Don’t fear….you still have “PURCHASING POWER!!”

[wadestock]

Don’t fear….you still have “purchasing power”

This came out of a recent debate I had with a right winger at work.

It’s almost impossible to get a hard core neocon to discuss the merits of the progressive tax system....so I often take a debate in the direction of how a vibrant middle class is “good for business”.

How can they argue that?
I’ve got many a dumb stare from them at certain points using that tactic.

But this guy had the best argument I’ve heard yet.

It goes something like this....
There is really nothing for the middle class to worry about as long as they have “purchasing power”. This is the true measure of whether things are OK (in other words, not total assets, which is usually considered a better measure, which has been on a steady decline since 1975 with the exception of certain Clinton years).

Production is the real source of wealth, and any other scheme which attempts to transfer money from one class to another is simply a scheme to transfer wealth. It would not become any true benefit for the middle class, and could actually lead to LESS overall production (this is often allegedly proven by neocons using the “Chilean model”).

So when you think about the real purpose of the middle class (using neoconic principles)...it is primarily for the purpose of supporting PRODUCTION. The neocons then use common economic indicators to convince themselves that the middle class is purchasing good and that growth is generally sustained, therefore the “middle class machine” which puts out the production....is doing just fine.

Do you see the fallacy of the argument?

Yes the middle class continues to purchase and most economic indicators look reasonably well. But much of this is as a result of cheap credit and probably a large portion has come through easy to obtain home equity loans. But is this any real indication of the "productive health" of our middle class? NO. There IS a true degradation in the middle class taking place which IS having an adverse effect on present production (although difficult to raise a red flag based on historical data) and one which will have even a more profound effect on FUTURE production.

No need to agonize over why this is true, because we all know that with college and health care cost, reduced retirement benefits, etc etc, and the general degradation of the middle class production base, we as a middle class are not only losing our “fair share” of the production machine, we’re losing our PRODUCTION potential as well. The bottom line is the middle class is becoming disenchanted with the system and is not being able to exist “comfortably” within the system. When this occurs, you can talk all you want about numbers, the fact is you produce an effect which is akin to the type of “workers depression” that occurs when someone is under a communistic system. We're not investing in our production base or properly educating our production base...that's the bottom line.

Conclusions:

1. There is absolutely nothing wrong with maintaining a vibrant middle class with a progressive tax system, which supports a highly successful production base. America has been the historical example that this works. There is actually no historical example to conclude that the ultimate society and production base occurs when the profits of the production base are taken from the middle class and moved to a small percentage on top.

2. The Neocons use the “purchasing power” argument to allow a “back door” means of justifying MOVING money to the top. They are profound hypocrites in terms of showing us the downfall of keeping money fairly centered in the middle class, while claiming that the more money goes to the top, the greater the PRODUCTION (and overall benefit to society) will be. They refuse to believe that there exists a “model” in which too much money on the top strangles the production base.

3. The outsourcing of jobs is actually key to their ability to maintain the production base AT THE EXPENSE OF THE MIDDLE CLASS IN THE US. First you start with a callous disregard for the middle class in the US, and an overall assumption that you must MINIMIZE letting them have TOO MUCH OF THE PROFITS. Truth is today....as the US production base slips under the “middle class squeeze”, they simply turn to foreign sources to fill the gap....with further profits skyrocketing to the top of the heap. Here they count on the resources from other countries to allow them to continue the PRODUCTION that they so desire, while giving THEM most of the purchasing power.


http://www.libertyhaven.com/politicsandcurrentevents/governmentreformitsrealrole/reapurch.html
Is a good website which presents the convoluted neocon argument....

[ALago1]

1. Well he's wrong about purchasing power

The NY Times just came out with an article last week saying real wages have been declining, making each dollar less powerful in the current market.

[wadestock]

2. A better way to articulate the "middle class squeeze".....

came out of this in my mind....

You see...they don't ideologically see any problem with the middle class losing assets....

How in hell does that really work into the growth and buying data?
It doesn't.

So....
All you do is keep on taking money and assets out of the middle class....and you go around the world to make up any slack....

As long as we can live on that last vestige of credit...the numbers may still look just fine.

They may even have figured out exactly what it all means in the end for those that are on the top.

For those on the top it will mean dynasties of wealth in the next 20 to 30 years that will make what Gates has now look like a piker.

WHY CAN'T OUR DEM LEADERS BETTER ARTICULATE WHAT HAS BEEN REFERRED TO AS THE MIDDLE CLASS SQUEEZE?????

WE ARE LOSING THIS ARGUMENT....