AmazingOceanSnaps

Why So Much Wealth at the Top Threatens the US Economy

Policymakers and the media are paying too much attention to how quickly the U.S. economy will emerge from the pandemic-induced recession, and not nearly enough to the nation’s deeper structural problem – the increasing imbalance of wealth that could enfeeble the economy for years.

Seventy percent of the US economy depends on consumer spending. But wealthy people, who now own more of the economy than at any time since the 1920s, spend only a small percentage of their incomes. Lower-income people, who were in trouble even before the pandemic, spend whatever they have – which has become very little.  

In a very practical sense, the U.S. economy depends on the spending of most Americans who don’t have much to spend. That spells trouble ahead.

It’s not simply a matter of an adequate “stimulus.” The $2,000 checks contained in the American Rescue Plan have already been distributed and extra unemployment benefits will soon expire. Consumer spending will be propped up as employers add to their payrolls. Biden’s spending plans, if enacted, will also help keep consumers afloat for a time.

But the underlying imbalance will remain. Most peoples’ wages will still be too low and too much of the economy’s gains will continue to accumulate at the top, for total consumer demand to be adequate.  

Years ago, Marriner Eccles, chairman of the Federal Reserve from 1934 to 1948, explained that the Great Depression occurred because the buying power of Americans fell far short of what the economy could produce. He blamed the increasing concentration of wealth at the top. In his words:

“A giant suction pump had by 1929-1930 drawn into a few hands an increasing portion of currently produced wealth. As in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.”

The wealthy of the 1920s didn’t know what to do with all their money, while most Americans could maintain their standard of living only by going into debt. When that debt bubble burst, the economy sunk.

History is repeating itself. The typical Americans’ wages have hardly increased for decades, adjusted for inflation. Most economic gains have gone to the top, just as Eccles’s “giant suction pump” drew an increasing portion of the nation’s wealth into a few hands before the Great Depression.

The result has been consumer spending financed by borrowing, creating chronic fragility. After the housing and financial bubbles burst in 2008, we avoided another Great Depression only because the government pumped enough money into the system to maintain demand, and the Fed kept interest rates near zero. Then came the pandemic.

The wealth imbalance is now more extreme than it’s been in over a century. There’s so much wealth at the top that the prices of luxury items of all kinds are soaring; so-called “non-fungible tokens,” ranging from art and music to tacos and toilet paper, are selling like 17th-century exotic Dutch tulips; cryptocurrencies have taken off; and stock market values have continued to rise even through the pandemic.  

Corporations don’t know what to do with all their cash. Trillions of dollars are sitting idle on their balance sheets. The biggest firms have been feasting off the Fed’s corporate welfare, as the central bank obligingly holds corporate bonds that the firms issued before the recession in order finance stock buybacks.

But most people have few if any assets. Even by 2018, when the economy appeared strong, 40% of Americans had negative net incomes and were borrowing money to pay for basic household needs.

The heart of the imbalance is America’s wealthy and the corporations they own have huge bargaining power – both market power in the form of monopolies, and political power in the form of lobbyists and campaign contributions.

Most workers have little or no bargaining power – neither inside their firms because of the near-disappearance of labor unions, nor in politics because political parties have devolved from giant membership organizations to fundraising machines.

Biden’s “stimulus” programs are fine but temporary. The most important economic reform would be to correct this structural imbalance by reducing monopoly power, strengthening unions, and getting big money out of politics.

Until the structural imbalance is remedied, the American economy will remain perilously fragile. It will also be vulnerable to the next demagogue wielding anger and resentment as substitutes for real reform.

They warned me your childhood would whizz by in a flash

They warned me and I laughed,

because then,

each day felt like a lifetime.

Each sleepless night was a year, each hour of the day was an age.

All my energy was consumed, with keeping you alive, happy, thriving.

Your smiles became my goal, your laughter my reward, your tears my every waking concern.

And here we are my love, you have grown.

I remember all the firsts, but I have no idea when the ‘lasts’ happened...

Where was I?

The last time you snuggled into my lap to read.

The last time I lifted your warm little body to mould into mine, that fit, just right.

The last time you crawled into my safe space, in the dark of the night.

They warned me your childhood would whizz by in a flash,

And I laughed.

But it did, my love,

It did.

And now I watch you grow evermore strong and I vow to drink in every tiny detail,

lest that go by in an instant also.

I may not remember all the ‘lasts’ my little one,

But I am watching for every ‘new’.

Yes,

I am watching.

Donna Ashworth

Image by KM Bergerren

If you want to know why people have lost faith in capitalism, this might help

A question I get asked a lot while working at a public library is "how do you deal with homeless people?"

And the answer is, we don't.

