Blame Rich, Overeducated Elites As Our Society Frays

[interestrateripoff]

http://www.bloomberg.com/news/2013-11-20/blame-rich-overeducated-elites-as-our-society-frays.html

Complex human societies, including our own, are fragile. They are held together by an invisible web of mutual trust and social cooperation. This web can fray easily, resulting in a wave of political instability, internal conflict and, sometimes, outright social collapse.

Analysis of past societies shows that these destabilizing historical trends develop slowly, last many decades, and are slow to subside. The Roman Empire, Imperial China and medieval and early-modern England and France suffered such cycles, to cite a few examples. In the U.S., the last long period of instability began in the 1850s and lasted through the Gilded Age and the “violent 1910s.”

We now see the same forces in the contemporary U.S. Of about 30 detailed indicators I developed for tracing these historical cycles (reflecting popular well-being, inequality, social cooperation and its inverse, polarization and conflict), almost all have been moving in the wrong direction in the last three decades.

The roots of the current American predicament go back to the 1970s, when wages of workers stopped keeping pace with their productivity. The two curves diverged: Productivity continued to rise, as wages stagnated. The “great divergence” between the fortunes of the top 1 percent and the other 99 percent is much discussed, yet its implications for long-term political disorder are underappreciated. Battles such as the recent government shutdown are only one manifestation of what is likely to be a decade-long period.

Interesting that this just happened the decade before Reagan unleashed the US debt binge.

[wonderpup]

The roots of the current American predicament go back to the 1970s, when wages of workers stopped keeping pace with their productivity. The two curves diverged: Productivity continued to rise, as wages stagnated.

And yet our leaders still mindlessly repeat the mantra that only by increasing his productivity can the working man improve his lot.

In reality higher productivity now leads to less bargaining power as the need for workers is reduced. So we could make a strong argument that increased productivity now leads to lower wages and living standards.

[fluffy666]

Slightly dubious research..

It may be a simple case of feedback, as inequality grows, social mobility through hard work becomes harder and harder. So for the ambitious, politics becomes more attractive. Or simply as politics becomes more about trying to grab a larger slice of a stagnant pie, instead of sharing out a growing pie it becomes more divisive and aggressive.

[fluffy666]

And yet our leaders still mindlessly repeat the mantra that only by increasing his productivity can the working man improve his lot.

In reality higher productivity now leads to less bargaining power as the need for workers is reduced. So we could make a strong argument that increased productivity now leads to lower wages and living standards.

It depends entirely on the distribution of income.

If productivity goes up 20% for a factory, then total wages should go up 20% (evenly) and total return on capital up 20%. The extra cash now spent into circulation is growth, it leads to more business opportunities.

However, if the proceeds go mostly to capital (the factory owners), and the employees see no extra pay - or any pay rises are captured by a small number of managers and executives - we don't see this growth.

[Errol]

Is it actually possible to be 'overeducated'?

[fluffy666]

Is it actually possible to be 'overeducated'?

Yes, you can often see Commons debates get sidetracked into issues such as the theoretical consequences for String Theory of the mass of the Higgs Boson being determined. Wastes a lot of legislative time..

[Guest eight]

Yes, you can often see Commons debates get sidetracked into issues such as the theoretical consequences for String Theory of the mass of the Higgs Boson being determined. Wastes a lot of legislative time..

Much easier to just read out the phone book.

[Executive Sadman]

If I do a google search for the apparently "violent 1910s" a grand total of 41 matches are revealed, mostly relating to this article. Ie, the idea of the 1910s being notable for violence is entirely fabricated by the author.

It sounds like a shameless piece of propaganda specifically designed to say the US has only been a non-bandit state since after the federal reserve was established.

Bloomberg is an evil bankster appeasing lie factory.

[winkie]

But, there are plenty of rich overeducated people that are thick, with few personal skills or common sense.....the same as there are plenty of undereducated ordinary people with good personal skills and common sense......being rich can't buy intelligence only influence and opportunities.

[Executive Sadman]

And yet our leaders still mindlessly repeat the mantra that only by increasing his productivity can the working man improve his lot.

In reality higher productivity now leads to less bargaining power as the need for workers is reduced. So we could make a strong argument that increased productivity now leads to lower wages and living standards.

Its got nothing to do with 'productivity' Its got everything to do with financialization, government theft and largesse. All made possible by central banks like the federal reserve.

These banks and their evil were at least muzzled under a gold standard, but now they are laws unto themselves, destroying anything and everything.

[campervanman]

http://www.bloomberg.com/news/2013-11-20/blame-rich-overeducated-elites-as-our-society-frays.html

Interesting that this just happened the decade before Reagan unleashed the US debt binge.

