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Tag Archives: Poverty


Wealth Gap 2020: The destruction of the American dream

Is feudalism our future?

By Larry Fedewa Ph.D.DrLarryOnline.com

The closer the 2020 election comes, the more urgent the necessity for understanding the wealth gap which underlies the entire debate.

The fundamental issue at stake in this election is how America will deal with the fact that the American Dream we all pursue has in fact become unattainable for many Americans. With most national politicians in their 70’s – or even older – the reality is that they simply do not understand that too many Americans today face a gloomy future. They are at a loss to explain why the nightly riots and violence can happen at all let alone why the public officials at least tacitly, and some openly, support such chaos.

What they don’t understand is that there is a great deal of anger in our land, that the traditional mantras of the American ethic just don’t work anymore for a segment of the American population. “Work hard, keep your nose clean, and you too can live the American dream” just isn’t true for these folks, and hasn’t been for a long time. 

Who are these people? And why are they so desperate for change?

One of the oldest questions in the American lexicon is, “What happens to the manual workers when the American quest for labor-saving technologies finally succeeds and the need for human labor ends?”

Now we know the answer to that question: The many American workers who have lost their jobs to technology are still there. But now they have nothing – not even their pride.

There is, of course, another segment of our society which has done somewhat better financially through these years. They are the so-called “upper middle class” who have adapted to the technological society, although they are concentrated now in the service industries, since manufacturing has all but disappeared.

Even their children, however, have been affected by their estrangement from two work-alcoholic parents, whose closeness to their children is questionable as is their loyalty to each other. Many of the protesters are white, middle class youths, whose sympathies lie closer to their African American comrades than to their befuddled parents.

It is well known that a coalition opposing this President exists, consisting of the Democrat Party, the Deep State bureaucracy, and the Press, as well as the dedicated Far Left organizers and followers, who have coalesced around the  issues of class and race so prominently featured in the violent summer of 2020.

It is clear that while these players have picked by various names the wealth gap as the key issue in this campaign, their timing of the current crisis was not dependent on their discovery of this issue. They have simply taken advantage of the uproar as it occurred.

So, what did happen?

What happened was the transfer of the asset wealth of the American population from the middle class (approximately 50% of the population) to the super rich (1% of the population). (The term, “assets”, is used instead of “income” because income can go up and down while assets tend to be more stable.)

How did this happen? Many factors came together and finally created one of the worst nightmares Americans have ever faced. The most obvious of these factors are three:

  1. Inflation: between 1971 (when Nixon ended the gold standard) and 2015, the value of the US dollar declined nearly 600%, causing the buying power of wages to become stagnant.
  2. Expansion of the workforce:
  • between 1960 and 2020 the American workforce nearly doubled as women entered the labor market;
  • the globalization beginning in the 1990’s expanded the American labor market to the third world
  1. American foreign policy which allowed, even encouraged, American firms to move production overseas. 

The result of this movement on the US working man was catastrophic. As the factories left American soil, the skilled workers were left behind with no job, no marketable skill, and eventually no hope.

The principle victims of this exodus were American men. Whereas their place in society and the family had always been respected and secure, they lost that place in both as they sought and were forced to take lower paying jobs or welfare.

Their self esteem followed their decline. Divorce rates soared along with family abuse, alcoholism, drug addiction, desertion, homelessness, and suicide and the decline of our cities left social services rare and bankruptcy all too common.

Through all this, the latch-key children bounced around helplessly, caught up in the whirlwind that their life had become. As they grew older, they asked “Work hard?” –“At what?” “College?” — “OK” and then no jobs available. “American dream?” — “What a crock!”

What they want is change. The old system isn’t working for them. Why is socialism suddenly becoming so popular? After all, it has been around since the 1930’s. Franklin Roosevelt’s Vice President, Norman Thomas, was an avowed socialist. Few believed in socialism as long as we had the American dream. People believe in socialism now because for them the American dream is gone. And socialists are the only ones listening to the cries of our suffering youth.

What now?

First, we must all recognize the underlying problem: it is the transfer of wealth! Prosperity for all tends to reduce all social tensions, as the Trump economy was beginning to show before COVID.

Secondly, if we do not want to watch our beloved country go the way of Venezuela, we had better face the realities of our situation and find a solution.

Finally, while some our people were caught in a vortex of tribulation, others were developing a new way, a new path to the American dream.

A third way: Luckily, many of these pioneers of a new capitalism have been not only inventing a new type of business process, but also organizing a potentially vast new movement to what will become, in my estimation, a new America, open to all races, genders and religions.

The most advanced of these renewed American businesses seem to be the Conscious Capitalistorganization, currently with 16,000 member companies, representing 3 million workers.

It aspires to become a new kind of business, one which is driven by its service to the community – whether that be a local factory, a retailer, or a worldwide marketplace.

