A Era of Middle Class Crunch

The one big asset for most middle and working class people–their home–will most likely no longer be an automatic savings program.

Meanwhile, the big liabilities for most middle and working class people–credit cards–continue to drain away their purchasing power.

The government’s safety nets and mechanisms for upward mobility get thinner every day with the benefits going to privatization fanatics and the costs remaining with the American Family.

I worry about the future of this country and its children.

Part of my parent’s retirement and old age security comes from Social Security; an insurance program now being threatened with cuts and privatization. As you know, I’m vehemently against both and believe much of the problems with Social Security are in the minds of the people that want to reap the benefits of a large pool of money in their hands instead of the trust funds’ care. The future aged will have even more challenges when they find their homes no longer are the nest eggs they assumed they would be.

The wealth generated by housing in those decades, particularly on the coasts, did more than assure the owners a comfortable retirement. It powered the economy, paying for the education of children and grandchildren, keeping the cruise ships and golf courses full and the restaurants humming.

More than likely, that era is gone for good.

“There is no iron law that real estate must appreciate,” said Stan Humphries, chief economist for the real estate site Zillow. “All those theories advanced during the boom about why housing is special — that more people are choosing to spend more on housing, that more people are moving to the coasts, that we were running out of usable land — didn’t hold up.”

Instead, Mr. Humphries and other economists say, housing values will only keep up with inflation. A home will return the money an owner puts in each month, but will not multiply the investment.

We must prepare for that reality and this one. Credit cards are the worse use of credit possible and are getting worse by the minute. Cut them up and get rid of them now! They are at levels that would make a loan shark blush given the rate of inflation. Banks are milking them for all they are worth because one established, balances are hard to get rid of. Never pay minimum payments and try to keep them only for true emergency purposes. They are the yoke of oppression.

Interest rates continue to tumble for the U.S. Treasury, companies and home buyers alike. But for a large portion of 381 million U.S. credit-card accounts, borrowing rates have been moving only one way: up.

And average rates are likely to climb further in the near future.

New credit-card rules that took effect Sunday limit banks’ ability to charge penalty fees. They come on top of rule changes earlier this year restricting issuers’ ability to adjust rates on the fly. Issuers responded by pushing card rates to their highest level in nine years.

In the second quarter, the average interest rate on existing cards reached 14.7%, up from 13.1% a year earlier, according to research firm Synovate, a unit of Aegis Group PLC. That was the highest level since 2001.

Those figures look especially stark when measuring the gap between the prime rate—the benchmark against which card rates are set—and average credit-card rates. The current difference of 11.45 percentage points is the largest in at least 22 years, Synovate estimates.

The continued recession environment is cutting into our living standards, our chances for employment, and the necessary services that the government provides. Education is especially hard hit. There has been a lot of effort to privatize public services and this has led to some astounding changes in the effectiveness of the public arena to deliver benefits instead of profits to private individuals.

It has come to this: Parents are now being asked to send their children to school with their own toilet paper. And not just toilet paper, but all sorts of basic items that schools themselves used to provide for kids. It’s all part of a disturbing trend, highlighted by the New York Times last week, of cash-strapped public schools — their budgets eviscerated by state cutbacks — shifting more and more financial responsibility onto parents.

Privatization meant transferring responsibility for entire programs or functions to the private sector. But with the drastic budget cuts that states have been forced to make, responsibility for public services and programs is literally being forced into private hands one roll of toilet paper at a time. We’ve entered the era of backdoor privatization.

On the surface, these stop-gap measures don’t seem unreasonable. After all, it’s hardly new for parents in well-off school districts to chip in for supplies, music classes and even teacher’s salaries in an effort to minimize the effect of school budget cuts on their children. What is new, though, is the extent to which families are being asked to contribute basic items. This may be too much to ask of parents who are struggling to pay their own bills — especially since they’ve already paid taxes that are supposed to support the public school system.

Our war dollars do not go to paying soldiers decent salaries and to supporting veterans in their hours of need. They are increasingly going to line the profiteer’s pockets. Blackwater, Halliburton, General Electric, Boeing, are major recipients of government largess. In this day of tight wallets, corporations that step in to profit from government services are experiencing record profits. Meanwhile, the American middle and working class is left to fend for itself. None of this has changed under the current administration and will get no better in the future.

Be aware of this new and growing reality and do not play into the schemes. We have HAMP which is supposed to help with mortgage modification that has failed. There are early signs that the new federal health care reform is on the same path. The failure of these programs was in the design. The links I’ve given you in this paragraph are to right wing sites. This is to show you that their failure will be used by the right wing to force further privatization and ‘profitization’ of public suffering and need which will be a booming market in the future. The greedy will step in to take advantage of the opportunities and there will be politicians that will let them.

