"Dissidents" are people who actively challenge established doctrine, policy, or institutions. This post is the fourth in a series of 10 posts regarding the confusing "revolutions" of the 2016 Presidential Election.
As previously noted, people are angry...well, some people are angry.
Certainly, not the rich, whoever they are. They are who the angry are angry at or angry about. Maybe we need to know who the rich are.
Recently, we've begun to talk about the 1% . But we tend to get lost in discussions about income and wealth which are two different things. Wealth, or net worth, is the sum of all assets minus the sum of all liabilities.
Sometimes it's easy to think of the rich in terms of Forbes 400 wealthiest individuals. According to an Economic Policy Institute report The State of Working America’s Wealth, 2011: Through volatility and turmoil, the gap widens: "In 2009, the price of admission to the Forbes 400 was just short of $1 billion, and the collective net worth of these 400 individuals was $1.3 trillion."
But this isn't reflective of the 1%, even though the 400 are in the 1%. In 2009, when The Great Recession impacted personal wealth the most ("recession" ...uh... more about that later), the report tells us: "Average wealth of the top 1% was close to $14 million in 2009..."
That pretty much defined the top 1% in terms of wealth in 2009 - a household net worth that can be rounded to a number that exceeds $10 million. That's substantially less wealth than that $1 billion mark.
It is important to keep in mind that if we use wealth (net worth) as the measurement, the impact of The Great Recession was somewhat uneven according to that report:
On average, the top 20% lost 16.0% and the bottom 80% lost 25.1% of their total wealth in 2008 and 2009. Average wealth of the bottom 80% was just $62,900 in 2009...slightly less, in inflation-adjusted terms, than it was more than a quarter-century ago in 1983.... The lowest 20% had -$27,200 of wealth in 2009. Since 2001 there has been a continual erosion of wealth for this class regardless of cyclical timing.Of course, most of the loss in The Great Recession was housing value with many homes "under water", meaning that the value of the house was less than the mortgage.
As you might guess, many of those angry folks are in the bottom 80% whose average net worth dropped from almost $105,000 at the peak to about $63,000 as the result of The Great Recession.
Another way of defining the 1% is in terms of income. Since The Great Recession according to this chart we in the 99% have something to be angry about even though the economy is starting to provide some income growth to them:
Click on image to see a larger version!
In terms of income, the 1% are not the same folks as those with 1% of the wealth. In a 2010 piece titled The United States of Inequality we learned:
The American aristocracy is less different from you and me than it was in Fitzgerald's day. ...The top of the heap are overwhelmingly job-holders deriving most of their income from their wages. Did it become posh to have a job? Not exactly. Having a job—the right job, anyway—became the way to get posh. That's encouraging in one sense: To roll in the dough you now have to work for a living. But it's discouraging in another sense: You can't blame enormous income disparities on non-working coupon-clippers who exist outside the wage structure (and reality as most of us understand it). The wage structure itself is grossly misshapen.The author divided the rich into three groups, "Sort of Rich, Rich, and Stinking Rich." And he explained that "it’s useful to think of the top 10 percent as the 'sort of rich,' the 1 percent as the straightforward 'rich,' and the 0.1 percent as the 'stinking rich.' "
In a more recent article Who Gets to Be “Rich”? And why do most people seem to think they are “middle class”? we are offered this piece of information: "...A household income of about $113,000 lands you at the top 10th, while $394,000 makes you a bona fide member of the 1 percent." What he then goes on to explain is:
...More than 76 percent of Americans get to experience the joys of a six-figure household income for at least one year, just more than half will make $150,000 or more at some point, and about 20 percent hit the $250,000 mark at least once, which these days would put them within the top 2 percent of earners.And yet we're told "the bottom 60 percent earned a maximum of $59,154 in 2010, the bottom 40 percent earned a max of $33,870, while the bottom 20 percent earned just $16,961 at maximum" in Who are the 1 percent?
... Just half of Americans hit six figures for five or more years, and only one-third manage it for a decade total. Meanwhile, less than 2 percent cross the quarter-million-dollar threshold for at least 10 years of their lives. Just 1 percent do it for 10 consecutive years.
