German Joys

Low-Wage Workers in Germany Work 45 Hours per Week Average

Germany, once the land of the social state, has seen median wages actually decline since 2000, and the number of low-wage workers increase. A new study shows that a quarter of them work 50 hours a week or more just to keep up with expenses (g). Von Amerika lernen heißt schuften lernen!

Merkel's End Game

The New York Times on growing resistance to austerity:

A German-inspired austerity regimen agreed to just last month as the long-term solution to Europe’s sovereign debt crisis has come under increasing strain from the growing pressures of slowing economies, gyrating financial markets and a series of electoral setbacks.

Spain officially slipped back into recession for the second time in three years on Monday, after following the German remedy of deep retrenchment in public outlays, joining Italy, Belgium, the Netherlands and the Czech Republic. In the Netherlands, Prime Minister Mark Rutte handed his resignation to Queen Beatrix on Monday after his government failed to pass new austerity measures over the weekend.

...

It was only in March that leaders from 25 of the 27 European Union countries gathered to sign the fiscal compact championed by Ms. Merkel. Her plan, combined with $1.3 trillion in cheap loans injected into the banking system by the European Central Bank in December and March, raised hopes that the worst of the crisis had passed.

But those hopes have been dashed as growth has faltered and interest rates on the debt of struggling countries like Spain and Italy have shot up to dangerous levels again.

...

Another possibility, which Germany will be under renewed pressure to accept, is some form of common European debt, generally referred to as Eurobonds, which any member of the currency zone could tap. It is a step that Ms. Merkel’s conservative bloc has opposed forcefully, but with more than 17 million people in the euro zone out of work and the unemployment rate at 10.8 percent, the need for urgent steps is growing.

Marie Diron, an economic adviser to the consulting firm Ernst & Young, said Germany could slow down its own drive to balance its budget and do more to encourage domestic consumption. Other European states would benefit if Germany bought more of their goods.

“Austerity has to fit into a wider policy context,” Ms. Diron said.

...

Ms. Merkel has proved herself a masterful tactician time and again. She was adept at working with the Social Democrats as her partner in the previous German government, and Mr. Hollande might be even more amenable than Mr. Sarkozy to ceding French sovereignty in economic policy in exchange for help on growth, Mr. Vaquer from the Barcelona Center for International Affairs said.

“She will have to backtrack on austerity anyway,” Mr. Vaquer said. “Germany can now extract a much more unified Europe in terms of economic governance than it ever could have before.”

I've thought for a while that Germany was eventually going to have to back down on austerity. Vaquer's comments point to the end game: after holding out for years, bringing Europe as a whole to the brink of recession (and shoving many periphery countries over that brink), Germany will finally relent, but not without extracting major sovereignty concessions from the rest of Europe and transferring much more power over economic policy to Brussels.

So perhaps Merkel has known all along that austerity was never going to stick, and that the EU was going to have to become more of a transfer union in to survive. But she held out for years, pretending not to grasp this, in order to put the fear of Yahweh into Germany's European partners. Mildly cunning, ruthless, Machiavellian! Not words that many Germans like seeing applied to their relations with the rest of Europe, but when it comes to protecting its economic interests, Germany behaves like any other country. This episode can, of course, be added to the tu quoque list I recently threw together, when a German criticizes the United States of ruthlessly pushing its economic agenda on weaker countries.

Why Germany's Welfare State Works

The LA Times profiles an ordinary German middle-class couple who enjoy various benefits that most Americans making a similar salary could only dream of [h/t LMGP]:

Every summer, Volkmar and Vera Kruger spend three weeks vacationing in the south of France or at a cool getaway in Denmark. For the other three weeks of their annual vacation, they garden or travel a few hours away to root for their favorite team in Germany's biggest soccer stadium.

The couple, in their early 50s, aren't retired or well off. They live in a small Tudor-style house in this middle-class town about 30 miles northwest of Frankfurt. He's a foreman at a glass factory; she works part time for a company that tracks inventories for retailers. Their combined income is a modest $40,000.

Yet the Krugers have a higher standard of living than many Americans who have twice that income.

Their secret: little debt, frugal habits and a government that is intensely focused on high production, low inflation and extensive social services.

