Tuesday, June 26, 2012
The Revolt of the Few and the Abdication of the Many Has Brought About the Collapse of the Middle Class in America
In short, the rise of Information and Communications Technology made it possible to increase profits by transferring production off shore and then importing the finished products back into the US market. At the same time, finance rather than manufacturing generated higher profit margins so that a company like General Electric, long a symbol of American manufacturing might, could generate more revenue from its off shore operations and, in particular, from its financial sector, than from building and selling stuff in the USA.
In this brave new world, there is no connection between Wall Street and Main Street. Instead, the elites of the transnational, global marketplace flitter back and forth between a host of global cities like New York, London, Paris, Singapore, Shanghai, and the like, in their eternal pursuit of the next big thing. The world is their oyster and the common folk are there to be shucked.
In many ways, there is nothing new in this turn of events. After all, as F. Scott Fitzgerald aptly wrote, "Let me tell you about the very rich. They are different from you and me."
But what seems to be unique in the last thirty years is the manner in which the many, those university-educated members of the top 10%, abdicated from their social responsibility to mediate between the rapacious desires of the few and the needs of the multitude or the demos.
It as though they gave their blessing to the breaking of the Fordist social contract so they too could binge out on a splurge of conspicuous consumption. No one needed to wait for Alan Greenspan's admission that there was a flaw in his ideology to know that markets are not infallible and that left to their own are subject to collapse.
But standing up for the little guy takes time and energy and with all those payments to make who has the time?
Perhaps, the most glaring example of turning away from a harsh reality in order to embrace the latest in urban chic is America's love affair with Apple.
Americans love their iPads, iPods, iPhones, and iTunes. Can't get enough of them even though Apple is the poster child of the iEconomy, an economy where it takes a permanent underclass (46 million Americans live off food stamps) so that luxury can be affordable to what remains of the middle class.
Apple has a capitalization of approximately 600 billion dollars and is sitting on about one hundred billion dollars in liquid assets. Yet, at the same time it produces its swag using a number of work camps, many of them in China, run by Foxconn. Moreover, when it comes to retail, their sales associates make on average $ 25,000 per annum, which lands them squarely amongst the ranks of the working poor, while their tech people, euphemistically referred to as Geniuses, toil away for a measly $40,000 a year, a paltry salary surely indicative of someone who doesn't know their worth.
You would think that the world's richest company could afford to pay their workers a decent wage.
But ain't that America, little pink houses for you and me.