Modest Income Growth in 2013 Puts Slight Dent in More than a Decade of Income Losses

From the Economic Policy Institute:

“Wage trends greatly determine how fast incomes at the middle and bottom grow, as well as the overall path of income inequality, as we argued in Raising America’s Pay. This is for the simple reason that most households, including those with low incomes, rely on labor earnings for the vast majority of their income. That is why my initial look at the data from the newly released Census Bureau report on income and, poverty in 2013 will look at wages and the incomes of working age households.

The Census data show that from 2012 to 2013, median household income for non-elderly households (those with a head of household younger than 65 years old) increased 0.4 percent from $58,186 to $58,448. However, that modest growth barely begins to offset the losses incurred during the Great Recession or the losses that prevailed in the prior business cycle from 2000 to 2007. Between 2007 and 2013, median household income for non-elderly households dropped from $63,527 to $58,448, a decline of $5,079, or 8.0 percent. Furthermore, the disappointing trends of the Great Recession and its aftermath come on the heels of the weak labor market from 2000-2007, where the median income of non-elderly households fell significantly, from $65,785 to $63,527, the first time in the post-war period that incomes failed to grow over a business cycle. Altogether, from 2000 to 2013, median income for non-elderly households fell from $65,785 to $58,448, a decline of $7,337, or 11.2 percent.”

So the question is: why has average US family income dropped from $65,785 in 2000 to $63,527 in 2007 and then to $58,448 in 2013?

The answer is simple. The money has been redistributed from the 99 to the 1 percent, which is why the stock markets and corporate earnings are at record levels and family income has plummeted for fourteen years, and now remains static and historically low.

Free trade treaties, for example, have shipped jobs overseas, and the difference between the old higher US wages and benefits and the new lower overseas wages and benefits has gone directly from the 99 percent and into the pockets of the 1 percent thanks to politicians such as Wall Street Senator Ron Wyden. Nearly two million US jobs were exported from the US in 2013, according to the Federal Reserve. Around thirty million have been exported since 1990. Thank you Senator Wyden.

Corporations have also pushed the income of their employees down, except of course, for CEO’s and important members of the major Wall Street investment banks. Many of these Wall Street people earn millions of dollars by illegally ripping off the retirement accounts of working Americans. US politicians make certain they’re able to do it. See the book Flash Boys by Michael Lewis.

There are a myriad of other ways the government acts as a legislative conduit to redistribute income from the 99 to the 1 percent. This has been ongoing since 1981.

Essentially, this means that the current massive income and wealth inequality we experience today is a function of tax cuts for the rich, which were then used to corrupt government at all levels, as well as both political parties.

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We are in a Great Depression and It’s Getting Worse

I’ve been telling people for years that we’re in a Great Depression, and that despite the election of Barack Obama, things are getting worse. There’s a reason for this. The rich are draining the mass of working people financially dry. They’re doing this using their power that they’ve purchased in the political markets and the corrupt corporate wing of the Supreme Court. Currently, the rich in the USA scam nearly 25 percent of all income generated. They also own over 80 person of all assets, whether we’re talking about cars, homes, stock and bonds. Think about this. Thirty years ago, the richest one percent received about 7 percent of the total income generated in the USA. And they are tearing away more and more income and wealth from those of us who work for a living. That means the rest of us will have less money to buy things. Less things bought means less jobs, less income and more. This is a downward spiral for the 99 percent. This has been going on for thirty years. I don’t usually toot my own horn, but I showed all of this in my book, The Rigged Game. Everything that’s going on now was easily predicted by me when I finished the final draft of the book in 2004.

Click here for a Great Article on Our Current Great Depression

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I finished Cycle Oregon

I was out of action the last couple of days because Cycle Oregon rode into the tiny tot towns of Powers and Riddle. We didn’t have Internet service there.

Derek and I finished the ride. We rode our bikes all the way. Hundreds of other riders used vans to get up hills. We climbed hills the old fashioned way; we pedaled our bikes.

The Asian woman walked up to me and introduced herself. Her name was Eleanor. She lives in the Seattle area. When I mentioned I lived in Portland, her interest in me vanished. We saw each other several more times.

I am sore and tired and this is the second day since we last rode.

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I Saw The Woman Again

There she was! Right in front of me. The woman I’d stood behind on two different days at two different rest stops in front of two different port-a-potties was standing in front of me today. She’d waved to me and said hello on the road yesterday. Today I sat at a table in a restaurant by the door. She walked in, her back turned to me. The bathroom’s were located across the restaurant exactly in front of her. What a coincidence.

She was with a young woman. I’d seen her on the ride several times before. She’d said hi to me the day before, and I’d returned the greeting. It took me a few moments, but I figured it out. This twenty-something was most likely the daughter of the Asian woman. She looked half Asian and half European, at least to my untrained eye.

The two stood at the door waiting to be seated. The young lady glanced at me with her brown eyes. A slight grin creased her face as she turned away. Then she turned to her mother and whispered something that sounded something like, “This isn’t coincidence.” Of course, I couldn’t be certain what she said.

