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Digby linked yesterday to Dan Froomkin's article on Jeff Faux's incredibly important book about the new servant economy. The key bit is here:

Jeff Faux, a progressive economist who founded the Economic Policy Institute in 1986, is the author of the new book, The Servant Economy: Where America's Elite Is Sending the Middle Class. "The mantra, as you know, in today's political debate is jobs, jobs, jobs," he told an audience at EPI recently. "Listen carefully because the subtext is low wages, low wages, low wages."

Faux argues that by the mid-2020s, even with the most optimistic assumptions about economic growth, current trends indicate that the average American's wages will drop about 20 percent. One big factor is that more and more good jobs will go overseas, leaving even America's best and brightest no alternative but to enter the service industry.

"You go into an Apple store and you see the future," Faux said. "The future's not in the technology -- the future of the labor force is all in those smart college-educated people with the T-shirts whose job is to be a retail clerk for Chinese goods."

One impetus for job growth, Faux writes in his book, is that as the super-rich get even richer, they'll need more and more servants.

Welcome to your new economy. And neither Party is doing anything about it:
But no matter who wins the election, Faux said, the governing elite has pretty much already ruled out that agenda, in favor of light regulation and governmental austerity.
That's because both Parties have been utterly captured by the ideology of Assets and Wages:
American public policy on both sides of the aisle reoriented itself away from a focus on wages and toward a focus on assets. Specifically, the idea was that wage growth was dangerous because it led to core inflation in a way that asset growth did not. American foreign policy became obsessed even more than it had been with maintaining access to oil, both to prevent future oil shocks and to prevent inflationary oil spirals. Wage growth was also dangerous because it would drive increasing numbers of American corporations to employ cheaper overseas labor.

But that left the question of how to sustain a middle class and functional economy while slashing wages. The answer was to make more Americans "true Capitalists" in Reagan's terms. Pensions were converted to 401K plans, thus investing about half of Americans into the stock market and creating a national obsession with the health of market indices. Regular Americans were given credit cards, allowing them to take on the sorts of debt that had previously only been available to businesses. Most crucially, American policymakers did everything possible to incentivize homeownership, from programs designed to help people afford homes to major tax breaks for homeownership and much besides.

Low prices on foreign-made goods were also a policy priority. This had a dual benefit for policymakers: lower prices offset stagnant wages, while keeping core inflation low. Free trade deals were also a major centerpiece of public policy in this context. Few politicians actually believed that these deals would help increase wages and jobs in America. But what they were designed to do is keep low-cost goods coming into America, while increasing the stock value of American companies exporting goods overseas, thus raising asset values.

Low interest rates were also important. Renters and savers suffer in a low-interest rate environment, but borrowers and asset owners do very well. Tax cuts, of course, are also helpful in offsetting the impact of wage stagnation.

This is not a uniquely American or even Anglosphere problem. This ideological uniformity is occurring to a greater or lesser degree across the entire developed world. The Left is in a universal quandary over what to do about it, insofar as the established Left recognizes it at all.

In America, the Democratic Party is a force for good in many ways, especially in ensuring equal access to our very imperfect meritocracy regardless of race, gender, sexual orientation, etc. But by and large, the Democratic Party is quite blind to this problem. It's difficult for people trapped in a system whose problems they don't fully understand to even begin to offer solutions to those problems. It is human nature to cling to a broken system for fear of alternatives until it's far too late, unable to even visualize alternatives or realize what is even wrong with the current system. So everyone rows right over the waterfall together, taking even the visionaries along with them like so many doomed Cassandras.

Among those who see the problems and see the end coming, there are many who look forward to the collapse, envisioning utopias that will never come to fruition and severely underestimating the darkness, prejudice, ignorance and injustice that inevitably arrive when large social systems fall into disrepair. Anarchists always believe that collapse must be superior to the current social order--until the social order disappears. When societies collapse, the creative destruction is far more destructive than it is creative.

