Today, the President and Vice President launched a task force on “the middle class.”
Here is what EMR said last month in a draft of Chapter 26:
A 2009 PERSPECTIVE ON THE IMPORTANCE OF VOCABULARY
There is a larger context for understanding the importance of Vocabulary. The Shape of the Future, Chapter 1. employs statements made during the decade of the 1990s by senior elected leaders to illustrate the importance of an understanding of human settlement patterns and need for a robust Vocabulary to discuss the topic. When the book was completed in 2000, 20-20 hindsight provided a crystal clear way to compare statements of the intent of the Clinton / Gore Administration with the results over the following 8 years. Chapter 1. provides the perspectives and goals of President Clinton and Vice President Gore in their own words and then evaluates progress on those goals.
Now the US of A stands on the cusp of a new Administration. With no hindsight upon which to rely, a robust Vocabulary – a prerequisite of getting the issues “right” – becomes even more important due to the diminished resource reserves that remain after 35 years of intentional Mass OverConsumption to fuel “growth” and prosperity for a few at the top of the Ziggurat.
There is a broad range of specific problems that citizens who voted for ‘change’ hope the new administration will address. The broad topic which the obligatory Vice Presidential Task Force will address is: “Strengthen the Middle Class.”
At first blush, strengthening the Middle Class would appear to address a number of hot button issues:
1. The economy
2. Job creation
3. Energy independence
4. Affordable health care
5. among others
It might be obvious that “strengthening the Middle Class” must address the Mobility and Access Crisis, the Affordable and Accessible Housing Crisis and the Helter Skelter Crisis. However, without a functional Vocabulary that reality will be missed by even those with the best of intentions.
The meaning and intent of “strengthening” should be clear to all: Improving the economic, social and physical well being of...
... of the “Middle Class,” of course. But there is the rub.
What is the Middle Class?
The Wikipedia discussion of “middle class” opens with this statement: “The term “middle Class” has a long history and has had many, sometimes contradictory, meanings.” Well put!
The bottom line is that almost no one believes that the classic Middle Class still exists. That Middle Class existed after the dust settled following World War II. It was articulated and confirmed by C Wright Mills, David Riesman, Robert and Helen Lynd and others. While Middletown’s Middle Class has changed and some say it does not exist, the term “Middle Class” is still used even though it has morphed to become a prime candidate for listing as a Core Confusing Word.
The Wikipedia discussion of “American Middle Class” focuses on three academic “class models” to summarize current scholarly classification of social class. Although there are three separate models, they divide the post 2000 social structure into four broad groupings that are remarkably similar. The four classes (with three sets of titles and percentages of the population) break down this way:
Class 1. Capitalist Class (1%) // Upper Class (1%) // The Super Rich (0.5%) and The Rich (0.5%) – percent total of the class is 1 percent in all three models.
Class 2. Upper Middle Class and Lower Middle Class (45%) // Upper Middle Class and Lower Middle Class (46%) // Middle Class (46%) – percent total varies from 45 to 46 percent in the three models.
Class 3. Working Class (30%) and Working Poor (13%) // Working Class (32%) // Working Class (40-45%) – percent total ranges from 32 to 45 percent in the three models.
Class 4. Underclass (12 %) // Lower Class (14-20%) // The Poor (12%) – percent total ranges from 12 to 20 percent in the three models.
The totals for those below “Middle Class” range from 42 to 65 percent. Note: The totals do not equal 100 percent within any single model.
In the three models selected by the Wikipedia authors the academics have remarkably similar categories and percentage distribution. The biggest variation are in the names and allocation of population of the lowest two classes.
In this ‘composite’ view of the Ziggurat, it seems there is not much room at the top. However, one percent of the population is about 3,060,000 citizens or something over 1,000,000 Households. These fortunate few would fill the largest NFL stadium about 37 times. While they compose a minuscule percentage of the population, this class provides – directly and indirectly – the majority of the funding for ideologically oriented Institutions (aka, think tanks or ‘Belief Tanks’) and support for the two major political parties. See THE ESTATES MATRIX for discussion of the impact of Institutions (especially Belief Tanks) in the New Third Estate. Also see Supercapitalism noted in Chapter 36. – Fireside Reading
It is significant that Class 1. (Upper) plus Class 2. (Middle) no longer make up a majority of the citizens of the US of A as they did in 1960 and in 1973. This raises the first question about the Vice Presidents Task Force:
Who needs “strengthening” most?
