Middle Class Squeeze

[Favonius Cornelius]

Is the middle class in America dying? Are tax cuts for the rich and a culture of second class citizen labor a recipe for America's future?

 

Has America's Middle Class Has Become Globalization's Loser?

[Pantagathus]

Service, service, service...

 

That will be the future life of the American middle & lower class.

[Primus Pilus]

Is the middle class in America dying? Are tax cuts for the rich and a culture of second class citizen labor a recipe for America's future?

 

Has America's Middle Class Has Become Globalization's Loser?

 

Of course the working middle class is a globalization loser (and coming from a manufacturing reliant state, the effects on our economy and labor force are easy to see) but what does it have to do with the comment regarding tax cuts for the rich when in reality there was an across the board tax cuts for everyone who pays taxes? The association is not relevant. We are losing industrial jobs because it is cheaper to make products in foreign factories. Individual income taxes (no matter who pays them and how much) have nothing to do with globalization. Regardless of the percentages of which group saves or pays how much, my personal tax cut was significant despite being quite decidedly middle class.

 

Are you suggesting that if we raised everyone's taxes some how manufacturing would miraculously return as a viable option for the US worker? Is there some correlation between manufacturing and raising the highest percentage bracket of US income taxes from 36% to a higher figure that I am missing. Does eliminating taxes for everyone in the lower brackets create some sort of incentive to build factories? I suppose the middle and lower classes would have an extra couple thousand dollars to blow on crap made in southeast Asian sweat shops, but it's not going to help anyone find an industrial job.

 

EDIT: Woops, forget to mention that the article is quite well written and my response is more to give FC a hard time than to refute anything in the article itself.

[Favonius Cornelius]

what does it have to do with the comment regarding tax cuts for the rich when in reality there was an across the board tax cuts for everyone who pays taxes? The association is not relevant.

 

Estate tax, from which a lot of money can be gained, which the rich only have an interest in suppressing. Also while tax cuts are equal, the ratio of expendible income is not. Higher taxes mean little actually to the middle class but a lot to the rich, especially if the tax percentage is higher for the rich (as it should be, considering they have a bigger interest in maintaining the status quo).

 

Are you suggesting that if we raised everyone's taxes some how manufacturing would miraculously return as a viable option for the US worker?

 

Its about policy and how that money is spent. Improving infrastructure, investing in technology and education would be great things in improving economy for long term goals and security. The current trend of hacking away all such spending, suppressing technology and R&D, and waging a useless war costing hundreds of billions of dollars, does not secure the future.

 

It does win elections however with the proper amount of spin and money.

[Primus Pilus]

Its about policy and how that money is spent. Improving infrastructure, investing in technology and education would be great things in improving economy for long term goals and security. The current trend of hacking away all such spending, suppressing technology and R&D, and waging a useless war costing hundreds of billions of dollars, does not secure the future.

 

But higher income taxes resolves all this? Do we assume that another political agenda would somehow spend it the "right way"? I really don't think this is political at all. We can raise all the taxes we want, and there are numerous factors at work, but we aren't going to see a return of US manufacturing until the labor cost playing field is level.

[Favonius Cornelius]

But higher income taxes resolves all this? Do we assume that another political agenda would somehow spend it the "right way"? I really don't think this is political at all. We can raise all the taxes we want, and there are numerous factors at work, but we aren't going to see a return of US manufacturing until the labor cost playing field is level.

 

That's a pretty defeatest attitude about it all. I don't understand why some folks in general have this morbid fear of taxation. It seems irrational to me, because for every economic level, a raise of something like 0.25% of income would not be noticed, and yet it would lead to a great amount of money which could be well applied.

 

Sure government always has a certain degree of waste, but what company does not also have the same? You have to trust SOMEONE's political agenda. What is the alternative, letting the rest of the world dictate the living standard of Americans, or letting the magic hands of capatalism fix everything (it wont). Moonlapse and I talked about this before. Capatalism is the ultimate form we know of, but it cannot exist well without recalibrations from time to time, because eventually money and power always eventually becomes too focused to the detriment of the nation as a whole.

[Primus Pilus]

But higher income taxes resolves all this? Do we assume that another political agenda would somehow spend it the "right way"? I really don't think this is political at all. We can raise all the taxes we want, and there are numerous factors at work, but we aren't going to see a return of US manufacturing until the labor cost playing field is level.

 

That's a pretty defeatest attitude about it all. I don't understand why some folks in general have this morbid fear of taxation. It seems irrational to me, because for every economic level, a raise of something like 0.25% of income would not be noticed, and yet it would lead to a great amount of money which could be well applied.

 

I don't fear taxes, I despise them and how they are spent, while understanding a minimal necessity of the evil. And to me, raising taxes is defeatist, not opposing them.

 

"There are no guarantees but death and taxes"... this is optimism?

 

EDIT: PS, my bad here guys, I don't want this to too far off on the taxation tangent... please do address the article... which actually doesn't mention a thing about income taxes anyway.

[Favonius Cornelius]

Well, if there is some alternative to investing the centralized wealth of the few into the greater population with the objective of preparing it to tackle the new emerging economy, then I am all ears.

 

The fold difference of total worker compensation in benifits, stock options and salery between the average worker and the CEO in America: 1980 ~80 times, 2003 ~300 times, 2006 ~420 times.

 

Does that really sound fair and balanced to anyone?

[Moonlapse]

It doesn't sound fair or balanced. However, we are conditioned to support the system. FC, do you have a cellphone? Who manufactured it? Who produced the componentry? Does your service provider also off-shore outsource any services? How many of your clothes were made in the U.S. using U.S. produced material? The bottom line for nearly everyone is value over any ideological priciple. This means that global companies are fiercely competitive, thus making successful business leaders a more important investment.

