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Did I say "Recession? What Recession?" Oh right, this recession
June 12, 2013 12:33 PM   Subscribe

Recession prompted 'unprecedented' fall in wages - Wages have fallen more in real terms in the current economic downturn than ever before, according to a report. On top of the rising cost of living, a third of workers who stayed in the same job saw a wage cut or freeze between 2010 and 2011, said the Institute for Fiscal Studies (IFS). "The falls in nominal wages... during this recession are unprecedented," said Claire Crawford from the IFS. Labour said the figures showed there was a "living-standards crisis".
posted by marienbad (62 comments total) 15 users marked this as a favorite

The post title is from here.
posted by marienbad at 12:33 PM on June 12, 2013

Oh, shit. It's not getting any better, is it? We're turning into a banana republic.
posted by Mental Wimp at 12:44 PM on June 12, 2013 [2 favorites]

...a third of workers who stayed in the same job saw a wage cut or freeze between 2010 and 2011...The falls in nominal wages... during this recession are unprecedented

Spin it as patriotic Brits getting a head-start on austerity. Profit!
posted by Thorzdad at 12:46 PM on June 12, 2013

I'm personally convinced that part of the reason the unemployment situation continues despite the improved health of business overall is that employers have figured out that if everyone is desperate to have a job, they can exploit their workers much more easily. Including, of course, paying people ridiculously inadequate salaries for their work. So there's no incentive to start hiring again, because it's better to work your staff to death while underpaying them than to hire staff at appropriate salaries and have them actually think they deserve to be treated like human beings instead of chattel.
posted by winna at 12:52 PM on June 12, 2013 [20 favorites]

The think tank found the pay gap between public- and private-sector workers has "increased substantially" in the past four years.

It said "average real hourly wages" had fallen faster in the private sector than the public sector over the last few years.

The widening gap between what the government has coming in and what's going out is striking - especially if you look at the big recessions of the last few decades - the mid-1970s, the early 1980s and 2008. We've used percentage of GDP so you can see it in real terms each year.

This is the public sector supporting itself with Keynesian stimulus while the private sector seeks to survive through austerity in the form of lower wages.
posted by three blind mice at 12:53 PM on June 12, 2013 [3 favorites]

Wage stagnation is the #1 economic problem in the US as well, it's just that no one wants to acknowledge it. And it goes beyond the recent recession; wages have sputtered along well behind other (read: Investment Class) economic indicators for decades. It is a phenomenon that is not unrelated to the upwardly spiraling salaries of upper management and the financial sector, in my humble opinion.
posted by Mister_A at 12:54 PM on June 12, 2013 [3 favorites]

This is the public sector supporting itself with Keynesian stimulus while the private sector seeks to survive through austerity in the form of lower wages.

Your assertion is not even wrong.
posted by Aizkolari at 1:11 PM on June 12, 2013 [16 favorites]

That's why the jobs are hard to come by. Some will rant and rave about how government gets in the way of job creation, but the simple fact is that businesses are making more employees do the same work for less money to goose profits. Automation continues to replace workers, so that's more jobs gone. When driverless cars become commonplace, a lot more jobs will be lost. There simply is no pressure on businesses to raise wages or employ more people, and no tax cut is ever going to change that.
posted by azpenguin at 1:15 PM on June 12, 2013 [3 favorites]

Public sector employment should be used as part of a comprehensive economic strategy to exert upwards wage pressure and provide a check against private sector wage suppression by offering decent, competitive pay for skilled professional workers. The more public wages and benefits have suffered under the "drown the government in a bathtub" movement, the less competition the private sector has had for skilled workers with subject matter expertise, and the more it's able to get skilled professionals on the cheap.
posted by saulgoodman at 1:28 PM on June 12, 2013 [7 favorites]

That's not a bug, that's a feature. History has shown that the natural condition of the vast majority of the population is abject serfdom. In the past few centuries, we have tampered with this, taking wealth away from the tiny minority who rightfully won or inherited the right to rule and using it to prop up an unnatural, bloated “middle class”. This is the beginning of a readjustment and a move back towards the natural order of things.
posted by acb at 1:35 PM on June 12, 2013 [11 favorites]

Add to the phenomena of reduced wage the reduction in the absolute number of available jobs, due to takeover of those jobs via new technologies.

There is a slow souring of economic opportunity sufficient to return Americans to the "good old days" of the so-called American Dream (which has never really been anything more than the "American Nightmare")

Given the wage slavery and debt that most Americans find themselves in, we would find ourselves defined as "slaves" by Aristotle's standards.

