City Journal Summer 2014

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Summer 2014
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Fred Siegel
Who Lost the Middle Class? « Back to Story

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So, on the one hand we have Germany: a strong manufacturing base for its economy, an export leader, and sound public finances; and at the same time, a heavily unionized workforce, high standards of education, strong environmental protection, public services (including health care) the equal of any in the world, and all this without the extreme inequality that has arisen in the US over that last thirty years or so. On the other hand, we have China: no environmental protection (thus appalling levels of pollution), no effective health and safety standards (hence a dreadful record of industrial accidents, workers with no way to organize, and one of the most unequal societies on the planet.
Are there problems with public sector unions? But as an explanation of growing inequality, this article is pitiful.
If Capitalism is to survive in this country, it will need a vital middle class.Unless the literature is wrong. This soceity cannot sustain itself if only a few states like New York flourish.Hobbesian realities may take hold and lay the groundwork for what he called "state of nature" thinking. I hope we are far from that, but it is looking dire.The super committee can't agree, parties can't agree. It appears that it has come to No one wants what's good for the country they just want to be RIGHT,
Bull%&it. The middle class jobs have gone to china. Thanks to the one percenters.
9-9-9

It's a multifaceted solution addressing many issues at once in its simplicity. I can remember another man with a bold plan that was simple "We win they lose!" and went about putting the policies in place to do just that. Herman Cain has that same sort of bold plan to solve big problems and end class warfare envy politicking as we know it.

9-9-9 encourages working poor to save which is typically the reason working poor are still WP after a decade of working. See immigrants who come with nothing and barely speak the language and live the American Dream through hard work, savings and make it.

The 9-9-9 plan encourages job growth, lowers cost for the employer which has direct correlation to pricing -good for the consumer. Also, gives people more money on their paychecks to spend/save.

If One gets $200.00 EXTRA a on their paycheck each week and the same bag of groceries One paid $200.00 for under 70,000 pages of tax code - One pays an extra $18.00 but still has $182.00 to put into savings that week or offset other taxable goods they might purchase that week. Many will see much more on their chacks that $200.00 and even the working poor will have more funds available each week.

When people are putting their money into savings accounts then banks don't need TARP bailouts the Federal Reserve printing money to supply them therefore devaluing savings accounts of the elderly and hurting the poor with inflation.

When perpetual working poor are saving they won't be perpetual working poor and they won't need government forcing banks to change time tested loan standards or F&F distorting the housing market creating bubbles.

9-9-9 takes away the catalyst for most if not all the divisive bickering ie envy politicking and class ware rhetoric as it treats everybody fairly, the same. The rich spend more because they can so they will pay their fair share.

9-9-9 allows Michael Moore or the frugal Warren Buffet to stimulate the economy and pay more taxes until their hearts content. True patriots! Moore can film a documentary of him and Buffet going around the country spending their money until they're blue in the face paying taxes. Moore can call his documentary "Warren and Me."

When we pass 9-9-9 pols will not be able to raise taxes because it will be easier for the opposition to explain how that “directly affects your life” to the consumer/voter. You’ll have a lot more people voting when you try raising their taxes. Good luck with that tax loving Democrats or even the "read my lips crowd" within the GOP establishment.

Herman Cain one simple plan addressing many problems directly at the roots and SOLVING THEM. Romney 59 of them just tweaking around the edges.

Millionaires like Romney and billionaires will be getting a tax break too and instead of hiding their money in the loopholes of 70,000+ pages of tax code, they will spend it and pay plenty of taxes. Why? How? - Because the so called “rich” spend more money by default.

Cain's plan sends the taxes to the government through the economy which means free markets will decide the winners and losers - not the government!
Isn't this laissez-faire approach exactly what we tried from 1979 to
2007, when inequality shot through the roof, according to the CBO?

NO! What we had is government interference into free markets and when government interferes it distorts the market and bubbles are created and popped. Take Fannie and Freddie with all their just sign here and own a home loans for instance. It created a boom as homes were in demand and put a lot of people to work building them but it was a bubble bound to pop because it was created by government forcing banks out of time tested loan standards the community organizers like Obama called racist. You know its racist for a bank to require good credit, 10-15% down and ability to pay loan with one week's pay etc...

Many people want to blame Wall St and the removal of Glass-Steagall but the fact is if that never happened there is still a banking crisis because of sub primes loans banks were forced to come up with by government that were based on the economy.

And another thing to consider is that if all those loans that were packed and sold were time tested loan standards before the government interfered then the Glass-Steagall thing wouldn't have mattered much because they would have been responsible loans where mortgages were paid regardless of slowing economy.

Pols like to have it both ways. For example Democrats are demonizing banks for not making small business loans yet require banks to have more cash on hand before making them. Dodd/Frank did that and did not address the F&F problem. Another example of government interfering into free markets is the Durbin Tax banks are now charging for debit card use. Example: Walmart and banks willfully agreed that Walmart will pay pennies per purchases using debit cards so banks didn't charge you the customer to cover their processing cost. The Durbin Tax removed that and now banks have to charge you $5.00 a month for your debit card whether you use it or not to cover the cost while Dick Durbin demonizes banks for charging that fee he forced them into charging.

Pols love to have both ways and its the same thing with the 70,000+ pages of tax code where pols are demonizing companies they tax for raising the cost of their product or service after pols raise their cost through higher taxes. Pols know those cost are always passed onto the consumer but its a win/win for them because they can then demonize the companies.

Herman Cain's 9-9-9 plan gets rid of all those hidden taxes and loopholes within the 70,000+ pages of tax code lobbyist lobby them to change etc... and when implemented 9-9-9 will result in an economic boom with cheaper products because companies will evaluate their bottom line with the money they save and lower cost trying to steal consumers from their competition. Competition is always good for the consumer and this is exactly why big corps lobby for taxes and loopholes that'll hurt their small business counterparts and exactly the reason we need a Main St President not a Wall St POTUS like Obama has been or Romney will be.

Basically at the root of the problem with the mortgage crisis is this noble but misguided idea that everyone deserves to own a home. Its not true! You deserve to ow a home when you can meet the free market standards for getting a loan. To pretend as pols do that banks want to loose money on their loans and need a bailout is nonsensical.
Looking from outside of the USA it looks to me more like the unbelievable level of corruption and outright criminality and fraud pervading your financial system, which has gone virtually unpunished is what is crushing America. No country with this level of corruption can thrive. It is looking more and more like a third world kleptocracy.