The Five-Step Process to Cheat the Middle Class Worker (loan, 2013, accounting)
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I'd like to share this article for discussion because I feel it accurately outlines the all too successful strategy of the class warfare that's been waged on the American worker.
It's a recipe for turning America into Pottersville. And it's working very well.
It's so artfully done, and so diabolical, that one can picture secret seminars in subterranean Wall Street meeting rooms, guiding young business recruits in the proven process of taking an extra share of wealth from the middle class. Their presentation might unfold as follows:
1. Boost productivity while keeping worker wages flat.
2. Build up a financial industry that has no maximum wage.
3. Keep accumulating wealth created by the financial industry.
4. Tax yourself as little as possible.
5. Lend out your excess money to people who can no longer afford a middle-class lifestyle.
You can read the full article explaining the five points at the link.
I'd like to share this article for discussion because I feel it accurately outlines the all too
successful strategy of the class warfare that's been waged on the American worker.
Quote:
It's so artfully done, and so diabolical, that one can picture secret seminars in subterranean Wall Street meeting rooms, guiding young business recruits in the proven process of taking an extra share of wealth from the middle class. Their presentation might unfold as follows:1. Boost productivity while keeping worker wages flat. 2. Build up a financial industry that has no maximum wage. 3. Keep accumulating wealth created by the financial industry. 4. Tax yourself as little as possible. 5. Lend out your excess money to people who can no longer afford a middle-class lifestyle.
6. Encourage them to produce children out of proportion to the market capacity
to absorb them so tat their offspring will have 5X as many competitors when they try
to get a job and at about half the earning power when they do.
1. Boost productivity while keeping worker wages flat.
Why isn't the worker acting smarter to prove they are worth more money? It is the worker's responsibility to prove they are worth more money. It isn't a company's responsibility to pay someone higher and higher wages
2. Build up a financial industry that has no maximum wage.
You mean the financial industry that gave the middle class double digit returns on their retirement portfolios for the last few decades? You industry that allows the middle class the vehicles by which they can buy houses, cars, and actually stop working and retire in their 60's? Shouldn't the middle class thank the financial services industry?
3. Keep accumulating wealth created by the financial industry.
Which the middle class can do as well. Does the author realize that ANYONE can invest in the market, not just the wealthy?
4. Tax yourself as little as possible.
As the middle class has done too. The wealthy pay dramatically more in effective tax rates than the middle class. Personally? I am middle class and have never paid more than 9% in taxes
5. Lend out your excess money to people who can no longer afford a middle-class lifestyle.
A 'middle class lifestyle' has grown dramatically over the last 40 years. The size of the average house went from 900 sqft in 1950 to 2400 in 2010. The number of cars owned by an average middle class house has risen by 40% since 1970.
Maybe if the middle class actually lived within their means, they would be able to save money. I am not sure that this is 'diabolical'. The average American is too ignorant/short sighted that he/she buys the dream house on 0% down instead of being disciplined, buying a smaller house, saving money, investing the difference, and actually start to accumulate wealth on their own. The upper class isn't 'diabolical'. The average american is simply undisciplined about managing their finances, and values material goods over personal wealth creation.
Maybe if the middle class actually lived within their means, they would be able to save money. I am not sure that this is 'diabolical'. The average American is too ignorant/short sighted that he/she buys the dream house on 0% down instead of being disciplined, buying a smaller house, saving money, investing the difference, and actually start to accumulate wealth on their own. The upper class isn't 'diabolical'. The average american is simply undisciplined about managing their finances, and values material goods over personal wealth creation.
Good post. The fact that the middle class has bought into the victim mindset instead than the visionary mindset is what produces the results of the class. Americans in the middle class often consume more than they can afford. They pay thousand of dollars a year in interest alone in car payments, credit cards, and other debts. They refinance their house and use the equity to buy new vehicles and other garbage they don't need.
I am not in agreement with the way some corporations are doing things, but there is still great opportunity for People who work hard and save.
Check out the below video to see the victim mindset of a lot of Millennials these days....Its long, but you can see within a couple of minutes the though process of some of the young geniuses....
Good post. The fact that the middle class has bought into the victim mindset instead than the visionary mindset is what produces the results of the class. Americans in the middle class often consume more than they can afford. They pay thousand of dollars a year in interest alone in car payments, credit cards, and other debts. They refinance their house and use the equity to buy new vehicles and other garbage they don't need.
I am not in agreement with the way some corporations are doing things, but there is still great opportunity for People who work hard and save.