The unhoused people who come here seeking refuge 99% of the time understand that they will be kicked out if they misbehave.

The people you have to watch out for are Jessica, who only came because the kid she didn't want had to visit for a homework assignment and she just *needs* to yell at her child for asking to borrow two books or stay an extra five minutes, or Michael, who came in to look at porn on our computers for whatever fucking reason, or Karen who just wanted to come by to throw a fit that the particular book she wanted was checked out and harrass our staff about our collection being too limited.

99% of the time, the people we need to ban are middle to upper-middle class white people while the homeless and mentally ill/disabled people mind their own damn business and are honestly some of the best patrons we have.

Hello So i'm about to move from my parents house into an aprtment with my best friend and her friend as roomates. Do you've got any tips on how to make sure we won't get into huge fights, learning how to be responisble with the bugdet and getting to know her friend more? I am really stressed out about it but there's no going back now

It can definitely be nerve-wracking to live with people you aren’t related to for the first time, whether you are moving in with friends, your partner, or random roommates off the internet. I’ve lived with many, many people over the years - most of them strangers I found online - and the best advice I can give you to make the experience more pleasant is to set ground rules and boundaries early, and to make sure that everyone is on the same page. Even close friends can have very different expectations when it comes to sharing a living space, and the big things that you’ll probably want to figure out are:

Shared expenses. Are common staples like margarine, ketchup, salt, dish soap, toilet paper and cooking oil going to be shared by the entire household, or does everyone have to buy their own? If you are sharing stuff, can one person decide to just go buy stuff that’s running low and ask for reimbursement, or do you all need to agree in advance? My roommates and I used to keep a communal list on the fridge that one person would use to make our monthly Costco run, and we’d all just pay one-third of whatever the total ended up being. You might prefer a similar approach, or you might just take turns paying - ie “I bought the last pack of toilet paper, now you buy the next one”. It depends on your budget, and how good your housemates are about holding up their end of the bargain. If you are on a smaller budget than others, or if one roommate tends to use more than their fair share, it might be less of a headache if everyone just buys their own stuff. It’s also important to figure out how rent and bills will be paid - whose name are they in? Are you paying rent with three separate cheques, or is one person writing a cheque for the whole rent? If one person is writing a cheque, when do you need to give them your portion of the rent each month?

Shared household items and appliances. If everyone has brought some kitchen items - cups, mugs, plates, etc - into the household, is every item totally up for grabs, or are there any special items (like a favourite mug or expensive blender) that not everyone is allowed to use? How is fridge and pantry space going to be divided? Are everyone’s items just put into the cupboards together, or do you each get a cupboard for the things you individually own? Does anyone have any allergies or dietary restrictions - like Kosher or Halal requirements - that make it important for other people to not use their dishes? My roommates and I always put our kitchen stuff together in a jumble and just went with it, but I have friends with strict Kosher roommates who cannot share any kitchenware at all. Will you all chip in to buy shared items like a couch and coffee table, or will one person buy the item and own it by themselves? 

Chore schedule. Different people have different standards of cleanliness, and it’s important to figure out how often cleaning should be done so that no one feels like they’re living in a hovel. How quickly should people be doing their dishes - as soon as they’ve finished cooking? Within 24 hours? Or will you eat together and take turns washing dishes? How often will non-daily chores - like mopping the floors, cleaning the shower stall, and cleaning the oven - be done, and who will do them? My roommates and I used to block out 2-3 hours every Sunday as “cleaning time” when we would all deep-clean the apartment together, but you might prefer to have assigned individual chores that you can do on your own time. 

Guest policy. Overnight guests and partners are probably one of the biggest sources of tension in a roommate relationship. Namely, how long can you have a guest stay in the apartment with you before they need to start chipping in with the bills? Do you need to give the other roommates advance notice before a guest comes to stay for a while? How many days out of the month can someone’s partner stay over before they effectively become part of the household and need to pitch in with bills and chores? Is it even okay if someone’s partner is staying over constantly, or are you not cool with that at all? Are roommates allowed to give their partners a key to the apartment, or does everyone in the apartment need to be on board before that can happen? My roommates and I had a lot of long-term guests in our tiny Manhattan apartment, but that only went smoothly because everyone was 100% okay with having long-term guests, and we had a hard limit on how many days someone could stay out of the month before they needed to start putting money in our “toilet paper and dish soap” fund. 

Shower schedule. If everyone in the apartment is working on a similar Monday-Friday, 9-5 schedule (which is less likely to be the case these days, but still), it’s important to work out a basic schedule for who gets to shower when in the mornings. There is nothing that will make you want to flip out on your roommate quite like being late for work because they took a 45-minute shower when you needed to get ready. If you don’t each have your own ensuite bathroom, figure out who gets the bathroom when in the mornings, or decide who is going to shower at night to avoid conflict. 

