Reply #11: notes

[rapier]

The entire financial world including the Fed is playing the wage deflation game. This has been going on for years and years folks. Wages have been stagnent for the lowest 7 deciles since 1973, 30 frikken years!!! It was codified under Rubin and Clinton.

Globalization is wage arbitrage, period. Or rather freeing capital movements in order to seek lower wages. Seeking lower wages being the definition of wage arbitrage.

While we can argue that wages are too low in China, it is hard to argue that hundreds of millions of Chineese are not better off now because of those jobs and the partial destruction of communist economy.

If you listen to Greenspan his endless blabbering about the lack of inflation is centered upon wage inflation. He KNOWS wages will not rise and can't rise so this is his ace in the hole. All other inflation can be hidden with statistical tricks, but wages can't be.

The miracle has been, since Clinton's day, how Americans can be sold on policies to lower their pay. Now one can argue the ideology and theology of 'free markets' and the benefits of globalization etc. etc. till your blue in the face but the simple fact is that nobody in their right mind would vote for this if they are a wage slave. Ideology is all well and good for the now significant 'conservative' plurality of voters but when it comes to the pocketbook ideology fades into obscurity.

The trick has been to replace income from wages with the inflation of financial assets and home prices. This has allowed the solidly middle class to feel wealthy despite stagnant wages. Asset inflation is the absolute necessity to maintain political control in America. If and or when the world of finance cracks the world as we know it, politically and cultrually will be swept away, and with it our lifestyle. (God, I hate that word)

Income from work, wages in other words, are doomed to fall in relation to general prices for a long long time. Perhaps forever. The post war period of rising income broadly distributed here in the US was an anomaly.

Most here are appalled to some degree by the mindless consumption that defines American culture. Consumption from which springs, to name an example, environmental disaster. Yet we are reluctant admit that it is high wages, at least higher than several billion other humans can ever dream of achieving which is the cause of that consumption. Cry falling wages if you must to gain political points but know in your heart that Americas tiny percentage of global population using 25% of world energy is a tell that something is way out of wack. Our wages can't rise in relation to the other 5 billion on earth. I'm not saying economics is a zero sum game mind you. I'm just saying that one way or another we are too rich, or perhaps I should say, too wastefull.