Check out the below video to see the victim mindset of a lot of Millennials these days....Its long, but you can see within a couple of minutes the though process of some of the young geniuses....
Being only 26 years old myself, I have had more than a few arguments with friends/old classmates/etc. about financial responsibility. I was called an idiot by my fellow mid-20's co-workers at my old job for working 75 hours/week for a 40 hour/week job. Then they didn't understand why I was offered a job that paid dramatically more than them when they weren't considered for it. That video doesn't surprise me at all.
I'd like to share this article for discussion because I feel it accurately outlines the all too successful strategy of the class warfare that's been waged on the American worker.
It's a recipe for turning America into Pottersville. And it's working very well.
You can read the full article explaining the five points at the link.
I will read, but I already know. Its exactly what is going on. All our net financial savings is being recycled as debt. There is no direct investment going on. We are saving lots of obligations .
1. Boost productivity while keeping worker wages flat.
Why isn't the worker acting smarter to prove they are worth more money? It is the worker's responsibility to prove they are worth more money. It isn't a company's responsibility to pay someone higher and higher wages
That may be good personal economic advice, but the share of the surplus to labor in the aggregate has to do with the relative bargaining power of labor. Tight or lose labor markets matter more. It also appears that you never worked for large companies that have defined pay scales. Any surplus curve will show you this. The aggregate can never be special. So the point being made is the relative bargaining power of labor in the aggregate during slack demand.
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2. Build up a financial industry that has no maximum wage.
You mean the financial industry that gave the middle class double digit returns on their retirement portfolios for the last few decades? You industry that allows the middle class the vehicles by which they can buy houses, cars, and actually stop working and retire in their 60's? Shouldn't the middle class thank the financial services industry?
That is just logically fallacious. All of that could have been done with equity financing. You also seem unaware that gross savings, which is quite high, only results in more resources out for loan. That is why the middle class has negative net savings despite the high gross savings rate.
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3. Keep accumulating wealth created by the financial industry.
Which the middle class can do as well. Does the author realize that ANYONE can invest in the market, not just the wealthy?
You are missing the aggregate problem again. All ponzi schemes reward early adopters. Its no different than the first people that sold off their water rights early. The first ones make a fortune, the rest end up with a worthless minority position. I would cite the Owen's valley water diversion as how this process works. The first few in the middle class who engage in debt financing can more or less become wealthy at the expense of those who engage in debt financing later.
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4. Tax yourself as little as possible.
As the middle class has done too. The wealthy pay dramatically more in effective tax rates than the middle class. Personally? I am middle class and have never paid more than 9% in taxes
They think they have. The market simply reacts to raise prices with the interest deduction, capital gains exemptions, etc. Those assets are then purchased with more debt, driving out asset equity. The middle class has only swapped tax payments for interest payments.
* lower property taxes
* raise home value
* higher bids
* higher mortgages
* higher interest payments.
taxes are swapped out for interest payments.
Quote:
5. Lend out your excess money to people who can no longer afford a middle-class lifestyle.
A 'middle class lifestyle' has grown dramatically over the last 40 years. The size of the average house went from 900 sqft in 1950 to 2400 in 2010. The number of cars owned by an average middle class house has risen by 40% since 1970.
That is just silly. That all occurred with duel income and fewer children. That should have added more than double to disposable income. Classic post hoc ergo proctor hoc.
Quote:
Maybe if the middle class actually lived within their means, they would be able to save money. I am not sure that this is 'diabolical'. The average American is too ignorant/short sighted that he/she buys the dream house on 0% down instead of being disciplined, buying a smaller house, saving money, investing the difference, and actually start to accumulate wealth on their own. The upper class isn't 'diabolical'. The average american is simply undisciplined about managing their finances, and values material goods over personal wealth creation.
What do you mean their means? We obviously had the means since we are here now. The question is why was it debt financed? Why were the wealthy loaning people money for excess housing? Why didn't the wealthy invest in something else? All this has to do with the finance model. Financial models need to keep human nature into account. The current financial model rewards those who adopt ponzi financing which will inevitable ensnare, and at times force people to do the same. If someone was buying up all the resources with debt financing they may buy up everything. There is no inherent limit to the asset appreciation/ debt financed virtuous cycle. If everyone is leveraging up, you may have to live in a ditch on your equity until the collapse that could take 40 years. With fiat currency it and money printing we are adding decades to this process at least. That is how long this one lasted.
The finance system is broken. We can't keep going on creating credit streams with home equity. We need an industrial capital productive loan model, a direct investment model, not a hoarding debt instrument model.