That has given them job security and good medical care as well as well-maintained roads, trains and bike paths. Both of their adult children are out on their own, thanks in part to Germany's job-training system and heavy subsidies for university education.

For instance, Volkmar's out-of-pocket costs for stomach surgery and 10 days in a hospital totaled just $13 a day. College tuition for their son runs about $260 a semester.

Germany, with its manufacturing base and export prowess, is the America of yesteryear, an economic power unlike any of its European neighbors. As the world's fourth-largest economy, it has thrived on principles that the United States seems to have gradually lost.

[One of those, the article points out, is a profound aversion to debt, both on the personal and governmental level].

...

Germany's lower unemployment rate also reflects its orientation toward formal vocational training.

The Krugers' older child, Thorsten, was interested in books from an early age, and prepared for a university education. Their daughter, Nadine, got a vocational diploma in social work that included three years of schooling after high school, with the final year being on-the-job training at half pay.

About one-fourth of all German businesses take part in this apprenticeship program; six of 10 apprentices end up getting hired permanently, said Dirk Werner of the Cologne Institute for Economic Research.

...

The practice, he said, is a key reason why Germany has one of the lowest unemployment rates for 15- to 24-year-olds, about 9.7%, according to the Organization for Economic Cooperation and Development in Paris. In the U.S., the comparable rate is about twice that.

Volkmar and others attribute part of the lower unemployment rate to the German work ethic. Yet Germans, on average, work far fewer hours a year than Americans, thanks partly to five or six weeks of vacation.

The article does a fine job of summarizing why the standard of living of ordinary middle-class Germans is so much higher than that of Americans, despite Americans' higher incomes: government policies consciously reduce the cost of living for the ordinary incidents of life (health care, higher education). German earn less than Americans, but also can spend less on basic necessities of life. Government policy also guarantees everyone enough time off to truly relax and recover. Further, those who don't go to college -- about 75% of the population in developed countries -- are channeled into solid middle-class jobs through internship programs run by public-private partnerships. That is, they are trained to do a job some company needs them to do, without being forced to incur thousands of dollars in debt to get that training.

Germany and the Medium Chill

A while ago, American blogger David Roberts coined the phrase 'medium chill.' It's based on recent research into happiness, which has shown that 'it's unlikely any job advance, material acquisition, or singular event will make you durably happier; the good news is that it's possible to make yourself durably happier without any new job, material acquisition, or singular event.' To do this, you scale down on the amount you work and consume, and concentrate more on social activities, which leads you to 'become more positive, open, and empathetic, to cultivate a resilient wellbeing that weathers changing circumstances.' You give up focusing on the next big career move, learn to live without unnecessary consumer luxuries, and spend more time doing leisure activities you love.

Problem is, you may not be able to live the 'medium chill' lifestyle on your own. You need a social infrastructure that makes it possible to enjoy a basically decent quality of life on a modest income. And that's something that America doesn't provide, except to a small, highly-educated elite. As Roberts notes, 'if you're going to de-emphasize the material in favor of the social, you're going to be talking about places. If we want people to own and consume less privately, we need to provision safe, accessible, pleasant public spaces and resources.' Recently, he also pointed to the role health insurance plays: 

I suspect there are many, many medium chillers who would be happy working 30-hour weeks and trading the extra income for leisure time. Or perhaps they'd like to share a job. Or maybe they'd like to work more when they need money and less when they don't -- just "work and get paid for it" when they need to. Those options aren't workable for most people today because of the specter of health insurance. To deviate from the 40-hour employee model is to take on risk beyond what all but a few brave souls are willing to bear.

...

To me this looks like an argument for universal, single-payer healthcare. Not only would it achieve better health outcomes for less money than the employer-based system, but it would free people to pursue much more diverse working arrangements. It's a step toward "de-formalising and de-bureaucratising labour," as Wilkinson seeks. Work-sharing along the lines of what Germany does would be another nice step. Or if you wanted to get really socialist-freaky, you could go for a guaranteed minimum income.

