Middle class faces extinction

The News-Press ^ | June 15, 2003 | JANE R. JOHNSON, N. Fort Myers

[FITZ]

Mexico had a socialist government for 80 years.

Not really ----ours is far more socialist. They have public school available ---not mandatory ---for everyone up until 6th grade, they don't have welfare, food stamps, free health care. They have a lot of socialism for the elite class ---when they object to Pemex being privatized, why do you think that is? Does Pemex money in any way benefit the 90%? No -- it's government controlled but all the money goes to a very few connected with the government.

[FITZ]

If the middle class "disappears" (which isn't going to happen) by moving up then everything will be fine.

When are they going to start moving up? After this many years of globalism, shouldn't it be happening already? Instead we're seeing growing unemployment-----which takes you closer to the poor class not the rich class, and dropping wages ---same thing ---poorer not richer. I just hope the few wealthy elite intend to pay off our national debt all by themselves.

[Dec31,1999]

I didn't know that. In what way were they socialist? It is quite doubtable. What was nationalized? Did they have the right to own property? Please expound.

But I was referring to South America as well, where conditions are similar.

[discostu]

Better take that up with their former government. According to MEXICO they were a socialist nation.

[discostu]

Most industry in Mexico was nationalized. Pay scales were set by law. For extended periods asking for a raise was a jailable offense.

South American nations are also largely socialize/ command economy. The government runs things, and does so poorly, thus resulting in mass poverty and all those things people incorrectly blame on capitalism. The problem isn't capitalism, it's government.

[FITZ]

A weird form of socialism maybe. Pemex is one of the better example ---it's nationalized but the profits only end up in a few families' pockets. The nationalization benefits the majority not at all ----they have no welfare or food stamp program, most poor kids don't attend school or for a few years if they're lucky. After 6th grade, their parents would have to pay ---so few go onto secundarias ---HOWEVER then the socialism picks up again ---if they graduate from secundaria --then they have free college or university. Another way the Socialism is only for the already wealthy, doesn't do the poor any good at all.

[discostu]

The simple fact that they have nationalized industry is all you need. Welfare systems are a method of supergluing socialism onto capitalism. When you're nation is really socialized the government runs so many aspects of the economy that it's ALL welfare. People have the job the government says, earn the money the government says, have the days off the government says... no capitalism.

[Dec31,1999]

Thanks for the information, but can you provide any documentation or at least, details for anyone else who might be lurking?

Quite a fascinating post.

[Dec31,1999]

I guess not, then.

[Dec31,1999]

I never check "My Comments" anymore, either. One must always respond to my face, or not at all, otherwise it falls upon deaf ears.

[RobbyS]

The mob that attacked the Bastille included many good bourgois Parisians. Only later were the mobs made up of sans-cullote.

[Regulator]

The source of that capital is "the rich."

Not really. Most venture capital in this country comes from the major pension funds, which see speculative ventures as a small part of their immense portfolios (like about 1%). The rest goes into things like municipal bonds and high grade corporate debt. By the way, some of the biggest pension funds that do this are the union funds. You'd be surprised what the Teamsters own.

The point about corporate debt is worth talking about. That's one of the largest sources of risk capital for the corporations. Their operating funds usually are from short term notes through the big merchant banks. And where do they get their money? Why, from Mr. Greenspan and his buddies over at the Fed. And they don't need a lot of deposits to do it (that's why it's called "fractional reserve banking").

So Fitz is right - a lot of the ordinary capital comes from banks. But a lot comes from giant pension funds, and in the last 15 years, from diversified stock funds supplied with money from ordinary Americans.

As far as corporations that started in a garage, they are far outnumbered by the ones that were started by an infusion of investment capital from a bank or venture fund that was investing money from all over the map. Like, for example, Intel when Arthur Rock sported them the startup capital. And as far as "the Rich" being motivated to invest, the Angel capital network is quite small and also insignificant. There aren't any Angels out there the size of CALPERS.

But there is one bottom line. Unless you're one of the gang, you can forget about access to this capital. Having done many presentations of my own up at Sand Hill Road, I can safely tell you that you only get to do that if you talk to the right people. If not...well, they might take your idea (they think Non-Disclosure Agreements are a joke; whattya gonna do, sue them?) and just give it to someone else. It's big bad world, they're the sharks...and you look like food to them.

Keep thinking that the whole game ain't rigged against ya. That way you won't end up bitter.

But that doesn't mean it isn't true.

[Pukin Dog]

Were it not for NAFTA, there would be even fewer jobs, because many corporations now using NAFTA would be out of business. Something that is never discussed among NAFTA detractors, is the reason why Businesses needed it.

Over-regulation, Tort lawyers, Environmentalists, Insurance and Union work rules have made the cost structure for most manufacturers too expensive to make a profit against foreign competition. China would not have been such a problem if not for the fact it just costs too much to manufacture things in America.

NAFTA has lowered costs to the point where SOME jobs in America have been preserved. Take away NAFTA, and you will see almost instant recession in America, as hundreds of remaining American shops go out of business. Businesses exist to turn a profit; no one should keep their doors open just to provide jobs.

[superloser]

You assume we actually make products in America.

The industrial base in this country has been stripped to where it was *before the Civil War* -- so, who is going to buy "American-made" products when there are none?

Welcome to Third World status. If you check our exports, you'll find it is mostly raw materials.

[Weimdog]

NAFTA's not the problem, China is.

Read your labels.

[Sonny M]

The industrial base in this country has been stripped to where it was *before the Civil War* -- so, who is going to buy "American-made" products when there are none?

Well, the first half of the theory is that you won't be making anything, you'll be selling it, to people, who also don't make things and have similar white collar jobs.

Its like the analogy I used before, You used to have a job making staplers, that job goes overseas, your new job...is selling staplers at staples office supply store to consumers who used to manufacter things but now sell things or hold some kind of service oriented job.

Not saying its right or wrong, but the attitude of both political parties today is that the USA is a service oriented economy, we sell, we design and create and market, but the making part is done somewhere else. Its dangerious thinking, in that, in reality, in todays world, any job, any thing that is done, can be (and apparently already is) exported or outsourced.

[LiteKeeper]

SITREP

[WRhine]

I'm in agreement that we are seeing a development of the two-class system. It is not economically healthy. Instead of trying to kill the unions here, I think we need to export the idea.

That's a very interesting idea. I've never been pro-union but after seeing the mass exportation of jobs, many of them union, shipped overseas in the last 2 decades I do have some sympathy for the union worker. Moreover just observing the corporate hucksters of late that have bilked shareholders, customers, employees to enrich themselves has strengthened in my mind the reason why unions came into existence to begin with.

Unmitigated Greed knows no class boundaries.

[WRhine]

Were it not for NAFTA, there would be even fewer jobs, because many corporations now using NAFTA would be out of business. Something that is never discussed among NAFTA detractors, is the reason why Businesses needed it.

Over-regulation, Tort lawyers, Environmentalists, Insurance and Union work rules

OR you can look at it like this: if NOT for NAFTA we would have had to face up to the demons of Over-regulation, Tort lawyers, Environmentalists, Insurance and Union work rules etc. Unsurprisingly the easy route was taken here. With NAFTA we got the worst of both worlds...lost jobs and no change in government policies.

[Princeliberty]

So should the whole world use slave labor since
that will lower costs the most?