The diminution of opportunity (worldwide) is going to especially hit those hardest who are not well-networked via class and/or cash.

I think America is going to be OK, long-term, mostly due to the diverse cultural and intellectual diversity of American culture. That said, we are going to go through a considerably long period of adjustment, where individuals are going to have to experiment with new ways of living (called "adaptation"), and learning some new rules about what "enough" is. We have been a culture of excessive surfeit, and now we're going to reap a whirlwind. Add to this the multiplier effect impacts of our diminution on the world economy, and one can pretty much see that it's not going to be comfy-cozy for quite some time.

Incidentally, if anyone thinks that the Chinese or any other "rising culture" (Brazil, India, etc.) is going to pick up the slack, think again! Those cultures to not have the sheer diversity or transparencies that we have - thus they are at a distinct disadvantage relative to advances through social innovation. That said, well-connected (via cash and social networks) individuals in those cultures - like ours - will thrive. Look for immense pressure, worldwide, coming from the "newly poor" (a relative term) to put pressure on the "haves" to stop showing off their bling.

In all, I think we'll be OK, but it's going to get uglier before it gets better. Hang on! Learn to cooperate, share, live on less (no hair shirts, just be sensible!); forgo outlandish debt; smaller housing spaces; migration to less expensive regions (including international regions - the "new American emigres).

Don't despair! DO something! And, realize that only in the doing will things change (and by doing I don't mean Occupy movements, which only get sucked up and processed by the media). Good luck out there!
posted by Vibrissae at 1:42 PM on June 12, 2013 [1 favorite]

Good, short summary on the Jobs Economist blog:
However, what is most intriguing about the IFS analysis is that it to some extent rewrites the accepted narrative of how businesses responded to the recession. Back in 2010 it was widely asserted that CEO’s and HR managers in larger firms had learnt the lessons of previous recessions and were holding onto staff during the downturn rather than resorting to large scale redundancies...

In fact, the IFS finds, it was mainly larger firms who cut jobs whereas small firms were more likely to keep workers on at lower pay in order to limit the impact of a fall in productivity on unit labour costs. With credit hard to come by but labour getting cheaper, small firms instead cut investment rather than jobs, this probably further reinforcing the drop in productivity. The IFS shows that firms with fewer than 50 employees suffered a productivity fall of 7% relative to a pre-recession trend, compared to no change for firms with more than 250 employees.

All this suggests that an explanation for what’s happened to UK jobs, pay and productivity in recent years mainly revolves around the balance of power between bosses and workers in small firms, where employment relations are highly individualised and staff are most exposed to the availability of an abundant supply of people in the external labour market. It also suggests that the micro-economic policy response lies in easing credit constraints to small firms and supporting their ability to invest in physical and human capital in order to boost productivity, rather than further watering down of employment regulations which would simply reinforce the foundations of our low-pay, low productivity economy.
My take is that we're trapped in a low-wage, low-productivity, low-investment cycle and desperately need some way to break out of it. All that the mainstream political parties seem to be offering though is lower public investment (austerity), and lower wages through workfare schemes and labour market "reforms", making the cycle worse.
posted by TheophileEscargot at 1:44 PM on June 12, 2013 [2 favorites]

History has shown that the natural condition of the vast majority of the population is abject serfdom. In the past few centuries, we have tampered with this, taking wealth away from the tiny minority who rightfully won or inherited the right to rule and using it to prop up an unnatural, bloated “middle class”. This is the beginning of a readjustment and a move back towards the natural order of things.

Not only does this neofeudalistic drivel misunderstand what "natural" means, but it betrays an exceedingly tendentious and simple-minded reading of history as a single story that repeats over and over. Anyone who would say something like this and mean it has no place in civilized society.
posted by clockzero at 1:45 PM on June 12, 2013 [8 favorites]

“When it gets down to it — talking trade balances here — once we've brain-drained all our technology into other countries, once things have evened out, they're making cars in Bolivia and microwave ovens in Tadzhikistan and selling them here — once our edge in natural resources has been made irrelevant by giant Hong Kong ships and dirigibles that can ship North Dakota all the way to New Zealand for a nickel — once the Invisible Hand has taken away all those historical inequities and smeared them out into a broad global layer of what a Pakistani brickmaker would consider to be prosperity — y'know what? There's only four things we do better than anyone else:
microcode (software)
high-speed pizza delivery”
― Neal Stephenson, Snow Crash

