Every now and then one encounters a nutwhack theory so profoundly at odds with reality that one has little choice other than to subject it to the light. After all, we know that excrement -eating insects as well as offal of all forms - animate and inanimate, thrives and grows best in the dark. Look at some of the worst festering fungi like stachybotrys.
This also applies in the realm of memes and ideas. In this case, a recent article appearing in the Wall Street Journal, 'Lessons from the Grand Expansion' in which we are expected to buy into the bullshit of one "Henry R. Nau" - cited as a "Hoover Institute fellow who teaches political science and foreign affairs at George Washington University". Well, all I can say is if this WSJ piece is emblematic of his teaching or courses, I am truly sorry for his students!
Anyway, Nau would have us believe, seriously, that the documented shrinking of the American Middle Class (as reported by the 2010 U.S. census) is not due to large swatches of families falling into poverty - no, not at all. The shrinkage is instead due to more of the Middle class becoming "rich" and LEAVING IT! All of which shows once again, that one can prove or show just about anything oe wishes with the spurious use of statistics.
In his piece Nau claims:
"Between 1980 and 2007, the world economy experienced what I call a 'Great Expansion' due largely to free market policies that President Obama blames for the last recession. Over those three decades world GDP grew about 145% or roughly 3.4 % a year"
Here, Nau is essentially correct because Reagan's policies of banking de-regulation (i.e. the Bank Holding and Deregulation Act of 1984) combined with his low taxation policies, essentially meant greener pastures for overseas speculators and markets. No surprise then that the infamous carry trade in currencies flourished, enriching tycoons in assorted foreign nations, as well as providing the impetus to send millions of American jobs overseas (since foreign labor became so much cheaper as a result of currency downgrades). Couple these financial loosenings with hideous trade agreements (NAFTA, GATT etc.) and the WTO or World Trade Organization, and one had the basis for a massive flow of capital from the U.S. outward to emerging markets and nations. But, in the zero sum game of global capitalism ...this meant Americans would have to become poorer and they have. (See for example, the attached Excel Chart tracking the incomes in quintiles over the decades).
Thus, this leads to Nau's numero uno canard that:
"None of this global growth came at the expense of the U.S."
Making one wonder what planet Nau inhabits, or if he even inhabits a planet at all! (For more on how the capital in the U.S. as well as wealth was lost, please see the following references: False Dawn: The Delusions of Global Capitalism, by John Grey, and One World Ready or Not - The Manic Logic of Global Capitalism, by William Greider, Simon & Schuster,1996.)
Both of the books I cite above provide the horrendous details of how American wealth has been decimated in the age of mobile global capital. Any one, especially an "expert", who doesn't see this is a liar, a fool or a fraud. It's as simple as that.
Nau then goes on to write, committing the usual statistical error of selective data:
"The U.S. grew by more than 3% per year from 1980-2007 and created more than 50 million new jobs, massively expanding a middle class of working women, African-Americans and legal as well as illegal immigrants."
Note how he halts his citation at the year 2007, when the great recession commenced, and especially excludes the fallout from the 2008 meltdown during which some 14 million middle class jobs were lost, probably forever. This is why his next statement means next to nothing:
"Per capita income increased by 65% and household income went up substantially in all income categories"
But let's look at the actual data, as provided in the accompanying graphs, one from U.S. Census data, the other from the Economic Policy Institute. The last clearly shows that family income growth across all quintiles from 1979-2010 did not keep pace with income growth over the period 1947-79. Again, I noted the reasons earlier. After 1979 Reagan's deregulating and low taxation policies were enacted, and together with the rise of mobile global capital incepted major capital outflows from the U.S. Naturally this included jobs dispatched as well, and we've seen over 12 million lost since about 1989, along with the 14 million cut in the wake of the recession of 2007-8 and the financial meltdown and credit squeeze. Note that the middle quintiles, applicable to most of the middle class, didn't even make the 0.6% cut! In fact, the lowest quintile, mainly working classes, lost 0.4%.
In the Census graph, note not only the rising Gini index of inequality (extreme left), but also the declining middle class income, especially since the 2007-08 crash.
Nau then has the absolute chutzpah to write:
"Yes, the middle class has shrunk but not because its getting poorer but rather because it's getting richer".
