Wages for the ninety-nine percent have gone down, steadily, since 2008. They've gone down especially for the bottom twenty-five percent of the population. This means that they've gone down especially for Blacks and Hispanics and other blue-collar workers. Their net worth has actually turned negative, and they don't have enough money to get by.
Michael HudsonThe current U.S. and Eurozone depression isn't because of China. It's because of domestic debt deflation. Commodity prices and consumer spending are falling, mainly because consumers have to pay most of their wages to the FIRE sector for rent or mortgage payments, student loans, bank and credit card debt, plus over 15 percent FICA wage withholding for Social Security and Medicare actually, to enable the government to cut taxes on the higher income brackets, as well income and sales taxes.
Michael HudsonMoney is not a factor of production. But in order to have access to credit, in order to get money, in order to get an education, you have to pay the banks.
Michael HudsonLook at Ukraine. Its currency, the hernia, is plunging. The euro is really in a problem. Greece is problematic as to whether it can pay the IMF, which is threatening not to be part of the troika with the European Central Bank and the European Union making more loans to enable Greece to pay the bondholders and the banks. Britain is having a referendum as to whether to withdraw from the European Union, and it looks more and more like it may do so. So the world's politics are in turmoil.
Michael HudsonThe price decline is a result of having to pay debts. That drains income from the circular flow between production and consumption - that is, between what people are paid when they go to work, and the things that they buy.
Michael Hudson