Why do our incomes rise and fall so much? People get sick and leave work. They get bonuses. They spend a year pulling enormous amounts of overtime. Parents leave their careers to care for children or cut down to part-time hours. Life isn’t a steady march, and nor are our incomes. This, I think, should complicate our idea of class. Quite a few of us get our 15 minutes of affluence, but sustaining it is hard.
To confuse matters more, we are offered this chart in How Much Income Puts You in the 1 Percent if You're 30, 40, or 50?:
Click on image to see a larger version!
The point is that if you make $135,000 a year and your age 27-31, you are in the top 1% of your age group. If you are 50+ you need to make $340,000±.
From all this, what we know is that if you are 40 making $285,000 a year, you're in the top 1%. Likely you'll be in that group for no more than five years of your life.
Then you may slip into the group of angry people.
You could easily find yourself making 30% of that and still be in the upper 40% income group - a middle class income.
And you might retire in the bottom 40% income group earned a max of $33,870 but still middle class. And still angry.
So who is this 1% we're angry at? The Forbes 400? People with a household net worth of more than $10 million. Or a 30-year-old techie making $135,000 a year. Heck, they are all in some version of the 1%.
Are we angry at them or angry at "The Establishment" because these 1% folks exist without "me" being among them?
Are we angry at Congress and the state legislatures because they don't tax these people enough?
Are we angry, really? Yes we are.
As I wrote here in the post The effect of the white white-collar Democrats' class war against white blue-collar American women there was The Great Recession and afterwards government and corporations "didn't do much to help restore to their prior status predominately white unionized blue collar age 40+ industrial workers who were used to making upper middle class incomes."
Here is where things get confusing. Economists have created lots of interesting terms about the ups and downs of an economy. We have economic downturns, recessions, and depressions.
An economic downturn is a general slowdown in economic activity over a sustained period of time in a specific region or on a global scale. It's a little hard to distinguish an economic downturn from a recession. The key features of an economic downturn include:
- Negative or very low economic growth
- Rising unemployment
- Falling asset prices – shares and house prices
- Low consumer confidence and falling investment.
- Rising spare capacity (negative output gap)
- Increasing government borrowing due to higher government spending on benefits and lower tax revenue.
The National Bureau of Economic Research (NBER) defines an economic recession as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."
All member states of the European Union including the United Kingdom define an economic recession as two consecutive quarters of negative economic growth, as measured by the seasonal adjusted quarter-on-quarter figures for real GDP.
A severe recession (GDP down by 10%) or prolonged recession (three or four years) is referred to as an economic depression.
According to the US National Bureau of Economic Research (the official arbiter of US recessions) The Great Recession began in December 2007 and ended in June 2009, thus extending over 19 months. By virtue of the way they measure "economic growth" which includes the flow government spending including the bank and GM bailouts, The Great Recession never became a depression.
Sure, as explained in economist talk in Wikipedia:
The distribution of household incomes in the United States has become more unequal during the post-2008 economic recovery, a first for the US but in line with the trend over the last ten economic recoveries since 1949. Income inequality in the United States has grown from 2005 to 2012 in more than 2 out of 3 metropolitan areas. Median household wealth fell 35% in the US, from $106,591 to $68,839 between 2005 and 2011In other words, as measured the GDP quit declining, the banks finished foreclosing on family homes and sold them to corporate landlords and real estate flippers, and some people found jobs at much lower wages than before causing the unemployment rate to drop.
As I explained in the post here The inane bigotry of the educated is the reason why Trump's “I love the poorly educated!” is a winner, construction employment is still 1.6 million jobs short of its 2007 level, manufacturing has 1 million fewer jobs than it did before the recession, and, compared to pre-recession employment levels, office and administrative support occupations have experienced the second-highest decline in jobs - 1.4 million.
Evidence is mounting as explained in Is the Middle Class Being “Disrupted” Into Extinction? that educated professionals of all types - tech, legal, education, journalists, nurses, "are falling prey to an unstable new America." Recently a study indicated that the leading tech companies expect that in the next three years automation and machine learning will replace 5% of their workforce.
The author has coined a new term derived from combining "proletariat" and "precarious" - the Middle Precariat. We all know what that "precarious" as defined by Dictionary.com (first definition) means "dependent on circumstances beyond one's control; uncertain; unstable; insecure.". The "proletariat" is a term in a capitalist society for the class of wage-earners whose only possession of significant material value is their labor-power, their ability to work.