Vocabulary becomes even more important when one digs a little deeper. The core concern according to Vice President-Elect Biden’s own statement is “Working Families.”
Here is a ‘two-fer’ with respect to Vocabulary:
First, “family:” For reasons spelled out in GLOSSARY, the term “family” itself has become a candidate for Core Confusing Word status. This is due to disaggregation of the settlement pattern and to the constant changes now experienced within almost all Households / Dwelling Units.
Second, and even more important, if it is “working” citizens that are of concern from a social structure perspective, those are folks is a different place in the Ziggurat (and in a different class) than “the Middle Class.”
There is no question those individuals and Households who are productive members of society (aka, working) and who have been slipping further and further behind since the mid-70s NEED to be the focus of attention if democracy is to be preserved.
As emphasized in Chapter after Chapter of TRILO-G the widening Wealth Gap is anathema to, and incompatible with long term stability of democratic processes and to market economies.
So if Vice President-Elect Biden is to “strengthen the Middle Class,” the first thing to do is to define what it is he and the task force are talking about. There is no way to “strengthen the Middle Class” unless the Task Force understands reality and embraces a realistic Vocabulary.
There is a second point in this context with respect to “The American Dream” of working citizens and expanding home ownership. A fair allocation of location variable costs will make it very clear that from 60 to 70 percent of the population can never afford Single Household Detached Dwellings. That does not rule out “home ownership” but it does impact the settlement pattern. Further, most of the urban citizens who can not afford Single Household Detached Dwellings also cannot afford Large, Private Vehicles to secure Mobility and Access in dispersed settlement patterns.
This is not a matter of policy or preference, it is a matter of physics and economics and also requires an understanding of human settlement patterns. See THE PROBLEM WITH CARS.
EMR
Friday, January 30, 2009
Wednesday, January 28, 2009
Needed: More Regulation and Less Bitching
One perpetual and frustrating riff I hear on this blog and throughout the conservative elements of Virginia is the bug-a-boo about government regulation.
Everyone from the Gipper on down has told us that we need to get the government off our backs, that government is the problem. I think the opposite is true. We need government to actually do its job.
Ask people who eat peanut butter.
According to The Washington Post, Lynchburg-based Peanut Corporation of America shipped contaminated peanut butter from a plant in Blakely, Georgia 12 times in the past two years. The firm's plant has been linked to a recent outbreak of salmonella that has killed eight people and sickened 502 in 43 states across the country, according to the Centers for Disease Control.
Closely-held Peanut Corporation of America doesn't make the types of peanut butter who find on grocery shelves. Instead, it sells its product to foodmakers such as Kellogg, Trader Joe's and Little Debbie which put in their products.
Federal investigators have found four strains of salmonella at the Georgia plant. One strain was found next to a washroom, which isn't surprising since salmonella is spread by animal feces. It seems possible that some plant workers didn't wash their hands thoroughly as instructed after using the toilet.
The firm isn't required to share internal testing results for samonella with regulators. But there sems to be a problem with the lack of regulation. The Food and Drug Admininistration is tasked with plant inspections but in this case gve the job to Georgia state authorities. How come? FDA says it just doesn't have enough regulators to go around.
State regulators inspected the plant most recently in October. Lo and behold, that's when the contaminated batches of peanut butter this time around were being produced. But the Georgia regulators somehow didn't test for salmonella. State authorities are investigating why they didn't.
Getting hard-pressed state regulators to do the jobs of hard-presssed federal regulators has been the modus operandi for years. Here in Virginia, too-few state regulators actually do the heavy lifting for the feds by investigating hazardous chemical waste sites and air and water pollution control as mandated by federal laws.
The right-wing General Assembly is loath to spend much money on regulation because we just love that "pro business" moniker. We also go for loopey self-regulation. So, we really don't have many regulators compared to other states which take public health and the environment more seriously.
Not many might remember but I sure am reminded of Kepone which polluted the James River back in the 1970s. The carcinogenic pesticide was made at a converted gas station through a scheme operated by now-defunct Allied Chemical. The idea was to somehow shield the chemical giant legally by having a little sub-company make the stuff at the Hopewell site. Waste ended up in Hopewell's water sewage system and since it's a chlorinated hydrocarbon that doesn't break down, it retained its toxic potency for years after it was flushed into the James River.
