Thursday, December 27, 2012

Warren Buffett Wasn't Joking, We're Being Exterminated

Ever since the mid-70's, when America's middle-class had peaked, our "captains of industry" began suppressing wages until they remained stagnant, forcing millions of American workers to increasing rely on government entitlements --- while at the same time, also attempting to completely eliminate government entitlements.

Six years ago when Warren Buffett said: “There’s class warfare all right, but it’s my class, the rich class, that’s making war --- and we’re winning," he wasn't exaggerating. The middle-class in America is literally being annihilated.

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Earlier this year history was made at Sotheby’s when Edvard Munch’s iconic masterpiece The Scream sold for $119.9 million in New York, marking a new world record for any work of art sold at an auction.(See my post: The "SWAG" Economy of the 1% )

Leon David Black, an American businessman and money manager that specializes in leveraged buyouts, bought the painting on May 2, 2012. Mister Black founded the private equity firm Apollo Global Management.

The painting reminds me of a middle-aged American worker witnessing the destruction of the middle-class before his very eyes.

The statistics that you are about to read below prove beyond a shadow of a doubt that the middle class is being systematically wiped out of existence in America.

From Business Insider: "The rich are getting richer and the poor are getting poorer at a staggering rate. Once upon a time, the United States had the largest and most prosperous middle class in the history of the world, but now that is changing at a blinding pace.

So why are we witnessing such fundamental changes? Well, the globalism and "free trade" that our politicians and business leaders insisted would be so good for us have had some rather nasty side effects. It turns out that they didn't tell us that the "global economy" would mean that middle class American workers would eventually have to directly compete for jobs with people on the other side of the world where there is no minimum wage and very few regulations. The big global corporations have greatly benefited by exploiting third world labor pools over the last several decades, but middle class American workers have increasingly found things to be very tough.

The reality is that no matter how smart, how strong, how educated or how hard working American workers are, they just cannot compete with people who are desperate to put in 10 to 12 hour days at less than a dollar an hour on the other side of the world. After all, what corporation in their right mind is going to pay an American worker ten times more (plus benefits) to do the same job? The world is fundamentally changing. Wealth and power are rapidly becoming concentrated at the top and the big global corporations are making massive amounts of money. Meanwhile, the American middle class is being systematically wiped out of existence as U.S. workers are slowly being merged into the new "global" labor pool.

What do most Americans have to offer in the marketplace other than their labor? Not much. The truth is that most Americans are absolutely dependent on someone else giving them a job. But today, U.S. workers are "less attractive" than ever. Compared to the rest of the world, American workers are extremely expensive, and the government keeps passing more rules and regulations seemingly on a monthly basis that makes it even more difficult to conduct business in the United States.

So corporations are moving operations out of the U.S. at breathtaking speed. Since the U.S. government does not penalize them for doing so, there really is no incentive for them to stay.

What has developed is a situation where the people at the top are doing quite well, while most Americans are finding it increasingly difficult to make it. There are now about 6 unemployed Americans for every new job opening in the United States, and the number of "chronically unemployed" is absolutely soaring. There simply are not nearly enough jobs for everyone.

Many of those who are able to get jobs are finding that they are making less money than they used to. In fact, an increasingly large percentage of Americans are working at low wage retail and service jobs.

But you can't raise a family on what you make flipping burgers at McDonald's or on what you bring in from greeting customers down at the local Wal-Mart.

The truth is that the middle class in America is dying -- and once it is gone it will be incredibly difficult nearly impossible to rebuild.

Statistics That Prove The Middle Class Is Being Systematically Wiped Out Of Existence In America

  • 83 percent of all U.S. stocks are in the hands of 1 percent of the people.
  • 61 percent of Americans "always or usually" live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.
  • 66 percent of the income growth between 2001 and 2007 went to the top 1% of all Americans.
  • 36 percent of Americans say that they can't afford to contribute anything to retirement savings.
  • 43 percent of Americans have less than $10,000 saved up for retirement.
  • 24 percent of American workers say that they have postponed their planned retirement age in the past year.
  • Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.
  • Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.
  • For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.
  • In 1950, the ratio of the average executive's paycheck to the average worker's paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.
  • As of 2007, the bottom 80 percent of American households only held about 7% of total liquid financial assets.
  • The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.
  • Average Wall Street bonuses for 2009 were up 17 percent when compared with 2008.
  • In the United States, the average federal worker now earns 60% MORE than the average worker in the private sector.
  • The top 1% of U.S. households own nearly twice as much of America's corporate wealth as they did just 15 years ago.
  • In America today, the average time needed to find a job has risen to a record 35.2 weeks.
  • More than 40% of Americans who actually are employed are now working in service jobs, which are often very low paying.
  • For the first time in U.S. history, more than 46 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go higher.
  • This is what American workers now must compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.
  • Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.
  • Approximately 21 percent of all children in the United States were living below the poverty line in 2010 - the highest rate in 20 years.
  • The top 10% of Americans now earn around 50% of our national income.

The 9 Articles Below Also Makes Warren Buffett's Case (The headlines alone tell the whole story)

Corporate Profits Hit Record High --- Worker Wages Hit Record Low 

The Corporate Tax Rate Is Lowest in Decades 

CEO's in the S&P 500 Now Average $13 Million a Year, Year after Year 

Capital Gains Taxes for Rich CEOs at Historical Lows 

50% of all American workers earn less than $26,965 a year. 

Why the Rich Live Longer 

Every Year $1 Trillion Not Taxed on the Rich for Social Security or Medicare 

Murder, Greed and Betrayal of the Rich and Famous 

Every Year Billions of Dollars Lost to Tax Evasion 

*** Google "Bank fraud", "libor rate fixing scandal", "robo-signing mortgage foreclosures" (etc.) to complete this list.

Besides busting labor unions to suppress wages, the Republicans also want to suppress the vote to gain permanent political power. That way the Republicans can totally eliminate unemployment benefits, Social Security and Medicare. The GOP and the rich don't just want to conquer us (the enemy) in this "class war" that they've been waging, they want to completely annihilate us!

And just like Warren Buffett had said, they're winning. And there's not a thing you and I can do about it. If ignorant Republican voters remain ignorant, the middle-class is doomed forever.

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