Also I second the notion we're probably on a return path to some sort of neo-feudal social structure. Given that most of human history has been dominated by a very pyramidal hierarchy with a small top and very large bottom, from ancient china japan and most of the history of the west, I think that the onus of rhetoric is on those who think that's an unlikely ultimate social stable-state, especially given the trajectory of the rapidly disintegrating middle class.
posted by ishrinkmajeans at 1:50 PM on June 12, 2013 [3 favorites]

Slavery has always been defined as much in terms of economic coercion, political and social self-determination as in terms of material standards of living. There have always been some classes of slaves whose material conditions and treatment were better than most people tend to think when they imagine the institution of slavery. Slavery's as much about political franchise, social equality and economic justice as it is about having access to food, nice stuff and entertaining diversions.
posted by saulgoodman at 1:52 PM on June 12, 2013

I think that the onus of rhetoric is on those who think that's an unlikely ultimate social stable-state, especially given the trajectory of the rapidly disintegrating middle class.

That's exactly what the confederate secessionists believed in the Civil War era, too. Not to mention, the tax strikers among the French upper-classes in the lead-up to the French Revolution. You argue for your "natural cycles," and I'll argue for mine.
posted by saulgoodman at 1:54 PM on June 12, 2013

Because most of human history has been dominated by a feudal structure doesn't mean that this is a good thing obviously. I also don't like being compared to a proponent of slavery or a Jacobin thanks.
posted by ishrinkmajeans at 1:58 PM on June 12, 2013

I didn't mean to compare you to either. But it's true that people have argued "serfdom" is a more natural and stable state before, and those people tended to be on the wrong side of history a lot.
posted by saulgoodman at 2:01 PM on June 12, 2013 [1 favorite]

You know, I'd be fine adapting to new economic realities, and trying new ways of living if I didn't know that a small group of people will never have to do this because they've stolen all the money.
posted by TheWhiteSkull at 2:02 PM on June 12, 2013 [17 favorites]

and Old Economy Steven continues to feel extremely, painfully poignant.
posted by entropone at 2:03 PM on June 12, 2013 [1 favorite]

If we want to get to something even resembling a meaningful statement, we could say that agrarian civilizations tend towards totalitarian hierarchies dependent on continuous expansion to maintain their power, but that expansion accelerated under industrial development, hitting a wall, destabilizing these civilizations to the point where they pretty much all collapsed (or are collapsing even now), especially in the late 18th century onwards (but the same has happened to many empires before). Social democracy is something we rigged up to stop us all from being in a state of perpetual war, but now the elites have no sense of perspective and seem inclined to dismantle these institutions, consequences be damned.

That's a bummer, for sure. But I don't see a way back to 18th century social structures without falling into technodystopian tropes (but hey, that's pretty much where we are now anyway).
posted by mek at 2:07 PM on June 12, 2013 [2 favorites]

Saulgoodman I am arguing that a middle class is a defacto good thing but most likely a historical aberration that will disappear and there's nothing we can do about it. This is the opposite of "bad thing that is disappearing but we should keep it out of argument to history" which I'm not claiming.

Also seconding that demands for sacrifice usually don't include the speaker. You want sacrifice? Sure, what are you planning to give up?
posted by ishrinkmajeans at 2:10 PM on June 12, 2013 [1 favorite]

Historically, societies have been hierarchies with a few prosperous people on top and a vast pool of serfs on the bottom because that's what it took to make food then. Now it doesn't. That isn't going to change.

Remember, if we all fell back to 1948 standards of living, we could get by on 2.7 hours of work a day now because of increased industrial productivity.
posted by Michael Roberts at 2:16 PM on June 12, 2013

Demands for sacrifice are either the rich saying the poor should work for a change, or are hairshirt religiosity in modern garb.
posted by Michael Roberts at 2:17 PM on June 12, 2013 [2 favorites]

Because most of human history has been dominated by a feudal structure doesn't mean that this is a good thing obviously.

This is factually mistaken, although the extent to which it is so (from plainly wrong to outrageously misinformed) depends upon how far back one measures human history. Feudalism was really only popular for a chunk of medieval and early-modern history in Europe, and never existed at all in some parts of the world. The quoted individual above is naively and foolishly conflating feudalism with political systems characterized by non-democratic decision-making and massive, persistently cross-generational wealth disparities. A lot of people who don't know much about history or politics make this mistake, and it obscures the fact that socio-political systems actually don't have a permanent character despite the fact that, diachronically and across cultures, the powerful tend to entrench their power and privilege in increasingly dehumanizing and brutal ways unless checked by systemic reforms that democratize power and coalitions with broad popular support. How this translates into real political systems is determined by historical conditions, not some ostensibly unchanging characteristic of social organization itself.
posted by clockzero at 2:22 PM on June 12, 2013 [4 favorites]

Seriously, Capitalism in its purest form is Feudalism.

Other other hand, Socialism in its purest form is Impossible. (Which is another problem.)
posted by oneswellfoop at 2:23 PM on June 12, 2013 [1 favorite]

I like to rant about the economic situation in the U.S. as much as the next guy, but y'all *do* realize this article is about the U.K., right?

There was a focus on austerity in the U.K. that was not quite duplicated stateside.
posted by superelastic at 2:24 PM on June 12, 2013 [3 favorites]

Seriously, Capitalism in its purest form is Feudalism.

This is complete hogwash, no offense oneswellfoop. Feudalism only makes sense when you live in a pre-modern world. Capitalism supplanted feudalism.
posted by clockzero at 2:25 PM on June 12, 2013 [6 favorites]

I've already given up a lot of the economic and social independence my grandparents' generation enjoyed--unlike them, I own virtually nothing of any significant economic value. And I have much less bargaining clout with employers than they did. There's more I could say but my son's literally screaming for my attention at the moment...
posted by saulgoodman at 2:30 PM on June 12, 2013

there was is a "living-standards crisis".

posted by koucha at 2:31 PM on June 12, 2013

clock zero

When people here are talking about feudalism in this thread they are talking about a massively bottom heavy social structure, not liege lords and titles of nobility.

I also wonder what happens when most of the means if production have been automated or outsourced. My guess is that you'll have a huge class of unemployed impoverished and a few wealthy owners of robot-factories. A hugely disparate social structure (or "feudal" one) need not be based on the inefficiencies of agrarianism if it can rely on the over efficiencies of capitalism.
posted by ishrinkmajeans at 2:33 PM on June 12, 2013

Wait, none of you guys has ever seen a hamburger before? It looks like this → <🍔> See if you can spot one earlier on this page!
posted by Nomyte at 2:38 PM on June 12, 2013 [1 favorite]

Whether the original "hamburger" poster was in jest, I think the argument he presented is a fair point. Also, irony kind of sucks as a rhetorical device; it's boring to not seriously take a position or imply that everyone who takes the position you're being ironic about aren't with it without presenting a proper rebuttal.
posted by ishrinkmajeans at 2:43 PM on June 12, 2013

Given that most of human history has been dominated by a very pyramidal hierarchy with a small top and very large bottom, from ancient china japan and most of the history of the west,

From what I've read about about pre-agrarian societies, most were not so strictly hierarchical. And since most of human history is pre-agrarian, it's not accurate to say that "most of human history has been dominated by a very pyramidal hierarchy."

What is accurate is that, as Michael Roberts alludes to, pyramidal hierarchies worked well for agrarian societies (or at least, the powerful in those societies). The rise of the industrial age and urbanization gave rise to modern capitalism and democracy, along with progressive innovations like labor unions.

Now we're in a new age and we still don't know what the economics of that will look like. But I don't think it's correct to assume we'll slide back into feudalism, mostly because the new economic models rely on a well-educated populace, and education is incompatible with serfdom/slavery.
posted by lunasol at 2:43 PM on June 12, 2013 [3 favorites]

Of course, that's not to say that the current economy isn't scary as hell, or that the oligarchs won't do everything they can to try and make a feudal economy.
posted by lunasol at 2:44 PM on June 12, 2013 [5 favorites]

When people here are talking about feudalism in this thread they are talking about a massively bottom heavy social structure, not liege lords and titles of nobility.

I'm not sure the loose description you give is the same one that everyone else is working with, but more importantly, that's not what feudalism is. I'm as descriptivist as the next right-minded fellow but that's simply a misuse of the term concomitant with a misunderstanding of what it refers to.
posted by clockzero at 2:58 PM on June 12, 2013 [3 favorites]

I hope everyone in this thread read the link and/or are aware that this refers to the UK.

The US shares some of these issues, but the economic situation is much worse in Britain than it is here and it's because Britain has been implementing austerity for years now and has had neither the stimulus nor the QE stuff that the US has had.

"This is the public sector supporting itself with Keynesian stimulus while the private sector seeks to survive through austerity in the form of lower wages."

Aizkolari's joke aside, that statement is wrong, both clauses but especially the first. Your own link shows that public expenditures have dramatically fallen since 2009. That's the opposite of "Keynesian stimulus". That's austerity.