1. Boost productivity while keeping worker wages flat.
Why isn't the worker acting smarter to prove they are worth more money? It is the worker's responsibility to prove they are worth more money. It isn't a company's responsibility to pay someone higher and higher wages
Um, increasing productivity is proving they are worth more money, or it used to be proof. Now the fat cats in the board room move all that profit upstairs and leave wages stagnant even in the face of increased productivity.
Quote:
Originally Posted by hnsq
2. Build up a financial industry that has no maximum wage.
You mean the financial industry that gave the middle class double digit returns on their retirement portfolios for the last few decades? You industry that allows the middle class the vehicles by which they can buy houses, cars, and actually stop working and retire in their 60's? Shouldn't the middle class thank the financial services industry?
No, I mean the financial industry that ripped off the middle class while the middle class was forced to bail them out of the economic collapse of their own creation, and the financial industry that crashes the market regularly and wipes out all those fantasy double digit returns. You have to be kidding.
Quote:
Originally Posted by hnsq
3. Keep accumulating wealth created by the financial industry.
Which the middle class can do as well. Does the author realize that ANYONE can invest in the market, not just the wealthy?
The middle class was forced to invest in the market through 401ks that replaced defined benefit pensions and the Wall St bailout. Now that same market, the Wall St Casino, crashes regularly and wipes out those 401k accounts and wants to get its fangs into Social Security to wipe that out too.
Quote:
Originally Posted by hnsq
4. Tax yourself as little as possible.
As the middle class has done too. The wealthy pay dramatically more in effective tax rates than the middle class. Personally? I am middle class and have never paid more than 9% in taxes
The wealthy, Mitt Romney, for example, pay far less in effective tax rate than their own employees, and those employees don't have the fancy lawyers, financial vehicles, and Cayman Island accounts to hide their non-existent "earnings" in.
Quote:
Originally Posted by hnsq
5. Lend out your excess money to people who can no longer afford a middle-class lifestyle.
A 'middle class lifestyle' has grown dramatically over the last 40 years. The size of the average house went from 900 sqft in 1950 to 2400 in 2010. The number of cars owned by an average middle class house has risen by 40% since 1970.
Maybe if the middle class actually lived within their means, they would be able to save money. I am not sure that this is 'diabolical'. The average American is too ignorant/short sighted that he/she buys the dream house on 0% down instead of being disciplined, buying a smaller house, saving money, investing the difference, and actually start to accumulate wealth on their own. The upper class isn't 'diabolical'. The average american is simply undisciplined about managing their finances, and values material goods over personal wealth creation.
I live well within my means but for most working people it's getting harder to live within their means as tax burdens increase and wages remain stagnant.
That may be good personal economic advice, but the share of the surplus to labor in the aggregate has to do with the relative bargaining power of labor. Tight or lose labor markets matter more. It also appears that you never worked for large companies that have defined pay scales. Any surplus curve will show you this. The aggregate can never be special. So the point being made is the relative bargaining power of labor in the aggregate during slack demand.
I have worked for large companies. I started doing work in addition to what I was currently doing, worked unpaid overtime for a year and a half, approached my boss, asked for a raise and got it.
The job market is not a 0-sum game. The average worker can create a job for him/herself. It just takes extra effort, which is where the average middle class person runs into problems.
Quote:
That is just logically fallacious. All of that could have been done with equity financing. You also seem unaware that gross savings, which is quite high, only results in more resources out for loan. That is why the middle class has negative net savings despite the high gross savings rate.
Please prove to me that you could maintain close to 20% YoY returns for two decades on equity financing. I would be interested to see your math.
Quote:
You are missing the aggregate problem again. All ponzi schemes reward early adopters. Its no diffrent than the first people that sold off their water rights early, The first ones make a fortune, the rest end up with a worthless minority position. I would cite the Owen's valley water diversion as how this process works. The first few in the middle class who engage in debt financing can more or less become wealthy at the expense of those who engage in debt financing later.
It doesn't take debt to not buy that flat screen TV and invest the money instead. But then again, you would have to go without your TV.
Quote:
They think they have. The market simply reacts to raise prices with the interest deduction, capital gains exemptions, etc. Those assets are then purchased with more debt, driving out asset equity. The middle class has only swapped tax payments for interest payments.
* lower property taxes
* raise home value
* higher bids
* higher mortgages
* higher interest payments.
taxes are swapped out for interest payments.