I thought she might have been whispering about me. Maybe not.

A short, bearded man ambled in. His beer belly led the woman and her daughter to a table. The Asian woman didn’t look at me. I tried making eye contact. She’d said “hi” to me on the ride. Who was this guy? Maybe her husband? I decided no, not likely. She wasn’t wearing a ring. Maybe he was a boyfriend. Perhaps he was just a friend. I don’t know, but I’ll let you know what, if anything, happens next.

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Cycle Oregon–Day Two and Three

We started off on a warm morning and ended up in a somewhat frigid afternoon.

We began our ninety mile ride in Sutherland, where it was nearly eighty degrees at 8 am. The ride was easy, at least for the first forty miles or so. Then we ran into the big hill. It was a killer. Cycle Oregon uses sag vans. These vans pick up exhausted, lazy, weak-willed or out-of-shape riders along the route and give them a ride to our next destination. I noticed a ton of bikes loaded onto each passing sag van as I drove my bicycle relentlessly up the monstrous hill at nearly three miles an hour.

After I got over the hill, and by the way I felt that way, I stood behind an attractive Asian woman at a bathroom. The next day, I realized I was standing behind the same woman. So I mentioned that I’d stood behind her the day before. Our conversation ended abruptly when a port-a-pottie became available. Later, she rode past me and said hello. Imagine the odds of that occurring out of 2,200 riders and hundreds of support people going to the bathroom.

That second day we rode into Reedsport with the temperature in the high fifties and the weather kind of drizzy, with occasional drops of rain bombing our jackets.

We left Reedsport the following day. Something was different this day. My body was still feeling the effects of the day before. I noticed, however, a lot more sag vans loaded with riders. I coasted down a long driveway into a state park where lunch was being served 42 miles into the ride. A ton of people followed me. When I left the park I had a strange feeling, like I’d been abandoned. There were hardly any of us leaving. Most of the better riders had left long ago. They were also the riders that left earlier. Of the 2250 riders, I’d been around number 1535 when I came into a rest stop prior to lunch. That means there were about 700 riders behind me and 1534 ahead of me.

Of course, a ton of riders started at 6:30am, but Derek and I usually left base camp more than an hour and a half later. That partially explains why I felt lonely now and then after lunch, with long expanses of not seeing other riders. But those sag vans loaded with bikes passing me by after lunch confirmed that many of those behind me had called it a day.

I fear that on day six I, too, may have to call it a day and drag my exhausted body into a sag van. We have a thirty-nine mile, 3400 feet climb that day. Hopefully that won’t happen.

Tonight I got lucky. Somehow, after feeling weak for many miles, I picked up strength and powered my way into Bandon, Oregon with Derek. Day four is a day of rest. But I’ll still report on it.

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Cycle Oregon -First Riding Day

The weather was hot, the ride was mostly flat, and I discovered we may have a tail wind as we head down the Oregon coast from Bandon, Oregon on Thursday. Things looked great for bike ride, except for my attitude.

What the hell am I doing here? I wondered time and again on Saturday, the day before the beginning of the ride. I had things to do, like write my next book and find a literary agent for my next one. I needed to mow my lawn, fix my bathroom, purchase my new bed, water my tomato plants, go to my Argentine tango lessons. I discovered the answer as to why I was here on Sunday, on the first leg of our journey. That’s when the charm of the ride hits you.

The temperature hit 87 degrees as we roared up 1400 feet in altitude on the first major hill climb that lasted over six miles. Okay, we really didn’t roar. We mostly dragged our sweating butts up the hill. Some walked. I didn’t. I rode.

Strangers talked and joked. I got a flat. I fixed it. Then I pumped up the tire and broke the valve. I didn’t have another spare. But Mike Rees of Charlotte, North Carolina had stopped a few feet away. He offered me one of his spares. I offered him money.

“No way,” he said, “just take it.”

So I did, from a total stranger. We had some spectacular views of Oregon, met people from Switzerland and enjoyed good food. And, oh yeah, pedaling the bike wasn’t all that bad.

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Could the Dow Sink Below 6,000?

In September 2007, I predicted the current recession, the Fed dropping the federal funds rate to zero, deflation, home mortgage interest rates “will drop below 5 percent and possibly 4 percent,” and numerous other things. Of those numerous other things I also said the Dow Jones Industrials will drop below 8,000 and “possibly” drop below 6,000.

My suggesting the Dow could plummet below 6,000 is not a 100% prediction, more of a strong feeling, a musing of a possibility that represents how weak the economy has become under the disastrous Republican economic policies of the last thirty years. And so we may yet reach that sad stage as billions of dollars of illusionary money disappears.

The below 6,000 possibility is now in sight. But we’re not likely to reach there overnight, it’s more a matter of months if we ever reach it, and there is yet a good possibility such a dubious outcome can be had.

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