And "austerity" in the UK and the Netherlands and elsewhere in the north (as opposed to the periphery) is all about reducing government expenditures (and raising revenue) to reduce debt because it's thought that debt creates uncertainty and fear that is inhibiting private spending and investment and that the public sector was large and inefficient and that reducing government means that money would move into the private sector and it would be invigorated (basically Reagan/Thatcher economics). That is to say, the theory, the claim has always been that the economy would get better and businesses would hire and wages would rise as a result of austerity. Businesses don't really pursue "austerity" policies, they just respond to prevailing economic conditions as they've always done.

As government policy, austerity was never meant to encourage businesses to limit wage growth. The promise is that it would do the opposite.

And it's obviously a combination of monumental stupidity and ignorance by people who think that public debt is the cause of the recession and ideological mendacity aimed at reducing government for the sake of reducing government.

All that said, austerity in the periphery is partly intended to result in falling real wages, even falling nominal wages. It's partly the same rationale as elsewhere — that debt is the root of all that's wrong and therefore government expenditures need to be cut while government revenue needs to be increased; but it's also about causing an intended relative deflation in wages. That is, to the degree to which there's an economic rationale for austerity in the periphery that's distinct from the "debt is bad" rationale, it's the perfectly reasonable theory that the currency union caused investment to pour from the core into the periphery, causing booms, where wages skyrocketed, and now that the party has ended and the firehosse of investment has stopped, wages in the periphery are too high relative to the core for the periphery to be able to be competitive in exporting products back to the core such that it would then have the income to repay its debts. So, the idea is that you want to make wages in the periphery fall so that they'll be able to sell relatively inexpensive stuff to the rest of Europe, which will help them out, providing jobs and income to pay debt.

This sound bad, but in theory if wages fell, and property is falling, then the cost of living would also fall and so internally it would balance out and wouldn't impose a burden. But if wages were pretty low relative to the rest of Europe, goods manufactured there would be attractive to the rest of Europe because they'd be less expensive.

In reality this doesn't work. The reason this doesn't work is that nominal wages really, really don't want to ever fall. People hate that. Even if the cost of living fell exactly in line with wages, people would hate it. Employees hate it and so employers are very reluctant to ever actually reduce nominal wages. Instead, they'll freeze hiring and raises and do other things to lower labor costs, but basically the last thing even employers end up doing is actually lowering wages. And so wages are very "sticky", as they say. Deflation doesn't really work for these purposes because there's enormous friction against it happening.

It does happen, but over spans such as more than a decade.

The alternative to this is for there to be some inflation in the core. This has exactly the same result as deflation in the periphery. But while people, especially Germans, don't really like inflation, moderate inflation is pretty tolerable compared to actual deflation and wage reduction. So, ideally, you'd not be trying to deflate the periphery, but inflate the core. This isn't happening in Europe mostly because the Germans have a deep horror of inflation at all and also because since they and the French are chiefly the ones who hold the debt of the periphery, they also hate inflation because inflation harms lenders while it help borrowers.

This is separate from the UK situation with regard to austerity, but there are some relationships. Mostly, though, the UK and northern Europe fascination with austerity comes down to a very simpleminded "public debt is bad" belief that this is the cause of the recession and that if you fix that, everything will get better. And that there's still a lot of Thatcherites in Britain who really believe, like US conservatives, that reducing government is inherently a good thing in terms of economics. The promise of these politicians has been that taking this bitter medicine four years ago would result in economic growth today. That hasn't happened. They keep coming up with excuses for this.
posted by Ivan Fyodorovich at 2:59 PM on June 12, 2013 [11 favorites]

feu·dal·ism  (fydl-zm)
1. A political and economic system of Europe from the 9th to about the 15th century, based on the holding of all land in fief or fee and the resulting relation of lord to vassal and characterized by homage, legal and military service of tenants, and forfeiture.
2. A political, economic, or social order resembling this medieval system.
feudal·ist n.
feudal·istic adj.

See 2
posted by ishrinkmajeans at 3:03 PM on June 12, 2013

Seriously, Capitalism in its purest form is Feudalism Faustian.
posted by vers at 3:08 PM on June 12, 2013 [2 favorites]

Is the U.K. like the U.S. in keeping the minimum wage low? The U.S. may not have engaged in the level of austerity that other countries have (Thank you, everyone who voted against TeaPublicans), but the 'sequester ', a series of austerity measures that kicked in when no budget could be passed, has applied austerity in ways that most hurt the poor. Social supports for food, rent, child care, etc., allow the working class to subsist on their low wages. Without those supports, it just gets harder to have any life at all, jobs or no jobs.
posted by theora55 at 3:45 PM on June 12, 2013 [1 favorite]

wow, has the global economy gotten so bad that people don't even recognize a hamburger anymore?

