In writing my last post, I realized that there’s another side to this whole societal stratification thing: I inadvertently left out the ones who usually get left out of the conversation.
Oops. My bad. Didn’t mean to do that.
The oversight is especially surprising because this latter group is the one of which I’m a member.
I’m going to blame it on the painkillers and their drowsy effects (grin). The accuracy of this scapegoating might be questionable, but it’s a likely story and besides–it’s fairly convenient. Who knows–it might even be true!
OK, so we talked about the driving forces behind the upper tier of the stratification concept. Now let’s talk about the other side of the coin: the financially strapped, and how we’re getting more strapped. In other words, I discussed before how the rich are getting richer and how some of the shrinkage of the middle class is due to ability of some to move into the upper echelon of the socioeconomic spectrum; now, let’s talk about the rest of the middle class, and why their status is potentially threatened, by unseen forces beyond their control (and often, beyond their awareness)–why are the poor getting poorer?
Some of this, too, stems from the concept of fiduciary responsibility, the legislatively-mandated idea that shareholders of companies are always the first to be considered in the decision-making process of any publicly traded company.
I mentioned before that companies must act in the best interests of these shareholders; what I didn’t mention is that they must do so even if that means making tough decisions that they don’t want to make, even if that means cutting jobs or raising prices. The shareholders are legally required to be protected at all costs, any cost.
This spells two avenues of potential long-term disaster for people just trying to get by: rising prices, which puts pressure on the cost of living, and cutting jobs, often middle class jobs.
Our way of life is more fragile than I dare to think about for too long, lest I give myself a bout of anxiety. And since anxiety sucks, I don’t like to go there. And for the middle class, life seems to be the most fragile of all the classes. The upper class people generally have the resources, whether that’s in the form of financial savings or powerful personal/professional connections, to help them out of a jam, should they find themselves in one.
The poorer people have at least some assistance, different kinds of programs and whatnot available to them.
The middle class are SOL. They make too much money to qualify for public assistance, but not enough to insulate themselves from catastrophe. And if you’re also self-employed, you’re really on your own. There’s no unemployment or other assistance available for you. You get to pay for everyone else, including the fat cats, but you generally don’t have the assets to shield nor the resources required to hire the top-tier accountants to find you all the loopholes the fat cats enjoy.
If it’s starting to sound like being caught in a vice grip, or being claustrophobically sandwiched, that’s because it is.
But I digress slightly. You’re all probably used to that by now, though (wink).
So anyway, about that fragile middle class…
The middle class occupy job positions that are themselves rather fragile. They’re not among the indispensable elite at the top of the ladder, nor are they the cheap, underpaid “grunts” at the bottom (I should know; I’ve been a grunt for a staggering percentage of my working life).
The middle class usually occupies middle management, which are usually among the first positions to find themselves on the chopping block if the fit hits the shan and tough choices have to be made. And in the world of fiduciary responsibility, tough choices are a way of life, a law of nature, an accepted part of reality. They come with the territory; they’re part of the landscape.
Which means that for the middle class, employment–indeed one’s livelihood and very identity–are far from solid and secure.
In a downturn or a merger, or even after a dire shareholders meeting, the middle class finds itself disproportionately in the Job Cut Crosshairs.
The middle class is also faced with declining product quality and rising prices. Sometimes it’s either-or, and sometimes it’s a little of both. As various old dependable staple stores either yuppify or start cutting corners, the middle class feels the pinch. The upper-middle and upper classes can absorb the higher costs–the costs involved in either continuing to buy what they did before, for its jacked-up new price, or in switching to higher-priced products should their former old standbys degrade too far in quality for their tolerance level. Either way, the upper strata are able to make the jump, but the lower-middle class is not.
And then there’s a darker, more insidious force at work: erosion of the value of the dollar.
This gets sticky, for reasons I’ll explain later.
But I argue that this erosion is actually the greatest threat to the middle class.
This situation, like most, is multifactorial. And everyone has had a hand in creating this situation. Everyone. (That’s why the discussion is eventually going to get sticky.)
One of the biggest and most devastating (and least necessary!) contributors to this problem is the insane levels of spending on the military-industrial complex. The major players here are an imperialist government, coupled with a select few elite defense contractors and think tanks. These players Make Stuff and Think Stuff Up. (Some of them also probably Make Stuff Up. “Weapons of mass destruction” circa 2005, anyone?)
You’ve probably heard of Halliburton and Lockheed Martin in this context. You’ve probably also heard of Boeing and Raytheon, and perhaps The Rand Corporation, but maybe or maybe not in this context. Regardless, they’re all players.
These contractors are paid exorbitant amounts of money to aid us in perpetuating the various conflicts overseas. And have you noticed that since World War II, when we established ourselves as an unquestionable world military superpower, there has been no shortage of these “conflicts”? And that they seem to drag on and on for longer and longer periods of time, despite exponential and one-sided technological advances? And that the reasons for getting involved are getting flimsier and more desperate-sounding?
Yeah, that’s not your imagination. After WWII, it was Korea. Then Vietnam. Then, the Iran-Contra thing. Then the Cold War with Russia. Right after the Cold War ended, we meddled in Iraq and Iran. Then Afghanistan (we’re now into 2001-2003, when all of that started). Despite the fact that Obama lambasted Bush for his involvement in the war (a criticism which I agree with), he did nothing to pull us out as promised; instead, the efforts were only escalated. The names of other countries pop up every so often–North Korea, Libya, and so on.
And if you notice, all of these conflicts arise on the heels of each other. We’ve been perpetually at (undeclared) war (“action”) since the 1940s, when we figured out that it was profitable and potentially economy-bolstering to go to war. So we did; we went to war…and stayed there. Through Johnson (LBJ), through Carter, through Reagan, through both Bushes, through Clinton, and through Obama. And I don’t see Trump changing anything anytime soon, as far as I know.
Some two-party system. Some voter choice. But I think I’m digressing again…
Besides lives lost, bad karma accrued, and the holding hostage of the psyches of the American people, keeping us locked up in a state of uncertainty (and insidious, low-level anxiety), there’s another downside to these never-ending conflicts: these defense contractors expect to get paid, and somebody’s got to write a check.
Don’t count on the richest people to cut that check; they’ve hired top-gun CPAs who know every existing loophole in the tax code backwards and forwards. Those loopholes were written precisely for those people, too; it’s the only way they let those bills pass and enter the Land of Law (or Law of the Land–heh).
Q. How else do you get a bunch of rich lawmakers to approve tax bills?
A. They quietly slipped in a bunch of weird, random get-out-of-jail-free cards for themselves, of course.
Meanwhile, the middle class gets no such jailbreak card; and there’s still a big-ass defense contractor’s bill to pay.
I’m a former Economics major. And in class, we studied three fundamental ways in which a government could raise funds.
- Raise taxes
- Raise interest rates
- Print more money
Raising taxes is generally the least popular, for obvious reasons. It’s definitely not exactly a surefire election/reelection campaign strategy. Pesky questions, such as who or what should get taxed and why, spark heated debates and lots of pointing fingers.
Raising interest rates is not the least popular, but it’s not great. It is, however, a surefire way to stymie an economy pretty quickly. People with debt, whether business owners with bank loans, citizens with mortgages or auto loans, or consumers with credit card balances would all be affected. Politicians might say to hell with citizens and consumers, but they may have business bank loans themselves or have buddies who do. And interest rates is interest rates; differentiating between different types and treating them differently, giving some a pass but penalizing others, would be cumbersome and might get sticky in terms of public relations. There might suddenly be a lot of tough questions to answer and perhaps a lot to answer for. So, can’t have that.
Printing more money remains the most popular, for many reasons. Mostly because we can (appear to) have our cake and eat it, too. Ever wonder how we’re able to fund everything we want without having to make serious cuts in other areas or jack taxes into the stratosphere? Yep, this is it.
We can leave taxes and interest rates alone, lull the people into thinking everything is grand, and still keep the defense contractors afloat (and bloated), just by visiting the local mint and printing more money! If we don’t have it on hand and we don’t want to piss people off by demanding more of theirs, well we can make it appear out of thin air! It’s freaking magic, I tell ya.
Bonus: it’s a lot less noticeable, and therefore, a lot less transparent, which means they can print shit-tons of extra money for all the black ops and not-so-low-bid projects and price quotes that they’d rather keep to themselves. They can pad the accounts receivable columns of their pet companies (Cheney and his relationship with Halliburton come to mind), and the American public is none the wiser.