So where were the state regulators? Probably off keeping the state safe for profits and business interests.
So next time you are bitching about government regulation or reading the pathetic new "Bacons Rebellion" e-zine operated by the dogmatic "Thomas Jefferson Institute" with its whining about the need for limited government, think peanut butter.
And think that half of the people affected by the peanut butter poisoning were children. They could be yours.
Peter Galuszka
Everyone from the Gipper on down has told us that we need to get the government off our backs, that government is the problem. I think the opposite is true. We need government to actually do its job.
Ask people who eat peanut butter.
According to The Washington Post, Lynchburg-based Peanut Corporation of America shipped contaminated peanut butter from a plant in Blakely, Georgia 12 times in the past two years. The firm's plant has been linked to a recent outbreak of salmonella that has killed eight people and sickened 502 in 43 states across the country, according to the Centers for Disease Control.
Closely-held Peanut Corporation of America doesn't make the types of peanut butter who find on grocery shelves. Instead, it sells its product to foodmakers such as Kellogg, Trader Joe's and Little Debbie which put in their products.
Federal investigators have found four strains of salmonella at the Georgia plant. One strain was found next to a washroom, which isn't surprising since salmonella is spread by animal feces. It seems possible that some plant workers didn't wash their hands thoroughly as instructed after using the toilet.
The firm isn't required to share internal testing results for samonella with regulators. But there sems to be a problem with the lack of regulation. The Food and Drug Admininistration is tasked with plant inspections but in this case gve the job to Georgia state authorities. How come? FDA says it just doesn't have enough regulators to go around.
State regulators inspected the plant most recently in October. Lo and behold, that's when the contaminated batches of peanut butter this time around were being produced. But the Georgia regulators somehow didn't test for salmonella. State authorities are investigating why they didn't.
Getting hard-pressed state regulators to do the jobs of hard-presssed federal regulators has been the modus operandi for years. Here in Virginia, too-few state regulators actually do the heavy lifting for the feds by investigating hazardous chemical waste sites and air and water pollution control as mandated by federal laws.
The right-wing General Assembly is loath to spend much money on regulation because we just love that "pro business" moniker. We also go for loopey self-regulation. So, we really don't have many regulators compared to other states which take public health and the environment more seriously.
Not many might remember but I sure am reminded of Kepone which polluted the James River back in the 1970s. The carcinogenic pesticide was made at a converted gas station through a scheme operated by now-defunct Allied Chemical. The idea was to somehow shield the chemical giant legally by having a little sub-company make the stuff at the Hopewell site. Waste ended up in Hopewell's water sewage system and since it's a chlorinated hydrocarbon that doesn't break down, it retained its toxic potency for years after it was flushed into the James River.
So where were the state regulators? Probably off keeping the state safe for profits and business interests.
So next time you are bitching about government regulation or reading the pathetic new "Bacons Rebellion" e-zine operated by the dogmatic "Thomas Jefferson Institute" with its whining about the need for limited government, think peanut butter.
And think that half of the people affected by the peanut butter poisoning were children. They could be yours.
Peter Galuszka
Tuesday, January 27, 2009
SHELTER FOOLS GOLD
On 26 January NAHB reported that existing home sales INCREASED in December: “Existing-Home Sales Spike As Bargains Glut Market: Sales Up a Surprising 6.5 Percent in December.
This was the only “good” economic news in weeks:
24 January 2009 WaPo: “Downturn Accelerates As It Circles The Globe: Economies Worse Off than Predicted Just Weeks Ago.” Record losses in jobs, defaulting banks, defaulting nation-states, riots in Eastern Europe, Autonomobile and retail closings, the four largest print media Enterprises in the US of A lost $18.3-billion in market value in just a year, the new federal administration scrambling for ways to expand bail-outs, consumer confidence at an all-time low, ...
The 2001 Nobel prize winner in economics and former chairman of the Council of Economic Advisors Joseph Stiglitz suggested to CNNPolitics that the US of A follow Sweden’s lead: Agencies should take over failing banks – wiping out owner and bank investor interests – instead of just loaning them money or buying preferred stock.
