Labors with No Fruits

It’s been a long row to hoe for most workers during the first 17 years of the new millennium.  The soil’s been hard and rocky.  The rewards for one’s toils have been bleak.

 

Ma and Pa farm worker lean against one of their recent productions to mug for the  daguerreotypist. Their happiness at a job well done is marred by misgivings about their remuneration in real terms.

Photo credit: Maple Valley Historical Society

 

For many, laboriously dragging a push plow’s dull blade across the land has hardly scratched enough of a rut in the ground to plant a pitiful row of string beans.  What’s more, any bean sprouts that broke through the stony earth were quickly strangled out by seasonal weeds.  Those ‘green shoots’ that persisted bore pods that dried out on the vine before maturity.

This has been the common experience of the typical 21st century American worker, thus far. Countless, stories of labors with no fruits have been shared at bowling alleys across the Bible Belt.  There are also hard numbers that backup these woeful tales.

Just this week, for example, Sentier Research released a new report showing that after scratching and clawing the earth day after day, median household income has finally surpassed a level last seen in January 2000.

In other words, living standards for the typical family are now a smidgen higher than they were at the turn of the century.  Rick Newman offers several details:

 

“Sentier calculates a monthly index representing median household income, based on Census Bureau data, starting at 100 in January of 2000.  Since it’s an index, it’s adjusted for inflation and represents the real earning power of a typical family.  The index drifted slightly above 100 a few times leading up to the 2008 financial meltdown, but mostly went sideways during the George W. Bush administration.  Then it plunged beginning in 2009, with a long recovery beginning in 2011.

“The latest reading in the Sentier index is 100.9, the first time it’s been above 100 since 2008. That number matches the previous high, from 2002, which means family income will hit a new high if it rises in May.”

 

The Sentier household income index vs. the U3 unemployment rate. Happy days are here again! Household income was probably invented by H.G. Wells, considering its eerie, time-machine-like qualities. We are back to where we were at the turn of the millennium! The complete Household Income Trends Report resides here (pdf) – click to enlarge.

 

Rip Van Winkle

Good grief.  What took so darn long? A lot has changed while the typical worker was running in place for the last decade and a half.  In fact, Rip Van Winkle would hardly recognize the world that remains after these lost years.  Good manners, good ethics, and good people have mostly gone the way of the dodo bird.

For one, politics at home has gone stark raving mad.  Debbie Wasserman Shultz.  Jim Comey.  Barry Obama.  Susan Rice.  John Podesta.  Hillary Clinton.  Anthony Weiner.  Barney Frank.  John Burton.  Harry Reid.  Chuck Schumer.  Ted Kennedy’s ghost.  And on and on.  And so on and so forth.

Years ago, when upright character was an expectation, these malevolent dingle berries would have been painted with tar and rolled in a dirty chicken coop full of feathers, among other things.  Nowadays, they get extended lordship, pensions, and countless hours of paid vacation. What to make of it?

 

Traveling by rail – citizens express their displeasure at a misbehaving politician the traditional way. Reportedly these folkways work wonders with respect to maintaining a certain minimum level of moral standards. Clearly some traditions are worth preserving; this one cries out for more practice.

Illustration via deviantart.com

 

The federal government – and many state and local governments – appear to be self-destructing in grand fashion.  Federal agencies and politicians are stabbing each other and the President in the back at a clip last witnessed in Moscow during the twilight of the Soviet Union.

At the same time, the truth has become a liability.  Specifically, sharing the dirty truth has become hazardous to one’s life expectancy.  For the ruling class has become desperate to keep the world tilted in its favor.  They’ll go to any length to keep money and power flowing towards them.

 

The Attack on Workers, Phase II

No doubt, President Trump’s a ghastly fellow.  But he’s not nearly as ghastly as the headlines make him out to be.  There are much worse haircuts out there.  Plus he’s facing an unwinnable battle.

All of Congress wants Trump to fail and are doing everything they can to ensure this happens.  Even his most partial efforts to redirect some of the failing social programs that are bankrupting the country are greeted with a disjointed and frenetic mass hysteria.  Rational contemplation and pragmatic decision making has given way to foaming mouths and erratic neck convulsions.

 

The Donald (he’s either praying for rain here or bestowing a benediction on his flock). Based on past experience with the Oslo-based Nobel committee’s decisions, we would argue he deserves a Nobel peace prize for the mere fact that he’s not Hillary. Not to mention that he merits recognition for having thrown all of Washington into a severe and persistent outbreak of hallucinatory hysteria that appears thoroughly Prozac-resistant.

Photo credit: AP

 

Should we be surprised?  Maybe this is the way things always were; only now they’ve been ratcheted up several notches.  For instance, two generations ago Nixon era Treasury Secretary William Simon let the cat out of the bag:

 

“One of the things I learned during my tenure in Washington is that the civic book picture of government in operation is completely inaccurate.  The idea that our elected officials take part in a careful decision-making process – monitoring events, reviewing options, responsibly selecting policies – has almost no connection with reality. 

