“I don’t want to be sacrificed in your war against an inflation enemy that isn’t here.”
11 Fed officials met with "Fed Up" protesters yesterday who told them: "You will be leaving us behind,” if the Fed rushes to raise rates, accusing the Fed of “pulling the ladder right up after you have climbed it. Our communities are still in a great recession” and “Let our wages grow”.
The protest, misguided though it is, exemplifies how uneven the US economy has become as 8 years of easy Fed policies have done nothing for the Bottom 80% – things have actually gotten worse just below the top of the economic ladder. Sadly, the Fed doesn't work for the Bottom 80% and the Fed is not the Government, the Fed is a Banking Cartel and the kind of inflation they seek to contain is WAGE inflation – exactly what the Fed Up crowd wants them to "fix".
Things are very fixed, as far as the Fed is concerned. In fact, in the past 3 months, US banks made $43.6 BILLION in profits, beating the previous record of $43.01Bn in Q2 of 2015. So the Fed is doing exactly the job they are supposed to be doing. They don't want higher wages – they want "full employment" – in other words, they want a high supply of labor but that doesn't mean they have any interest in those employees making a living wage – that would be inflationary!
I know that when we look at globally the overall U.S. population, it seems like things are getting better. But when you really start breaking it down and you look at that core consumer that we serve on the lower economic scale that's out there, that demographic, things have not gotten any better for her, and arguably, they're worse. And they're worse, because rents are accelerating, healthcare is accelerating on her at a very, very rapid clip.
Making matters worse, he added that the company's core consumers base, 65% of which is comprised of lower-income shoppers, has been impacted by the recent reduction or elimination in foodstamps: "now couple that in upwards of 20 states where they have reduced or eliminated the SNAP benefit, and it has really put a toll on [the core consumer]."
Keep in mind that this is the DOLLAR store that people can no longer afford to shop at! If you think the economy is fine, perhaps it is because you don't speak to many people in the bottom 80% and especially the bottom 60%, who top out at $50,000 in income per household and fall off very rapidly from there.
After taxes, that's $37,000 a year to live on, $3,000 a month, $100 per day for food, phones, utilities, rent, healthcare, car insurance, college savings, retirement savings, furniture, repairs – you know – stuff! Most of us (thankfully) forget what it's like to live from paycheck to paycheck but, for 133M of our fellow Americans and their families (250M total) – that's their daily reality.
Recent studies have shown that the stress of being poor actually damages your brain over time and, for children, it has a profound effect on cognative development. No wonder these people are upset, but they are complaining to the wrong guys. Our society needs to profoundly rethink the distribution of income or all these economic "fixes" are just putting another finger in the dike and a flood is most certainly coming!
We can't keep acting like this is the way it's supposed to be and, if you think this cartoon is an exaggeration, you are right, because the bottom 90% only get 38% of the wages! In fact, between 1979 and 2012, the average income for people in the Bottom 90% FELL from $33,526 to $30,438 (down 9%) while the average income for people in the Top 10% rose from $144,418 to $254,449 (up 76%).
So be careful when you invest thinking the economy is getting better because it may be getting better for you (since you have money to invest, you are probably in the Top 10%) but it's still a downhill slope for those people who wash our cars, bag our groceries, serve our food, clean our homes, cut our grass etc. When you get in a taxi or uber, the guy driving you makes about $11/hr or about $23,000 a year and they work 11-12 hours a day, the people you see on the news (non stars) make between $28,000 and $37,000 on average. Being a chef is the top job in a restaurant but they only make $42,500 on average and the base pay of those soldiers that our GOP friends love and respect so much – $18,378, which is $8.83 per hour!
How do you think America looks to those people when they have to pay $10 for popcorn and a coke at a $10 movie? This is the economy our beloved Federal Reserve has engineered for us and it is truly a gangsters paradise for those of us on top of the heap.
IN PROGRESS
