 to 2016) to five pharmacies in four tiny West Virginia towns having a total population of about 22,000. Ten million pills were shipped to two small pharmacies in Williamson, West Virginia. The number of deaths increased along with the company and wholesaler profits.

This crap does end up in rural areas and it does impact the poor. As tends to happen with public health epidemics, overdoses have an outsize effect in certain regions. For instance, the biggest spike in fatalities by percentage occurred in Nebraska, North Carolina, New Jersey, Indiana, and West Virginia (33.3%, 22.5%, 21.1%, 15.1%, and 11.2% rises, respectively). But areas like Wyoming, Utah, and Oklahoma experienced declines of 9.2% to 33%.

These are just bits and pieces of what I have written on the topic of opioids and its impact all over America. "60% of opioid deaths occur in those who were given a prescription by a physician. The other 40% of deaths are caused by people who obtained opioids by "doctor shopping," and receive multiple scripts at once.

Usually someone will show up and start to argue with your comments or the numbers of deaths.

John M , February 20, 2019 at 2:27 pm

"Add death by opioids to the list"

Wonder if it is possible to recreate a list of all of those who have died because opioids/fentanyl overdose?
Remembering those we have lost (especially in such high numbers) reminds us of the collective and specific areas of communal loss in this country (i.e. West Virginia etc.) instead of the same type of sad individualized they-should-have-known-better pretension that often masks addiction/substance use in this country, especially as the aim of neoliberalism's second tenant -- please die -- is always operating.

Also, a running list might allow for more examination of each current death in context (pusher, supplier, distribution and invisible institutions enabling system to perpetuate for profit).

Ford Prefect , February 20, 2019 at 3:14 pm

The culmination and high point of trickle-down economics.

BoyDownTheLane , February 20, 2019 at 4:39 pm

Did anyone mention the clipper ship barons who made fortunes off opium? The original families locked into Skull & Bones (arguably a foreign intervention linked to Marxism, the Rothschilds and later the CFR, the Trilateralists, and the Rhodes gang)? Or the massive trafficking in illicit narcotgics by the nation's intelligence agencies?

JBird4049 , February 20, 2019 at 6:48 pm

I don't know about Marxism of all things being a connection unless you mean Karl Marx started his work after seeing the misery of the Industrial Revolution; a revolution partially fueled by the Chinese money the British got after starting and winning the Opium Wars. So I guess opium is partly responsible for Marxism.

Bob Anderson , February 20, 2019 at 5:23 pm

I don't agree. what, they couldn't afford "better" drugs where you would not OD? The consumerism is what causes OD. Cheaper drugs just make it easier.

The drug culture has been around since the mid-70's in terms of hard drugs. That correlates well the surge in single mother births and divorces. Matter of fact, everything goes back to the mid-70's.

JBird4049 , February 20, 2019 at 7:19 pm

Not quite. It's confusing correlation with causation. The social problems might have increased because of the increase in hard drugs. Maybe, but drugs and addiction was always prevalent.

The British had an awful problem with alcohol especially gin in the general population 1700's, and later in 1800's with morphine, opium, and cocaine. The Americans had similar problems, although not with the extremely cheap gin that used to be sold in Britain. After the American Civil War addiction to morphine increased with the millions of injured soldiers/addicts.

All of the older hard drugs were sold over the counter and with no prescription. Indeed, they were added to everyday medicine. Teething problems? Womanly complaints? 14 hour work shifts at the factory? They had the medicine just for you! Coca-Cola had cocaine in it originally and (I believe) a pharmacist created it.

It was with such legislation as the Food and Drug Safety Act in the early 1900s, the general improvement in working conditions, and having all the old addicts die, hopefully of old age, that decreased the levels of addiction. The problem never went away. The hard drugs were always around and used. It only declined and shifted to the more socially acceptable alcohol and nicotine. You might say that those manufacturers won the lobbying wars.

Jack Gavin , February 20, 2019 at 6:00 pm

I realize that opiods are the topic here. But crystal meth has to be included in any discussion regarding drugs and death. Also, I wonder if crystal meth and its cousins are more prevalent in those places where opiods are less of an issue.

VietnamVet , February 20, 2019 at 8:49 pm

If it makes money, neoliberalism deregulated it. In the case of fentanyl, prescription restrictions were ignored. FDA looked the other way. Manufacturers and prescribers got richer.

China is now meeting the users demand for the drug. The enablers of this have all imbibed the global aristocrat's contempt of the little people. Lexus lanes, housing, medical care, student loans, casinos and drugs are all extortion schemes to extract what little wealth that is left. Poor Americans are dying earlier with $15,000 of debt. #### [Feb 17, 2019] Death of the Public University Uncertain Futures for Higher Education in the Knowledge Economy (Higher Education ##### Notable quotes: ##### "... Administration bloat and academic decline is another prominent feature of the neoliberal university. University presidents now view themselves as CEO and want similar salaries. ..." ###### Feb 17, 2019 | www.amazon.com Customer Review The eyes opening, very important for any student or educator book This book is the collection of more than dozen of essays of various authors, but even the Introduction (Privatizing the Public University: Key Trends, Countertrends, and Alternatives) is worth the price of the book Trends in neo-liberalization of university education are not new. But recently they took a more dangerous turn. And they are not easy to decipher, despite the fact that they are greatly affect the life of each student or educator. In this sense this is really an eyes-opening book. In Europe previously higher education as assessable for free or almost free, but for talented student only. Admission criteria were strict and checked via written and oral entrance exams on key subjects. Now the tend is to view university as business that get customers, charge them exorbitant fees and those customers get diploma as hamburgers in McDonalds at the end for their money. Whether those degree are worth money charged, or not and were suitable for the particular student of not (many are "fake" degrees with little or no chances for getting employment) is not university business. On the contrary marketing is used to attract as many students as possible and many of those student now remain in debt for large part of their adult life. In other words, the neoliberalization of the university in the USA creates new, now dominant trend -- the conversion of the university into for-profit diploma mills, which are essentially a new type of rent-seeking (and they even attract speculative financial capital and open scamsters, like was in case of "Trump University" ). Even old universities with more than a century history more and more resemble diploma mills. This assault on academic freedom by neoliberalism justifies itself by calling for "transparency" and "accountability" to the taxpayer and the public. But it operates used utter perversion of those terms. In the Neoliberal context, they mean "total surveillance" and "rampant rent-seeking." Neoliberalism has converted education from a public good to a personal investment in the future, a future conceived in terms of earning capacity. As this is about your future earning potential, it is logical that for a chance to increase it you need to take a loan. Significantly, in the same period per capita, spending on prisons increased by 126 percent (Newfield 2008: 266). Between the 1970s and 1990s there was a 400 percent increase in charges in tuition, room, and board in U.S. universities and tuition costs have grown at about ten times the rate of family income (ibid.). What these instances highlight is not just the state's retreat from direct funding of higher education but also a calculated initiative to enable private companies to capture and profit from tax-funded student loans. The other tendency is also alarming. Funds now are allocated to those institutions that performed best in what has become a fetishistic quest for ever-higher ratings. That creates the 'rankings arms-race.' It has very little or nothing to do with the quality of teaching of students in a particular university. On the contrary, the curriculums were "streamlines" and "ideologically charged courses" such as neoclassical economics are now required for graduation even in STEM specialties. In the neoliberal university professors are now under the iron heel of management and various metrics were invented to measure the "quality of teaching." Most of them are very perverted or can be perverted as when a measurement becomes a target; teachers start to focus their resources and activities primarily on what 'counts' rather than on their wider competencies, professional ethics and societal goals (see Kohn and Shore, this volume). Administration bloat and academic decline is another prominent feature of the neoliberal university. University presidents now view themselves as CEO and want similar salaries. The same is true for the growing staff of university administrators. The recruitment of administrators has far outpaced the growth in the number of faculty – or even students. Meanwhile, universities claim to be struggling with budget crises that force to reduce permanent academic posts, and widely use underpaid and overworked adjunct staff – the 'precariat' paid just a couple of thousand dollars per course and often existing on the edge of poverty, or in real poverty. Money now is the key objective and the mission changed from cultural to "for profit" business including vast expenses on advancement of the prestige and competitiveness of the university as an end in itself. Ability to get grants is now an important criteria of getting the tenure. #### [Feb 15, 2019] Losing a job in your 50s is especially tough. Here are 3 steps to take when layoffs happen by Peter Dunn ##### Unemployment usually is just six month or so; this is the time when you can plan you "downsizing". You do not need to rush. ##### Often losing job logically requires selling your home and moving to a modest apartment, especially if no children are living with you. At 50 it is abut time... You need to do it later anyway, so why not now. ##### But that's a very tough decision to make... Still, if the current housing market is close to the top, this is one of the best moves you can make. Getting from your house several hundred thousand dollars allows you to create kind of private pension to compensate for losses in income till you hit your Social Security check, which currently means 66. #####$300K investment in A quality bonds that returns 3% per year are enough to provides you with $24K per year "pension" from 50 to age of 66. That allows you to pay for the apartment and amenities. The food is extra... ##### This way you can take lower paid job and survive. ##### And in this case you 401k remains intact and can supplement your SS income later on. Simple Excel spreadsheet can provide you with a complete picture of what you can afford and what not. Actually ability to walk of fresh air for 3 or more hours each day worth a lot of money ;-) ##### Notable quotes: ##### "... Losing a job in your 50s is a devastating moment, especially if the job is connected to a long career ripe with upward mobility. As a frequent observer of this phenomenon, it's as scary and troublesome as unchecked credit card debt or an expensive chronic health condition. This is one of the many reasons why I believe our 50s can be the most challenging decade of our lives. ..." ##### "... The first thing you should do is identify the exact day your job income stops arriving ..." ##### "... Next, and by next I mean five minutes later, explore your eligibility for unemployment benefits, and then file for them if you're able. ..." ##### "... Grab your bank statement, a marker, and a calculator. As much as you want to pretend its business as usual, you shouldn't. Identify expenses that don't make sense if you don't have a job. Circle them. Add them up. Resolve to eliminate them for the time being, and possibly permanently. While this won't necessarily lengthen your fuse, it could lessen the severity of a potential boom. ..." ###### Feb 15, 2019 | finance.yahoo.com ... ... ... Losing a job in your 50s is a devastating moment, especially if the job is connected to a long career ripe with upward mobility. As a frequent observer of this phenomenon, it's as scary and troublesome as unchecked credit card debt or an expensive chronic health condition. This is one of the many reasons why I believe our 50s can be the most challenging decade of our lives. Assuming you can clear the mental challenges, the financial and administrative obstacles can leave you feeling like a Rube Goldberg machine. Income, health insurance, life insurance, disability insurance, bills, expenses, short-term savings and retirement savings are all immediately important in the face of a job loss. Never mind your Parent PLUS loans, financially-dependent aging parents, and boomerang children (adult kids who live at home), which might all be lurking as well. When does your income stop? From the shocking moment a person learns their job is no longer their job, the word "triage" must flash in bright lights like an obnoxiously large sign in Times Square. This is more challenging than you might think. Like a pickpocket bumping into you right before he grabs your wallet, the distraction is the problem that takes your focus away from the real problem. This is hard to do because of the emotion that arrives with the dirty deed. The mind immediately begins to race to sources of money and relief. And unfortunately that relief is often found in the wrong place. The first thing you should do is identify the exact day your job income stops arriving . That's how much time you have to defuse the bomb. Your fuse may come in the form of a severance package, or work you've performed but have't been paid for yet. When do benefits kick in? Next, and by next I mean five minutes later, explore your eligibility for unemployment benefits, and then file for them if you're able. However, in some states severance pay affects your immediate eligibility for unemployment benefits. In other words, you can't file for unemployment until your severance payments go away. Assuming you can't just retire at this moment, which you likely can't, you must secure fresh employment income quickly. But quickly is relative to the length of your fuse. I've witnessed way too many people miscalculate the length and importance of their fuse. If you're able to get back to work quickly, the initial job loss plus severance ends up enhancing your financial life. If you take too much time, by your choice or that of the cosmos, boom. The next move is much more hands-on, and must also be performed the day you find yourself without a job. What nonessentials do I cut? Grab your bank statement, a marker, and a calculator. As much as you want to pretend its business as usual, you shouldn't. Identify expenses that don't make sense if you don't have a job. Circle them. Add them up. Resolve to eliminate them for the time being, and possibly permanently. While this won't necessarily lengthen your fuse, it could lessen the severity of a potential boom. The idea of diving into your spending habits on the day you lose your job is no fun. But when else will you have such a powerful reason to do so? You won't. It's better than dipping into your assets to fund your current lifestyle. And that's where we'll pick it up the next time. We've covered day one. In my next column we will tackle day two and beyond. Peter Dunn is an author, speaker and radio host, and he has a free podcast: "Million Dollar Plan." Have a question for Pete the Planner? Email him at AskPete@petetheplanner.com. The views and opinions expressed in this column are the author's and do not necessarily reflect those of USA TODAY. #### [Feb 13, 2019] Microsoft patches 0-day vulnerabilities in IE and Exchange ##### It is unclear how long this vulnerability exists, but this is pretty serious staff that shows how Hillary server could be hacked via Abedin account. As Abedin technical level was lower then zero, to hack into her home laptop just just trivial. ###### Feb 13, 2019 | arstechnica.com Microsoft also patched Exchange against a vulnerability that allowed remote attackers with little more than an unprivileged mailbox account to gain administrative control over the server. Dubbed PrivExchange, CVE-2019-0686 was publicly disclosed last month , along with proof-of-concept code that exploited it. In Tuesday's advisory , Microsoft officials said they haven't seen active exploits yet but that they were "likely." #### [Feb 13, 2019] Death of the Public University Uncertain Futures for Higher Education in the Knowledge Economy ##### Notable quotes: ##### "... This assault on academic freedom by neoliberalism justifies itself by calling for "transparency" and "accountability" to the taxpayer and the public. But it operates used utter perversion of those terms. In the Neoliberal context, they mean "total surveillance" and "rampant rent-seeking. ..." ###### Feb 11, 2019 | www.amazon.com skeptic, February 11, 2019 The eyes opening, very important for any student or educator book This book is the collection of more than dozen of essays of various authors, but even the Introduction (Privatizing the Public University: Key Trends, Countertrends, and Alternatives) is worth the price of the book Trends in neo-liberalization of university education are not new. But recently they took a more dangerous turn. And they are not easy to decipher, despite the fact that they are greatly affect the life of each student or educator. In this sense this is really an eyes-opening book. In Europe previously higher education as assessable for free or almost free, but for talented student only. Admission criteria were strict and checked via written and oral entrance exams on key subjects. Now the tend is to view university as business that get customers, charge them exorbitant fees and those customers get diploma as hamburgers in McDonalds at the end for their money. Whether those degree are worth money charged, or not and were suitable for the particular student of not (many are "fake" degrees with little or no chances for getting employment) is not university business. On the contrary, marketing is used to attract as many students as possible and many of those student now remain in debt for large part of their adult life. In other words, the neoliberalization of the university in the USA creates new, now dominant trend -- the conversion of the university into for-profit diploma mills, which are essentially a new type of rent-seeking (and they even attract speculative financial capital and open scamsters, like was in case of "Trump University" ). Even old universities with more than a century history more and more resemble diploma mills. This assault on academic freedom by neoliberalism justifies itself by calling for "transparency" and "accountability" to the taxpayer and the public. But it operates used utter perversion of those terms. In the Neoliberal context, they mean "total surveillance" and "rampant rent-seeking. " Neoliberalism has converted education from a public good to a personal investment in the future, a future conceived in terms of earning capacity. As this is about your future earning potential, it is logical that for a chance to increase it you need to take a loan. Significantly, in the same period per capita, spending on prisons increased by 126 percent (Newfield 2008: 266). Between the 1970s and 1990s there was a 400 percent increase in charges in tuition, room, and board in U.S. universities and tuition costs have grown at about ten times the rate of family income (ibid.). What these instances highlight is not just the state's retreat from direct funding of higher education but also a calculated initiative to enable private companies to capture and profit from tax-funded student loans. The other tendency is also alarming. Funds now are allocated to those institutions that performed best in what has become a fetishistic quest for ever-higher ratings. That creates the 'rankings arms-race.' It has very little or nothing to do with the quality of teaching of students in a particular university. On the contrary, the curriculums were "streamlined" and "ideologically charged courses" such as neoclassical economics are now required for graduation even in STEM specialties. In the neoliberal university professors are now under the iron heel of management and various metrics were invented to measure the "quality of teaching." Most of them are very perverted, or can be perverted as when a measurement becomes a target teachers start to focus their resources and activities primarily on what 'counts' rather than on their wider competencies, professional ethics and societal goals (see Kohn and Shore, this volume). Administration bloat and academic decline is another prominent feature of the neoliberal university. University presidents now view themselves as CEO and want similar salaries. The same is true for the growing staff of university administrators. The recruitment of administrators has far outpaced the growth in the number of faculty – or even students. Meanwhile, universities claim to be struggling with budget crises that force to reduce permanent academic posts, and widely use underpaid and overworked adjunct staff – the 'precariat' paid just a couple of thousand dollars per course and often existing on the edge of poverty, or in real poverty. Money now is the key objective and the mission changed from cultural to "for profit" business including vast expenses on advancement of the prestige and competitiveness of the university as an end in itself. Ability to get grants is now an important criteria of getting the tenure. #### [Feb 12, 2019] Older Workers Need a Different Kind of Layoff A 60-year-old whose position is eliminated might be unable to find another job, but could retire if allowed early access to Medicare ##### Highly recommended! ##### This is a constructive suggestion that is implementable even under neoliberalism. As everything is perverted under neoliberalism that might prompt layoffs before the age of 55. ##### Notable quotes: ##### "... Older workers often struggle to get rehired as easily as younger workers. Age discrimination is a well-known problem in corporate America. What's a 60-year-old back office worker supposed to do if downsized in a merger? The BB&T-SunTrust prospect highlights the need for a new type of unemployment insurance for some of the workforce. ..." ##### "... One policy might be treating unemployed older workers differently than younger workers. Giving them unemployment benefits for a longer period of time than younger workers would be one idea, as well as accelerating the age of Medicare eligibility for downsized employees over the age of 55. The latter idea would help younger workers as well, by encouraging older workers to accept buyout packages -- freeing up career opportunities for younger workers. ..." ###### Feb 12, 2019 | www.bloomberg.com The proposed merger between SunTrust and BB&T makes sense for both firms -- which is why Wall Street sent both stocks higher on Thursday after the announcement. But employees of the two banks, especially older workers who are not yet retirement age, are understandably less enthused at the prospect of downsizing. In a nation with almost 37 million workers over the age of 55, the quandary of SunTrust-BB&T workforce will become increasingly familiar across the U.S. economy. But what's good for the firms isn't good for all of the workers. Older workers often struggle to get rehired as easily as younger workers. Age discrimination is a well-known problem in corporate America. What's a 60-year-old back office worker supposed to do if downsized in a merger? The BB&T-SunTrust prospect highlights the need for a new type of unemployment insurance for some of the workforce. One policy might be treating unemployed older workers differently than younger workers. Giving them unemployment benefits for a longer period of time than younger workers would be one idea, as well as accelerating the age of Medicare eligibility for downsized employees over the age of 55. The latter idea would help younger workers as well, by encouraging older workers to accept buyout packages -- freeing up career opportunities for younger workers. The economy can be callous toward older workers, but policy makers don't have to be. We should think about ways of dealing with this shift in the labor market before it happens. #### [Feb 12, 2019] The Neoliberal University ##### Notable quotes: ##### "... Neoliberalism has transformed education from a social good into a production process where the final product is a reserve army of workers for the information economy. What David Harvey calls the "state-finance nexus" pushes universities to play the part by withholding state funds until they expand their enrollment and increase the number of college graduates entering the workforce.[13] In 2012, the Obama Administration identified increasing the number of undergraduate STEM degrees by one million over the next decade as a 'Cross-Agency Priority Goal' on the recommendation of the President's Council of Advisors on Science and Technology (PCAST). ..." ##### "... The present relationship between the university and the state flows from the dynamics of financialization. As financialization transforms the role of the United States in the global economy, it appropriates higher education to suit the needs of finance capital. Compared to the ever-expanding administrative apparatus responsible for managing contracts and investments, programs outside of STEM and business fields are considered superfluous. Humanities programs are often downsized and tenure tracks closed to push professors into permanent part-time employment arrangements.[15] Meanwhile, schools like Northeastern and MIT are surrounded by high-tech and business firms that rely on students and research facilities for cheap labor and productive capital. ..." ##### "... The position of financial and credit institutions as the financiers of America's productive infrastructure has far-reaching consequences for social institutions like universities with the potential to absorb surplus capital in the form of credit or produce the 21st-century 'information' workforce. Students, and faculty at universities like Northeastern will struggle against market pressures on universities to attract outside investors while downsizing education for as long as the U.S. economy is dominated by finance. ..." ###### Feb 12, 2019 | www.nupoliticalreview.com Last month at Northeastern University, the adjunct union reached a tentative agreement with the university administration to avert a planned walkout after more than a year of unsuccessful negotiations. Those familiar with the adjunct campaign know that adjunct professors are contingent workers who comprise more than half of the teaching staff at Northeastern and are paid a couple thousand dollars for each class that they teach.[1] From a budgetary standpoint, contingent workers are economical because they are easily replaced and therefore can be paid less. Still, at a school like Northeastern University with an operating budget of more than$2.2 billion, it is hard to argue that more than half of all professors need to earn poverty wages for the school to remain profitable.[2]

In today's neoliberal landscape -- a term which refers to the coordinated effort by capital and financial interests after the 1980s to privatize public institutions and deregulate markets -- Northeastern is not unusual in its treatment of adjunct professors. The neoliberal university model of high tuitions, bloated administrative departments, and upscale student facilities -- along with assaults on the job security and pay of professors -- is the new norm. It is the image of a thoroughly financialized economy that has transformed the relationship between universities and the state.

From the 19th century through the 1970s, the relationship between universities and the state remained constant. There was an informal arrangement of mutual independence: Academics operated autonomously with state funding on the understanding that they were willing to pursue research in which the state had an interest, such as medicine or space exploration.[3] Underlying this arrangement was the assumption that as a social good, education should drive public research and development.

The story of how universities became neoliberalized begins with the economic crisis of the 1970s and the subsequent free-market discourse that invoked capitalism's insatiable need for economic growth in order to equate the interests of working people with the interests of financiers.

In the three decades after World War II, the U.S. established economic hegemony over the global capitalist world. The Fordist compromise between strong manufacturers and a strong, suburbanizing working class yielded unprecedented wage growth.[4] However, the Fordist model could not last forever. As a general rule, whenever compound economic growth falls below three percent, people begin to get scared . In order to sustain three percent compound growth, there must be no barriers to the continuous expansion and reinvestment of capital.

The suburbanization of postwar America did sustain high demand for American-made automobiles and home products, but reinvestment in manufacturing eventually became difficult for capital because a widely-unionized and militant working class created a labor shortage (i.e. near-full employment) which drove up wages and hurt profitability.[5][6] To the extent that productivity could be improved by technological innovations, organized labor insisted on "productivity agreements" that ensured that machines would not be used to undermine wages or benefits. To make matters worse for U.S. manufacturers, monopolies like the Big Three auto companies were broken by foreign imports from a newly rebuilt Europe and Japan.[7]

In The Grundrisse , Karl Marx remarked that "every limit [to capital accumulation] appears as a barrier to be overcome."[8] For Marx, sustained capital accumulation requires an "industrial reserve army" to keep the cost of labor (i.e. wages) from impeding profitability. To restore profits, American capital had to discipline labor by drawing from the global working population. The Immigration and Nationality Act of 1965 addressed U.S. labor scarcity by abolishing immigration quotas based on nationality so that cheap labor would flood the market and drive down wages.[9] However, it proved more effective for manufacturing capital to simply relocate to countries with cheaper labor, and throughout the 1970s and 1980s capital did just that -- first to South Korea and Thailand, and then to China as wages in those countries became too high.[10]

"Globalization" entailed removing barriers to international capital relocation such as tariffs and quotas in order to construct a global market where liquid money capital could flow internationally to wherever it yielded the most profits. Of course, wage suppression eventually lowers consumer demand. The neoliberal solution was for financial institutions to sustain middle-class purchasing power through credit. In The Enigma of Capital , David Harvey writes that "the demand problem was temporarily bridged with respect to housing by debt-financing the developers as well as the buyers. The financial institutions collectively controlled both the supply of, and demand for, housing!"[11]

The point of this history though, is that the financialization of the American economy, through which financial markets came to dominate other forms of industrial and agricultural capital, served as the backdrop for the transformation of higher education into what it is today. Neoliberal ideology reframed the social value of higher education as a tool for building the next workforce to serve the new "information economy" -- a term that emerged in the midst of globalization to describe the role of U.S. suburban professionals in the global economy. Simultaneously, finance capital repurposed universities as points of capital accumulation and investment.

The discourse around the information economy sought to rationalize the offshoring of manufacturing from the U.S. The idea was that due to globalization, America has reached a stage of development where its participation in the global economy is as a white-collar work force, specializing in technology and the spread of information.[12] In this telling, there is nothing to critique about the deindustrialization of the American economy because it was inevitable. It was then simple to realign the social goals of universities with the economic goals of Wall Street because the state repression of radical civil rights movements on the Left and the emergent free-market discourse of the Right formed a widespread perception of the state as inherently problematic . State research and development at universities was easily dismissed as inefficient, which cleared space for a neoliberal redefinition of higher education.

Neoliberalism has transformed education from a social good into a production process where the final product is a reserve army of workers for the information economy. What David Harvey calls the "state-finance nexus" pushes universities to play the part by withholding state funds until they expand their enrollment and increase the number of college graduates entering the workforce.[13] In 2012, the Obama Administration identified increasing the number of undergraduate STEM degrees by one million over the next decade as a 'Cross-Agency Priority Goal' on the recommendation of the President's Council of Advisors on Science and Technology (PCAST).

At the same time that neoliberalism transforms education into a production process for high-tech workers, it transforms the university itself into a site for surplus capital absorption through the construction of new labs, facilities, and houses to draw wealthy students and faculty capable of attracting federal grants. In December 2015, Northeastern filed a letter of intent with the Boston Redevelopment Authority to propose building a residence hall for approximately 800 students. The Boston Globe reported that the project is currently under review by American Campus Communities, the largest developer of private student housing in the U.S. To an economizing university administrator, private developers are very appealing because they assume the debt generated by construction projects. The circular process whereby a large university endowment comprised of financial assets is used to contract a debt-financed independent developer reveals how neoliberalism integrates universities into the circulatory system of capital as circuits of accumulation and investment.[14]

The present relationship between the university and the state flows from the dynamics of financialization. As financialization transforms the role of the United States in the global economy, it appropriates higher education to suit the needs of finance capital. Compared to the ever-expanding administrative apparatus responsible for managing contracts and investments, programs outside of STEM and business fields are considered superfluous. Humanities programs are often downsized and tenure tracks closed to push professors into permanent part-time employment arrangements.[15] Meanwhile, schools like Northeastern and MIT are surrounded by high-tech and business firms that rely on students and research facilities for cheap labor and productive capital.

The position of financial and credit institutions as the financiers of America's productive infrastructure has far-reaching consequences for social institutions like universities with the potential to absorb surplus capital in the form of credit or produce the 21st-century 'information' workforce. Students, and faculty at universities like Northeastern will struggle against market pressures on universities to attract outside investors while downsizing education for as long as the U.S. economy is dominated by finance.

#### [Feb 12, 2019] The neoliberal university is making us sick Who's to blame by Jodie-Lee Trembath

###### Feb 12, 2019 | thefamiliarstrange.com

June 14, 2018

Trigger warning: This post contains the discussion of depression and other mental health issues, and suicide. If you or anyone you know needs help or support for a mental health concern, please don't suffer in silence. Many countries have confidential phone helplines (in Australia you can call Lifeline on 13 11 14, for example); this organisation provides worldwide support, while this website compiles a number of helpline sites from around the world.

I am writing today from a place of anger; from a rage that sits, simmering on the surface of a deep well of sadness. I didn't know Dr. Malcolm Anderson, the senior accountancy lecturer from Cardiff University whose death, after falling from the roof of his university building, was last week ruled a suicide . I obviously have no way to know the complexity of his feelings or what sequence of events led up to his decision to end his own life. However, according to the results of an inquest, we can know what Dr. Anderson wanted his university to understand about his death – that it was, at least in part, because of the pressures of his academic work.

The media reports that Dr. Anderson had recently been appointed to Deputy Head of his department, significantly increasing his administrative load. Nonetheless, he was still teaching 418 students and needed to mark their work within a 20-day turnaround. To meet that deadline, he would have needed to work approximately 9 hours a day without food or toilet breaks, for 20 days straight, and not do ANY other kind of work during that time (such as the admin that comes with being a Deputy Head). Practically impossible, given he was also a human being, with a home life, and physical needs like food, in addition to work responsibilities.

His wife, Diane, has been quoted saying that Dr. Anderson worked very long hours and often took marking to family events. She has said that although he was a passionate educator who won teaching awards every year, he had been showing signs of stress and had spoken to his managers about his difficulty meeting deadlines. A colleague told the inquest that he was given the same response each time he asked for help, and staffing cuts had continued.

A Marked Problem

... ... ...

And look, I get it. To someone outside the academy, I'm sure the perception remains that academics sit in leather armchairs, gazing out the gilded windows of our ivory towers, thinking all day.

