Those of us who live near the top of the income pyramid are doing very nicely, thank you. Yet our government keeps showering us with Christmas presents. Meanwhile, economic life is pretty miserable for those near the bottom and is getting worse for those in the middle. Does this strike you as fair?

The main story line of the U.S. economy over the last third of a century evokes Charles Dickens’s classic “A Christmas Carol.” Starting in the late 1970s, the labor market turned ferociously against those with less education and in favor of those with more. This was not Ronald Reagan’s fault, nor George Bush’s (either one), nor Mitch McConnell’s. It just happened. And except for a brief shining moment during the Clinton boom, the Great Disequalization has continued unabated to this day…

Wages. When it comes to wages, the basic story of recent decades is redolent of Scrooge. Real average hourly earnings (excluding fringe benefits) now stand roughly at 1974 levels. Yes, that’s right, no real increase in over 35 years. That is an astounding, dismaying and profoundly ahistorical development. The American story for two centuries was one of real wages advancing more or less in line with productivity. But not lately. Since 1978, productivity in the nonfarm business sector is up 86%, but real compensation per hour (which includes fringe benefits) is up just 37%. Does that seem fair?

Taxes. We often hear that the top 1% of income-tax payers pay about 40% of all the income taxes. Sounds like Robin Hood is on the job. But that’s just income taxes. Did you know that the payroll tax (the people’s tax) now brings in about 96% as much revenue as the personal income tax (the rich man’s tax)? As recently as 2000, it brought in just 65% as much. Yes, taxpaying has been radically democratized. Yet the drumbeat from the right continues: We must remove the oppressive yoke of taxation from the backs of the haves, and put it on the backs of the . . . Well, they usually don’t finish the sentence. But someone must pay the bills.

The federal budget deficit. American budget history from the end of World War II until the Reagan presidency was simple: The federal government ran modest deficits in a growing economy, and the debt-to-GDP ratio fell and fell. President Reagan’s huge income tax cuts, which were heavily skewed toward the rich, changed all that. And it took 15 years—and politically courageous actions by Presidents Bush 41 and Clinton—to set things right.

But the nation took leave of its fiscal senses, and simply stopped paying for anything, during President Bush 43’s eight years. Not for huge tax cuts—once again skewed toward the rich. Not for the Medicare drug benefit—which, in fairness, is skewed toward the poor. Not for two wars. That spree was followed by the financial crisis, the Great Recession, and the policy responses thereto—all of which blew up the deficit massively under President Obama.

Forty years of de-regulation, tax cutting, off-shoring and the general erosion of social cohesion has set the stage for the big one. The question is when will it hit?

Yesterday, I posted on the story that the Republican commissioners on the Financial Crisis Inquiry Commission bailed early to release a maddeningly stupid ‘report’ of their own that reiterated all of the non-sense bouncing around talk radio and Fox News, because I felt that it offers us a clear picture of how political power is constructed in early 21st America and how that construct intersects with concrete realities only in an accidental and ad hoc manner. Today, Barry Ritholtz demonstrates why this is important and offers ten questions for any thinking individual to consider in assessing the validity of the claims being made by these public intellectuals. I realize that it is easy to dismiss the whole affair as ‘more of the same’, but I would caution you against such a dismissive conclusion.

Across the political spectrum, the means of constructing an effective political bloc capable of achieving power is through the manipulation of language. Repeat the Big Lies enough and those lies develop what you could call ‘truth effects’ as in they create their own reality in which certain outcomes becomes pre-ordained. Whether its a ‘Fair Tax’ that would push the nation’s tax burden down the income ladder or labelling the few remaining institutions mandated with the task of protecting workers and senior citizens from wage slavery as being Ponzi schemes, it is through the manipulation of language and popular discourse that the Masters of the Universe wield their evil magic.

What sparked this particular rant…? The new Big Lie being propagated in the noise machine that public employees [aided by their evil unions] are better paid than their private sector counterparts is leaking into more mainstream outlets despite being almost total fantasy…

Using the latest federal data, Keefe said the average total compensation for workers in the private sector with bachelor’s degrees is $89,041 compared with $56,641 for public workers.

For workers with professional degrees — lawyers, say, or doctors — the gap is more dramatic: $175,141 in the private sector, $79,330 in the public.

