The U.S. Labor Market and Household Income Continue To Worsen

From 2001 to 2010, U.S. median household income fell from $72,956 to $69,487. Now this is nominal dollars which magnifies the fall in household income for $72,956 in 2001 would be worth $89,996 in 2010 after adjusting for inflation as per the consumer price index (CPI).

The U.S. median household net worth, which is the value of assets minus debt, dropped from $129,582 to $93,150 over the same 10-year period. Again, this is in nominal dollars and $129,582 in 2001 would be $159,848 in 2010 after ajusting for inflation as per the consumer price index (CPI) (1).

(1) http://www.pewsocialtrends.org/2012/08/22/the-lost-decade-of-the-middle-class/#chapter-1-overview

The results of the 2011 American Community Survey (ACS), released by the U.S. Census Bureau, show that between 2010 and 2011, inflation-adjusted median household income either fell or stayed the same in every state except Vermont and that the distribution of income became more inequitable (2).

Worse yet, a new 2012 study from Sentier Research shows that U.S. median household income has continued to fall since the "end" of the Great Recession stating, "almost every group is worse off now than it was three years ago" (3).

Also declining were U.S. real wages (4) and the U.S. middle class (5).

(2) http://www.census.gov/newsroom/releases/archives/american_community_survey_acs/cb12-175.html

(3) http://www.huffingtonpost.com/2012/08/24/us-annual-income-recovery-recession_n_1828127.html

(4) http://www.huffingtonpost.com/2011/10/20/us-incomes-falling-as-optimism-reaches-10-year-low_n_1022118.html

(5) http://www.pewsocialtrends.org/files/2012/08/pew-social-trends-lost-decade-of-the-middle-class.pdf

One of the social impacts of this has been that the wealthy are increasingly segregating themselves from their less fortunate neighbors as this August, 2012 Pew Reasearch report titled 'The Rise of Residential Segregation by Income' reveals (6).

(6) http://www.pewsocialtrends.org/2012/08/01/the-rise-of-residential-segregation-by-income/

Job growth for U.S. citizens became scarcer too. Domestic job creation is now well below what is needed even to meet new entrants to the labor market with the labor force participation rate at 63.5%, which is the lowest share of Americans over age 16 in the workforce since September 1981. As the Wall Street Journal stated, "That's going way backward!" (7).

(7) http://online.wsj.com/article/SB10000872396390443819404577637653650025944.html?mod=googlenews_wsj

Complicating this dismal domestic labor market are statistics showing that in some areas of the country what domestic job creation there is has been increasingly going to immigrants both legal and illegal. Pew reported that in the second quarter of 2010, American citizens lost more than a million jobs while foreign-born workers gained 656,000 jobs (11). A Center For Immigration Studies (CIS) report showed that of jobs created in Texas since 2007, 81 percent were taken by newly arrived immigrant workers (legal and illegal) (8a).

A November, 2012 CIS report titled 'Who Got Jobs During the Obama Presidency? Native and Immigrant Employment Growth, 2009 to 2012' reveals that, "Since President Obama took office, 67 percent of employment growth has gone to immigrants (legal and illegal)" (8b).

(8a) http://cis.org/immigrants-filled-most-new-jobs-in-Texas
(8b) http://cis.org/who-got-jobs-during-obama-presidency

Despite much of the new job growth now bypassing U.S. natural born citizens, the large influx of immigrants is one of the reasons (in addition to high U6 unemployment, a decrease in real wages, the nation's broken trade paradigm, failure to protect intellectual property and trade secrets from foreign nations to wield for an economic domestic competitive advantage, etc...) for the dramatically increased size of the nation’s low-income population, (9) their resulting dependence on welfare, (10) and their growing reliance on unreported untaxed income (11).

(9) http://cis.org/2012-profile-of-americas-foreign-born-population

(10) http://www.cis.org/immigrant-welfare-use-2011

(11) http://cis.org/kammer/informal-economy

In the past, the U.S. simply absorbed the influx of foreign immigrants because U.S. businesses were booming and U.S. businesses used domestic labor almost exclusively. Free trade has changed that and now we simply don't have the jobs anymore. With demand for labor way way down and the supply of labor way way up, compensation for labor has also fallen. So there are fewer jobs and lower compensation and they are increasingly going to immigrants (both legal and illegal) who are creating immigrant networks that almost always hire other immigrants.

Except for the holiday Q4 temporary turn-around that occurs each year, all of these problems are getting worse over time not better.