This is mildly revolutionary advice in work-obsessed America, but, as Roberts notes, reflects reality for most Germans. German society contains dozens of subtle mechanisms permitting most citizens to scale the amount of work they do to fit their current life situation. If the company you work for hits a rough patch, you're more likely to be put on part-time work than laid off. You never have to worry about losing your state-mandated basic health insurance. Both mothers and fathers of children are given an almost absurdly luxurious palette of options for adjusting their work schedules to care for young children. You get over a month of paid vacation automatically. And Germany offers tons of inviting public spaces and cultural options to fill all that free time. Of course, cultural factors play a role here, as well. Assuming you have a decent work record and a good reason to do so, if you visit with your boss and request a lighter work schedule, you're likely to get your wish.

The overall result is that Germans work about 70% as much as Americans do, and much of that difference takes the form of people voluntarily scaling back their workload. Unfortunately, many Germans, hopelessly provincial and blinkered as they are, constantly bitch about the work-life balance in Germany, claim to be overworked and overstressed, and pout like three-year-olds who've just had their favorite toy taken away. They appear to have no idea at all what life is like in countries without these generous social protections built in to everyday life. That's why I return to this theme so frequently...

I'm Against Multiculturalism, Whatever It Means

John R. Bowen brings some much-needed clarity to the European debate over 'multiculturalism':

But while it is hard to know what exactly the politicians of Europe mean when they talk about multiculturalism, one thing we do know is that the issues they raise—real or imagined—have complex historical roots that have little to do with ideologies of cultural difference. Blaming multiculturalism may be politically useful because of its populist appeal, but it is also politically dangerous because it attacks “an enemy within”: Islam and Muslims. Moreover, it misreads history. An intellectual corrective may help to diminish its malign impact.

Political criticisms of multiculturalism confuse three objects. One is the changing cultural and religious landscape of Europe. Postwar France and Britain encouraged immigration of willing workers from former colonies; Germany drew on its longstanding ties with Turkey for the same purpose; somewhat later, new African and Asian immigrants, many of them Muslims, traveled throughout Western Europe to seek jobs or political refuge. As a result, one sees mosques where there once were only churches and hears Arabic and Turkish where once there were only dialects of German, Dutch, or Italian. The first object then is the social fact of cultural and religious diversity, of multicultural and multi-religious everyday life: the emergence in Western Europe of the kind of social diversity that has long been a matter of pride in the United States.

The second object—suggested by Cameron’s phrase “state multiculturalism”—concerns the policies each of these countries have used to handle new residents. By the 1970s, Western European governments realized that the new workers and their families were there to stay, so the host countries tried out a number of strategies to integrate the immigrants into the host society. Policymakers all realized that they would need to find what later came to be called “reasonable accommodations” with the needs of the new communities: for mosques and schools, job training, instruction in the host-country language. These were pragmatic efforts; they did not aim at assimilation, nor did they aim to preserve spatial or cultural separation. Some of these policies eventually were termed “multicultural” because they involved recognizing ethnic community structures or allowing the use of Arabic or Turkish in schools. But these measures were all designed to encourage integration: to bring new groups in while acknowledging the obvious facts of linguistic, social, cultural, and religious difference.

The third object that multiculturalism’s critics confuse is a set of normative theories of multiculturalism, each of which attempts to mark out a way to take account of cultural and religious diversity from a particular philosophical point of view. Although ideas of multiculturalism do shape public debates in Britain (as they do in North America), they do so much less in continental Europe, and even in Britain it would be difficult to find direct policy effects of these normative theories.

Politicians err when they claim that normative ideas of multiculturalism shape the social fact of cultural and religious diversity: such diversity would be present with or without a theory to cope with it. Nor are state policies shaped by those ideas, which tend to be recent in origin. Quite to the contrary, each European country has followed well-traveled pathways for dealing with diversity. Methods designed to accommodate sub-national religious blocs are now being adapted and applied to Muslim immigrants. Far from newfangled, misguided policies of multiculturalism, these distinct strategies represent the continuation of long-standing, nation-specific ways of recognizing and managing diversity.

Turning to Germany:

...Merkel’s notion that the German government had promoted a multikulti society (as distinct from celebrating colorful Kreuzberg or a Turkish star on the German soccer team) ignores the brunt of German immigration policy, which, until 2000, denied citizenship to those workers, their children, and their grandchildren. In other words, the government and many, perhaps most, Germans had not hoped, as Merkel claimed, that everyone would live side by side. Rather, the hope was that “they” would just pack up and leave.

