Tue Dec 4, 2012, 08:59 AM
HiPointDem (20,729 posts)
Financial Firms Have Been Hollowing Out America for Decades: the story of our decline
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.
And yet the pit exists. It goes by the name of “austerity.” However, it didn’t just appear in time for the last election season or the lame-duck session of Congress to follow. It was dug more than a generation ago, and has been getting wider and deeper ever since. Millions of people have long made it their home. “Debtpocalypse” is merely the latest installment in a tragic, 40-year-old story of the dispossession of American working people.
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...
But could this just be the familiar story of capitalism’s penchant for “creative destruction”? The usual tale of old ways disappearing, sometimes painfully, as part of the story of progress as new wonders appear in their place...? For the first time in American history, the life expectancy of white people, men and women, has actually dropped... between 1985 and 2010, American women fell from 14th to 41st place in the United Nation’s ranking of international life expectancy. (Among developed countries, American women now rank last...)for the first time since the Great Depression, the social mobility of Americans is moving in reverse... In every decade from the 1970s on, fewer people have been able to move up the income ladder than in the previous 10 years. Now Americans in their thirties earn 12% less on average than their parents’ generation at the same age...Remarkably, 42% of American men raised in the bottom one-fifth income cohort remain there for life...
The ascendancy of high finance didn’t just replace an industrial heartland in the process of being gutted; it initiated that gutting and then lived off it, particularly during its formative decades. The FIRE sector, that is, not only supplanted industry, but grew at its expense -- and at the expense of the high wages it used to pay and the capital that used to flow into it. Think back to the days of junk bonds, leveraged buy-outs, megamergers and acquisitions, and asset stripping in the 1980s and 1990s...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.
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Financial Firms Have Been Hollowing Out America for Decades: the story of our decline (Original post)
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