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https://www.peakprosperity.com/falling-through-the-cracks/

Falling Through The Cracks

The poverty crisis is hitting home

In the trailer for our recent (and excellent) webinar WTF: What The Fed?!?, I ask:

What’s it going to take for the pitchforks to come out? How much more does the common man need to be abused before he wakes up and says ‘I’m not going to take anymore!’?

As discussed in detail in the webinar, our economic and political systems have been captured by monied interests. Industry, government, markets and the judicial system all work for their benefit, not ours.

The result? An acceleration of wealth and opportunity away from the masses and into the pockets of the top 1% (really, the top 0.1%)

The public is literally being sacrificed so that a tiny number of powerful elites can enjoy “more”.

Today, I’m not going to make my point with my usual onslaught of charts and data. Instead, I’m going to make it visually.

We’ve all read the articles about the dying middle class and the explosion of homelessness in recent years.

Well, I live in northern California, in Sonoma County, about an hour north of San Francisco. It’s quite pleasant up here, with lots of small farms, orchards and vineyards.

Yes, there are some rich folks here. But nothing like the rest of the Bay Area. Most families are working class.

The local economy is nothing like the Tech frenzy of Silicon Valley. But it’s better than most places in the country.

At least, it has been.

Recently, it’s become impossible not to see the signs that more and more people are falling into poverty. They just can’t afford the rising cost of living, even if they have a job.

Here where I live, nowhere is this more apparent than the Joe Rodota trail connecting my small town of Sebastopol with the nearby city of Santa Rosa. Over the past year, this previously quiet, clean, bike & pedestrian route has exploded into a sprawling homeless encampment for hundreds of dispossessed people.

Here’s a 2-minute video I took of the encampment this afternoon (h/t to my daughter Charlotte for manning the camera as I drove):

YouTube is full of similar shocking video of much larger encampments across the West Coast, from Los Angeles to Seattle. Here in the Bay Area, even our “jewel” cities of San Francisco and Berkeley are becoming overrun by an exploding homeless problem and the mental health, sanitation, addiction, safety and crime issues associated with it.

It’s a major issue with no clear fix in sight. And folks, it’s only going to get worse. Far worse.

Remember, we’re in the 11th year of the longest economic expansion in US history. The markets are at record highs. The official reported unemployment rate is at a record low.

When the next recession hits it will be like pouring jet fuel on this fire.

Homelessness in California has doubled in just the past few years and our social support systems are already overwhelmed. What’s it going to be like if mass layoffs cause the homeless population to quadruple in a single year?

I remain amazed at how difficult life is for the millions of working poor in America. What harsh conditions they suffer just to hold a job, sleep under (any) shelter, find food, and wake up the next day to do it all over again. Day after day, always worried that sickness, injury, misfortune or theft is going to jeopardize the little you have.

Once you’ve dropped into poverty, especially if you have family dependents, it is damn hard to extricate yourself from it. Regardless of how hard you apply yourself.

If you have the time, I recommend watching this 45-minute documentary on US poverty produced by a German public broadcast service. Currently more than 40 million Americans live beneath the poverty line — that’s twice as many as in 1970.

Viewing our country through their outsider’s eye is a stark warning that we ignore this metastasizing social epidemic at our peril:

Back to my question at the start of this post: What’s it going to take?

How many more millions will fall into poverty? How much more abuse will continue until of those of us paying attention, with growing fear at the social implications and perhaps at our own financial vulnerability, actively revolt against the elite-centric status quo?

For thousands of years, history has warned us that such social imbalance will not stand:

" An imbalance between rich and the poor is the oldest and most fatal ailment of all republics ", Plutarch

Are we going to listen in time?

....

A comment to this article,

" I like how the Saker refers to the 0.1% as the “Dismal Decimal”, the tiny elite hoovering up all the world’s wealth.

Like all social shifts, change is going to require a shift in perception. Right now, society is remaining tolerant of the billionaire class — wrapped in the mantle of ‘proof of the the American Dream’ and the fruits of the benefits of capitalism. In many ways we still venerate and celebrate their wealth.

The change we need won’t happen until we admit the system has metastasized into a cancer very different from what we pretend it to be.

We don’t have capitalism where the plucky and hardworking can succeed on a level playing field. We have ‘crony capitalism’ where the rich and powerful control the rulemakers, enforcers, and profit & information flows to slant the playing field increasingly to their advantage — squeezing out competition.

It’s deeply unfair. And when left unchecked as it is now, it ends with Plutarch’s prophecy of the desperate masses rising in revolt against the master class. Nobody benefits by going down that road.

What’s the solution? I don’t have all the answers, but stopping the current subsidization of the rich by ending central banking’s intervention in the economy and financial markets is a good place to start.

The central banks (many of which, like the US Federal Reserve, are owned by private banks) are picking winners and losers.

They are rewarding those who own financial assets (predominately the already rich), providing dirt cheap credit to corporations fueling stock buybacks and investment in automation (further driving up the price of said financial assets), enabling otherwise failed businesses to persist as zombie companies, and bailing out these players when the music stops.

On the other side of the ledger, savers have been destroyed. The $trillions in new thin-air money have driven the cost of living so high that household and capital formation is now out of reach for an increasing majority of society. Millions of jobs are being lost for good to globalization, robotics and AI. Little of the growing debt pile and deficit spending is being invested back in improving our infrastructure, education or health care systems. And yet, when the music stops, it’s the bottom 99% that gets stuck with the bill via layoffs, higher fees and higher taxes. No bailouts for Joe Sixpack.

I’m NOT a fan of wealth redistribution as a general policy. I believe competition and the incentive structure offered by true capitalism, tempered with enough limits to protect the “commons”, is probably the best system we yet know of.

But when the game becomes as rigged and the wealth as concentrated as its becoming now, it will be corrected. Either by policy or by pitchfork.

And both paths start with a change in sentiment towards those holding all the cards.

The Dismal Decimal should start being very worried "