Where public outdoes private is among workers without much education. The average compensation for a public worker without a high school diploma is $41,000, compared with $27,719. With diplomas, employees in both sectors make $44,000.

Public workers are more educated than private — 57 percent have college degrees and higher, compared with 44 percent. Because workers in all sectors are paid according to education and skill levels, lumping them all together — the least skilled with the most — is misleading.

While the middle and working classes continue their descent toward peonage, the nation’s wealth is becoming increasingly concentrated among the noble few, and any resistance to this dynamic is quickly labelled ‘class warfare‘ by the powers that be.

Median household fell to $50,303 last year, from $52,163 in 2007. In 1998, median income was $51,295. All these numbers are adjusted for inflation.

In the four decades that the Census Bureau has been tracking household income, there has never before been a full decade in which median income failed to rise. (The previous record was seven years, ending in 1985.) Other Census data suggest that it also never happened between the late 1940s and the late 1960s. So it doesn’t seem to have happened since at least the 1930s.

The key here is to remember that this long slide toward a Banana Republic is not something that is being done to us [the body politic] by evil Republicans or Democrats but is something that we are doing to ourselves. We internalize discourses that do not only bear little resemblance to reality but also undermine our own self-interests as citizens of the republic, and this is where education enters the picture. The reason the Masters of the Universe use the Big Lie and marketing techniques to achieve political ends is that it works. Only a well-educated populace capable of critical thinking and rational inquiry can immunize the republic from this growing kleptocracy, and it only takes a quick glance at education statistics to understand that we’re in deep trouble.

Larry Cuban, a professor emeritus of education at Stanford University, says some of the public’s negative views come from frequent criticism from policymakers and in news reports.

“It’s become a throwaway line: ‘Oh, sure U.S. schools are lousy,’” said Cuban. “I think we have schizophrenia in the U.S. that we believe all U.S. schools are lousy except the schools we send our kids to.”

Thirty years of intensive marketing bank-rolled by the richest families in America has paid off in a general sense. Much like the denizens of the Scooter Store Revolution collecting government assistance while demonstrating against government assistance for an amorphous group of ‘others’ sucking on the entitlement tit, Americans are all for punishing lazy teachers working in predominantly urban areas far from their comfortable suburban oases but seem quite satisfied with their teachers and schools.

Second, while I can’t speak for big urban districts like Chicago and NYC, the whole issue is a bunch of horse manure. You show me a lazy, good-for-nothing teacher [and they're out there... I've worked with them] working in a school and I’ll show you an administrator who is failing to do his/her job. For the majority of school districts, there are procedures in place for getting rid of dead weight. What unions offer teachers is the right to due process and that is it. Living in the South I’ve witnessed many occasions in which due process saved teachers [usually biology teachers] from the pre-Enlightenment influence of local churches intent on ensuring children do not learn the basic knowledge informing many of the medical procedures keeping church elders alive to do God’s work.

Perhaps the most important take away from all of this is that the long term strategy of the elite in creating politicized think tanks, policy centers, and foundations to ’shape’ the body politic to their benefit are now reaping the rewards of their investments. The commonsensical ‘center’ of American politics has now shifted so far to the right that the public commons is now being offered up to the highest bidder in the name of liberty and equality.

If you want to understand where public education reform is heading, look south and east to Florida, where the governor-elect, Rick Scott, is talking about a new funding student formula that is more likely to destroy the public school system than accomplish anything else.

Scott wants to expand a voucher program that allows low-income and disabled students to use public money to go to private schools to ALL students…

Once upon a time in America, it may have sounded preposterous not only in concept but in chances of implementation.

But the Republicans in Florida, who just tightened their control in the state capital in the last election, are making in clear that they are determined to push for such a system in the state legislature next year.

There are legal, constitutional and other hurdles, but in today’s political and education atmosphere, no bad idea is impossible to implement.

That Rick Scott is a veteran of the largest Medicare fraud scheme in US history speaks volumes as to how dysfunctional our political system has become, but that he is now poised to set up yet another form of public looting in a legalized form should give everyone pause before blindly accepting the entreaties of public education reformers like Scott’s new useful tool Michelle Rhee.