The idealism of this brand of business is appealing to the young, who may not know socialism from a community swimming pool, but who do know that they are Americans who value their personal freedom and the room to grow into a happy future without a government telling them what they can and cannot do.

The dilemma facing this country is that conscious capitalists see politics, as do most Americans, in the light of partisanship. As a result, they want to be apolitical so that all sides feel welcome.

Nevertheless, in today’s America, you are either a socialist or a capitalist, either in favor of big government controlling the transfer of wealth from the 1% or in favor of devising a solution which is voluntary and based on merit rather than welfare.

Unfortunately, there are no candidates running for national office who present new alternatives to the socialist programs of the Democrats. The Republican alternative stands for continuing to implement Reagan economics, believing that the wealth gap will solve itself in time.

It seems clear that this is a better alternative than the opposition. At least a victory here would buy us time. By 2024 perhaps a “third way” capitalist will come forward.

As Alexander Pope wrote in 1734, “Hope springs eternal in the human breast.”


Report: Illegally Entering Guatemalans Aren’t Fleeing Violence, They Want To Make More Money

The Wall Street Journal is the latest media outlet to report on what’s driving the border crisis. For most Guatemalans, it’s economic opportunity, not the reported violence and bloodshed.

By John Daniel DavidsontheFederalist

A report this week in the Wall Street Journal chronicles the border crisis at one of its sources, a city in Guatemala that’s emptying out as families leave for the United States, and leaves little doubt that what’s motivating most of them to leave isn’t violence or persecution, but economic opportunity.

The focus of the story is the mountainous city of Joyabaj, “population 100,000 and falling.” The United States has deported 627 people to Joyabaj in the first six months of this year, more than any other municipality in the country except Guatemala City, population 2.5 million, which saw 643 deportees from the United States over the same period. According to one school official, about 2,000 out of 16,400 first- through ninth-graders in Joyabaj’s public schools have gone north over the past 18 months.

Indeed, Guatemalans now make up the largest nationality of those arrested along the southwest border, with 235,638 Guatemalans apprehended so far this year. Of these, the vast majority are family units or unaccompanied minors. As of June, more than 167,100 family units from Guatemala had been arrested, more than the previous three years combined.

What’s driving the exodus? Grinding poverty at home, the chance to get ahead in America, and a robust smuggling industry. On this last, the Journal report is eye-opening. Radio stations in Joyabaj advertise the services of smugglers with ads that ask, “Tired of so much poverty? Tired of so much humiliation?”

Business is good. One smuggler barrels along roads in a bright yellow Hummer. He doubles as a priest in the Maya religion and is paid handsomely to perform ceremonies to insure a safe journey.

Many Guatemalans use homes and plots of farmland as collateral for high-interest loans to pay smugglers.

A popular YouTube influencer has sophisticated equipment to create videos with such titles as ‘The American Dream,’ and ‘I left for the US looking for a better life.’ Together, they have notched almost three million views. Some of the inspirational videos are, in fact, advertisements for one of the area’s most successful human smugglers.

The Key Is Getting a Family Member into America

The Journal isn’t alone in its Guatemala reporting. News organizations that have actually bothered to send people to the country have reported at length on the economic benefits of migration, how Guatemalans who sent a family member to the United States live in large, comfortable houses while those who have not live in shacks with dirt floors.

In April, the New Yorker ran an article titled, “The Dream Homes of Guatemalan Migrants,” about American-style casas de remesa, or remittance houses, “which have become ubiquitous in the country’s western highlands as a way for immigrants to invest their earnings while living abroad.”

All of this reflects what Guatemalans say about why they’re leaving. A 2016 survey by the International Organization for Migration found that more than 90 percent emigrated to the United States for economic reasons. According to the report, “56.8 percent of Guatemalans migrate in search of better employment, 32.9 percent to improve their income, 1.2 percent to buy a home, and 0.1 percent to open businesses.” Only 0.3 percent say they migrate because of violence, and 0.2 percent cite gang problems.

Meanwhile, the entire political class in Washington DC is seemingly content to pretend that none of this is happening. Rather than confront the reality that the vast majority of those crossing the border are economic migrants, media elites tend to repeat, mantra-like, that migrants are fleeing violence and crime.

Few of them ever mentioned that although the Northern Triangle remains a relatively violent place, homicide rates in Guatemala, Honduras, and El Salvador have plummeted in recent years. In Honduras, the murder rate has dropped by more than half since 2012; In El Salvador, the rate has fallen for three years in a row; and in Guatemala it has decreased by half since 2009.

Others emphasize poverty in these countries, which is understandable because poverty is rampant in this part of the world. Less emphasized is the fact that the economies of Guatemala and Honduras have grown about 3.5 percent on average in recent years (El Salvador’s GDP growth has been a bit more sluggish, at about 3 percent).

