From the Wall Street Journal:

Workers with professional degrees, such as doctors and lawyers, were the only educational group to see their inflation-adjusted earnings increase over the most recent economic expansion, adding to the concern that the economy has benefited higher-earning Americans at the expense of others.

Given this, the Republicans are berating Democrats in Congress for not wanting to “give Americans access to American oil,” presumably to ease their financial burdens. A burden which happens to be more severe because they’re making, effectively, less money than they were before President Bush was elected. And, how much diffence will this make?

The idiocy of this is nicely summarized by Sen. Whitehouse (D-RI): (via digby)

WHITEHOUSE: Gentlemen, we’re in the middle of a near total mortgage system meltdown in this country. We have a health care system that burns 16 percent of our GDP, in which the Medicare liability alone has been estimated at $34 trillion. We’re burning $10 billion a month in Iraq.

This administration has run up $7.7 trillion in national debt, by our calculation. And there is worsening evidence every day of global warming, with worsening environmental and national security and economic ramifications. In light of those conditions, do any of you seriously contend that drilling for more oil is the number one issue facing the American people today?

(Long silent pause during which nobody answers.)

WHITEHOUSE: No, it doesn’t seem so

In case you missed the headlines today:

In one of the most dramatic days in Wall Street’s history, Merrill Lynch agreed to sell itself on Sunday to Bank of America for roughly $50 billion to avert a deepening financial crisis, while another prominent securities firm, Lehman Brothers, filed for bankruptcy protection and hurtled toward liquidation after it failed to find a buyer.

Robert Reich:

Ironically, a free-market-loving Republican administration is presiding over the most ambitious intrusion of government into the market in almost anyone’s memory. But to what end? Bailouts, subsidies, and government insurance won’t help Wall Street because the Street’s fundamental problem isn’t lack of capital. It’s lack of trust.

The sub-prime mortgage mess triggered it, but the problem lies much deeper. Financial markets trade in promises — that assets have a certain value, that numbers on a balance sheet are accurate, that a loan carries a limited risk. If investors stop trusting the promises, Wall Street can’t function.

Paul Krugman:

The stock market isn’t doing as badly as one might have feared — although it’s just broken below Dow 11,000 as I write. But Felix Salmon suggests that we look at my old standby, the TED spread, shown above — and it’s looking kinda spiky. All in all, way too soon to conclude that we won this game of Russian roulette.

Holy um, stuff! I go out to get a cup of tea and suddenly it’s Black Monday.

Sen. John McCain:

I think still — the fundamentals of our economy are strong.

As I mentioned in my last post, there doesn’t seem to be much new to talk about. Still, I was stuck by this post from the Wonk Room and thought it would be good for us all to be reminded about what a terrible thing a McCain Presidency would be.

In a new report from the Center for American Progress, Senior Fellow Scott Lilly chronicles the “extraordinary transfer of wealth that took place between ordinary households and the extremely well-to-do” during the past eight years under President George W. Bush.

There are lots of pretty (and pretty disturbing) graphs to go a long with it…  go read it.

And yes, stats like these make me wonder why any middle class person would support a Republican on economic grounds.

Me, 3 months ago:

So, we have a large majority of our country who spend an ever increasing percentage of their Republican-supressed income on food and energy. This majority will be unable to buy things to keep the econonomic engine moving.

[...]

It all comes back to money. For years, the Republicans have taken money out of our hands and we are now at a point where every last one of us needs more buying power.

Robert Reich, today:

The heart of the matter isn’t the collapse in housing prices or even the frenetic rise in oil and food prices. These are contributing to the mess but they are not creating it directly. The basic reality is this: For most Americans, earnings have not kept up with the cost of living.

[...]

[T]ypical Americans have run out of coping mechanisms to keep up their standard of living. That means there’s not enough purhasing power in the economy to buy all the goods and services it’s producing. We’re finally reaping the whirlwind of widening inequality and ever more concentrated wealth.

Sometimes, I hate being right.