That has not been my experience, nor that of anyone I know.

My colleagues and peers have, however , experienced levels of anxiety and depression that are six times higher than experienced in the general population (Evans et al. 2018). They report higher levels of workaholism , the kind that has a negative and unwanted effect on relationships with loved ones (Torp et al. 2018). The picture is often even bleaker for women , people of colour , and other non-White, non-middle-class, non-males. So whether you think academics are 'delicate woeful souls' or not, it's difficult to deny that there is a real problem to be tackled here.

Obviously, marking load is only one issue amongst many faced in universities the world over. But it's not bad as an illustration, partly because it's quantifiable . It's somewhat ironic that the neoliberal metrics that we rail against, the audit culture that causes these kinds of examples to happen, could also help us describe to others why they are a problem for us. So quantifiability brings us to neoliberalism. How did neoliberalism become so pervasive that it's almost impossible to imagine how the world could look different?

Neoliberalism, then and now

These last two weeks I've been working out of the Stockholm Centre for Organisational Research in Sweden, which, by coincidence, is where Professor Cris Shore , anthropologist of policy and the guest on our next podcast episode is currently based. I was chatting to him the other day about the interview we recorded last December, which centres around many of the ideas I'm discussing in this blog post. I had to admit, I hadn't realised until we did that interview how angry many people still feel towards the Thatcher government for introducing neoliberal ideologies and practices into the public sector. Despite doing a Ph.D. about modern university life, it hadn't fully registered for me that events of the past , specifically the histories of politics and economics in 'the West', were such active players in the theatre of higher education's present .

To understand today's neoliberal universities, let's explore a little history in the UK and the US, two of the biggest influencers in the global higher education sector today. In 1979, Margaret Thatcher rose to power on a platform of reviving the stagnant British economy by introducing market-style competition into the public sector. This way, she claimed, she was ensuring, that "the state's power [was] reduced and the power of the people, enhanced" (Edwards, 2017) . For universities, this meant increased "accountability" and quality assurance measures that would drag universities out of their complacency .

Meanwhile, in the US, Ronald Reagan was also arriving at neoliberalism via a different path. Americans historically don't trust central government (Roberts, 2007) , so in 1981, Reagan introduced tax cuts (especially for the rich) for the first time in American history, therefore "protecting" the American people from the rapacious spending habits of the state (Prasad, 2012) . In American universities, this manifested over the next 30 years in reduced public spending on higher education, transferring the costs for tuition to student-consumers, and encouraging partnerships with industry and endorsements from philanthropists (often with agendas) to cover research costs (Shumway, 2017) .

Then in the 90s, there was a moral panic about the public sector caused by scandals such as " the collapse of Barings Bank in 1995 , the failures of the medical profession revealed by investigations into the serial murders by Dr Harold Shipman , and the numerous cases of child abuse that have plagued the Catholic Church " (Shore, 2008) . Frankly, it seems pretty understandable that people were looking for greater transparency, a bit of accountability, and a whole lot less of, "leave it to the professionals, they seem like alright blokes, don't they?" from their public sector.

However, an ideology that had originally looked so promising to the public began, over time, to create a new set of problems. As Cris Shore points out in his seminal 2008 article, ' Audit culture and Illiberal governance: Universities and the politics of accountability ':

The official rationale for [neoliberal ideologies and actions] appears benign and incontestable: to improve efficiency and transparency and to make these institutions more accountable to the taxpayer and public (and no reasonable person could seriously challenge such commonsensical and progressive objectives). The problem, however, is that audit confuses 'accountability' with 'accountancy' so that 'being answerable to the public' is recast in terms of measures of productivity, 'economic efficiency' and delivering 'value for money' (VFM).

The trouble with neoliberalism and its offshoot, New Public Management , is that much like the Newspeak of Orwell's 1984 , the words that were used to sell it – quality, accountability, transparency etc. – in practice, mean the opposite of what they appear to mean. For example, as Chris Lorenz (2012) points out in an article that convincingly compares New Public Management in universities to the outcomes of a Communist regime , there has been no evidence, statistical or otherwise, that increasing 'quality control measures' in universities has actually improved quality in universities by any objective criteria – and often just the opposite.

What has "improved" in universities because of neoliberal practices is efficiency, often through measures like restructures and reviews. Again, taking steps to save money and time sounds like a positive. However, the problem with 'efficiency' is that, unlike its counterpart 'effectiveness' (the ability to bring about a specific effect), 'efficiency' has no end point – it is a goal unto itself. As Lorenz phrases it, "efficient, therefore, is never efficient enough," (2012, p. 607).

Bringing this back, then, to issues of mental health and increasing workloads on campus. Liz Morrish of Academic Irregularities pointed out last week that when tragedies such as the death of Malcolm Anderson occur in universities, the most common response is for said university to announce a review. As anticipated, two days after the results of Dr. Anderson's inquest were first reported in the media, Cardiff University announced that they would be reviewing the 'support, information, advice and specialist counselling' available to all staff, but also urged any academic "who has any concerns regarding workload, to raise them with their line manager, in the first instance, so all available advice and support can be offered."

This platitude has been taken by many online as exactly that – a platitude. Several commenters on Twitter have pointed out that providing more mental health support doesn't actually reduce workload, while others have noted that there has been no discussion by Cardiff U of attempting to fix the underlying cause. I agree with them, and it's part of the reason I'm so angry. Malcolm Anderson could easily be any one of us.

Yet, I have to admit, I'd also hate to be part of the executive team at Cardiff University right now. Can you imagine the anguish of knowing that someone had taken their life, and held you directly responsible? You'd have to feel so helpless, so powerless in the shadow of neoliberal forces that permeate every last aspect of the global higher education sector. I don't know, I haven't been a Vice Chancellor, maybe you wouldn't have to feel that way. But it's easy to imagine how one could.

The path to neoliberal hell is paved with good intentions

So, what's the answer? I wish I knew. What I do know is that anthropological thinking has a lot to offer in the exploration of big immutable mobiles 2 like neoliberalism. As Sherry Ortner asks in her 2016 article " Dark anthropology and its others: Theory since the eighties ", who better to question the power structures inherent in 'dark' topics such as neoliberalisation or colonialism than anthropologists? Yet, she urges an approach that also acknowledges the possibility of goodness in the world, quoting from the opening to Michael Lambek's Ordinary Ethics as rationale:

Ethnographers commonly find that the people they encounter are trying to do what they consider right or good, are being evaluated according to criteria of what is right and good, or are in some debate about what constitutes the human good. Yet anthropological theory tends to overlook all this in favor of analyses that emphasize structure, power, and interest. (Lambeck, 2010, p. 1)

And this is where I have to deviate from the majority of the neoliberal university critiques I've read. In these pieces, it's all too common to read criticisms of academic managers, or administrators, or university 'service providers' as if they are The Reason that neoliberal ideologies get enacted in university contexts. But usually, they're just human beings too, also subject to KPIs and managerial demands and neoliberal ideologies.

Having worked at different times as an educator, a researcher, and a communications manager in various universities for more than 10 years, and now having conducted fieldwork at a university for my PhD, I have had the chance to observe and conduct research on at least nine different university campuses, in at least five countries. Based on those experiences, I am in complete agreement with Lambek: the majority 3 of non-academics that I have encountered, in every type of department, and at every level of universities from Level 1 administrative officers to Presidents and Vice Chancellors, "are trying to do what they consider right or good" (2010, p. 1).

They demonstrate, both through words and their actions, their beliefs that education is valuable, and that students are important as human beings, not just as cash cows. They are often working long hours themselves, trying to keep up with the demands that neoliberal university life is placing on them. I just can't get on board with the idea that they are, universally, the villains of the neoliberal horror story.

It seems much more likely, to me, that neoliberal ideologies continue to get enacted and reinforced by academic managers because these practices have become the norm. Throughout and because of the historical growth pattern neoliberalism has experienced, these ideologies have put down roots, and these roots have become so entangled with other aspects of university life as to be inseparable. For many working-aged people, neoliberalism is the water we were born swimming in. Even presented with its inadequacies, it's difficult to imagine an alternative.

What I can agree with the critics about, however, is that non-academics often don't understand or appreciate – or perhaps remember (if they had worked in that capacity in the past) – the demands of being an academic, just like academics don't tend to understand or appreciate the demands that non-academics within the university are facing.

In their recently published book Death of the Public University (2017), Susan Wright and Cris Shore refer to the idea of 'Faculty Land' – a place synonymous with 'La La Land', where non-academic employees of universities think academics live. This really resonates with what I saw on fieldwork at an international university in Vietnam, but not only from administrators – academics too.

As I've said in a previous post , all the actors in universities are trying to abrogate responsibility sideways or upwards until they can only blame 'the neoliberal agenda', and once they get there, all they can see is a towering, monolithic idea , and it becomes like trying to have a fist fight with a cloud. Most people don't ever get to that point though, because the world feels more controllable if we believe that there is another human to blame .

The thing is though, blaming others almost never works . It doesn't make things better, it just creates a greater divide between groups, encourages isolationism and othering, and decreases the likelihood that either side will ever want to work together to fix the problem.

Dr Anderson's tragic death, and the similarly tragic statistics that tell us that the collective mental health of our academics is in crisis, should be a wake up call to all of us who work or study in universities, in any capacity. Whether it will be remains to be seen.

Again: If you or anyone you know needs help or support for a mental health concern, please don't suffer in silence . Sometimes talking about things with an objective outsider can help.

• If you work in a university with a counselling service, consider seeking them out. Many have emergency sessions set aside each day.
• Many countries have confidential phone helplines (in Australia you can call Lifeline on 13 11 14, for example).
• Befrienders.org provides worldwide support.
• The International Bipolar Foundation has compiled a number of helpline sites from around the world .
• If you (or your department) have the financial means, psychologists who specialise in working with HDR students and academics, such as Dr Shari Walsh of Growth Psychology sometimes offer Skype appointments. (I have had Skype sessions with Shari myself; she's lovely. PS. I don't get anything out of plugging her services, I just think what she offers is valuable.)

Yes, I know, this is a structural problem and we shouldn't have to take care of it as individuals (see Grace Krause's moving poem about this here ). But in the meantime, while we work on that, please seek help if you need it .

#### [Feb 12, 2019] Death of the Public University Uncertain Futures for Higher Education in the Knowledge Economy (Higher Education

##### "... London Metropolitan's near-bankruptcy opened the possibility of a second method of privatization; a 'fire sale' of a university and its prized degree-awarding powers, to one of the many U.S. for profit education providers that had been seeking entry into the market ..."
###### Feb 12, 2019 | www.amazon.com

Higher Education in Critical Perspective: Practices and Policies

Series editors: Susan Wright, Aarhus University; Penny Welch, Wolverhampton University

INTRODUCTION Privatizing the Public University: Key Trends, Countertrends and Alternatives

CRIS SHORE AND SUSAN WRIGHT

Since the 1980s, public universities have undergone a seemingly unending series of reforms designed to make them more responsive both to markets and to government priorities. Initially, the aim behind these reforms was to render universities more economic, efficient and effective. However, by the 1990s, prompted by the Organization for Economic Cooperation and Development (OECD 1998) and other international agencies, many national governments adopted the idea that the future lay in a 'global knowledge economy'. To these ends, they implemented policies to repurpose higher education as the engine for producing the knowledge, skills and graduates to generate the intellectual property and innovative products that would make their countries more globally competitive.

These reforms were premised on neoliberal ideas about turning universities into autonomous and entrepreneurial 'knowledge organizations' by promoting competition, opening them up to private investors, making educational services contribute to economic competitiveness, and enabling individuals to maximize their skills in global labour markets.

These policy narratives position universities as static entities within an all-encompassing market economy, but alternatively, the university can be seen as a dynamic and fluid set of relations within a wider 'ecology' of diverse interests and organizations (Hansen this volume; Wright 2016). The boundaries of the university are constantly being renegotiated as its core values and distinctive purpose rub up against those predatory market forces, or what Slaughter and Leslie (1997) term 'academic capitalism'. Under pressure to produce 'excellence', quality research and innovative teaching, improve world rankings, forge business links and attract elite, fee-paying students, many universities struggle to maintain their traditional mandate to be 'inclusive', foster social cohesion, improve social mobility and challenge received wisdom – let alone improve the poor records on gender, diversity and equality.

This book examines how public universities engage with these dilemmas and the implications for the future of the public university as an ideal and set of institutional practices. The book has arisen from a four-year programme of knowledge exchange between three research groups in Europe and the Asia Pacific, which focused on the future of public universities in contexts of globalization and regionalization. 1 The groups were based in the U.K. and Denmark, chosen as European countries whose public universities have quite different histories and current reform policies, and New Zealand, as a country at the forefront of developing 'entrepreneurial' public universities, and with networks to other university researchers in Australia and Asia. Through a series of six workshops, four conferences and over thirty individual exchange visits, the project developed an extended discussion between the three groups of researchers. This enabled us to generate a new approach and methodology for analysing the challenges facing public universities. As a result, this book asks:

• How are higher education institutions being reconfigured as 'entrepreneurial' and as 'knowledge' organizations, and with what effects?

• In what ways are new management systems and governance regimes transforming the culture of academia?

• How are universities responding to these often contradictory policy agendas?

• How are national and international reforms impacting on the social purposes of the university and its relationship to society?

• What possibilities are there for challenging current trends and developing alternative university futures?

Mapping the Major Trends

Nowhere are the above trends more evident than in the English-speaking universities, particularly in the U.K., Australia and New Zealand. These countries have been a laboratory for testing out a new model of the neoliberal entrepreneurial university. At least seven key features characterize these reforms.

1. State Disinvestment in Universities – or Risk-free Profits for Private Providers?

The first feature is a progressive withdrawal of government support for higher education. In the U.K., for example, the Dearing Report (1997) showed that during the previous twenty years, a period of massive university expansion, state funding per student had declined by 40 percent. While Tony Blair's New Labour government of 1997 proclaimed 'education, education, education' as its key priority, it did so by introducing cost-sharing, in the form of student tuition fees, as a way to reduce the annual deficit in the funding of university teaching.

In 2010, the British Conservative–Liberal government under David Cameron went even further by removing all state funding for teaching except in the STEM subjects (science, technology, engineering and mathematics).

Instead, students were now to pay fees of £9,000 per annum (a three-fold increase) for which state-funded loans were made available. From the government's perspective, the genius of this shifting of state funding from teaching to loans was that private for-profit education providers could now access taxpayers' money – and this transfer of funds was further justified ideologically as providing competition and creating a 'level playing field' between public and private education providers.

Other countries have also decided to withdraw state funding for higher education. For example, in September 2015, Japan's education minister Hakobyan Shimomura wrote to all of the country's eighty-six national universities calling on them to 'take active steps to abolish [social science and humanities] organizations or to convert them to serve areas that better meet society's needs' (Grove 2015b).

These measures echo the wider global trend set by advocates of Milton Friedman and the Chicago School's brand of neoliberal economics. In the 1980s, the 'Chicago boys' carried out their most radical experiments in Chile, removing the state's direct grants to universities, funding teaching only through students' tuition fees, and making government loans available to students so that they could pay those fees (Bekhradnia 2015).

In the United States, the same policies have been adopted. For example, in California between 1984 and 2004, state spending per capita on higher education declined by 12 percent.

Significantly, in the same period per capita spending on prisons increased by 126 percent (Newfield 2008: 266). Between the 1970s and 1990s there was a 400 percent increase in charges in tuition, room and board in U.S. universities and tuition costs have grown at about ten times the rate of family income (ibid.). What these instances highlight is not just the state's retreat from direct

funding of higher education but also a calculated initiative to enable private companies to capture and profit from tax-funded student loans.

2. New Regimes for Promoting Competitiveness

A second major trend that has reshaped higher education has been the creation of funding and assessment regimes designed to increase productivity and competition between universities, both nationally and globally. What began in the 1980s as an exercise to assure the 'quality' of research in British universities had morphed, by the end of the 1990s, into ever-more invasive systems for ranking institutions, disciplines, departments, and even individuals.

The results were used to allocate funds to those institutions that performed best in what has become a fetishistic quest for ever-higher ratings and 'world class' status, or what Hazelkorn (2008: 209) has termed the 'rankings arms-race'.

Where some rankings are focused on research performance (such as the U.K.'s Research Excellence Framework, the Excellence in Research for Australia, and New Zealand's Performance Based Research Framework), others rank whole institutions (the Shanghai Jiao Tong Index, the QS and THE World University Rankings). Significantly, these ranking systems have especially negative impacts on minority groups and women (see Blackmore, Curtis, Grant and Lucas, this volume). This obsession with auditing and measuring performance also includes systems for evaluating teaching quality, surveying student satisfaction and measuring student engagement. 2

Even though vice chancellors and university managers ridicule ranking methodologies, they have learned to their cost to take them extremely seriously, as the financial viability of a university increasingly hinges on the reputational effects of these measures of performance (Sauder and Espeland 2009; Wright 2012).

3. Rise of Audit Culture: Performance and Output Measures

Third, running alongside the growth of these ranking systems has been the proliferation of performance and output measurements and indicators designed to foster transparency, efficiency and 'value for money'. This is part of a wider phenomenon called 'audit culture' and its growing presence throughout the public and private sectors, including higher education (Shore and Wright 2015; Strathern 2000). Driven by financial imperatives and the rhetoric of 'value for money' – and justified by a political discourse about the virtues of transparency and accountability – these technologies have been particularly instrumental

in promoting the logics of risk management, financialization and managerialism (see Dale, and Lewis and Shore, this volume). In Denmark, time has become a key metric and instrument for the efficient throughput of students and the accountability of institutions, but as Nielsen and Sarauw (this volume) show, these measures affect the very nature of education. Audits do not simply or passively measure performance; they actively reshape the institutions into which they are introduced (Power 1997; Shore and Wright 2015). When a measurement becomes a target, institutional environments are restructured so that they focus their resources and activities primarily on what 'counts' to funders and governors rather than on their wider professional ethics and societal goals (see Kohn and Shore, this volume).

The fourth key development during this period has been the extraordinary growth in the number and status of university managers and administrators. For the first time in history, as figures from the U.K.'s Higher Education Statistics Agency (HESA) show, support staff now outnumber academic staff at 71 percent of higher education institutions (Jump 2015). In Denmark, there has been an equally large increase in the number of administrators and the increased percentage of annual expenditure on administrators in just five years alone was equivalent to 746 new lectureships (Wright and Boden 2010). The figures from the U.S. are even more dramatic. Federal figures for the period 1987 to 2011/2012 show that the number of college and university administrators and professional employees has more than doubled in the last twenty-five years; an increase of 517,636 people – or an average of eight-seven new administrators every working day (Marcus 2014). The recruitment of administrators has far outpaced the growth in the number of faculty – or even students. Meanwhile, universities claim to be struggling with budget crises that force them to reduce permanent academic posts, and the temporarily employed teaching assistants – the 'precariat' – have undergone a massive increase in numbers.

This astonishing increase in management and administration is partly due to the pressures universities now face to produce data and statistics for harvesting by the ranking industries. Universities themselves often attribute the growth of their administrative and technical units to the enormous rise in government regulations. As the President of the American Association of University Administrators recently explained, 'there are "thousands" of regulations governing the distribution of

financial aid alone' and every university that is accredited probably has at least one person dedicated to that. However, the proliferation of administrators and managers has also been fuelled by the universities themselves, as they have taken on new functions and pursued new income streams. This is particularly evident in the U.S.:

Since 1987, universities have also started or expanded departments devoted to marketing, diversity, disability, sustainability, security, environmental health, recruiting, technology and fundraising, and added new majors and graduate and athletics programs, satellite campuses, and conference centers (Marcus 2014).

These trends are captured with exceptional clarity in Benjamin Ginsberg's book, The Fall of the Faculty (2011a). Ginsberg's thesis is that the new professional managers 'make administration their life's work', to the detriment of the universities' core functions. They have little or no faculty experience and promoting teaching and research is less important than expanding their own administrative domains: 'under their supervision, the means have become the end' (ibid.: 2). Every year, writes Ginsberg: hosts of administrators and staffers are added to college and university payrolls, even as schools claim to be battling budget crises that are forcing them to reduce the size of their full-time faculties. As a result, universities are filled with armies of functionaries -- vice presidents, associate vice presidents, assistant vice presidents, provosts, associate provosts, vice provosts, assistant provosts, deans, deanlets, deanlings, each commanding staffers and assistants -- who, more and more, direct the operations of every school. Backed by their administrative legions, university presidents and other senior administrators have been able, at most schools, to dispense with faculty involvement in campus management and, thereby to reduce the faculty's influence in university affairs (Ginsberg 2011a: 2).

One of the weaknesses in these statistics is that they fail to distinguish between administrative staff who support the teaching and research and those who do not. Support staff are crucial to enabling academics to carry out effective research, teaching and scholarship – the traditional mission of the university. Likewise, universities need managers who support academics in fulfilling these key functions of the university, but the statistics are rarely sufficiently refined to make these distinctions. Interestingly, many universities have dropped the term 'support staff' in favour of terms like 'senior administrators' and

'professional staff'. This move reflects the way that many university managers now see their role – which is no longer to provide support for academics but, rather, to manage them as 'human capital' and a resource. From the perspective of many university managers and human resources (HR) departments, academics are increasingly portrayed as a reluctant, unruly and undisciplined workforce that needs to be incentivized or cajoled to meet management's targeted outputs and performance indicators.

5. Institutional Capture: the Power of the 'Administeriat'

The budgetary reallocation from academic to administrative salaries is linked to a fifth major trend: the rise of the 'administeriat' as a new governing class and the corresponding shift in power relations within the university. Whereas in the past the main cleavage in universities was between the arts and the sciences, or what C.P. Snow (1956) famously termed 'the two cultures', today the main division is between academics and managers.

Collini (2013) attributes this shift in power to the way all university activities are now reduced to a common managerial metric. As he puts it, the 'terms that suit [managers'] activities are the terms that have triumphed'. Scholars now spend increasing amounts of their working day accounting for their activities in the 'misleading' and 'alienating' language and categories of managers. This 'squeezing out' of the true use-value of scholarly labour accounts for the 'pervasive sense of malaise, stress and disenchantment within British universities' (Collini 2013).

Professor of Critical Management Studies Rebecca Boden compares the way that university managers expand their increasingly onerous regulations to the way that 'cuckoos lay their eggs in the nests of other birds, and how the young cuckoos then evict the nest-builders' offspring' (cited in Havergal 2015). This cuckoo-in-the-nest metaphor might seem somewhat overblown, but it highlights the important fact that managers and administrators have usurped power in what were formerly more collegial, self-governing institutions . Yet many of these managers would not succeed as professionals in industry. Levin and Greenwood (2016) argue that, if universities were indeed business corporations, they would soon collapse, as their work organization currently violates nearly every one of the practices that characterize successful and dynamic high-tech areas and service industries. It is a short step from here to managers' appropriation of the identity of the university, with managers increasingly claiming not only to speak for the

university but to be the university (Ørberg 2007; Readings 1996; Shore and Taitz 2010). Today, rather than being treated as core members of a professional community, academics are constantly being told by managers and senior administrators what 'the university' expects of them, as if they were somehow peripheral or subordinate to 'the university'.

6. New Income Streams and the Rise of the 'Entrepreneurial University'

Faced with diminishing state funding and year-on-year cuts to national budgets for higher education, universities have been compelled to seek alternative income streams. This has entailed fostering more lucrative and entrepreneurial partnerships with industry; conducting commissioned research for businesses and government; partnering up with venture capitalists; commercializing the university's intellectual property through patents and licences; developing campus spin-out (and spin-in) companies; engaging proactively in city development programmes; and maximizing university assets including real estate, halls of residence, conference facilities and industrial parks. Equally important has been the raising of student tuition fees and the relentless drive to recruit more high-fee-paying international students . This project has given rise to the moniker 'export education', a sector of the economy and foreign-currency earner of growing importance to many countries. For example, in Canada, expenditures of international education students (tuition, accommodation, living costs and so on) infused $6.5 billion into the Canadian economy, surpassing exports of coniferous lumber (CAN$5.1 billion) and coal (CAN$6.1 billion) and gave employment to 83,00 Canadians (Roslyn Kunin and Associates, Inc 2009). Similarly, 'educational services' has become one of Australia's leading export industries such that, by 2008, it had become Australia's third-largest generator of export earnings with over AU$12.6 billion (Olds 2008). Along with Australia and Canada, the U.S.A., U.K. and New Zealand dominate the trade in international students (OECD 2011; chart 3.3) and the global demand for international student places is estimated to rise to 5.8 million by 2020 (Bohm et al. 2004).

The relentless pursuit of these new income streams has had a transformative effect on universities. Almost two decades ago Marginson and Considine (2000) coined the term the 'enterprise university' to describe the model in which: the economic and academic dimensions are both subordinated to something else. Money is a key objective, but it is also the means to a more fundamental mission: to advance the prestige and competitiveness of the university as an end in itself (ibid. 2000: 5).

However, it would be misleading to suggest that all these changes are simply a consequence of the pressures that governments have placed on universities to refashion themselves as pseudo-business corporations. Some of the more entrepreneurially hawkish university rectors, vice chancellors and presidents have enthusiastically welcomed these changes. Many have benefitted from the enormous executive salaries that have become the norm for university 'CEOs', and they undoubtedly enjoy their vaulted status and the opportunities this provides to mingle with world leaders at prestigious summits and receptions, airport VIP lounges and gala fundraising events. For example, the Times Higher Education annual review of vice chancellors' pay shows that average salary and benefits for university vice chancellors in the U.K. rose by between £8,397 and £240,794 in 2013–2014. This constituted a 3.6 percent rise, whereas in the same period, other university staff received an increase of only 1 per cent (Grove 2015a).

A study by economists Bachan and Reilly (2015), from Brighton Business School, found that in the past two decades, vice chancellors have seen their salaries soar by an eye-watering 59 percent (Henry 2015), but concluded that these increases could not be justified in terms of their university's performance criteria, such as widening participation or bringing in income such as grants for teaching and research and capital funding. Rather, the study found that the presence of other high-paid administrative staff was pushing up vice chancellors' pay. Both the U.K.'s House of Commons' Public Accounts Committee and the former Minister for Business and Employment, Vince Cable, have condemned this 'substantial upward drift' of salaries among vice chancellors. However, this annual ritual of chastisement has little perceivable impact.

7. Higher Education as Private Investment Versus Public Good

The seventh major trend is recasting university education as a private and positional investment rather than a public good. The idea that gained prominence in the post-war era was that higher education was a public investment that benefits the economy and society as well as contributing to personal growth and social mobility (Morgan this volume). In the 1990s, this idea – and the Keynesian model that sustained it – was displaced by the Chicago School's economic doctrine and the notion that individuals, not the state, should take responsibility

for repeatedly investing in their education and skills in order to sustain and improve their position in a fast-changing competitive and global labour market. This is what the OECD termed 'new human capital theory' (Henry et al. 2001), an idea that came to dominate government thinking about growth and investment. However, several recent studies challenge the premises upon which this model is based (Ashton, Lauder and Brown 2011; Wright and Ørberg this volume).

Arising from this new way of conceptualizing higher education as a private individual good and the reduction of government funding for the sector, has been the replacement of student grants with loans. This has been coupled with a massive hike in student fees – or what is euphemistically called 'cost-sharing' by ministers and World Bank experts. There are several bizarre paradoxes in this way of financing higher education. First, as McGettigan (2013) shows, government funding of student loans to pay fees is likely to cost the taxpayer more than the previous system of funding universities directly for their teaching. Second, as Vernon (2010) points out, most students and their families can only afford to pay for the costs of their higher education through the kinds of debt-financing that governments across the world now condemn as reckless and inappropriate for themselves. Third, whereas the scale of national debt in many countries has become so severe that it has required emergency austerity measures to combat, the level of household debt is even more perilously high, peaking to 110 percent of GDP in 2009 in the U.K. (Jones 2013).