Look it is nothing to do with the 1% stealing the wealth created by increased productivity. Future generations have had their wages and pension prospects destroyed because granny insists on living in a 4 bed house instead of a 1 bedroomed flat.

[slacker]

Look it is nothing to do with the 1% stealing the wealth created by increased productivity. Future generations have had their wages and pension prospects destroyed because granny insists on living in a 4 bed house instead of a 1 bedroomed flat.

Yes, I have to stop myself from knee-jerking on the 1% thing.

It's clear that the 'elite' haven't quite been in it all together and are doing well by historical measurements - but the real issue for under 40 proles is the uneven wealth distribution benefitting the over 50 proles (who worked hard, saved, didn't buy iphones or go on holidays).

[porca misèria]

Interesting that this just happened the decade before Reagan unleashed the US debt binge.

1970s is when post-war "dead mens shoes" career opportunities came to an end. And with it the illusion of growth and prosperity that had fuelled '60s excess.

[zugzwang]

Yes, you can often see Commons debates get sidetracked into issues such as the theoretical consequences for String Theory of the mass of the Higgs Boson being determined. Wastes a lot of legislative time..

Educated beyond his intelligence, that's how I'd describe George Osborne.

[fluffy666]

Educated beyond his intelligence, that's how I'd describe George Osborne.

Quite a competent towel-folder. Should have kept at it.

[zugzwang]

Quite a competent towel-folder. Should have kept at it.

Bathroom furnishing technician, if you please.

[wonderpup]

It depends entirely on the distribution of income.

If productivity goes up 20% for a factory, then total wages should go up 20% (evenly) and total return on capital up 20%. The extra cash now spent into circulation is growth, it leads to more business opportunities.

However, if the proceeds go mostly to capital (the factory owners), and the employees see no extra pay - or any pay rises are captured by a small number of managers and executives - we don't see this growth.

Exactly- so the crude equation that increased productivity by the labor force automatically translates into increased prosperity for that labor force is simplistic and misleading. Unless that labor force has the power to claim an increased share of that increased prosperity there is no reason to believe they will do so.

So when Cameron talks about winning the global race he is not talking about labor, he is talking about capital- the winners will be the elite members of those states who most successfully degrade the living standards of their own populations in order to maintain a competitive edge.

The aim is not to enrich the plebs, it's to impoverish them.

This from Zero Hedge;

Blame it on the Fed, blame it on globalization, blame it on corporations who have a virtually unlimited labor, cheap and global pool to pick from, but the bottom line is US workers have zero leverage.

Where unions and their allies see reason for alarm, employers see a way to retain jobs against the lure of lower wages overseas. There were about 12 million U.S. factory jobs in October, buoyed by recent gains while still down 39 percent from 1979’s peak.

“We certainly have seen manufacturers become much more competitive,” said Chad Moutray, chief economist at the Washington-based National Association of Manufacturers. Falling labor costs have helped “keep U.S. manufacturers much more competitive and you’re seeing more investment in the U.S. as a result.”

The good news for workers: each day of pain for them means a day of joy for the shareholders - typically those in US society who already are the wealthiest.

Manufacturers’ after-tax profits rose to a record $289.1 billion last year, more than three times 2009’s tally, the Commerce Department reported. The Standard & Poor’s 500 Industrials Index has more than tripled since its 2009 low, and topped the broader index by 59 percentage points over that span.

“What’s being referred to as a recovery in manufacturing is to a large extent a recovery in profitability,” said Dean Baker, co-director of the Center for Economic and Policy Research, a Washington-based group funded by unions and private foundations. “That’s good for the companies and good for the shareholders but it’s not necessarily good for the workers.”

But the reality is that in a world drowning in overcapacity, and in which globalization, technological innovation and improvements in productivity mean that Boeing can open a plant anywhere else in the US, or in the world and still pay less than it does currently, even if it means a lot of unhappy, and unemployed labor workers.

http://www.zerohedge.com/news/2013-11-21/%E2%80%9C-really-symbol-what%E2%80%99s-going-whole-country-we%E2%80%99re-losing-middle-class-jobs%E2%80%9D

Edited November 21, 2013 by wonderpup

[the gardener]

If I do a google search for the apparently "violent 1910s" a grand total of 41 matches are revealed, mostly relating to this article. Ie, the idea of the 1910s being notable for violence is entirely fabricated by the author.

It sounds like a shameless piece of propaganda specifically designed to say the US has only been a non-bandit state since after the federal reserve was established.

Bloomberg is an evil bankster appeasing lie factory.

WWI? That was quite violent, no?