And still, the upper classes pay far higher taxes in terms of effective tax rates. Also, do you realize that no one forces you to buy a home with 30 year mortgages? You are allowed to rent while saving your money such that you can buy a smaller, more affordable home while paying less interest. But then again, you wouldn't have you 2,400 sqft house by your 30th birthday, which is a sacrifice most middle class refuse to make.
Quote:
That is just silly. That all occured with duel income and fewer children. That should have added more than double to disposable income. Classic post hoc ergo proctor hoc.
A dishwasher is considered an 'essential appliance' today. The middle class today is living a very, very nice lifestyle and can easily afford to cut spending. The middle class spends more today than it did 40 years ago when accounting for the duel-income issue. Are you seriously disagreeing that the standard of living of the middle class dramatically increased over the last 40 years?
Quote:
What do you mean their means? We obviously had the means since we are here now. The question is why was it debt financed? Why were the wealthy loaning people money for excess housing? Why didn't the wealthy invest in something else?
What does the place in which people invest have to do with the average american spending more money than he/she makes on non-essential material goods?
Quote:
All this has to do with the finance model. Financial models need to keep human nature into account. The current financial model rewards those who adopt ponzi financing which will envitable ensnare, and at times force people to do the same. If someone was buying up all the resources with debt financing they may buy up everything. There is no inherent limit to the asset appreciation/ debt financed virtuous cycle. If everyone is leveraging up, you may have to live in a ditch on your equity until the collapse that could take 40 years. With fiat currency it and money printing we are adding decades to this process at least. That is how long this one lasted.
And if a person doesn't educate themselves to the point where they think critically and don't voluntarily purchase a home they cannot afford just because someone tells them they 'qualify for a loan', then they have no one to blame but themselves for their financial problems.
If I walk into BestBuy and purchase a $5,000 TV on credit when I have no income and no savings, is my debt BestBuy's fault or my own? Don't blame a system or industry for individual people's poor decisions.
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The finance system is broken. We can't keep going on creating credit streams with home equity. We need an industrial capital productive loan model, a direct investment model, not a hoarding debt instrument model.
Or the average american can actually make the choice to be financially responsible for themselves instead of trying to live a bigger lifestyle than they can afford.
Um, increasing productivity is proving they are worth more money, or it used to be proof. Now the fat cats in the board room move all that profit upstairs and leave wages stagnant even in the face of increased productivity.
Increasing productivity is NOT the same thing as proving you are worth more money. Proving you are worth more is being the type of employee who, if you quit, the employer will turn around and ask you to come back. If I can find someone else who will do your same job for your same salary, then you aren't doing anything to prove you are worth more money. When I look around and can't find someone to replace you, THEN you are worth more.
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No, I mean the financial industry that ripped off the middle class while the middle class was forced to bail them out of the economic collapse of their own creation, and the financial industry that crashes the market regularly and wipes out all those fantasy double digit returns. You have to be kidding.
First point, I was against the bailouts of the financial industry. Second point, the collapse a few years ago did NOT wipe out those savings. People invested did not go to zero, they went from having high double digit annualized lifetime returns to mid-to-high single digit returns. The markets still gave returns several multiples greater than the APR of something such as social security. The middle class should still thank the financial services industry, because they have gotten us greater returns than any other investment vehicle, even when accounting for the crash a few years ago.
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The middle class was forced to invest in the market through 401ks that replaced defined benefit pensions and the Wall St bailout. Now that same market, the Wall St Casino, crashes regularly and wipes out those 401k accounts and wants to get its fangs into Social Security to wipe that out too.
And where do you think the money in pension funds came from? Wouldn't you rather maintain control over where in the market your money lies instead of having your company do it for you (as is the case in pension funds)? You do realize that pension funds aren't just a giant savings account holding cash, don't you?
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The wealthy, Mitt Romney, for example, pay far less in effective tax rate than their own employees, and those employees don't have the fancy lawyers, financial vehicles, and Cayman Island accounts to hide their non-existent "earnings" in.
But this isn't true. Even in terms of effective rates, the upper class pays far more than the middle class. You have to make upwards of $150k per year for your effective rate to even creep into double digits.
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I live well within my means but for most working people it's getting harder to live within their means as tax burdens increase and wages remain stagnant.
You must live in a different USA from them.
You are right, I must live in a different USA than you. I live in the USA where I actually look at facts and figures instead of blindly trusting the evening news, as you seem to. I have worked unpaid overtime for years now to prove I am worth more money, and have dramatically increased my salary by changing jobs twice since 2008. I take steps to improve my own life instead of sitting on my a** complaining that my 'wages remain stagnant'.
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