Blue Collar Economics 101

Welcome to Working Class Weekly.

Our origins, beginning October 2010:

Let's get right down to it. It is 2010 and the world economy is still reeling from the dramatic crash of 2008. Economists have all kinds of ideas about what could be done but none of them can tell you with any certainty when--or if--things will take an upturn.

If the economists hint too strongly that there is something that is fundamentally wrong with our economic system, they will lose their jobs. Their job is to convince people like you and I that if we invest our labor and hard-earned dollars in this economic system we will come out ahead of the game.

Well, as a factory worker, I don't make those assumptions. I have seen things go south for workers for at least three decades now.

I will lose my job if I don't make my production and quality quotas and show up for work on time, but I won't lose my job if I tell you that the economic system is fundamentally flawed.

So, from the mind of a factory worker--Blue Collar Economics 101:

Many of you lost big chunks of money from your 401K. As a friend of mine said, "When you lose money in the stock market where does it go?".

Good question.

Let me share a little known fact about about this thing called a "Depression". Oh, OK, if you insist, I will call it a "recession". Not very convincing to those on the hurting end of it but I can work with it for now.

Depressions--or "recessions"--are accompanied by a dramatic transfer of wealth from those lower on the economic scale to those higher on the economic scale.

You could almost say that this transfer of wealth is one of the things that most characterizes a depression.

Before the Great Depression of the 1930's eighty per cent of farms were family owned. After the recession 30% were. This is a dramatic concentration of wealth transferred from those at the bottom of the economic scale to those at the top.

The current real estate foreclosures? Same deal. Corporate bail-outs? Same deal. More wealth being transferred--being moved away from people like you and I and concentrated in the hands of people at the upper levels of our economic system.

In the case of home foreclosures it is people's life savings being transferred. In the case of corporate bail-outs it is our tax money. No matter to those at the top where it comes from as long as they maintain their dominance in the economic system.

The A-student of Blue Collar Economics asks, "What about my 401k?". Go to the head of the class. And sorry you got burned in the recession. Same deal though. "Thanks for letting us play with your money at your expense. By the way you don't have as much as you used to before you let us invest it for you."

And don't blame yourself if you weren't the A-student. We had some of the "brightest minds" in the country telling us to invest our future in this booming economic engine.

The head of the Federal Reserve Alan Greenspan who was the nearest thing to a god in the financial world admits that he blew the call on the economy.

It is no wonder we were confused. We wanted to believe. The American dream dies hard. 

So just know--this current recession that is causing your depression is nothing new. It is the cyclical nature of a system that requires illogical growth and investment in financial instruments that have only speculative (and no inherent) value and are not regulated in any way that protects the consumer. 

It is the nature of an economy that relies on consumption and at the same time keeps the profits from getting into the hands of the consumer. Deregulation in theory reduces costs for consumers but it often comes with tax cuts for the corporations, taxes fall onto the consumers, the gained wealth is not shared with consumers which in the end lessens demand.

So the game grinds to a halt and the deck is reshuffled. Who will end up holding the cards this time? Who will rewrite the rules of the game?