The Big Squeeze: How Americans Are Being Crushed by Financial Insecurity and Doubt
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The Great Recession officially started in December 2007 and ended in June 2009. It was the gravest financial crisis the nation has faced since the Great Depression of the 1930s. Sadly, most Americans have yet to recover.
It fostered what many call the “new normal,” the unspoken sense that America is stuck if not in decline. This new sensibility bears profound consequences; foremost is the recognition that Americans are living lives of lowered expectation and intensified financial uncertainty.
The “American Century” is over. The great historical phase of America’s domestic prosperity and global hegemony is withering. In the decades following the Second World War, American capitalism fashioned the postmodern, and increasingly globalized, world order. In the process, it abandoned America and the American people.
We first witnessed the transfer of jobs overseas, rationalized as “throwaway” or low-skilled jobs. Then came the growing dependency of foreign borrowing, rationalized by the U.S.’s ostensible credit worthiness. Now, America’s great corporations, like GE and GM, are earning more overseas than at home, accompanied by generous domestic tax breaks. More disturbing, the U.S. military-industrial-political establishment repeatedly embarks on doomed “great war” campaigns that rob the nation of its young, its wealth and its ideals.
Domestically, over the last three decades the rich have systematically expropriated the middle-class’s sizable and hard-earned wealth. It has been the most massive transfer of wealth in the nation’s history, with the gravest consequences. It has been a period of legalized robbery.
The decades following WWII witnessed the middle-class accumulating significant wealth as measured in the pride of home ownership, the glamour of a new car, the accomplishment of sending one’s kid to college, the security of good health and assured retirement. It was a period marked by the narrowest income gap separating the rich and the poor in the nation’s history. It fostered the great social, legal, technological and cultural movements that distinguish the post-war era -- civil rights, Roe v. Wade, a man on the moon and the counterculture.
Today, the U.S. is stuck, confronting an historical sea change. Most Americans live at the intersection of earning the next dollar and paying the latest bill. This is the powerful vice of the Big Squeeze, of financial uncertainty and doubt, of living holding one’s breath.
Nearly everyone feels squeezed by the Big Squeeze, excepting, of course, those rolling in dough or too naïve to care. A November 2010 Rasmussen poll found that just over one-third (37 percent) of respondents believe America’s best days are still ahead; sadly, nearly half (47 percent) said the nation’s best days were in the past. A recent New York Times front-page article announced: “New Poll Shows Darkening Mood Across America.” [NYT, April 22, 2011]
Capitalism is being restructured, and in the process, Americans are being disciplined, forced to accept a poorer quality of life. The process of social and personal “reeducation” now being imposed on the vast majority of Americans is the Great Squeeze, it is the process of accepting a qualitatively more miserable life.
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Big Squeeze is revealed in many ways. The clearest examples are the key economic indicators, particularly those detailing the growing income gap and the resulting social consequences. In a recent report, the Economic Policy Institute (EPI) finds that, "since 1983 the top 5% of wealth holders consistently held more than 50% of all wealth, but the share increased from 56.1% in 1983 to 63.5% in 2009. The bottom 80% of wealth holders consistently held less than 20% of all wealth, but the share declined from 18.7% in 1983 to 12.8% in 2009."