 

Labor pay rates are rising in India and especially China. China will also hit a slump in the next 50 years because their current ratio of productive to non-productive citizen will become undesirable when the current workforce starts retiring and depending on a younger generation that has been supressed with population control.

 

Anyways, I'm not sure how to fix it. I hate to sound like a broken record, but I think our forced schooling system will need to drastically change before we have enough locally minded entreprenuers AND consumers to cause a rise in the middle class. Also, we do owe our standards of living to global corporations. If you enjoy your current level of comfort then be thankful, if you prefer a fairer system then you should be prepared to do without some of the more extravagant aspects of American life.

 

What about places like Denmark? Denmark didn't innovate the technology required to maintain their standard of living. It's mostly corporate capitalist technology that socialism benefits from. Actually, I've come to believe that socialism is basically the corporate subsidy of lower classes, gotta keep the order.

[M. Porcius Cato]

The fold difference of total worker compensation in benifits, stock options and salery between the average worker and the CEO in America: 1980 ~80 times, 2003 ~300 times, 2006 ~420 times.

 

Does that really sound fair and balanced to anyone?

 

Salaries should not be equal because (1) the value added by each worker is not equal and (2) the abilities of critical functions are not equally common. If a critical skill set for a corporation can only be found in 1 of 2 million workers, it's fair for corporations to compete for those rare skill sets. What other mechanism for attracting rare skill sets to corporations could be more fair?

 

The secular trend you cite also doesn't address fairness. If education goes down the toilet (which it has been since the 60s), it becomes more and more difficult to find people who can run a company, and thus the value of CEOs increases over time.

 

I agree with Moonlapse that the rotten state of public education is an important place to look for increasing the competitiveness of the American labor market. Additionally, I'd have a policy that puts anyone with a degree from US universities (which are the best in the world) on a fast track to citizenship (if they want it). This policy would also help to increase the size of the middle class.

 

In my opinion, no one possesses some metaphysical right to join the middle class simply because they are white Americans. If Americans won't work hard to compete, they don't deserve to be in the middle class.

 

Well, if there is some alternative to investing the centralized wealth of the few into the greater population with the objective of preparing it to tackle the new emerging economy, then I am all ears.

 

What do you think venture capitalists do for a living??????

[Faustus]

Is the middle class in America dying? Are tax cuts for the rich and a culture of second class citizen labor a recipe for America's future?

 

Has America's Middle Class Has Become Globalization's Loser?

A . . . DANGEROUS TRADE GAME by The U.S. House. The House action (of not bringing the most recent trade agreement up for a vote) abruptly and unilaterally terminates . . . the pending free trade agreements with Panama and Korea, as well as Colombia, and . . . any remaining prospect for an early conclusion of the Doha Round in the World Trade Organization . . since the House action, the U.S. has lost all credibility. In other words, the "time out" proposed for trade policy by one of the major presidential candidates

Edited May 27, 2008 by Faustus

[Ludovicus]

When it comes to the US worker-CEO pay differential it's instructive to see how many top executives have secured a golden parachute* upon termination, thereby further ballooning the gap between top boss and nonsalaried employee. Here are just four from http://www.houseoffusion.com/groups/cf-com.../threadid:25303 :

 

Stanley O'Neal, Merril Lynch: $160 million, including more than $129 million in stock and options. O'Neal takes the fall for failing to adequately control the firm's credit and market risks, which resulted in a stunning $8 billion-plus write down in the third quarter.

 

Hank McKinnell, Pfizer: $198 million, including $78 million in deferred compensation he built up in 35 years at the pharmaceutical company. Pfizer shares sank 40% on his watch, which ended last year. The company had to cut billions in costs and fire thousands of employees, and said it wouldn't see revenue growth until 2009.

 

Stephen Hilbert, Conseco: Took an estimated $72 million. Hilbert bought GreenTree Financial in 1998, just as the subprime lending business was about to go topsy turvy. The purchase left Conseco, an insurance company, with big write downs and ultimately contributed to its 2001 bankruptcy. The company has since reemerged from reorganization.

 

Douglas Ivester, Coca-Cola: Took $120 million when he stepped down in 2000 in his mid-50s. The departure was deemed a "retirement," but Ivester had presided over a period of stagnant growth, declining earnings and bad publicity.

 

 

*golden parachute-A clause in an executive employment contract that provides the executive with a lucrative severance package in the event of their termination. May include a continuation of salary, bonus and/or certain benefits and perquisites, as well as accelerated vesting of stock options.

Edited May 28, 2008 by Ludovicus

[Faustus]

When it comes to the US worker-CEO pay differential it's instructive to see how many top executives have secured a golden parachute . . . golden parachute-A clause in an executive employment contract that provides the executive with a lucrative severance package in the event of their termination. May include a continuation of salary, bonus and/or certain benefits and perquisites, as well as accelerated vesting of stock options.

L. you cited four cases of apparent gross overpayment and excessive pay-offs (golden parachutes) by American corporations to their seemingly less than stellar CEOs, and doubtless you could come up with more, but so what? Of course abuse of pay and privilege, and lack of proper oversight by the company boards do take place. We don

[Ludovicus]

When it comes to the US worker-CEO pay differential it's instructive to see how many top executives have secured a golden parachute . . . golden parachute-A clause in an executive employment contract that provides the executive with a lucrative severance package in the event of their termination. May include a continuation of salary, bonus and/or certain benefits and perquisites, as well as accelerated vesting of stock options.

L. you cited four cases of apparent gross overpayment and excessive pay-offs (golden parachutes) by American corporations to their seemingly less than stellar CEOs, and doubtless you could come up with more, but so what? Of course abuse of pay and privilege, and lack of proper oversight by the company boards do take place. We don