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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.

And, my folks were like that, only they were in Vermont. Our families did okay during times like the Depression, because back then, families stuck together. Everyone contributed to the welfare of their family--even the smallest of children. . .they even had chores, even if it was just holding the basket as grandma collected the eggs from the hen house for that mornings breakfast.
In the 70's when I was a kid-I was taught from an early age how to grow food, how to take care of animals, how to cook. So many people today have never been taught these things. Most families today cannot afford to have a parent or grandparents stay home with the children to teach these basic lessons, that are going to be sooo important to know in the next few years.
Those of us that know these things, are going to have to teach the others. If we don't--they will die. And I really don't want that on my hands.

How many errors am I permitted in my next 22 lines. Hopefullly, at least as many as Kay54, beginning with the ludicrous notion that Bill Clinton took the Democratic party to "the extreme right." Were you there in Chicago in 1968 when Democrats laid open their intellectual abdomen and bled to death with the Vietnam War as the backdrop? It was Clinton who was able "to get policies of hate passed against the poverty stricken with welfare reform?" Who is it who doesn't understand Temporary Assistance for Needy Families, insisting that it forced adults in "welfare families" to work? In fact, millions of welfare recipients -- adults who had lost their jobs or their job skills, as well as their children who were being marginalized in school -- were able to advance their education and employment talents by satisfying what you call "the work requirement." Follow those discussions with clarification and conclusions on the many other mischaracterizations herein -- crime bill, prisons for profit, NAFTA, Glass Steagall repeal, faux war on terror (within weeks after 9/11/2001, expanded police and security state, removal of privacy rights/civil rights, Obama's eight cuts in food stamps/housing assistance/heating assistance, neoliberals and neocons gutting "the safety net," rigged Democratic primary elections, Russiagate . . . Some may think they can't live long enough to reach rational conclusions on these issues, but I don't think it would take long go do so.

"Two Americas" was a stump speech from John Edwards in 2004, not Barack Obama in 2008, though the roots trace back 40+ years as you noted.

Welfare reform helped millions of Americans to come out of poverty into better situations. Previous welfare systems and incentives were hurting people and everyone knew it, but the 1990s welfare reform did a lot of good to improve people's lives.

Except the American people who applied!

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