I've asked this before, and I've never heard an answer that makes sense: what, exactly, is the end game for the elite who keep siphoning off more and more of the wealth of nations for themselves? Are they all going to move into impregnable redoubts and be attended by robotic servants while the rest of us fight over scraps?

I mean, at some point they've got to realize that they're bleeding the rest of us a little bit too much, don't they? Surely they realize there *has* to be a middle class and that it can't just be the super elite looking down from Olympus at all of the rest of humanity?
posted by lord_wolf at 4:12 PM on June 12, 2013

Are they all going to move into impregnable redoubts and be attended by robotic servants while the rest of us fight over scraps?

Yes, lord_wolf, I think that's pretty much it, except they may need to hire some human enforcers to kill anyone who thinks about trying to take their stuff.

Given the public behavior of the so-called "1%" over the last 30 years or so, I have no doubt that the vast majority of them would happily see hundreds of millions or perhaps even billions of people starve to death before they'd agree to even the slightest increase in taxes. Concepts like the common good and noblesse oblige are dead, and won't be reanimated soon. There is nothing more important to them than money.
posted by Nat "King" Cole Porter Wagoner at 4:57 PM on June 12, 2013 [4 favorites]

From the rational (self-interested) point of view, the goal of the rich is to slowly bleed off wealth from the rest at whatever the fastest possible rate is that doesn't provoke significant revolt. Minor revolt is ok -- they want that in fact, since that provides the feedback to know when you're going a little too fast, which is necessary if you want to efficiently keep the needle right on the red line. OWS* (or arguably the original Tea Party) is actually useful to alert the 1% that they need to slow down and find new low-visibility routes for wealth transfer (or just fall back temporarily on the old standbys, such as tax cuts). Starving people to death, though, is bad strategy: revolutions are much more likely when people starve. Much better to simply taper things down, particularly if technological advancements provide a steady supply of low-level progress even while real wealth levels are flat or declining. Even occasional steps in the wrong direction are ok, as long as the net is good (from their point of view): for instance, 1 step back in each Democratic administration, 2 steps forward in each Republican. The rich take the long view.

This is why certain folks still advocate revolutions.

*I know the article is referring to the UK, but despite the differences in degree of austerity, many of the economic and policy issues are of course similar in the US, as well as most other capitalist democracies.
posted by chortly at 6:39 PM on June 12, 2013 [4 favorites]

You're right, chortly - a parasite that kills its host too quickly will have trouble over the long term, as will a predator who eats all the available prey and can't find a new hunting ground.

Some rich people are smart enough to take the long view you describe. But it seems to me that increasingly, a lot of them seem to have a toxic combination of greed, impatience, racism, contempt for workers and the poor, and some other stuff that leaves them unable to control themselves. It may prove to be their undoing eventually - we can hope - but in the meantime, a lot of people will have to suffer.
posted by Nat "King" Cole Porter Wagoner at 7:33 PM on June 12, 2013 [1 favorite]

This debate would be a lot more pleasant if it were leavened by some empirical details.
posted by lambdaphage at 7:34 PM on June 12, 2013

lambdaphage, that's a five-year-old article based on a single study, so I don't know that it's exactly definitive with regard to the current political and economic situation. Also, the WSJ's opinion page and blogs aren't what most people would consider an objective source when it comes to issues of wealth and class.

It's true that some rich people vote for Democrats, and some support programs that benefit their inferiors in the lower classes. Some of them may be genuinely decent people who want to hold up their end of things and try to build a better society. But some are just the smarter sort of predators chortly was describing, who understand that a lamb can be sheared many times to make hundreds of sweaters, but it can only be Sunday dinner once.
posted by Nat "King" Cole Porter Wagoner at 7:46 PM on June 12, 2013

Here you go, fresher numbers from an approved source. Note that even though this graph cannot resolve the distinction Frank makes between the merely rich and the mega-rich, the trend is still evident.

The source I cited originally was Robert Frank, a Cornell economist who studies these issues professionally and publicly advocates increasing taxes on the rich. The blog just happens to be hosted by WSJ. I am embarrassed to have to spell that out. And, as Noam Chomsky noted, the WSJ's reporting is typically excellent-- it's the op ed page that reads like it was written from another planet.