Don’t be caught off guard.

A tale of two law professors with Harvard Connections

Okay, I’m going to mince and play with words. I’m probably taking all this talk about being “professorial” too personally but look at different takes on the word. One as applied to Elizabeth Warren and the other applied to President Obama. Notice the differences?

WaPo on the professorial Elizabeth Warren:

She’s either the plain-spoken, supremely smart crusader for middle-class families that her supporters adore, or she’s the power-hungry headline seeker her critics loathe, a fiery zealot disguised in professorial glasses and pastel cardigans.

NYPost on the professorial Elizabeth Warren:

O’Neill has a particular bone to pick with Geithner because he hasn’t been forceful about endorsing Warren. He has reportedly expressed some behind-the-scenes opposition to her because the brainy Harvard professor’s hard-charging style isn’t suited for the finesse Washington politics requires.

CNN and ‘language mavens’ on POTUS being professorial:

He singled out this sentence from Obama as unfortunate: “That is why just after the rig sank, I assembled a team of our nation’s best scientists and engineers to tackle this challenge — a team led by Dr. Steven Chu, a Nobel Prize-winning physicist and our nation’s secretary of energy.”

“A little less professorial, less academic and more ordinary,” Payack recommended. “That’s the type of phraseology that makes you [appear] aloof and out of touch.”

NPR on POTUS being professorial (and having “rhetorical tics”)

Since Obama’s election, a parade of critics has opined that as president he seems to be more of a professor and less of a poet when addressing the public. And they say that though he may be trying to explain the complicated issues of the day in a simple manner, the way he talks to his constituents may be creating more problems than solutions. After all, desperate times call for inspirational oratory.

Myiq2xu on Law Professor Ann Althouse’s take on POTUS and his incoherency and the professorial meme:

Only a bad law professor operates that way. A good law professor speaks as clearly as possible and draws attention to anything the courts have glossed over or left ambiguous. We lawprofs try to extract the doctrinal rules and point up any place where courts have left the rule mushy. Then we apply those rules to particular factual settings. We hypothesize the most difficult applications of law to fact and help the students work through these hard problems. Obama’s lolling at high levels of abstract principle and avoiding the specifics of applying principle to real problems is not the way of the law professor.

See Elizabeth. See Elizabeth speak. See Elizabeth coherently fry Geithner’s ass in a very large pan on TV.

So which is it? Is being professorial being “aloof” or “fiery”? Is it a genitalia thing or a melatonin thing or just a bunch of confused journalists thing?

NOW’s Terry O’Neil thinks the old boys club at the White House are pushing Warren to the sidelines because she won’t fit in with the Washington Crowd. So, how come Obama was touted for his ‘professorial’ outsider status and Warren gets a dead fish?

A spokesman for Treasury said that selecting Warren isn’t up to Geithner. “It’s the White House’s decision,” the spokesman said.

Still, O’Neill believes that Geithner’s lack of endorsement for Warren is indicative of the nature of Washington politics and President Obama’s administration of late.

“Treasury is a notoriously sexist and misogynist industry and the good old boys don’t like her,” the NOW president said. “It’s the testosterone-fueled attitude that drove our economy off a cliff, and yet the president has advisers that are from that industry.”

It’s a combination of [Warren’s] attitude and her anatomy,” she added.

For Geithner, this isn’t his first estrogen-charged run-in. The Treasury Secretary locked horns several times with Federal Deposit Insurance Co. Chair Sheila Bair during the height of the credit crisis.

Well, that’s understandable. But still, I have to ask, where do these two completely different pictures of what it means to be professorial come from?

Endangered Species: The American Middle Class

I continue to follow and bring you information on the economics front that is depressing and for that I apologize. I wish I could be the bearer of really good news for a change but circumstances are what they are. I’m going to cite two more articles that have done extensive research into statistics that show that more and more middle class Americans are losing their socioeconomic status. I find this an appalling development because the strength of a democracy and a market economy lie in its middle class. We’re quite dependent–as an economy–on the buying power of households, further erosion of middle incomes can only eradicate any hope we have of steady growth. Then, there’s the social impact of accessibility to schools and other means of upward mobility. Limitations are by definition limiting. If we place limitations on the majority of American people, we limit our country.

The international version of Der Spiegel has an article that explains this trend in the U.S. First, Americans aren’t stupid. We know we’re losing ground.

