Tuesday, December 27, 2011

Are there no workhouses?

As solid as Sears? Well not so much. Sears announced today that it close one hundred Sears and Kmart stores after a dismal Christmas season. They still have 3500 stores and 3 billion available on their credit line so the dancing isn’t over just yet. Their real problem is that the middle class doesn’t have any money to spend. Even as the economy seems to be perking up the middle class continues to decline.

Sears used to be where the middle class went to pretend they were shopping at a big classy department store, they could feel like the carriage trade who shopped at the real high end stores. Now Sears looks kind of run down and can’t compete on price with the Big Box companies that dominate the China trade. Meanwhile the former middle class are shopping at dollar stores and those chains can’t expand fast enough.

The top 10% now account for nearly 40% of retail sales and the stores that cater to them are doing fantastic business. Increasingly the people doing the marketing don’t even consider anyone below the 80% line. Walmart does cater to the middle class, but their business plan doesn’t involve marketing so much as simply driving out the local competition. Even Walmart isn’t immune to declining sales however. As they spruce up their stores to attract former middle-class people who are on their way down to working poor status, Walmart‘s traditional base are going to the dollar stores to spend what little money they have.

What this economy needs is a 50% increase in the minimum wage, but the Republicans in Congress would burn the Capitol before allowing such a thing to happen. Before the colonists rebelled against the British East India Company (that’s how they spelled “Walmart” in olde English) the British had maximum wage laws, yes maximum wage laws.

Republicans aren’t shy about advocating for a zero minimum wage, they don’t need a maximum as they’ve learned how to keep wages from rising. By not enforcing the anti-trust laws for the last 30 years the Republicans have concentrated so much economic power that they already exceed the corporate brutality that the patriots shed their blood in order to drive it from America.

A lot of people will say that I’m over stating this corporate power and the danger is presents. Once the last social safety nets are done away with, making the poor really desperate, and the last regulations holding corporations back are voided you will see things that you only read about in Dickens or the dystopian writers of the 40’s. Once power is concentrated, those who did the concentrating never give it up willingly, and in fact are compelled to become ever more brutal to maintain the status quo. We have to “concentrate” the power with the 99% while we still can.  www.prairie2.com

9 comments:

Dave said...

There's one thing that I don't hear discussed very often and that is the idea of renting money, or put as it is better known: Consumer credit.

This particular form of expensive lending has been used for many years to hide the fact that most people don't really have any money. It's also been a big money-maker for a few people.

I've been reading lately of credit deleveraging,that people are getting out of consumer debt. Could it be that people can't borrow anymore? Or are they getting used to being poor and not buying so many things?

In any case less borrowing means less money being made by somebody. I have to wonder how much this will shrink the "sort-of-have" class and how small the "have" class can get before it's unsustainable. How well will the upper four percent do selling stuff or, even better, paper to one another?

prairie2 said...

Most of the de-leveraging is from defaults but some is from declining credit availability. These "boom and bust cycles" are about capturing real wealth more than for making money. The one percent have monopolies on everything and can charge the peasants as much as they want. The one percent don't pay taxes, they tax the rest of us by charging higher prices for everything. People in the top 20% excluding the top 2% are having their wealth stolen as well.

Tony said...

Prairie2,

Any discussion of corporate control over this country is not complete without mentioning the Citizens United Supreme Court decision, which historians will note as the end of Democracy in the USA. The turning point doubtlessly is 9/11, the end of the first chapter is with Citizens United and unchecked corporate power over our government through money.

Barring the overturning of that decision, the 99% will never influence elected leaders more than millions of dollars in hush money.

Anonymous said...

Prairie,
When I see young street people with tattoo's all over their body and older street people with cell phones, painted finger nails and a fresh pack of cigarettes, it makes me wonder just how poor are these people or are there priorities really skewed.

I'm not legitimizing the 1%'rs or even those that aren't feeling any sort of a crunch in these trying times, but when I see that kind of frivolous spending it makes me think that poor in America isn't what it used to be.