Quiet hours. At what hours of the day is it inconsiderate for a roommate to be making noise or watching TV in common areas while people are trying to sleep? The answer may depend on the layout of the apartment, your individual work schedules, and how sensitive everyone is to noise. If you have roommates that work nights or are working from home during the day and need quiet for their conference calls, that’s something else to keep in mind. 

Breaking the lease. What happens if something comes up, and one person needs to leave before the lease is over? How much notice do they need to give the other roommates? Is it the departing roommate’s responsibility to find someone to take over their bedroom, or would the remaining roommates rather choose who they are living with? If you all pitched in to make a big purchase together - like a couch or a kitchen table - how will that work if one person leaves the lease? And how will the damage deposit be handled? The majority of leases I’ve been on have not had all the original roommates stay until the end, and it was important to plan for that in advance so that no one felt like they’d been tricked into living with someone new that they never agreed to live with. 

Above all, the secret to living with roommates is to communicate, and to try to be as considerate of others as you can. The way that you live and manage your finances directly affects your roommates’ quality of life, and everyone needs to put in some serious effort to make sure that everyone gets to enjoy the living space that they are paying for. The money stuff is especially important - talk to your roommates ahead of time about what costs you will be sharing and what costs you won’t, and make sure that you are setting aside the money you need for shared expenses each month so that no one is left holding the bag. And be sure to speak up if other roommates aren’t respecting your needs either - the occasional dirty coffee cup left in the sink or wine spilled on the rug is just a part of life and probably not worth fighting over, but if someone is consistently neglecting their chores, making huge messes, making lots of noise at night or failing to pay their fair share of household expenses, that’s a situation that you need to speak up about, so that you can all try to find a way to resolve the issue. Living with a friend, roommate or partner is all about finding a balance between accommodating other people and sticking up for yourself, and it’s a balance that will be become easier with time. 

It’s also important to find time to just enjoy hanging out with your roommates. Yes, living with other people can be scary and stressful, and there may be times when you’re ready to scream because someone ate your ice cream without permission and no one remembered to buy more toilet paper, but there will also be good times, especially if you are living with someone you are already friends with. Some of the best memories of my early 20s were just from hanging out with my roommates - like the time that we got drunk on cheap wine and painted some silly paintings because we couldn’t afford to decorate the apartment properly, or the time we got a huge box of breakfast food from the local diner and stayed up all night watching Game of Thrones, or the time we had to spend all day taking all our IKEA furniture apart in the lobby and carrying it up to our walk-up piece by piece because none of us could lift the boxes, and we barely made it up the stairs because we were laughing so hard. Being young and kind of broke and living with your friends can be a very fun time in your life, and it’s important to enjoy it - hang out together, do silly things, enjoy making mistakes because none of you have any real idea what you’re doing. Just because you have financial responsibilities and a chore chart doesn’t mean that you can’t have fun. Best of luck to you!Miss Mentelle

relevant xkcd

I did not write this - but WOW does it speak to my heart!!! Worth the read.

Barely the day started and... it's already six in the evening.

Barely arrived on Monday and it's already Friday.

... and the month is already over.

... and the year is almost over.

... and already 40, 50 or 60 years of our lives have passed.

... and we realize that we lost our parents, friends.

and we realize it's too late to go back...

So... Let's try, despite everything, to enjoy the remaining time...

Let's keep looking for activities that we like...

Let's put some color in our grey...

Let's smile at the little things in life that put balm in our hearts.

And despite everything, we must continue to enjoy with serenity this time we have left. Let's try to eliminate the afters...

I'm doing it after...

I'll say after...

I'll think about it after...

We leave everything for later like ′′ after ′′ is ours.

Because what we don't understand is that:

Afterwards, the coffee gets cold...

afterwards, priorities change...

Afterwards, the charm is broken...

afterwards, health passes...

Afterwards, the kids grow up...

Afterwards parents get old...

Afterwards, promises are forgotten...

afterwards, the day becomes the night...

afterwards life ends...

And then it's often too late....

So... Let's leave nothing for later...

Because still waiting see you later, we can lose the best moments,

the best experiences,

best friends,

the best family...

The day is today... The moment is now...

We are no longer at the age where we can afford to postpone what needs to be done right away.

So let's see if you have time to read this message and then share it.

Or maybe you'll leave it for... ′′ later "...

And you'll never share it....