Charitable donations have been seriously impacted (12), suicide rates are up (13), and the number of people who have fallen at least 12 months behind in student loan payments has risen by about a third over the last five years. Nearly one in every six borrowers with a student loan balance is currently in default (14).

(12) http://www.barna.org/donorscause-articles/571-the-economy-continues-to-squeeze-americans-charitable-giving

(13) http://www.bloomberg.com/news/2011-04-14/suicide-rates-rise-in-u-s-as-economy-declines-cdc-study-finds.html

(14) http://www.nytimes.com/2012/09/09/business/once-a-student-now-dogged-by-collection-agencies.html?_r=1&pagewanted=all

Furthermore, the U.S. deficit for 2012 is the highest on record (after the supposed end of the Great Recession) at $1.327 trillion usd (15) and inflation is occurring.

Note that U.S. military spending for 2011 is the highest on record (after the end of the Iraq War) at almost $712 billion usd (16) though the Office of Management and Budget (17) revealed that U.S. military spending for 2012 decreased a few billion dollars to almost $706 billion from its high of almost $712 billion in 2011. It should be noted; however, that the Obama administration has predicted in the 'President's Budget' that U.S. military spending overall will rise again in 2013 and 2014 primarily due to defense-related debt interest. Wikipedia explains 2012 military expenditures in layperson's terms (18).

(15) http://www.gpo.gov/fdsys/search/pagedetails.action?packageId=BUDGET-2012-BUD

(16) http://www.sipri.org/databases/milex

(17) http://www.whitehouse.gov/omb/budget/Historicals/

(18) http://en.wikipedia.org/wiki/Military_budget_of_the_United_States#Budget_breakdown_for_2012

Finally, primarily due to the state's enormous population, it's said that "as California goes: there goes the nation."

From the mid-1980s to 2005, California's population grew by 10 million, while Medicaid recipients soared by seven million; tax filers paying income taxes rose by just 150,000; and the prison population swelled by 115,000 (19).

(19) http://online.wsj.com/article/SB10001424052702304537904577277242682364690.html?mod=WSJ_Opinion_LEADTop

But it is the next couple of decades that will see the absolute decline of the U.S. economy in the world according to a recent Economic Co-operation and Development (OECD) report which states:

"On the basis of 2005 purchasing power parities (PPPs), China is projected to surpass the Euro Area in a year or so and the United States in a few more years, to become the largest economy in the world, and India is projected to surpass Japan in the next year or two and the Euro area in about 20 years" (20).

(20) http://www.oecd.org/economy/economicoutlookanalysisandforecasts/lookingto2060.htm

VIEW BONUS VIDEO: THE FLAW:

David Sington's documentary THE FLAW takes an in-depth look at how the credit bubble hastened the economic crash and is a documentary about the causes of the financial crisis, directed by David Sington, which splices the thoughts of economists such as Robert Shiller and Joseph Stiglitz with the testimony of participants in the housing market and some entertaining cartoons and archive clips. It takes its title from the testimony of Alan Greenspan to Congress in which he admitted to a flaw in his reasoning.

Wiki Leaks Details Of The Trans-Pacific Partnership (TPP) Negotiations

Thanks to leaked documents, we now know some of the undesirable details of the secret Trans-Pacific Partnership (TPP) Negotiations being conducted away from the public arena and most don't pertain to trade!



Rather, TPP would impose a system of binding global governance over our federal and state laws and courts. We would be obliged to conform our domestic policies on land use, food safety, financial regulation, foreign ownership, patents and copyright, and more to TPP's terms.

Failure to do so would result in trade sanctions and/or obligations to compensate foreign firms with our tax dollars - penalties imposed by foreign tribunals. We now know the following:

• Offshoring Incentives: TPP has the investor protections also found in NAFTA that help corporations offshore jobs by removing many of the risks associated with relocating to low-wage nations. The U.S. has lost more than 5 million (1 out of 4) of its manufacturing jobs since NAFTA and the global WTO went into effect. This will mean a loss of many more American jobs.

• Ban on "Buy American": Any firm operating in a TPP signatory nation would get privileged access to U.S. procurement contracts paid with our tax dollars! TPP would send our taxpayer money offshore, rather than recycling it here to create American jobs. "Buy American" would be penalized if not made outright criminal.

• U.S. Submitted to Jurisdiction of Foreign Tribunals: TPP would expand the notorious "investor-state" system, subjecting the U.S. to the jurisdiction of World Bank and U.N. tribunals. The tribunals would be empowered to order payment of our tax dollars to foreign corporations operating within the U.S. if they object to complying with the same laws that apply to U.S. firms.