Ultimately, the rot at the core of our political structure will break the American system that emerged from the upheavals of early 20th century, and this kleptocratic ’success’ is made possible by the common sense understandings that have been under construction for the past 3 decades. From Rush Limbaugh to the Op-Ed page of the Washington Post, the individuals who make up the American body politic have been conditioned to see themselves as atomistic entities who will achieve ‘liberty’ only through the rejection of social action and community.

Social Darwinism and the “life is like the jungle” attitude that are so pervasive in our society have a single purpose: to convince you that you are an antelope. The only thing you can do is run away. You’ll be OK so long as there are other people around who are even more vulnerable. You could try to stop them, but why? Every time they eat the poor, the geezers, and the kids who are defenseless, you live another day. Don’t try holding your ground against the big, strong predator. Don’t stick together or they’ll eat all of you.

Just imagine how much different our politics and society would be if we were less eager to say “As long as they’re eating someone else, I don’t care” and more apt to get in a big group and ask the lion if it feels lucky.

In reality, you should prepare yourself for heavy doses of the new status quo masquerading as a challenge to the entrenched interests of the… wait for it… status quo.

Moon-Pies and RC’s for all, Clive! We’ve done lost our minds!

The point of this long-winded introduction is that I was cruising through Tom Hoffman’s place and came across this post on how the foundational ideas of educational conservatism would be dismissed by today’s conservatives as being a fascistic-socialist plot to indoctrinate our children, or something like that.

I’ve taken a little closer look at Dorothy Sayer’s 1947 essay The Lost Tools of Learning, which subsequently became a touchstone for “Classical,” “Christian Classical” or really it should be “Neo-Classical” or something, and conservative school design after being reprinted in The National Review in the early seventies. The essay is typical of its era, when public intellectuals of all stripes were engaged in a question of immediate, visceral urgency: Can we educate our children in such a way to avoid the next Hitler, Stalin, Mao, World War III? And while it does seem like the kind of thing William F. Buckley would have liked back in the day, the appeal to contemporary American conservatives is more of a stretch.

You should really click through an read Tom’s post and the essay. What really caught my eye is that Sayer’s prescription is strikingly similar to what I’ve been saying on this blog.

I am concerned only with the proper training of the mind to encounter and deal with the formidable mass of undigested problems presented to it by the modern world. For the tools of learning are the same, in any and every subject; and the person who knows how to use them will, at any age, get the mastery of a new subject in half the time and with a quarter of the effort expended by the person who has not the tools at his command. To learn six subjects without remembering how they were learnt does nothing to ease the approach to a seventh; to have learnt and remembered the art of learning makes the approach to every subject an open door.

The primary goal of public education should be directed away from the delivery of ‘dead’ curricular content toward classrooms that impart to students the “Tools of Learning.” That’s it. Let universities and the private sector train the next generation of intellectuals and employees. Public schooling should prepare young people with the tools they will need to succeed as human beings.

I feel quite certain that I’ll be coming back to this essay… Thanks for the find, Tom!

New research findings add complexity to the basic assumption that humans act in their own economic self-interest. By analyzing hundreds of survey questions from 1952 to 2006, Peter Enns, assistant professor of government, and Nathan Kelly of the University of Tennessee found that as inequality rises, low income individuals’ attitudes toward redistribution become more conservative. Their paper appears in the October issue of the American Journal of Political Science.

“It’s a bit of a conundrum,” Enns admits.

The researchers also examined public opinion data on the question: Should government increase spending on welfare, keep it the same or decrease it? “As inequality rose, the high- and low-income respondents on average become less supportive of spending on welfare,” Enns said. “And this is not because low-income people are unaware of inequality; our results show they are more aware of it than most people.”

The point of this long-winded rant is to introduce the only item that I read this morning that I think should be more widely disseminated. Love him or hate him, Matt Taibbi is perhaps the only journalist that has done due diligence in documenting the degree to which the financialization of the American economy is both a reflection of and determinant in the decline of a once promising nation into a bloated banana republic on the brink of collapse. The closing lines of his latest piece on foreclosure fraud sums up the large scale problems facing the nation across the board, and it is well worth your time.

Why don’t the banks want us to see the paperwork on all these mortgages? Because the documents represent a death sentence for them. According to the rules of the mortgage trusts, a lender like Bank of America, which controls all the Countrywide loans, is required by law to buy back from investors every faulty loan the crooks at Countrywide ever issued. Think about what that would do to Bank of America’s bottom line the next time you wonder why they’re trying so hard to rush these loans into someone else’s hands.

