The recession is technically over but salaries and revenues continue to suffer. Meanwhile the banking industry celebrates the unexpected five trillion dollar windfall that was dumped into its collective lap. Are they re-opening the floodgates to let all that tax-generated largesse flow back out into the economy? Nope. They have correctly judged that criminal liberality in mortgage lending was what crashed the system in the first place, so they are sitting on that money and only using it TO REBUILD THEMSELVES. Dozens of foreclosed businesses stand shuttered in every town, while new bank branch offices spring up too fast to count.
When the rich refuse to pay high taxes but dare not reduce public assistance programs for fear of public backlash, the only option left is to screw the middle classes by cutting THEIR programs and increasing THEIR taxes. This strategem works, but not forever: drain your middle classers dry and they sink into the impoverished lower class. If a glass ceiling exists (and it does) to prevent access to the ranks of the monied elite, that leaves no place for upwardly mobile middle classers to go… and the squeeze is on.
History shows that when the middle class finally gets too small to carry the weight of the system, bad things happen. Monarchies and governments topple. The rich get dragged from mansions and hung from streetlamps. No kidding.
Fun times ahead. Thanks for the gumball, Mickey!
After numerous banking and corporate corruption scandals culminated in the great Stock Market Crash of 1929, reformers crafted legislation aimed at protecting American workers: laws to prevent large corporations from treating employees as rightless wage slaves. A large part of what we now consider “The American Dream” is based around that movement, which ruled that an average worker should be able to support a family by working 8 hours a day, five days a week. Legislation was eventually drafted to create and enforce that standard: The Fair Labor Standards Act.
Big business fought back, but heavy post-Depression public pressure got the FLSA passed by Congress on 25th June, 1938. The stated objective of the Act was to eliminate “labor conditions detrimental to the maintenance of the minimum standards of living necessary for health, efficiency and well-being of workers.” The act established maximum working hours (culminating in the 40 hour work week) and minimum wages per hour. The Act also prohibited child labor in all industries engaged in producing goods in inter-state commerce. It was considered a monumental step towards establishing a decent American Standard of Living.
During following decades minor amendments were enacted to the FLSA. But nothing too radical was done until August 23, 2004, when the FLSA underwent several controversial changes that modified the definition of who can be considered “exempt” from overtime laws. These changes affected many employees in a variety of technical fields who had specialized knowledge but no formal academic training. Millions of these and other workers could now be forced to work extra hours at the same pay rate because they are now classified as “executives,” “supervisors,” or “managers,” despite the fact that their titles are a feint intended to side-step the law— those workers have NO direct management or administrative authority.
These changes were pushed through by big corporate lobbyists who claimed that the laws needed “clarification” and that “few workers” would be affected. The Bush administration actually HAD THE BALLS to call the new regulations “FairPay.” Coupled with the now-legendary “giant sucking sound” made by the disastrous offshoring and outsourcing frenzy that followed the Clinton Administration’s NAFTA treaty, big business finally regained the ability to force middle class employees to work longer for less or make use of child labor and other forms of wage slavery imported from outside U.S. borders.
What’s profitable for American corporations is not necessarily good for American workers. “Trickle down” economics is exactly what it sounds like: a bullshit excuse to skim the cream at the expense of the many.
Last month Congress passed three new Free Trade Agreements between the United States and trading partners South Korea, Colombia and Panama, highly reminiscent of NAFTA.
Bend over, American Standard of Living. Here it comes again.