Home > American Racket. Debt Deregulation, Bubbles, Bailouts and GoldplatedLies > How Right-Wing Billionaires and Business Propaganda Got Us into the Economic Mess of the Century

How Right-Wing Billionaires and Business Propaganda Got Us into the Economic Mess of the Century

AlterNet / By Joshua Holland

“You might wonder why Americans are so docile compared to others in the face of such a brutal economic onslaught by a small and entitled elite. Any number of theories have been offered to explain the apparent disconnect. Thomas Frank argued eloquently in his book What’s the Matter with Kansas? that wedge social issues—“God, guns and gays”—that the American Right nurtures with such care, obscure the fundamental differences between rich and poor, the powerful and the disenfranchised. Class consciousness, common to other liberal democracies, has been trumped by social anxieties, according to Frank.

I would offer two additional explanations. First, the 90 percent of Americans who haven’t seen a raise in 35 years compensated for their stagnant incomes and kept on consuming, buying televisions and going out to dinner. How did they do it? First, by bringing women into the workforce in huge numbers, transforming the “typical” single-breadwinner family into a two-earner household. Between 1955 and 2002, the percentage of married women who had jobs outside the home almost doubled.  Workers’ salaries stayed pretty much the same, but the average family now had two paychecks instead of one.

After that, we started to finance our lifestyles through debt—mounds of it. Consumer debt blossomed; trade deficits (which are ultimately financed by debt) exploded, and the government started to run big budget deficits, year in and year out. In the period after World War II, while wages were still rising along with the overall economy, Americans socked away 7 to 12 percent of the nation’s income in savings annually (the data only go back as far as 1959). But in the 1980s, that began to decline—the savings rate fell from around 10 percent in the 1960s and the 1970s to about 7 percent in the 1980s, and by 2005, it stood at less than 1 percent (it’s rebounded somewhat since the crash—to 3.3 percent at the beginning of 2010).”

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