Again, can't this birdbrain read or interpret graphs? How can he say or assert that when the actual quintile data shown, as well as the Census data, don't support it? Not content to appear semi-competent he goes in for more, to emerge as totally incompetent, scribbling:
"According to Stephen Rose of the Georgetown University Center of Education and the Workforce, fewer people today live in middle class households with incomes between $35,000 and $105,000.....where did the missing households go? They became richer!"
But if this is so, how is it that a Wall Street Journal report dated Sept. 10, 2011 (p. A1, charts p. A16)note that "the continued evaporation of the net wealth of the Middle Class (those deemed to earn in the range from $50,000- $140,000) has meant marketers can no longer assume this economic niche can purchase the wares that in the past they had taken for granted"
The article then noted, citing across a broad range of diverse products, how the loss of wealth has been such that it translated into "downscale purchasing" - buying Gain" Laundry detergent instead of the more expensive TIDE, Bounty Basic paper towels instead of regular Bounty, and replacing their regular toothpaste with BAKING SODA! Huh! These are rich folks? Maybe we need a lesson here in semantics, eh Mr. Nau?
How the hell can those downscale-spending behaviors be deemed of the "rich"? In fact, they can't be because the numbers don't add up based on the quintile distributions. There simply aren't the enhance income or net wealth indicators to support either Nau's or Rose's fairy tales. In addition, the article pointedly noted the current U.S. Gini index of 0.48, and we know Ginis in the 0.4- 0.5 range typically disclose 90% of earnings or wealth are being controlled by 5% of the populace. That adds up to maybe 2.5 million people, and given as The Economist has noted ('Who Exactly Are the 1%', Jan. 21-27, p. 31) this richest tier is essentially stable and "the rich marry their own kind" where are the infused middle class coming? Well, not into the 1% ($252,000/yr base threshold income after subtracting federal taxes) and as I already showed not in the $140,000.
This also applies in the realm of memes and ideas. In this case, a recent article appearing in the Wall Street Journal, 'Lessons from the Grand Expansion' in which we are expected to buy into the bullshit of one "Henry R. Nau" - cited as a "Hoover Institute fellow who teaches political science and foreign affairs at George Washington University". Well, all I can say is if this WSJ piece is emblematic of his teaching or courses, I am truly sorry for his students!
Anyway, Nau would have us believe, seriously, that the documented shrinking of the American Middle Class (as reported by the 2010 U.S. census) is not due to large swatches of families falling into poverty - no, not at all. The shrinkage is instead due to more of the Middle class becoming "rich" and LEAVING IT! All of which shows once again, that one can prove or show just about anything oe wishes with the spurious use of statistics.
In his piece Nau claims:
"Between 1980 and 2007, the world economy experienced what I call a 'Great Expansion' due largely to free market policies that President Obama blames for the last recession. Over those three decades world GDP grew about 145% or roughly 3.4 % a year"
Here, Nau is essentially correct because Reagan's policies of banking de-regulation (i.e. the Bank Holding and Deregulation Act of 1984) combined with his low taxation policies, essentially meant greener pastures for overseas speculators and markets. No surprise then that the infamous carry trade in currencies flourished, enriching tycoons in assorted foreign nations, as well as providing the impetus to send millions of American jobs overseas (since foreign labor became so much cheaper as a result of currency downgrades). Couple these financial loosenings with hideous trade agreements (NAFTA, GATT etc.) and the WTO or World Trade Organization, and one had the basis for a massive flow of capital from the U.S. outward to emerging markets and nations. But, in the zero sum game of global capitalism ...this meant Americans would have to become poorer and they have. (See for example, the attached Excel Chart tracking the incomes in quintiles over the decades).
Thus, this leads to Nau's numero uno canard that:
"None of this global growth came at the expense of the U.S."
Making one wonder what planet Nau inhabits, or if he even inhabits a planet at all! (For more on how the capital in the U.S. as well as wealth was lost, please see the following references: False Dawn: The Delusions of Global Capitalism, by John Grey, and One World Ready or Not - The Manic Logic of Global Capitalism, by William Greider, Simon & Schuster,1996.)