OK, I know I haven’t been around much…   but that’s really only apparent because the more the loquacious of us has been even more silent. I’m sure he’d give some lame excuse about busy prepping for Colorado Cup or some such. Me? I’m gonna stick on the apathy train…   The news is depressing and nothing is going to change for a while…

I just need to keep reminding myself that it’s worth building this slow boil of the madness, arrogance, and atrocities of the current administation.

So, I thought I’d drop in for a few comments on some old news, since I’ll be playing GRUB this weekend and don’t expect to get much computer time.

Here goes:

Matt posts about results from two vastly different polls. In comments on the first, someone points out this question from the poll.

 Just as your best guess, about what percentage of all Americans are black: less than 10%, between 10 and 20%, between 20 and 30%, between 30 and 50%, or more than 50%?

	Less than 10%	10-20%	20-30%	30-50%	More than 50%	DK/NA
7/7-14/08	1	21	32	32	9	5
White	1	21	33	33	8	5
Black	4	24	26	24	17	4

The correct answer appears to be about 13.5%

The second tests John Edwards’ “Two Americas” idea. The increasing sense of a divided country is interesting…  but in this conversation, I’m more intrigued by the idea that almost 60% of respondants would categorize themselves as “Haves”

My sense is that there are a lot of middle class people who feel like they’re doing pretty well for themselves, making a good salary, own a house, are able to pay most/all their bills, have an HDTV, get their kids ready for/into college (with the same debt they think everyone is encurring) and think “yeah, I have what I need. I’m certainly not desitute. I’m a ‘have’.”

I get this sense because, until I started reading about the growing inequality in this country that’s much like I felt. I was getting by, making my way in the world. I had some advantages growing up, and life could certainly be a whole lot worse for me.

But, I think that’s part of the great con from the Republicans of the last few decades. Sure, we have more and better stuff, but its really a distraction from the fact that our real income hasn’t increased in 30 years. By hanging on, we’re losing money. We think we’re doing OK because we really have no idea how the real “haves” live. They are so few (in comparison) and so far removed from middle-class and upper middle class lifestyles that when we compare haves to have-nots, we’re not looking at the right people.

When income distribution looks like this:

null

And income growth looks like this:

What are the chances that the “Haves” make substantially more than $250,000 a year, and the rest of us are “Have-nots”?

Anyway- both of these polls make me think that we’re just not at all aware of our surroundings or circumstances and that ignorance is the biggest weapon the Republicans have.

I must admit that I’ve been feeling like there’s just nothing new to say. Since I started blogging, I figured this day would come, and I’m a little surprised that it’s taken so long…  but here we are.

The presidential campaign continues, but it seems to have reached the stage where each candidate just repeats the same thing in the different ways every day. The media covers it, or not, depending on their whim. And bloggers either rant about it, or ignore it.

Congress continues to demonstrate their lack of concern for the slow dismantling of the Constitution.

What all of this is really about — the reason why political elites like Nancy Soderberg are so eager to defend it — is because they really do believe that lawbreaking isn’t wrong, that it doesn’t deserve punishment, when engaged in by them rather than by commoners. People who defend telecom immunity or who say that it’s not a big deal are, by logical necessity, adopting this view: “Our highest political officials and largest corporations shouldn’t face consequences when they break our laws as long as they claim it was for our own good.” That’s the destructive premise that lies at the heart of this deeply corrupt measure, the reason it matters so much. Just like the pardon of Nixon, the protection of Iran-contra criminals, and the commutation of Lewis Libby’s sentence, this bill is yet another step in cementing a two-tiered system of justice in America where our highest political officials and connected elite can break our laws with impunity.

There’s a decent chance President Bush will embroil us in yet another failed war before he leaves office.

The Bush Administration, while publicly advocating diplomacy in order to stop Iran from pursuing a nuclear weapon, has increased clandestine activities inside Iran and intensified planning for a possible major air attack. Current and former American military and intelligence officials said that Air Force planning groups are drawing up lists of targets, and teams of American combat troops have been ordered into Iran, under cover, to collect targeting data and to establish contact with anti-government ethnic-minority groups. The officials say that President Bush is determined to deny the Iranian regime the opportunity to begin a pilot program, planned for this spring, to enrich uranium.

