Depleted middle class depletes America’s economy


“SLAVERY was a violation of the Declaration’s “majestic interpretation of the economy of the Universe,” allowed by the founders because it was already among us, but placed by them in the course of ultimate extinction.  Although unfulfilled in the present, the Declaration’s promise of equality was a “beacon to guide” not only “the whole race of man then living” but “their children and their children’s children, and the countless myriads who should inhabit the earth in other ages.” Doris Kearns Goodwin, the Political Genius of Abraham Lincoln, 2005.

We have always believed that “all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”

That all one has to do is by sheer effort and hard work, one succeeds in America.

It was not only an aspiration for migrating Irish, Germans, Italians, Jews, Mexicans, Chinese, Japanese, Filipinos, but also Catholics, Protestants, Episcopalians, and later, Iraqis, Egyptians, Lebanese, Indians, but many more citizens of other nations who later became naturalized Americans, who believed in the American dream and helped in the building of infrastructures of America: railroads and highways by the Chinese, farm fields by the Japanese and Filipinos, canneries by Mexicans, information technology by Indians, Filipinos and Chinese, and many more immigrant stories that have yet to be told.

Yet, the ‘pursuit of happiness’ eluded the middle class for a decade now.  We saw our financial resources depleted, as reserve funds were paid to federal income taxes.

For some families, it took a whole year to satisfy payment, until June 2013, when middle class families experienced breathing spaces.  Spaces to resume building middle class lives.  Let me share some snippets of middle class lives and why it is important to give them spaces to live, to regenerate, and to fuel the growth of the economy.

Cleaning ladies and nannies

I get a glimpse of lives outside my own, engaged with folks in my church, in the bakery I visit, in community events and in one on one conversations with folks I meet.

One day, I sat to have coffee with a cleaning lady.  During the day, her physical body is now betraying her, after cleaning homes for 2 decades now, but not her loving spirit to provide professional cleaning services.

An additional $2,000 extra federal taxes per year to her family budget depletes her resources for a  weekly trip to take out her family to lunch, after Sunday Mass.  A regular tab for three comes out to $25.  Or a trip to a Chinese restaurant, where she sternly warns family members not to order any entrée above $9.99, on their restaurant tab.

Why that limited spending?  That is what her income can sustain, and wipe away her limited discretion, her family cannot go to McDonalds, nor can she afford a Chinese restaurant for the week.

Week after week of that family cultural practice amounts to jobs at McDonalds or jobs at that Chinese restaurant.

Add another dimension, her husband is a welder. If there are not enough construction jobs he can have, the family is even more hard up and they have to limit the gas that they buy. With limited gas, he cannot go to enough construction projects to look for additional work.

It is a spiraling down trend that is felt by this working middle class family, increasing the emotional stress and tension.  He is also diabetic and additional stress on their family’s lifestyle creates a disturbance in his health, necessitating trips to the emergency room, to bring down his sugar level that has soared above 400.  There is not much reserves they can speak of, and not much financial independence to be had when health care is reduced to a visit to emergency and not enough preventive care services to be had, until Obamacare was passed.

When a middle class family cuts back on their expenses, cleaning ladies are the first to go, and for this cleaning lady, cleaning homes is her primary source of income. Without this paid-for services, she cannot pay her house payment, and three months in arrears will lead her family to foreclosure.

It is what we don’t need, nationally, wherein more homes will be foreclosed, leading to blighted neighborhoods and a tanking economy.

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Oil subsidies

Does it make sense that Big Oil and Gas companies continue to receive tax subsidies, since 1916, to the tune of $4 billion a year, according to the estimates done by the White House?

At $3.65 per gallon of unleaded gas at the pump, where a one cent increase to $3.66, in the price of gasoline, yields $200 million profits a month, would you not feel like the Big Oil companies are profiting at the expense of the working family, like the one, I just described above?