This was before the government transferred even more of the costs of higher education to families and tripled university fees. These policies are justified on the grounds that degree-holders gain a lifetime premium in earning: hence the catchphrase 'learn to earn'. In New Zealand, however, which has the seventh-highest university fees among developed countries, the OECD survey found that the value of a university degree in terms of earning power is the lowest in the world. The net value of a New Zealand tertiary education for a man is just $63,000 over his working life (compared with$395,000 in the U.S.). For a woman, it is even lower: 38,000 over her working life (Edmunds 2012). As Brown and Hesketh (2004) also show for the U.S., graduates' imagined future incomes are largely illusory. Yet students and parents are encouraged to take out what is effectively a 'subprime loan', in the gamble that it will eventually pay off by enhancing their future job prospects and earning power: it is a 'hedge against their future security' (Vernon 2008). In other words, higher education is now being modelled on the same types of financial speculation that produced the 2010 global financial crisis. The Death of the Public University? Do the seven trends outlined above spell the end of the public university? From the earliest beginnings of these developments, there has been an extensive literature foretelling the demise of the university. According to historians Sheldon Rothblatt and Bjorn Wittrock (1993: 1), the university is the second-longest unbroken institution in Western civilization, after the Catholic Church. Today, however, the university – or what John Henry Newman termed the 'idea of a university' – does indeed look broken. Or is this an unduly pessimistic conclusion? Jean-Francoise Lyotard set the agenda with his provocative book The Postmodern Condition: A Report on Knowledge . Noting the collapse of the university's traditional authority in producing legitimate knowledge, he wrote: The question (overt or implied) now asked by the professionalist student, the State, or institutions of higher education is no long 'Is it true?' but 'What use is it?' In the context of the mercantilization of knowledge, more often than not this question is equivalent to: 'Is it saleable?' And in the context of power-growth: 'Is it efficient?' (Lyotard 1994: 51). Following this line of reasoning, Bill Readings' book The University in Ruins (1996), noted both the decline of the university as the cultural arm of nation building and the administrators' eclipse of the scholar-teacher as the central figure in the university story. As he gloomily argued, the grand narrative of the university 'centred on the production of a liberal reasoning subject is no longer readily available to us (1996: 9). If, for Readings, the university was in a state of 'ruin', for David Mills, writing in 2003, it is locked in a state of permanent 'scaffolding'; an ongoing and ambiguous project of both maintenance and repair, construction and demolition. Thus 'crumbling bastions of social and intellectual elitism' are combined 'with shiny new campuses espousing lifelong access to 24/7 education for all' (Mills 2003). These contradictory trends have both positive and negative dimensions for universities and the project of higher education. On the one hand, access to universities has been massively increased and technological innovations, including Mass Open Online Courses (MOOCs), have allowed more distance learning. But on the other hand, universities and their staff have been subjected to an almost continuous process of reforms and restructurings designed both to recast higher education institutions as transnational business corporations and to open up the sector to more private-sector involvement. The complaint often voiced by academics is that universities – like hospitals, libraries and other local community services – are undergoing a process of 'death by a thousand cuts'. But chronic underfunding of public institutions also reflects a wider and arguably more purposeful political agenda that aims to fundamentally transform the public sector. One of the greatest threats to the university today lies in the 'unbundling' of its various research, teaching and degree-awarding functions into separate, profit-making activities that can then be outsourced and privatized. This agenda is articulated clearly in the recent report entitled 'An Avalanche is Coming: Higher Education and the Revolution Ahead' (Barber et al. 2013), published by the London-based think tank, the Institute for Public Policy Research. Its principal authors are Sir Michael Barber, Chief Education Advisor for Pearson PLC (a British-owned multinational education provider and publisher) and two of Pearson's executive directors. The report's central argument, captured in its 'avalanche' metaphor, is that the current system of higher education is untenable and will be swept away unless bold and radical steps are taken: The next 50 years could see a golden age for higher education, but only if all the players in the system, from students to governments, seize the initiative and act ambitiously. If not, an avalanche of change will sweep the system away. Deep, radical and urgent transformation is required in higher education. The biggest risk is that as a result of complacency, caution or anxiety the pace of change is too slow and the nature of change is too incremental. The models of higher education that marched triumphantly across the globe in the second half of the 20th century are broken (Barber, Donnelly and Rizvi 2013: 5). A series of forces that lie 'under the surface' threatens to transform the landscape of higher education. These include: a changing world economy in which the centre of gravity is shifting towards the Asia-Pacific region; a global economy still struggling to recover from the trauma of the global financial crash of 2007–2008; and the escalating costs of higher education, which are vastly outstripping inflation and household income. These are coupled with the declining value of a degree and a technological shift that makes information ubiquitous. Universities no longer hold a monopoly over knowledge production and distribution and face growing competition from the emergence of new universities and from 'entirely new models of university' that Pearson itself has been spearheading to exploit the new environment of globalization and the digital revolution (ibid. 2013: 9–21). The Barber report is part of a growing literature which seeks to 'remake the university' as an altogether different kind of institution (see Bokor 2012). Epochal and prophetic in tone and often claiming to be diagnostic and neutral, this literature proposes solutions that are anything but impartial or disinterested. Pearson, for example, makes no secret of its ambition to acquire a larger share of the higher education market and the rents that can be captured from its various activities. In 2015, Pearson sold off its major publishing interests to restructure the company around for-profit educational provision both in England and worldwide. Pearson also has a primary listing on the London Stock Exchange and a secondary listing on the New York Stock Exchange. Writing in the preface to the Barber reports, former president of Harvard University Lawrence Summers underscores its central ambition when he writes that in this new 'phase of competitive intensity', all of the university's core functions can be 'unbundled and increasingly supplied, perhaps better, by providers that are not universities at all' (Barber 2013: 1). As John Morgan (this volume) shows, higher education has long been – and continues to be – a site of ideological struggle between competing interests and their vision of society. Towards the Privatization of English Universities In England, these processes have been taken to an extreme. Events since the Conservative–Liberal coalition took office in 2010 suggest a tipping point may have been reached in the transformation of the public university. Research by the legal firm Eversheds (2009) revealed that no legislation was needed for public universities to be transferred to the private for-profit sector, either by a management buyout or by outside interests buying-in (Wright 2015). London Metropolitan University was an early contender. It advertised a tender worth £74 million over five years for a partner who would create a for-profit 'special services vehicle' to deliver all the university's functions and services – everything except academic teaching and the Vice Chancellor's powers. Such 'special services vehicles' are a way for private investors to buy into the university's activities. This plan was only stymied because civil servants found major administrative failings, and the resulting fines and repayments pushed the university close to bankruptcy. But this 'special services vehicle' model has been implemented by other universities, including Falmouth and Exeter, where a private company runs not only catering, estate maintenance and services on the two campuses, but also its entire academic support services (libraries, IT, academic skills and disability support services) (University and College Union 2013). London Metropolitan's near-bankruptcy opened the possibility of a second method of privatization; a 'fire sale' of a university and its prized degree-awarding powers, to one of the many U.S. for profit education providers that had been seeking entry into the market (Wright 2015). Privatization was only avoided thanks to the successful actions of its new Vice Chancellor. However, one university with a charter and degree-awarding powers has been transferred to the for-profit sector. In 2006, the Department of Business, Innovation and Science rushed through approval to give the College of Law in London degree-awarding powers and university status. This was just in time for its sale to finance company Montagu Private Equity. To maintain that university's charitable (tax-favourable) status and provide bursaries for students, the institution divided itself into a for-profit company with all the education and training activities, and an educational foundation. Montagu Private Equity made a leveraged buyout of the university: £177 million of the £200 million purchase price was borrowed and then put on the university's balance sheet, making it responsible for paying the debt and interest from its cash flow. A few years later, Montagu announced it was selling the university's buildings, in what was a clear case of asset stripping. The legal firm Eversheds recommended that other public universities follow this model and either sell stakes in their institution or be sold outright to financiers. As the University of Law example shows, such investors' prime interest is the short-term extraction of profit and liquidization of assets, rather the long-term future of higher education. Indeed, in June 2015, Montagu sold the University of Law to Aaron Etingen, founder and chief executive officer of Global University Systems (GUS), which owns a network of for-profit colleges worldwide (Morgan 2015). #### [Feb 11, 2019] The current diploma mills> are the result of the consecutive waves of university reforms since the 1990s to ground knowledge production on market principles. If university employees behave like ruthless rent-seekers, it is because they are forced to do so by the incentive structures that have been imposed on them by Johan Söderberg ##### Highly recommended! ##### IMHO there is no economics, only "political economy" and mathiness and "cult of measurement" especially with all those some fuzzy metrics currently in use, are just a part of the ideological smokescreen over "naked neoliberalism." Like shaman dances around the fire. Impressive and useless simultaneously. ##### In other words, many current practitioners of neoliberal economic theories (including but not limited to neoclassical economics) are practicing pseudoscience and are, directly or indirectly, bought and paid by financial oligarchy. That does not exclude possibility of some, occasional, useful insight. ##### Notable quotes: ##### "... The counterargument that I will elaborate here, is that neoliberalism and social democracy should be treated as two distinct and internally consistent thought and value systems. The integrity of the two ideologies must neither be reduced to practices/policies, which occasionally may overlap, nor to individual representatives, who, over the course of a lifetime, can move from one pole to the other. ..." ##### "... Robbins Report ..." ##### "... Underpinning this analysis is a bleak diagnosis of what purpose the university system and its employees serve. It is a diagnosis that Fuller, by his own admission, has gleaned from the Virginia-style neoliberal Gordon Tullock. ..." ##### "... The task assigned to the university, i.e. to certify bodies of trustworthy knowledge, is not called for by any intrinsic property of that knowledge (it being true, safe etc.), but is rather a form of rent-seeking. The rent is extracted from the university's state-induced monopoly over the access rights to future employment opportunities. Rent-seeking is the raison-d'être of the university's claim to be the royal road to knowledge. ..." ##### "... Granted, the cynical reading of the university system as a rent-seeking diploma-mill has a ring of truth to it when we, for instance, think of how students are asked to pay higher and higher tuition fees, while the curriculum is successively being hollowed-out. ..." ##### "... this is the result of the consecutive waves of university reforms since the 1990s to ground knowledge production on market principles. If university employees behave like self-interested rent-seekers, it is because they are forced to do so by the incentive structures that have been imposed on them. ..." ##### "... Thirty years of neoliberal politics have created the conditions under which categories such as "human capital" and "rent-seeking" start to make good sense... ..." ###### Feb 11, 2019 | lse.ac.uk From: A response to Steve Fuller The differences between social democracy and neoliberalism by Johan Söderberg ... ... ... The counterargument that I will elaborate here, is that neoliberalism and social democracy should be treated as two distinct and internally consistent thought and value systems. The integrity of the two ideologies must neither be reduced to practices/policies, which occasionally may overlap, nor to individual representatives, who, over the course of a lifetime, can move from one pole to the other. Neoliberalism and the university system Fuller's argument pivots on the mixed legacy of Lionel Robbins. On the one hand, Robbins' credentials as a neoliberal are firmly established by his decision to recruit Friedrich Hayek to the LSE. On the other hand, Robbins authored the government report whereby many regional universities in the UK were founded, in keeping with a classic social democratic agenda of enrolling more students from the working class. This encourages Fuller to draw an arc from the 1963 Robbins Report to university reforms of a more recent date (and with a more distinct, neoliberal flavour). The common denominator of all the reforms, Fuller says, is the ambition to enhance human capital. Alas, the enhancement of human capital is blocked on all sides by incumbent traditions and rent-seeking monopolies. From this problem description – which Fuller attributes to the neoliberals, but which is also his own – follows the solution: to increase the competition between knowledge providers. Just as the monopoly that Oxbridge held over higher education was offset by the creation of regional universities in the 1960s, so is the current university system's monopoly over knowledge acquisition sidelined by reforms to multiply and diversify the paths to learning. Underpinning this analysis is a bleak diagnosis of what purpose the university system and its employees serve. It is a diagnosis that Fuller, by his own admission, has gleaned from the Virginia-style neoliberal Gordon Tullock. The task assigned to the university, i.e. to certify bodies of trustworthy knowledge, is not called for by any intrinsic property of that knowledge (it being true, safe etc.), but is rather a form of rent-seeking. The rent is extracted from the university's state-induced monopoly over the access rights to future employment opportunities. Rent-seeking is the raison-d'être of the university's claim to be the royal road to knowledge. In this acid bath of cynicism, the notions of truth and falsehood are dissolved into the basic element that Tullock's world is made up of – self-interest. This reasoning lines up with a 19 th century, free market epistemology, according to which the evolutionary process will sift out the propositions that swim from those that sink. With a theory of knowledge like that, university-certified experts have no rationale for being. Their knowledge claims are just so many excuses for lifting a salary on the taxpayers' expense. It bears to stress that this argument can easily be given a leftist spin, by emphasising the pluralism of this epistemology. This resonates with statements that Steve Fuller has made elsewhere , concerning the claimants of alternative facts. Granted, the cynical reading of the university system as a rent-seeking diploma-mill has a ring of truth to it when we, for instance, think of how students are asked to pay higher and higher tuition fees, while the curriculum is successively being hollowed-out. However, as was pointed out to Fuller by many in the audience in Lancaster, this is the result of the consecutive waves of university reforms since the 1990s to ground knowledge production on market principles. If university employees behave like self-interested rent-seekers, it is because they are forced to do so by the incentive structures that have been imposed on them. Thirty years of neoliberal politics have created the conditions under which categories such as "human capital" and "rent-seeking" start to make good sense... ... ... ... The author would like to thank Adam Netzén, Karolina Enquist Källgren and Eric Deibel for feedback given on early drafts of this blog post, and especially Steve Fuller, for having invited a response to his argument. #### [Feb 11, 2019] Universities in the neoliberal age by Rafael Winkler ##### Notable quotes: ##### "... Higher education was being made to conform to the norms of efficiency, value for money, customer service, audit and performance targets. One of the consequences of this was the substitution of the authority of the academic, which is based on his or her professional knowledge of the discipline, for the authority of the line manager. ..." ##### "... I don't think that there has been a more sinister assault on academic freedom than this colonisation of higher education by neoliberalism. It justifies itself by calling for "transparency" and "accountability" to the taxpayer and the public. But it operates with a perverted sense of these words (since what it really means is "discipline and surveillance" and "value for money"). ..." ##### "... Let me explain. One of the central aspects of neoliberalism is the disappearance of the distinction between the worker and the capitalist. In the neoliberal setting, the worker is not a partner of exchange with the capitalist. She does not sell her labour-power for a wage. ..." ##### "... The labourer's ability to work, her skill, is an income stream. It is an investment on which she receives a return in the form of wages. The worker is capital for herself. She is a source of future earnings. In the neoliberal market, as Michel Foucault remarks, everyone is a capitalist. ..." ##### "... Neoliberalism has converted education from a public good to a personal investment in the future, a future conceived in terms of earning capacity. ..." ###### Sep 14, 2018 | mg.co.za Many of the students I have taught in Britain and South Africa see higher education as a place where they "invest" in themselves in the financial sense of the word. "Going to university," one student said, was a way of "increasing" his "value" or employability in the labour market. This perception of the university has not arisen by chance. Capitalism entered a new phase with the Thatcher and Reagan governments in Britain and the United States during the 1980s. The managerial practices used to run businesses were applied to the public sector, in particular to education and healthcare. This reform of the public sector (called "new public management") introduced a new way of thinking about the university. Higher education was being made to conform to the norms of efficiency, value for money, customer service, audit and performance targets. One of the consequences of this was the substitution of the authority of the academic, which is based on his or her professional knowledge of the discipline, for the authority of the line manager. Since then, everything has come to depend on audits and metric standards of so-called quality assessment (student satisfaction, pass rates, league tables, et cetera). Academics have little, if any, say on whether departments should continue to exist, what degrees and courses should be on offer and even what kind of assessment methods should be used. I don't think that there has been a more sinister assault on academic freedom than this colonisation of higher education by neoliberalism. It justifies itself by calling for "transparency" and "accountability" to the taxpayer and the public. But it operates with a perverted sense of these words (since what it really means is "discipline and surveillance" and "value for money"). Its effect, if not its aim, has been to commodify higher education and produce a new kind of social identity. This is the identity of the self as entrepreneur. Let me explain. One of the central aspects of neoliberalism is the disappearance of the distinction between the worker and the capitalist. In the neoliberal setting, the worker is not a partner of exchange with the capitalist. She does not sell her labour-power for a wage. The labourer's ability to work, her skill, is an income stream. It is an investment on which she receives a return in the form of wages. The worker is capital for herself. She is a source of future earnings. In the neoliberal market, as Michel Foucault remarks, everyone is a capitalist. Neoliberalism has converted education from a public good to a personal investment in the future, a future conceived in terms of earning capacity. How did we get to this situation? The modern university came into existence at the start of the 19th century as an extension of the state. The aim of the state during the colonial and imperial age was to constitute the identity of the national subject. As a public institution, the university was designed to teach students to see their life in a specific way. They would learn to see that it is only as members of a national community and culture that their individual life has a meaning and worth. This was the aim of the educational programme that German philosophers such as Wilhelm von Humboldt and Johann Gottlieb Fichte envisaged for the University of Berlin. For them, science was in the service of the moral and intellectual education of the nation. Established in 1810, the University of Berlin was the first modern university. It was founded on the principles of academic freedom, the unity of research and teaching, and the primacy of research over vocational training. It functioned as the prototype for universities in both the United States and Europe during the second half of the 19th century. Once transnational corporations started to control more capital than nation-states in the 1980s, the university ceased to be one of its principal organs. It lost its ideological mission and entered the market as a corporation. It started to encourage students to think of themselves as customers rather than as members of a nation. This history shows that the university is today the site of two competing social identities. • On the one hand, because of globalisation, the student who enters university sees herself as someone who is there to increase her human capital, as an enterprise to invest in. It must be remarked that, for the entrepreneur (taken as a social figure) who invests in herself, differences of class, religion, ethnicity or race are phantasms of a bygone age. The differences in the name of which wars were waged and social movements organised in the past have no more meaning in her eyes than cheap advertising. There is, for her, something improper or inauthentic about them, as Giorgio Agamben says of the new petty bourgeoisie in The Coming Community. Like Britain's former prime minister, David Cameron, she is sceptical of multiculturalism. • On the other hand, the university has not ceased to draw on its modern role as a producer, protector and inculcator of national identity and culture. Much of what is going on today in South African universities under the name of decolonisation and Africanisation draws on this heritage and understanding of the modern university, even if tacitly. That is why students will politicise themselves by identifying with an ethnicity or nationality. Nationalism was an emancipatory political project during the anti-colonial struggles of the second half of the 20th century. It was not tribalist or communalist. According to Eric Hobsbawm in Nations and Nationalism since 1780, its aim was to extend the size of the social, cultural and political group. It was not to restrict it or to separate it from others. Nationalism was a political programme divorced from ethnicity. Is this political nationalism a viable way of resisting neoliberalism today? Can it gainsay the primacy of economic rationality and the culture of narcissist consumerism, and restore meaning to the political question concerning the common good? Or has nationalism irreversibly become an ethnic, separatist project? It is not easy to say. So far, we have witnessed one kind of response to the social insecurities generated by the global spread of neoliberalism. This is a return to ethnicity and religion as havens of safety and security. When society fails us owing to job insecurity, and, concomitantly, with regard to housing and healthcare, one tends to fall back on one's ethnicity or religious identity as an ultimate guarantee. Moreover, nationalism as a political programme depends on the idea of the state. It holds that a group defined as a "nation" has the right to form a territorial state and exercise sovereign power over it. But given the decline of the state, there are reasons to think that political nationalism has withdrawn as a real possibility. By the "decline of the state" I do not mean that it no longer exists. The state has never been more present in the private life of individuals. It regulates the relations between men and women. It regulates their birth and death, the rearing of children, the health of individuals and so forth. The state is, today, ubiquitous. What some people mean by the "decline of the state" is that, with the existence of transnational corporations, it is no longer the most important site of the reproduction of capital. The state has become managerial. Its function is to manage obstacles to liberalisation and free trade. Perhaps that is one of the challenges of the 21st century. How is a "nation" possible, a "national community" that is not defined by ethnicity, on the one hand, and, on the other, that forsakes the desire to exercise sovereign power in general and, in particular, over a territorial state? The university is perhaps the place where such a community can begin to be thought. Rafael Winkler is an associate professor in the philosophy department at the University of Johannesburg #### [Feb 05, 2019] Capitalists need their options regulated and their markets ripped from their control by the state. Profits must be subject to use it to a social purpose or heavily taxed. Dividends executive comp and interest payments included ###### Feb 05, 2019 | economistsview.typepad.com Mr. Bill -> Mr. Bill... , January 31, 2019 at 08:22 PM Is anyone else tired of the longest, least productive waste of war in American history ? What have we achieved, where are we going with this ? More war. Mr. Bill -> Mr. Bill... , January 31, 2019 at 08:31 PM We are being fed a fairy tale of war about what men, long dead, did. And the reason they did it. America is being strangled by the burden of belief that now is like then. Mr. Bill -> Mr. Bill... , January 31, 2019 at 08:46 PM By the patrician men and women administrators, posturing as soldiers like the WW2 army, lie for self profit. Why does anyone believe them ? Korea, Vietnam, Iraq, each an economic decision, rather than a security issue. Mr. Bill -> Mr. Bill... , January 31, 2019 at 08:48 PM America is dying on the same sword as Rome, for the same reason. Plp -> JF... , January 31, 2019 at 07:28 AM Capitalists need their options regulated and their markets ripped from their control by the state. Profits must be subject to use it to a social purpose or heavily taxed. Dividends executive comp and interest payments included Julio -> mulp ... , January 31, 2019 at 08:58 AM Well done! Much clearer than your usual. There are several distinct motivations for taxes. We have been far enough from fairness to workers, for so long, that we need to use the tax system to redistribute the accumulated wealth of the plutocrats. So I would say high marginal rates are a priority, which matches both objectives. Wealth tax is needed until we reverse the massive inequality supported by the policies of the last 40 years. Carbon tax and the like are a different thing, use of the tax code to promote a particular policy and reduce damage to the commons. Gerald -> Julio ... , January 31, 2019 at 04:14 PM "...we need to use the tax system to redistribute the accumulated wealth of the plutocrats. So I would say high marginal rates are a priority..." Forgive me, but high marginal rates (which I hugely favor) don't "redistribute the accumulated wealth" of the plutocrats. If such high marginal rates are ever enacted, they'll apply only to the current income of such plutocrats. Julio -> Gerald... , January 31, 2019 at 06:22 PM You merged paragraphs, and elided the next one. The way I see it, high rates are a prerequisite to prevent the reaccumulation of obscene wealth, and its diversion into financial gambling. But yes that would be a very slow way to redistribute what has already accumulated. Gerald -> Julio ... , February 01, 2019 at 04:48 AM Didn't mean to misinterpret what you were saying, sorry. High rates are not only "a prerequisite to prevent the reaccumulation of obscene wealth," they are also a reimposition of fair taxation on current income (if it ever happens, of course). Global Groundhog -> Julio ... , February 02, 2019 at 01:39 PM Wealth tax is needed until we reverse the massive inequality supported by the policies of the last 40 years. Carbon tax and the like are a different thing, use of the tax code to promote a particular policy and reduce damage to the commons. " more wisdom as usual! Although wealth tax will be unlikely, it could be a stopgap; could also be a guideline to other taxes as well. for example, Elizabeth points out that billionaires pay about 3% of their net worth into their annual tax bill whereas workers pay about 7% of their net worth into their annual tax bill. Do you see how that works? it doesn't? this Warren argument gives us a guideline. it shows us where other taxes should be adjusted to even out this percentage of net worth that people are taxed for. Ceu, during the last meltdown 10 years or so ago, We were collecting more tax from the payroll than we were from the income tax. this phenomenon was a heavy burden on those of low net worth. All this needs be resorted. we've got to sort this out. and the carbon tax? may never be; but it indicates to us what needs to be done to make this country more efficient. for example some folks, are spending half a million dollars on the Maybach automobile, about the same amount on a Ferrari or a Alfa Romeo Julia quadrifoglio, but the roads are built for a mere 40 miles an hour, full of potholes. What good is it to own a fast car like that when you can't drive but 40 -- 50 miles an hour? and full of traffic jams. something is wrong with taxation incentives. we need to get a better grid-work of roads that will get people there faster. Meanwhile most of those sports cars just sitting in the garage. we need a comprehensive integrated grid-work of one way streets, roads, highways, and interstates with no traffic lights, no stop signs; merely freeflow ramp-off overpass interchanges. thanks, Julio! thanks again .! JF -> Global Groundhog... , February 04, 2019 at 05:42 AM Wonderful to see the discussion about public finance shifting to use net worth proportions as the focus and metric. Wonderful. Let us see if press/media stories and opinion pieces use this same way of talking about the financing of self-government. Mr. Bill -> anne... , February 03, 2019 at 08:15 PM Jesus Christ said, in so many words, that a man's worth will be judged by his generosity and his avarice. " 24And the disciples were amazed at His words. But Jesus said to them again, "Children, how hard it is to enter the kingdom of God! 25It is easier for a camel to pass through the eye of a needle than for a rich man to enter the kingdom of God." 26They were even more astonished and said to one another, "Who then can be saved?" #### [Jan 31, 2019] Linus Torvalds and others on Linux's systemd by By Steven J. Vaughan-Nichols ##### Notable quotes: ##### "... I think some of the design details are insane (I dislike the binary logs, for example) ..." ##### "... Systemd problems might not have mattered that much, except that GNOME has a similar attitude; they only care for a small subset of the Linux desktop users, and they have historically abandoned some ways of interacting the Desktop in the interest of supporting touchscreen devices and to try to attract less technically sophisticated users. ..." ##### "... If you don't fall in the demographic of what GNOME supports, you're sadly out of luck. (Or you become a second class citizen, being told that you have to rely on GNOME extensions that may break on every single new version of GNOME.) ..." ##### "... As a result, many traditional GNOME users have moved over to Cinnamon, XFCE, KDE, etc. But as systemd starts subsuming new functions, components like network-manager will only work on systemd or other components that are forced to be used due to a network of interlocking dependencies; and it may simply not be possible for these alternate desktops to continue to function, because there is [no] viable alternative to systemd supported by more and more distributions. ..." ###### Sep 19, 2014 | www.zdnet.com So what do Linux's leaders think of all this? I asked them and this is what they told me. Linus Torvalds said: "I don't actually have any particularly strong opinions on systemd itself. I've had issues with some of the core developers that I think are much too cavalier about bugs and compatibility, and I think some of the design details are insane (I dislike the binary logs, for example) , but those are details, not big issues." Theodore "Ted" Ts'o, a leading Linux kernel developer and a Google engineer, sees systemd as potentially being more of a problem. "The bottom line is that they are trying to solve some real problems that matter in some use cases. And, [that] sometimes that will break assumptions made in other parts of the system." Another concern that Ts'o made -- which I've heard from many other developers -- is that the systemd move was made too quickly: "The problem is sometimes what they break are in other parts of the software stack, and so long as it works for GNOME, they don't necessarily consider it their responsibility to fix the rest of the Linux ecosystem." This, as Ts'o sees it, feeds into another problem: " Systemd problems might not have mattered that much, except that GNOME has a similar attitude; they only care for a small subset of the Linux desktop users, and they have historically abandoned some ways of interacting the Desktop in the interest of supporting touchscreen devices and to try to attract less technically sophisticated users. If you don't fall in the demographic of what GNOME supports, you're sadly out of luck. (Or you become a second class citizen, being told that you have to rely on GNOME extensions that may break on every single new version of GNOME.) " Ts'o has an excellent point. GNOME 3.x has alienated both users and developers . He continued, " As a result, many traditional GNOME users have moved over to Cinnamon, XFCE, KDE, etc. But as systemd starts subsuming new functions, components like network-manager will only work on systemd or other components that are forced to be used due to a network of interlocking dependencies; and it may simply not be possible for these alternate desktops to continue to function, because there is [no] viable alternative to systemd supported by more and more distributions. " Of course, Ts'o continued, "None of these nightmare scenarios have happened yet. The people who are most stridently objecting to systemd are people who are convinced that the nightmare scenario is inevitable so long as we continue on the same course and altitude." Ts'o is "not entirely certain it's going to happen, but he's afraid it will. What I find puzzling about all this is that even though everyone admits that sysvinit needed replacing and many people dislike systemd, the distributions keep adopting it. Only a few distributions, including Slackware , Gentoo , PCLinuxOS , and Chrome OS , haven't adopted it. It's not like there aren't alternatives. These include Upstart , runit , and OpenRC . If systemd really does turn out to be as bad as some developers fear, there are plenty of replacements waiting in the wings. Indeed, rather than hear so much about how awful systemd is, I'd rather see developers spending their time working on an alternative. #### [Jan 29, 2019] The Language of Neoliberal Education by Henry Giroux ##### Highly recommended! ##### Interview by MITJA SARDOČ ##### Notable quotes: ##### "... This interview with Henry Giroux was conducted by Mitja Sardoč, of the Educational Research Institute, in the Faculty of the Social Sciences, at University of Ljubljana, Slovenia. ..." ##### "... Not only does it define itself as a political and economic system whose aim was to consolidate power in the hands of a corporate and financial elite, it also wages a war over ideas. In this instance, it has defined itself as a form of commonsense and functions as a mode of public pedagogy that produces a template for structuring not just markets but all of social life. ..." ##### "... In this sense, it has and continues to function not only through public and higher education to produce and distribute market-based values, identities, and modes of agency, but also in wider cultural apparatuses and platforms to privatize, deregulate, economize, and subject all of the commanding institutions and relations of everyday life to the dictates of privatization, efficiency, deregulation, and commodification. ..." ##### "... Since the 1970s as more and more of the commanding institutions of society come under the control of neoliberal ideology, its notions of common sense – an unchecked individualism, harsh competition, an aggressive attack on the welfare state, the evisceration of public goods, and its attack on all models of sociality at odds with market values – have become the reigning hegemony of capitalist societies. ..." ##### "... What many on the left have failed to realize is that neoliberalism is about more than economic structures, it is also is a powerful pedagogical force – especially in the era of social media – that engages in full-spectrum dominance at every level of civil society. ..." ##### "... Neoliberalism's promotion of effectiveness and efficiency gives credence to its ability to willingness and success in making education central to politics ..." ##### "... The Crisis of Democracy, ..." ##### "... At the core of the neoliberal investment in education is a desire to undermine the university's commitment to the truth, critical thinking, and its obligation to stand for justice ..." ##### "... Neoliberalism considers such a space to be dangerous and they have done everything possible to eliminate higher education as a space where students can realize themselves as critical citizens ..." ##### "... It is waging a war over not just the relationship between economic structures but over memory, words, meaning, and politics. Neoliberalism takes words like freedom and limits it to the freedom to consume, spew out hate, and celebrate notions of self-interest and a rabid individualism as the new common sense. ..." ##### "... Equality of opportunity means engaging in ruthless forms of competition, a war of all against all ethos, and a survival of the fittest mode of behavior. ..." ##### "... First, higher education needs to reassert its mission as a public good in order to reclaim its egalitarian and democratic impulses. Educators need to initiate and expand a national conversation in which higher education can be defended as a democratic public sphere and the classroom as a site of deliberative inquiry, dialogue, and critical thinking, a site that makes a claim on the radical imagination and a sense of civic courage. ..." ##### "... The ascendancy of neoliberalism in American politics has made visible a plague of deep-seated civic illiteracy, a corrupt political system and a contempt for reason that has been decades in the making. ..." ##### "... It also points to the withering of civic attachments, the undoing of civic culture, the decline of public life and the erosion of any sense of shared citizenship. As market mentalities and moralities tighten their grip on all aspects of society, democratic institutions and public spheres are being downsized, if not altogether disappearing. ..." ##### "... First, too little is said about how neoliberalism functions not simply as an economic model for finance capital but as a public pedagogy that operates through a diverse number of sites and platforms. ..." ##### "... I define neoliberal fascism as both a project and a movement, which functions as an enabling force that weakens, if not destroys, the commanding institutions of a democracy while undermining its most valuable principles ..." ##### "... As a movement, it produces and legitimates massive economic inequality and suffering, privatizes public goods, dismantles essential government agencies, and individualizes all social problems. In addition, it transforms the political state into the corporate state, and uses the tools of surveillance, militarization, and law and order to discredit the critical press and media, undermine civil liberties while ridiculing and censoring critics. ..." ###### Dec 25, 2018 | www.counterpunch.org This interview with Henry Giroux was conducted by Mitja Sardoč, of the Educational Research Institute, in the Faculty of the Social Sciences, at University of Ljubljana, Slovenia. Mitja Sardoč: For several decades now, neoliberalism has been at the forefront of discussions not only in the economy and finance but has infiltrated our vocabulary in a number of areas as diverse as governance studies, criminology, health care, jurisprudence, education etc. What has triggered the use and application ofthis'economistic'ideologyassociatedwith the promotion of effectiveness and efficiency? Henry Giroux: Neoliberalism has become the dominant ideology of the times and has established itself as a central feature of politics. Not only does it define itself as a political and economic system whose aim was to consolidate power in the hands of a corporate and financial elite, it also wages a war over ideas. In this instance, it has defined itself as a form of commonsense and functions as a mode of public pedagogy that produces a template for structuring not just markets but all of social life. In this sense, it has and continues to function not only through public and higher education to produce and distribute market-based values, identities, and modes of agency, but also in wider cultural apparatuses and platforms to privatize, deregulate, economize, and subject all of the commanding institutions and relations of everyday life to the dictates of privatization, efficiency, deregulation, and commodification. Since the 1970s as more and more of the commanding institutions of society come under the control of neoliberal ideology, its notions of common sense – an unchecked individualism, harsh competition, an aggressive attack on the welfare state, the evisceration of public goods, and its attack on all models of sociality at odds with market values – have become the reigning hegemony of capitalist societies. What many on the left have failed to realize is that neoliberalism is about more than economic structures, it is also is a powerful pedagogical force – especially in the era of social media – that engages in full-spectrum dominance at every level of civil society. Its reach extends not only into education but also among an array of digital platforms as well as in the broader sphere of popular culture. Under neoliberal modes of governance, regardless of the institution, every social relation is reduced to an act of commerce. Neoliberalism's promotion of effectiveness and efficiency gives credence to its ability to willingness and success in making education central to politics. It also offers a warning to progressives, as Pierre Bourdieu has insisted that the left has underestimated the symbolic and pedagogical dimensions of struggle and have not always forged appropriate weapons to fight on this front." Mitja Sardoč: According to the advocates of neoliberalism, education represents one of the main indicators of future economic growth and individual well-being.How – and why – education became one of the central elements of the 'neoliberal revolution'? Henry Giroux: Advocates of neoliberalism have always recognized that education is a site of struggle over which there are very high stakes regarding how young people are educated, who is to be educated, and what vision of the present and future should be most valued and privileged. Higher education in the sixties went through a revolutionary period in the United States and many other countries as students sought to both redefine education as a democratic public sphere and to open it up to a variety of groups that up to that up to that point had been excluded. Conservatives were extremely frightened over this shift and did everything they could to counter it. Evidence of this is clear in the production of the Powell Memo published in 1971 and later in The Trilateral Commission's book-length report, namely, The Crisis of Democracy, published in 1975. From the 1960s on the, conservatives, especially the neoliberal right, has waged a war on education in order to rid it of its potential role as a democratic public sphere. At the same time, they sought aggressively to restructure its modes of governance, undercut the power of faculty, privilege knowledge that was instrumental to the market, define students mainly as clients and consumers, and reduce the function of higher education largely to training students for the global workforce. At the core of the neoliberal investment in education is a desire to undermine the university's commitment to the truth, critical thinking, and its obligation to stand for justice and assume responsibility for safeguarding the interests of young as they enter a world marked massive inequalities, exclusion, and violence at home and abroad. Higher education may be one of the few institutions left in neoliberal societies that offers a protective space to question, challenge, and think against the grain. Neoliberalism considers such a space to be dangerous and they have done everything possible to eliminate higher education as a space where students can realize themselves as critical citizens, faculty can participate in the governing structure, and education can be define itself as a right rather than as a privilege. Mitja Sardoč: Almost by definition, reforms and other initiatives aimed to improve educational practice have been one of the pivotal mechanisms to infiltrate the neoliberal agenda of effectiveness and efficiency. What aspect of neoliberalism and its educational agenda you find most problematic? Why? Henry Giroux: Increasingly aligned with market forces, higher education is mostly primed for teaching business principles and corporate values, while university administrators are prized as CEOs or bureaucrats in a neoliberal-based audit culture. Many colleges and universities have been McDonalds-ized as knowledge is increasingly viewed as a commodity resulting in curricula that resemble a fast-food menu. In addition, faculty are subjected increasingly to a Wal-Mart model of labor relations designed as Noam Chomsky points out "to reduce labor costs and to increase labor servility". In the age of precarity and flexibility, the majority of faculty have been reduced to part-time positions, subjected to low wages, lost control over the conditions of their labor, suffered reduced benefits, and frightened about addressing social issues critically in their classrooms for fear of losing their jobs. The latter may be the central issue curbing free speech and academic freedom in the academy. Moreover, many of these faculty are barely able to make ends meet because of their impoverished salaries, and some are on food stamps. If faculty are treated like service workers, students fare no better and are now relegated to the status of customers and clients. Moreover, they are not only inundated with the competitive, privatized, and market-driven values of neoliberalism, they are also punished by those values in the form of exorbitant tuition rates, astronomical debts owed to banks and other financial institutions, and in too many cases a lack of meaningful employment. As a project and movement, neoliberalism undermines the ability of educators and others to create the conditions that give students the opportunity to acquire the knowledge and the civic courage necessary to make desolation and cynicism unconvincing and hope practical. As an ideology, neoliberalism is at odds with any viable notion of democracy which it sees as the enemy of the market. Yet, Democracy cannot work if citizens are not autonomous, self-judging, curious, reflective, and independent – qualities that are indispensable for students if they are going to make vital judgments and choices about participating in and shaping decisions that affect everyday life, institutional reform, and governmental policy. Mitja Sardoč: Why large-scale assessments and quantitative data in general are a central part of the 'neo-liberal toolkit' in educational research? Henry Giroux: These are the tools of accountants and have nothing to do with larger visions or questions about what matters as part of a university education. The overreliance on metrics and measurement has become a tool used to remove questions of responsibility, morality, and justice from the language and policies of education. I believe the neoliberal toolkit as you put it is part of the discourse of civic illiteracy that now runs rampant in higher educational research, a kind of mind-numbing investment in a metric-based culture that kills the imagination and wages an assault on what it means to be critical, thoughtful, daring, and willing to take risks. Metrics in the service of an audit culture has become the new face of a culture of positivism, a kind of empirical-based panopticon that turns ideas into numbers and the creative impulse into ashes. Large scale assessments and quantitative data are the driving mechanisms in which everything is absorbed into the culture of business. The distinction between information and knowledge has become irrelevant in this model and anything that cannot be captured by numbers is treated with disdain. In this new audit panopticon, the only knowledge that matters is that which can be measured. What is missed here, of course, is that measurable utility is a curse as a universal principle because it ignores any form of knowledge based on the assumption that individuals need to know more than how things work or what their practical utility might be. This is a language that cannot answer the question of what the responsibility of the university and educators might be in a time of tyranny, in the face of the unspeakable, and the current widespread attack on immigrants, Muslims, and others considered disposable. This is a language that is both afraid and unwilling to imagine what alternative worlds inspired by the search for equality and justice might be possible in an age beset by the increasing dark forces of authoritarianism. Mitja Sardoč: While the analysis of the neoliberal agenda in education is well documented, the analysis of the language of neoliberal education is at the fringes of scholarly interest. In particular, the expansion of the neoliberal vocabulary with egalitarian ideas such as fairness, justice, equality of opportunity, well-being etc. has received [at best]only limited attention. What factors have contributed to this shift of emphasis? Henry Giroux: Neoliberalism has upended how language is used in both education and the wider society. It works to appropriate discourses associated with liberal democracy that have become normalized in order to both limit their meanings and use them to mean the opposite of what they have meant traditionally, especially with respect to human rights, justice, informed judgment, critical agency, and democracy itself. It is waging a war over not just the relationship between economic structures but over memory, words, meaning, and politics. Neoliberalism takes words like freedom and limits it to the freedom to consume, spew out hate, and celebrate notions of self-interest and a rabid individualism as the new common sense. Equality of opportunity means engaging in ruthless forms of competition, a war of all against all ethos, and a survival of the fittest mode of behavior. The vocabulary of neoliberalism operates in the service of violence in that it reduces the capacity for human fulfillment in the collective sense, diminishes a broad understanding of freedom as fundamental to expanding the capacity for human agency, and diminishes the ethical imagination by reducing it to the interest of the market and the accumulation of capital. Words, memory, language and meaning are weaponized under neoliberalism. Certainly, neither the media nor progressives have given enough attention to how neoliberalism colonizes language because neither group has given enough attention to viewing the crisis of neoliberalism as not only an economic crisis but also a crisis of ideas. Education is not viewed as a force central to politics and as such the intersection of language, power, and politics in the neoliberal paradigm has been largely ignored. Moreover, at a time when civic culture is being eradicated, public spheres are vanishing, and notions of shared citizenship appear obsolete, words that speak to the truth, reveal injustices and provide informed critical analysis also begin to disappear. This makes it all the more difficult to engage critically the use of neoliberalism's colonization of language. In the United States, Trump prodigious tweets signify not only a time in which governments engage in the pathology of endless fabrications, but also how they function to reinforce a pedagogy of infantilism designed to animate his base in a glut of shock while reinforcing a culture of war, fear, divisiveness, and greed in ways that disempower his critics. Mitja Sardoč: You have written extensively on neoliberalism's exclusively instrumental view of education, its reductionist understanding of effectiveness and its distorted image of fairness. In what way should radical pedagogy fight back neoliberalism and its educational agenda? Henry Giroux: First, higher education needs to reassert its mission as a public good in order to reclaim its egalitarian and democratic impulses. Educators need to initiate and expand a national conversation in which higher education can be defended as a democratic public sphere and the classroom as a site of deliberative inquiry, dialogue, and critical thinking, a site that makes a claim on the radical imagination and a sense of civic courage. At the same time, the discourse on defining higher education as a democratic public sphere can provide the platform for a more expressive commitment in developing a social movement in defense of public goods and against neoliberalism as a threat to democracy. This also means rethinking how education can be funded as a public good and what it might mean to fight for policies that both stop the defunding of education and fight to relocate funds from the death dealing military and incarceration budgets to those supporting education at all levels of society. The challenge here is for higher education not to abandon its commitment to democracy and to recognize that neoliberalism operates in the service of the forces of economic domination and ideological repression. Second, educators need to acknowledge and make good on the claim that a critically literate citizen is indispensable to a democracy, especially at a time when higher education is being privatized and subject to neoliberal restructuring efforts. This suggests placing ethics, civic literacy, social responsibility, and compassion at the forefront of learning so as to combine knowledge, teaching, and research with the rudiments of what might be called the grammar of an ethical and social imagination. This would imply taking seriously those values, traditions, histories, and pedagogies that would promote a sense of dignity, self-reflection, and compassion at the heart of a real democracy. Third, higher education needs to be viewed as a right, as it is in many countries such as Germany, France, Norway, Finland, and Brazil, rather than a privilege for a limited few, as it is in the United States, Canada, and the United Kingdom. Fourth, in a world driven by data, metrics, and the replacement of knowledge by the overabundance of information, educators need to enable students to engage in multiple literacies extending from print and visual culture to digital culture. They need to become border crossers who can think dialectically, and learn not only how to consume culture but also to produce it. Fifth, faculty must reclaim their right to control over the nature of their labor, shape policies of governance, and be given tenure track lines with the guarantee of secure employment and protection for academic freedom and free speech. Mitja Sardoč: Why is it important to analyze the relationship between neoliberalism and civic literacy particularly as an educational project? Henry Giroux: The ascendancy of neoliberalism in American politics has made visible a plague of deep-seated civic illiteracy, a corrupt political system and a contempt for reason that has been decades in the making. It also points to the withering of civic attachments, the undoing of civic culture, the decline of public life and the erosion of any sense of shared citizenship. As market mentalities and moralities tighten their grip on all aspects of society, democratic institutions and public spheres are being downsized, if not altogether disappearing. As these institutions vanish – from public schools and alternative media to health care centers– there is also a serious erosion of the discourse of community, justice, equality, public values, and the common good. At the same time reason and truth are not simply contested, or the subject of informed arguments as they should be, but wrongly vilified – banished to Trump's poisonous world of fake news. For instance, under the Trump administration, language has been pillaged, truth and reason disparaged, and words and phrases emptied of any substance or turned into their opposite, all via the endless production of Trump's Twitter storms and the ongoing clown spectacle of Fox News. This grim reality points to a failure in the power of the civic imagination, political will, and open democracy. It is also part of a politics that strips the social of any democratic ideals and undermines any understanding of education as a public good. What we are witnessing under neoliberalism is not simply a political project to consolidate power in the hands of the corporate and financial elite but also a reworking of the very meaning of literacy and education as crucial to what it means to create an informed citizenry and democratic society. In an age when literacy and thinking become dangerous to the anti-democratic forces governing all the commanding economic and cultural institutions of the United States, truth is viewed as a liability, ignorance becomes a virtue, and informed judgments and critical thinking demeaned and turned into rubble and ashes. Under the reign of this normalized architecture of alleged common sense, literacy is regarded with disdain, words are reduced to data and science is confused with pseudo-science. Traces of critical thought appear more and more at the margins of the culture as ignorance becomes the primary organizing principle of American society. Under the forty-year reign of neoliberalism, language has been militarized, handed over to advertisers, game show idiocy, and a political and culturally embarrassing anti-intellectualism sanctioned by the White House. Couple this with a celebrity culture that produces an ecosystem of babble, shock, and tawdry entertainment. Add on the cruel and clownish anti-public intellectuals such as Jordan Peterson who defend inequality, infantile forms of masculinity, and define ignorance and a warrior mentality as part of the natural order, all the while dethroning any viable sense of agency and the political. The culture of manufactured illiteracy is also reproduced through a media apparatus that trades in illusions and the spectacle of violence. Under these circumstances, illiteracy becomes the norm and education becomes central to a version of neoliberal zombie politics that functions largely to remove democratic values, social relations, and compassion from the ideology, policies and commanding institutions that now control American society. In the age of manufactured illiteracy, there is more at work than simply an absence of learning, ideas or knowledge. Nor can the reign of manufactured illiteracy be solely attributed to the rise of the new social media, a culture of immediacy, and a society that thrives on instant gratification. On the contrary, manufactured illiteracy is political and educational project central to a right-wing corporatist ideology and set of policies that work aggressively to depoliticize people and make them complicitous with the neoliberal and racist political and economic forces that impose misery and suffering upon their lives. There is more at work here than what Ariel Dorfman calls a "felonious stupidity," there is also the workings of a deeply malicious form of 21 st century neoliberal fascism and a culture of cruelty in which language is forced into the service of violence while waging a relentless attack on the ethical imagination and the notion of the common good. In the current historical moment illiteracy and ignorance offer the pretense of a community in doing so has undermined the importance of civic literacy both in higher education and the larger society. Mitja Sardoč: Is there any shortcoming in the analysis of such a complex (and controversial) social phenomenon as neoliberalism and its educational agenda? Put differently: is there any aspect of the neoliberal educational agenda that its critics have failed to address? Henry Giroux: Any analysis of an ideology such as neoliberalism will always be incomplete. And the literature on neoliberalism in its different forms and diverse contexts is quite abundant. What is often underplayed in my mind are three things. First, too little is said about how neoliberalism functions not simply as an economic model for finance capital but as a public pedagogy that operates through a diverse number of sites and platforms. Second, not enough has been written about its war on a democratic notion of sociality and the concept of the social. Third, at a time in which echoes of a past fascism are on the rise not enough is being said about the relationship between neoliberalism and fascism, or what I call neoliberal fascism, especially the relationship between the widespread suffering and misery caused by neoliberalism and the rise of white supremacy. I define neoliberal fascism as both a project and a movement, which functions as an enabling force that weakens, if not destroys, the commanding institutions of a democracy while undermining its most valuable principles. Consequently, it provides a fertile ground for the unleashing of the ideological architecture, poisonous values, and racist social relations sanctioned and produced under fascism. Neoliberalism and fascism conjoin and advance in a comfortable and mutually compatible project and movement that connects the worse excesses of capitalism with fascist ideals – the veneration of war, a hatred of reason and truth; a populist celebration of ultra-nationalism and racial purity; the suppression of freedom and dissent; a culture which promotes lies, spectacles, a demonization of the other, a discourse of decline, brutal violence, and ultimately state violence in heterogeneous forms. As a project, it destroys all the commanding institutions of democracy and consolidates power in the hands of a financial elite. As a movement, it produces and legitimates massive economic inequality and suffering, privatizes public goods, dismantles essential government agencies, and individualizes all social problems. In addition, it transforms the political state into the corporate state, and uses the tools of surveillance, militarization, and law and order to discredit the critical press and media, undermine civil liberties while ridiculing and censoring critics. What critics need to address is that neoliberalism is the face of a new fascism and as such it speaks to the need to repudiate the notion that capitalism and democracy are the same thing, renew faith in the promises of a democratic socialism, create new political formations around an alliance of diverse social movements, and take seriously the need to make education central to politics itself. #### [Jan 29, 2019] Bilderberg 2015: where criminals mingle with ministers by Charlie Skelton ##### Notable quotes: ##### "... The Bilderberg set call people like you either their "dogs" (if you are in politics or the military) or the "dead." ..." ##### "... What do you mean "where criminals mingle with ministers". That is assuming that ministers are not criminals. Considering that there will be ministers from the USA, Canada, France, Germany, Italy, Japan and the UK, I'd suggest that there is a near 100% certainty that some, if not all, the ministers there are criminals. ..." ##### "... That one group of almost-certainly-criminals meets another group of almost-certainly-criminals is hardly surprising. That the whole shebang is protected by the host's police force is even less so ..." ###### Jun 12, 2015 | The Guardian Convicted criminals. Such as disgraced former CIA boss, David Petraeus, who's just been handed a100,000 (£64,000) fine and two years' probation for leaking classified information.

