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News, notes, and observations from the James River Valley in northern South Dakota with special attention to reviewing the performance of the media--old and new. E-Mail to

Monday, November 1, 2010

Take America back to where?

The country is making a slow recovery from the recession, but it cannot seem to break the 9.6 percent unemployment rate.  That fact is frustrating, but it should come as no surprise to those who have tracked the long term trends in jobs and wages.  Those trends which are eliminating the middle class have been at work for three decades.

Washington Post writer Harold Meyerson cites the statistics

Since the ascent of Ronald Reagan, ... America's claim to being a land of opportunity has become a sick joke. Unions have dwindled; colleges have become unaffordable; manufacturing has gone abroad; taxes on the rich have plummeted; our infrastructure has decayed.

In short, the economic life and prospects for Americans since the Reagan Revolution have grown dim, while the lives of the rich -- the super-rich in particular -- have never been brighter. The share of income accruing to America's wealthiest 1 percent rose from 9 percent in 1974 to a tidy 23.5 percent in 2007.

The economy has continued to grow handsomely, but for the bottom 90 percent of Americans, it's been a time of stagnation and loss. Since 1980, the share of all income in America going to the bottom 90 percent has declined from 65 percent to 52 percent. In actual dollars, the average income of Americans in the bottom 90 percent flat-lined -- going from the $30,941 of 1980 to $31,244 in 2008.

The 1980s experienced a massive shift in the forces allowed to work in the economy, and for the majority of Americans in the economic lower and middle classes that shift has meant being pushed down into the growing under class and those who live in poverty. Four million additional Americans found themselves in poverty in 2009, with the total reaching 44 million, or one in seven residents.   In  1980, 29.3 million were below the poverty line.  With the poverty rate in the U.S. now making up 15 percent of the population, the conditions for explosive revolts are mounting. 

As the Obama administration tries to coax the economy back into higher productivity, the people he saved from disaster are the ones pouring money into combating the measures that help the middle class.  The concentration of wealth by the super rich is a fact of life, but a dangerous fact of life.    After saving the financial and automobile industries from total collapse, their executives are rewarding themselves with massive bonuses and  pouring millions into political PACs in the effort to defeat the reforms that would prevent their industries from engaging in the behavior and practices that created the recession we are in.  

Meyerson points out that when people talk of taking their country back, they are largely referring to the Reagan years, when in actuality the years in which the greatest generation produced the surge in economic opportunity was between World War II and 1980. When, under the the principles of supply side economics, the Reagan administration began its dismantlement of government and deregulated industries,  it enhanced the super rich class by enlarging the class of poor and poverty stricken. And that super rich class has been sucking up the economic resources to produce an economic situation that has made the U.S. a full-fledged plutocracy.  (For those who don't know what that word means and don't want to look it up, it means government by the wealthy.)  There are shouts of alarm that attempts to regulate the financial industry amount to a redistribution of wealth, but, as Meyerson says, that redistribution has been taking place for  30 years with the nation's wealth being concentrated in ten percent of the  population. 

The deregulation instituted during the Reagan revolution has adversely affected the larger American population by allowing vital services to deteriorate, including the airlines, trucking,  banking, credit, farm programs, meat inspection, water and air quality, unions, mining--in fact, there is not an aspect of life not touched by the deterioration of services necessary for a healthy overall economy.  

In South Dakota, that deterioration can be observed in specific ways.  The farm programs have benefited the corporations of agri-business and facilitated the consolidation and integration of farms into the corporate structures more than it has made possible the economic viability of family-sized farms. The farm crisis of the 1980s was caused by the same banking practices that caused the mortgage meltdown of 2008.  Banks were encouraging farmers to take on loans that they could not afford to pay back.  Under Reagan's Secretary of Agriculture, John Block, farmers lost their land to foreclosure at a rate that approached that of the Great Depression.  Congress had to  pass a Debt and Loan Restructuring System which saved American agriculture from total failure by helping vulnerable farmers restructure their debt and stay on the land.  This aspect of the Reagan years is largely ignored, but it involved the equivalent action to the bail outs that have been so highly criticized in contemporary times. 

The deregulation of the airlines saw an almost immediate decline, for example, of air service to Aberdeen.  One day the regional airport had jet service, and one could fly directly to places such as Sioux Falls, Fargo, Watertown, and Brookings, as well as  Minneapolis.  The next day every flight was to the Twin Cities in small, cramped aircraft that did not have enough capacity to the haul the luggage of all its passengers.  As deregulation advanced, the 14-county area surrounding Aberdeen experienced the biggest outmigration of population in the country. Businesses closed or moved out, as jobs were shipped out of the country.  The community became too isolated to be a convenient place to have a business.  When the farm crisis hit,  hordes of people left the area.  When I came to Aberdeen, I was among those at an orientation meeting at which it was announced that the city had a population  of 28,000  with prospects of hitting 30,000 within the next few years.  In mid-1980s, the population went to 24,000 and has been bouncing within a thousand of that  ever since.  (That 28,000 figure was most likely chamber of commerce promotonal hype.)

During the farm crisis and the closing of a computer component manufacturer, which cost Aberdeen 800 jobs, Northern State was among the universities that offered programs to help displaced farmers and workers make the transition to new careers.  These programs, set up by mandates from state and federal government, were quite successful in helping people qualify for new careers and make new lives.  Ironically, the State of South Dakota offered few opportunities for those new careers and renewed lives, so most of the people who were retrained through those programs went to other places.  The population decline continued with the eventual closing of two elementary schools in Aberdeen and the closing and consolidation of a number of school districts in the region.  

 Those who are touting Reagan's quip that government is not a solution but is the problem aren't looking at the actual history of that period of time.  Trickle-down economics and deregulation caused massive human destruction that the era is not given credit for.  It was government programs that stepped in and stopped, for a time at least, the predation of banks, and rehabilitated numerous people who had lost their livelihoods.

People have short and faulty memories, and are preparing to launch another venture into human oppression and destruction, and national failure.   

And, then, take a look at this.

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Aberdeen, South Dakota, United States