America: Why Aren’t You Protesting?

Monday, July 25, 2011
By Paul Martin

by Andrew Smolski

As noted by Richard Heinberg on June 22nd, 2011, the media has lacked the ability to connect the economic situations in the Middle East and their uprisings to what is happening in Europe. I would avoid the word “Revolution” in the case of the Middle Eastern uprisings, seeing as no dramatic systemic changes have taken place, only the ousting of dictators. Same as I would avoid the words of social upheaval in the case of European protests, which have been quite calm and only demanding to maintain the social safety nets produced through years of labor struggle. Rather, the odd occurrence is the ostensibly quiet population of the United States who are in many cases having the same economic problems and austerity based government solutions. This is a place where the media does want to ask the public the question, “Why aren’t you protesting?”

Effectively in the United States the labor movement has been dismantled over 30 years through multiple policies, the main one being “Right-to-Work” laws, which have left only 6.9% of private sector workers in unions, and 36.2% of public sector workers in unions. This has correlated as well to a 30 year stagnation in wages, which has barely kept pace with inflation, leaving many with the option of accumulating debt buttressed by a free flowing credit policy. That points to a problem when consumer spending accounts anywhere from 40%-70% of the economy (whether or not you wish to count government spending which is done through the aggregation of taxes from said consumers). Even if the low end number of 40% is the truth of the matter, it is large stake in the economy and plays a disproportionate role in the health of the economy as a whole.

The importance of wage and debt is linked to the economy having a large consumer component, which is basically like the gas to the engine, it keeps things in motion. According to the Federal Reserve, Household Debt is far greater than disposable income, basically at a ratio where consumers are maxed out. Connect this with the Weltanschauung (world outlook) of consumers at the moment, according to the Rasmussen Consumer Index, 61% of the US population see the economy as getting worse. Basically, you have a massive Molotov cocktail being thrown at the economy. The wage trend is not reversing, as noted by Paul Craig Roberts and Shadow Government Statistics, new jobs are typically in non-value added labor (service economy), with an industrial sector shedding jobs as they are outsourced to countries with cheaper labor and laxer regulations (or harsher authoritarian regimes).

When unemployment is calculated correctly it stands nearer to 16-17%, and high-value labor is not returning to employ most of these people, but only the non-value added labor. Without wages and jobs, how is 40% (roughly 5.9 trillion dollars) of 14.7 trillion dollars going to be maintained. Possibly through Citigroup’s idea of a Plutonomy, where the economy services only 20% of the population. However, wouldn’t that lead to political instability in a country that in a form stabilizes the world economy through dollar supremacy and also US treasury bonds (one of the safest investments).

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