Petraeus now works for the vulturous private equity firm KKR, run by Henry Kravis, who does arguably Bilderberg's best impression of Gordon Gecko out of Wall Street. Which he cleverly combines with a pretty good impression of an actual gecko.

... ... ...

"Can I go now?" Another no. So I continued my list of criminals. I moved on to someone closer to home: René Benko, the Austrian real estate baron, who had a conviction for bribery upheld recently by the supreme court. Which didn't stop him making the cut for this year's conference. "You know Benko?" The cop nodded. It wasn't easy to see in the glare of the searchlight, but he looked a little ashamed.

... ... ...

I decided to reward their vigilance with a chat about HSBC. The chairman of the troubled banking giant, Douglas Flint, is a regular attendee at Bilderberg, and he's heading here again this year, along with a member of the bank's board of directors, Rona Fairhead. Perhaps most tellingly, Flint is finding room in his Mercedes for the bank's busiest employee: its chief legal officer, Stuart Levey.

A Guardian editorial this week branded HSBC "a bank beyond shame" after it announced plans to cut 8,000 jobs in the UK, while at the same time threatening to shift its headquarters to Hong Kong. And having just been forced to pay £28m in fines to Swiss regulators investigating money-laundering claims. The big question, of course, is how will the chancellor of the exchequer, George Osborne, respond to all this? Easy – he'll go along to a luxury Austrian hotel and hole up with three senior members of HSBC in private. For three days.

High up on this year's conference agenda is "current economic issues", and without a doubt, one of the biggest economic issues for Osborne at the moment is the future and finances of Europe's largest bank. Luckily, the chancellor will have plenty of time at Bilderberg to chat all this through through with Flint, Levey and Fairhead. And the senior Swiss financial affairs official, Pierre Maudet, a member of the Geneva state council in charge of the department of security and the economy. It's all so incredibly convenient.

... ... ...

consumersunite -> MickGJ 12 Jun 2015 15:23

Let's see, maybe because we have read over their leaked documents from the 1950s in which they discussed currency manipulation and GATT. Everything they have discussed in their meetings over the past decades has almost come to fruition. There are elected officials meeting with criminals such as HSBC. Did you even read the article? If you did, and you are not het up or whatever you call it, then you are of a peasant mentality, and there is no use talking to you.

The Bilderberg set call people like you either their "dogs" (if you are in politics or the military) or the "dead." I won't be looking for your response because you have confirmed that you do not matter.

Carpasia -> MickGJ 12 Jun 2015 10:52

Thank you for your comment, my good man. Hatred is human, and helps us all to avoid pain, for pain, especially unnecessary pain, is allowed to be hated by the agreement of all, if nothing else is. I would hate to be beaten by Nazis. Thus, I would avoid going to a place where that could occur. That is how hatred works for me. It is the only way it can work, and not be pernicious to the self and others.

I distrust the international order as it is the means, harnessed by money, whether corporate or state or individual or monarchical, by which this world is being destroyed. Could things have been better? Jesus is on one end of the spectrum, and Lord Acton on the other, of the spectrums of viewpoints from which that could be properly assessed.

If the corruption at the heart of the international order is not regulated properly, this world will come to an end, not the end of the world itself, but the end of the world as we know it. This is happening now. The world is finite.

I am not a xenophobe. In my experience, the people that are most likely to hurt me, and thus deserve fear, are those closest. Perhaps that is a cynical way of describing it, but anyone who thinks honestly about it would accede to the notion that it is the people who "love" us that hurt us the most, for we agree too be vulnerable to them. It is the matrix of love.

As for Austria and Bavaria, I have visited both places and they were, both, the cleanest locales I have ever seen, with Switzerland having to be mentioned in the same breath, of course.

I take a certain liberty in writing. I am not damning the human race, or strangers to me. If I did not entertain, but caused offence, I apologize to you. I do not possess omniscience, and my words will have to speak for themselves.

Thank you, again.

DemonicWarlordSlayer 12 Jun 2015 08:02

"How Geo Bush's Grandfather Helped Hitler's Rise to Power" in the UK Guardian >

"Did Geo H W Bush Coordinate a JFK Hit Team" at Veterans Today >

"9/11 Conspiracy Solved, Names, Connections, Details" on youtube....dot-to-dot of the

Demonic Warlord's Crimes Against Humanity....end feudalism.

Carpasia 12 Jun 2015 07:09

Excellent article.

I visited Austria once, and I know of what he speaks. It was the one place I have ever visited that I thought I would be jailed if I littered. I was wandering at the time, but I tentatively had a meal of chicken and departed henceforth.

Austrians are an interesting lot, to be sure. That they are perfect goes without saying. Their main virtue is that they do not travel, and that strangers, which we call tourists these days, are not welcomed. If only we were all like that, the world would be a far better place.

Austrians do everything well, including crime. Some of the greatest crimes in the world have been committed by Austrians, but their crimes did not include not having their papers.

During World War 2, and I pass over Hitler, the German machine of death had an unusually high proportion of Austrians in commanding roles assisting it. It can not be explained away by saying they were some kind of faux Germans, and so it matters not. Indeed, if anything, Germans are faux Austrians, looked at in the broad brush of history. Men of many nations joined the Germans and adorned themselves with the Death's Head, but many Austrians might as well have tattooed it onto their foreheads. I know of what I speak, for I read on it, and will justify if questioned.

Reinhard Heydrich is an epitome of this, in the true sense of the word. Kurt Waldheim was another, too young too rise too far before the Ragnarok of May of 1945, but government of the world was not out of his reach, a man who had materially assisted the transportation of the Jews of Thessaloniki to the gas chambers of Auschwitz and, when challenged, was unrepentant, not as a racist, but as something worse even, as a man whose great virtue was that he followed orders. It is order that the Austrians value over everything. Even crime is ordered.

In the common-law west we think criminals are disordered beasts to be locked up. We do not give them papers. They are registered only to warn us of their existence, and we do not like to let them travel, as much as we could benefit by their absence, because we think they flee to license, and we think it wrong to inflict them upon innocents abroad. In Austria, the criminal is the man with no papers. If he has papers, all is well, and he is no criminal, whatever he has done.

colingorton 12 Jun 2015 03:19

What do you mean "where criminals mingle with ministers". That is assuming that ministers are not criminals. Considering that there will be ministers from the USA, Canada, France, Germany, Italy, Japan and the UK, I'd suggest that there is a near 100% certainty that some, if not all, the ministers there are criminals.

That one group of almost-certainly-criminals meets another group of almost-certainly-criminals is hardly surprising. That the whole shebang is protected by the host's police force is even less so.

How far can all this mutual back scratching go? It seems that the only alternative left is far too drastic, but there really seems to be no place for a legal alternative, does there?

#### [Jan 29, 2019] 7th Circuit Rules Age Discrimination Law Does Not Include Job Applicants

##### "... Most of the positions in science and engineering fields now are basically "gig" positions, lasting a few months to a year. ..."
###### Jan 29, 2019 | www.nakedcapitalism.com

By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans.

The US Court of Appeals for the Seventh Circuit decided in Kleber v. CareFusion Corporation last Wednesday that disparate impact liability under the Age Discrimination in Employment Act (ADEA) applies only to current employees and does not include job applicants.

The case was brought by Dale Kleber, an attorney, who applied for a senior position in CareFusion's legal department. The job description required applicants to have "3 to 7 years (no more than 7 years) of relevant legal experience."

Kleber was 58 at the time he applied and had more than seven years of pertinent experience. CareFusion hired a 29-year-old applicant who met but did not exceed the experience requirement.

Kleber filed suit, pursuing claims for both disparate treatment and disparate impact under the ADEA. The Chicago Tribune notes in Hinsdale man loses appeal in age discrimination case that challenged experience caps in job ads that "Kleber had out of work and job hunting for three years" when he applied for the CareFusion job.

Some Basics

Let's start with some basics, as the US Equal Employment Opportunity Commission (EEOC) set out in a brief primer on basic US age discrimination law entitled Questions and Answers on EEOC Final Rule on Disparate Impact and "Reasonable Factors Other Than Age" Under the Age Discrimination in Employment Act of 1967 . The EEOC began with a brief description of the purpose of the ADEA:

The purpose of the ADEA is to prohibit employment discrimination against people who are 40 years of age or older. Congress enacted the ADEA in 1967 because of its concern that older workers were disadvantaged in retaining and regaining employment. The ADEA also addressed concerns that older workers were barred from employment by some common employment practices that were not intended to exclude older workers, but that had the effect of doing so and were unrelated to job performance.

It was with these concerns in mind that Congress created a system that included liability for both disparate treatment and disparate impact. What's the difference between these two concepts?

According to the EEOC:

[The ADEA] prohibits discrimination against workers because of their older age with respect to any aspect of employment. In addition to prohibiting intentional discrimination against older workers (known as "disparate treatment"), the ADEA prohibits practices that, although facially neutral with regard to age, have the effect of harming older workers more than younger workers (known as "disparate impact"), unless the employer can show that the practice is based on an [Reasonable Factor Other Than Age (RFAO)]

The crux: it's much easier for a plaintiff to prove disparate impact, because s/he needn't show that the employer intended to discriminate. Of course, many if not most employers are savvy enough not to be explicit about their intentions to discriminate against older people as they don't wish to get sued.

District, Panel, and Full Seventh Circuit Decisions

The district court dismissed Kleber's disparate impact claim, on the grounds that the text of the statute- (§ 4(a)(2))- did not extend to outside job applicants. Kleber then voluntarily dismissed his separate claim for disparate treatment liability to appeal the dismissal of his disparate impact claim. No doubt he was aware – either because he was an attorney, or because of the legal advice received – that it is much more difficult to prevail on a disparate treatment claim, which would require that he establish CareFusion's intent to discriminate.

Or at least that was true before this decision was rendered.

