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The Rise and Fall of the U.S. Middle Class: 1789 - Present

The Rise and Fall of the U.S. Middle Class: 1789 - Present

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For 130 Years, we enjoyed Good Jobs, No Income Tax, Rising Wealth and a Rising Middle Class. Then ...
For 130 Years, we enjoyed Good Jobs, No Income Tax, Rising Wealth and a Rising Middle Class. Then ...

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Published by: John Clifford Schuler on Jun 07, 2011
Copyright:Attribution Non-commercial


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Photo: Boeing B-29 Superfortress AircraftBombing Japan in March, 1944
To better understand what is happening to Our Country and Our Middle Class today, let’s goback a bit to how it all started, how things have changed and how we got to where we aretoday.
Fear, Greed, Avarice and Power:
In a nutshell, people moved in massive numbers from Europe to the American Coloniesbecause the lacked Power and Wealth. Many lived in Fear of Hunger, Fear of a loss of Freedom, and Fear of the Future. Fear is a great motivator. Unfortunately, it is often theprecursor of Greed.
U.S. Tax & Economy History:
In 1789, shortly after our Founders had put together our Constitution and the Bill of Rights,and had won a War of Revolution culminating in Independence from Great Britain,Alexander Hamilton (1
Treasury Secretary) and George Washington (1
President) puttogether a few Taxes to pay off War Debts, build up a bit of cash and protect a fledglingManufacturing Industry from (Then British) Imports.
Taxing Imports, Exports and Whiskey
Taxes from 1790 to 1913 would grow from 5% over the next the next 130 Years to average29% of all Imported Goods. See Fig: 1 below. These plus a few others like the Tax onWhiskey and Selected Export Goods would run our Government and create an Economythat was the envy of the Western World.
Our Coast Guard and Army:
Since some 95% or more of all imports came from Europe by ship, Hamilton even createdwhat is now our Coast Guard to enforce collection. The Whiskey Tax Rebellion was haltedwhen President George Washington literally got on is horse and led an Army to convinceprotestors that they had to pay.
© 2011 John C Schuler, Founder & Chief Strategy Officer * Page 1 of 5OEM Solutions Group, Portland, Oregon, USA *  johnschuler@comcast.net
Taxing / Controlling Exports:
As for taxes on Exports, that is something we need to revisit today – think Raw Materials likeWood and Coal that we should be using at home in our won Factories.Two examples come to mind: We go to great lengths to clean up our own environment andminimize pollution, then every month we sell millions of tons of cheap coal to China where itis burned and the Air Pollution drifts back over to “Bomb” Our Cities and Our Lungs withparticulates that foul Our Air and damage our Health.
Logic, Empathy and Planning:
Much of what went on before 1913 was driven by honest, empathic and dedicated Leadersand Citizens who cared about the Well-being all of our People, the Economic Health of our entire Country – and the Quality of Life for Present and Future Generations.Later, those same Citizens or their heirs would find it necessary to enact laws to protect usfrom our own success. Or put another way; protect us from the few Sociopaths who tookadvantage of a wonderful system to enrich themselves in what used to be called an“unseemly” manner.
Making Sense of Nonsense:
Whenever something today makes no sense from thestandpoint of the well being of most of us, one merely needs to remember the cynical butapt comment:
“Follow The Money.”
Or the Oil, or the Coal.
Trade & Wealth Perspective:
Prior to 1789, as a Colony of Great Britain, America was ade-facto Third World Entity; i.e. it exported Raw (Cheap) Materials and Imported (expensive)Finished Goods.Like 3
World entities today, Hamilton and others believed that the U.S. could not hope tobecome a viable and wealthy Country unless it developed it own means of Manufacturing.
A Loss of Morality and Balance:
Unfortunately, like many initially good undertakings, Our Manufacturers, Our Corporationsand even Our Unions were often allowed to exercise unbridled growth and power - andbecame problems in and of themselves.Just as each of us who is mentally and physically balanced, organizations have a plethora of personalities and a complex of characteristics. Sadly, not all Adults or Corporations manageto maintain a healthy balance between personal desire and the good of Society.Our Founders understood that each of us possesses a bit of larceny along with our goodtraits. They built a number of safeguards into our Constitution that worked well for over aCentury. But then things began to go awry.
Democracy Declines As Sociopaths Rise:
It is estimated that within our Society about 1 person in 100 – 1% - is a true Socipath.Describe simply as self-centered and lacking in empathy.
© 2011 John C Schuler, Founder & Chief Strategy Officer * Page 2 of 5OEM Solutions Group, Portland, Oregon, USA *  johnschuler@comcast.net
Unfortunately, when one is unencumbered by morality or concern for one’s fellow humanbeing, it is easier to lie and obfuscate to rise to the top of any Organization. As one walksinto any Corporate office or Boardroom, or saunters along the Halls of Congress, one willfind that instead of 1 in 100 being a Sociopath, the number rises to perhaps 1 in 10 or even1 in 3.
The Corporate Profit Machine
Most Sociopaths in high positions are intelligent, Charming and even Charismatic. Theybecome “Successful” because they have learned to pretend that they care. As these non-empathic, selfish and greedy individuals rise, they also gain more and more power. Thatpower is brought to bear AGAINST anything and anyone who attempts to block their owngoals and ambitions.Giving a Sociopath a position of power with no checks and balances – no matter howbrilliant and effective in the role they choose to play – is not unlike giving a spoiled 2-Year-Old an Automatic Weapon and an unlimited supply of Ammunition.
From Bombing Foreigners to “Bombing” U.S. Citizens
In the Summer of 1945, a Boeing-made B-29 Superfortress – a massive “Derivative”of earlier, smaller Aircraft designs - dropped an Atomic Bomb on Hiroshima, Japan:
It cost about $25 Billion to develop and build 4 Bombs (2010 Dollars)
It cost about $32 Billion to develop and build 4,000 Bombers (2010 Dollars)
In the Summer of 2008, our own Banksters “Bombed” us with their own “Derivatives”,which Warren Buffett called: “Economic Weapons of Mass Destruction.”
It cost them almost nothing to design, “build” and sell millions of them.
Their profits were measured in Hundreds of Billions or Trillions of Dollars
The monetary cost to the U.S. and the rest of the World exceeds $100 Trillion.
The emotional cost to homeowners & small-business people is immeasurable.
Wealth, Profit and Perpetual War: 1776 – 2011
Internal United States trade disputes among the States in the early 1800s would later set thestage for the U.S. Civil War of 1861-1865. It was a lot more about Trade, Import Tariffs andCotton Exports than it ever was about Slavery.For 130 Years, until 1913, Taxes (Tariffs) on Imported Goods paid off all our debts andprovided over a Century of Rising Wealth for all of our Citizens to share.But by 1886, Steel and Railroad Empires and the Sociopaths who ran them becameMonopolies. Not content with good and reasonable profits, they hankered after ObsceneProfits.Starting in 1913 and ending (temporarily) in 1929 under FDR, the Economic Policies of theUnited States Government were being re-designed and implemented to build wealth andprosperity for the few at the expense of the many.
© 2011 John C Schuler, Founder & Chief Strategy Officer * Page 3 of 5OEM Solutions Group, Portland, Oregon, USA *  johnschuler@comcast.net

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