The existing home sales news was apparently what kept the gambling venues (aka, Dow Jones, et. al.) from tanking during the first part of the last week in January because other news from the shelter sector not good:
On 24 January it was reported that Freddie Mac will ask for $35-billion more in taxpayer’s money and on 26 January that Fannie Mae will ask for $16-billion more. On 24 January FHA reported that the number of FHA-backed loans in default were rising.
There was some good news: The Newton Bank of Nigeria is offering loans to all comers over the Internet.
And almost as foolish, Bill Bolling who wants another term as Lt. Governor of Virginia has a “legislative agenda” that includes a $2,500 per person ($5,000 per couple) “tax credit” for Virginian’s buying homes with no location related criteria – such as qualifying for location efficient mortgages.
Perhaps most scary of all was the front page of WaPo’s Real Estate section on 24 January. The feature was a puff piece on green building (this story has already been cited in prior comments): “Seeking a Smaller Footprint: Builders Scale Back House Sizes as Buyers Commit to Energy Efficiency.”
Why is this scary? Check out the photographs of the featured buildings! If there were real standards for journalistic decency this would be stamped “PORNOGRAPHY!” It is well known that even those committed to energy efficiency will not walk forever. These dwellings are said to be “near Winchester.” But from the pictures it is clear they are not THAT near. Where are the Jobs and Services needed to achieve Balance?
Somewhat Better Size House, still in the Wrong Location.
But what puts the December rise in existing house sales in the deception category? The real estate industry is using the percentage drop in home value during the Depression when looking for the “bottom” of the market.
There are major differences in the unsustainable runup in house prices over the past 35 year, and especially the last 15 years with the Roaring 20s and the Depression Era drop of around a third in value. Here are some:
Far lower percentage of homes with mortgages
Far fewer homes
Far more dwellings with two or more generations in a unit.
This later point is critical. These occupants could work to help make ends meet. Multi-generational occupancy was especially prevalent in detached dwelling and detached dwellings were mainly in the Countryside. The occupants of detached dwellings were far more likely to be able to depend on the land for the needs of everyday life.
Then there is the fact that the housing bubble built up over the 20s was a far smaller bubble and it was not nearly as leveraged nor were the mortgages packaged, securitized and peddled around the globe. Home mortgages were a Community and a Regional activity.
If one wants to look for levels of property value declines they need to look not at nation-state wide percentages of owner occupied dwellings but at the bursting land speculation bubbles in Florida, California and elsewhere.
While NAHB reports that sales were up “a surprising” 6.5 percent in December, CNNMoney was reporting: “Flood of foreclosures: It’s Worse Than You Think.” “Banks are moving slowly to list repossessed homes for sale, which could mean that housing inventory is even more bloated that current statistics indicate.”
Of course most of these not yet listed dwellings are Wrong Size House in the Wrong Location – see “THE TRAGEDY OF TRICKLE DOWN.”
The bottom is not yet in sight. December sales numbers are Fools Gold.
And still new units are being built in the Wrong Locations, and the wrong dwelling type, even if somewhat closer in size and energy consumption.
EMR
This was the only “good” economic news in weeks:
24 January 2009 WaPo: “Downturn Accelerates As It Circles The Globe: Economies Worse Off than Predicted Just Weeks Ago.” Record losses in jobs, defaulting banks, defaulting nation-states, riots in Eastern Europe, Autonomobile and retail closings, the four largest print media Enterprises in the US of A lost $18.3-billion in market value in just a year, the new federal administration scrambling for ways to expand bail-outs, consumer confidence at an all-time low, ...
The 2001 Nobel prize winner in economics and former chairman of the Council of Economic Advisors Joseph Stiglitz suggested to CNNPolitics that the US of A follow Sweden’s lead: Agencies should take over failing banks – wiping out owner and bank investor interests – instead of just loaning them money or buying preferred stock.
The existing home sales news was apparently what kept the gambling venues (aka, Dow Jones, et. al.) from tanking during the first part of the last week in January because other news from the shelter sector not good:
On 24 January it was reported that Freddie Mac will ask for $35-billion more in taxpayer’s money and on 26 January that Fannie Mae will ask for $16-billion more. On 24 January FHA reported that the number of FHA-backed loans in default were rising.
There was some good news: The Newton Bank of Nigeria is offering loans to all comers over the Internet.
