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Big Lie: America Doesn't Have #1 Richest Middle-Class in the World...We're Ranked 27th!

America is the richest country on Earth. We have the most millionaires, the most billionaires—and a increasingly poor "middle class."

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  • Our tax structures favor the rich and their corporations that no longer pay their fair share. They move money to foreign tax havens, they create and use tax loopholes, and they fight to make sure the source of most of their wealth—capital gains—is taxed at low rates. Meanwhile the rest of us are pressed to make up the difference or suffer deteriorating public services.

  • The wealthy dominate politics. Nowhere else in the developed world are the rich and their corporations able to buy elections with such impunity.

  • Big Money dominates the media. The real story about how we're getting ripped off is hidden in a blizzard of BS that comes from all the major media outlets...brought to you by....

  • America encourages globalization of production so that workers here are in constant competition with the lower-wage workers all over the world as well as with highly automated techonologies.

Is there one cause of the middle-class collapse that rises above all others?

Yes. The International Labor organization produced a remarkable study ( Global Wage Report 2012-13) that sorts out the causes of why wages have remained stagnant while elite incomes have soared. The report compares key causal explanations like declining bargaining power of unions, porous social safety nets, globalization, new technologies and financialization.  

Guess which one had the biggest impact on the growing split between the 1 percent and the 99 percent?

Financialization!   

What is that? Economist Gerald Epstein offers us a working definition:

"Financialization means the increasing role of financial motives, financial markets, financial actors and financial institutions in the operation of the domestic and international economies."

This includes such trends as:

  • The corporate change during the 1980s to make shareholder value the ultimate goal.

  • The deregulation of Wall Street that allowed for the creation of a vast array of new financial instruments for gambling.

  • Allowing private equity firm to buy companies, load them up with debt, extract enormous returns, and then kiss them goodbye.

  • The growth of hedge funds that suck productive wealth out of the economy.

  • The myriad of barely regulated world financial markets that finance the globalization of production, combined with so-called "free trade" agreements.

  • The increased share of all corporate profits that go to the financial sector.

  • The ever increasing size of too-big-to-fail banks.

  • The fact that many of our best students rush to Wall Street instead of careers in science, medicine or education.

In short, financialization is when making money from money becomes more important that providing real goods and services. Here's a chart that says it all. Once we unleashed Wall Street, their salaries shot up, while everyone else's stood still.

Do we still know how to fight!

The carefully researched ILO study provides further proof that Occupy Wall Street was right on the money. OWS succeeded (temporarily), in large part, because it tapped into the deep reservoir of anger toward Wall Street felt by people all over the world. We all know the financiers are screwing us.

Then why didn't OWS turn into a sustained, mass movement to take on Wall Street?

One reason it didn't grow was that the rest of us stood back in deference to the original protestors instead of making the movement our own. As a result, we didn't build a larger movement with the structures needed to take on our financial oligarchs. And until we figure out how to do just that, our nation's wealth will continue to be siphoned away.  

 
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