• More Financial Instability: TPP would forbid bans on risky financial products or services while making measures to reduce systemic risk, such as capital controls, illegal.

• Higher Medicine Prices: Big PhRMA would get new privileges to raise drug prices.

Etc...

TPP secrets: Obama covertly handing more power to corporations



Interestingly, New Scientist published a study conducted by a trio of complex systems theorists at the Swiss Federal Institute of Technology in Zurich which combined the mathematics long used to model natural systems with comprehensive corporate data to map ownership among the world's transnational corporations (TNCs).

What they discovered analyzing the relationships between the 43,000 largest transnational corporations on earth was that 147 organizations, mainly banks, wielded a disproportionate power over the global economy.

http://www.newscientist.com/article/mg21228354.500-revealed--the-capitalist-network-that-runs-the-world.html

Forbes explained the size of these 147 companies is simply a reflection of the way most people invest in the public markets; however, allowing the world financial system to be dominated by a relatively few firms is obvious: when they go broke they take everyone else with them, as we have already witnessed.

Another problem is that they wield enormous power over governments and can end up dictating and oppressing the populations and small businesses (e.g. their competitors) of entire nations effectively becoming the "iron hand in the velvet glove" over not only our jobs, income, and property but also our government, rule of law, etc...

It is by leveraging our own government, that they have created a trade and business paradigm by which they displace our U.S. middle class into the ranks of the poor acquiring their income, wealth, and property in the process. The TPP is simply the next logical step for them to take.

It should also be noted that the Commerce Clause of our Constitution is an enumerated power listed in Article I, Section 8, Clause 3 which states that the United States Congress shall have power "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes."

Obama is currently "freelancing" the executive branch to push through a secret treaty to regulate commerce in the United States that allows for foreign corporations operating in the US to appeal regulations to an international tribunal that could over rule American laws. This is a secret backdoor strategy and it's completely out of line.

Also:
1. Visit 'Economy In Crisis' at http://www.economyincrisis.org for more information.

2. Enter your zip code at the Electronic Frontier Foundation to tell your representatives you want "to bring transparency to the TPPs agreement and ensure that the TPP text reflects the interests of all U.S. industries and citizens."

U.S. Recovery Is Dependent On Fixing Its Broken Trade Paradigm

Before leaving office, U.S. President George H. W. Bush signed the North American Free Trade Agreement (NAFTA) On December 17, 1992 which Bill Clinton ratified and it became law. The era of American "free" trade had begun.

The result has been a hollowing out of American jobs, wealth, and innovation to foreign trading partners and the U.S. falling to the bottom in the 2010 CIA factbook for the worst trade account balance. There will be no long-lasting sustainable economic recovery for America until the broken trade paradigm is fixed.

So what went wrong? Trade works when it economically benefits a nation. The problem with our current "free" trade paradigm is that commercial activity is unbalanced to the point where it depletes our economy while enriching others. This has resulted in a redistribution of American jobs, wealth, and innovation which has benefited our trading partners, and those U.S. special interests that profit from it, but materially injured most Americans and the ability of the United States to maintain long-term economic, military, and political supremacy.

Our current "free" trade amounts to a unilateral abandonment of trade barriers by the U.S. to exploit cheap foreign labor and operating conditions for U.S. businesses with the justification that the developing world will grow from accessing our market to create viable markets which U.S. companies can then serve someday.

The problems with this are manifold. First, it leaves a great many Americans unemployed, underemployed, and underpaid. Secondly, foreign markets refuse to follow our lead. They continue to protect their own markets while engaging in damaging activities that range from intellectual property theft to currency manipulation.

U.S. presidents have worked hard with the G20 to try and get foreign countries to do away with their value added taxes (VAT) on American goods and truly dismantle their trade barriers but it's been a material failure. These countries benefit from maintaining a trade advantage and have no desire to negate it.

Our trade imbalance tells the story. Between 1989 and 2009, Americans bought over $6 trillion more from the world than we sold to them and just in 2010 and 2011, we added more than $1 trillion of trade deficit to that $6 trillion. -reference: U.S. Bureau of Economic Analysis

More recently, our trading partners have begun a big push of both buying American companies and forming many new businesses to serve their own markets.