In this sense Germany has largely followed its longer-term policies for dealing with diversity: German federal and state governments have historically denied that immigration could be of value and maintained a policy of limiting citizenship only to those who could demonstrate German descent. But Germany may also follow the public-corporation model it has arranged with Christian and Jewish groups. A proposed Islamic public corporation would have the legal status to obtain government funding for mosques and would serve as a legitimate overseer of materials selected for Islamic religious education. This promising policy goal, not yet achieved, would recognize and support Islam in accordance with long-standing German principles governing religious diversity, not on grounds of multiculturalism.

I think Bowen has this right. German conservative politicians' attacks on the bogeyman of 'multiculturalism' are meaningless. As Bowen points out, it's impossible to specify what German politicians even mean when they refer to 'multiculturalism'. Their attacks on it are dog-whistles to voters who generally dislike foreigners, nothing more. Further, like so much German political discourse, attacks on multiculturalism have little or nothing to do with policy substance. Immigrants and non-ethnic-German citizens are here to stay, and there's nothing German politicians can do about that. Policies might be tweaked here or there, but not drastically, and in any event it's the civil servants who really run Germany, not the politicians. Attacking multiculturalism is the right-wing counterpart to insisting on a more 'social' economic system. Sounds vaguely principled, shores up certain parts of the base, requires no action whatsoever.

Maximum Surplus Value Extraction

A few more dispatches from across the pond. First, the involuntary multigenerational household is back in the USA:

In other countries, people value filial duty and sticking around the family home, but in America we value independence. You're supposed to -- after you graduate from college -- leave the house. You're supposed to pay your own rent. You're supposed to find a spouse and raise your own children. But lately that process has gotten blocked. The latest census shows that in the age group 25 to 34, 5.5 million Americans are living with their parents.

And here's what's worse: the grandparents are moving in, too.

There is a new phenomenon in America called the multigenerational household. It now accounts for about 16 percent of American households, which is by far the highest it has been almost since the Great Depression, more like since the 1950s...

Meanwhile, even during their paltry two-week summer vacations, Americans have to stay connected:

The majority of Americans expect to stay connected to their office during their summer vacation, according to Regus, a company that provides office spaces, office furniture and communications tools.

How Americans will work while on vacation varies, but three-quarters say they will stay connected in some way.

Sixty-six percent of the 5,000 people surveyed said they will check and respond to email during their time off and 29 percent expect they may have to attend meetings virtually while on vacation.

And a 40-hour work week is the new part-time job:

Americans consider a 40-hour work week as "part time" in most professional jobs and as a sign of a stagnant career, according to a recent study by the Center for American Progress.

The Social Hammock

Ed Philp tips me to this website comparing living standards:

Matt Yglesias says he'd rather live in the US and comments:

Not only do we have better food and music, but ... I have a fun job and I’m in good health. Under the circumstances, the “work longer hours for more money much of which is clawed back by health care costs” trade looks okay. But differently situated people will look on this differently. What’s important, I think, is that conventional American dialogue about this tends not to acknowledge how many countries there now are out there where the GDP per hour worked is at-or-near American levels and greater American output is caused by Americans working more. I’d say the Dutch seem to have outpaced us in material living conditions for the average person, for example. But the idea that it might even be possible for some other country to be more prosperous than the USA rarely seems to be considered.

Obviously, nobody should take this too seriously; many of Yglesias' comments are tongue-in-cheek. The key thing, of course, is where you end up living in the U.S. and what you do for a living. Like Yglesias, I have a fun job that gives me plenty of autonomy, and that tends to color my perception of where it's nice to live. The chart furnishes more evidence for the notion that Americans just plain work harder -- they are just as productive as Germans, but just do about 30% more producing, and get 30% higher incomes for it. Of course, for many of these people, all that extra money is going to be clawed back by healthcare costs, transportation (in the 98% of America in which owning a car is pretty much mandatory), and other costs that are much more socialized in Germany, but that are borne by individuals in the States.