According to a recent opinion poll, 70 percent of Americans believe that the recession is still in full swing. And this time it isn’t just the poor who are especially hard-hit, as they usually are during recessions.

This time the recession is also affecting well-educated people who had been earning a good living until now. These people, who see themselves as solidly middle-class, now feel more threatened than ever before in the country’s history. Four out of 10 Americans who consider themselves part of this class believe that they will be unable to maintain their social status.

No amount of cheerful discussion about the summer of recovery is going to change the outlook around us. You can see it every where. Things are not improving. The root cause of this is still the poor jobs market and the inability of the federal government to really grasp and do something significant about the problem. I still can’t believe that unemployment rates are where they are and that there is a threat of deflation and some policy folks are talking about the deficit. The deficit will close if people pay taxes and don’t require unemployment benefits and food stamps. Putting people back to work solves much of this issue. Why do so many government leaders refuse to see this? These rates of unemployment cannot be taken as the new normal.

In fact, the United States, in the wake of a real estate, financial economic and now debt crisis, which it still hasn’t overcome, is threatened by a social Ice Age more severe than anything the country has seen since the Great Depression.

The United States is experiencing the problem of long-term unemployment for the first time since World War II. The number of the long-term unemployed is already three times as high as it was during any crisis in the past, and it is still rising.

More than a year after the official end of the recession, the overall unemployment rate remains consistently above 9.5 percent. But this is just the official figure. When adjusted to include the people who have already given up looking for work or are barely surviving on the few hundred dollars they earn with a part-time job and are using up their savings, the real unemployment figure jumps to more than 17 percent.

In its current annual report, the US Department of Agriculture notes that “food insecurity” is on the rise, and that 50 million Americans couldn’t afford to buy enough food to stay healthy at some point last year. One in eight American adults and one in four children now survive on government food stamps. These are unbelievable numbers for the world’s richest nation.

The Dubya years should’ve put down the notion of any return to trickle down economics. Tax exemptions and reductions for the very rich do not create a vibrant economy. It creates asset bubbles. Why do we not see bold leadership on economic issues? Certainly, that’s been the main issue for the last two years in every election. Why do they not get it?

A recent NY Post op-ed ‘So long, middle class’ beats the wealthy’s drum against higher taxes –which is an argument that completely lacks merit–but gets the basic statistics correct.

Here are some of those statistics.

According to a 2009 poll, 61% of Americans “always or usually” live paycheck to paycheck, which was up from 49% in 2008 and 43% in 2007.

36% of Americans say that they don’t contribute anything to retirement saving

Only the top 5% of households have earned enough additional income to match the rise in housing costs since 1975

The bottom 40% of income earners now collectively own less than 1% of the nation’s wealth.

About 21% of all children are living below the poverty line in 2010 — the highest rate in 20 years.

According to Professor Emmanuel Saez of the University of California at Berkeley, the top 10% percent of Americans now take in approximately 50% of the income.

More than 40% of Americans who are employed now work in often low-paying service jobs.

Despite the financial crisis, the number of millionaires in the US rose a whopping 16% to 7.8 million in 2009.

For the first time in US history, more than 40 million Americans are on food stamps, and the US Department of Agriculture projects that number will go up to 43 million Americans in 2011

We’re still a very rich nation. Where the hell are our priorities? These are the kinds of statistics that lead a country into third world status and make them revolution prone. Right now, the anger is aimed at folks still coming into the U.S. looking for opportunities. The xenophobia recently has been way over the top. This anger needs to be channeled into something more productive; like working on policies to change the direction of these trends. We can’t continue to build massive jails instead of revitalized school houses and send young working class men and women into the military and to the Middle East as their only chance at training and upward mobility. This is not the behavior of a developed nation.

We need real change. It’s time to call out the Madison Avenue version of change for what it is. It’s more of the same. The bailout plans, the health care reform, the stimulus package did more for multinational entities than it has for our own neighbors. We need to start focusing and venting our frustration towards the politicians that put their lobbyist-in-training status above the interests of the nation.

Is religion naturally intolerant?

The Park51 project has brought many ugly things to the surface. One of the astounding rumors that we’ve continually had to put down here at TC are the ones about President Obama and his Muslim and Kenyan roots that some extremists have been using to whip up xenophobia. Just because we don’t consider him to be an effective president doesn’t mean we support right wing memes about him that play into xenophobia and religious and ethnic bigotry. Playing into those fears is the Rev. Franklin Graham. While some religious leaders work towards interfaith understanding, others fan the flame of we’re right and every one else is apostate.