Unfortunately, the seventh circuit has now held that the disparate impact section of the ADEA does not extend to job applicants. .Judge Michael Scudder, a Trump appointee, wrote the majority 8-4 opinion, which reverses an earlier 2-1 panel ruling last April in Kleber's favor that had initially overruled the district court's dismissal of Kleber's disparate impact claim.

The majority ruled:

By its terms, § 4(a)(2) proscribes certain conduct by employers and limits its protection to employees. The prohibited conduct entails an employer acting in any way to limit, segregate, or classify its employees based on age. The language of § 4(a)(2) then goes on to make clear that its proscriptions apply only if an employer's actions have a particular impact -- "depriv[ing] or tend[ing] to deprive any individual of em- ployment opportunities or otherwise adversely affect[ing] his status as an employee." This language plainly demonstrates that the requisite impact must befall an individual with "status as an employee." Put most simply, the reach of § 4(a)(2) does not extend to applicants for employment, as common dictionary definitions confirm that an applicant has no "status as an employee." (citation omitted)[opinion, pp. 3-4]

By contrast, in the disparate treatment part of the statute (§ 4(a)(1)):

Congress made it unlawful for an employer "to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privi- leges of employment, because of such individual's age."[opinion, p.6]

The court compared the disparate treatment section – § 4(a)(1) – directly with the disparate impact section – § 4(a)(2):

Yet a side-by-side comparison of § 4(a)(1) with § 4(a)(2) shows that the language in the former plainly covering appli-cants is conspicuously absent from the latter. Section 4(a)(2) says nothing about an employer's decision "to fail or refuse to hire any individual" and instead speaks only in terms of an employer's actions that "adversely affect his status as an employee." We cannot conclude this difference means nothing: "when 'Congress includes particular language in one section of a statute but omits it in another' -- let alone in the very next provision -- the Court presumes that Congress intended a difference in meaning." (citations omitted)[opinion, pp. 6-7]

The majority's conclusion:

In the end, the plain language of § 4(a)(2) leaves room for only one interpretation: Congress authorized only employees to bring disparate impact claims.[opinion, p.8]

Greying of the Workforce

Older people account for a growing percentage of the workforce, as Reuters reports in Age bias law does not cover job applicants: U.S. appeals court :

People 55 or older comprised 22.4 percent of U.S. workers in 2016, up from 11.9 percent in 1996, and may account for close to one-fourth of the labor force by 2022, according to the Bureau of Labor Statistics.

The greying of the workforce is "thanks to better health in older age and insufficient savings that require people to keeping working longer," according to the Chicago Tribune. Yet:

numerous hiring practices are under fire for negatively impacting older applicants. In addition to experience caps, lawsuits have challenged the exclusive use of on-campus recruiting to fill positions and algorithms that target job ads to show only in certain people's social media feeds.

Unless Congress amends the ADEA to include job applicants, older people will continue to face barriers to getting jobs.

The Chicago Tribune reports:

The [EEOC], which receives about 20,000 age discrimination charges every year, issued a report in June citing surveys that found 3 in 4 older workers believe their age is an obstacle in getting a job. Yet hiring discrimination is difficult to prove and often goes unreported. Only 3 percent have made a formal complaint. Allowing older applicants to challenge policies that have an unintentionally discriminatory impact would offer another tool for fighting age discrimination, Ray Peeler, associate legal counsel at the EEOC, has said.

How will these disparate impact claims now fare?

The Bottom Line

FordHarrison, a firm specialising in human relations law, noted in Seventh Circuit Limits Job Applicants' Age Discrimination Claims :

The decision narrowly applies to disparate impact claims of age discrimination under the ADEA. It is important to remember that job applicants are protected under the disparate treatment portion of the statute. There is no split among the federal appeals courts on this issue, making it an unlikely candidate for Supreme Court review, but the four judges in dissent read the statute as being vague and susceptible to an interpretation that includes job applicants.

Their conclusion: "a decision finding disparate impact liability for job applicants under the ADEA is unlikely in the near future."

Alas, for reasons of space, I will not consider the extensive dissent. My purpose in writing this post is to discuss the majority decision, not to opine on which side made the better arguments.

antidlc , January 27, 2019 at 3:28 pm

8-4 opinion. Which judges ruled for the majority? Which judges ruled for the minority opinion?

Sorry,,,don't have time to research right now. It says a Trump appointee wrote the majority opinion. Who were the other 7?

grayslady , January 27, 2019 at 6:09 pm

There were 3 judges who dissented in whole and one who dissented in part. Of the three full dissensions, two were Clinton appointees (including the Chief Justice, who was one of the dissenters) and one was a Reagan appointee. The partial dissenter was also a Reagan appointee.

run75441 , January 27, 2019 at 11:25 pm

ant: Not your law clerk, read the opinion. Easterbook and Wood dissented. Find the other two and and you can figure out who agreed.

YankeeFrank , January 27, 2019 at 3:58 pm

"depriv[ing] or tend[ing] to deprive any individual of employment opportunities or otherwise adversely affect[ing] his status as an employee."

–This language plainly demonstrates that the requisite impact must befall an individual with "status as an employee."

So they totally ignore the first part of the sentence -- "depriv[ing] or tend[ing] to deprive any individual of employment opportunities " -- "employment opportunities" clearly applies to applicants.

Its as if these judges cannot make sense of the English language. Hopefully the judges on appeal will display better command of the language.

Alfred , January 27, 2019 at 5:56 pm

I agree. "Employment opportunities," in the "plain language" so meticulously respected by the 7th Circuit, must surely refer at minimum to 'the chance to apply for a job and to have one's application fairly considered'. It seems on the other hand a stretch to interpret the phrase to mean only 'the chance to keep a job one already has'. Both are important, however; to split them would challenge even Solomonic wisdom, as I suppose the curious decision discussed here demonstrates. I am less convinced that the facts as presented here establish a clear case of age discrimination. True, they point in that direction. But a hypothetical 58-year old who only earned a law degree in his or her early 50s, perhaps after an earlier career in paralegal work, could have legitimately applied for a position requiring 3 to 7 years of "relevant legal experience." That last phrase, is of course, quite weasel-y: what counts as "relevant" and what counts as "legal" experience would under any circumstances be subject to (discriminatory) interpretation. The limitation of years of experience in the job announcement strikes me as a means to keep the salary within a certain budgetary range as prescribed either by law or collective bargaining.

Almost like the willful misunderstanding of "A well regulated militia being necessary to the security of a free State "? Of course, that militia also meant slave patrols and the occasional posse to put down the native "savages," but still.

> "depriv[ing] or tend[ing] to deprive any individual of employment opportunities or otherwise adversely affect[ing] his status as an employee."

Says "or." Not "and."

Magic Sam , January 27, 2019 at 5:53 pm

They are failing to find what they don't want to find.

Magic Sam , January 27, 2019 at 5:58 pm

Being pro-Labor will not get you Federalist Society approval to be nominated to the bench by Trump. This decision came down via the ideological makeup of the court, not the letter of the law. Their stated pretext is obviously b.s.. It contradicts itself.

Mattie , January 27, 2019 at 6:05 pm

Yep. That is when their Utah et al property mgt teams began breaking into homes, tossing contents – including pets – outside & changing locks

Even when borrowers were in approved HAMP, etc. pipelines

PLUG: If you haven't yet – See "The Florida Project"

nothing but the truth , January 27, 2019 at 7:18 pm

as an aging "stem" (cough coder) worker who typically has to look for a new "gig" every few years, i am trembling at this.

Luckily, i bought a small business when I had a few saved up, so I won't starve.

Health insurance is another matter.

I forbade my kids to study programming.

Plumbing. Electrical work. Permaculture. Get those kids Jackpot-ready!

Joe Well , January 28, 2019 at 11:40 am

I'm re reading the classic of Sociology Ain't No Makin It by Jay MacLeod, in which he studies the employment prospects of youths in the 1980s and determined that even then there was no stable private sector employment and your best option is a government job or to have an excellent "network" which is understandably hard for most people to achieve. So I'm genuinely interested in what possible options there are for anyone entering the job market today or God help you, re-entering. I am guessing the barriers to entry to those trades are quite high but would love to be corrected.

what is the point of being jackpot ready if you can't even support yourself today? To fantasize about collapse while sleeping in a rented closet and driving for Uber? In that case one's personal collapse has already happened, which will matter a lot more to an individual than any potential jackpot.

Plumbers and electricians can make money now of course (although yea barriers to entry do seem high, don't you kind of have to know people to get in those industries?). But permaculture?

Ford Prefect , January 28, 2019 at 1:00 pm

I think the trick is to study something and programming, so the programming becomes a tool rather than an end. A couple of my kids used to ride horses. One of the instructors and stable owners said that a lot of people went to school for equine studies and ended up shoveling horse poop for a living. She said the thing to do was to study business and do the equestrian stuff as a hobby/minor. That way you came out prepared to run a business and hire the equine studies people to clean the stalls.

Do you actually see that many jobs requiring something and programming though? I haven't really. There seems no easy transition out of software work which that would make possible either. Might as well just study the "something".

Programming is a means to an end, not the end itself. If all you do is program, then you are essentially a machine lathe operator, not somebody creating the products the lathe operators turn out.

Understanding what needs to be done helps with structured programs and better input/output design. In turn, structured programming is a good tool to understand the basics of how to manage tasks. At the higher level, Fred Brooks book "The Mythical Man-Month" has a lot of useful project management information that can be re-applied for non computer program development.

We are doing a lot of work with mobile computing and data collection to assist in our regular work. The people doing this are mainly non-computer scientists that have learned enough programming to get by.

The engineering programs that we use are typically written more by engineers than by programmers as the entire point behind the program is to apply the theory into a numerical computation and presentation system. Programmers with a graphic design background can assist in creating much better user interfaces.

If you have some sort of information theory background (GIS, statistics, etc.) then big data actually means something.

nothing but the truth , January 28, 2019 at 7:02 pm

the problem is it is almost impossible to exit the programming business and join another domain. Anyone can enter it. (evidence – all the people with "engineering" degrees from India) Also my wages are now 50% of what i made 10 years ago (nominal). Also I notice that almost no one is doing sincere work. Most are just coasting, pretending to work with the latest toy (ie, preparing for the next interview).

Now almost every "interview" requires writing a coding exam. Which other profession will make you write an exam for 25-30 year veterans? Can you write your high school exam again today? What if your profession requires you to write it a couple of times almost every year?

Hepativore , January 28, 2019 at 2:56 pm

I am an "aging" former STEM worker (histology researcher) as well. Much like the IT landscape, you are considered "over-the-hill" at 35, which I turn on the 31st. While I do not have children and never intend to get married, many biotech companies consider this the age at which a worker is getting long in the tooth. This is because there is the underlying assumption that is when people start having familial obligations.

Most of the positions in science and engineering fields now are basically "gig" positions, lasting a few months to a year. A lot of people my age are finding how much harder it is to find any position at all in these areas as there is a massive pool of people to choose from, even for permatemp work simply because serfs in their mid-30s might get uppity about benefits like family health plans or 401k

I am 59 and do not mind having employers discriminate against me due to age. ( I also need a job) I had my own business and over the years got quite damaged. I was a contractor specializing in older (historical) work.

I was always the lead worker with many friends and other s working with me. At 52 I was given a choice of very involved neck surgery or quit. ( no small businesses have disability insurance!)

I shut down everything and helped my friends who worked for me take some of the work or find something else. I was also a nationally published computer consultant a long time ago and graphic artist.

Reality is I can still do many things but I do nothing as well as I did when I was younger and the cost to employers for me is far higher than a younger person. I had my chance and I chose poorly. Younger people, if that makes them abetter fit, deserve a chance now more than I do.

Joe Well , January 27, 2019 at 7:49 pm

I'm sorry for your predicament. Do you mean you chose poorly when you chose not to get neck surgery? What was the choice you regret?

My career choices. Choosing to close my business to possibly avoid the surgery was actually a good choice.

Joe Well , January 28, 2019 at 11:47 am

I'm sorry for your challenges but I don't think there were many good careers you could have chosen and it would have required a crystal ball to know which were the good ones. Americans your age entered the job market just after the very end of the Golden Age of labor conditions and have been weathering the decline your entire working lives. At least I entered the job market when everyone knew for years things were falling apart. It's not your fault. You were cheated plain and simple.

> I had my chance and I chose poorly.

I don't see how it's possible to predict the labor market years in advance. Why blame yourself for poor choices when so much chance is involved?

With a Jobs Guarantee, such questions would not arise. I also don't think it's only a question of doing, but a question of sharing ("experience, strength, and hope," as AA -- a very successful organization! -- puts it, in a way of thinking that has wide application).

Dianne Shatin , January 27, 2019 at 7:46 pm

Unelected plutocrat and his international syndicate funded by former IBM artificial intelligence developer and social darwinian. data manipulation electronic platforms and social media are at the levels of power in the USA. Anti justice, anti enlightenment, etc.

Since the installation of GW Bush by the Supreme Court, almost 20 yrs. ago, they have tunneled deeply, speaking through propaganda machines such as Rush Limbaugh gaining traction .making it over the finish line with KGB and Russian oligarch backing. The net effect on us? The loss of all built on the foundation of the enlightenment and an exceptional nation no king, a nation of, for and by the people, and the rule of law. There is nothing Judeo-Christian about social darwinism but is eerily similar to National Socialism (Nazis). The ruling againt the plaintiff by the 7th circuit in the U.S. and their success in creating chaos in Great Britain vis a vis "Brexit" by fascist Lafarge Inc. are indicators how easy their ascent.
ows how powerful they have become.

anon y'mouse , January 27, 2019 at 9:19 pm

They had better get ready to lower the SSI retirement age to 55, then. Or I predict blood in the streets.

I wish it was so. They just expect the older crowd to die quietly.

How is it legal , January 27, 2019 at 10:04 pm

Where are the Bipartisan Presidential Candidates and Legislators on oral and verbal condemnation of Age Discrimination , along with putting teeth into Age Discrimination Laws, and Tax Policy. – nowhere to be seen , or heard, that I've noticed; particularly in Blue ™ California, which is famed for Age Discrimination of those as young as 36 years of age, since Mark Zuckerberg proclaimed anyone over 35, over the hill in the early 2000's , and never got crushed for it by the media, or the Politicians, as he should have (particularly in Silicon Valley).

I know those Republicans are venal, but I dare anyone to show me a meaningful Age Discrimination Policy Proposal, pushed by Blue Obama, Hillary, even Sanders and Jill Stein. Certainly none of California's Nationally known (many well over retirement age) Gubernatorial and Legislative Democratic Politicians: Jerry Brown, Gavin Newsom, Dianne Feinstein, Barbara Boxer, Nancy Pelosi, Kamala Harris, and Ro Khanna (or the lesser known California Federal State and Local Democratic Politicians) have ever addressed it; despite the fact that homelessness deaths of those near 'retirement age' have been frighteningly increasing in California's obscenely wealthy homelessness 'hotspots,' such as Silicon Valley.

Such a tragic issue, which has occurred while the last over a decade of Mainstream News and Online Pundits, have Proclaimed 50 to be the new 30. Sadistic. I have no doubt this is linked to the ever increasing Deaths of Despair and attempted and successful suicides of those under, and just over retirement age– while the US has an average Senate age of 65, and a President and 2020 Presidential contenders, over 70 (I am not at all saying older persons shouldn't be elected, nor that younger persons shouldn't be elected, I'm pointing out the imbalance, insanity, and cruelty of it).

Further, age discrimination has been particularly brutal to single, divorced, and widowed females , whom have most assuredly made far, far less on the dollar than males (if they could even get hired for the position, or leave the kids alone, and housekeeping undone, to get a job):

Patrick Button, an assistant economics professor at Tulane University, was part of a research project last year that looked at callback rates from resumes in various entry-level jobs. He said women seeking the positions appeared to be most affected.

"Based on over 40,000 job applications, we find robust evidence of age discrimination in hiring against older women, especially those near retirement age, but considerably less evidence of age discrimination against men," according to an abstract of the study.

Jacquelyn James, co-director of the Center on Aging and Work at Boston College, said age discrimination in employment is a crucial issue in part because of societal changes that are forcing people to delay retirement. Moves away from defined-¬benefit pension plans to less assured forms of retirement savings are part of the reason.

> "Based on over 40,000 job applications, we find robust evidence of age discrimination in hiring against older women, especially those near retirement age, but considerably less evidence of age discrimination against men," according to an abstract of the study.

Well, these aren't real women, obviously. If they were, the Democrats would already be taking care of them.

From the article: The greying of the workforce is "thanks to better health in older age and insufficient savings that require people to keeping working longer," according to the Chicago Tribune.

Get on the clue train Chicago Tribune, because your like W and Trump not knowing how a supermarket works, that's how dense you are. Even if one saved, and even if one won the luck lottery in terms of job stability and adequate income to save from, healthcare alone is a reason to work, either to get employer provided if lucky, or to work without it and put most of one's money toward an ACA plan or the like if not lucky. Yes the cost of almost all other necessities has also increased greatly, but even parts of the country without a high cost of living have unaffordable healthcare.

Enquiring Mind , January 27, 2019 at 11:07 pm

Benefits may be 23-30% or so of payroll and represent another expense management opportunity for the diligent executive. One piece of low-hanging fruit is the age-related healthcare cost. If you hire young people, who under-consume healthcare relative to older cohorts, you save money, ceteris paribus. They have lower premiums, lower loss experience and they rebound more quickly, so you hit a triple at your first at-bat swinging at that fruit. Yes, metaphors are fungible along with every line on the income statement.

If your company still has the vestiges of a pension or similar blandishment, you may even back-load contributions more aggressively, of course to the extent allowable. That added expense diligence will pay off when those annuated employees leave before hitting the more expensive funding years.

NB, the above reflects what I saw and heard at a Fortune 500 company.

Another good reason for a Canadian style single payer system. That turns a deciding factor into a non-factor.

Jack Hayes , January 28, 2019 at 8:15 am

A reason why the court system is overburdened is lack of clarity in laws and regulations. Fix the disparity between the two sections of the law so that courts don't have to decide which section rules.

Polarization has made tweaks and repairs of laws impossible.

Jeff N , January 28, 2019 at 10:17 am

Yep. Many police departments *legally* refuse to hire anyone over 35 years old (exceptions for prior police experience or certain military service)

Joe Well , January 28, 2019 at 12:36 pm

It amazes me how often the government will give itself exemptions to its own laws and principles, and also how often "progressive" nonprofits and political groups will also give themselves such exemptions, for instance, regarding health insurance, paid overtime, paid training, etc. that they are legally required to provide.

Ford Prefect , January 28, 2019 at 2:27 pm

There are specific physical demands in things like policing. So it doesn't make much sense to hire 55 year old rookie policemen when many policemen are retiring at that age.

Arthur Dent , January 28, 2019 at 2:59 pm

Its an interesting quandary. We have older staff that went back to school and changed careers. They do a good job and get paid at a rate similar to the younger staff with similar job-related experience. However, they will be retiring at about the same time as the much more experienced staff, so they will not be future succession replacements for the senior staff.

So we also have to hire people in their 20s and 30s because that will be the future when people like me retire in a few years. That could very well be the reason for the specific wording of the job opening (I haven't read the opinion). I know of current hiring for a position where the firm is primarily looking for somebody in their 20s or early 30s for precisely that reason. The staff currently doing the work are in their 40s and 50s and need to start bringing up the next generation. If somebody went back to school late and was in their 40s or 50s (so would be at a lower billing rate due to lack of job related experience), they would be seriously considered. But the firm would still be left with the challenge of having to hire another person at the younger age within a couple of years to build the succession. Once people make it past 5 years at the firm, they tend to stay for a long time with senior staff generally having been at the firm for 20 years or more, so hiring somebody really is a long-term investment.

#### [Jan 25, 2019] Davos Elites Love to Advocate for Equality - So Long As Nothing Gets Done -

##### "... Branko Milanovic is the author of Global Inequality: A New Approach for the Age of Globalization and of the forthcoming Capitalism, Alone, both published by Harvard University Press. He is senior scholar at the Stone Center on Socio-Economic Inequality at the Graduate Center, City University of New York. An earlier version of this post has previously appeared in Milanovic's blog . ..."
###### Jan 25, 2019 | promarket.org

The return to the industrial relations and tax policies of the early 19th century has been spearheaded by people who speak the language of equality, respect, participation, and transparency.

but slow to take any step.

-- Euripides, Hecuba

Thousands of people with a combined wealth of several hundred billion dollars, perhaps even close to a trillion, are gathering this week in Davos. Never in world history, quite possibly, has the amount of wealth per square foot been so high. This year, for the seventh or eighth consecutive time, one of the principal topics addressed by these captains of industry, billionaires, employers of thousands of people across the four corners of the globe, is inequality. Even the new "hot" topics of the day -- trade wars and populism -- are in turn related, or even caused by inequality of income, wealth, or political power.

Only in passing, and probably on the margins of the official program, will the global elites gathered in Davos get into a discussion of the tremendous monopoly and monopsony power their companies have. Neither will they publicly mention companies' ability to play one jurisdiction against another in order to avoid taxes, ban organized labor within their ranks, use government ambulance services to carry workers who have fainted from the heat (to save expenses on air conditioning), make their workforce complement its wages through private charity donations, or perhaps pay an average tax rate of between 0-12 percent.

Some participants, if they are from the emerging market economies, can also exchange experiences on how to delay payments of wages for several months while investing these funds at high interests rates, save on labor protection standards, or buy privatized companies for a song and then set up shell companies in the Caribbean or Channel Islands.

It is just that somehow, the "masters of the universe" who gather annually in Davos never managed to find enough money, or time, or perhaps willing lobbyists to help with the policies many will agree, during the official sessions, should be adopted. For example, increasing taxes on the top 1 percent and on large estates, providing decent wages or not impounding wages, reducing gaps between CEO compensation and average pay, spending more money on public education, making access to financial assets more attractive to the middle and working class, equalizing taxes on capital and labor, reducing corruption in government contracts and privatizations.

Actually, when policies that are supposed to make some headway in counteracting rising inequality are finally proposed, such as the one made by Rep. Alexandria Ocasio-Cortez (D-NY) of 70 percent marginal tax on extra high-incomes (above $10 million annually), they are quick to argue that such policies will do more harm than good. One is left, to put it mildly, puzzled: If they are against a most obvious and rather modest proposal, what policies do they have in mind to fight inequality? In reality they have none, except for the vacuous talk of "social inclusion," "prosperity for all" and "trickle-down economics." Not surprisingly, nothing has been done since the Global Financial Crisis to address inequality. Rather, the opposite has happened. Donald Trump has, as promised, passed a historic tax cut for the wealthy; Emmanuel Macron has discovered the attraction of latter-day Thatcherism; the Chinese government has slashed taxes on the rich and imprisoned the left-wing students at Peking University who supported striking workers. In Brazil, Jair Bolsonaro seems to consider praise for torture and the rising stock market as the ideal mélange of modern capitalism. Bizarrely, this return to the industrial relations and tax policies of the early 19th century has been spearheaded by people who speak the language of equality, respect, participation, and transparency. The annual gathering in Davos, in that regard, is not just a display of the elites' financial superiority. It is also supposed to showcase their moral superiority. This is in line with a longstanding trend: Over the past fifty years, the language of equality has been harnessed in the pursuit of the most structurally inegalitarian policies. It is much easier (and profitable), apparently, to call journalists and tell them about nebulous schemes whereby 90 percent of wealth will be -- over an unknown number of years and under unknowable accounting practices -- given away as charity than to pay suppliers and workers reasonable rates or stop selling user data. They are loath to pay a living wage, but they will fund a philharmonic orchestra. They will ban unions, but they will organize a workshop on transparency in government. And next year, as inequality continues to rise and the state of Western middle classes continues to deteriorate, the same elites will be back in Davos, talking about inequality and populism in grave tones. A new record in dollar wealth per square foot may be reached, but the topics of discussion within the conference halls, and on the margins, will remain the same. Branko Milanovic is the author of Global Inequality: A New Approach for the Age of Globalization and of the forthcoming Capitalism, Alone, both published by Harvard University Press. He is senior scholar at the Stone Center on Socio-Economic Inequality at the Graduate Center, City University of New York. An earlier version of this post has previously appeared in Milanovic's blog . #### [Jan 20, 2019] Note on students debt peonage ###### Jan 20, 2019 | www.truthdig.com RW: Well at this point I think it really depends on what indexes you're looking at. The biggest thing that's kept this economy going in the last few years should make everybody tremble. It's called debt, let me give you just a couple of examples. Ten years ago, at the height of the crash, the total debt carried by students in the United States was in the neighborhood of$700 billion, an enormous sum. What is it today? Over twice that, one-and-a-half trillion dollars. The reason part of our economy hasn't collapsed is that students have taken up an enormous amount of debt that they cannot afford, in order to get degrees which will let them get jobs whose incomes will not allow them to pay back the debts. And forget about getting married, forget about having a family.

We have paid an enormous price in hobbling the generation of people who would have otherwise lifted this economy and made us more productive. It is a disastrous mistake historically, and if you face that, and if you add to it the increased debt of our businesses, and the increased debt of our government, you see an economy that is held up by a monstrous increase in debt, not in underlying productivity, not in more jobs that really produce anything, but in debt.

That should frighten us because it was the debt bubble that burst in 2008 and brought us the crash. It is as if we cannot learn in our system to do other than we've always done and that's taking us into another crash coming now.

LC: Yeah. This is the land of the free, but it seems like most of us are chained down by debt peonage.

#### [Jan 20, 2019] Degeneration of the US neoliberal elite can be partially attributed to the conversion of neoliberal universities into indoctrination mechanism, rather then institutions for fostering critical thinking

##### "... As their more recent alumni move into government, media and cultural production, the primitiveness of their views and their inability to think -- to say nothing of their fundamental ignorance about our civilization other than that it is bad and evil -- begin to have real effect. ..."
###### Jan 20, 2019 | www.theamericanconservative.com

Paul Reidinger, January 17, 2019 at 2:03 pm

An excellent piece. I would add only that the so-called elites mentioned by Mr Bacevich are largely the products of the uppermost stratum of colleges and universities, at least in the USA, and that for a generation or more now, those institutions have indoctrinated rather than educated.

As their more recent alumni move into government, media and cultural production, the primitiveness of their views and their inability to think -- to say nothing of their fundamental ignorance about our civilization other than that it is bad and evil -- begin to have real effect. The new dark age is no longer imminent. It is here, and it is them. I see no way to rectify the damage. When minds are ruined young, they remain ruined.

#### [Jan 17, 2019] Elizabeth Warren is demanding that Wells Fargo be kicked off college campuses, a market the bank has said is among its fastest-growing

##### "... "When granted the privilege of providing financial services to students through colleges, Wells Fargo used this access to charge struggling college students exorbitant fees," Warren said in a statement. "These high fees, which are an outlier within the industry, demonstrate conclusively that Wells Fargo does not belong on college campuses." ..."
###### Jan 17, 2019 | www.bloomberg.com

Elizabeth Warren is demanding that Wells Fargo & Co. be kicked off college campuses, a market the bank has said is among its fastest-growing.

The Democratic senator from Massachusetts and likely presidential candidate said Thursday that she requested more information from Wells Fargo Chief Executive Officer Tim Sloan and from 31 colleges where the bank does business. The inquiry follows a Consumer Financial Protection Bureau report said that Wells Fargo charged students the highest fees of 573 banks examined.

"When granted the privilege of providing financial services to students through colleges, Wells Fargo used this access to charge struggling college students exorbitant fees," Warren said in a statement. "These high fees, which are an outlier within the industry, demonstrate conclusively that Wells Fargo does not belong on college campuses."

Warren has been a vocal critic of Wells Fargo -- including repeatedly calling for Sloan's ouster -- since a series of consumer issues at the company erupted more than two years ago with a phony-accounts scandal.

Wells Fargo is "continually working to improve how we serve our customers," a bank spokesman said in an emailed statement Thursday. "Before and since the CFPB's review on this topic, we have been pursuing customer-friendly actions that support students," including waiving service fees on some checking accounts offered to them.

A reputation for overcharging students could further harm Wells Fargo's consumer-banking strategy. The San Francisco-based bank has identified college-age consumers as a growth opportunity, and John Rasmussen, head of personal lending, said last year that Wells Fargo may expand into the refinancing of federal student loans.

#### [Jan 17, 2019] The financial struggles of unplanned retirement

##### People who are kicked out of their IT jobs around 55 now has difficulties to find even full-time McJobs... Only part time jobs are available. With the current round of layoff and job freezes, neoliberalism in the USA is entering terminal phase, I think.
###### Jan 17, 2019 | finance.yahoo.com

A survey by Transamerica Center for Retirement Studies found on average Americans are retiring at age 63, with more than half indicating they retired sooner than they had planned. Among them, most retired for health or employment-related reasons.

... ... ...

On April 3, 2018, Linda LaBarbera received the phone call that changed her life forever. "We are outsourcing your work to India and your services are no longer needed, effective today," the voice on the other end of the phone line said.

... ... ...

"It's not like we are starving or don't have a home or anything like that," she says. "But we did have other plans for before we retired and setting ourselves up a little better while we both still had jobs."

... ... ...

Linda hasn't needed to dip into her 401(k) yet. She plans to start collecting Social Security when she turns 70, which will give her the maximum benefit. To earn money and keep busy, Linda has taken short-term contract editing jobs. She says she will only withdraw money from her savings if something catastrophic happens. Her husband's salary is their main source of income.

