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The Economy Since The 1970's: Poverty Worst in the Midst of Plenty


(Updated July 17, 2012)


INTRODUCTION


In their essay The Problem of the 20th Century: Poverty in the midst of plenty, Willard and Marguerite Beecher provide a brief economic history of mankind up until the 1970's and clearly show that:

 

    The Age of Abundance is upon us and Man need never again go hungry or cold.

 

    Poverty exists in the midst of plenty primarily because of immoral, greedy, selfish acts of what the Beechers called businessmen (executives of large corporations/companies, banks and financial institutions hereafter) who keep prices, profits and their salaries up by keeping goods, scarce, curtailing production, paying low wages, laying off employees, outsourcing jobs, and forming cartels.


The Beechers concluded their essay with:

 

The businessman himself does not serve any genuine purpose in the current era; the engineer and the scientist have become the indispensable men.

 

Common necessity will force us to make and distribute goods whether or not businessmen make profits. Failing to earn money in his apparently dominant situation, he will turn over the problems of production to engineers and the task of distribution to anyone who will handle it. Most likely, this will be some government agency. ... Profits most likely, will then disappear.”

 

It is not unthinkable that worse depressions may come. Businessmen ... certainly are unable to unravel the chaos of the present date

 

Probably, the forthcoming economic breakdown will be handled on a worldwide rather than on a national basis. Only one thing is certain: the resulting system will have small resemblance to what exists now. The Battle of Production has been won, and the Battle of Distribution is in the making. It will begin with the abdication of the businessman and it will end only when methods have been found to distribute Abundance.


Over thirty years have passed since the Beechers’ essay was published. Businessmen have not turned over distribution to anyone and they have not and will not voluntarily abdicate. Profits have not “disappeared”, they have increased. The current great recession and abject failure of financial systems were caused by them. Today we still have massive Poverty in the Midst of Plenty and it is now the Problem of the Twenty First Century.


We will have the worldwide economic breakdown and depression predicted by the Beechers unless drastic steps are taken.


Charles Ferguson, Director of the Oscar winning documentary "Inside Job" in his new book Predator Nation, says that much of the American (and global) financial sector has become criminalized, creating an industry culture that tolerates or even encourages systematic fraud.


Many of the businessmen have profited from their failures and received billions of dollars of bailout money from taxpayers. They are making money with money instead of investing in producing goods.


Today's "businessmen," as described by the authors own/control most of the large banks, financial institutions, rating agencies, major corporations, government regulators and the media. Their representatives and agents occupy key positions in the administration, the judiciary and congress. They have markedly increased their campaign contributions and job promises [both bribes] to politicians and exercise control over key individuals in all three branches of government, the Federal Reserve, the various regulatory agencies, the World Bank, the IMF and the World Trade organization. They have bribed legislatures to remove regulations and to write well over a hundred unjust injurious laws which favor corporations over individuals.


Financial institutions have obtained at least $37 trillion of tax payers dollars from the Federal Reserve and the government in grants, loans or loan guarantees at very low interest rates - from 0% to 0.38%. They charge exorbitant interest rates as high as 35%, compounded daily, on the money that they are willing to lend. These banks and financial institutions foreclose on homes, small farms and businesses and pay their executives scores of millions in salaries. At the same time many of the engineers, scientists, farmers and workers responsible for advances in technology and productivity that made the Age of Abundance possible are going deeper into debt to these immoral businessmen.


In the richest country in the world, at least the one with the most millionaires and billionaires, we have many children being born homeless and going hungry thanks to immoral and unethical bankers, businessmen and public servants.


Richard D. Wolff Footnote , a Professor Emeritus at the University of Massachusetts in Amherst and author, describes in additional detail what has happened to the economy during and since the 1970's and why on his website www.rdwolff.com. The following, paraphrased from his article Deepening Economic Divisions provides part of the how and why:

 

Until the 1970s, US workers enjoyed rising real wages as there was more work than workers. Businesses kept raising wages to keep employees and attract immigrants. In the 1970s real wages stopped rising as businessmen replaced millions of workers with computers and robotics and outsourced more and more jobs and women's liberation help millions of US women move into the workforce.

 

US businessmen no longer faced a shortage of labor and stopped raising wages and benefits as basic labor scarcity became labor excess.

 

While workers' average real wages stayed flat, their productivity rose. They produced more goods and services for each hour of labor. More and better machines (including computers), better education, and harder and faster labor effort raised productivity. While workers delivered more and more value to the businessmen, these businessmen paid workers more. The businessmen reaped all the benefits of the increased productivity: increased salaries, bonuses, stock options dividends to shareholders, They did not share the benefits with employees.

 

Over the last 30 years, most US workers have in fact gotten poorer when you sum up flat real wages, reduced benefits (pensions, medical insurance, etc.), reduced public services, and raised tax burdens.

 

US workers sent more family members to do more hours of paid labor and they borrowed huge amounts [from the "businessmen"], exhausting themselves, stressing family life, and taking on unsustainable levels of debt until the global crisis hit in 2007. Now, the US working class buying power could no longer grow: rising unemployment kept wages flat, while no more hours of work or borrowing was possible. Reckoning time had arrived. A US capitalism built on expanding mass consumption lost its foundation [failed miserably.

 

The rich, however, have gotten much richer since the 1970s, as every measure of US income and wealth inequality attests. The richest 10-15% -- those cashing in on employers' good fortune from no longer rising wages -- helped bring crisis by speculating wildly and unsuccessfully in all sorts of new financial instruments (asset-backed securities, credit default swaps, etc.). The richest also contributed to the crisis by using their money for lobbyist, campaign contributions and rendering government regulation and oversight inadequate to anticipate or moderate the crisis or even to react properly once it hit.


The people must wake up to the fact that it is businessmen and public servants who are behind the increasing unemployment, foreclosures, bankruptcies homelessness and poverty.


The time is ripe. Let’s work together to force the businessmen to abdicate, implement methods to distribute Abundance and eliminate poverty once and for all..


To do this, we must replace and/or humanely and privately prosecute “businessman” who are breaking the law.


The following provides additional information about the economy and what can be done about it:

 

    Primary Causes of the Ongoing Economic and Jobs Crises

 

    Peoples Vision and Agenda for a Peaceful, Prosperous, Just World

 

    Provide Both Employment Opportunities at Living Wages and Affordable Necessities of Life for All

 

    Reform and Revitalize Financial Systems and Resolve Banking, Derivatives, Mortgages, Foreclosures and Debt Crises