Both of the books I cite above provide the horrendous details of how American wealth has been decimated in the age of mobile global capital. Any one, especially an "expert", who doesn't see this is a liar, a fool or a fraud. It's as simple as that.
Nau then goes on to write, committing the usual statistical error of selective data:
"The U.S. grew by more than 3% per year from 1980-2007 and created more than 50 million new jobs, massively expanding a middle class of working women, African-Americans and legal as well as illegal immigrants."
Note how he halts his citation at the year 2007, when the great recession commenced, and especially excludes the fallout from the 2008 meltdown during which some 14 million middle class jobs were lost, probably forever. This is why his next statement means next to nothing:
"Per capita income increased by 65% and household income went up substantially in all income categories"
But let's look at the actual data, as provided in the accompanying graphs, one from U.S. Census data, the other from the Economic Policy Institute. The last clearly shows that family income growth across all quintiles from 1979-2010 did not keep pace with income growth over the period 1947-79. Again, I noted the reasons earlier. After 1979 Reagan's deregulating and low taxation policies were enacted, and together with the rise of mobile global capital incepted major capital outflows from the U.S. Naturally this included jobs dispatched as well, and we've seen over 12 million lost since about 1989, along with the 14 million cut in the wake of the recession of 2007-8 and the financial meltdown and credit squeeze. Note that the middle quintiles, applicable to most of the middle class, didn't even make the 0.6% cut! In fact, the lowest quintile, mainly working classes, lost 0.4%.
In the Census graph, note not only the rising Gini index of inequality (extreme left), but also the declining middle class income, especially since the 2007-08 crash.
Nau then has the absolute chutzpah to write:
"Yes, the middle class has shrunk but not because its getting poorer but rather because it's getting richer".
Again, can't this birdbrain read or interpret graphs? How can he say or assert that when the actual quintile data shown, as well as the Census data, don't support it? Not content to appear semi-competent he goes in for more, to emerge as totally incompetent, scribbling:
"According to Stephen Rose of the Georgetown University Center of Education and the Workforce, fewer people today live in middle class households with incomes between $35,000 and $105,000.....where did the missing households go? They became richer!"
But if this is so, how is it that a Wall Street Journal report dated Sept. 10, 2011 (p. A1, charts p. A16)note that "the continued evaporation of the net wealth of the Middle Class (those deemed to earn in the range from $50,000- $140,000) has meant marketers can no longer assume this economic niche can purchase the wares that in the past they had taken for granted"
The article then noted, citing across a broad range of diverse products, how the loss of wealth has been such that it translated into "downscale purchasing" - buying Gain" Laundry detergent instead of the more expensive TIDE, Bounty Basic paper towels instead of regular Bounty, and replacing their regular toothpaste with BAKING SODA! Huh! These are rich folks? Maybe we need a lesson here in semantics, eh Mr. Nau?
How the hell can those downscale-spending behaviors be deemed of the "rich"? In fact, they can't be because the numbers don't add up based on the quintile distributions. There simply aren't the enhance income or net wealth indicators to support either Nau's or Rose's fairy tales. In addition, the article pointedly noted the current U.S. Gini index of 0.48, and we know Ginis in the 0.4- 0.5 range typically disclose 90% of earnings or wealth are being controlled by 5% of the populace. That adds up to maybe 2.5 million people, and given as The Economist has noted ('Who Exactly Are the 1%', Jan. 21-27, p. 31) this richest tier is essentially stable and "the rich marry their own kind" where are the infused middle class coming? Well, not into the 1% ($252,000/yr base threshold income after subtracting federal taxes) and as I already showed not in the $140,000.
So then the influx or middle refugees would have to be entering into the $140,000-$252,000 niche, which numbers roughly 1.1 million households. If more than 90% are stable "inbreds", married into this wealth or via inheritance, than that means the nouveau riche middle class interlopers - newly arrived, could not comprise more than about 20,000 households! Yet the middle class shrinkage has been by at least 10% since 1979. Or likely around 12 million households. (Also supported by earlier Census data).
When it comes time to spouting bollocks and bilge, we may be sure the WSJ and its hacks takes the cake!
When it comes time to spouting bollocks and bilge, we may be sure the WSJ and its hacks takes the cake!
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