Trading partners like Ireland and Sweden simply keep their tax rates below that of the United States (no matter how low we lower the tax rate on the wealthiest investors and public corporations foreign countries will simply offer a better rate because it costs them nothing to do so and they benefit from it at U.S. expense) enticing U.S. businesses to simply abandon the U.S. and relocate and an increasing number are taking advantage because of "free" trade. The U.S. becomes a place to dump their foreign made goods and services for profit.

The result of this has hurt all but the wealthiest American investors and the multinationals who have profited short-term from the hollowing out of America to maximize their wealth and the foreign countries and workers which benefit from this unilateral unfair trade paradigm.

Initially, the consumer benefited from lower priced goods but the cost of foreign goods is rising due to foreign demand for them increasing negating the benefit of them to Americans.

Yet the most damaging aspect of the unilateral unfair trade paradigm is that U.S. companies and Americans are so undermined by the broken "free" trade paradigm that there's little incentive to build or grow business in the United States anymore while existing American small business owners continue to realize decreased profits overall.

Unfortunately, there is nothing on the horizon from either U.S. political party suggesting they even want to fix U.S. trade. They don't get paid by the special interests profiting from it to fix it. They get paid not to fix it.

As a result, the GOP solution is simply to cut off government social benefits to Americans in a Great Recession in order to decrease spending while seeking tax cuts for the wealthiest Americans in order to implement "trickle-down theory" and stimulate the economy while the Democratic solution is to gain greater government control to try and reduce the costs while raising taxes. Either "solution" won't fix U.S. trade but will create more problems.

Both parties largely ignore military spending which has surged to almost $700 billion a year in 2010, before dropping slightly in 2011, enormous partisan pork earmarks (each just wants the other party to stop theirs), campaign reform to redirect political power away from special interests back to the American people, the decertification of public unions, the massive influx of insourced immigrant foreign labor and illegal immigration which continues to displace American workers, and most importantly: FIXING America's broken business trade paradigm.

It's important for voters to understand that trickle-down theory increasingly fails to benefit American workers because of the broken business trade paradigm. Before "free" trade, American companies used American workers almost exclusively. Now they increasingly use foreign workers both abroad and also insourced in large numbers on visas. Trickle-down today increasingly ends up in the pockets of foreign partners and workers and not American workers.

This is why the GOP strategy to implement trickle-down economics will fail to bring recovery to the average American. They are increasingly bypassed. It simply enriches the wealthy owners of the multinationals and props up foreign producer nations economies and foreign workers who increasingly make most of the products sold in the U.S. today while delivering American invention and innovation into their hands to exploit with respect to their own businesses that compete with the U.S. businesses giving them American invention/innovation!

And even here in the U.S. public corporations increasingly seek out the cream of the crop from the vast pool of low-paid foreign workers to insource

These reasons are also important factors why pumping stimulus money into our economy (a practice both the Bush and Obama administration's engaged in) hasn't brought a jobful economic recovery to most Americans and the practice of borrowing to "stimulate" the U.S. economy in this current "free" trade paradigm will eventually make things much worse rather than produce the long-lasting sustainable economic recovery to America its proponents claim. It flows in and it flows out bypassing Americans.

All the partisan politics being played in the media and by our elected representatives (and we need serious campaign reform to free our politicians from having to look to the pockets of the elitists and multinationals who are benefiting from our broken paradigm to even hold office) aren't going to solve this problem.

We can bring democide to America and balance the budget/pay off the national debt and our nation will still decline. We can turn to socialism in an effort to bring costs down to almost nothing and we'll still decline. Why? Because American jobs, capital investment, and innovation are being transferred to foreign trading partners enmasse due to our broken unilateral unfair business trade paradigm that passes as "free" trade today.

There will be no long-term sustainable economic recovery for the American people until the broken business trade paradigm is fixed.

As things stand right now, we may be looking at two futures. If the GOP "wins," we will end like Mexico. If the Democrats "win," we will end like Greece. Either way, the U.S. Gini index will continue to grow as a disparity between the wealthiest and everyone else continues. America as we know is slowly passing into history and the primary reason for it is a broken business trade paradigm.

The American people need to grasp this and demand in one voice systemic MAJOR trade reform back to a business trade paradigm that benefits Americans and the long-term U.S. national interest. It is the ONLY way to save the standard of living for Americans in the United States of America.

We have to return to an economy that out innovates, efficiently produces, and quickly supplies what the world needs and wants using American labor while protecting our innovation like we did during the Cold War so our competitors don't simply take it and use it against us. That's what made us the strongest economy in the world and what will restore us to long-term jobful sustainable prosperity.


Recommended Reading: