The World View

Germany’s respected Der Spiegel magazine just published an article called “The Erosion of America’s Middle Class – On the Way Down.”

In this careful analysis of today’s America, author Thomas Schulz contrasts our rich congratulating themselves for donating billions to charity, banks showing record profits, a wall street returned to DOW 10,000 and higher – against the growing gap between rich and poor that is causing our middle class to disappear.

This article and the video interview that follows with a Chinese economist are stinging enough to perhaps wake up those of us still complacent, unbelieving…or yet in shock. America is driving over a cliff, and it would appear that the rich have their foot on the gas pedal.

A few article insights:

Ventura, long a “storybook California” city with its rich homes and beautiful beaches, has launched a program allowing people to sleep in their cars within city limits. Why? Police discovered that the cars parked in front of driveways were new and well-tended, and the people sleeping in them were former owners and neighbors…not Mexican transients.

Four out of ten Americans who consider themselves middle class now believe they will be unable to maintain their income or social status.

“Food insecurity” is on the rise, with 50 million Americans unable to afford enough food to stay healthy…and one in eight adults and one in four children now surviving on government food stamps.

The overwhelming majority of Americans – after almost 30 years of economic growth – are earning on an adjusted basis less than what they earned in 1978: $45,879 then vs. $45,113 now.

In this same timeframe, the number of U.S. billionaires grew by a healthy 17 percent in 2009.

Where did all the money go?

The German reporter poses his answer to the question, where did “All the enormous market gains and corporate earnings, the profits from the boom in the financial markets and the 110-percent increase in the gross national product in the last 30 years” go? It went to those who had always had more than enough already.

To those who had more than enough…already.

Our government spent $182 billion to bail out a just one company – AIG, while communities across the country are closing schools, eliminating bus service, and even turning off the lights.

Insurance companies which fought health care reform bitterly are showing heavy profits - on Americans who are paying twice as much for health insurance than they did in a previous decade.

Wall Street pays out obscene bonuses (for people who accomplished…what?) while the new “Working Poor” live from paycheck to paycheck – some 61 percent of Americans, at this point.

Does Capitalism inherently require that the rich get richer?

Writing “The End of the ‘End of History:’ The Structural Crisis of Capitalism and the Fate of Humanity,” Minqi Li a professor at the University of Utah relates another world view of America’s financial situation and how it – and China’s economy – is leading to a fact-based disillusionment with capitalism.

“The global capitalist economy is now in its deepest crisis since the Great Depression. Even the world’s ruling elites no longer have any doubt that a significant historical turning point has arrived.”

He continues: “The neoliberal phase of capitalist development is coming to an end. This will prove to be the end of the so-called…era of global counter-revolution it signifies.”

“Ruling elites?” “Global counter-revolution?”

As well as I can understand this, the “ruling elites” are those at the upper reaches of the rich and highest levels of government. The “counter revolution” will be those who comprise the seriously-have-not’s.  This may not yet include the middle class – they haven’t experienced full pain or a full realization of what lies in store.

What is in store is termed by Professor Li, as the “structural crisis” that capitalism encounters along its way to accumulating wealth.

In an interview with “RealNews,” Professor Li declares that capitalism’s “structural crises” have happened before, but that this one is significantly different.

Professor Li claims that capitalism has “exhausted” its “historical space for social reform” which in the past enabled recovery.  Why is this? Because it is not possible to combine a redistribution to the favor of working people with the requirement of “capitalist accumulation.”

Simply put, the rich absolutely require the system to make themselves richer. Nothing personal – just the way it is.

Although my reader (even this writer) may bristle at the idea it is a requirement that Capitalism must “exploit” a cheap labor force – most recently being workers in the non-Western world – but the numbers seem to dictate that.  Unfortunately, that resource is not sustainable. The very creation of factories inevitably leads to demands on the part of labor for better wages and living conditions – thus reducing capitalist profit.

It’s even more grim than that.

“After centuries of accumulation, capitalism has exhausted the environmental space,” Li says, “so much so that the global ecological system is now on the verge of collapse.” He then lists a UN study showing that by 2025 as much as 70% of the world’s population will live in areas of water stress, soil erosion, expanding deserts, deforestation, ocean acidification – all threatening the global ecological system.”

The Chinese worker to the Rescue?

Although Professor Li’s interviewer, senior editor Paul Jay, points out that even many of the financial elite are beginning to call for greater financial regulation to keep the finance sector from “running amuck.” Isn’t there a likelihood that America’s workforce may actually gain some ground? That argument doesn’t win Li over.

“The ruling elite is answering this crisis,” Li says, “by reducing fiscal deficits and backing off from their historical commitment to worker’s health care and pensions while in the U.S. the congress fails to pass climate change laws.”

As for worker resistance, even massive demonstrations in Western Europe has not yet changed the capitalist mindset. Capitalism has to have its profits…whatever the cost to the social order. Consider the Newly Poor to be “collateral damage.”

The potential rescuer?  It will be the Chinese worker who will challenge the Chinese capitalist system.  No longer willing to endure sweatshop conditions and survival wages, they are demanding greater wages and conditions.

You remember – the conditions which Americans believed they left behind after the last Depression and the enforcement of greater disciplines by the New Deal on the financial sector.

But there is no “New Deal” possible in America – and no “FDR” to rescue the ordinary citizen. If this isn’t a revisit to “Workers of the World, Unite,” I would like to know what is.

Der Spiegel article
Real News interview