As always, this sort of comparison has to be made from behind the veil of ignorance: If you couldn't control where you would end up on the social scale, would you choose to live in Germany or the U.S.? If I were going to be a supermarket cashier, I would certainly choose Germany -- not least because supermarket cashiers in the U.S. have to stand up while they work.

Is the EU Self-Immolating?

Some Crooked Timber bloggers think so:

The measures that the eurozone states have recently decided to adopt will be even harsher, if they make the mistake of following Germany’s example. Germany’s debt brake, which at first Berlin implicitly proposed as a model for other European countries, turns austerity into a constitutional obligation. In theory, it provides some flexibility during hard economic times, but in practice it makes deficit spending as difficult as possible: only the vote of a supermajority of German legislators can relax it. And it rules out debt-financed investment, such as in infrastructure, even though that can spur long-term growth.

As they begin to adopt Germany’s model, or something along those lines, the other eurozone states will find it nearly impossible to use fiscal stimulus in times of crisis. And with monetary policy already in the hands of the dogmatically anti-inflationary European Central Bank, their only means of adjusting to crises will be to stand by as wages fall and unemployment soars. Ireland—with its collapsed tax revenues, massive cuts in government spending, shrinking wages, and skyrocketing unemployment—is the unhappy exemplar of rigid austerity measures in the new Europe.

This approach cannot be sustained for long. The EU has never had much popular legitimacy: many voters have gone along with it so far only out of the belief that their politicians knew best. Today, they are more suspicious. And if they come to think that further European integration is causing more economic hardship, their suspicion could harden into bitterness and perhaps even xenophobia. Ireland’s new finance minister, Michael Noonan, has told voters that the EU is a game rigged in Germany’s favor; editorials in major Irish newspapers warn of Germany’s return to racist imperialism. As economic shocks hit other EU countries, politicians in those states will also look for someone to blame.

...

Resorting to hard Keynesianism to deal with the euro crisis would require making far-reaching changes to the rules and practices of the EU’s economic and monetary union. It would mean both toughening the requirements of the Stability and Growth Pact, which governs the euro, and strengthening the enforcement of these rules. As they stand, the Stability and Growth Pact’s bylaws require the eurozone states to maintain budget deficits under three percent of GDP and debt-to-GDP ratios under 60 percent. The system does not provide enough flexibility during downturns: even German politicians ignored these requirements a few years ago, when Germany was suffering from a recession—much as they prefer not to remember this today.

To be more effective, the system needs to be stricter. The Stability and Growth Pact should be strengthened so that it requires countries to put aside surpluses during auspicious years. Since governments are persistently tempted to squander surpluses, a new supervisory institution should be introduced at the EU level. It should be granted access to detailed budget-planning and other economic information from the eurozone states and should be empowered to sanction misbehaving states....

Such an active use of fiscal policy requires the coordination of fiscal and monetary policies. This, in turn, means that the European Central Bank can no longer be totally independent, as it has been since the implementation of the euro. As it stands, the European Central Bank is possessive about its powers. For example, it has resisted oversight by the European Parliament even though it has begun to take on an increasingly important political role through its support for the European banking system. It has assiduously avoided mingling monetary policy and fiscal policy, focusing instead on targeting inflation. But it nonetheless failed to prevent asset price booms, and these could only have been prevented with much more direct institutional control over unsound financial innovations. As the interaction between governments and central banks is unavoidable and the role of the European Central Bank is increasingly political, it would be better to properly define the relations of authority among these bodies. The European Central Bank must be more willing to adjust its policies so that they do not undercut those of elected national governments. Even if this were not necessary economically, it would be necessary politically. Handing the power to destroy national economies to unelected technocrats is simply not politically sustainable.

What High European Taxes Buy

Following up on my post from a few days ago, here's a section of a much longer David Cay Johnston called "Nine Things the Rich Don't Want You to Know About Taxes." Here, Johnston compares American and German tax policies:

We measure our economic progress, and our elected leaders debate tax policy, in terms of a crude measure known as gross domestic product. The way the official statistics are put together, each dollar spent buying solar energy equipment counts the same as each dollar spent investigating murders.

We do not give any measure of value to time spent rearing children or growing our own vegetables or to time off for leisure and community service. 