"I am used to going out and spending money on other people," she says. "We are very generous with our family and friends who are not as well off as we are. So we take care of a lot of people. We can't do that anymore. I can't go out and be frivolous anymore. I do have to look at what we spend - what I spend."

Vogelbacher says cutting costs is essential when living in retirement, especially for those on a fixed income. He suggests moving to a tax-friendly location if possible. Kiplinger ranks Alaska, Wyoming, South Dakota, Mississippi, and Florida as the top five tax-friendly states for retirees. If their health allows, Vogelbacher recommends getting a part-time job. For those who own a home, he says paying off the mortgage is a smart financial move.

... ... ...

Monica is one of the 44 percent of unmarried persons who rely on Social Security for 90 percent or more of their income. At the beginning of 2019, Monica and more than 62 million Americans received a 2.8 percent cost of living adjustment from Social Security. The increase is the largest since 2012.

With the Social Security hike, Monica's monthly check climbed $33. Unfortunately, the new year also brought her a slight increase in what she pays for Medicare; along with a$500 property tax bill and the usual laundry list of monthly expenses.

"If you don't have much, the (Social Security) raise doesn't represent anything," she says with a dry laugh. "But it's good to get it."

#### [Jan 14, 2019] Beware of billionaires and bankers bearing gifts: In education, philanthropy means Billionaires buying the policies they want

##### "... quelle surprise ..."
###### Jan 14, 2019 | www.nakedcapitalism.com

"Winners Take All" is one of several recently published books raising difficult questions about how the world's biggest donors approach their giving. As someone who studies, teaches and believes in philanthropy, I believe these writers have started an important debate that could potentially lead future donors to make make a bigger difference with their giving.

Giridharadas to a degree echoes Ford Foundation President Darren Walker , who has made a stir by denouncing a " paradox of privilege " that "shields (wealthy people) from fully experiencing or acknowledging inequality, even while giving us more power to do something about it."

Like Walker , Giridharadas finds it hard to shake the words of Martin Luther King Jr., who spoke of "the circumstances of economic injustice which make philanthropy necessary."

To avoid changes that might endanger their privileges, mega-donors typically seek what they call win-win solutions. But however impressive the quantifiable results of those efforts may seem, according to this argument, those outcomes will always fall short. Fixes that don't threaten the powers that be leave underlying issues intact.

Avoiding Win-Lose Solutions

In Giridharadas's view, efforts by big funders , such as The Bill and Melinda Gates Foundation and the Walton Family Foundation , to strengthen public K-12 education systems by funding charter schools look past the primary reason why not all students learn at the same pace: inequality .

As long as school systems are funded locally, based on property values, students in wealthy communities will have advantages over those residing in poorer ones. However, creating a more equal system to pay for schools would take tax dollars and advantages away from the rich. The wealthy would lose, and the disadvantaged would win.

So it's possible to see the nearly $500 million billionaires and other rich people have pumped into charter schools and other education reform efforts over the past dozen years as a way to dodge this problem. Charters have surely made a difference for some kids, such as those in rural Oregon whose schools might otherwise have closed. But since the bid to expand charters doesn't address childhood poverty or challenge the status quo – aside from diluting the power of teacher unions and raising the stakes in school board elections – this approach seems unlikely to help all schoolchildren. Indeed, years into the quest to fix this problem without overhauling school Paying for Tuition Bloomberg's big donation raises a similar question. He aims to make a Johns Hopkins education more accessible for promising low-income students. When so many Hopkins alumni have enjoyed success in a wide range of careers, what can be wrong with that? Well, paying tuition challenges millions of Americans, not just the thousands who might attend Hopkins . Tuition, fees, room and board at the top-ranked school cost about$65,000 a year.

Only 5 percent of colleges and universities were affordable , according to the Institute for Higher Education Policy, a nonpartisan global research and policy center, for students from families earning $69,000 a year or less. Like Giridharadas, the institute argues paying for college is "largely a problem of inequity." Bloomberg's gift will certainly help some people earn a Hopkins degree. But it does nothing about the bigger challenge of making college more affordable for all in a country where student debt has surpassed$1.5 trillion .

One alternative would be to finance advocacy for legislative remedies to address affordability and inequity. For affluent donors, Giridharadas argues, this could prove to be a nonstarter. Like most of what he calls " win-lose solutions ," taking that route would lead to higher taxes for the wealthy.

Subsidies for Gifts from the Rich

Similarly, who could quibble with Bezos spending $2 billion to fund preschools and homeless shelters? Although he has not yet made clear what results he's after, I have no doubt they will make a difference for countless Americans. No matter how he goes about it, the gesture still raises questions. As Stanford University philanthropy scholar Rob Reich explains in his new book " Just Giving ," the tax break rich Americans get when they make charitable contributions subsidizes their favorite causes. Or, to phrase it another way, the federal government gives initiatives supported by Bezos and other wealthy donors like him preferential treatment. Does that make sense in a democracy? Reich says that it doesn't. me title= The elected representatives in democracies should decide how best to solve problems with tax dollars, not billionaires who are taken with one cause or another, the Stanford professor asserts. That's why I think it's so important to ask the critical questions that Giridharadas and Reich are raising, and why the students taking my philanthropy classes this semester will be reading "Winners Take All" and "Just Giving." Editor's note: Johns Hopkins University Press provides funding as a member of The Conversation US, which also has a grant from the Walton Family Foundation. The Gates Foundation is a funder of The Conversation Media Group. tongorad , January 11, 2019 at 10:35 am In education, philanthropy means Billionaires buying the policies they want. Re Bill Gates, Eli Broad, DeVos, etc, Adam Eran , January 11, 2019 at 12:47 pm None of the common tactics of the "reformers" have scientific backing. So (union-busting) charter schools, merit pay (because teachers are motivated by money), and testing kids until their eyeballs bleed are all bogus, and do not have an impact on educational outcomes. The plutocrats have even funded a propaganda film called "Waiting for Superman" in which Michelle Rhee applies "tough love" to reform failing Washington D.C. schools, firing lots of teachers because their students' test scores didn't make the cut, etc. Waiting for Superman touts the Finnish schools as the ones to emulate and they are very good ones, too. Omitted from their account is the fact that Finnish teachers are tenured, unionized, respected and quite well paid. So what does correlate with educational outcomes? Childhood poverty. In Finland, only 2% of their children are poor. In the U.S. it's 23%. The problem is systemic, not the teachers, or the types of schools. In some sense this is nothing new. Back when Pittsburgh was a network of steel mills and mine tailings Carnegie funded meuseums, libraries, arboretums, and strike-breakers who shot workers that complained. He was public about the need to "give back" and made a point of demanding that the places were open on Sundays because he forced his workers to do 12 hour days six days a week. No doubt he may have felt he was helping, and no doubt the institutions have been and still are a positive benefit, but they also did nothing to attack the root cause of the suffering nor did they make any fundamental change in society. That would upset his apple cart. By the same token the fact that private donors needed to fund public institutions was based upon the simple fact that they had all the money. It is also notable that some of the more recent endeavors such as Gates' tech-driven charter schools, or Facebook's donation to the same, or for that matter Apple's donation of iPads to LAUSD have a direct commercial component. The intial gift may be free but in the end it is market-making as much of the cash routes back to the company. They may genuinely believe in the solution but the financial connection is also clear. More interesting though Pierre Omidyar who combined his business and "philanthropy" more directly by putting money into a foundation that then invests in startups he runs which "do social good" or which sell technology to those that do so. Ultimately Bill Gates and Jeff Bezos may have more to play with than Carnegie ever dreamed of but at the end of the day much of what they are doing is the same, starving necessary institutions of funds, smoothing out the rough edges of their PR (especially when, like Bezos, they are in the crosshairs), and then peddling "solutions" that look good but only reinforce the conditions that make them rich. JerryDenim , January 11, 2019 at 12:42 pm " have a direct commercial component. The intial gift may be free but in the end it is market-making as much of the cash routes back to the company." How true, but you might not even be cynical enough. Back in 2012 (I believe) there was reportage about large banks quitely lobbying Bloomberg to make big cuts to the New York City's funding of local charities and non-profits. Several million dollars were cut as a result of the austerity lobbying by the banks. The same week the food pantry where I volunteered, which lost$40,000 of City funding if memory serves me correctly, received a "generous" gift of a folding table from Citibank. My wife who at the time worked at a large non-profit dedicated to community issues in the South Bronx, had to attend a presentation by a Citibank employee with a name like "How the Nonprofit Community Has Failed the Community". Her attendance was a courtesy demanded in exchange for a several thousand dollar donation from Citibank to her nonprofit. Her non-profit lost much more in funding from the City due to the banks' lobbying efforts, and surprise surprise, what was the main thrust of the Citibank presentation? How micro-finance lending can help historically marginalized communities of course! My wife's organization was engaged in several programs aimed at encouraging and aiding entrepreneurship and financial literacy. Citibank saw local non-profits that were helping the community keep their collective heads above the water as competition. Their programatic work was harmful to the bank's business model of luring people into odious debt by promulgating an environment of despair and desperation.

Beware of billionaires and bankers bearing gifts. Their vast fortunes should be trimmed down to size with taxation/force and distributed democratically according to the needs of the community, not the whims of the market or the misguided opinions of non-expert, know-it-all billionaires who have never lived nor worked in the communities they claim to care about.

Montanamaven , January 11, 2019 at 1:31 pm

Charity makes people supplicants which is a form of servitude. "Thank you kindly, sir, for you gracious gift." That is not a "free" society. We should have a society where no one needs some good folks' trickle downs. A basic guaranteed income might work better than the system we have now especially with an affordable heath care system. It would eliminate food banks and homeless shelters and jobs involving making lists and forms and graphs for the Medical Insurance Business. And it would eliminate a lot of other stupid and bullsh*t jobs. Yes, I've been rereading David Graeber's "Bullsh*t Jobs."

chuck roast , January 11, 2019 at 4:36 pm

Several years ago I collected signatures for Move to Amend, an organizations which advocates for an anti-corporate personhood amendment to the US Constitution. I learned two things:
1. ordinary citizens 'get it' about corporations running the show, and they are enthusiastic about bringing them to heel, and
2. ordinary citizens who work in 501(c)3 non-profits are far less enthusiastic about the possible withering away of their cozy corporate dole.
So, while the giant vampire squids of the world drift lazily along on a fine current of their own making, keep in mind that there are huge schools of pilot fish that depend on their leavings for survival. All of these small fish will surely resist any effort to tenderize this calamari.

drHampartzunk , January 11, 2019 at 4:43 pm

No one said it better than William Jewett Tucker, a contemporary critic of Carnegie:

"I can conceive of no greater mistake, more disastrous in the end to religion if not to society, than of trying to make charity do the work of justice."

David in Santa Cruz , January 11, 2019 at 8:28 pm

This was a terrific post on a very important issue.

Even in my insignificant little burg we have experienced this problem first-hand. A local Charter School was doing a very good job of "keeping out the brown people" and publishing a "walk of shame" of all who made "voluntary" contributions to their coffers, thus "outing" those who didn't (the California constitution forbids schools that spend public money from requiring fees). They even went so far as to hire a Head of School from one of the last Mississippi Segregation Acadamies, just in case their "mission" wasn't clear. Admission was by lottery ("because lotteries are fair!"), unless you happened to be on their massively bloated and self-appointed Board (including influential local officials, quelle surprise !). Those with learning differences or languages other than English were "strongly discouraged" from even applying.

The Charter covered their operating budget with all those "voluntary" contributions, and had sequestered all the cash squeezed out of the local public schools, in order to buy an office building (because kids just love preparing for the world of work by going to school in office buildings!). A local billionaire whose name rhymes with "Netflix" bailed them out with a $10M donation for the building when it appeared that some in authority might look askance at who would be the beneficiaries of this insider real estate deal using skimmed-off public monies. Scratch a Charter School and 9 times out of 10 there's a real estate deal underlying it ("Because, the children !"). Billionaires should have no more influence than any other individual voter in making public policy. orange cats , January 13, 2019 at 9:45 am Grrrrr, Charter Schools are making me angry. The real estate deal(s), you mention are absolutely true. Here's another sweet scheme in Arizonia: "The Arizona Republic has reported that Rep. Eddie Farnsworth stands to make about$30 million from selling three charter schools he built with taxpayer money.
The toothless Arizona State Board for Charter Schools approved the transfer of his for-profit charter school to a new, non-profit company. He might collect up to $30 million -- and maybe even continue running the operation in addition to retaining a$3.8 million share in the new for-profit company.

The Benjamin Franklin charter schools operate in wealthy neighborhoods. The 3,000 students have good scores and the schools have a B rating. But that's not surprising, since most of the parents have high incomes and college educations. If the schools are like most charters in the state, they're more racially segregated than the campuses in the surrounding school districts. The state pays the charter schools $2,000 per student more than it pays traditional school districts like Payson -- which is supposedly to make up for the charter's inability to issue bonds and such. However, converting the charters to a non-profit company will enable the schools to avoid property taxes and qualify for federal education funds. Taxpayers will essentially end up paying for the same schools twice, since taxpayers have footed the bills for the lease payments to the tune of about$5 million annually. Now, the new owners will use taxpayer money to finance the purchase of buildings already paid for by taxpayers."

drHampartzunk , January 11, 2019 at 9:08 pm

Stevenson school in Mountain View CA, a public school with PACT (parents and children together), has a lottery. Its students are 70% white. Across the street, Theuerkauf, which does not have PACT, is 30% white and no lottery. And a huge difference in the two schools test scores. Smells illegal.

Also, Google took the former building of the former PACT program hosting school, which resulted in this grotesque distortion of the supposed public service the school district provides.

Michael Fiorillo , January 12, 2019 at 9:09 am

As a former NYC public school teacher who fought against the billionaire-funded hostile takeover of public education for two decades, I'm gratified to see the beginnings of a harsher critique of so-called philanthropy, in education and everywhere else.

But the next hurdle is to overcome the tic of always qualifying critique and pushback with talk of the "good intentions" of these Overclass gorgons. Their intention are not "good" in the way most human beings construe that word, and are the same as they've always been: accumulation and establishing the political wherewithal to maintain/facilitiate the same. This hustle does the added trick of getting the public to subsidize it's own impoverishment and loss of political power (as in Overclass ed reformers funding efforts to eliminate local school boards).

When there is near-total congruence between your financial/political interests and the policies driven by your "philanthropy," the credibility of your "good intentions" transacts at an extremely high discount, no matter how much you try to dress it up with vacuous and insipid social justice cliches. For a case in point, just spend five minutes researching the behavior and rhetoric of Teach For America.

Malanthropy (n): the systemic use of non-profit, tax-exempt entities to facilitate the economic and political interests of their wealthy endowers, to the detriment of society at large. See also, Villainthropy.

Mattski , January 12, 2019 at 11:07 am

The critical thing, I have found, is to see "philanthropy" and charitable endeavor as a cornerstone of capitalism, without which the system would–without any doubt–fail. Engels and others documented, contemporary scholars have continued to document, the way that the wives of the first factory owners established almshouses and lying in hospitals where the deserving poor were separated from the undeserving, dunned with religion and political cant, and channelled into various forms of work, including reproductive labor. A very big piece of the neoliberal puzzle involves the rise of the NGO during the Clinton/Blair period, and its integration with works of the like of the IMF and USAID, the increasing sophistication of this enterprise which has at times also included union-busting (see Grenada in the aftermath of the US invasion) and worse. As a State Department function, the Peace Corps integrates the best of charity, grassroots capitalism, and good old Protestant cant.

Spring Texan , January 12, 2019 at 5:54 pm

I've read the Winners Take All book and it's terrific! Even if you understand the general outlines, the author will make you see things differently because of his intimate knowledge of how this ecosystem works. Highly recommended! Also recommend his twitter account, @AnandWrites

He's really good on "pinkerizing" too, and "Thought Leaders" and how they comfort the comfortable.

#### [Jan 12, 2019] Tucker Carlson Mitt Romney supports the status quo. But for everyone else, it's infuriating Fox News

##### "... Adapted from Tucker Carlson's monologue from "Tucker Carlson Tonight" on January 2, 2019. ..."
###### Jan 02, 2019 | www.foxnews.com
Tucker: America's goal is happiness, but leaders show no obligation to voters

Voters around the world revolt against leaders who won't improve their lives.

Newly-elected Utah senator Mitt Romney kicked off 2019 with an op-ed in the Washington Post that savaged Donald Trump's character and leadership. Romney's attack and Trump's response Wednesday morning on Twitter are the latest salvos in a longstanding personal feud between the two men. It's even possible that Romney is planning to challenge Trump for the Republican nomination in 2020. We'll see.

But for now, Romney's piece is fascinating on its own terms. It's well-worth reading. It's a window into how the people in charge, in both parties, see our country.

Romney's main complaint in the piece is that Donald Trump is a mercurial and divisive leader. That's true, of course. But beneath the personal slights, Romney has a policy critique of Trump. He seems genuinely angry that Trump might pull American troops out of the Syrian civil war. Romney doesn't explain how staying in Syria would benefit America. He doesn't appear to consider that a relevant question. More policing in the Middle East is always better. We know that. Virtually everyone in Washington agrees.

Corporate tax cuts are also popular in Washington, and Romney is strongly on board with those, too. His piece throws a rare compliment to Trump for cutting the corporate rate a year ago.

That's not surprising. Romney spent the bulk of his business career at a firm called Bain Capital. Bain Capital all but invented what is now a familiar business strategy: Take over an existing company for a short period of time, cut costs by firing employees, run up the debt, extract the wealth, and move on, sometimes leaving retirees without their earned pensions. Romney became fantastically rich doing this.

Meanwhile, a remarkable number of the companies are now bankrupt or extinct. This is the private equity model. Our ruling class sees nothing wrong with it. It's how they run the country.

Mitt Romney refers to unwavering support for a finance-based economy and an internationalist foreign policy as the "mainstream Republican" view. And he's right about that. For generations, Republicans have considered it their duty to make the world safe for banking, while simultaneously prosecuting ever more foreign wars. Modern Democrats generally support those goals enthusiastically.

There are signs, however, that most people do not support this, and not just in America. In countries around the world -- France, Brazil, Sweden, the Philippines, Germany, and many others -- voters are suddenly backing candidates and ideas that would have been unimaginable just a decade ago. These are not isolated events. What you're watching is entire populations revolting against leaders who refuse to improve their lives.

Something like this has been in happening in our country for three years. Donald Trump rode a surge of popular discontent all the way to the White House. Does he understand the political revolution that he harnessed? Can he reverse the economic and cultural trends that are destroying America? Those are open questions.

But they're less relevant than we think. At some point, Donald Trump will be gone. The rest of us will be gone, too. The country will remain. What kind of country will be it be then? How do we want our grandchildren to live? These are the only questions that matter.

The answer used to be obvious. The overriding goal for America is more prosperity, meaning cheaper consumer goods. But is that still true? Does anyone still believe that cheaper iPhones, or more Amazon deliveries of plastic garbage from China are going to make us happy? They haven't so far. A lot of Americans are drowning in stuff. And yet drug addiction and suicide are depopulating large parts of the country. Anyone who thinks the health of a nation can be summed up in GDP is an idiot.

The goal for America is both simpler and more elusive than mere prosperity. It's happiness. There are a lot of ingredients in being happy: Dignity. Purpose. Self-control. Independence. Above all, deep relationships with other people. Those are the things that you want for your children. They're what our leaders should want for us, and would want if they cared.

But our leaders don't care. We are ruled by mercenaries who feel no long-term obligation to the people they rule. They're day traders. Substitute teachers. They're just passing through. They have no skin in this game, and it shows. They can't solve our problems. They don't even bother to understand our problems.

One of the biggest lies our leaders tell us that you can separate economics from everything else that matters. Economics is a topic for public debate. Family and faith and culture, meanwhile, those are personal matters. Both parties believe this.

Members of our educated upper-middle-classes are now the backbone of the Democratic Party who usually describe themselves as fiscally responsible and socially moderate. In other words, functionally libertarian. They don't care how you live, as long as the bills are paid and the markets function. Somehow, they don't see a connection between people's personal lives and the health of our economy, or for that matter, the country's ability to pay its bills. As far as they're concerned, these are two totally separate categories.

Social conservatives, meanwhile, come to the debate from the opposite perspective, and yet reach a strikingly similar conclusion. The real problem, you'll hear them say, is that the American family is collapsing. Nothing can be fixed before we fix that. Yet, like the libertarians they claim to oppose, many social conservatives also consider markets sacrosanct. The idea that families are being crushed by market forces seems never to occur to them. They refuse to consider it. Questioning markets feels like apostasy.

Both sides miss the obvious point: Culture and economics are inseparably intertwined. Certain economic systems allow families to thrive. Thriving families make market economies possible. You can't separate the two. It used to be possible to deny this. Not anymore. The evidence is now overwhelming. How do we know? Consider the inner cities.

Thirty years ago, conservatives looked at Detroit or Newark and many other places and were horrified by what they saw. Conventional families had all but disappeared in poor neighborhoods. The majority of children were born out of wedlock. Single mothers were the rule. Crime and drugs and disorder became universal.

What caused this nightmare? Liberals didn't even want to acknowledge the question. They were benefiting from the disaster, in the form of reliable votes. Conservatives, though, had a ready explanation for inner-city dysfunction and it made sense: big government. Decades of badly-designed social programs had driven fathers from the home and created what conservatives called a "culture of poverty" that trapped people in generational decline.

There was truth in this. But it wasn't the whole story. How do we know? Because virtually the same thing has happened decades later to an entirely different population. In many ways, rural America now looks a lot like Detroit.

This is striking because rural Americans wouldn't seem to have much in common with anyone from the inner city. These groups have different cultures, different traditions and political beliefs. Usually they have different skin colors. Rural people are white conservatives, mostly.

Yet, the pathologies of modern rural America are familiar to anyone who visited downtown Baltimore in the 1980s: Stunning out of wedlock birthrates. High male unemployment. A terrifying drug epidemic. Two different worlds. Similar outcomes. How did this happen? You'd think our ruling class would be interested in knowing the answer. But mostly they're not. They don't have to be interested. It's easier to import foreign labor to take the place of native-born Americans who are slipping behind.

But Republicans now represent rural voters. They ought to be interested. Here's a big part of the answer: male wages declined. Manufacturing, a male-dominated industry, all but disappeared over the course of a generation. All that remained in many places were the schools and the hospitals, both traditional employers of women. In many places, women suddenly made more than men.

Now, before you applaud this as a victory for feminism, consider the effects. Study after study has shown that when men make less than women, women generally don't want to marry them. Maybe they should want to marry them, but they don't. Over big populations, this causes a drop in marriage, a spike in out-of-wedlock births, and all the familiar disasters that inevitably follow -- more drug and alcohol abuse, higher incarceration rates, fewer families formed in the next generation.

This isn't speculation. This is not propaganda from the evangelicals. It's social science. We know it's true. Rich people know it best of all. That's why they get married before they have kids. That model works. But increasingly, marriage is a luxury only the affluent in America can afford.

And yet, and here's the bewildering and infuriating part, those very same affluent married people, the ones making virtually all the decisions in our society, are doing pretty much nothing to help the people below them get and stay married. Rich people are happy to fight malaria in Congo. But working to raise men's wages in Dayton or Detroit? That's crazy.

This is negligence on a massive scale. Both parties ignore the crisis in marriage. Our mindless cultural leaders act like it's still 1961, and the biggest problem American families face is that sexism is preventing millions of housewives from becoming investment bankers or Facebook executives.

For our ruling class, more investment banking is always the answer. They teach us it's more virtuous to devote your life to some soulless corporation than it is to raise your own kids.

Sheryl Sandberg of Facebook wrote an entire book about this. Sandberg explained that our first duty is to shareholders, above our own children. No surprise there. Sandberg herself is one of America's biggest shareholders. Propaganda like this has made her rich.

We are ruled by mercenaries who feel no long-term obligation to the people they rule. They're day traders. Substitute teachers. They're just passing through. They have no skin in this game, and it shows.

What's remarkable is how the rest of us responded to it. We didn't question why Sandberg was saying this. We didn't laugh in her face at the pure absurdity of it. Our corporate media celebrated Sandberg as the leader of a liberation movement. Her book became a bestseller: "Lean In." As if putting a corporation first is empowerment. It is not. It is bondage. Republicans should say so.

They should also speak out against the ugliest parts of our financial system. Not all commerce is good. Why is it defensible to loan people money they can't possibly repay? Or charge them interest that impoverishes them? Payday loan outlets in poor neighborhoods collect 400 percent annual interest.

We're OK with that? We shouldn't be. Libertarians tell us that's how markets work -- consenting adults making voluntary decisions about how to live their lives. OK. But it's also disgusting. If you care about America, you ought to oppose the exploitation of Americans, whether it's happening in the inner city or on Wall Street.

And by the way, if you really loved your fellow Americans, as our leaders should, if it would break your heart to see them high all the time. Which they are. A huge number of our kids, especially our boys, are smoking weed constantly. You may not realize that, because new technology has made it odorless. But it's everywhere.

And that's not an accident. Once our leaders understood they could get rich from marijuana, marijuana became ubiquitous. In many places, tax-hungry politicians have legalized or decriminalized it. Former Speaker of the House John Boehner now lobbies for the marijuana industry. His fellow Republicans seem fine with that. "Oh, but it's better for you than alcohol," they tell us.

Maybe. Who cares? Talk about missing the point. Try having dinner with a 19-year-old who's been smoking weed. The life is gone. Passive, flat, trapped in their own heads. Do you want that for your kids? Of course not. Then why are our leaders pushing it on us? You know the reason. Because they don't care about us.

When you care about people, you do your best to treat them fairly. Our leaders don't even try. They hand out jobs and contracts and scholarships and slots at prestigious universities based purely on how we look. There's nothing less fair than that, though our tax code comes close.

Under our current system, an American who works for a salary pays about twice the tax rate as someone who's living off inherited money and doesn't work at all. We tax capital at half of what we tax labor. It's a sweet deal if you work in finance, as many of our rich people do.

