By EDWARD MORRISSEY
Is this a political inconvenient truth? Has the middle class been “buried” the last four years? By any measure, the middle class has certainly lost ground. Median household income has declined each of the last four years, a decline which has accelerated during the Obama “recovery” that started in June 2009. Median household income dropped 2.6 percent during the Great Recession, but has dropped 4.8 percent in the three years since.
Income inequality and the decline of the middle class has been developing for decades in America until now the closest counterparts are Russia with its oligarchs and Iran. Neither political party has done anything to stop it. An article in Vanity Fair May 2011 by Joseph Stiglitz “Of the 1%, by the 1%, for the 1%” is an analysis with the figures, consequences and reasons for it. http://www.vanityfair.com/society/features/2011/05/top-one-percent-201105
Australia is not so extreme yet but is on the same path.
Blame has to rest with modern economics as politicians take their advice from experts as well as respond to lobby groups.
Mainstream economics of the 20th century is virtually a product of Wall St and as such has achieved exactly what was intended. Boards of American universities in the late 19th and early 20th centuries changed from being composed of clergymen to businessmen. JP Morgan at New Yorks Columbia University is one influential example. The boards were unaccountable and hired and funded the scholars whose work was no threat to the power elites of the world. The terminology and paradigm of economics was changed, and with ridicule the ideas that had developed in the preceding 150 years were dismissed. In particular they conflated “land” into “capital”. A book “The Corruption of Economics” by Mason Gaffney and Fred Harrison describes how the discipline of economics itself has been put to the service of a system that funnels power and wealth to a parasitic minority. It is no wonder it is called “the dismal science”. David Suzuki describes mainstream economics as a form of brain damage.
Excellent post. It is time to remove economic management from the clutches of Wall St. They have corrupted capitalism to suit their own ends.