And we do not measure the economic damage done by shocks, such as losing a job, which means not only loss of income and depletion of savings, but loss of health insurance, which a Harvard Medical School study found results in 45,000 unnecessary deaths each year.

Compare this to Germany, one of many countries with a smarter tax system and smarter spending policies.

Germans work less, make more per hour and get much better parental leave than Americans, many of whom get no fringe benefits such as health care, pensions or even a retirement savings plan. By many measures the vast majority live better in Germany than in America.

To achieve this, unmarried Germans on average pay 52 percent of their income in taxes. Americans average 30 percent, according to the Organization for Economic Cooperation and Development. 

At first blush the German tax burden seems horrendous. But in Germany (as well as in Britain, France, Scandinavia, Canada, Australia and Japan), tax-supported institutions provide many of the things Americans pay for with after-tax dollars. Buying wholesale rather than retail saves money. 

A proper comparison would take the 30 percent average tax on American workers and add their out-of-pocket spending on health care, college tuition and fees for services, and compare that with taxes that the average German pays. Add it all up and the combination of tax and personal spending is roughly equal in both countries, but with a large risk of catastrophic loss in America, and a tiny risk in Germany. 

Americans take on $85 billion of debt each year for higher education, while college is financed by taxes in Germany and tuition is cheap to free in other modern countries. While soaring medical costs are a key reason that since 1980 bankruptcy in America has increased 15 times faster than population growth, no one in Germany or the rest of the modern world goes broke because of accident or illness. And child poverty in America is the highest among modern countries—almost twice the rate in Germany, which is close to the average of modern countries.

On the corporate tax side, the Germans encourage reinvestment at home and the outsourcing of low-value work, like auto assembly, and German rules tightly control accounting so that profits earned at home cannot be made to appear as profits earned in tax havens. 

Adopting the German system is not the answer for America. But crafting a tax system that benefits the vast majority, reduces risks, provides universal health care and focuses on diplomacy rather than militarism abroad (and at home) would be a lot smarter than what we have now.

The Crumbling Plutocracy

Whenever people ask me why I've chosen to live in Europe, I say that America's just become too damn depressing. What I'm talking about are things like this New York Times article, which helpfully informs us that the American higher-education system, which charges tuition fees that put students in a kind of debt bondage -- is demanding ever more tribute from its victims students:

Two-thirds of bachelor’s degree recipients graduated with debt in 2008, compared with less than half in 1993. Last year, graduates who took out loans left college with an average of $24,000 in debt. Default rates are rising, especially among those who attended for-profit colleges.

The mountain of debt is likely to grow more quickly with the coming round of budget-slashing. Pell grants for low-income students are expected to be cut and tuition at public universities will probably increase as states with pinched budgets cut back on the money they give to colleges.

Some education policy experts say the mounting debt has broad implications for the current generation of students.

“If you have a lot of people finishing or leaving school with a lot of debt, their choices may be very different than the generation before them,” said Lauren Asher, president of the Institute for Student Access and Success. “Things like buying a home, starting a family, starting a business, saving for their own kids’ education may not be options for people who are paying off a lot of student debt.”

It's just another data point in the gradual destruction of the American middle class. You could also add the homeless shelter, already full, sending homeless families into the woods to live in tents , or the bankruptcy of one of America's greatest orchestras, or the political resentment caused by rising gas prices in an overwhelmingly car-dependent culture.

All these signs show America abandoning a principle that it used to share with Western Europe: In a decent society, someone of average talents with an average job should be able to afford the basic incidents of civilized life, such as a reasonably comfortable retirement, job security, regular vacations, childcare, entertainment, healthcare, and the ability to finance as much education as they or their children qualify for. This is the essence of social democracy -- it's not, as some people think, a giant charity for the poor, but a giant redistribution system for the middle class. In these societies, making a middle-class lifestyle affordable is partly done by naked redistribution, but is also accomplished indirectly by creating complex public-private hybrids like a heavily-regulated insurance industry and various tax subsidies. At least in Northern Europe, it still works reasonably well. That is, in Europe, much government activity is aimed at ensuring that ordinary people -- not the gifted, the beautiful, or the driven -- can go to a nice park on Sunday, take several vacations a year, get basic medical care, send their children to college, afford a newspaper subscription and opera tickets and the occasional nice restaurant meal, etc.

