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downward mobility is not just a scary sound bite. It’s a real possibility.” Samuelson

EDITOR’S COMMENT: The largest impact is on the children. Our children — expecting and needing their parents to protect, provide and nourish them to adulthood with good values and commitment to our society — are being systematically undermined by our actions and inactions.

If you look at the numbers that everyone agrees are valid, there are some 100 million Americans who are in unworkable situations in which they are stressed out beyond reason, with no help from government, friends or family all of whom are virtually bankrupt. Children coming into this world are presented with hopeless parents who have little other than spiritual faith (if that) to get them through the day, with no time for parenting, nurturing, guiding and teaching.

In a world of progress, life is driven by hope and optimism, creativity and ambition. At the moment virtually every part of our society is under pressure, undermining any possibility that the parents will communicate hope, ambition, morality, creativity or optimism. The number of economically driven suicides is skyrocketing as you have seen on these pages and those of other bloggers and media. For every person who commits suicide there are probably hundreds who are thinking about it rather than face the prospect of admitting to their spouse and children that the situation is dire.

I hope there is enough hope left in this country that we will insist on restoring normal discourse and practical problem solving. Failing that, what will our world and the world of our children’s children look like when it is driven by depressed, unambitious people whose creativity and drive was stomped out of them when they were developing as children? If I may paraphrase a statement from Golda Meier: this will change when we care more about our grandchildren than we do about our grandfathers. Every step we take should be toward the goal of producing a brighter future together, and every attempt to divide us in that endeavor should be met with total rejection.

Robert J. Samuelson
Robert J. Samuelson
Opinion Writer for Washington Post

Why our children’s future no longer looks so bright

By , Published: October 16

Aspecter haunts America: downward mobility. Every generation, we believe, should live better than its predecessor. By and large, Americans still embrace that promise. A Pew survey earlier this year found that 48 percent of respondents felt that their children’s living standards would exceed their own. Although that’s down from 61 percent in 2002, it’s on a par with the mid-1990s. But these expectations could be dashed. For young Americans, the future could be dimmer.

Along with jobs, the 2012 presidential election could be fought over this issue. “Can the Middle Class Be Saved?” worried a recent cover story in the Atlantic. Pessimism rises with schooling. In the Pew poll, 54 percent of respondents with a high-school diploma or less felt their children would do better; only 35 percent of graduate school alums agreed. “A kind of depression has set in,” writes Washington Post columnist Richard Cohen. “We’ve lost our mojo, our groove.”

Robert J. Samuelson

Samuelson writes a weekly economics column.

It can be argued that all this glumness repeats a historical error: projecting the present onto the future. Just because the economy is rotten today doesn’t mean that it will always be. After World War II, the Nobel Prize-winning economist Robert Fogel has recalled, there was widespread “alarm about massive unemployment.” Eleven million veterans and 9 million defense industry workers had to be re-employed. People feared a new Depression. It didn’t happen, because pent-up demand for homes, cars and appliances fueled a hiring boom.

Unfortunately, this caveat is only half relevant now. Our future would certainly be brighter if the economy resumed strong growth, but that wouldn’t automatically ensure higher living standards. A society generates those through productivity — increases in efficiency, technology or business organization that lower costs or enable firms to pay higher wages. Without higher productivity, broad living standards won’t rise. But even with it, the young may not enjoy gains.

The explanation is that productivity improvements have already been committed to demographic trends we can’t alter (aging) or problems we haven’t addressed (runaway health costs, deteriorating infrastructure). Future productivity and income gains will be diverted to these uses: higher taxes to pay for an older population; health spending; and taxes and fees to repair roads, schools and water systems.

It’s already happening. “A decade of health care cost growth has wiped out real income gains for an average U.S. family,” report two Rand Corp. researchers in the journal Health Affairs. From 1999 to 2009, total compensation of a typical four-member family with employer-paid health insurance rose by $23,000. About 95 percent of this (almost $22,000) went to inflation and health care, including employer costs, family premiums, out-of-pocket payments and taxes. For most families, higher costs didn’t deliver parallel benefits. The reason: Health spending is concentrated; the sickest 5 percent account for half the total.

