The ongoing 21st Century Great Crash, despite all the claims to the contrary, is showing no signs of improvement.
Banks continue to get away with fiscal murder, with criminal charges rarer than foie gras at a tailgate party. Restoring Eisenhower-era tax rates for the rich is a pipe dream as the wealthy continue to accumulate ever-larger portions of the fruits of the labor of the masses and the natural riches of the planet.
For those of us who don’t belong to the One Percent, things look decidedly grimmer.
Consider the plight of two separate groups, retired grandparents and their grandchildren, Boomers and members of Generation Y.
Back when esnl was a tot [and we were born on the very first surge of what became the Baby Boom], folks were worked for many companies usually had a retirement plan of some sort, a pension to supplement their employees’ Social Security income.
Through the years, that would change, with the worker contributing an ever larger portion of their income.
Also changing was the nature of retirement plans as federal laws opened the floodgates for ever-riskier investments.
Instead of resting their confidence in fund managers, workers became active investors in 401K plans, in which stocks purchased by the worker or her broker became the norm.
One good friend, a reporter with a wreath of numinous laurels to his credit, lost most of his money in the Dot Com Crash of the last century’s closing decade, forcing him to work well into his “Golden Years.” Other friends saw their retirement funds vanish through Employee Stock Ownership Plans gutted in leveraged buyouts of their employers.
They, like esnl, are forced to rely increasingly on Social Security.
Once upon a time, a Republican President had this to say:
Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt (you possibly know his background), a few other Texas oil millionaires, and an occasional politician or business man from other areas. Their number is negligible and they are stupid.
But now there are those who hope, if not to abolish Social Security, then at least to inflict crippling blows — presumably with the intent of forcing Americans to turn the last of their cash over to those same rapacious banksters who caused the latest crash.
One way of forcing Americans to hand over more money to the private sectors is by a devious process that the Obama administration seems set to swallow.
From Laura Gottesdiener for AlterNet:
This “dark art” works by switching the inflation adjustment calculation from one that increases the benefit payments to keep up with the increasing costs of basic necessities such as food (this one is called Consumer Price Index-Urban, or CPI-U) to another calculation, one that assumes that if prices skyrocket people will make substitution in their spending (called Chained CPI). Switching to the chained CPI calculation would dramatically decrease the Social Security benefits as seniors age; as one study shows, it will cut the benefits of a 95-year-old by 9.2 percent, decreasing their annual benefit by $1,611.
The problem with this decrease — and with calculating Social security using chained CPI in general — is that seniors often can’t and don’t make spending substitutes. Moreover, these cuts get worse as people age, so changing to Chained CPI is essentially taking money away from the oldest women in country — and it will affect not only future Social security recipients, but those currently using its benefits. The public overwhelming opposes changing the inflation calculation; according to one poll, 60 percent of Americans think the switch is “unacceptable.”
But a good number of liberal opinion writers are accepting the concession anyway, following Paul Krugman’s lead and using squeamish and defeatist language — classic Krugman: “as of last night I was marginally positive, right now marginally negative” — that tacitly lends their approval to this plan (it wouldn’t if the vociferously opposed it and called it a sellout).
Read the rest.
So what does it mean?
Consider first this chart from Bold Progressives:
So what substitutions will be involved?
From canned cat food to dry dog food as the favored dinner entre? From small apartment to a cardboard box under a bridge?
Chained CPI strikes us more as chaining our oldest citizens to ever-harsher forms of misery.
Generation Y as the Dead End Kids
But what about their grandchildren, members of Generation Y?
Consider this dire prognosis relayed by Elliot Blair Smith of Bloomberg:
Generation Y professionals entering the workforce are finding careers that once were gateways to high pay and upwardly mobile lives turning into detours and dead ends. Average incomes for individuals ages 25 to 34 have fallen 8 percent, double the adult population’s total drop, since the recession began in December 2007. Their unemployment rate remains stuck one-half to 1 percentage point above the national figure.
Three and a half years after the worst recession since the Great Depression, the earnings and employment gap between those in the under-35 population and their parents and grandparents threatens to unravel the American dream of each generation doing better than the last. The nation’s younger workers have benefited least from an economic recovery that has been the most uneven in recent history.’
“This generation will be permanently depressed and will be on a lower path of income for probably all of their life — and at least the next 10 years,” says Rutgers professor Cliff Zukin, a senior research fellow at the university’s John J. Heldrich Center for Workforce Development. Professionals who start out in jobs other than their first choice tend to stay on the alternative path, earning less than they would have otherwise while becoming less likely to start over again later in preferred fields, Zukin says.
Read the rest.
Not mentioned is another burden imposed by the rapacious politics of greed that came to dominate the country starting about the same time Ronald Reagan took the oath of office in Washington: Student debt.
When esnl moved to California in 1967, the University of California charged $50 a semester in fees. Now they’re at $13,000, with students now paying more for their UC education that the state does — a direct violation of the state’s educational master plan.
And those costs don’t include room, board, books, and a host of other expenses.
The same picture is being repeated across the country, and students load up on student loans [again, from those same banksters who already screwed up their futures] to make up the difference, leaving Generation Y grads facing not only a bleaker vocational outlook but unprecedented levels of debt, a lethal double whammy.
But the rich are getting richer. . .