If we wisely choose not to embrace the collapse, we have to look at how to change the system as is. As long as America has a winner-take-all voting system, there will be two dominant political parties. As long as there are two dominant political parties, the only real path to change is to exert influence on one of those two parties.

Those of us with the vision to see the problem have to act to exert our influence against the mindset that got us here. It's the only way out for those of us who refuse to embrace the darkness of reactionary plutocracy and pseudo-progressive nihilism.

Cross-posted from Digby's Hullabaloo

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Comment Preferences

  •  It's got to be done the way the Teabaggers did: (16+ / 0-)

    Start local.  Take entry level party positions and work your way up.

    And STAY STRONG and don't give in to the money or sell your soul for winning.

    "Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity." --M. L. King "You can't fix stupid" --Ron White -6.00, -5.18

    by zenbassoon on Mon Sep 03, 2012 at 08:32:40 AM PDT

    •  exactly (7+ / 0-)

      the big changes can actually best be made at the state legislature level at this point. Local activists can start by taking over their county committees and endorsing progressives, building a base at the city council and school board and Assembly levels.

      But most importantly, we need people to start talking about these issues that are so ignored at the national level.

      •  Blue County Project? (0+ / 0-)

        Instead of building a national movement, perhaps a few hundred progressives should move to the same county and start to build a progressive society on the county level. The Blue County Project.

        I take inspiration and warning from the Libertarians' Free State Project, in which they've tried to get a bunch of libertarians to move to New Hampshire and remake it on libertarian principles. Inspiration from the core idea of concentrating like-minded people in one place to maximize their political impact. Warning from the fact that even with a very low-population state as their target, they haven't been able to get a critical mass of people to commit. Thus I suggest a county, not a state.

        A county...where? Georgia. Reasons: (1) Georgia has 150+ counties, which means there are plenty of small, low-population counties. (2) Georgia has good potential for solar power and, from the timber industry, biomass. (3) I like the southern climate. (4) OK, I confess, I live in Georgia already, and so do my friends and family. (Though I don't live in a suitable county for the Blue County Project.)

        Nine Georgia counties have populations under 5,000. Of those, the populations of four are majority African-American, i.e., likely more open to electing progressive Democrats.

        I've created a Google map showing these counties, and other counties under 10,000 in Georgia, Alabama, Florida, NC, SC, and Tennessee:

        Additional thoughts:

        One of these days I'm going to expand this into a diary. Not till after the election, though.

        "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

        by HeyMikey on Mon Sep 03, 2012 at 01:29:50 PM PDT

        [ Parent ]

  •  No, the reason the 1% need servants (3+ / 0-)
    Recommended by:
    phonegery, The Hamlet, martini

    is because they can't do anything for themselves.  Other than the gift of gab and a not unpleasant personal appearance, they are bereft of talents and skills.  They know how to make demands and issue commands, but, since they have no know-how themselves, they aren't even able to judge whether their commands are being carried out, or are worth carrying out.

    It has always been thus.  We have always had people who do not know among us.  Jesus of Nazareth said to forgive them.  Socrates, somewhat earlier, had advised "know thyself."  I suspect Socrates did not realize that self-awareness is something that some people do not have.

    We are fortunate.  We have a living example before us -- a clueless bloke who goes by the name of Willard and has found a kindred spirit in a fellow named Paul.

    Most trade and exchange is not virtual.  That's an advantage.  We can reclaim the tokens of value we use any time we want.  We do not have to beg the Dutch to finance industrial development.  We can do it ourselves by simply taking back control of the purse, since the banksters have proved to be unjust stewards. Whom have we empowered to do that?  Why, our representatives in the House and Senate.
    We need to throw the bums out and get a new set of public servants.

    The thing about high quality service is that the market never gets saturated.  Economists assign a higher value to goods because goods are easier to count and they themselves don't like to serve.