So if violence is decreasing and the economy is growing, why are so many people leaving Guatemala? The answer varies depending on the region of the country, but the common theme is that people are leaving because they are poor and have far better prospects in the United States. Subsistence farmers in the western highlands are facing crop failures due to climate change, so they pack up and leave.

In cities like Joyabaj, cheap cell phones keep people in touch with relatives in the United States, and success stories spread quickly, inspiring others to follow. As one man told the Journal, “If you work in the U.S., you get paid $12 an hour for eight hours, that’s $96 a day. Here you make 40 quetzales [$5.30] a day when there is work. Not enough to live.”

What we’re witnessing is a mass exodus from Central America driven above all by poverty but made possible by a broken asylum and immigration system in the United States. The scale of this exodus is hard to convey. About 17 million people live in Guatemala. Since October of last year, 235,638 Guatemalans have been apprehended by U.S. Border Patrol. That means over the past nine months nearly 1.4 percent of the entire population of Guatemala has been apprehended and processed by U.S. authorities.

It’s time for policymakers and establishment elites to get serious about what’s happening and quit pretending that the vast majority of those now arriving at the southwest border are anything but economic migrants doing what any of us would do in their shoes: exploit a broken U.S. asylum system to forge a better life for ourselves and our children.


Listen up, millennials. There’s sequence to success.

By George F. Will • Washington Post

The Bronx, the only one of New York City’s five boroughs that is on the American mainland, once had a sociological as well as geographical distinction. In the 1930s it was called, as Daniel Patrick Moynihan noted, “the city without a slum.” It was “the one place in the whole of the nation where commercial housing was built during the Great Depression.” In the third quarter of the 20th century, however, there came, particularly in the South Bronx, social regression that Moynihan described as “an Armageddonic collapse that I do not believe has its equal in the history of urbanization.”

Of the several causes of descent, there and elsewhere, into the intergenerational transmission of poverty, one was paramount: family disintegration. Some causes of this remain unclear, but something now seems indisputable: Among today’s young adults, the “success sequence” is insurance against poverty. Continue reading


More Redistribution Has Led to Less Income

2852.EconomicRecessionObama has spread the wealth, but the poor and middle class haven’t benefited.

Editorial Board    •    Wall Street Journal 

One reading of the midterm election wave is that voters have concluded that President Obama ’s answer to falling incomes and slow growth—higher taxes on the rich and more redistribution—is tapped out. These policies have been up and running for six long years but the middle class is no better off as a result.

On taxes, Mr. Obama often claims that the rich don’t pay their “fair share,” yet the most affluent one-fifth of taxpayers on average supplied 68.7% of federal revenue for 2011. That’s according to the Congressional Budget Office, which last week updated its statistics on the U.S. distribution of income and taxes for 2011 and preliminary calculations for last year.

As for the top 1%, they funded 24% of everything the government does in 2011. The CBO also estimates that the end-of-2012 fiscal cliff deal that lifted the top marginal income tax rate to 39.6%, plus ObamaCare’s taxes on high-income individuals, increased their average federal taxes by 4.3 percentage points to 33.3% of income. The Warren Buffett minimum-tax rule asserted that no millionaire should pay an effective tax below 30%. Mission accomplished. Continue reading


The Administration’s Poor Record on Poverty

Poverty Urban Blightby Frank Donatelli

President Obama’s State of the Union address will focus on “income inequality.” One can understand why he wants to change the subject from the very real problems America faces. His policies have made those problems worse. Obamacare has caused tens of thousands of Americans to lose their health plans and forced them into insurance exchanges that cost more and provide fewer doctor choices. Meanwhile, millions of Americans are still out of work and even more have stopped looking.

On the foreign policy front, the president and Secretary of State John Kerry remain determined to throw a lifeline to Iran’s sinking economy in exchange for vague promises of future cooperation on nuclear proliferation.

The president wants you to forget all that and now consider the plight of the poor. Sadly, he hasn’t done a very good job there either. That’s because his own actions as president have made the poor worse off. Reducing poverty has never been a major priority of this administration. Continue reading


Fact Free Policy Debates: Part III

money income inequalityby Thomas Sowell

Since this year will mark the 50th anniversary of the “war on poverty,” we can expect many comments and commemorations of this landmark legislation in the development of the American welfare state.

The actual signing of the “war on poverty” legislation took place in August 1964, so the 50th anniversary is some months away. But there have already been statements in the media and in politics proclaiming that this vast and costly array of anti-poverty programs “worked.”

Of course everything “works” by sufficiently low standards, and everything “fails” by sufficiently high standards. The real question is: What did the “war on poverty” set out to do — and how well did it do it, if at all? Continue reading


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