The Servant Economy: Where America's Elite is Sending the Middle Class

The Servant Economy: Where America's Elite is Sending the Middle Class

Language: English

Pages: 298

ISBN: 0470182393

Format: PDF / Kindle (mobi) / ePub

Renowned economist Jeff Faux explains why neither party's leaders have a plan to remedy America's unemployment, inequality, or long economic slide

America's political and economic elite spent so long making such terrible decisions that they caused the collapse of 2008. So how can they continue down the same road? The simple answer, that no in charge one wants to publicly acknowledge: because things are still pretty great for the people who run America. It was an accident of history, Jeff Faux explains, that after World War II the U.S. could afford a prosperous middle class, a dominant military, and a booming economic elite at the same time. For the past three decades, all three have been competing, with the middle class always losing. Soon the military will decline as well.

  • The most plausible projections Faux explores foresee a future economy nearly devoid of production and exports, with the most profitable industries existing to solely to serve the wealthiest 1%
  • The author's last book, The Global Class War, sold over 20,000 copies by correctly predicting the permanent decline of our debt-burdened middle class at the hands of our off-shoring executives, out of control financiers, and their friends in Washington
  • Since his last book, Faux is repeatedly asked what either party will do to face these mounting crises. After looking over actual policies, proposed plans, non-partisan reports, and think tank papers, his astonishing conclusion: more of the same.

















Wait till next year,” “Tomorrow is another day,”  “If at first you don’t succeed, try, try again,” and a thousand similar phrases resonate in our cultural surround sound from the cradle to the grave. As Nellie Forbush, the heroine of the 1949 Broadway musical South Pacific, sang, this is the land of “cock-eyed optimists. ” Foreign visitors are commonly surprised that when they attempt to answer truthfully the ritual greeting “How are you? ,” the average American reacts with surprise and some distaste.

The media reported that the Democrats were “shocked” and “stunned. ” How could Greenspan, the symbol of financial probity, support a tax-cut proposal that would spend the surplus and have the government borrow money to pay for it? How could Greenspan, who had lectured the Democrats for eight years that deficits were the root cause of runaway inflation and would destroy the Social Security system, so cavalierly dismiss his own doomsday scenario? The only answer that fits the facts is that for Greenspan, as for Reagan, balancing the budget was not his true priority.

11 c02. indd 29 5/4/2012 7:44:28 AM 30   T h e S e rva n t Ec o n o m y Big business was the great beneficiary, but small business, populist farmers, and the nascent labor movement came aboard as well. Crushed by Wall Street’s control of the dominant Republican Party after the election of 1896, labor’s next best hope was faster growth through the exploitation of foreign markets. Increasing the size of the pie seemed to be the best way to increase the size of labor’s small slices. The expansion of overseas markets was not free trade.

Friedman does not expect that we will completely swallow his predicted scenarios. But he reminds us that the “black swan” thesis of financial contrarian Nassim Nicholas Taleb (see chapter 1 of this book) taught us to expect the improbable. And Friedman’s improbable future is built on assumptions about military technology, demographics, and the maintenance of global hegemony that are widely accepted by the U. S. governing class and are generally compatible with the beliefs of Zakaria, Slaughter, Rose, and Kotkin.

It’s the saga of an art history major just out of college who became a twenty-four-year-old mortgage bond trader with Salomon Brothers. Later he wrote, “I’d never taken an accounting course, never run a business, never even had savings of my own to manage. I stumbled into a job at Salomon Brothers in 1985 and stumbled out much richer three years later, and even though I wrote a book about the experience, the whole thing still strikes me as preposterous. ”27 Yet throughout the 1990s, Rubin and Greenspan not only looked the other way, they also shot at any attempt to deal with the growing evidence of a bubble.

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