In 2010, for example, Mitt Romney made about $22 million dollars in investment income. He paid an effective federal tax rate of 14 percent. For normal upper-middle-class wage earners, the federal tax rate is nearly 40 percent. No wonder Mitt Romney supports the status quo. But for everyone else, it's infuriating. Our leaders rarely mention any of this. They tell us our multi-tiered tax code is based on the principles of the free market. Please. It's based on laws that the Congress passed, laws that companies lobbied for in order to increase their economic advantage. It worked well for those people. They did increase their economic advantage. But for everyone else, it came at a big cost. Unfairness is profoundly divisive. When you favor one child over another, your kids don't hate you. They hate each other. That happens in countries, too. It's happening in ours, probably by design. Divided countries are easier to rule. And nothing divides us like the perception that some people are getting special treatment. In our country, some people definitely are getting special treatment. Republicans should oppose that with everything they have. What kind of country do you want to live in? A fair country. A decent country. A cohesive country. A country whose leaders don't accelerate the forces of change purely for their own profit and amusement. A country you might recognize when you're old. A country that listens to young people who don't live in Brooklyn. A country where you can make a solid living outside of the big cities. A country where Lewiston, Maine seems almost as important as the west side of Los Angeles. A country where environmentalism means getting outside and picking up the trash. A clean, orderly, stable country that respects itself. And above all, a country where normal people with an average education who grew up in no place special can get married, and have happy kids, and repeat unto the generations. A country that actually cares about families, the building block of everything. Video What will it take a get a country like that? Leaders who want it. For now, those leaders will have to be Republicans. There's no option at this point. But first, Republican leaders will have to acknowledge that market capitalism is not a religion. Market capitalism is a tool, like a staple gun or a toaster. You'd have to be a fool to worship it. Our system was created by human beings for the benefit of human beings. We do not exist to serve markets. Just the opposite. Any economic system that weakens and destroys families is not worth having. A system like that is the enemy of a healthy society. Internalizing all this will not be easy for Republican leaders. They'll have to unlearn decades of bumper sticker-talking points and corporate propaganda. They'll likely lose donors in the process. They'll be criticized. Libertarians are sure to call any deviation from market fundamentalism a form of socialism. That's a lie. Socialism is a disaster. It doesn't work. It's what we should be working desperately to avoid. But socialism is exactly what we're going to get, and very soon unless a group of responsible people in our political system reforms the American economy in a way that protects normal people. If you want to put America first, you've got to put its families first. Adapted from Tucker Carlson's monologue from "Tucker Carlson Tonight" on January 2, 2019. #### [Jan 12, 2019] Tucker Carlson has sparked the most interesting debate in conservative politics by Jane Coaston ##### Highly recommended! ##### Tucker Carlson sounds much more convincing then Trump: See Tucker Leaders show no obligation to American voters and Tucker The American dream is dying ##### Notable quotes: ##### "... America's "ruling class," Carlson says, are the "mercenaries" behind the failures of the middle class -- including sinking marriage rates -- and "the ugliest parts of our financial system." He went on: "Any economic system that weakens and destroys families is not worth having. A system like that is the enemy of a healthy society." ..." ##### "... He concluded with a demand for "a fair country. A decent country. A cohesive country. A country whose leaders don't accelerate the forces of change purely for their own profit and amusement." ..." ##### "... The monologue and its sweeping anti-elitism drove a wedge between conservative writers. The American Conservative's Rod Dreher wrote of Carlson's monologue, "A man or woman who can talk like that with conviction could become president. Voting for a conservative candidate like that would be the first affirmative vote I've ever cast for president. ..." ##### "... The Two-Income Trap: Why Middle-Class Parents Are Growing Broke ..." ##### "... Carlson wanted to be clear: He's just asking questions. "I'm not an economic adviser or a politician. I'm not a think tank fellow. I'm just a talk show host," he said, telling me that all he wants is to ask "the basic questions you would ask about any policy." But he wants to ask those questions about what he calls the "religious faith" of market capitalism, one he believes elites -- "mercenaries who feel no long-term obligation to the people they rule" -- have put ahead of "normal people." ..." ##### "... "What does [free market capitalism] get us?" he said in our call. "What kind of country do you want to live in? If you put these policies into effect, what will you have in 10 years?" ..." ##### "... Carlson is hardly the first right-leaning figure to make a pitch for populism, even tangentially, in the third year of Donald Trump, whose populist-lite presidential candidacy and presidency Carlson told me he views as "the smoke alarm ... telling you the building is on fire, and unless you figure out how to put the flames out, it will consume it." ..." ##### "... Trump borrowed some of that approach for his 2016 campaign but in office has governed as a fairly orthodox economic conservative, thus demonstrating the demand for populism on the right without really providing the supply and creating conditions for further ferment. ..." ##### "... Ocasio-Cortez wants a 70-80% income tax on the rich. I agree! Start with the Koch Bros. -- and also make it WEALTH tax. ..." ##### "... "I'm just saying as a matter of fact," he told me, "a country where a shrinking percentage of the population is taking home an ever-expanding proportion of the money is not a recipe for a stable society. It's not." ..." ##### "... Carlson told me he wanted to be clear: He is not a populist. But he believes some version of populism is necessary to prevent a full-scale political revolt or the onset of socialism. Using Theodore Roosevelt as an example of a president who recognized that labor needs economic power, he told me, "Unless you want something really extreme to happen, you need to take this seriously and figure out how to protect average people from these remarkably powerful forces that have been unleashed." ..." ##### "... But Carlson's brand of populism, and the populist sentiments sweeping the American right, aren't just focused on the current state of income inequality in America. Carlson tackled a bigger idea: that market capitalism and the "elites" whom he argues are its major drivers aren't working. The free market isn't working for families, or individuals, or kids. In his monologue, Carlson railed against libertarian economics and even payday loans, saying, "If you care about America, you ought to oppose the exploitation of Americans, whether it's happening in the inner city or on Wall Street" -- sounding very much like Sanders or Warren on the left. ..." ##### "... Capitalism/liberalism destroys the extended family by requiring people to move apart for work and destroying any sense of unchosen obligations one might have towards one's kin. ..." ##### "... Hillbilly Elegy ..." ##### "... Carlson told me that beyond changing our tax code, he has no major policies in mind. "I'm not even making the case for an economic system in particular," he told me. "All I'm saying is don't act like the way things are is somehow ordained by God or a function or raw nature." ..." ###### Jan 10, 2019 | www.vox.com "All I'm saying is don't act like the way things are is somehow ordained by God." Last Wednesday, the conservative talk show host Tucker Carlson started a fire on the right after airing a prolonged monologue on his show that was, in essence, an indictment of American capitalism. America's "ruling class," Carlson says, are the "mercenaries" behind the failures of the middle class -- including sinking marriage rates -- and "the ugliest parts of our financial system." He went on: "Any economic system that weakens and destroys families is not worth having. A system like that is the enemy of a healthy society." He concluded with a demand for "a fair country. A decent country. A cohesive country. A country whose leaders don't accelerate the forces of change purely for their own profit and amusement." The monologue was stunning in itself, an incredible moment in which a Fox News host stated that for generations, "Republicans have considered it their duty to make the world safe for banking, while simultaneously prosecuting ever more foreign wars." More broadly, though, Carlson's position and the ensuing controversy reveals an ongoing and nearly unsolvable tension in conservative politics about the meaning of populism, a political ideology that Trump campaigned on but Carlson argues he may not truly understand. Moreover, in Carlson's words: "At some point, Donald Trump will be gone. The rest of us will be gone too. The country will remain. What kind of country will be it be then?" The monologue and its sweeping anti-elitism drove a wedge between conservative writers. The American Conservative's Rod Dreher wrote of Carlson's monologue, "A man or woman who can talk like that with conviction could become president. Voting for a conservative candidate like that would be the first affirmative vote I've ever cast for president." Other conservative commentators scoffed. Ben Shapiro wrote in National Review that Carlson's monologue sounded far more like Sens. Bernie Sanders or Elizabeth Warren than, say, Ronald Reagan. I spoke with Carlson by phone this week to discuss his monologue and its economic -- and cultural -- meaning. He agreed that his monologue was reminiscent of Warren, referencing her 2003 book The Two-Income Trap: Why Middle-Class Parents Are Growing Broke . "There were parts of the book that I disagree with, of course," he told me. "But there are parts of it that are really important and true. And nobody wanted to have that conversation." Carlson wanted to be clear: He's just asking questions. "I'm not an economic adviser or a politician. I'm not a think tank fellow. I'm just a talk show host," he said, telling me that all he wants is to ask "the basic questions you would ask about any policy." But he wants to ask those questions about what he calls the "religious faith" of market capitalism, one he believes elites -- "mercenaries who feel no long-term obligation to the people they rule" -- have put ahead of "normal people." But whether or not he likes it, Carlson is an important voice in conservative politics. His show is among the most-watched television programs in America. And his raising questions about market capitalism and the free market matters. "What does [free market capitalism] get us?" he said in our call. "What kind of country do you want to live in? If you put these policies into effect, what will you have in 10 years?" Populism on the right is gaining, again Carlson is hardly the first right-leaning figure to make a pitch for populism, even tangentially, in the third year of Donald Trump, whose populist-lite presidential candidacy and presidency Carlson told me he views as "the smoke alarm ... telling you the building is on fire, and unless you figure out how to put the flames out, it will consume it." Populism is a rhetorical approach that separates "the people" from elites. In the words of Cas Mudde, a professor at the University of Georgia, it divides the country into "two homogenous and antagonistic groups: the pure people on the one end and the corrupt elite on the other." Populist rhetoric has a long history in American politics, serving as the focal point of numerous presidential campaigns and powering William Jennings Bryan to the Democratic nomination for president in 1896. Trump borrowed some of that approach for his 2016 campaign but in office has governed as a fairly orthodox economic conservative, thus demonstrating the demand for populism on the right without really providing the supply and creating conditions for further ferment. When right-leaning pundit Ann Coulter spoke with Breitbart Radio about Trump's Tuesday evening Oval Office address to the nation regarding border wall funding, she said she wanted to hear him say something like, "You know, you say a lot of wild things on the campaign trail. I'm speaking to big rallies. But I want to talk to America about a serious problem that is affecting the least among us, the working-class blue-collar workers": Coulter urged Trump to bring up overdose deaths from heroin in order to speak to the "working class" and to blame the fact that working-class wages have stalled, if not fallen, in the last 20 years on immigration. She encouraged Trump to declare, "This is a national emergency for the people who don't have lobbyists in Washington." Ocasio-Cortez wants a 70-80% income tax on the rich. I agree! Start with the Koch Bros. -- and also make it WEALTH tax. -- Ann Coulter (@AnnCoulter) January 4, 2019 These sentiments have even pitted popular Fox News hosts against each other. Sean Hannity warned his audience that New York Rep. Alexandria Ocasio-Cortez's economic policies would mean that "the rich people won't be buying boats that they like recreationally, they're not going to be taking expensive vacations anymore." But Carlson agreed when I said his monologue was somewhat reminiscent of Ocasio-Cortez's past comments on the economy , and how even a strong economy was still leaving working-class Americans behind. "I'm just saying as a matter of fact," he told me, "a country where a shrinking percentage of the population is taking home an ever-expanding proportion of the money is not a recipe for a stable society. It's not." Carlson told me he wanted to be clear: He is not a populist. But he believes some version of populism is necessary to prevent a full-scale political revolt or the onset of socialism. Using Theodore Roosevelt as an example of a president who recognized that labor needs economic power, he told me, "Unless you want something really extreme to happen, you need to take this seriously and figure out how to protect average people from these remarkably powerful forces that have been unleashed." "I think populism is potentially really disruptive. What I'm saying is that populism is a symptom of something being wrong," he told me. "Again, populism is a smoke alarm; do not ignore it." But Carlson's brand of populism, and the populist sentiments sweeping the American right, aren't just focused on the current state of income inequality in America. Carlson tackled a bigger idea: that market capitalism and the "elites" whom he argues are its major drivers aren't working. The free market isn't working for families, or individuals, or kids. In his monologue, Carlson railed against libertarian economics and even payday loans, saying, "If you care about America, you ought to oppose the exploitation of Americans, whether it's happening in the inner city or on Wall Street" -- sounding very much like Sanders or Warren on the left. Carlson's argument that "market capitalism is not a religion" is of course old hat on the left, but it's also been bubbling on the right for years now. When National Review writer Kevin Williamson wrote a 2016 op-ed about how rural whites "failed themselves," he faced a massive backlash in the Trumpier quarters of the right. And these sentiments are becoming increasingly potent at a time when Americans can see both a booming stock market and perhaps their own family members struggling to get by. Capitalism/liberalism destroys the extended family by requiring people to move apart for work and destroying any sense of unchosen obligations one might have towards one's kin. -- Jeremy McLallan (@JeremyMcLellan) January 8, 2019 At the Federalist, writer Kirk Jing wrote of Carlson's monologue, and a response to it by National Review columnist David French: Our society is less French's America, the idea, and more Frantz Fanon's "Wretched of the Earth" (involving a very different French). The lowest are stripped of even social dignity and deemed unworthy of life . In Real America, wages are stagnant, life expectancy is crashing, people are fleeing the workforce, families are crumbling, and trust in the institutions on top are at all-time lows. To French, holding any leaders of those institutions responsible for their errors is "victimhood populism" ... The Right must do better if it seeks to govern a real America that exists outside of its fantasies. J.D. Vance, author of Hillbilly Elegy , wrote that the [neoliberal] economy's victories -- and praise for those wins from conservatives -- were largely meaningless to white working-class Americans living in Ohio and Kentucky: "Yes, they live in a country with a higher GDP than a generation ago, and they're undoubtedly able to buy cheaper consumer goods, but to paraphrase Reagan: Are they better off than they were 20 years ago? Many would say, unequivocally, 'no.'" Carlson's populism holds, in his view, bipartisan possibilities. In a follow-up email, I asked him why his monologue was aimed at Republicans when many Democrats had long espoused the same criticisms of free market economics. "Fair question," he responded. "I hope it's not just Republicans. But any response to the country's systemic problems will have to give priority to the concerns of American citizens over the concerns of everyone else, just as you'd protect your own kids before the neighbor's kids." Who is "they"? And that's the point where Carlson and a host of others on the right who have begun to challenge the conservative movement's orthodoxy on free markets -- people ranging from occasionally mendacious bomb-throwers like Coulter to writers like Michael Brendan Dougherty -- separate themselves from many of those making those exact same arguments on the left. When Carlson talks about the "normal people" he wants to save from nefarious elites, he is talking, usually, about a specific group of "normal people" -- white working-class Americans who are the "real" victims of capitalism, or marijuana legalization, or immigration policies. In this telling, white working-class Americans who once relied on a manufacturing economy that doesn't look the way it did in 1955 are the unwilling pawns of elites. It's not their fault that, in Carlson's view, marriage is inaccessible to them, or that marijuana legalization means more teens are smoking weed ( this probably isn't true ). Someone, or something, did this to them. In Carlson's view, it's the responsibility of politicians: Our economic situation, and the plight of the white working class, is "the product of a series of conscious decisions that the Congress made." The criticism of Carlson's monologue has largely focused on how he deviates from the free market capitalism that conservatives believe is the solution to poverty, not the creator of poverty. To orthodox conservatives, poverty is the result of poor decision making or a lack of virtue that can't be solved by government programs or an anti-elite political platform -- and they say Carlson's argument that elites are in some way responsible for dwindling marriage rates doesn't make sense . But in French's response to Carlson, he goes deeper, writing that to embrace Carlson's brand of populism is to support "victimhood populism," one that makes white working-class Americans into the victims of an undefined "they: Carlson is advancing a form of victim-politics populism that takes a series of tectonic cultural changes -- civil rights, women's rights, a technological revolution as significant as the industrial revolution, the mass-scale loss of religious faith, the sexual revolution, etc. -- and turns the negative or challenging aspects of those changes into an angry tale of what they are doing to you . And that was my biggest question about Carlson's monologue, and the flurry of responses to it, and support for it: When other groups (say, black Americans) have pointed to systemic inequities within the economic system that have resulted in poverty and family dysfunction, the response from many on the right has been, shall we say, less than enthusiastic . Really, it comes down to when black people have problems, it's personal responsibility, but when white people have the same problems, the system is messed up. Funny how that works!! -- Judah Maccabeets (@AdamSerwer) January 9, 2019 Yet white working-class poverty receives, from Carlson and others, far more sympathy. And conservatives are far more likely to identify with a criticism of "elites" when they believe those elites are responsible for the expansion of trans rights or creeping secularism than the wealthy and powerful people who are investing in private prisons or an expansion of the militarization of police . Carlson's network, Fox News, and Carlson himself have frequently blasted leftist critics of market capitalism and efforts to fight inequality . I asked Carlson about this, as his show is frequently centered on the turmoils caused by " demographic change ." He said that for decades, "conservatives just wrote [black economic struggles] off as a culture of poverty," a line he includes in his monologue . He added that regarding black poverty, "it's pretty easy when you've got 12 percent of the population going through something to feel like, 'Well, there must be ... there's something wrong with that culture.' Which is actually a tricky thing to say because it's in part true, but what you're missing, what I missed, what I think a lot of people missed, was that the economic system you're living under affects your culture." Carlson said that growing up in Washington, DC, and spending time in rural Maine, he didn't realize until recently that the same poverty and decay he observed in the Washington of the 1980s was also taking place in rural (and majority-white) Maine. "I was thinking, 'Wait a second ... maybe when the jobs go away the culture changes,'" he told me, "And the reason I didn't think of it before was because I was so blinded by this libertarian economic propaganda that I couldn't get past my own assumptions about economics." (For the record, libertarians have critiqued Carlson's monologue as well.) Carlson told me that beyond changing our tax code, he has no major policies in mind. "I'm not even making the case for an economic system in particular," he told me. "All I'm saying is don't act like the way things are is somehow ordained by God or a function or raw nature." And clearly, our market economy isn't driven by God or nature, as the stock market soars and unemployment dips and yet even those on the right are noticing lengthy periods of wage stagnation and dying little towns across the country. But what to do about those dying little towns, and which dying towns we care about and which we don't, and, most importantly, whose fault it is that those towns are dying in the first place -- those are all questions Carlson leaves to the viewer to answer. #### [Jan 06, 2019] Neocons in US niversities: Everything Madeleine Albright Doesn t Like is Fascism ##### Notable quotes: ##### "... The fact that obviously deranged fanatic hack has students is a testimony to a sewer level of the US "elite-producing" machine and a pathetic sight contemporary US "elite" represents. ..." ##### "... "political science" is not a science but pseudo-academic field for losers who do not want to study real history or take courses which actually develop intellect and provide fundamental knowledge. ..." ###### Jan 06, 2019 | www.unz.com Early on in her book, Albright says: My students remarked that the Fascist chiefs we remember best were charismatic Marked in bold is the most terrifying thing about Albright's book and I am not even going to read her pseudo-intellectual excrement. The fact that obviously deranged fanatic hack has students is a testimony to a sewer level of the US "elite-producing" machine and a pathetic sight contemporary US "elite" represents. This is apart from the fact that "political science" is not a science but pseudo-academic field for losers who do not want to study real history or take courses which actually develop intellect and provide fundamental knowledge. #### [Jan 04, 2019] A whopping 84 percent of all stocks owned by Americans belong to the wealthiest 10 percent of households. And that includes everyone's stakes in pension plans, 401(k)'s and individual retirement accounts, as well as trust funds, mutual funds and college savings programs like 529 plans. ###### Jan 04, 2019 | economistsview.typepad.com anne -> anne... , January 01, 2019 at 12:58 PM https://www.nytimes.com/2018/02/08/business/economy/stocks-economy.html February 8, 2018 We All Have a Stake in the Stock Market, Right? Guess Again By PATRICIA COHEN Take a deep breath and relax. The riotous market swings that have whipped up frothy peaks of anxiety over the last week -- bringing the major indexes down more than 10 percent from their high -- have virtually no impact on the income or wealth of most families. The reason: They own little or no stock. A whopping 84 percent of all stocks owned by Americans belong to the wealthiest 10 percent of households. And that includes everyone's stakes in pension plans, 401(k)'s and individual retirement accounts, as well as trust funds, mutual funds and college savings programs like 529 plans. "For the vast majority of Americans, fluctuations in the stock market have relatively little effect on their wealth, or well-being, for that matter," said Edward N. Wolff, an economist at New York University who recently published new research * on the topic.... Tom aka Rusty said in reply to anne... , January 02, 2019 at 12:13 PM I am skeptical of the 84% if only because 401(k) plans have gotten so large. Darrell in Phoenix said in reply to Tom aka Rusty... , January 03, 2019 at 01:50 PM What I could find says 401(k)s have$5.6T, IRAs have $2.5T, and when you add in pensions, the total is$29 trillion. Not sure when those numbers are from.

Hard to know what part of that is stocks vs. bonds.

As of last April, US stock markets had $34 trillion and the rest of the world$44 trillion equiv.

So, if IRA, 401(k) and retirement plans have almost as much wealth as the total of us stocks, and that is 16% of all stocks... does that mean we
1) Americans own a lot more foreign stocks than foreigners own american stocks
or
2) 84% of retirement assets are bonds?

There is, what? $50 trillion is US debt, much of it backed by bonds. So,$30 trillion retirement assets, $24.5T bonds and$5.5 trillion stocks... such that $5.5T is 16% of$34T?

That doesn't "smell right" to me.

point , January 01, 2019 at 12:37 PM
Meh.

"And it certainly made most Americans poorer. While 2/3 of the corporate tax cut may have gone to U.S. residents, 84 percent of stocks are held by the wealthiest 10 percent of the population. Everyone else will see hardly any benefit."

Wildly unsubstantiated first sentence, though the rest seems likely true. Whether the bulk went to tax cuts for domestic or foreign national or into the furnace, there was indeed some sliver that actually went to the rest of us.

anne -> point... , January 01, 2019 at 01:05 PM
Wildly unsubstantiated...

[ Correct and documented, as always. ]

Plp -> anne... , January 01, 2019 at 01:41 PM
"And it certainly made most Americans poorer"

" everyone else will see hardly any
Benefit "

Well which is it

Poorer or a very little benefit ?

Sloppy righteousness

Plp -> Plp... , January 01, 2019 at 01:55 PM
Here's the PK finesse

"since the tax cut isn't paying for itself

it will eventually have to be paid for some other way "

Nonsense !

" either by raising other taxes
or by cutting spending on programs people value"

This pretends the federal government is a household

Not a self determining
sovereign economy

Plp -> Plp... , January 01, 2019 at 02:01 PM
Sovereign debt in the sovereign's own currency

Has no intrinsic real value

Example

The burden of that debt on society
can become zero
Once the rate of intetest
On the whole stock of debt is cycled
into a zero real rate status

The Fed could start that process at any time

Once it's zero real it can stay zero real forever

EMichael -> Plp... , January 02, 2019 at 04:38 AM
It's about efficiency, not just the printing press.

And even the MMT people realize there are limits.

RC AKA Darryl, Ron said in reply to EMichael... , January 02, 2019 at 06:29 AM
Efficiency of what, I might ask? Efficiency of shipping goods halfway around the world from where people work for less in less safe environments is really the efficiency of theft by capitalists, not the efficiency of production. Taking from the land and sea and dumping waste into the land, sea, and air is the efficiency of theft by capitalists too, not the efficiency of resource use. We are very efficient at making billionaires from externalized costs. We continue to cheaply sell ourselves out because the price is right. Ask Paine what lies hidden in the price?
EMichael -> RC AKA Darryl, Ron... , January 02, 2019 at 06:47 AM
Yeah, I got that business and government can both be inefficient in many ways.

My point is that when you reduce the cost of doing business, or reduce the credit worthiness of a borrower, you will see greater inefficiency.

Digging holes and filling them in is one way to spend money. Building a road or a building is another.

Which would you prefer?

RC AKA Darryl, Ron said in reply to EMichael... , January 02, 2019 at 07:21 AM
I would prefer unhiding externalized costs and allocating domestic labor to pay those costs, not with taxes, but with production of domestic goods and the elimination of pollutants and managed use of limited resources. That's just me and entirely off the subject when it comes to macroeconomics.

In any case, I am also for Paine's KLV full employment macroeconomics. If anything KLV macro is more accessible both politically and intellectually than the kinds of price movements that would be required to place environmentally sustainable caps on carbon emissions or the commercial menhaden catch. A nominal interest rate for interbank lending that was maintained by the Fed to persist at just the rate of inflation except for lower when necessary to recover from a recession is not a terrible thing. The consequence of braking the economy just to avoid hitting some inflation target is reckless driving. As we know the crash victims are always labor.

EMichael -> RC AKA Darryl, Ron... , January 02, 2019 at 07:41 AM
I'd prefer all of that, and a pony.

You need to separate Paine's economics from his politics. He believes a peoples' party can deliver that. It cannot. It will not. As efficiency goes out the door when a small, unregulated group controls everything. Not to say our version of capitalism has anywhere near the government regulation I think it needs to reach your(and my) goals. But it is light years ahead of Paine's dreams.

RC AKA Darryl, Ron said in reply to EMichael... , January 02, 2019 at 07:51 AM
Paine's economics are insightful and useful. Paine's politics are bifurcated. Paine is as much for a progressive liberal democrat as he is for an enlightened communist dictator. Which do you think has a greater chance of actually ever existing in this century?
EMichael -> RC AKA Darryl, Ron... , January 02, 2019 at 08:03 AM
I'm all in on Paine's economics, but I believe his politics make him an opponent to ever coming up with progressive liberal democrats running the country.

All or nothing with him, and that makes it beyond hard to move towards that goal. Many in here like that. I admire them for going through their life without once ever settling for anything but perfect. I never had that opportunity.

A bunch of small steps are necessary, as the Founders insured that. Raging against those facts are immense negatives. And it is why Reps win elections.

Christopher H. said in reply to EMichael... , January 02, 2019 at 09:21 AM
lol the Founders F!@#ed up. They gave us the Senate and electoral college.
RC AKA Darryl, Ron said in reply to EMichael... , January 02, 2019 at 09:33 AM
I am largely in concurrence with you, but I do have some specific caveats.

At least in my part of the country Paine's far left politics are not representative of anything that we come into contact with in public life. Your politics are bit left of us here. I am the far left in these parts. Paine's more populous left side is barely represented by any group in my reality. So, for me, Paine is a unique curiosity reminiscent of my socialist friends from the 60's and early 70's for which I have seen no analog since the introduction of Disco and double-knit leisure suits.

The EV crowd in general is a microcosm of nerdiness rather than a microcosm of well informed constituencies of the US unrepresentative "democracy." There is nothing unsettling about it. This crowd is as normal as the characters of "Big Bang Theory."

Republicans win elections because they get the most votes. The VA voter turnout for 2018 was almost 60%, well above 2014 and 2010 midterms which were just above 40%. Most people think that Trump is the most politically divisive POTUS in history, but I think nothing in my life has done more to unify the Democratic Party given they can curb their enthusiasm about beating Trump in 2020 enough to not rip the party apart over who gets the spoils.

Turnout for POTUS election in VA has been above and sometimes well above 70% for every POTUS election since 1975 except for 2000. Turnout for VA gubernatorial elections has been between 40% and 50% for each election from 1997 up through 2017, but ran much higher before motor voter stopped the purging of voter registration rolls. VA elects state legislators in off years for statewide elections with just over 30% of voters showing up.

https://www.elections.virginia.gov/resultsreports/registration-statistics/registrationturnout-statistics/index.html

Tom aka Rusty said in reply to EMichael... , January 02, 2019 at 12:12 PM
Common sense can still be applied to politics.

Going all flaming leftist is a recipe for losing elections. We need to elect more Democrats.

EMichael -> Tom aka Rusty... , January 02, 2019 at 04:39 PM
Understand. But flaming leftist will help the working class.
RC AKA Darryl, Ron said in reply to EMichael... , January 02, 2019 at 07:44 AM
"...My point is that when you reduce the cost of doing business, or reduce the credit worthiness of a borrower, you will see greater inefficiency.

Digging holes and filling them in is one way to spend money. Building a road or a building is another.

Which would you prefer?"

[While I would prefer bridges to digging holes and filling them, my hesitation in answering this question was with the assumption that lower interest rates generate more wasteful investment, despite that I know it to be true in some contexts. Speculation is the problem more than real projects by far. Diversity among investments can be a very good thing. Failure in this context is just a consequence of innovation by trial and error, one of the more efficient means. Besides, for private investment the risk spread limits useless excursions, while the state needs conscious limits on pork perhaps, but pork is also a useful medium of political exchange. Uncle's discretionary spending is a very small pot of gold.]

EMichael -> RC AKA Darryl, Ron... , January 02, 2019 at 08:05 AM
Lower interest make business plans much easier. In doing so, risks are taken that should not be taken, thus increasing inefficiency.

This is especially true when the planners carry absolutely no financial risk themselves on a project.

Christopher H. said in reply to EMichael... , January 02, 2019 at 09:17 AM
" Many in here like that. I admire them for going through their life without once ever settling for anything but perfect. I never had that opportunity.

A bunch of small steps are necessary, as the Founders insured that. Raging against those facts are immense negatives. And it is why Reps win elections."

The New Deal.

The Great Society.

Social Security. Medicare. Medicaid.

EMichael would have argued against all of them as overreaching.

His excuse for the Democrats was that past Presidents had large majorities in Congress.

He would say the country is too conservative and racist. But they like those programs now.

Christopher H. said in reply to EMichael... , January 02, 2019 at 09:19 AM
During the golden age of social democracy during the post War period, when entrepreneurs failed they had a safety net and could try again.

EMichael has this weird puritanical streak. Just like mulp, another crank on the Interent.

He wants his failed red state family member to wallow in bitterness.

RC AKA Darryl, Ron said in reply to EMichael... , January 02, 2019 at 09:48 AM
"Lower interest make business plans much easier. In doing so, risks are taken that should not be taken, thus increasing inefficiency.

This is especially true when the planners carry absolutely no financial risk themselves on a project."

[I understood what you were going for and do not doubt that you have specific instances for which you are sure that is true. For a few years prior to 2008 then I am sure that was true, but those "animal spirits" were drunk on more than just low interest rates. There was a specific sequence of events that played out over a long period of time bringing the US economy to the precipice of financial system euphoria over the infallibility of markets. Lenders and borrowers and especially middlemen stared down into the abyss and then kept on truckin'. Then we all heard a big splat!

Now is not then. Some future now may be then again if we forget about then, but it takes a lot of stupid to get there, not just low interest rates. Taking a bit more risk, but without the stupid is how we learn from failure to achieve greater success.

RC AKA Darryl, Ron said in reply to RC AKA Darryl, Ron... , January 02, 2019 at 09:52 AM
If either the dot.com splat or the mortgage splat were not clearly visible at least three or four years before the splat then either you need a new prescription for your eye glasses or you need to step out of that fog that you were living in.
Darrell in Phoenix said in reply to RC AKA Darryl, Ron... , January 02, 2019 at 10:27 AM
"success through failure" has become a norm of American business, with the PotUS as the perfect example.

He never got into the casino, steak, wine, water, university, etc. businesses with intent on making money in those businesses. Heck, he barely breaks even on the condo and golf businesses.

He creates the towers and golf resorts to promote the name, and promotes the name to be able to lease it to doomed businesses which he starts with the intent of losing money on the leasing of his name. I suspect the most profitable thing he's ever done was "realty tv" host and having a book ghost-written in his name.

And yes, low interest rates DO create easy money, and much of it does find its way into "success through failure" investments. Why would you loan money to a business that you know was a scam just created to accumulate debt then go bust? Because you can securitize the debt and sell it off to Main Street suckers to eat the loss.

Why else "success through failure". Well, I've worked for a company that dumped a lot of money into a venture it knew was doomed long-term. Why? Because it intended to go IPO, and it needed the (unprofitable) revenue from the doomed venture to pump its price in the IPO.

I think we'd all agree that "success through failure" is terrible and wish it would go away. Problem is, it works.

RC AKA Darryl, Ron said in reply to Darrell in Phoenix... , January 02, 2019 at 12:18 PM
Regarding "Success through failure" I was thinking in terms of the dot.com boom from which sprang the broadband Internet and Amazon. Out there in Phoenix AZ where you and EMichael live things must be really crazy. Back in 70's Phoenix was the yuppy Mecca. What happened?
Darrell in Phoenix said in reply to RC AKA Darryl, Ron... , January 02, 2019 at 01:18 PM
True, not all of the dot.com was bad investment. Just most.

We got a lot of housing built during the housing boom too. Too bad most of it was 2000-3000 sqft McMansions on golf courses, 50 miles from any jobs.

"Out there in Phoenix AZ where you and EMichael live things must be really crazy."

