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July 26, 2017


As my followers know, I have written hundreds of posts in re wage inequality, naming it as the number one issue in domestic policymaking. The reason I keep writing about it is because nothing is being done to end or even reduce the effects of this cancer on the American economy and the hapless Americans who are trapped in it. Result? An underperforming economy and an over-performing Dow where rentiers and financiers (thanks to compliant politicians) walk away with a lopsided piece of the economy’s fruits while corporate workers are left with the crumbs that fall from the table.

The Wall Street Journal and other corporate-captive business press highlight increasing employment as the answer to our demand woes in the marketplace. I have written that such is pretense, false, propaganda and a cover for a continuation of low-wage policy to the benefit of the rentiers and financiers of free market fundamentalism (Wall Street banks and paper shufflers). As we will see later in this essay, I have support in this observation among those who are adversely affected by such policies.

Corporate workers such as John and Jane Doe are left to their own devices with starvation wages in bringing food to the table, education to their children, healthcare to their families etc. Many work second jobs or try their hands as independent contractors in order to pay their mortgages, clothe their children and try to either remain or move into the middle class. Millions are failing and have descended into poverty, a situation the paper shufflers attribute to lack of skills to match the jobs available in our new economy, sloth, and anything else their propagandists can dream up to justify the continuing and lopsided take their clients are enjoying from the economy’s income into “shareholder value” and outrageous pay and bonuses to corporate executives, including even the theft of worker productivity.

Ordinary Americans have had to come up with a new economic consciousness to deal with such realities, and they have. Stan Greenberg in his 2015 book, American Ascendant, an otherwise positive outlook on America’s future, writes that Americans ascribe their economic plight first and foremost to the rather simple fact the “Jobs in the new economy don’t pay enough to live on. All of the economists’ data and accounts of long-term trends boil down to this simple reality. People are on the edge financially as they cope with stagnant wages, pay cuts, and the lack of middle-class jobs that pay well, and it means people will put together multiple jobs and come up with new strategies to get by.”

Greenberg’s observation is true to a fault but offers no answer as to why it is that the new economy doesn’t pay enough to live on, nor does it answer the question of who determines how the income of the economy will be divided between corporate moguls, Wall Street, and corporate workers, an area politicians could but don’t materially involve themselves in since it would involve political intrusion into our “free market economy” and other such exercises in farce.

This, too, is propaganda, since the Wagner Act, the Fair Labor Standards Act, Davis-Bacon and minimum wage laws have long since provided grounds for fair treatment of wages, working conditions and the right to organize to corporate workers. The current problem is that, like our anti-trust laws, such laws are unenforced because those who are prospering at the expense of their workers don’t want such laws enforced and, as the old saying goes, “those who got the gold make the rules,” the “gold” in this case being campaign contributions from free market libertarians and Wall Street denizens (contributions known in my day as bribes). Citizens United has made the process of corporate bribery easy – and legal.

The Wall Street pretense that low unemployment equals economic prosperity is a false barometer. It doesn’t matter if everyone in America is “employed;” what matters is the median wage (and not the average wage which would include Bill Gates and Warren Buffet to skew the result). The median wage (as adjusted for inflation) has hardly moved for some forty years, which means that America’s workforce has not had a real raise in forty years, which further explains our structurally underperforming economy due to lack of aggregate demand as workers have had to contend with stagnant wages, outsourcing and like negatives paycheck to paycheck, only one medical “emergency” from a Chapter 7 bankruptcy.

Greenberg quotes some of the responses that were given in his poll by those who were presented with government reports on the jobs gained in one month after recovery from Bush’s Great Recession, noting that one moderator was almost attacked by some of those polled. I will here quote samples of responses he had to such cheery reports. “They keep saying they created 225,000 new jobs – and what is the job doing? I mean, you can work for McDonald’s for $9 an hour to $11 an hour.” “What was the average salary for those jobs?” “Are these jobs that people can live on?” “Last week at my part-time job I worked thirty hours and made $180. That’s where a lot of people are at with being unemployed.” One lady polled talked of the cost of living. She said that “It’s very depressing. The cost of food is going up but raises aren’t happening in the workplace so it’s going to be really hard for people to afford food.”

Corporate and other workers in this economy are not fooled by Wall Street propaganda and cheery government employment statistics, and why? It’s because such framing and numbers have nothing to do with where the rubber meets their road, i.e., where underpaid millions are struggling to pay college loans, credit card balances, and even to put food on the table while the rentiers and Wall Street paper shufflers run off with the lion’s share of the economy’s income.

So what are politicians going to do about this cancer on our economy and the financial noose around the collective necks of our workforce? So far, nothing. We are left to the tender mercies of cheerleaders and Wall Street paper shufflers who give us Adam Smith homilies and the mythology of free market economics while they skip merrily with their loot to the bank, and perhaps a Swiss bank.

What to do? The usual, change politicians. Elect those more interested in the common good than bribes for the next election. When? As soon as possible, before the economy entropies and we all go down with the ship, since the ultimate question is > How do we save capitalism from the capitalists?    GERALD      E



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