This leads me to continue my assumption that most forms of religion are–by human design–intolerant.

Here’s Graham fanning the falsehood about Obama’s faith.

The Rev. Franklin Graham on Friday said that President Barack Obama was “born a Muslim” because the religion’s “seed” is passed from the father.

Graham made the remark during an interview with CNN’s John King set to air Friday night after being asked about a new Pew poll showing that 31 percent of Republicans believe the president — a Christian — is Muslim.

Asked by King if he, too, has doubts about the president’s faith, Graham said that Obama’s “problem is he was born a Muslim.”

“The seed is passed through the father,” Graham said. “He was born a Muslim. His father was a Muslim; the seed of Muslim is passed through the father like the seed of Judaism is passed through the mother. He was born a Muslim; his father gave him an Islamic name.”

Graham, the son of evangelist Billy Graham, acknowledged that Obama has said he is a Christian.

Obama says he’s a Christian, why not just leave it at that? This stupidity has even led to a circus of comments that suggest the president needs to go to church more often to prove it. This is ridiculous. Public displays of religion don’t actually demonstrate how seriously one takes their faith. Turning religion into a political strategy is something that has always been anathema to me. Not only because the Jesus created in the new testament preaches against it (Examples from Matthew: “And when thou prayest, thou shalt not be as the hypocrites [are]: for they love to pray standing in the synagogues and in the corners of the streets, that they may be seen of men. Verily I say unto you, They have their reward. But thou, when thou prayest, enter into thy closet, and when thou hast shut thy door, pray to thy Father which is in secret; and thy Father which seeth in secret shall reward thee openly.” “But when ye pray, use not vain repetitions, as the heathen [do]: for they think that they shall be heard for their much speaking”. ), but because it goes against the secular nature of our government as set up in The Constitution

Here are the voices of September Eleventh Families for Peaceful Tomorrows who support Religious Freedom.

September 11th Families for Peaceful Tomorrows applauds President Barack Obama for his statement in support of the building of a mosque near Ground Zero. On that day, members of our organization paid the ultimate price. We lost loved ones in the tragic attacks, attacks perpetrated by criminals. Our losses will never be redeemed; our wounds will never fully heal. On 9/11/2001 while many of us buried our loved ones we also took heart in our nation’s principles and our rule of law. Ours is a nation that fights for religious freedom. Many of us who call ourselves Americans do so because we came to escape religious persecution in other lands.

We applaud President Obama for his leadership on this issue. Simply put:
we lost our family members on 9/11/2001, but will not lose our nation, too. America, the concept and the people and the land thrive when we chose to trust in our principles rather than cave to our basest fears.

What better place for healing, reconciliation and understanding than Ground Zero? We honor our family members by practicing American principles and moving forward from Ground Zero to a future of peaceful coexist

I am no fan of institutionalized religion as you well know. I am, however, a huge fan of the constitutional right to practice one’s religion and to be religious without public harassment. I don’t care if it’s the president or the guy on the corner. All this right wing religious fanaticism on what is and what isn’t acceptable is just pure xenophobia and based on religious intolerance. It’s not pretty and it’s not an American Value. Here’s a good article in Time on the number of U.S. religious leaders that support the Park51 project.

Is this the man you want to listen to?

or how about this?

There are many things that form a reasoned basis to for criticism of President Obama. There are many things that form a reasoned basis to criticize policies and human rights violations by countries like Saudi Arabia and revolutionary terrorist groups like the Taliban. Why ignite the fires of religious and ethnic bigotry? The President is not a Muslim and he was born in Hawaii. Franklin Graham and his seed story should be relegated to a nonpublic place.

Get on with discussing some real issues. Constitutional rights are not negotiable.

Hello? It’s not really killed yet and there’s still Oil in the Gulf! (Oh, and U.S. troops in the other Gulf)

The real headlines are still out there. Why is no one covering them? Just look at the lack of attention paid to the Gulf Oil Gusher. It’s still not killed yet but you wouldn’t know that reading the newspapers or watching the news any where but down here. They’re talking September now.

It now looks like BP’s blown well in the Gulf of Mexico won’t be completely killed until September. BP engineers are conducting a series of tests in preparation for a procedure called a bottom kill to ensure the well can withstand the pressure from the operation.

No oil has leaked from the well since it was capped with a static kill procedure last month. But the bottom kill is needed to make sure the well stays sealed. Before the well was capped on July 15, 4.9 barrels of oil spilled into the Gulf. The worst oil spill in US history was set off by an explosion aboard the Deepwater Horizon oil rig on April 20.