1970 Phoenix metro had 1 million people. Today we're at 4.75 million.

Politics are a mess. Big money is pushing to constantly lower taxes, but now people are pushing back wanting more funding for schools. Surprisingly, we've passed phased in $12 minimum wage and medical marijuana (recreational failed by less than 1%), and now have split representation at the federal level indicating a move toward liberal. And yet, we'll still very Republican in the state house and go highly conservative on many other issues such as animal rights. A recent "green energy initiative" failed ugly. So, to sum it up... Pretty Liberal, but Very CONservative, with a HUGE swing vote that goes this-way-and-that in random directions and on different issues... ...but in general want low taxes, are hate big government... ...except on the things like Social Security, Medicare, Medicaid, Defense, education, transportation, police, fire, courts, justice system, boarder security, anti-terrorism, and the rest of stuff government actually spends almost all of its money on... ... but are all for getting rid of all the wasteful government that practically doesn't really exist... ... and we definitely want religious freedom, as long as that religion is Christianity and the freedom is to force their views onto others, and not allow other religions to have a place in society. Hope that clarifies what happened. RC AKA Darryl, Ron said in reply to Darrell in Phoenix... , January 03, 2019 at 07:57 AM "...1970 Phoenix metro had 1 million people. Today we're at 4.75 million... ...Hope that clarifies what happened." [In spades, Dude. THANKS!] EMichael -> RC AKA Darryl, Ron... , January 02, 2019 at 04:42 PM Adequate regulation would have stopped that. No one notices that the biggest factor in the housing bubble was bush ordering the OCC to take regulation of national banks out of the hands of the states. The bubble would have been much, much less. RC AKA Darryl, Ron said in reply to EMichael... , January 03, 2019 at 07:58 AM Oh, butt for the winged frog... Darrell in Phoenix said in reply to EMichael... , January 03, 2019 at 08:56 AM "Adequate regulation would have stopped that." The population increase? People would have to be somewhere, and unlike coastal California with those stupid oceans, bays and mountains... Phoenix has plenty of open space. 2000-3000 sqft mcmansions 50 miles from jobs? Probably true. Without the housing bubble we would have hit the wall on housing and caused massive rent spike a decade ago instead of a few years ago. With that massive rent increase then instead of now, meaning that a decade ago we would have seen the in-building of small apartments and condos that we are now getting. Net, we probably would have been better off with more in-building of smaller, multi-family units instead of massive sprawl of McMansions. RC AKA Darryl, Ron said in reply to Darrell in Phoenix... , January 03, 2019 at 09:41 AM Don't complain too much. The "massive sprawl of McMansions" is a sure sign of widespread prosperity. Here in eastern Henrico County VA we have the massive sprawl of McCracker boxes instead although not just crackers live in them. McMansions are usually on at least 1/2 acre lots, while McCracker boxes are built so close together that most of the time there was not room left for a driveway and people park on the street except that some of those streets are actually the highways to the neighboring cracker box town. On street parking is just one sign of poverty. There are also drug related shootings just like in the big city. In eastern Henrico there are only a few small McMansion developments in prime real estate overlooking the flood plain of the James River where there is any such high ground in eastern Henrico near the river. Chesterfield County across the James River has the advantage of very high ground near the James River at River's Bend, a.k.a, Meadowville, where there is plenty room for a golf course and marina as well as loads of McMansions and high-end apartment buildings. High and dry western Henrico County is where they build the McMansions along with all the exclusive high end shopping. The "Sad-eyed Lady of the Lowlands" was probably sad because her basement flooded whenever it rained:<) Darrell in Phoenix said in reply to RC AKA Darryl, Ron... , January 03, 2019 at 10:50 AM "Don't complain too much." I wasn't complaining. I was adding a tad to the "inefficiencies" discussion caused by disconnecting loan origination from loss risk. I got my piece of the giant federal government giveaway needed to clean up the mess. In 2011 I bought a 1000 sqft condo for$48K that I now have leased out for a nice cash-flow positive $600+ a month and true after-tax profit of about the same$600 a month (add $100 of the payment that is principal reduction, then subtract 22% income tax on$500 a month ($700 profit -$200 depreciation)).

If you notice the purchase price doesn't match the depreciation, yeah, I've done over $20K in additional capital improvements that increase the base including new roof, new HVAC, replaced all aluminum windows and doors with high-E, gutted and replaced the kitchen and both baths. Summer cooling bill was cut by more than half from ~$300 to ~$125 by the new windows and doors and more efficient HVAC, increasing the monthly rent accordingly. I've only been spending abut$400 of that $600 profit, letting the rest accumulate for maintenance, repairs, upgrades. Oh, I also save about$250 a month on the mortgage of my primary by locking in 3% interest rate.

Not big deals in the grand scheme, but the boom->crash->rent squeeze worked out okay for me personally.... for now.

Darrell in Phoenix said in reply to Darrell in Phoenix... , January 03, 2019 at 11:10 AM
As for the cracker houses, we got a lot of those in the 80's and 90's before the big McMansion boom.

Like these 1990s beauties with almost, but not quite enough room in the driveway to park a car without blocking the sidewalk.

https://www.zillow.com/homes/for_sale/globalrelevanceex_sort/33.540639,-112.146931,33.538696,-112.149814_rect/18_zm/

To be perfectly honest, it is exactly those kinds of houses that the Phoenix market needs a lot more of.

Switching from those to McMansions, then hardly any construction at all for 6 or 7 years, is why there is such a crunch on housing, and skyrocketing rents and house prices now.

Even now they aren't building many of those small single family homes.

They are building redevelopment/in-fill condos in downtown/near ASU in Tempe and apartments in the middle-burbs.

anne -> anne... , January 01, 2019 at 01:43 PM
https://www.nytimes.com/2018/11/14/opinion/the-tax-cut-and-the-balance-of-payments-wonkish.html

November 14, 2018

The Tax Cut and the Balance of Payments (Wonkish)
Lots of financial maneuvering, signifying nothing
By Paul Krugman

What tax cuts were supposed to do

A tax cut for corporations looks, on its face, like a big giveaway to stockholders, mainly bypassing ordinary families: of stocks held by Americans, 84 percent are held by the wealthiest 10 percent; * 35 percent of U.S. stocks are held by foreigners. **

The claim by tax cut advocates was, however, that the tax cut would be passed through to workers, because we live in an integrated global capital market. There were multiple reasons not to believe this argument in practice, but it's still worth working through its implications....

anne -> anne... , January 01, 2019 at 01:52 PM
https://www.nytimes.com/2019/01/01/opinion/the-trump-tax-cut-even-worse-than-youve-heard.html

The key point to realize is that in today's globalized corporate system, a lot of any country's corporate sector, our own very much included, is actually owned by foreigners, either directly because corporations here are foreign subsidiaries, or indirectly because foreigners own American stocks. Indeed, roughly a third of U.S. corporate profits basically flow to foreign nationals – which means that a third of the tax cut flowed abroad, rather than staying at home. This probably outweighs any positive effect on GDP growth. So the tax cut probably made America poorer, not richer.

And it certainly made most Americans poorer. While 2/3 of the corporate tax cut may have gone to U.S. residents, 84 percent of stocks are held by the wealthiest 10 percent of the population. Everyone else will see hardly any benefit....

-- Paul Krugman

Tom aka Rusty said in reply to anne... , January 02, 2019 at 12:10 PM
It will not make them poorer, but will not make many better off, there is a difference.
Tom aka Rusty said in reply to point... , January 02, 2019 at 12:08 PM
As my first tax professor said, "the best first answer to most tax questions is IT DEPENDS."

In the pro formas I have done not everyone in the middle class is getting a tax cut. Some a slight tax increase, most not too much impact at all.

We will know a lot more by April.

anne , January 01, 2019 at 12:50 PM
http://cepr.net/blogs/beat-the-press/steven-rattner-s-charts-in-the-nyt-don-t-show-he-says-they-show

December 31, 2018

Steven Rattner's Charts in the New York Times Don't Show He Says They Show
By Dean Baker

Steven Rattner used his New York Times column * to present a number of charts to show Donald Trump's failures as president. While some, like the drop in enrollments in the health care exchanges, do in fact show failure, others do not really make his case.

For example, he has a chart with a headline "paltry raise for the middle class." What his chart actually shows is that middle class wages, adjusted for inflation, fell sharply in the recession, but have been rising roughly 1.0 percent a year since 2014. They recovered their pre-recession levels in 2017 and now are almost a percentage point above the 2008 level. This is not a great story, but the picture under Trump is certainly better than under Obama. (This wasn't entirely Obama's fault, since he inherited an economy that was failing.)

The chart shows more rapid growth at the bottom of the pay ladder and a modest downturn under Trump for those at the top. By recent standards, this is not a bad picture, even if Trump does not especially deserve credit for it. (He came in with an unemployment rate that was low and falling.)

Rattner also presents as a bad sign projections for fewer Federal Reserve rate hikes. While one basis for projecting fewer rate hikes is that the economy now looks weaker for 2019 than had been thought earlier in the year (but still stronger than had been projected in 2016), another reason is that inflation is lower than expected. Economists have consistently over-estimated the impact that low unemployment would have on the inflation rate. With inflation coming in lower than projected, there is less reason for the Fed to raise rates.

Contrary to what Rattner is implying, this is a good development. It means that the unemployment rate can continue to fall and workers at the middle and the bottom of the pay ladder can continue to see real wage gains.

Rattner also shows us how growth projections for the U.S. and the world have been lowered since June of 2018. It's not clear how much Trump can be held responsible for growth in the EU (try blaming the European Commission's austerity drive) and the rest of the world, but his argument about the U.S. is pretty weak. The 2.4 percent growth projection from December 2018 is actually up 0.1 percentage point from the June projection. More importantly, it is up from a projection of 1.7 percent from January of 2017, the month Trump took office.

Then we have the chart showing the rise in the debt relative to GDP. While Rattner is right that the tax cuts to the rich were a waste of resources, the higher debt to GDP ratio is basically meaningless. (Japan's debt to GDP ratio is almost 250 percent and the current interest rate on its long-term bonds is 0.00 percent.)

If anyone is seriously concerned about the debt that the government is passing on to future generations then it is also necessary to include the rents associated with patent and copyright monopolies. These monopolies are alternative mechanisms to direct funding that the government uses to pay for services (i.e. research and creative work).

To take the most important case, suppose the government were the replace the $70 billion (0.35 percent of GDP) in patent monopoly supported research that the pharmaceutical industry conducts each year with direct funding of$70 billion. All research findings could then be placed in the public domain and new drugs would sell at generic prices.

Rattner and his crew would count the $70 billion in addition spending as an addition to the debt and deficit. However, when the industry is able to charge the public an extra$360 billion ** (1.8 percent of GDP) a year in higher drug prices due to patent monopolies and related protections, Rattner and company choose to ignore the burden. This sort of groundless debt fear mongering deserves only ridicule; it is not serious economic analysis.

Trump has done many awful things as president and threatens to do many more. But this is not a reason to adopt Trumpian tactics, the data provide plenty of grounds to attack his performance without playing games with it.

anne -> anne... , January 01, 2019 at 02:41 PM
https://fred.stlouisfed.org/graph/?g=mv7B

January 15, 2018

Real Median Weekly Earnings, * 1992-2018

* All full time wage and salary workers

(Percent change)

January 15, 2018

Real Median Weekly Earnings, * 1992-2018

* All full time wage and salary workers

(Indexed to 1992)

anne -> anne... , January 01, 2019 at 02:41 PM
https://fred.stlouisfed.org/graph/?g=mm0s

January 15, 2018

Real Median Weekly Earnings for men and women, * 1992-2018

* All full time wage and salary workers

(Percent change)

January 15, 2018

Real Median Weekly Earnings for men and women, * 1992-2018

* All full time wage and salary workers

(Indexed to 1992)

anne , January 01, 2019 at 12:50 PM
http://cepr.net/blogs/beat-the-press/e-j-dionne-provides-classic-example-of-liberals-missing-the-boat

December 31, 2018

E.J. Dionne Provides Classic Example of Liberals Missing the Boat
By Dean Baker

I often rail against liberals who wring their hands over the unfortunate folks who have been left behind by globalization and technology. E.J. Dionne gave us a classic example * of such hand-wringing in his piece today on the need to help the left behinds to keep them from becoming flaming reactionaries.

For some reason, it is difficult for many liberals to grasp the idea that the bad plight of tens of millions of middle class workers did not just happen, but rather was deliberately engineered. Longer and stronger patent and copyright protection did not just happen, it was deliberate policy. Subjecting manufacturing workers to global competition, while largely protecting doctors, dentists, and other highly paid professionals was also a policy decisions. Saving the Wall Street banks from the consequences of their own greed and incompetence was also conscious policy.

I know it's difficult for intellectuals to grasp new ideas, but if we want to talk seriously about rising inequality, then it will be necessary for them to try. (Yeah, I'm advertising my - free - book "Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer" ** again.) Anyhow, let's hope that in 2019 we can actually talk about the policies that were put in place to redistribute income upward and not just pretend that Bill Gates and his ilk getting all the money was a natural process.

Plp -> anne... , January 01, 2019 at 01:27 PM
The way forward is not taking the path that got us here in reverse till its say 1976 again

Because once there where do we go next
Where do we go from there
that doesn't by twist and turn
lead back here in another post 2008
Quagmired earth

Christopher H. said in reply to Plp... , January 01, 2019 at 01:27 PM
The Nordic countries have gone further than 1976 - and it works!

But even they have been backsliding.

They key is rising living standards for everyone. That means eradicating poverty & financial precariousness and rising incomes up the income ladder.

End the Dem's fascination with means testing. Make big programs everyone supports. Republican party needs to be destroyed as Jane Curtin said on CNN.

#### [Jan 03, 2019] Piketty's World Inequality Review- A Critical Analysis - naked capitalism

##### "... World Inequality Report ..."
###### Jan 03, 2019 | www.nakedcapitalism.com

Yves here. It's surprising to see Piketty and even more so, one of this co-authors, Gabriel Zucman, make such strong claims for tax data as a way to measure income inequality. The rich and super rich engage in tax avoidance and evasion, to the degree that Zucman has estimated that 6% of the world's wealth is hidden. First, that wealth was hidden to avoid paying taxes on it and/or to hide its criminal origins (such as looting governments). Second, the income on hidden wealth is also by nature hidden.

By James K. Galbraith, Lloyd M. Bentsen Jr. Chair in Government and Business Relations, University of Texas at Austin. Originally published at the Institute of New Economic Thinking website

Thomas Piketty and his colleagues [1] have produced a new exposition of their empirical work, entitled the World Inequality Report 2018 (hereafter: WIR). Their purpose is to showcase the exploration of income and wealth inequalities begun with the World Top Incomes Database (Atkinson and Piketty 2010) and theorized in Piketty's epic Capital in the XXI Century (2014) . In particular the WIR concentrates on the presentation of measures and evidence; the stated goal is to inform a "deliberative process" with "more rigorous and transparent information on income and wealth" than has been available to date. In a review article published on-line and open access in Development and Change on December 24, 2018, I initiate this "deliberative process" by examining the WIR data and the claims made for it.

The ground-breaking, systematic and transparent methodology on which the WIR rests is largely the use of tax records–specifically income tax records–mined to show the income shares of tranches of the income-earning population: top one percent, top ten percent, next forty percent, and bottom fifty percent are the usual divisions. These Piketty and his colleagues argue are more complete, comprehensive, and comparable across countries and through time than the generally-used alternative, which is household or person-based surveys.

The WIR authors write disparagingly of the "Gini index" -- the inequality measure most prevalent in such surveys -- which they find too "technical" and not sufficiently intuitive. But they also object to survey methods: "The main problem with household surveys, however, is that they usually rely entirely on self-reported information about income and wealth. As a consequence, they misrepresent top income and wealth levels, and therefore overall inequality." (p. 29) This sweeping critique carries on for several pages, brushing aside a body of research comprising thousands of papers and millions of survey observations, including the work of the Luxembourg Income Studies, the World Bank, Eurostat, the Economic Commission for Latin America, and the United States Census Bureau among scores of national data-collection agencies. It is a repudiation of what almost every previous researcher has done in this field over fifty years.

But are tax data really better? Where survey and tax measures both exist, and report different results, should one systematically prefer a measure based on taxes? The answer depends in part on the quality of the survey measures. But it also must depend in part on the quality, consistency, length and continuity of the national tax record, and in particular of the income tax. The WIR authors acknowledge that tax data have limits, in particular they cannot cover income and wealth hidden from tax authorities in tax havens. But the question of the quality of tax records goes much further than this.

My new essay examines the question from three points of view: the coverage provided by tax data in the world economy, the consistency of tax data with other sources of information on income inequality, and the peculiarities of tax-based measurement of inequality in the United States. It goes on to make a comparison with measures drawn from other forms of administrative data -- specifically payroll records, used by the University of Texas Inequality Project -- which are generally more consistent with records of inequality measured in household surveys than are the WIR's tax records.

In brief summary, the review shows that by comparison with payroll and survey data, available records from tax files are relatively sparse, and biased toward wealthier countries and those that were once British colonies, which imposed income tax. It shows that tax data are far less consistent with survey and payroll records than are the latter two with each other. And it shows that even within the United States, a country with good tax records by world standards, changes in tax law distort the WIR's measures of changes in the top income shares, while a misunderstanding of the nature of low-income tax filers in the US leads to a dramatic but nonsensical claim that the earnings of the bottom 50 percent of Americans have "collapsed" in recent decades.

Overall, the review casts doubt on claims by the authors of the World Inequality Report to have produced major advances in the study of world economic inequality, and documents that many of the findings touted in the Report as new and unprecedented have in fact been reported in the literature for years, even decades in some cases.

[1] The credited co-authors are Facundo Alvaredo, Lucas Chancel, Thomas Piketty, Emmanuel Saez and Gabriel Zucman.

Figure 1 Top One Percent Shares from the World Inequality Database, showing an unacknowledged data break due to the US Tax Reform Act of 1986. Adjusting the data for the change in the tax definition of income would show that the US top share tracks the UK and Canada very closely. Low numbers for France and Italy are likely due to inferior tax recording of high income persons, not an underlying condition of less inequality.

I do not see your and the essay's point about tax evasion impacting actual reported income more harshly than surveys. Even in cases where answers to surveys are required by law, the penalties and effort undertaken by enforcement agencies are going to be several orders of magnitude greater in cases of tax evasion compared to incorrect survey answers. Furthermore income taxes are frequently automated which makes correct or at least some reporting the default case while the default state of surveys is no data at all. Only by taking action is any data generated. While it is theoreticaly possible that surveys are more accurate because the incentive of lower taxes is also stronger, the logic argument given here is not self-evident and actual empirical data is needed for prove.

The critic regarding change in tax reporting over time is quite correct altough I am far from certain that neither survey methods nor questions haven't changed over the last century. A feature not talked about at all is samplesize which always favours actual tax data over surveys given that everyone with an income over a small threshold must pay taxes.

The only empirical evidence provided in the essay is self-referential. If one proxy (survey data) is faulty correlation between it and another proxy (payroll records) does not prove that the first proxy is correct because it remains possible that both proxies have the same deficiencies and are therefore correlated – instead of both being a good approximation of reality.

This is not to say that the essay must be wrong or Piketty et al's assertions must be right, but with only the information provided here a lack of evidence still exists in my opinion.

CanCyn , January 3, 2019 at 12:36 pm

this line towards the end: " nonsensical claim that the earnings of the bottom 50 percent of Americans have "collapsed" in recent decades." is nonsensical itself. Anyone who doesn't believe that low and middle income earners' incomes have collapsed is living in a very opaque bubble, head firmly planted up *ss.

I earned $12.00 per hour in retail with only a high school education in the early 1980s. I'm Canadian but I don't think the two countries are so different in this regard. In 2018 dollars, according to the Bank of Canada inflation calculator that is$26.00 per hour!! Do you know anyone in retail with only a high school education earning $26.00 per hour today? My husband, again, no high school, was making twice that amount in a steel mill in the eighties. Know anyone earning almost$60 per hour in any kind of factory work today? I sure don't. That includes the people who work in that factory now, it is mostly precarious contract work, at much lower wages, the union having been busted long ago

Further, I went back to school in the late 80s and ended with my Masters in Library Science, my first full-time job in the early 90s had me earning the 1990ish equivalent of that $12.00 per hour, things were already going south. It took me quite a few more years to outpace that 1980 retail wage. My husband and I are living proof that wages have collapsed. I don't care how anecdotal that is, I know the truth, just by looking around and talking to people. It is beyond frustrating to have to argue against this stuff. CanCyn , January 3, 2019 at 2:57 pm one correction, that should be "only high school" not "no high school" with regard to my husband's education. One question for the author. How do you account for the fact that payroll records, at least as I understand them, generally omit capital gains which is where the upper income generally get most of their real wealth. Stock buybacks and share disbursements are not generally considered "payroll" as I understand it. The advantage of tax is that it should, at least in theory, show money received by individuals rather than just money sent out in one category. There's a lot more to inequality than money,,, #### [Dec 27, 2018] The Yoda of Silicon Valley by Siobhan Roberts ##### Highly recommended! ##### Although he is certainly a giant, Knuth will never be able to complete this monograph - the technology developed too quickly. Three volumes came out in 1963-1968 and then there was a lull. January 10, he will be 81. At this age it is difficult to work in the field of mathematics and system programming. So we will probably never see the complete fourth volume. ##### This inability to finish the work he devoted a large part of hi life is definitely a tragedy. The key problem here is that now it is simply impossible to cover the whole area of system programming and related algorithms for one person. But the first three volumes played tremendous positive role for sure. ##### Also he was distracted for several years to create TeX. He needed to create a non-profit and complete this work by attracting the best minds from the outside. But he is by nature a loner, as many great scientists are, and prefer to work this way. ##### His other mistake is due to the fact that MIX - his emulator was too far from the IBM S/360, which became the standard de-facto in mid-60th. He then realized that this was a blunder and replaced MIX with more modem emulator MIXX, but it was "too little, too late" and it took time and effort. So the first three volumes and fragments of the fourth is all that we have now and probably forever. ##### Not all volumes fared equally well with time. The third volume suffered most IMHO and as of 2019 is partially obsolete. Also it was written by him in some haste and some parts of it are are far from clearly written ( it was based on earlier lectures of Floyd, so it was oriented of single CPU computers only. Now when multiprocessor machines, huge amount of RAM and SSD hard drives are the norm, the situation is very different from late 60th. It requires different sorting algorithms (the importance of mergesort increased, importance of quicksort decreased). He also got too carried away with sorting random numbers and establishing upper bound and average run time. The real data is almost never random and typically contain sorted fragments. For example, he overestimated the importance of quicksort and thus pushed the discipline in the wrong direction. ##### Notable quotes: ##### "... These days, it is 'coding', which is more like 'code-spraying'. Throw code at a problem until it kind of works, then fix the bugs in the post-release, or the next update. ..." ##### "... AI is a joke. None of the current 'AI' actually is. It is just another new buzz-word to throw around to people that do not understand it at all. ..." ##### "... One good teacher makes all the difference in life. More than one is a rare blessing. ..." ###### Dec 17, 2018 | www.nytimes.com With more than one million copies in print, "The Art of Computer Programming " is the Bible of its field. "Like an actual bible, it is long and comprehensive; no other book is as comprehensive," said Peter Norvig, a director of research at Google. After 652 pages, volume one closes with a blurb on the back cover from Bill Gates: "You should definitely send me a résumé if you can read the whole thing." The volume opens with an excerpt from " McCall's Cookbook ": Here is your book, the one your thousands of letters have asked us to publish. It has taken us years to do, checking and rechecking countless recipes to bring you only the best, only the interesting, only the perfect. Inside are algorithms, the recipes that feed the digital age -- although, as Dr. Knuth likes to point out, algorithms can also be found on Babylonian tablets from 3,800 years ago. He is an esteemed algorithmist; his name is attached to some of the field's most important specimens, such as the Knuth-Morris-Pratt string-searching algorithm. Devised in 1970, it finds all occurrences of a given word or pattern of letters in a text -- for instance, when you hit Command+F to search for a keyword in a document. ... ... ... During summer vacations, Dr. Knuth made more money than professors earned in a year by writing compilers. A compiler is like a translator, converting a high-level programming language (resembling algebra) to a lower-level one (sometimes arcane binary) and, ideally, improving it in the process. In computer science, "optimization" is truly an art, and this is articulated in another Knuthian proverb: "Premature optimization is the root of all evil." Eventually Dr. Knuth became a compiler himself, inadvertently founding a new field that he came to call the "analysis of algorithms." A publisher hired him to write a book about compilers, but it evolved into a book collecting everything he knew about how to write for computers -- a book about algorithms. ... ... ... When Dr. Knuth started out, he intended to write a single work. Soon after, computer science underwent its Big Bang, so he reimagined and recast the project in seven volumes. Now he metes out sub-volumes, called fascicles. The next installation, "Volume 4, Fascicle 5," covering, among other things, "backtracking" and "dancing links," was meant to be published in time for Christmas. It is delayed until next April because he keeps finding more and more irresistible problems that he wants to present. In order to optimize his chances of getting to the end, Dr. Knuth has long guarded his time. He retired at 55, restricted his public engagements and quit email (officially, at least). Andrei Broder recalled that time management was his professor's defining characteristic even in the early 1980s. Dr. Knuth typically held student appointments on Friday mornings, until he started spending his nights in the lab of John McCarthy, a founder of artificial intelligence, to get access to the computers when they were free. Horrified by what his beloved book looked like on the page with the advent of digital publishing, Dr. Knuth had gone on a mission to create the TeX computer typesetting system, which remains the gold standard for all forms of scientific communication and publication. Some consider it Dr. Knuth's greatest contribution to the world, and the greatest contribution to typography since Gutenberg. This decade-long detour took place back in the age when computers were shared among users and ran faster at night while most humans slept. So Dr. Knuth switched day into night, shifted his schedule by 12 hours and mapped his student appointments to Fridays from 8 p.m. to midnight. Dr. Broder recalled, "When I told my girlfriend that we can't do anything Friday night because Friday night at 10 I have to meet with my adviser, she thought, 'This is something that is so stupid it must be true.'" ... ... ... Lucky, then, Dr. Knuth keeps at it. He figures it will take another 25 years to finish "The Art of Computer Programming," although that time frame has been a constant since about 1980. Might the algorithm-writing algorithms get their own chapter, or maybe a page in the epilogue? "Definitely not," said Dr. Knuth. "I am worried that algorithms are getting too prominent in the world," he added. "It started out that computer scientists were worried nobody was listening to us. Now I'm worried that too many people are listening." Scott Kim Burlingame, CA Dec. 18 Thanks Siobhan for your vivid portrait of my friend and mentor. When I came to Stanford as an undergrad in 1973 I asked who in the math dept was interested in puzzles. They pointed me to the computer science dept, where I met Knuth and we hit it off immediately. Not only a great thinker and writer, but as you so well described, always present and warm in person. He was also one of the best teachers I've ever had -- clear, funny, and interested in every student (his elegant policy was each student can only speak twice in class during a period, to give everyone a chance to participate, and he made a point of remembering everyone's names). Some thoughts from Knuth I carry with me: finding the right name for a project is half the work (not literally true, but he labored hard on finding the right names for TeX, Metafont, etc.), always do your best work, half of why the field of computer science exists is because it is a way for mathematically minded people who like to build things can meet each other, and the observation that when the computer science dept began at Stanford one of the standard interview questions was "what instrument do you play" -- there was a deep connection between music and computer science, and indeed the dept had multiple string quartets. But in recent decades that has changed entirely. If you do a book on Knuth (he deserves it), please be in touch. IMiss America US Dec. 18 I remember when programming was art. I remember when programming was programming. These days, it is 'coding', which is more like 'code-spraying'. Throw code at a problem until it kind of works, then fix the bugs in the post-release, or the next update. AI is a joke. None of the current 'AI' actually is. It is just another new buzz-word to throw around to people that do not understand it at all. We should be in a golden age of computing. Instead, we are cutting all corners to get something out as fast as possible. The technology exists to do far more. It is the human element that fails us. Ronald Aaronson Armonk, NY Dec. 18 My particular field of interest has always been compiler writing and have been long awaiting Knuth's volume on that subject. I would just like to point out that among Kunth's many accomplishments is the invention of LR parsers, which are widely used for writing programming language compilers. Edward Snowden Russia Dec. 18 Yes, \TeX, and its derivative, \LaTeX{} contributed greatly to being able to create elegant documents. It is also available for the web in the form MathJax, and it's about time the New York Times supported MathJax. Many times I want one of my New York Times comments to include math, but there's no way to do so! It comes up equivalent to:$e^{i\pi}+1\$.

48 Recommend
henry pick new york Dec. 18

I read it at the time, because what I really wanted to read was volume 7, Compilers. As I understood it at the time, Professor Knuth wrote it in order to make enough money to build an organ. That apparantly happened by 3:Knuth, Searching and Sorting. The most impressive part is the mathemathics in Semi-numerical (2:Knuth). A lot of those problems are research projects over the literature of the last 400 years of mathematics.

Steve Singer Chicago Dec. 18

I own the three volume "Art of Computer Programming", the hardbound boxed set. Luxurious. I don't look at it very often thanks to time constraints, given my workload. But your article motivated me to at least pick it up and carry it from my reserve library to a spot closer to my main desk so I can at least grab Volume 1 and try to read some of it when the mood strikes. I had forgotten just how heavy it is, intellectual content aside. It must weigh more than 25 pounds.

Terry Hayes Los Altos, CA Dec.