|“Debtpocalypse” looms. Depending on who wins out in Washington, we’re told, we will either free fall over the fiscal cliff or take a terrifying slide to the pit at the bottom. Grim as these scenarios might seem, there is something confected about the mise-en-scène, like an un-fun Playland. After all, there is no fiscal cliff, or at least there was none—until the two parties built it.
Think of it as the archeology of decline, or a tale of two worlds. As a long generation of austerity politics hollowed out the heartland, the quants and traders and financial wizards of Wall Street gobbled up ever more of the nation's resources. It was another Great Migration—instead of people, though, trillions of dollars were being sucked out of industrial America and turned into “financial instruments” and new, exotic forms of wealth. If blue-collar Americans were the particular victims here, then high finance is what consumed them. Now, it promises to consume the rest of us. [...]
In the 1980s, when Jack Welch, soon to be known as “Neutron Jack” for his ruthlessness, became CEO of General Electric, he set out to raise the company’s stock price by gutting the workforce. It only took him six years, but imagine what it was like in Schenectady, New York, which lost 22,000 jobs; Louisville, Kentucky, where 13,000 fewer people made appliances; Evendale, Ohio, where 12,000 no longer made lights and light fixtures; Pittsfield, Massachusetts, where 8,000 plastics makers lost their jobs; and Erie, Pennsylvania, where 6,000 locomotive workers got green slips.
Life as it had been lived in GE’s or other one-company towns ground to a halt. Two travelling observers, Dale Maharidge and Michael Williamson, making their way through the wasteland of middle America in 1984 spoke of “medieval cities of rusting iron” and a largely invisible landscape filling up with an army of transients, moving from place to place at any hint of work. They were camped out under bridges, riding freight cars, living in makeshift tents in fetid swamps, often armed, trusting no one, selling their blood, eating out of dumpsters.
Nor was the calamity limited to the northern Rust Belt. The South and Southwest did not prove immune from this wasting disease either. [...]
Laments about “the vanishing middle class” have become commonplace, and little wonder. Except for those in the top 10% of the income pyramid, everyone is on the down escalator. The United States now has the highest percentage of low-wage workers—those who earn less than two-thirds of the median wage—of any developed nation. George Carlin once mordantly quipped, “It’s called the American Dream because you have to be asleep to believe it.” Now, that joke has become our waking reality.
Think back to the days of junk bonds, leveraged buy-outs, megamergers and acquisitions, and asset stripping in the 1980s and 1990s. (Think, in fact, of Bain Capital.) What was getting bought and stripped and closed up supported windfall profits in high-interest-paying junk bonds. The stupendous fees and commissions that went to those “engineering” such transactions were being picked from the carcass of a century and a half of American productive capacity. The hollowing out of the United States was well under way long before anyone dreamed up the “fiscal cliff.”
For some long time now, our political economy has been driven by investment banks, hedge funds, private equity firms, real estate developers, insurance goliaths, and a whole menagerie of ancillary enterprises that service them. But high times in FIRE land have depended on the downward mobility of working people and the poor, cut adrift from more secure industrial havens and increasingly from the lifelines of public support. They have been living instead in the “pit of austerity.” Soon many more of us will join them.
Blast from the Past. At Daily Kos on this date in 2010—Obama makes surprise visit to Afghanistan:
|The fact that 2014 is our goal for ending the war [in Afghanistan] is a pretty stark reminder of just how much of a disaster the conflict has been for our country. By 2014, the war will have been dragging on for thirteen years. Thirteen! If it ends up lasting that long, there will be American soldiers fighting in it who were five years old when the war began.|
If you're looking for something else (short) to read, I highly recommend Ta-Nehisi Coates's Why Aren't More Liberals Defending 'Lincoln'?
Tweet of the Day:
Despite numerous technical problems today, the Kagro in the Morning show pushed on through, and after a shortened visit with Greg Dworkin, we turned to another extensive look at the filibuster reform fight by reviewing this past weekend's excellent Up with Chris Hayes episode focusing on the issue with a panel of experts that included an actual former Senate Parliamentarian. And still, there was more to add, believe it or not! Armando also joined in, and we make the case that there's no logical reason why unlimited debate should be read to mean unending debate.