Seriously, there are rich people that have done real damage by getting ahold of various levers of institutional power, but I'd much prefer to talk specifics than foam at the mouth about "the elite", whose political attitudes can actually vary considerably depending on one's definition of the term.
posted by lambdaphage at 8:14 PM on June 12, 2013 [2 favorites]

Yeah, I think it's unhelpful to talk about "goals" of the rich in such a matter.

Information does not "want" to be free. Evolution does not "want" an animal to reproduce. Outside of oligarchies few rich have the detriment of the underclasses as a "goal". Yes, things often end up emulating the results of that scenario. Yes, talking about the goals of the rich can be good rhetoric. But describing it as an actual goal of the actual rich encourages faulty diagnostics.
posted by tychotesla at 8:21 PM on June 12, 2013 [4 favorites]

The goal is not to impoverish the lower classes. The goal is to get all the money. The impoverishment and accompanying human suffering are, depending on how you look at it, either nature's way, a cost of doing business, or a side effect providing entertainment for the sadistic and opportunities to posture about moral superiority and personal virtue for the rest.

lambdaphage, those numbers may be more recent, and perhaps the source is credible. But I'm not sure of the point you're trying to make. Yes, some of the ultra-rich voted for a Democratic candidate. But his economic policies are in many ways similar to those of Republicans in the recent past, say the 1970s, before tax cuts became the be-all and end-all.

At this point, the only people who think President Obama is a liberal are Fox News and that ilk. He's clearly a centrist: somewhat liberal on social issues; thinks of economic issues in terms of business, not labor; and, though he hasn't started any new wars, has acted in ways that suggest he holds views very similar to what used to be the Republican consensus on national security and foreign policy.

So if some wealthy people support him, what does that prove? Are you assuming that most people think there's a significant difference between the Democrats and Republicans on these issues? Because I'm not sure that's so.
posted by Nat "King" Cole Porter Wagoner at 8:45 PM on June 12, 2013

"Some of the ultra-rich" is actually two-thirds of the ultra-rich (as defined by the poll as those with a net worth of over 30 million), making Obama substantially more popular among sadists and moral posturers, as you would have it, than among the electorate as a whole. The fabled 1st percentile tends to vote like the 70th percentile.

Let me quote to you from the article by known capitalist running-dog Robert Frank:
Among the Upper Richistani’s [sic] supporting Sen. Obama, tax policies ranked last, with only 16% citing them as important. “Social issues” ranked first, with “policies dealing with wars” [remember, this is 2007...] ranking second (67%) and Supreme Court nominations and health-care issues ranking next.
The fact that Obama is not Ralph Nader does not bear on the poll's main finding that the mega-rich report being motivated by issues on which Obama was widely expected to be a convincingly liberal candidate, rather than by some urge to dismantle the system.

As it turns out, voting patterns are complex (see Andrew Gelman's work on this) and you actually need to do some empirical digging and statistical modeling if you want beliefs that accurately reflect reality instead of a Two Minutes' Hate.
posted by lambdaphage at 9:19 PM on June 12, 2013

Wealthy people like Barack Obama because defaulting on the debt out of spite is bad for business.
posted by ishrinkmajeans at 9:19 PM on June 12, 2013 [1 favorite]

It's jolly to know that the ultra rich love Pres. Obama. I hear he's all for the poor folk, and has taken the time to actually meet some. Then, of course shoo'd them off the lawn because "What would the neighbors think?"
posted by evilDoug at 9:58 PM on June 12, 2013

I kid, but really Pres. Obama is not a friend to what used to be called the working or middle class (not to mention the poor). Yes I prefer ANY Democrat to a Teabilly nutbag, but it would be nice to have one who at least pays lip service to liberal values.
Also, while I don't believe we're sliding into feudalism, someone (and yes I AM so lazy I'm not even going to check) suggested that it was obvious this wasn't going to happen because feudalism relies on an uneducated working class, and yay team America and ejimacation! In Colorado where I live, I get to witness the dismantling of our public education system, maybe it's not happening where you live but it sure is here. This does not fill me with hope for the near future.
posted by evilDoug at 10:08 PM on June 12, 2013 [2 favorites]

The goal is not to impoverish the lower classes. The goal is to get all the money.

The goal is not to get all the money, the goal is to make money.