William Browning, a research librarian, wrote: “The American Coalition for Ethanol estimates that when combined with state and local government aid to large oil companies, subsidies amount to anywhere from $133.8 billion to $280.8 billion annually from all sources of taxpayer aid that goes to the oil and gas industry.  The Obama administration contends the oil industry no longer needs help.  The three largest oil companies made $80 billion in profits combined in 2011, which amounts to $200 million per day. The White House also asserts America uses 20 percent of the world’s oil, but only has two percent of the world’s oil reserves. Oil drilling continues in all areas of the United States and oil rigs are plentiful in the Gulf of Mexico, the White House blog states.”

So, the compelling need for subsidies, which existed in 1916 no longer exists today in 2012.

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A small business owner

In one neighborhood, a small business enterprise supports a family of 24.  Their hired help consists of the owners’ daughter, nieces, nephews, brothers and sisters.  This retinue of helpers mold the bread, prepare the bread for rising and then, for baking. It is the combined family’s labor that creates a supply source for bread to prestigious hotels and restaurants in the area.  It is also the source of income that supports a university student, pursuing her education in engineering, an investment in our future.

Would it not make sense that our federal subsidies instead go to support college students, so they are not incurring student loans, that by the time they come out of college, they have amassed loans of $125,000, more than enough down payment to support a house.  If enough college graduates carry such a debtload, is it any surprise that they are not lining up to buy their real estate, their first home, their first condo, their first loft?

It is a rationalizing of our national priorities that is so needed.  It is what Lincoln did during his times.  We can no longer say we are free, or that all men are created equal.  For in reality, each day, we are not.  Oil companies continue to bleed our federal budgets dry and we, the taxpayers, continue to be bled by the banking industries.

In 2008-2010, one small bank that I know of, whose resources are in the $8 billion and above, accumulated enough cash reserves of $5 billion from not lending to small businesses and consumers, and from selling their buildings. In their small billion dollar world, they profited by not lending, while still they lined up for federal stimulus funds. Now, they are reaching out to small businesses to improve their lending rates.

Why? Monies hoarded in a place do not create value, it is only when monies are circulated to pay for loans, like the hefty student loans at 6% interest, or the hefty home loans to a more reasonable 3 percent interest rates, or where labor makes bread in the bakery that I mentioned, that dollar currency acquires value.  Billionaires do not make millions and billions by hoarding, it is labor applied to capital that gives them value.

Doris Kearns Goodwin cites Lincoln: “It is the same spirit that says, ‘You work and toil and earn bread, and I’ll eat it.’  No matter in what shape it comes, whether from the mouth of a king who seeks to bestride the people of his own nation and live by the fruits of their labor, or from one race of men as an apology for enslaving another race, it is the same tyrannical principle.”

It was slavery then, it was even royal kingdom’s enslavement of its subjects, but today, it is institutionalized, legalized form of modern financial slavery, where superprofits are made by Big Oil Companies, at the rate of $200 million per day, or $80 billion in profits in 2011 by the big 3 oil companies, yet we continue to provide them tax subsidies via our federal government, at the rate of $4 billion a year.   This subsidy, coupled with the tax cuts to the superrich have created more than a trillion deficit I the federal budget.

Enough already!  We need to stop the hemorrhaging of federal government’s treasury deficit to modern day slaveowners, the big Oil companies and banking industry. It is time to focus on growing middle class families and educating our schoolchildren.

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Prosy Abarquez-Delacruz, J.D. writes a weekly column for Asian Journal, called “Rhizomes.” She has been writing for AJ Press for 9 years now. She contributes to Balikbayan Magazine. Her training and experiences are in science, food technology, law and community volunteerism for 4 decades. She holds a B.S. degree from the University of the Philippines, a law degree from Whittier College School of Law in California and a certificate on 21st Century Leadership from Harvard’s Kennedy School of Government. She has been a participant in NVM Writing Workshops taught by Prof. Peter Bacho for 4 years and Prof. Russell Leong. She has travelled to France, Holland, Belgium, Japan, Mexico and 22 national parks in the US, in pursuit of her love for arts.

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