“A more accurate image would be that of a runaway train with the throttle stuck wide open — while the passengers and crew are living it up in the dining car.”

 

These days, however, the runaway train is one ridge turn from jumping the tracks.  Alas, a stock market crash, depression, and world war will likely accompany it.  After that the attack on worker begins in earnest.

 

Dude! Where are our green shoots? Future revolutionaries in a field somewhere near Hicksburg.

Photo credit: Russell Lee

 

Chart by: Sentier

 

Chart and image captions by PT

 

MN Gordon is President and Founder of Direct Expressions LLC, an independent publishing company. He is the Editorial Director and Publisher of the Economic Prism – an E-Newsletter that tries to bring clarity to the muddy waters of economic policy and discusses interesting investment opportunities.

 

 
 

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5 Responses to “The Attack on Workers, Phase II”

  • Hans:

    You are most welcome, Mr Gordon, as readers on acting-man
    appreciate your splendid contributions!

    Precious metals, have benefited mighty from the Lonney Tunes Reverse’s
    policies and FedZero; which has forced investors into asset investments
    in order to find a return on their money.

    At the expense of sounding like a Socshevik, the middle class (we personally
    have been demoted) has declined, no thanks to the FRB and their ilk in
    CONgress.

    The worrisome collapse in GNP growth (as shown in your excellent article
    four weeks ago) along with declining productivity, has lead to employment
    destabilization, coupled with reduced wage growth. The days of long tenure
    and yearly wage growth, which allowed for disposable income to be placed with
    your local “community” banker at 5%, appears to be dead.

    As you have stated, Mr Gordon, the FRB has decided to redistribute the money
    supply from savers to spenders! This is why consumers with rest home insurance
    have seen dramatic rate increases; something the Onion Press Industry has never
    addressed.

    The frightful thing is, the entire world central bankers complex, is engaging
    in pretty much the same polices, with complete control over the financial
    sectors, interest rates and domestic economies. Debt, debt nothing
    but debt, so help you God.

    America has already reached Chapter Seven, which is why the return of
    normal interest rates is a thing of the past.

    Since Milhous(e) Nixon, all FRB chairperson have placed their
    right hand on the FRB’s emblem and sworn, “we are all Keynesians now.”

    Make Interest Rates Great Again
    Make Economists Great Again

  • Kafka:

    “There must a explanation for this lack
    of correlation”

    Baseline economics takes Monetary Policy as some benign, background liquidity producer keeping up with or sometimes giving the economy a little kick of cash or reduced interest rates.
    It was never contemplated that Central Banks would effectively take control of the economy, almost entirely for the benefit of their cronies.
    In that world, where the little guy would be lucky indeed to save a million dollars in his lifetime, a Central Bank can conjure, out of thin air, enough cash or credit to buy and sell the entire asset class(es) on the CME every hour of every day.

    • Hans:

      Kalka: “In that world, where the little guy would be lucky indeed to save a million dollars in his lifetime, a Central Bank can conjure, out of thin air, enough cash or credit to buy and sell the entire asset class(es) on the CME every hour of every day.”

      Yes indeed, Kalfa, as they can now monetizes the entire US debt. And why not,
      as there balance statement has little affect on either policy or the American
      economy.

      I would call the FRB’s action as FedCoin, no difference than Bitcoin
      with the exception that there are no market forces at play.

      The only acts that I approve of, from this institution, was Greenspam
      continuous requests, “ladies and gentlemen, can we break for
      coffee.”

  • Hans:

    Thank you, Mr Gordon, for always presenting such
    interesting charts!

    The right hand part of the chart seems rather logical,
    as the supply of labor diminishes, employers are forced
    to pay a higher level of compensation.

    What is rather puzzling is the absence of S & D on
    the left side of the chart. What interfered with the
    law of supply and demand?

    We all know how delicate and complex the machinery
    of the economy is. There must a explanation for this lack
    of correlation, however, it is no present in the recess of my mind.
    Perhaps that is a good thing. :<)

    Hear is an excellent observation of wealth. What is clear to
    me, are the interactions of the FRB (FedZero) and assets.

    http://slopeofhope.com/2017/05/very-interesting-video-on-wealth.html

    A somber Memorial Day to all, as we are all ensured to join the fallen.

    • M.N. Gordon:

      You’re right. The left side of the chart is very much a head scratcher. I squinted my eyes, and moved my head close to the screen and I still couldn’t discern what was going on. Though, Kafka appears to have hit the nail squarely on the head. Rampant money and credit inflation by the Federal Reserve and other central banks has devalued the earnings and savings of the working stiff wage earner. I suppose my article on the attack of the worker was incomplete for not mentioning this. Of course, what makes the central bank money creation scheme so rotten is that when they inflate away someone’s life savings, not only are they stealing this money from the saver, they are steal the time and effort that went into earning it. Thus they’re stealing that person’s life.
      Thanks for pointing us all to the slope of hope video. Very astounding presentation on just how skewed the distribution of wealth has become.

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