The effect may be the same, but it's an important distinction if you're trying to diagnose. It's counterproductive to stereotype something that you're trying to understand.
posted by tychotesla at 10:22 PM on June 12, 2013 [3 favorites]

tychotesla, I stand by the use of the word "get." The kind of people we're talking about don't care if they generate new wealth, or simply appropriate existing wealth for themselves. For an example, consider the ongoing efforts to "privatize" Social Security; the "reform" proposals are simply a way to steal money that would have gone to benefits for working people, and give it to Wall Street as "management fees" and whatnot.

lambdaphage, I still don't see your point. In terms of economic policy, President Obama hasn't done much of substance for working people or the middle class, and nothing for the poor. He's talked a little bit about a need for small tax increases, but otherwise has generally favored policies that help big businesses and the wealthy. Why wouldn't they support him? They know none of the tax increases can possibly pass in the current House anyway.

The social issues stuff is a red herring. There are plenty of wealthy people who are "liberal," in the sense that they don't embrace a right-wing/evangelical Christian social agenda. They don't hate gays or want to ban abortion completely, may be OK with decriminalizing pot, and so on. For the most part, these issues don't affect them personally, because no rich person ever goes to jail for having an illegal abortion or possessing a few ounces of weed, or worries about getting fired from a job for being gay.

Moreover, those aren't even really liberal positions anymore; most of them are solidly mainstream, but just get labeled as "liberal" by a media industry that parrots right-wing framing of the issues.

Lastly, trying to evaluate the actions of rich people by looking at their self-reported voting patterns seems like a sucker's game. They're as capable of lying to pollsters as anyone, and have more than enough incentive to do so, if only to convince themselves that, "Hey, I'm not the problem here." And even if they're telling the truth, what they do with their money is more important than how they vote anyway.

I don't think all wealthy people are amoral super-predators; but enough of them are, and their actions are sufficiently unconstrained, that it's a problem.
posted by Nat "King" Cole Porter Wagoner at 5:41 AM on June 13, 2013 [3 favorites]

Isn't it wonderful how a post about the British economy, wages, and austerity became a debate about Obama and American millionaires?

Yes, I'm filled with wonder. A bad kind of wonder.
posted by Ivan Fyodorovich at 6:43 AM on June 13, 2013 [4 favorites]

There was an interesting article positing that austerity developed historically both because tax revenues fell during recessions but also because austerity actually works when full employment is the "state of nature". In other word, if almost everyone works growing food, then government market manipulations, palace building, etc. failing improves the economy by correcting food prices and sending everyone back to more important work like growing food, lest they starve.

It seems that ancient austerity and keynesianism both increase the velocity of money by spreading the money around more, but keynesianism does not necessarily optimize the economy like austerity does, and modern austerity reduces the velocity of money by cutting social programs instead of cutting unnecessary work.

In the modern world, we could optimize our economy by reducing "control" jobs like military, police, management, finance, etc. while spreading around the important work much more evenly by shortening the work week. (previously)
posted by jeffburdges at 8:03 AM on June 13, 2013

The goal is not to get all the money, the goal is to make money.

I reality some try to get, some try to make. Making money through wealth creation is a fine and noble activity. The real problem lies in the getting rather than making. (I recognize that both can be contained in the same activity, but am ignoring that wrinkle, as it isn't relevant to the current discussion.) People who expend their time figuring out how to siphon money off in large amounts through little productive effort distort the markets and slow the flow of capital through hoarding.
posted by Mental Wimp at 8:44 AM on June 13, 2013

I agree that some kinds of behavior don't actually create value. And that some or even many rich people do things they know are bad simply because they can. The point I'm trying to make is that if you have to categorize these behaviors you should place making money (+value) near making money (-value) because the motivations are roughly the same, and that making social change (in order to maintain money) is largely a myth except in oligarchies.

This is important because it recognizes systemic failure as a primary problem. It says that one of the most important things about the super-rich has nothing to do with their personality, but instead with the fact that they're super-rich: that alone means that their effect on the world is categorically different than that of the rich because their incentives and concerns are categorically different.

All a super-rich person need to do to come across as predatory and evil is to have the politics and temperament of the well meaning, intelligent, but not entirely aware people that live next door to both you and I.
posted by tychotesla at 7:17 PM on June 13, 2013

[...] making social change (in order to maintain money) is largely a myth except in oligarchies.

I didn't phrase that right, it should probably read something more like:

[...] making social change in order to maintain class distinctions is largely a myth except in oligarchies.

Because again, you don't need to add the concept of humans being evil in order to understand why making tons of money creates political and economic catastrophes.
posted by tychotesla at 7:44 PM on June 13, 2013

Everything is Rigged, Vol. 9,713: This Time, It's Currencies
posted by homunculus at 8:40 PM on June 13, 2013 [2 favorites]

The Next Crash And The Next Bailout Now
posted by homunculus at 9:48 PM on June 13, 2013 [1 favorite]

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