There is a chilling report out from the Federal Reserve that the median net worth of families plunged by 39 percent in just three years, from $126,400 in 2007 to $77,300 in 2010. That returns American families to the wealth level of 1992.
The biggest hit were the middle class families. The wealthiest families actually saw a slight rise. The median for credit card debt did not materially change, however. Much of this decline is due to the decline in home values which remains the biggest investment for most families. Forty-seven percent of citizens do not pay taxes income taxes and 87 percent of those earn less than $20,000 a year.
These figures are remarkable since they parallel the Great Depression but we have not seen the same degree of displacement or social or political upheaval as a result. There are different theories from better public welfare programs to a new political dynamic with many lower and middle class families supporting either the Tea Party or GOP. It may also be that many families have experienced the decline but continue to hold on to their homes so that the diminishing in wealth does not manifest as sharply in their lives. Whatever the cause, the reduction in wealth has not produced a comparative political backlash that I can see.
Source: Washington Post
Indigo Jones 1, June 12, 2012 at 4:11 pm
@Dredd
I don’t know where you took that Madison quote from …
===========================================
You also know very little about anything else concerning the birth of the greatest hope for freedom the world has seen in modern times.
Let me offer you a clue.
It was not to establish the ideology, opulence, or power of the King.
Ruminate from that point of reference and you may get yourself to the consciousness that provided a chance, a hope, a better way for nations to conduct their affairs.
@Dredd
I don’t know where you took that Madison quote from, but some context would be helpful.
I could match you a John Jay quote (from the Federalist 4):
” nations in general will make war whenever they have a prospect
of getting anything by it.”
In short, it often comes down to money.
But make no mistake about what was at stake for the Framers: they organized a huge payoff for themselves.
Two conspicuous clauses in the Constitution, missing from the Articles of Confederation, were the linchpin on which Hamilton’s scheme rested: the ability of the new federal government to levy taxes, and the ability of the new federal government to enforce contracts MADE UNDER THE PREVIOUS GOVERNMENT.
Here’s how it worked:
The Revolutionary war was funded about 1/5 by foreign debt, and 4/5 by domestic debt. This domestic debt largely took two forms: stock bought in the Revolutionary government (most purchased by poor farmers) and promissory notes paid to soldiers (which could be redeemed in land, typically in the Western Terrotories).
After the war, nobody knew if the new government would stand and the value of the dollar plummeted. The new government was not strong enough to fight off the indians, and so the value of the Western lands remained low. Many farmers and soldiers, to recoup some of their losses, sold their stock and land to SPECULATORS, who then agitated for a new Constitution.
After the new Constitution was drafted by the Capitalists, Hamilton was appointed to the Treasury. He ever so gently “pushed through Congress” a number of measures: creating a national bank, and paying off the national debt (now held by the speculators who drafted the new Constitution — conflict of interest?).
Hamilton ensured that the national debt would be paid off by issuing gold and silver coin in exchange for paper debt — AT THE FACE VALUE OF THE STOCK, not the depreciated value. To fund this, Hamilton proposed — and Congress instigated — the Whiskey Tax, which charged poor farmers (who had sold their stock to speculators at a loss, in most cases earning only 1/10 or 1/20 face value) for the whiskey they themselves produced and drank.
To reiterate: speculators who did not fight in the Revolutionary war buy up depreciated war bonds from soldiers and farmers, overthrow the government, pay themselves off in gold coin, and then fund the payoff by taxing the poor. The clause in the Constitution forbidding paper money insured that nobody else could try their scheme again.
The value of the payoff was about $40 million, or about 1/10 the value OF ALL THE TAXABLE LAND IN THE UNION AT THE TIME. The years surrounding the writing of the Constitution was a veritable orgy of speculation and insider trading.
These were wealthy MEN going into it, and they made provision to keep things that way.
Dezza 1, June 12, 2012 at 3:25 pm
First off, since 2010 this is Boehner’s Economy. His Congress holds the purse strings …
=========================================
True in the sense that the Constitution gives original budget drafting power to the House.
However, the Constitution also mandates a bicameral legislative endeavor. Both the Senate and the House must accept legislation before it can go to the President, otherwise that legislation dies short of a chance.
Should any House bill survive the Senate, the president can still veto any legislation, including any budget legislation that makes it to her or his desk.
Thus, all congressional legislation is bicameral, plus there is an additional check on legislation, the Presidential veto.
In the end, the President is traditionally cursed or blessed for legislation of an economic nature, because the is the final link in the chain that pulls us out of the mud, or imprisons us in folly, by making that legislation law.
First off, since 2010 this is Boehner’s Economy. His Congress holds the purse strings and Republican’s unwillingness to take ANY significant action to improve the Recession’s affect on the middle class, unemployment and the lingering problem of homeowners underwater means this mess is their baby. The President’s initiatives have not been implemented. Secondly and perhaps more important is one word…austerity.
idealist707 1, June 12, 2012 at 2:39 pm
TO ALL HERE:
Why does not any heavy weight from the long timers here address the explanation that Indigo Jones lays out for us as to why we’ve been screwed from the very framing of the Constitution?
==========================================
Probably because only a frigging stolle would think that the U.S. Constitution was engineered to exalt the King.
idealist707 1, June 12, 2012 at 2:48 pm
Dredd,
Do you understand I am quoting the father and chief writer of the Constitution, James Madison. It was he that said the purpose was……etc. Not I.
So tell him he is talking bullshit. And of course you know better than he does. He, of course, was not addressing an assembly of the poor, but men who had the suffrage to vote and to influence the votes. But you know that of course.
Are we together again, or do you insist that Madison talks BS?
==================================
The attack on Madison by the warmongers has been building for some years.
Because he famously said:
The Greatest Source of Power Toxins). He was the one who wrote the Bill of Rights, a.k.a. the First Ten Amendments to the U.S. Constitution.
His statements made before those were included were a castigation of the constitution, to show them what they had without the Bill of Rights.
Context separates the 1% from the 99%, so be careful my friend, and stay thirsty my friend.
Correct me if I’m wrong but wasn’t 2007– the base year for this report– the peak of the real estate bubble? So the net worth that people have supposedly lost was partly, maybe even mostly, due to asset inflation.
Do people who think they’ve lost the difference in the value of their property since the height of the market at least feel grateful to the people who bid the real estate market up in the first place– the house flippers and the liar loan borrowers?
And as for inflation, the last time I bought coffee I paid $5.49 for a two-pound can, down from seven dollars last year. If your tastes run to twelve-dollar coffee, good for you– but don’t try and make it into a social problem.
Dredd,
Do you understand I am quoting the father and chief writer of the Constitution, James Madison. It was he that said the purpose was……etc. Not I.
So tell him he is talking bullshit. And of course you know better than he does. He, of course, was not addressing an assembly of the poor, but men who had the suffrage to vote and to influence the votes. But you know that of course.
Are we together again, or do you insist that Madison talks BS?
TO ALL HERE:
Why does not any heavy weight from the long timers here address the explanation that Indigo Jones lays out for us as to why we’ve been screwed from the very framing of the Constitution?
Indigo Jones was all the rage after his economics lessons. Why silence now? Are you in fact members of the class that kept power in this nation? Or are you wannabe’s?
Does his interpretation smell too strongly of the C word? Does it require that we make the painful admission that in reality we are playing games in a rigged casino, where even the cards are in cahoots with the casino.
“You were not meant to have a chance at determining anything.”
Well, as I remember from Fed 51 quote, Madison/Hamilton presumed that the majority would not realize its own unity of class and purpose, and would not exercise its majority electorally.
Well, we can vote now, even women. Let’s start a peoples party. Any who dare?
So realizing what we are up against is part of the problem. The first step to unification and real change.
Accepting his hypothesis, and answering my challenge would be nice to see evidence of here.
Where is our propaganda 101 leader? Where are the others?
Why is Shano crying like a prophet in the wilderness?
And who gave me the job of agitator?
idealist707 1, June 12, 2012 at 12:10 pm
Indigo Jones,
…
“The purpose of the Constitution is to protect the opulent from the rest.”
====================================
That is horse shit.
The purpose of the U.S. Constitution was to water down, yes to weaken power, which was seen as an intoxicant, a toxic unseen influence on those who were exposed to power.
The Constitution was a effort to spread power, rather than to concentrate it.
The forfathers such as Madison knew well that power is a shape shifter, that it hides itself so well that governmental structures must be flexible, distributed, close to the people, and always on guard.
When power hides itself in money, in wealth, then the exercise becomes one of resisting a plutocracy and its child, plutonomy.
Storms threatening the fabric of civilization come from many directions, some new, some old.
But those storms always develop in the mind, and more specifically they develop by the work of the amydala, a servant of civilization’s darkness and degeneration.
“People like to throw around the 47% figure but very few bother to actually look at the detail.”
Glenn,
Thank you for that mostly overlooked point. The payroll tax paid ostensibly for Social Security does not go into a “lockbox” as was the popular saying in the 2000 campaign, it goes into the governments general fund. I began noticing sometime in the early 90’s that more money was taken out of my paycheck for Social Security, than for income taxes. That 47% of the populace doesn’t pay income tax is supportive of the specious logic of the anti-tax types. Those not in the 1% pay a significantly greater share of their income than do the elite. Truth is the elite 1% benefit more from government largesse than do the 99%.
“yep, socialism does that every time.”
Bron,
If I didn’t on some level like the persona you portray, I’d tear you a new asshole for your continued stupid use of the “socialism” meme. It has been proven on this blog time and again that you have no concept of what socialism is, yet despite that you persist in playing that card at every opportunity. Is it really the defense mechanism of denial, intentional dishonesty in support of your cause, or merely that you are typical of the authoritarian mindset? I have no idea, but in any event it does you no credit to maintain this false position.
Bron, about that “injection of capitalism”, Multinational corporations are sitting on 2 TRILLON dollars of cash. Not investing in jobs, not investing in R&D. This has never happened before in the history of the US.
Most of this money is in dark pools of unregulated derivatives and other financial assets that create no real wealth, much of it pure gambling and speculation- as in the commodities markets- driving up the costs of oil, food, pork bellies, etc. for all the rest of us.
Tell me how you plan to change these capitalists endeavors, to get them to inject this money into the real economy instead of gambling and speculation, and then you may have a small point.
Why does Bron always stand himself and everything else on its head. He always ends up pissing in his mouth.
Dedicated to Blouise, More vulgar, but ……useful?
@idealist
The Framers knew exactly what they were doing. Madison and Adams were under the impression that there were bound to be inherent class distinctions in society, but that the aristocracy could be forced to serve the public good. Jefferson was part of a camp primarily concerned with agrarian reform; the agrarians wanted paper money and fought the Revolutionary war to create a classless society (not to enrich a handful of bankers).
The Madisonian camp supposed that (Federalist 10):
“The latent causes of faction are thus sown in the nature of man;
and we see them everywhere brought into different degrees of
activity, according to the different circumstances of civil society.
A zeal for different opinions concerning religion, concerning
government, and many other points, as well of speculation as of
practice; an attachment to different leaders ambitiously contending
for pre-eminence and power; or to persons of other descriptions
whose fortunes have been interesting to the human passions, have, in
turn, divided mankind into parties, inflamed them with mutual
animosity, and rendered them much more disposed to vex and oppress
each other than to co-operate for their common good…
“But the most common and durable source of factions has been the various and unequal distribution of property. Those who hold and those who are without property have ever formed distinct interests in society.
Those who are creditors, and those who are debtors, fall under a
like discrimination. A landed interest, a manufacturing interest, a
mercantile interest, a moneyed interest, with many lesser interests,
grow up of necessity in civilized nations, and divide them into
different classes, actuated by different sentiments and views. The
regulation of these various and interfering interests forms the
principal task of modern legislation, and involves the spirit of
party and faction in the necessary and ordinary operations of the
government.”