    We organize governments to provide benefits and prevent abuse.

    by hannah on Mon Sep 03, 2012 at 08:44:38 AM PDT

  •  1st Order of Business November 7th. (5+ / 0-)

    Meanwhile we have to use the party we've got for 2 more months, to block as many Republicans as possible.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Mon Sep 03, 2012 at 08:44:50 AM PDT

    •  I am enthusiastically on board for an election (5+ / 0-)
      Recommended by:
      phonegery, blueoasis, Renee, martini, BusyinCA

      tidal wave and Democratic landslide and repudiation of Republicans and their horrible worldview and policies.

      But after that, if I am rewarded with Centrist, Republican Lite bi-partisany Grand Bargains, I will head for the exits and never look back and work to build a real third party that represents the 99%.  No more the Democrats taking me for granted.

      “Human kindness has never weakened the stamina or softened the fiber of a free people. A nation does not have to be cruel to be tough.” FDR

      by Phoebe Loosinhouse on Mon Sep 03, 2012 at 08:58:55 AM PDT

      [ Parent ]

      •  I think a lot of us feel the same way (6+ / 0-)
        •  Work within the party. Or parallel to it. (1+ / 0-)
          Recommended by:

          In the entire history of America, no third party has made an impact worth a damn. Except Nader tipping 2000 to Dubya. (Note: I am fully aware there were multiple other factors; flame war unnecessary.)

          I have tried to figure out whether the Tea Party is our best model. They've significantly impacted their party's agenda, but have not gotten their own agenda into law. Instead they have just prevented their party from compromising across the aisle, resulting in stalemate.

          I think, actually, that our best model may be the civil rights movement, or the labor movement. They were not part of either political party, though they were heavily involved in politics. Both brought about profound, favorable transformations.

          Of course we also need to figure out why the labor movement has lost so much ground in recent decades.

          "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

          by HeyMikey on Mon Sep 03, 2012 at 01:24:09 PM PDT

          [ Parent ]

          •  The thing about the tea partiers is that they view (1+ / 0-)
            Recommended by:

            their responsibilities of citizenship as paramount. In addition to that they think they have a holy mandate to enact change.

            On our side part of our  culture is a rejection of "square culture". Honestly I know a bunch of people who are worn down and they think it is uncool to vote. It's caring too much. It's being a chump.

            Durin the two people driven movements you speak of, there was not a national preoccupation with being cool.

            I know I sound like a jerk, but I think I have a good point.

            Poverty = politics.

            by Renee on Mon Sep 03, 2012 at 02:14:22 PM PDT

            [ Parent ]

            •  You do NOT sound like a jerk. Your point is GOOD. (1+ / 0-)
              Recommended by:

              The Tea Partiers are fucking right about one thing: the responsibilities of citizenship are paramount.

              The problem with democracy is that we get what the average person votes for...or fails to vote against.

              "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

              by HeyMikey on Mon Sep 03, 2012 at 07:26:50 PM PDT

              [ Parent ]

  •  Good diary. (2+ / 0-)
    Recommended by:
    eztempo, martini

    I totally agree that the Democratic party appears blind to the real problems lately, but that the GOP is far worse and anarchy would be disastrous.

    We must keep working for democracy. We were complacent at some point in our recent history and we allowed this to happen.

    We must work hard to change the lobbyist system that is ruining our country.

  •  "Choose not to embrace the collapse." (0+ / 0-)

    The decline in share of our national wealth held by the Middle Class has, now that the housing bubble has burst, tracked with the stagnant incomes since the beginning of the Reagan Revolution.  This, despite the remarkable improvement in productivity. The benefit in increased profits gained by corporate America has been glommed by top management and financiers, who have increased their stake in purchasing Congressional careers.

    It's not just a matter of Obama's stewardship.  Democrats have stood aside and accepted the "limited possibilities" and "reduce government's share" narrative of an eroding standard of living for wage & salary earners, along with a transfer of the burden of financing government from asset-based income to wage income, right along with the Republican Party's taking of the lead on fiscal policy.

    It's not only time for Progressives to take over the Democratic Party, we need to develop progressive and, yes, Leftist economists and policy wonks and move them into more prominent media discussions.

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