With all these bennies, what’s not to love?
Heh. There’s a catch. (Isn’t there always? But you knew that.)
The catch is, the money that gets printed does indeed go first to the pet entities, but most of it doesn’t stay there; it eventually gets dumped into the general circulation, as the people involved in those companies (all the way up and down the ladder), who are paid fairly well, take those paychecks and spend them in the general marketplace.
Each dollar that gets printed ends up contributing to the existing supply of dollars, and what happens when something becomes more common? It becomes less valuable. If something is easier to come by, then each individual one of those things is going to carry less value.
And therein lies a huge problem: over time, this silently erodes the value of each dollar, to the point where it takes a lot more dollars to buy stuff, putting just (or well) out of reach what might have been easily attainable before.
That’s inflation, and although it’s a long-term fact of life, it’s been steadily creeping up over the past couple of decades.
Inflation first shows itself to the public in the form of higher prices for goods and services. Staples like rent and groceries have seen some incredible increases during the past 15 years, as has tuition and real estate.
Sometimes this occurs in a way that’s even more sneaky: technology changes. Let’s take a minor, easy example: movies. A movie on VHS tape in the 1990s and especially the 2000 had bottomed out; I remember paying $1-5 for a used one, never more than $10 for a new one. Clearance bins often held tapes priced at $5-10.
When DVDs first came out, however, their stickers read $20-30. Ridiculous! I’m being indirectly pressured to replace my movie collection for $20-30 a pop? I think not.
But it didn’t stop there. The catalog archive at the video rental store, which, around the same time, boasted 99-cent, 5-day rentals (and only $2-3 for 1-to-2-day rentals for new releases), suddenly started skyrocketing in price, finally reaching upwards of $6-7 for each cheesy selection in a cable package’s On Demand menu.
Essentially, the advent of DVDs got people used to paying $30 for a movie, or $6-7 to borrow one. With a single format change, the movie industry was essentially able to jack prices by a factor of 6. And once DVDs started to come down in price, Blu Ray was introduced. Coincidence? (Hint: no.)
Ugh. And that’s just something super-simple and petty, like movies! Now consider the significance of the ramifications of this type on other sectors; for example, we’re now accustomed to paying $500-750 for a cell phone, an increase by a factor of 10-15 over other cell phones that averaged about $50. We’re now familiar with houses that used to list for $150,000 now asking $300k+. And so on. It’s getting out of hand.
Don’t get me started on medical/healthcare or health insurance! 😉
Inflation continues when, naturally, we need a raise to offset the encroaching expenses. It gets worse yet when minimum wage is increased.
The reason that we’re all to blame, more or less, is because we’ve all had a hand in contributing to this situation.
Every time I’ve raised my prices, I’ve contributed.
Every time I have gone ahead and agreed to pay those prices for cell phones, I’ve contributed.
Every time one votes for politicians that campaign on a promise to raise minimum wage, we’ve contributed.
Every time my partner and I renew our apartment lease, and the price has gone up another 10% like it has for the past few years straight, we’re contributing.
The only vote no entity can tamper with or manipulate these days is the vote one makes with their wallet. It doesn’t lie, and it doesn’t hide details or make excuses. It can’t be fudged or twisted or doctored or reallocated. In the Wallet Vote, there is no question; there are no hanging chads or demands for recounts. Once the numbers are in, they are what they are. The entity desiring your money either fared well, or it didn’t.
Sticky Discussion Time: raising minimum wage, as universally agreeable as it sounds, is not the answer. Even if it were sustainable to keep doing so–which it isn’t–it would only provide a short-term band-aid that solves nothing and actually fuels the problem further, driving the economy further into oblivion.
My own propositions are far less politically correct, but rest assured, I’m an unconventional moderate/centrist/libertarian-flavored independent who seeks balance, logic, realism, long-term results, and the highest quality of life for the greatest number–and the most deserving–of people. I’ll write a separate post on that sometime soon, in the (distant? Not-too-distant?) future.
For now I’ll give this topic a rest for a while. I’ve hammered it lately, and I apologize for the lack of variety on here, but I didn’t want to leave the subject unfinished.
And besides–I’m on painkillers and I’ve been bored and restless lately, and this is one of the few activities I can do that provide an excellent distraction from the pain. 😉