Category: poverty

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The graph that explains what has happened

 

This is the most important graph you are going to see in the next decade.

Whatever its cause – and historians and economists have much to explain – the gap between rises in productivity and hourly compensation that started in 1973 meant that an increasing proportion of national income has gone to the owners of assets, not the workers. Maybe capital needed to make more money; maybe the workers were making too much: I am unqualified to say. Certainly the Reagan regime did much to restore the profitability of capital.

Yet in that simple graph we can see why Trump found support to deal with a perceived problem. Perceived by whom, you ask? Perceived by the people who do not know or subscribe to the New York Times or the Atlantic magazine. Perceived by the people whose children don’t have jobs and who know people who have died from fentanyl overdoeses, people from towns where the mill has been shuttered for thirty years. Where they used to make things. Not perceived by people who work from desks and computers. No perceieved by people whose jobs have not been affected by COVID.

Nuxon went to China in 1972, thus splitting the Communist world and starting the process whereby jobs left the United States for China and places abroad. I am not asserting a directly causal relationship here between diplomatic recognition of China by the US and the off-shoring of US industry.

Nixon went off the gold standard in 1972, This meant we entered upon the world of fiat currencies, where government declares that money is worth something unrelated to the stock of gold. As many now understand, a consistent undervaluation of one’s currency can suck indistry towards the low cost producer. Is that the cause of US jobs bening leeched out of the United States?

Watch this video and see if you agree. 

Whatever the cause of the growing gap in the rates of productivity and hourly compensation – I wish I knew – its existence engenders a vast retinue of consequences

Bloomberg, South Carolina, and the States generally

Mrs Dalwhinnie and I recently drove north from Charleston, South Carolina for several hours to reach the I-95. It was the most depressing landscape of poverty I can recall seeing. Crap towns. Abandoned stores with plywood for windows. No agriculture to speak of, just endless pine forests. Hovels, shacks, bungalows, trailers. Scarcely a middle class, well-maintained house, for hour after hour. Dozens of Protestant churches for every five miles of road. A dozen varieties of Baptist churches, some little better than shacks, one Presbyterian Church for the prosperous, and a few African Methodist Episcopal, which looked positively prosperous next to the Southern Baptist. Two hours of driving on secondary roads through this desolation was utterly weird.

Image result for south carolina pine barrens

Anyone who thinks the US is rich compared to Canada needs to contemplate places like South Carolina before they get too confident. The same poverty exists in New Brunswick too, but I have not seen poverty so extensive as that of South Carolina. The region is a pine barrens. We have something the same as when you drive from Ottawa to Peterborough on Route 7, and come across little shacks selling blueberries. But this is the result of no soil and bare rock. In South Carolina the poverty appears to be without geographic limit.

This brings me to Bloomberg’s spending $500 million on television ads.

Roughly $1.50, for every American: 500 divided by 327

The claim that this would have produced a million dollars for every American is a mistake. The actual amount of Bloomberg’s expenditure would be $1.50 per American, which could get them a Coke or something, and not a million per American, as the people on TV seemed to think. Innumeracy is growing as fast as ignorance, thanks to modern education.

As we drove north on I-95 and then I-81, we did not see prosperity thicken until Virginia. The Shenandoah Valley looks as rich and productive as good soils can make it. At the upper end of it, near Maryland, were huge factories and warehouses, probably serving the Washington-Baltimore-Richmond prosperity zone. Even former coal mining and manufacturing towns of Scranton, Wilkes-Barre, and Binghampton, looked wealthy by comparison to South Carolina.

Mrs Dalwhinnie, who crossed the US in February, said that west of Iowa, a lot of the American West looks much like South Carolina: people living in trailers, scarcely any towns, Walmarts every third town serving as the only shopping available, and hard, hard lives.

These are among the people who will put Trump back into the Presidency. Life may be getting better for the lowest paid of the American population under his nationalist policies, but scarcely soon enough. For the well-off, they have only to look at their retirement savings accounts. They may not like Trump, but they like what he is doing for them.

https://www.pewsocialtrends.org/2020/01/09/trends-in-income-and-wealth-inequality/