The folks at The Oil Drum find this curiouser and curiouser.

from Rock man:

“Thad Allen, appearing on CNN, said under the latest timeline agreed with BP, the operation to kill the well by injecting mud and cement into the bottom through a relief well should be conducted the week after the U.S. Labor Day holiday, which is on Monday, September 6”

What I find curious is that once they replace the BOP they still currently plan to do the bottom kill/cmt with RW1. With the new BOP in place it’s a rather standard procedure to go in hole with drill pipe. Not only can they tag the top of the top cmt job and confirm exactly where it is they can do a leak off test (LOT) and confirm exactly what its limit is. They can also pull out the DP and run a variety of logs to tell where the cmt is in the annulus. They can also perforate a shallow section of the production csg and pump cmt into the annulus and permanently seal it. Likewise they can perf the csg at the planned RW intersect and pump cmt into the annulus there. After that it would be a simple matter to set the MMS required cmt plugs in the csg and complete the P&A process.

Once the BOP has been replaced making the RW intersect won’t be exceptionally dangerous. OTOH, it isn’t neccesary. Finishing the kill and P&A with drill pipe would be the safest approach IMHO. I wonder if that isn’t what they’re thinking about but don’t want to put it on the table until the replace the BOP and run logs.

response by MoonofA:

I think you are correct Rockman, but the BP and the politicians think, rightly, that the public has heard so much about “Relief Well” that it now expects that relief well process to be finished to its end. Not doing so would again raise lots of conspiracy stories.

Even if they totally kill the well form above, which they may well do, the “Relief Well” success shown and commented on CNNFOXMSNBC is what everybody has invested in and wants to see.

We’re also getting conflicting reports about how much oil is actually still out there. The University of Georgia just released a study that conflicts with what NOAA and the government are telling us.

Most of the oil spilled into the Gulf of Mexico earlier this year is still there and poses a sizable risk to the marine ecosystem, according to a report issued yesterday by a group of independent marine scientists.

Of the 4.1 million barrels of oil spilled during the Deepwater Horizon disaster, the researchers estimate between 70 and 79 percent remains in the water. The new calculations are markedly different from a government report issued on Aug. 4 which argued that just 26 percent of the oil was “residual” in the water.

Media reports quickly picked up on this figure, and made it sound as though the vast majority of oil had simply disappeared. Jane Lubchenco, the head of the National Oceanic and Atmospheric Administration, appeared to be hedging her bets when she said, “At least 50 percent of the oil that was released is now completely gone from the system, and most of the remainder is degrading rapidly or is being removed from the beaches.”

The new report, authored by a mix of oceanographers at the University of Georgia and the Skidaway Institute of Oceanography, called such characterizations “largely inaccurate and misleading.”

Another story that is obviously largely inaccurate and misleading is that of the “last combat troops being pulled from Iraq”. At least MSNBC was a bit more clear: ‘Last full U.S. combat brigade leaves Iraq; Final fighting force rolls into Kuwait; 50,000 Americans to remain’. This seems a bit of a ‘mission accomplished banner’ moment to me. FIFTY THOUSAND remain? Notice how it also says “full” U.S. combat brigade. Isn’t ‘full’ a bit of a triangulation? Notice, also, that all they really did was cross the border to Kuwait. Is that really an end?

So, how about this from “Civilians to Take U.S. Lead as Military Leaves Iraq”? Or, more aptly, when is a withdrawal not really a withdrawal?

The array of tasks for which American troops are likely to be needed, military experts and some Iraqi officials say, include training Iraqi forces to operate and logistically support new M-1 tanks, artillery and F-16s they intend to acquire from the Americans; protecting Iraq’s airspace until the country can rebuild its air force; and perhaps assisting Iraq’s special operations units in carrying out counterterrorism operations.

Such an arrangement would need to be negotiated with Iraqi officials, who insisted on the 2011 deadline in the agreement with the Bush administration for removing American forces. With the Obama administration in campaign mode for the coming midterm elections and Iraqi politicians yet to form a government, the question of what future military presence might be needed has been all but banished from public discussion.

“The administration does not want to touch this question right now,” said one administration official involved in Iraq issues, adding that military officers had suggested that 5,000 to 10,000 troops might be needed. “It runs counter to their political argument that we are getting out of these messy places,” the official, speaking only on condition of anonymity, added. “And it would be quite counterproductive to talk this way in front of the Iraqis. If the Iraqis want us, they should be the demandeur.”

Oh, and we’re in the “recovery summer”. Did you catch this headline today? “Weekly Jobless Claims Post Surprise Jump, Hit 500,000”.