And almost as foolish, Bill Bolling who wants another term as Lt. Governor of Virginia has a “legislative agenda” that includes a $2,500 per person ($5,000 per couple) “tax credit” for Virginian’s buying homes with no location related criteria – such as qualifying for location efficient mortgages.
Perhaps most scary of all was the front page of WaPo’s Real Estate section on 24 January. The feature was a puff piece on green building (this story has already been cited in prior comments): “Seeking a Smaller Footprint: Builders Scale Back House Sizes as Buyers Commit to Energy Efficiency.”
Why is this scary? Check out the photographs of the featured buildings! If there were real standards for journalistic decency this would be stamped “PORNOGRAPHY!” It is well known that even those committed to energy efficiency will not walk forever. These dwellings are said to be “near Winchester.” But from the pictures it is clear they are not THAT near. Where are the Jobs and Services needed to achieve Balance?
Somewhat Better Size House, still in the Wrong Location.
But what puts the December rise in existing house sales in the deception category? The real estate industry is using the percentage drop in home value during the Depression when looking for the “bottom” of the market.
There are major differences in the unsustainable runup in house prices over the past 35 year, and especially the last 15 years with the Roaring 20s and the Depression Era drop of around a third in value. Here are some:
Far lower percentage of homes with mortgages
Far fewer homes
Far more dwellings with two or more generations in a unit.
This later point is critical. These occupants could work to help make ends meet. Multi-generational occupancy was especially prevalent in detached dwelling and detached dwellings were mainly in the Countryside. The occupants of detached dwellings were far more likely to be able to depend on the land for the needs of everyday life.
Then there is the fact that the housing bubble built up over the 20s was a far smaller bubble and it was not nearly as leveraged nor were the mortgages packaged, securitized and peddled around the globe. Home mortgages were a Community and a Regional activity.
If one wants to look for levels of property value declines they need to look not at nation-state wide percentages of owner occupied dwellings but at the bursting land speculation bubbles in Florida, California and elsewhere.
While NAHB reports that sales were up “a surprising” 6.5 percent in December, CNNMoney was reporting: “Flood of foreclosures: It’s Worse Than You Think.” “Banks are moving slowly to list repossessed homes for sale, which could mean that housing inventory is even more bloated that current statistics indicate.”
Of course most of these not yet listed dwellings are Wrong Size House in the Wrong Location – see “THE TRAGEDY OF TRICKLE DOWN.”
The bottom is not yet in sight. December sales numbers are Fools Gold.
And still new units are being built in the Wrong Locations, and the wrong dwelling type, even if somewhat closer in size and energy consumption.
EMR
Sunday, January 25, 2009
Did Eric Cantor Know that Diane's Bank Got a Federal Bailout?
Here's a curious tale that you're not likely to see in the Richmond Times-Dispatch or other Media General outlet.
Diane Cantor, a veteran finance industry official and wife of GOP Congressional wunderkind Eric Cantor, is an executive of a bank that got a $267 million federal bailout even though conservative Cantor has at times publicly opposed the federal bailout program.
According to the investigative journalism Website propublica.org, New York Private Bank and Trust was the beneficiary of a Treasury Department purchase of $267 million work of the bank's preferred stock to shore it up. The bank is the holding company for Emigrant Bank with 35 branches mostly around New York City. Diane Cantor runs the Virginia branch of Emigrant's wealth-management division, Virginia Private Bank & Trust, which targets wealthy clients.
Diane Cantor is also a director on the board of Media General, which owns the Times-Dispatch whose editorial staff gushes constantly about how wonderful Cantor, now House Republican Whip, and his wife are. The newspaper does note Mrs. Cantor's association with the board, but as far as the newspaper's editorial and news staffs go, "never is heard a discouraging word" about the Cantors. The TD acts as Cantor's personal PR machine since he is seen as an up-and-coming young Republican leader destined to re-energize the now-hapless GOP leadership left in shambles after eight years of Bush-Cheney-Rove.
Prorepublica.org did talk with Cantor's office which says that Eric did not know about the bailout of his wife's bank and did notihng to intercede for it.