“Donald Trump threatens the entire existence of the American republic. He is able to do this because the Supreme Court he created is assisting him in doing so. It is a corrupt Court – on which more later. It overturned a central right for half of our population. It routinely mixes and matches rationales, jurisprudences, logics to arrive at the end point of transforming America into their extremist vision. We’ve heard that yesterday’s decision was a terrible decision, an extremist decision, that it changes the American experiment fundamentally. No disagreement with any of those points. Most importantly, in my mind, it’s a fake decision. Yes, it will now be controlling within the federal courts. But it doesn’t change the constitution any more than a foreign army occupying New England would make Massachusetts no longer part of the United States. That may seem like a jarring analogy. But it’s the only kind that allows us to properly view and react to this Supreme Court.”

—

The rationale for the decision yesterday has literally no basis whatsoever in the US constitution.

Josh Marshall is correct, but I don’t think it matters. This corrupt, activist, fascist SCOTUS does not care. The majority has decided that the Constitution, 250 years of precedent, popular opinion, and the foundational ideas that have made America what it is since 1787 are what they say they are.

I live in a country of three hundred and forty million people.

In this country, six unelected christian nationalists, five of whom were placed on the court by presidents who lost the popular vote, who are opposed by SEVENTY PERCENT of the population, are making up laws out of whole cloth because their power is unchecked and can impose their regressive authoritarianism on that entire population is not a free country.

America has not been attacked like this since 9/11. Six unelected people forcing their christian nationalist agenda on a population of three hundred and forty million is not a Democracy. It is tyranny.

Everyone is missing the central message of yesterday’s ruling: SCOTUS is going to install Trump as dictator for life, by any means necessary. Somehow, after he loses the popular vote again, and after he’s even lost the Electoral College again, these six Fascists will invent a reason to overturn the will of the electorate, again. Every single one of their rulings this term have been part of their coup. Now, just line them all up and connect the dots.

We are four months away from the likely end of what passes for freedom in America, and once it’s gone, it’s not coming back in my lifetime.

the funny thing is that i don't think younger people - and i mean those under the age of 40 - really have a grasp on how many of today's issues can be tied back to a disastrous reagan policy:

war on drugs: reagan's aggressive escalation of the war on drugs was a catastrophic policy, primarily targeting minority communities and fueling mass incarceration. the crusade against drugs was more about controlling the Black, Latino and Native communities than addressing the actual problems of drug abuse, leading to a legacy of broken families and systemic racism within the criminal justice system.

deregulation and economic policies: reaganomics was an absolute disaster for the working class. reagan's policies of aggressive tax cuts for the rich, deregulation, and slashing social programs were nothing less than class warfare, deepening income inequality and entrenching corporate greed. these types of policies were a clear message that reagan's america was only for the wealthy elite and a loud "fuck you" to working americans.

environmental policies: despite his reputation being whitewashed thanks to the recovery of the ozone layer, reagan's environmental record was an unmitigated disaster. his administration gutted critical environmental protections and institutions like the EPA, turning a blind eye to pollution and corporate exploitation of natural resources. this blatant disregard for the planet was a clear sign of prioritizing short-term corporate profits over the future of the environment.

AIDS crisis: reagan's gross neglect of the aids crisis was nothing short of criminal and this doesn't even begin to touch on his wife's involvement. his administration's indifference to the plight of the lgbtq+ community during this devastating epidemic revealed a deep-seated bigotry and a complete failure of moral leadership.

mental health: reagan's dismantling of mental health institutions under the guise of 'reform' led directly to a surge in homelessness and a lack of support for those with mental health issues. his policies were cruel and inhumane and showed a personality-defining callous disregard for the most vulnerable in society.

labor and unions: reagan's attack on labor unions, exemplified by his handling of the patco strike, was a blatant assault on workers' rights. his actions emboldened corporations to suppress union activities, leading to a significant erosion of workers' power and rights in the workplace. he was colloquially known as "Ronnie the Union Buster Reagan"

foreign policy and military interventions: reagan's foreign policy, particularly in latin america, was imperialist and ruthless. his administration's support for dictatorships and right-wing death squads under the guise of fighting "communism" showed a complete disregard for human rights and self-determination of other nations.

public health: yes, reagan's agricultural policies actually facilitated the rise of high fructose corn syrup, once again prioritizing corporate profits over public health. this shift in the food industry has had lasting negative impacts on health, contributing to the obesity epidemic and other health issues.

privatization: reagan's push for privatization was a systematic dismantling of public services, transferring wealth and power to private corporations and further eroding the public's access to essential services.

education policies: his approach to education was more of an attack on public education than anything else, gutting funding and promoting policies that undermined equal access to quality education. this was, again, part of a broader agenda to maintain a status quo where the privileged remain in power.

this is just what i could come up with in a relatively short time and i did not even live under this man's presidency. the level at which ronald reagan has broken the united states truly can't be overstated.