MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT
Despite reassurances from the White House about the economy picking up, a recent survey by the Federal Reserve reveals a far bleaker perception among US wage earners.
According to Reuters, a Federal Reserve study released on August 7 found most of the 99% pessimistic about their personal income status and economic condition:
In its first large-scale study of household finances, the U.S. central bank uncovered lingering effects of the sharpest economic downturn since the Great Depression, with 42 percent of respondents saying they had delayed major purchases and 18 percent saying they put off a major life decision, including buying a home or getting married, due to the crisis.
Thirty-six percent said they now planned to retire later, according to the online survey.
In a finding that could figure into the Fed's monetary policy debate, three-fourths of households said they expected their incomes to be the same or lower over the next year.
Maybe this is a surprise to the Federal Reserve, but BuzzFlash and Truthout have been reporting for years on the decline in wages relative to inflation. This is due to many factors, but much of it began with Reaganomics and the transfer of income and assets from working Americans to the wealthy. This has gone on through various congressionally sanctioned laws - including grossly excessive tax cuts for the rich - that restructured the economic distribution of the nation's income.
Various corporate tactics to lower wages, break unions and move jobs overseas - among other strategies - have contributed to the plight of hourly and lower- and mid- level white collar workers cutting back on their expenses or incurring debt.
In fact, one of the primary accelerating sources of income for the top 1% - especially in the financial world - is the double-digit interest rate earned on the debt of the working class in the United States. In short, keeping salaries down not only increases corporate profit, it also strengthens the bottom line of banks.
It is hard to swallow the jingoistic politicking in the US - as politicians continually declare the United States the greatest nation in the world for opportunity - when the Federal Reserve report discloses that "more than half of those surveyed said they had dipped into their savings as a result of the recession, and more than a third reported 'going without some form of medical care' for financial reasons."
The Fed study is based on the perception of the respondents, so it doesn't actually provide quantifiable proof as to the accuracy of how the respondents are assessing their economic situations. However, BuzzFlash posted a commentary a short time ago on a New York Times study that confirmed a factual basis for the Federal Reserve findings.
The BuzzFlash column, entitled "Average US Household Now Worth a Third Less, While Assets of the 1% Soar," quoted from the New York Times article:
Economic inequality in the United States has been receiving a lot of attention. But itâ€™s not merely an issue of the rich getting richer. The typical American household has been getting poorer, too.
The inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36 percent decline, according to a study financed by the Russell Sage Foundation. Those are the figures for a household at the median point in the wealth distribution â€” the level at which there are an equal number of households whose worth is higher and lower. But during the same period, the net worth of wealthy households increased substantially.
Whenever the likes of the Koch brothers or politicians start talking about the dangers of class warfare, know that beneath their stern faces, they are smugly grinning.
Why? Because they have waged class warfare relentlessly for decades and have, thus far, won decisively - and nothing but continued grassroots resistance can stop them from achieving a feudal economic system.
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