In the U.S., by contrast, the amount you need to earn to secure the ordinary incidents of middle-class life continues to rise, and far outstrips what most (formerly) middle-class people earn, as this report (pdf) documents. The middle class is like the proverbial frog in boiling water, passively observing as more and things their parents took for granted gradually slip out of reach. In short, the people who live where most Americans live -- not on the coasts, but in states like Texas or Arizona or Florida -- and the politicians who lead them -- have given up on the idea of trying to improve the way their communities work as societies. Of course, there are always exceptions. There are Arizonans and Texans who are doing old-fashioned social work (among them the Catholic Church, one reason the church has a reputation as -- mirabile dictu -- left wing in many parts of the USA). But changing a culture is a question of critical mass. There will never be a uniform belief that the welfare of all is the concern of all, but there has to be at least a broad consensus.

In places like Arizona, that's not even remotely the case. If you're an relatively privileged Arizonan, you don't try to solve social problems, or expect any government to do so. Suburban McMansions and massive vehicles waste incredible amounts of energy, yet merely suggesting that it might be wise to seek alternatives to a single person driving a three-ton automobile 500 yards to buy a gallon of milk will earn you a tirade about an American's God-given right to spend their hard-earned money however the hell they damn well please. Like this one.

The huge cars are all part of the contemporary American dream, which involves insulating yourself from social problems, rather than solving them. You live in the suburbs, possibly in a gated community, you buy a security system for your home (and maybe a gun), you send your kids to private school, you buy that tank-like car, you start saving for your children's college the moment they're born, you do whatever you can to keep your health insurance, you save for your own retirement, etc. If your children have problems, the last thing you will do is turn to the state. Its social services -- like its mass transit and its public-defender offices and its charity hospitals -- are under-funded and populated exclusively by people who can't afford anything better. You'll need to resolve family emergencies privately, and that means money for lawyers, tutors, shrinks, and private clinics, to make sure your childrens' futures aren't ruined by a criminal record.

All this private-market insulation against social problems and loss of status costs money, more every year. But if you're one of the few who can afford it, you can live a life in which everything works well for you: you live in a nice house in a safe neighborhood, you can pay all your bills, you'll get good medical care if you're sick, and your children will attend good schools and go to college. You'll soon forget about the people who don't have it as well as you do. Which, after all, is the point of insulation.

But you'll still be in the minority. As the Washington Post recently reported:

More than a year into the recovery, the economy is starting to show signs of improvement. The stock market has rebounded. Corporate profits are soaring. And yet, for millions of Americans, the lingering legacy of the Great Recession is a Great Slide, as job losses, declining home values and decimated retirement savings have knocked them down the socioeconomic ladder. For the formerly middle class, this slide plays out in big and small ways, from a loss of identity to the day-to-day inconveniences of life with less.

Unemployment is still over 8%, and income inequality has been increasing steadily. The latest crisis has just thrown into relief the background process in which working and middle classes have been falling behind for decades. It's brutally exposing just how much little insulation against misfortune remains for anyone below the upper-middle class.

Of course, the fact that the government doesn't meet the needs of ordinary people doesn't mean nobody does. Ever entrepreneurial, many firms make a living by exploiting others' economic hardship. The number one profiteers are, of course, large companies: unemployment increases the reserve army of labor, decreasing pressure on wages and reducing pressure to improve working conditions. Amazing as it sounds, there are still Americans naive enough to show unfeigned surprise that corporate profits are rising in times of high unemployment. But companies are just the beginning. The poorer areas of town are filled with payday loan shops, pawn shops, and other businesses whose business model is based on the old maxim: "It's expensive to be poor." Millions of people also get suckered in by private, for-profit "universities" located in gleaming office buildings by the side of the highway. There, they borrow tens of thousands of dollars a year to get degrees that often turn out to be useless -- or, at least, which don't furnish them with anything like the earning power they'll need to pay off their five-figure students loans. There's money to be made in convincing working-class people to spend beyond their means: the housing boom was caused in no small part by mortgage brokers who conned people of limited means into buying houses they couldn't afford, simply to pocket the fees.