When you meet people who are losing their homes in this foreclosure crisis, they almost all have the same look of deep shame and anguish. Nowhere else on the planet is it such a crime to be down on your luck, even if you were put there by some of the world’s richest banks, which continue to rake in record profits purely because they got a big fat handout from the government. That’s why one banker CEO after another keeps going on TV to explain that despite their own deceptive loans and fraudulent paperwork, the real problem is these deadbeat homeowners who won’t pay their fucking bills. And that’s why most people in this country are so ready to buy that explanation. Because in America, it’s far more shameful to owe money than it is to steal it.

1. Social Security reform that guarantees my current level of benefits, alters someone else’s, and cuts everyone’s Social Security taxes to boot.

2. A world-class national infrastructure that can be built and maintained without tax dollars.

3. A balanced budget that doesn’t sacrifice any of the government programs – especially the sacred military-industrial complex and the various old age benefits – that we like.

4. Clean air without pollution controls, clean water with a neutered and underfunded EPA, and businesses that do socially responsible things without any regulation whatsoever.

5. Consumer goods at Made in China prices that create high-paying jobs in America.

6. Giant trucks and SUVs that drive like Formula One race cars, look cool, fit into small parking spaces, cost under $18,000, and get the fuel economy of a Toyota Prius.

7. Complete freedom and complete security at the same time.

8. An America that acts like a swaggering, sociopathic asshole on the global stage yet is beloved by all the nations of the world.

9. Wars against every enemy, real or imagined, all of the time, with no U.S. casualties and no effect on the budget.

10. Incredibly rich and rewarding professional lives while supporting our employers’ right to do whatever they want to us without recourse.

Do read on…

My point is that to understand the on-going disaster that is American education policy you must situate it within the larger structural context in which it is playing out. To that end, I would point you toward this New Geography article entitled “The Privatization-Industrial Complex“. While I disagree with the framing of a supposed golden age of privatization as being all about efficiency, the article does a pretty good job of fleshing out the profit-seeking mechanism that is chipping away at the nation’s infrastructure, including education.

[Privatization schemes] are driven not by efficiencies but by an investment banker mindset focus on money and narrow parameters of the asset operations. They also provide enormous temptation to elected officials to grab the money now even at the expense of future generations. They are also rife with potential conflicts of interest and incentive problems.

One major source of conflict comes with the professional advisors that drive the deals. Since long term leases involve so much money and are so complex, they require millions of dollars of services from investment banks, lawyers, financial advisors, etc. Unlike for typical government transactions such as issuing bonds or contracting out services like printing, building maintenance, or call centers, for which cities have some experience, the vast majority of cities have little in house expertise for complex financial transactions.

Thus local officials are at the mercy of these out of town experts to give them the best advice they need to defend the public’s interest. But what advice can we expect from these firms, who have a stake on highly leveraged deals? The people in the firm may be technically competent and possess the highest levels of personal integrity, but still are prisoners of a structural conflict of interest in promoting privatization transactions…

If you make money on privatization transactions, then no deals means no money. So obviously these firms have every reason in the world to promote privatization and see deals go through regardless of whether any particular deal is good or not. This doesn’t mean they are crooks, it’s just the reality. These firms now form of the core of the “privatization-industrial complex” with an incentive to cheerlead for leading public assets because that’s how they make their money. They need deal flow, the more transactions the better.

Do read on…

The alarming truth is that, as bad as the current situation seems, there is little daylight ahead as we look to the next five years–which makes it all the more worrisome that educators are relying on haphazard tactics, like erratically cutting bus services or asking parents to supply paper towels, to deal with the budget crunch. This Outlook will explain why the bleak situation is unlikely to brighten anytime soon and suggest a more comprehensive reform strategy, including reevaluating cost structures and addressing systemic inefficiencies.

In this case, “systemic inefficiencies” is MBA-speak for sound pedagogical practice, and it is clear that private money from the Oligarchs will provide at the very least adequate funding for more innovative policies to cut “cost structures” and address “systemic inefficiencies”. The sad reality educators must now face is that the ‘starve the beast‘ method of political economy will continue to reap huge benefits for a very narrow class of people for the foreseeable future, including those seeking to suckle up to public treasuries for private gain.