If that's the truth, then Cantor is in a somewhat better position than Rep. Barney Frank, the outspokenly liberal chair of the House Financial Services Committee. Frank, a Democrat, admits he did intercede to get OneUnited Bank of Boston federal bailout money. Frank insists it was a legitimate attempt to help the minority-owned bank, according to The Boston Globe.
Even so, the news puts Cantor in an awkward position. Last summer, when the Bush Administration's proposal for a $700 billion bailout of troubled financial companies was introduced, Cantor initially pushed for an alternative structure so taxpayers wouldn't have to pay for it. Cantor suggested using investors on Wall Street to fund the bailout.
He ended up up supporting the program which has ended up giving Diane's bank taxpayer money. More recently, he voted against releasing the second tranche of the funds.
What's next is up for grabs. There has been plenty of criticism of the $700 billion bailout program which former Treasury Secretary Henry Paulson introduced in a spare, two-and-a-half page long proposal so vague that it wouldn't get an Average Joe an auto loan. Paulson initially suggested the bailout be used to buy up toxic loans, but since it has been used for just about everything else, from stock buys of banks, to funding bank acquisitions, to helping auto companies and their finance firms.
Barack Obama's team is ready to propose major restructurings and major re-regulation of the Bushies' giveaway that has benefited lots of Wall Street insiders as well as Diane whether Eric knew of it or not.
It isn't clear if anything was done wrong here. The sad part is that because of Media General's corporate monopoly over news coverage in much of the state, not many Virginians are likely to learn of what is a legitimate news story at all. And that's a damned shame.
Peter Galuszka
Diane Cantor, a veteran finance industry official and wife of GOP Congressional wunderkind Eric Cantor, is an executive of a bank that got a $267 million federal bailout even though conservative Cantor has at times publicly opposed the federal bailout program.
According to the investigative journalism Website propublica.org, New York Private Bank and Trust was the beneficiary of a Treasury Department purchase of $267 million work of the bank's preferred stock to shore it up. The bank is the holding company for Emigrant Bank with 35 branches mostly around New York City. Diane Cantor runs the Virginia branch of Emigrant's wealth-management division, Virginia Private Bank & Trust, which targets wealthy clients.
Diane Cantor is also a director on the board of Media General, which owns the Times-Dispatch whose editorial staff gushes constantly about how wonderful Cantor, now House Republican Whip, and his wife are. The newspaper does note Mrs. Cantor's association with the board, but as far as the newspaper's editorial and news staffs go, "never is heard a discouraging word" about the Cantors. The TD acts as Cantor's personal PR machine since he is seen as an up-and-coming young Republican leader destined to re-energize the now-hapless GOP leadership left in shambles after eight years of Bush-Cheney-Rove.
Prorepublica.org did talk with Cantor's office which says that Eric did not know about the bailout of his wife's bank and did notihng to intercede for it.
If that's the truth, then Cantor is in a somewhat better position than Rep. Barney Frank, the outspokenly liberal chair of the House Financial Services Committee. Frank, a Democrat, admits he did intercede to get OneUnited Bank of Boston federal bailout money. Frank insists it was a legitimate attempt to help the minority-owned bank, according to The Boston Globe.
Even so, the news puts Cantor in an awkward position. Last summer, when the Bush Administration's proposal for a $700 billion bailout of troubled financial companies was introduced, Cantor initially pushed for an alternative structure so taxpayers wouldn't have to pay for it. Cantor suggested using investors on Wall Street to fund the bailout.
He ended up up supporting the program which has ended up giving Diane's bank taxpayer money. More recently, he voted against releasing the second tranche of the funds.
What's next is up for grabs. There has been plenty of criticism of the $700 billion bailout program which former Treasury Secretary Henry Paulson introduced in a spare, two-and-a-half page long proposal so vague that it wouldn't get an Average Joe an auto loan. Paulson initially suggested the bailout be used to buy up toxic loans, but since it has been used for just about everything else, from stock buys of banks, to funding bank acquisitions, to helping auto companies and their finance firms.
Barack Obama's team is ready to propose major restructurings and major re-regulation of the Bushies' giveaway that has benefited lots of Wall Street insiders as well as Diane whether Eric knew of it or not.
It isn't clear if anything was done wrong here. The sad part is that because of Media General's corporate monopoly over news coverage in much of the state, not many Virginians are likely to learn of what is a legitimate news story at all. And that's a damned shame.
Peter Galuszka
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