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Study By MIT Economist: U.S. Has Regressed To A Third-World Nation For Most Of Its Citizens

America divided – this concept increasingly graces political discourse in the U.S., pitting left against right, conservative thought against the liberal agenda. But for decades, Americans have been rearranging along another divide, one just as stark if not far more significant – a chasm once bridged

America divided – this concept increasingly graces political discourse in the U.S., pitting left against right, conservative thought against the liberal agenda. But for decades, Americans have been rearranging along another divide, one just as stark if not far more significant – a chasm once bridged by a flourishing middle class.

Peter Temin, Professor Emeritus of Economics at MIT, believes the ongoing death of “middle America” has sparked the emergence of two countries within one, the hallmark of developing nations.

In his new book, The Vanishing Middle Class: Prejudice and Power in a Dual Economy, Temin paints a bleak picture where one country has a bounty of resources and power, and the other toils day after day with minimal access to the long-coveted American dream.

In his view, the United States is shifting toward an economic and political makeup more similar to developing nations than the wealthy, economically stable nation it has long been.

Temin applied W. Arthur Lewis’s economic model – designed to understand the workings of developing countries – to the United States in an effort to document how inequality has grown in America.

The parallels are unsettling. As noted by the Institute for New Economic Thinking:

In the Lewis model of a dual economy, much of the low-wage sector has little influence over public policy. Check. The high-income sector will keep wages down in the other sector to provide cheap labor for its businesses. Check. Social control is used to keep the low-wage sector from challenging the policies favored by the high-income sector. Mass incarceration – check. The primary goal of the richest members of the high-income sector is to lower taxes. Check. Social and economic mobility is low. Check.

Temin describes multiple contributing factors in the nation’s arrival at this place, from exchanging the War on Poverty for the War on Drugs to money in politics and systemic racism. He outlines the ways in which racial prejudice continues to lurk below the surface, allowing politicians to appeal to the age old “desire to preserve the inferior status of blacks”, encouraging white low-wage workers to accept their lesser place in society.

“We have a structure that predetermines winners and losers. We are not getting the benefits of all the people who could contribute to the growth of the economy, to advances in medicine or science which could improve the quality of life for everyone – including some of the rich people,” he laments.

The antidote, as prescribed by Temin, is likely a tough sell in today’s political climate.

Expanding education, updating infrastructure, forgiving mortgage and student loan debt, and overall working to boost social mobility for all Americans are bound to be seen as too liberal by many policy makers.

Until the course is changed, he warns, the middle class will continue to fade and America will remain unsustainably divided.

End the Federal Reserve

If the economy falters Socialism is usually the first cry.. However, it didn't have much pull during the last 2008- recession. It will take total social upheaval to change our economic model where the top 10% own 90% of the wealth.

We the People are in many ways responsible. Lack of interest in politics. Many people were too comfortable with the status quo to vote and little by little our rights started to slip away. We can still turn it around Vote! When representatives stick questionnaires in your mailbox, fill the damn things out. Usually takes 10 minutes. Let's not get too obsessed with a college education - having a trade and working with your hands is no disgrace and these folks are always in demand. Remember we outnumber these rich bastards. Big example - St Patrick's Day Parades were started in our urban areas in the 19th Century to show the leaders just how many Irish rhere were among us.

The reason America is now a 3rd World country is right-wing policy has dominated since the Reagan Era. Ronald Reagan began the destruction of the American middle-class and every republican economic policy is aimed at increasing the wealth of the super-rich at the expense of the American working class.

Birthrate in U.S. is already less that two children per woman. Problem isn't population.

Agree with you JBSteel

We are headed for a bitter harvest..."The Grapes of Wrath". When we needed a rejuvenation of the " New Deal".... what they voted for, was the "Big Deal".....

Only one thing went wrong. We bailed out the banks and big money in the Great Recession. Had we not done that mass amounts of wealth would have been eliminated and a new growth process from the purge would have begun. Prices would have fallen dramatically as well. Instead we propped up the high risk taking money class who would have finally lost it and did so on the backs of everyone else.

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Bailing out wall street's big wigs, the auto industry, Salle Mae and other likes doomed middle America.....

Reaganomics, neoliberalism, and the military-industrial-financial complex. Low corporate tax rates (Reaganomics) shifted the incentives from paying workers more, investing in plant and equipment, and doing research and development to increasing profits to be used for corporate share buy backs and increasing dividends to raise the price of corporate shares and to pay top management more money and corporate shares. This has caused a huge outsourcing of industries with good paying jobs to low wage countries. Outsourcing has reduced high paying jobs and increased competition for low wage jobs. Opening our markets to unlimited trade has put pressure on local labor wages to ratchet down to match countries with low wages. Both political parties support low corporate income taxes. Both support paying high tech managers very high salaries. Both support the military-industrial-banking complex. Both support Big Business. Both do not support benefits for the poor, the sick, or the prisoner. Neither party supports education for the poor and lower middle class. There has been a shift from supporting public schools to putting children of wealthy families into private schools while letting public schools falter and fail. Infrastructure has been allowed to deteriorate. All of this works to the disadvantage of the poor and middle class. Finally, unending waste since 2003 in the Middle East has eroded the standard of living for lower an d middle class people. Finally the bottom 80% own 7% of the wealth in this country. The top 1% owns 50% of the wealth, especially corporate stock and bonds. Our policies have created a Central American oligarchy / plutocracy that has militarized our police forces and uses domestic spying by all levels of government. We are living past the good old days when high corporate taxes and a devotion to democracy were the norms of our society.

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