The debt to income ratio was relatively small, people spent money in the local community shops, but they didn’t over extend themselves into debt mainly because they didn’t need to. They had more cash on hand because they were paid a living wage.
Since 1980 to today the American middle class’ wages have remained relatively stagnant.
The American worker is fighting against a tidal wave of global competition.
We are told now that in order to remain viable in this global environment and keep America competitive, the working men and women must give up some of their wages. We are being told this by our politicians and our Corporate Executives.
These same corporate executives have increased their pay 300 times the average worker, while they are telling us we need a pay cut.
Now we see working class families getting deeper into debt. We are borrowing more money to maintain a middle class lifestyle, rather than getting paid a living wage and affording one. Finally after 30 years of debt accumulation, the bill is due and the middle class doesn’t have the means to pay it back. We have been riding a wave of debt and now that wave has crashed on our shores.
What we need as a society is a movement to come together and demand better wages from the companies we work for. Demand our government to protect our industries, so we can no longer be threatened with the outsourcing of our jobs.
Free trade should not mean an American company can move to China or any other underdeveloped country and sell back to us, it should mean a Chinese company should be able to sell to Americans and Americans sell to the Chinese. I don’t see Chinese companies on the store shelves. I see American companies using chinese labor.
It’s a slap in the American workers’ face and in my humble opinion, downright anti-American.
You put in 1980 to get the terrible Reagan and save St. Jimmy. The stagnation of the middle class started in 1972 when Nixon delinked the dollar from gold. Here is the chart the average hourly earnings:
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…but not the cause.
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p>In the early Seventies the cost of commodities skyrocketed as countries at the points of extraction created cartels and raised prices. OPEC was the most famous, but hardly the only example.
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p>At the same time the bill came due from Vietnam, where the reluctance to raise taxes to pay for the war (or the national welfare state) caused inflation.
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p>Nixon taking the country off the gold standard was a means to obscure the problem, but not the cause.
Commodities generally rise in price before other goods and services when the dollar is devalued. That’s why the oil price went up not because of OPEC, which never really performed as a cartel.
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p>In any case we are probably arguing around the elephant, I’m sure there were other reasons people thought at the time that delinking from gold was a good idea.
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p>My question is why do you think it’s a good idea now to have a discretionary monetary policy with an unelected emperor of money in charge? Why isn’t this #1 on the agenda of the Democratic Party?
…but the fixed exchange rates of the Bretton Woods era. Nixon allowed for the US to join managed float. But the result was clear.
We were the direct beneficiaries of the manufacturing economy you describe. Although, really, it WASN’T the worker’s paradise you describe – there may not have been offshore slavery, but there were always workers you could pay less, like blacks and women.
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p>Now, we’re retirees and we demand our COLAs and cruises. We don’t buy American, we buy cheap and we absolutely demand that debt be created to support our lifestyle.
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p>It’s why I meet so many yong Libertarians.