While I was growing up and becoming acquainted with what poor meant, I saw people using pay phones because they couldn't afford the $4 or $5 a month for a phone in your home, they often lived in dumpy trailer parks or shacks and used public laundromats. And there clothes usually looked like hand me downs that had seen their better day unlike now and what is sold as vintage clothing. And they didn't get food stamps like so many people do today..they ate lots of bologna and mac and cheese.

Are you aware over 50% of kids in some public school districts are on some sort of meal assistance program? And have been long before the great recession started. There's something wrong when parents are making babies they can't afford or are there priorities just screwed up. Sometimes I wonder if we were to go to their homes how many tv's they would have and how much their cell phone bill was?

Poor in America isn't what it used to be. I bet most people in Afghanistan would love to be poor in America.

Again, I'm not trying to legitimize how the corporations have taken over our government and how everything is in their favor now and will be even worse in a few years, but I can't help but think the reason the people in general aren't more upset with what's happening to our country is because they aren't hurting enough ... yet.

PS - I am not a right winger... but it doesn't mean I can't make comments on some of the problems I see within our society.

prairie2 said...

To "not a righter winger". There have always been, and always will be people who make bad choices. That's not the problem. Although an education system that works and universal healthcare would dramatically reduce those bad choices. But really, you are choosing to see the things you want to see that reinforce your beliefs.

Demand_sider said...

In the absence of a decent job or hope for the future, people look for happiness and self worth in Chinese made baubles, food, and body art. The Equality Trust explains this phenomenon pretty thoroughly.

http://www.slideshare.net/equalitytrust/the-spirit-level-slides-from-the-equality-trust

An economy based on American manufacturing would supply much needed pride,more equal wealth distribution, and also prevent Wall St. from contracting with Chinese State Owned Enterprises to waste precious fossil fuels to ship under priced goods that are never repaired or recycled.

The only cure I can see for this unsustainable insanity is an unprecedented stock market crash, mass disobedience, or revolution.

Toothless Americans being administered health care in trailers by foreigners, the elderly going without heat, and families living in vehicles are pretty good harbingers of things to come, don't you think?

Tony said...

To "not a right winger," did you know that corporations and rich people used to pay taxes in this country? Those were the days . . .

Anonymous said...

Hey wait just a minute! I heard it said once that there are two groups of people who know how to manage money-the very rich and the very poor. Both classes pinch pennys.

My father,a top 1%er, used to hand deliver a letter to save a 10 cent stamp!Even after he made it he still used the old desk he bought 40years ago second-hand.

The truth is that those who have money,often have it because they are really tight.

Many of the rich shop at the dollar stores as well because here are a list of items you can buy there for $1: 4 rolls of tp,2 cans of dog food,pet supplies to bark for, flashlights, numerous batteries,office supplies galore, fabulous party supplies and wonderful gift wrappings fit for a queen,those helium filled balloons so you can buy 5 for $5 instead of just one at the rip-off stores,a huge variety of candy i.e.red vines (regular packs),just as good cleaning supplies and plenty of 'em,just as good kitchen supplies galore,hardware city,food,and it's always the place to shop for any holiday. Best of all kids have enough money to buy somethin' for their Mom or Dad.

My theory is that women only do the buying for the geniuses who got dollar stores together. I love 'em, am thankful for 'em and think you are a fool for not checking them out unless you love flushing your money down the comode.
OK, you can say the stuff is made by slave labor but sorry charlie, what isn't at any store in the mall these days.

If I were in the top one half of the 1% I'd still shop there for stuff I need. PS: I'm for real, not a dollar store exec!

Dave said...

While it's true that some poor people are less poor than others, our paying attention to that misses the entire point. That is that too much money, all over the world, is in too few private hands.

In the US we used to have tax policies that discouraged wealth-hording. When Reagan began getting rid of those incentives, the money started flowing to the most already wealthy.

Now workers are getting paid less by less-well-funded companies, owned by those non-creating job-creators, and public treasuries are going broke because not enough tax revenue is being collected.

If you think the whole problem could be fixed by cutting government waste, I'd like to see the numbers. Of course that's not to say that public money isn't going up in smoke some places. The military and pharmaceutical industrial complexes come to mind.