General Knox described the threat posed by Jeffersonian Democracy like this, reacting to the Shays Rebellion (which was levied by the debtor class aimed at chipping away at privilege):
“The people who are the insurgents have never paid any, or but very little taxes — But they see the weakness of government; they feel at once their own poverty, compared with the opulent, and their own force, and they are determined to make use of the latter, in order to remedy the former. Their creed is ‘That the property of the United States has been protected from the confiscations of Britain by the joint exercise of all, and therefore ought to be the common property of all.’ … In a word they are determined to annihilate the debts public and private and have agrarian laws, which are easily effected by means of unfunded paper money which shall be a tender in all cases whatever…”
The word “creed” may be used in a very literal sense, traced back to the Bretheren of the Free Spirit and the Ranters in the Middle Ages: Jefferson picked up on the same strain of thought in Western Thought that Marx later picked up.
Hamilton, on the other hand, was outright disdainful of Democracy, and devoted his life to ensuring that it would not emerge on the American continent.
During the Continental Congress, the main “factions” among the wealthy capitalists were between landholders and money interests. Until around 1850, only white, Landowning men could vote. The capitalists were trying to figure out how to specify wealth minimums for participation in government that would allow creditors to participate without actually enfranchising farmers; the task got to be so difficult that landholding minimums were left out of the Constitution and left to States to regulate accordingly.
The main task of the capitalists who wrote the Constitution for their own benefit (as they controlled the legislature and nominated the judiciary, which was supposed to keep the federal government “limited” to serving the interests of the wealthy in the legislature) was to keep the majority fragmented, to prevent them from coming into awareness of their majority status, their awareness that they were the ones who actually produced the wealth of the nation (not the bankers who let their money work for them): in short, they were determined to prevent the poor and the working class from obtaining to a class consciousness that could organize their efforts. They viewed this as key to the long-term continuation of their power.
yep, socialism does that every time.
Middle class is always hurt the most. The rich are always successful in a socialist economy because they are in bed with government.
Not surprising at all, in fact it is expected.
the only way to end this is to get rid of Barrack Obama and all the democrats and republicans who think big deficits and redistribution is the way to go.
No other way. We need an injection of capitalism to save this patient, the quicker the better.
Shano, why don’t they just execute the homeless? Then they won’t have a problem with trying to sweep them all under a rug which apparently doesn’t exist. Just exactly WHERE are they proposing that these people go? I guess it would be easier if they could just pull an Endora and wave their arms, and they would all just neatly disappear, never to plague them again! Seriously! Where do they want these people to go that they won’t be disobeying all their laws to cast them aside?
http://www.ted.com/talks/lang/en/richard_wilkinson.html
http://thesocietypages.org/socimages/2012/01/24/income-inequality-is-bad-for-society/
The mysterious SocProf, who writes The Global Sociology Blog, offered a nice review of Richard Wilkinson and Kate Pickett‘s book, The Spirit Level: Why More Equal Societies Almost Always Do Better. Wilkinson and Pickett offer transnational research showing how, exactly, income inequality is related to bad outcomes on average. In other words, as SocProf puts it, ”…egalitarianism is not a bleeding heart’s wet dream but rather the only rational course of action in terms of public policy.”
Societies with more income inequality have higher infant death rates than other societies
Societies with more income inequality have higher rates of mental illness than other societies
Societies with more income inequality have a higher incidence of drug use than other societies:
Societies with more income inequality have a higher high school drop out rate than other societies
Societies with more income inequality imprison a larger proportion of their population than other societies
Societies with more income inequality have a higher rate of obesity than other societies
Individuals in societies with more income inequality are less likely to be in a different class than their parents compared to other societies
Individuals in unequal societies trust others less than people in other societies
Societies with more income inequality have higher rates of homicide than other societies
Children in societies with more income inequality do less well than children in other societies
The authors sum it up pretty simply: : “The dissatisfaction [measured in this data is] a cost which the rich impose on the rest of society.”
This is a clear warning for those who might want to place low public expenditure and taxation at the top of their priorities. If you fail to avoid high inequality, you will need more prison and more police. You will have to deal with higher rates of mental illness, drug abuse and every other kind of problems. If keeping taxes and benefits down leads to wider income differences, the need to deal with ensuing social ills may force you to raise public expenditure to cope.”
We need to change our ‘jobs’ programs:
How in hell can a state or a city have a “feeding ban”?? I thought the Right likes to claim that we are a Christian country? These bad wealth numbers will not improve as long as we embrace the economic policies first started by the Reagan administration and the so-called austerity plans by the Republicans in Congress and the Senate.