Which brings us back to the anger. GDP means Gross Domestic Product. It measures productivity in terms of the value of output of goods and services. It doesn't measure whether workers contribute to or share in the wealth created by that output.
That's ok for economists to talk about. But it's not ok in real life for real people, particularly including politicians.
You see economists may think The Great Recession didn't turn into a depression because GDP stopped falling in less than two years. But when median household wealth fell 35% in the US between 2005 and 2011, that's six years. And when in 2013, real median household income was 8.0 percent lower than in 2007 that's six years.
The reality to be faced by the Shareholder Capitalists and the Academic Oligarchists - and by Congress and state officials - is that in 2008 for somewhere between 60% to 80% of American households a recession began that has not ended. For real people, not economists, in fact The Great Recession turned into a depression because real people don't care what happens to corporations, they care about what happens to people.
To give the situation a term, what happened in 2008 was an Economic Collapse built upon an earlier economic decline for which according to Wikipedia "there is no precise definition." Instead, Wikipedia offers a description of symptoms (emphasis added):
The term has been used to describe a broad range of bad economic conditions, ranging from a severe, prolonged depression with high bankruptcy rates and high unemployment (such as the Great Depression of the 1930s), to a breakdown in normal commerce caused by hyperinflation (such as in Weimar Germany in the 1920s), or even an economically caused sharp rise in the death rate and perhaps even a decline in population (such as in countries of the former USSR in the 1990s).The crux of the matter is that an Economic Collapse means a period of a few months that results in the long term significant loss (greater than 10%) of personal wealth (net worth) for the 80% of the households having the lowest wage income. That means most of the people.
As indicated in Wikipedia "often economic collapse is accompanied by social chaos, civil unrest and sometimes a breakdown of law and order."
As discussed in posts here, we not only have had prolonged unemployment and other symptoms of an Economic Collapse that really began with the burst of the dot-com bubble which took place during 1999–2001, but we now know that we likely have an economically caused sharp rise in the death rate as "white women have been dying prematurely at higher rates since the turn of this century, passing away in their 30s, 40s and 50s in a slow-motion crisis driven by decaying health in small-town America."
And that is what the election of 2016 is all about - ignorance among the best educated people among us about the 21st Century Economic Collapse. They have been literally Economic Collapse deniers because it really didn't impact them for any length of time. And frankly the revolt is, in part, because of the one type bigotry not recognized by and deeply ingrained in the college-centric politically correct police as explained in detail in The Atlantic article The War on Stupid People:
"When Michael Young, a British sociologist, coined the term meritocracy in 1958, it was in a dystopian satire. At the time, the world he imagined, in which intelligence fully determined who thrived and who languished, was understood to be predatory, pathological, far-fetched. Today, however, we’ve almost finished installing such a system...."What the article explains is that a dystopian, predatory, pathological system of economic and social discrimination has been put in place since the 1960's that strongly favors 20%± of the population and seriously dispossess 60%± of the population, while leaving the remaining 20%± feeling a great deal of unease. In the article we are told: "From 1979 to 2012, the median-income gap between a family headed by two earners with college degrees and two earners with high-school degrees grew by $30,000, in constant dollars."
Of course, 1979 was the beginning of the Information Age. Shareholder Capitalists and Academic Oligarchists were enthralled with the advent of the Digital Revolution/Information Age precisely because it created a preference on intelligence, as they defined it, as opposed to wisdom which can be possessed by anyone and has no direct correlation to intelligence scores.
Shareholder Capitalists and Academic Oligarchists seemed to have lost touch with even modern history. For instance, there is a line, albeit not completely straight, that runs through intellectuals Hegel, Marx, Kerensky and Lenin leading to Joseph Stalin who began his method of taking control by ousting Molotov and Shlyapnikov as editors of the newspaper Pravda because he had an understanding of, and control of, then modern media coverage and because he understood how really unwise intellectuals are.
So let's take a deeper look at the four groups, particular the Shareholder Capitalists and Academic Oligarchists who the rest of us are angry at. Let's begin with the Shareholder Capitalists.
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