— By Kevin Drum
| Fri Mar. 25, 2011 3:00 AM PDT
EXTRACT: A lot has happened over the past 30 years, but if you're looking for a single political sea change that's had the biggest impact on middle class wages—more important than union decline, more important than NAFTA, more important than the end of Glass-Steagall—it's the political consensus that underlies the Fed's reluctance to allow labor markets to stay tight enough to generate wage increases in the real economy. And it's something we're seeing all over again right now, as the DC chattering classes have almost unanimously decided that inflation is our real enemy right now, even though core inflation is running around 1% and unemployment is still near 9%.
This is a policy beloved of the business community, which prefers loose labor markets that keep wages low and executive compensation high, but it hasn't always been the Fed's policy and it's not written in stone that it has to be now. Tight labor markets and rising middle-class wages are, to a large extent, a choice we make. Politics took them away 30 years ago, and politics can return them to us if we want.
Phi Beta Iota: The lack of a strategic analytic model, and the lack of a “Smart Nation” mentality that prizes transparency, truth, and trust above all else (i.e. inherent integrity), is a vestige of the Industrial Era and the anomalous ability of an elite to operate in secrecy and not have to justify or explain its self-serving decisions. The above article is important but incomplete–security (the absence of fear) is about everything, always, and anyone who does not understand that is part of the stovepipe problem. Robust education, social safety nets, honest politicians, a rescinding of public corporate charters when corporations cheat on taxes and fail to account for true costs of all goods including the toxins they so freely proliferate….this is not simple, but it can be understood. Dumb nations, however rich in resources, however good their population might be in spirit, are destined to self-destruct as America is self-destructing. The pre-conditions for revolution exist in the USA, lacking thus far is a precipitant, a catalyst, for a wholesale rejection of the two-party tyranny and the fraudulent democracy it perpetuates in favor of banking and the Federal Reserve and inherent systemic corruption across all domains. The USA is a “cheating culture” and that is its eulogy absent a renaissance of integrity achievable through collective intelligence favoring panarchy and demanding Electoral Reform as a non-negotiable condition for restoring the legitimacy of US governance.