When the other shoe drops -- when the house gets foreclosed on, or the sleep-deprived trucker working overtime jackknifes on the freeway, or the minimally-qualified nurse's assistant gives the wrong medication -- there are others waiting to profit. David J. Stern, a Florida lawyer who "made millions" processing evictions, "enjoyed a lifestyle that featured grand mansions, flashy sports cars and a yacht called Misunderstood. But the days of easy money are over for Mr. Stern, his law firm and ... investors."

Advertisements for plaintiffs' lawyers, in which they promise help to victims of truck or refinery accidents, plaster the freeways. Their websites proclaim them to be the tribunes of the little man -- the official motto of one plaintiff's firm is "Protecting What's Right®." But don't get the idea these protectors of the right are missionaries: they'll take 1/3 of whatever they win for the 'little guy". In return for this, of course, they'll always provide excellent and honest legal representation to their working-class (in American legal parlance, "unsophisticated") clients. Or maybe not -- as evidenced by the burgeoning sub-industry of lawyers who sue other lawyers for malpractice. Note, however, that the lawyer-malpractice lawyer won't take cases unless they involve at least $100,000 in damages.

And God forbid you should get in trouble with the law. America has a two-tier justice system: if you can't afford a private lawyer, you'll be dumped onto public defenders or "contract" attorneys. There, it's a pure lottery: the local public defender or private lawyer may care about their job -- or they may just be interested in processing as many cases as possible to enhance profit margins. Inmates in jails and prisons are fleeced right and left. One common scam, noted by a friend of mine who represents prisoners, is special meals for jail and prison inmates. The prison will outsources food preparation to a private firm. Part of the contract allows the firm to offer special higher-quality meals, which prisoners' relatives -- working-class or poor people -- can order online or by telephone. Of course, the same company providing the expensive-yet-delicious meals at a fat profit is also responsible for the "normal" meals. Which, predictably, are flavorless. Prisons also farm out telephone services to private companies, who charge astronomical fees to their captive customers.

The bottom line: if you're a working-class American, your social landscape is teeming not with efficient, low-cost social services, but with people and businesses picking over your ever-dwindling earnings like vultures huddled around a rotting corpse.

The most depressing part of all of this, perhaps, is that there's no end in sight. Americans have always been more individualistic than most other peoples, but this individualism used to be counterbalanced by an appreciation of solidarity, the role of unions, some sort of sense of collective responsibility for the most vulnerable. But that's all been gradually dismantled. Mainstream American discourse no longer understands the vocabulary it would need to even properly understand these problems. Firebrand, progressive Democratic politicians who actually took the 'little man's' side are long gone, as are the sort of Tory-conservative Rockefeller Republicans who acknowledged the need for strong social institutions -- if need be, the government -- to guarantee a decent standard of living to all. That sort of language doesn't even exist anymore in mainstream American political discourse. Kevin Drum recently summed it up well:

Income inequality has grown dramatically since the mid-'70s—far more in the US than in most advanced countries—and the gap is only partly related to college grads outperforming high-school grads. Rather, the bulk of our growing inequality has been a product of skyrocketing incomes among the richest 1 percent and—even more dramatically—among the top 0.1 percent. It has, in other words, been CEOs and Wall Street traders at the very tippy-top who are hoovering up vast sums of money from everyone, even those who by ordinary standards are pretty well off.

Second, American politicians don't care much about voters with moderate incomes. Princeton political scientist Larry Bartels studied the voting behavior of US senators in the early '90s and discovered that they respond far more to the desires of high-income groups than to anyone else. By itself, that's not a surprise. He also found that Republicans don't respond at all to the desires of voters with modest incomes. Maybe that's not a surprise, either. But this should be: Bartels found that Democratic senators don't respond to the desires of these voters, either. At all.

So it's hardly a surprise that Obama recently announced his ideal campaign contribution for the upcoming 2012 election: $350,000. I'll vote for him anyway, I suppose, if I bother to vote at all. But until something dramatic changes -- and in America, it always can -- I can't get all that excited about who will eventually run the crumbling plutocracy...