Salt of the Earth
‘Let’s drink to the hard working people
‘Let’s drink to the lowly of birth
‘Raise your glass to the good and the evil
‘Let’s drink to the salt of the earth
‘Say a prayer for the common foot soldier
‘Spare a thought for his back breaking work
‘Say a prayer for his wife and his children
‘Who burn the fires and who still till the earth’
‘Salt of the Earth’ by The
Rolling Stones (watch here)
Today, we say a prayer for the hard-working people…the factory girls and long-haul truckers…they’re going to need it.
‘The national average cost of a regular gallon of gasoline hit $4.589 early Thursday morning. This price topped Wednesday’s previous record of $4.567, which had beat Tuesday’s record of $4.523, which in turn had beat Monday’s record of $4.470.’
And here’s CBS News, looking ahead:
‘California drivers are grappling with the most expensive gas in the nation, shelling out an average $6.06 per gallon as of Thursday. That could soon be the fate of drivers in the rest of the nation, according to a JPMorgan analyst, who predicts the national average per gallon price could reach $6.20 this summer.’
Rising house prices (thanks to the Fed’s ultra-low interest rates) forced middle- and lower-income workers to move further and further away from their work. Now, they may commute 40 miles or more just to get to the job. That’s about two gallons of gas…or about US$12 worth — one way. At an average blue-collar wage, commuting alone costs more than 10% of income.
‘Too bad…’ say the elite. ‘But this will encourage them to use less fossil fuel. They should buy electric cars.’
If that weren’t galling enough, there are early signs that the two legs of middle-class prosperity — housing and jobs — are beginning to buckle.
Unsteady she goes
First, the labour market may be rolling over. The New York Post:
‘The number of Americans filing new claims for unemployment benefits unexpectedly rose last week, reaching a four month-high and potentially hinting at some cooling in demand for workers amid tightening financial conditions.’
Second, house prices are rising at a double-digit annual rate. But with mortgage rates edging up, who can afford to buy them? This from CNBC: ‘Home sales drop 18% in April’:
‘The April drop in closings is the largest one-month decline since July 2010, when the homebuyer tax credit, a federal stimulus resulting from the subprime mortgage crash, expired.’
The average new house in the US now sells for US$523,000. That’s up from US$400,000 in January of last year. Interest rates are also up — by nearly 3%. If the entire amount were financed, that would mean a monthly mortgage payment of about US$1,500 higher.
So the other day, we were wondering…
How come…with so many problems here in the US — stocks crashing…consumer prices rising by double digits…the baby formula crisis…and people killing shoppers in retail establishments or robbing them on the streets…
…our leaders go to a foreign country, give the folks there US$40 billion, and promise undying support for their war with Russia?
‘You do the dying’, they say…‘we’ll just send you our taxpayers’ money’.
McConnell, Pelosi, Yellen…et al — from both wings of the Deep, Deep State…Republican and Democrat — are supposed to represent ‘the people’. And yet…where’s the love?
We turn to Newsweek: ‘The Divide Isn’t Right v. Left; It’s Us Blue Collar Workers Fighting Elite Contempt’.
Charles Stallworth thinks the real divide is not a matter of Republican versus Democrat or Black versus White. It’s a matter of ‘class’. He says the people who do the real work — butchers, carpenters, truck drivers — don’t get any respect. For example, in the COVID panic, the elite kept drawing their paycheques — working remotely — while the factories and workshops were shut down. The only working-class people with jobs were the ones who delivered DoorDash food and Amazon packages to white-collar homes.
Rules for thee
And now that the COVID Panic has faded, the class divide is more visible than ever. In restaurants, stores, and banks — clerks and servers wear masks; customers don’t.
Salt-of-the-earth commoners pay taxes to support local schools…where their children are taught their non-college-educated parents are failures. The youngsters are told that the only route to success is via ‘higher education’. They are assured that if they go to college, they will not only do more meaningful work — saving the planet! — they will also earn more money.
And now, the Biden Administration wants to cancel student debt. Who benefits? The fellows waiting tables, driving trucks, or swinging hammers? Or the college graduates who waited tables and paid their own way through school? From Bloomberg:
‘At least 30 senior White House staffers have student loan balances, according to 2021 financial disclosures Bloomberg News obtained from the Office of Government Ethics, including Biden’s new press secretary, Karine Jean-Pierre, and Bharat Ramamurti, deputy director of the National Economic Council.’
The poor working stiffs will end up paying the elite’s college expenses…and then, the educated upper classes can thank them:
‘Waiter…I said no ice in my [imported from Italy] sparkling water. I care about the environment. Thank you.’
Mr Stallworth doesn’t mention the Fed. Twice this century, it bailed out the rich man’s stock portfolio with trillions of dollars in crisp new bills. But not a penny for the sweating masses.
We are waiting to see if it will repeat the trick. Already, some US$30 trillion has been lost worldwide in the retreat from Peak Bubble. As the losses mount, the class divide will come front and centre: Grosso modo, the ruling elite, benefits from rising asset prices. The middle and lower classes benefit from falling consumer prices. It’s one or the other. The Fed can try to bail out the fund managers once again. But it will mean much higher prices for the truck drivers. Or it can tackle inflation…but the elite will lose trillions.
Which way will it go? Say a prayer for the hardworking people.
More to come…
For The Daily Reckoning Australia