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November 8, 2005

Death of the middle-class, Tues., Nov. 8, 2005, 4:08 AM

We are rapidly becoming a society of haves and have-nots. Soon there will be no middle class; the transfer of wealth to the rich and powerful will be complete. It is 4 am and I cannot sleep. The rapid breakdown of society as we used to know it is constantly on my mind.

I grew up believing in the principle that the most important objective anybody could have in life was to create wealth. Now, sadly, I see our most important job is to protect it.

Protect it from whom? Protect it from the rich and powerful who are taking it from us.

I am beginning to see that clearly.

In this early hour I can see many things clearly. I can see that the most important issue facing society is being swept under the carpet. That, my friends, is that the social contract between those who create wealth and those who control it has broken.

Increasingly, I see examples of a process of wealth transference from many to few. And I can see how it is happening. Yesterday afternoon I pointed out just two: Charles Schwab and Stephen Roach, and I became frustrated, not that the game is being played, but because so few in society can see what I see.

In the next few years, as the rich tell us they will not raise interest rates; trust me, they will.

In the next few years, as the rich tell us there is no inflation, which is just another word for the destruction of wealth of the middle class; trust me, there will be.

Interest rates and inflation are brothers of the rich. Every few years these siblings are used as tools to help the rich facilitate wealth transfer.

This is a never-ending cycle of the upper class eliminating the middle class. It starts by international conflict and war, which leads to inflation, which brings higher interest rates, which in turn causes the collapse of bonds and stocks and real property.

This has been going on since time immemorial.

And this wave is going to engulf the middle class again soon, and you are not being told to protect yourself because mass media is controlled by the rich and used as their tool.

Yesterday, I pointed out an exchange of communication I had with the business and finance editor of a major Texas newspaper. He said, in effect, he was too busy to think. No, actually; he was too scared for his job to think. When you work for people you are obligated to do as they wish.

Which brings me to the great issue of the day that people in the media will not talk about; that is, the breakdown in the social contract between those few who control capital and the rest of us who are creating it.

General Motors, which is America's largest manufacturing company, is a case in point. Did the workers, past and present, deliver on their contract to produce wealth for GM, or did they not? So then why did the rich and powerful decide to under fund the workers' pension plan, which is an obligation management holds? And why has the Mom & Pop owners of the GM stocks and bonds been so badly shafted? I call it theft by management and a handful of so-called capitalists. And why is government in the process of facilitating this theft?

I see the same thing going on today with the Steel Company of Canada (Stelco), which is the country's biggest steel manufacturer, located in Hamilton Ontario. The workers' pension plan liability was deliberately under funded. That has led to an inevitable conflict with management who have been backed by a handful of so-called capitalists, who are in the process of hijacking the company from the shareholders and bondholders, with the process being facilitated by government.

Years ago I happened to have held a day job for PwC as external auditor for one of Stelco's competitors, so I worked alongside steelworkers and blast furnaces. Then at night, I would drive about 75 miles to Hamilton, past the Stelco plants and headquarters, where I would earn an MBA from McMaster University.

Today, I am so disappointed in my alma mater for not speaking out on the Stelco issue, I am ready to disavow any connection with that school. What happened to academic integrity where a School of Business could stand by and permit such a travesty happen within their eyesight.

I am speaking of course where a management has decided that, with the help of friends in private equity and in government and the courts, they can usurp all rights of the stockholders and bondholders, and the workers, past and present, by a pre-emptive use of an arcane bankruptcy law in a bankruptcy process that no shareholder, bondholder, creditor or worker had ever tried to start. This gang, who have been intent from the outset to steal wealth from the rightful owners, started this Stelco bankruptcy process.

And the School of Business at McMaster University and the local media, all of whom rely today on the patronage of the rich and wealthy, are not going to speak out.

This problem in Hamilton is not any different from the one down the 401-highway in Detroit where so-called capitalists and their friends in private equity and company management are attempting to hijack a great wealth producer for America by breaking legal and social contracts with shareholders, bondholders, creditors and workers.

Meanwhile, the Detroit press and the Schools of Business at nearby Michigan State and University of Michigan are silent.

Friends, the middle class is dying, and we are letting it happen. Does the rich and powerful have that much control over government, the courts, the media and academia today to steal from us in such a blatant fashion?

Blogging has in the past couple months moved into uncharted waters. The boundary lines are being set. The blogosphere is about to change now that the upper class is concerned enough to get into it. To wit: the NBC and CNBC blogs, which are being controlled by those who control General Electric.

The blogosphere will become history's next Great War Theater.

This is such an important point that I cannot have you miss the link so I am going to reproduce the full text here. After all, I have been disturbed out of my sleep over this issue; I hope I make my point.

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Blogosphere (alternate: BlogSphere or BloggingSphere) is the collective term encompassing all weblogs or blogs as a community or social network. Many weblogs are densely interconnected; bloggers read others' blogs, link to them, reference them in their own writing, and post comments on each others' blogs. Because of this, the interconnected blogs have grown their own culture.

The term blogosphere was coined on September 10, 1999 by Brad L. Graham, as a joke [1]. It was re-coined in 2002 by William Quick (quite seriously) [2] and was quickly adopted and promulgated by the warblog community. Many people still treat it as a joke, however National Public Radio's programs Morning Edition, Day To Day, and All Things Considered have used the term several times to discuss public opinion. The term bears a similarity to a much older word: "logosphere". In the Greek roots, "logo" means word, and "sphere" can be interpreted as "world", resulting in "the world of words", the universe of discourse. The term also recalls the pronunciation and the meaning of the term "noosphere".

The notion of a blogosphere is an important concept for understanding blogs. Blogs themselves are just instances of a particular formatting choice, whereas the blogosphere is a social phenomenon. What differentiates blogs from webpages or forums is that blogs can be part of a shifting Internet-wide social network formed by two-way links between different blogs. You link to my interesting articles and I'll link to your interesting articles.

Sites such as Technorati, Blogdex, Blogrunner, Blog Street, BlogsNow, PubSub, and Truth Laid Bear use the links made by bloggers to track the interconnections between bloggers. Taking advantage of hypertext links which act as markers for the subjects the bloggers are discussing, these sites can follow a piece of conversation as it moves from blog to blog. These also can help information researchers like MIT Media Lab study new communication technologies.

Weblogs tend to be about a variety of subjects. The form weblogs can take ranges from a simple list of personal links to diary-style. From the beginning, many weblogs have dealt with current events and politics.

Within business circles there is a particular focus on influentials and other forms of early adopter. The challenges of using blogging as a medium for advertising have been covered by Fortune magazine and Forbes magazine. Tools have been developed to track how fast a meme spreads through the blogsphere, in order to track which sites are the most important for gaining early recognition. "

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With that off my chest, now I can return to bed.

Posted by Posted by Bill Cara on November 8, 2005 04:08:32 AM | Category: Blogging World

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