They Live in a Different Country

The reality of America is a story of polarization, a colossal fall in the standard of living for most of us, a collapse of free educational standards when compared to the rest of the world just as the costs to individual families to educate their children is soaring… and a new ability for our government, no matter which party is in control, to pretend our lives are good by hiding behind statistics that are wildly misleading and profoundly self-serving. The fact is that like too many third world banana republics, there are two Americas living on top of each other… and the gap between them is widening rapidly. We don’t even live in the same “space” any more.

“Across the United States, more than 10 million housing units are in gated communities, where access is ‘secured with walls or fences,’ according to 2009 Census Bureau data. Roughly 10 percent of the occupied homes in this country are in gated communities, though that figure is misleadingly low because it doesn’t include temporarily vacant homes or second homes. Between 2001 and 2009, the United States saw a 53 percent growth in occupied housing units nestled in gated communities.” New York Times, March 29, 2012. Some put the number a tad higher. A “The growth of gated communities in the United States, to the point where such developments now account for roughly 11 per cent of all new housing and provide housing for about 4 million people…” (according to a report – Gated Communities: A Systematic Review of the Research Evidence – from the University of Glasgow).

This doesn’t count the mega-estates with private guards or single-family fortresses, the uber-expensive cooperatives and condominiums in cities like New York, Boston and Washington D.C., where the well-heeled are protected from the hoi polloi by stern doormen and very sophisticated security systems, sometimes enhanced with armed guards. The one percenters have insulated themselves from the rough and tumble reality of life in the streets. Pricey restaurants, where the tab for a single evening easily rises to the average monthly cost of rent in the lives of many non-homeowners in our dwindling middle class, are thriving.

We already know that the tax code favors those who make their livings buying and trading securities (capital gains taxes and the “carried interest” rates for those who run the funds that service that top level of earners, the ability to “tax plan” to keep earnings off-shore and out of the tax collector’s reach), that the financial industry has tilted the playing field so that 90% of the post-2008 income gains have positively impacted only 10% of all income-generators, and that the top 1% continues to own 42% of the nation’s wealth, a statistic that threatens to grow bigger in the current “recovery.” People who earn wages, salaries and commissions (outside of that carried interest exception) pay taxes at much higher rates.

We also know that the most of the metrics that our government uses to determine that we are in “recovery mode” are totally skewed to avoid the pain that continues to impact the middle and lower classes and over emphasize variables that only measure the performance at the top. Much touted are the rise in the stock market and the fall of raw unemployment, without looking at the fact that real buying power continues to fall for most Americans, the news jobs created are primarily at the bottom of the economic ladder with little opportunity for advancement and too many Americans have just given up looking for work.

The manufacturing and lower-end service sector is slowing growing… and being run by robots. Forget about the threat of outsourcing to other countries; that is old news. The new threat to semi-skilled and unskilled American workers comes from within. The future suggests that this trend is accelerating, providing more income to those who own the robots as opposed to the workers who might have once performed those tasks.

“Robert Hof, Forbes: "Google ... has bought a military robot company called Boston Dynamics. ... Unlike the other robot-makers, this company makes machines by the names of BigDog, Atlas and Cheetah that can variously outrun Usain Bolt and hurl cinderblocks 17 feet. ... Google, like AT&T, IBM and Xerox in previous decades, has monopoly-like profits that it can use to do research into areas that go far beyond its current business. Whether robots or self-driving cars or wearable computers become significant businesses for Google is less important than the fact that today, it's willing to spend the big bucks to push forward in these seemingly unrelated areas.” USA Today, December 16^th.

The polarization has become so pronounced that private aviation is considering new alternatives so as not to be inconvenienced by crowded public airports. Giant Google, for example, has so many Silicon Valley executives on private aircraft that they need their own brand new, state of the art airport (artist rendering above).“Google may get to experience every Fortune 500 company's wildest travel dream next month: A $82 million jet center dedicated to executives' private planes.

“In January, groundbreaking is expected to take place on a 29-acre facility featuring approximately 270,000 square feet of hangar space. The huge swath of space will effectively become a separate airport for Google executives and other tech muckety-mucks; private aviation support firm Signature Flight Support has a 50-year lease on the facility and will operate it with a partner named Blue City Holdings. In a statement, airport executives described San Jose-based Blue City as a ‘corporation representing the personal aircraft of the principals at Google’ and explicitly said they would grant private airport section access to ‘other figures in the Silicon Valley business community as well.’" FastCompany.com, December 17th.

When you read about keeping tax rates low, understand that unless you are in the very highest income bracket, a few points up or down in tax rates really will have almost no impact on your life. But the net impact to the mega-wealthy can result in tens if not hundreds of thousands or even millions of times more in hard dollar savings to each individual at the top of the food chain. To those who claim that these are the job creators, another way of phrasing the much-discredited “trickledown” theory of economic wealth, know that this is a myth (a polite way of saying “a lie”). “A study from the Congressional Research Service — the non-partisan research office for Congress — shows that ‘there is little evidence over the past 65 years that tax cuts for the highest earners are associated with savings, investment or productivity growth.’" CNBC.com, September 17, 2012.

Think of exactly how many American workers were involved in the manufacture of that Ferrari, BMW or Porsche, or that Armani suit or that Gucci handbag! So the next time you hear a politician talking about reducing taxes or keeping the tax rates low (to stimulate the economy or create jobs), or that regulation is un-American, think about the impact of those policies as directly and immediately coming out of your economic hide, that same economic hide that has resulted in 12 consecutive years of uninterrupted decline in the buying power and quality of life for the average American.

I’m Peter Dekom, and I wonder if the fall in our academic standards has also resulted in our becoming one of the most gullible electorates on earth!