Meanwhile, spendable incomes — what people consider their living standards — stagnate. The squeeze will continue. In 1990, there were 32 million Americans 65 and over; by 2040, that’s reckoned at 80 million. Rising costs for Social Security and Medicare have created a new political dynamic: If benefits for the elderly aren’t cut, burdens on the young will go up. Decaying infrastructure poses similar choices. Either pay for repairs or tolerate substandard roads and dilapidated schools.

Our children’s futures have been heavily mortgaged. That’s true even if the economy returns in a few years to “full employment” (say, 5 percent unemployment) and past productivity gains (about 1.7 percent annually since 1966) continue. If today’s weak recovery persists, the outlook darkens. Unemployment will remain high, say 7 percent to 9 percent. Wage increases will remain depressed. Young workers will have trouble finding jobs to develop the skills and contacts that lead to better jobs. Productivity growth might falter.

America is a competitive society. It’s not guaranteed that children achieve their parents’ relative economic status: The children of parents in the richest 20 percent won’t automatically stay in the richest 20 percent. Some children advance; some fall. But if overall incomes are rising, even those who don’t advance relatively often have higher absolute incomes than their parents. Studies by the Pew Economic Mobility Project confirm this. Two-thirds of Americans have higher incomes than their parents; half of those either ranked in the same spot of the economic distribution as their parents or lower.

Generational gains tempered individual setbacks. We may now lose this comforting cushion. Our leaders might try to avoid that by boosting economic growth, controlling health spending and trimming benefits for the elderly. But we aren’t sure how to do the first and lack the political will to do the second and third. The future is never entirely predictable, but downward mobility is not just a scary sound bite. It’s a real possibility.

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13 Responses

  1. The “con” done by Greenspan, Federal Reserve, Wall Street and the Banks upon the American people must be exposed for what it was.
    Dylan Ratigan has posted several You Tube videos on this Con.
    He hosts a morning show on CSNBC.
    Watch, Learn, Share. Get the truth out there. Even the majority of politicians don’t understand the truth of the con.
    His vidoes are pretty easy to understand…….

  2. Thank you, thank you very much for putting out there what I always felt (especially being single and with two kids, pressure of the house helped the divorce). But not just me, I always had the numbers, 8 million homes means about 32 million FaMiLiEs. And they are growing up in this environment. Good luck with the crime rate in the future!

  3. Dyingtruth- JPMorganChase donation to the NYPD is,as you say,coming just in time. Seems like the old protection racket. Which,of course, is what is needed by the banker ponzi racket. I think if we got,say,around 500 large men,say all 6’2″, dressed them in black,with ray bans and a black boots with metal cleats on the soles, we could form a wall between the peaceful protesters and the bullying cops. It would also help if the 500 neither spoke nor smiled. That would send the coppers packing.

  4. “[Wall Street’s] $4.6 Million Donation to NYPD Smells Like a Payoff”

    The Occupy Wall Street movement took a lot of unnecessary heat from, well, The Heat this weekend. First, Deputy Inspector Anthony Bologna maced women in an act of clear, unwarranted police brutality, and then there were mass arrests on the Brooklyn Bridge for absolutely no good reason. So, as if the NYPD didn’t already look like total jerks, there’s more disturbing news coming out about who’s backing their movement to break up the peaceful Occupy Wall Street demonstration.

    JPMorgan Chase — one of the biggest banksters that Occupy Wall Street is standing up to — made the largest donation in the history of the New York City Police Foundation to the NYPD’s nonprofit organization … just in the nick of time! They donated $4.6 million, supposedly to fund new laptops in patrol cars and security monitoring software. Seems pretty benign … at first.

    Clearly, CEO Jamie Dimon said he hopes the donation shows how much they value the NYPD’s “hard work.” I’m sure that’s, uh, part of it. But it’s more likely he appreciates how hard the NYPD worked to put demonstrators in their place. The bribe-like donation is so blatant, it’s almost unbelievable!

    Then again, it also illustrates to a tee what the Occupy Wall Street movement is about. This kind of shady corruption and government being in bed with greedy corporations is so outrageous, it’s an insult to New Yorkers and the American people. Regardless of when the donation took place, I’d be hard-pressed to think of any other reason that JPMorgan would have given such a “generous” chunk of change other than to influence the city-run institution.

    And you know, it’s indicative of the very disease that pervades all levels of government. We can’t even vote in politicians who haven’t been bought in some way, shape, or form by these white-collar criminals anymore. That’s why there has never been a better time for the “99 percent” to stand up and call for an end to corporate corruption. With hope, the OWS movement has only just begun.

    What do you think about JPMorgan Chase making this donation to the NYPD?

    Maressa Brown

  5. Right on, Shelley…that’s why we need to get money out of politics however we can—it has led to total corruption.

    Please everyone—your signature can help make the world better for your children!! And tell a friend–or two!!

  6. You are right on again, But hopefully good will come out of this very bad experience. Our children need to see how Democracy works and how to be wise to the criminal elite and never allow this to happen to people in any country again. They need to see how easily their rights can be taken away if they alllow the elite powerful to change laws, buy politicians and run our government. They must police their government and never allow this to happen again. Some good will come out of this when we stop this crime. If we do not fight for our rights -right now, our children are doomed.

  7. Pete and everyone,

    The heavy weights are now seriously looking into it and advocating to dismantle all the major banks while firing and prosecuting a few individuals. As soon as that happens, we’ll all be able to rebuid our country.

    Watch William Black.

  8. Every time I feel like quitting my fight–which is quite often–I look at my two children and suddenly remember why I am doing this. For them. And then I remember that resistance is victory and when they ask me what I did during the Second Great Depression, I will be able to tell them I fought like hell for our family and for this country. And it was worth it, no matter the outcome.

  9. What out children will see and what will shape them is what we decide to do:

    1) Will we right the wrongs committed or, at the very least, fight with all our strength and teach them it is the only acceptable position to adopt?

    2) Will we sit down with them, review the situation and explain to them what went wrong and why, without giving 100% of the blame to Wall Street (in my situation, I do admit that I miscalculated by anticipating that my finances would never take a nose dive, I would never lose my job and I would always be able to pay my bills. In that, I departed from what my parents had taught me: pay cash as much as you want, don’t take more than one credit at a time and assure that you always have 6 months living expenses saved ahead).

    3) Will we be willing to die for justice and to assure they have a future?

    What everyone is afraid of is coming: sending the military has already decided the tone this will take on. Blomberg has already signaled what’s coming: it will be bloddy and violent.

  10. yup…and get money out of politics:

    please sign and tell a friend—thank you!

  11. Neil, you are so right on this. My child is suffering greatly and receives little attention from me as I try to figure out how to save our home after putting $140,000 down and paying interest only since 2007 on a home that is $250,000 under water. We both lost our jobs and found new jobs that pay half of what we were making. This is my daughter’s home, this is where her friends are, that is her room..I simply cannot allow it to be stolen from her. Yet the fraudsters are stealing precious time with her as I try to figure out how this all happened and what to do about it. We got a loan modification from Wells while they had no interest in it. We’re still paying, but we are left with the inevitable.

  12. Neidermeyer : You’ve got it absolutely right!!!!

  13. The productivity increases are real ,, what’s fake are the GDP numbers ,, “Wall Street” is now 48% of the GDP ,, add “Gov’t Spending” at about 20% (and that is fake because government creates NOTHING!) and realize that under 1/3rd of the economy is real … the 1/3rd are pulling the wagon … The rules must change for us to survive ,, we must not only stop exporting jobs but bring them back with tax law changes …

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