The economy continues to be in the tank, and it seems likely that Republican policies will only continue making things worse.

But behind all of this is the one fundamental fact that economic analysts would rather not dwell on: American consumers are at the end of their ropes. High energy prices have contributed to it, as have high food prices. Consumer confidence is plunging. Housing prices are still dropping, which means the piggy banks of home equity and refinancing are closing.

But without consumers, there’s no one to buy all the goods and services we create. Sure, big American companies are doing fine abroad, but foreign sales can’t sustain them. Nor can exports. Hence, bond defaults by companies are up. Earnings are down.

And so, it continues…  there really isn’t any new news, and there isn’t really any hope of new news. So, what exactly is there to blog about?

Another story from Marketplace caught my attention. Apparently (and this really isn’t a surprise), banks are hesitant (at best) or unwilling (at worst) to offer student loans.

Nancy Marshall Genzer: Since the latest credit crunch, banks have been re-evaluating risk. The latest group to be hit by this are students at community colleges and technical schools.

[...]

Statistically, students at these schools are more likely to default.

[...]

You can get a student loan directly from the government, but those loans are limited — enough to pay the tuition at a community college, but not much else.

So, here we are, with an economy in the toilet, global competition for skilled work growing by the day, with Presidential candidates promising “green” jobs which will (I imagine) require a more skilled workforce. Yet, there doesn’t appear to be a path from here to there. We’ve relied on private banks to provide loans to students, trusting in the wonders of the free market, which has worked well, when the economy is doing OK, or at least, when credit was easy to obtain.

But now the credit market has imploded and taken the economy with it. Now, some out of work people who want to return to school to obtain newer/better/more applicable skills can’t, because they can’t get a loan. Or high school graduates hoping to prepare for career, or just get the degree everyone says they need to get a good job, can’t afford college, because some rich guys on Wall Street decided to play fast and loose with “collateralized debt obligations.”

If our society’s success is based on a continually growing economy, shouldn’t we be investing in the success of the future workers in that economy? Shouldn’t we be willing to pay to provide everyone access to quality education at all levels? Maybe post-secondary education will always require loans, but shouldn’t we be willing to protect the availability of those loans from market vagaries?

I do wonder, sometimes, if these sorts of free market failures will open our eyes a bit, and help us realize that, as Sen. Obama says “we’re all in this together.” And I hope that realization makes us more willing to embrace things like Universal Health Care and Universal Pre-K.

Sean-Paul Kelley, at The Agonist, is depressed about the financial burden of supporting the baby boomers in their retirement. At the same time, Matt and Ezra debate the impact of education level on income, touching, once again, on income inequality.

While the debate itself is interesting, in the context of Sean-Paul’s worries, it just serves to remind me about how ill-prepared we are to face the significant challenges ahead of us. In the last 30 years or so:

the wage and salary income of Americans at the 90th percentile of the income distribution rose only 34 percent, or about 1 percent per year. [...]But income at the 99th percentile rose 87 percent; income at the 99.9th percentile rose 181 percent; and income at the 99.99th percentile rose 497 percent.

and the trend is still visible for the last 20. And, somehow, it seems connected to Republican presidencies. And so, we’ve arrived at a point in time when energy, food, and commodity prices are rising (and don’t seem likely to ever fall) and when health care costs are sky-rocketing; essentially, when everything is getting more expensive.

And what are we facing? Retiring baby boomers, the need to get serious about combating global warming, millions of people without health insurance, and a trillion dollar debt from a pointless war.

All of this costs money, and the assumption is that overcoming each of these challenges will cost the middle class more in the way of taxes. And that may be true, but, with income inequality as large as it is, there must be some way to shift the burden to those who have been doing so well for the last 3 decades. And then there’s that military budget I mentioned yesterday.

Regardless of how we pay for it, though, I think it’s painfully clear how incredibly Republican policies have failed this country (28 of the last 39 years have seen a Republican President). We coasted while things were good, never thinking about preparing for what might come next, and now we get to pay the price.

UPDATE: The CBO provides a nifty little picture today, after I spent an hour last night trying to find something like it: