And the most worrisome thing is that the obvious solutions for where we are at – a short period of higher inflation, massive credit writedowns, and a larger government deficit paid for with higher taxes on the rich and the largest banks – are all things this new financial elite hate. And the current debates about “structural unemployment” or a lack of interest in jobs provide cover for an obvious priority with this elite – the American middle-class was an anomaly of history, an artifact of the Cold War and the post WWII era. Regular Americans are going to have to take a massive cut in wages and lifestyle in order to recover. This was the argument in the age of Keynes and the Great Depression, and it is the argument now. No wonder the Democratic party looks paralyzed from the outside.
This is a straight-up terrifying analysis of our current economic situation. Of course what makes it terrifying isn’t what Konczal is saying, but the reality that he is describing.
That said, I am not willing to accept that “the American middle-class was an anomaly of history, an artifact of the Cold War and the post WWII era.” Organizing can still happen to stop this. Leaders can step forward to fight for the middle class. Regulators can regulate. Legislatures can legislate. Judges can judge. Government can function. Or, if not, things get really ugly.