Collateral Damage, Friendly Fire, and Unshared Sacrifice

by Martin Harris 

Martin Harris

The military vocabulary has no word or phrase for the once-acceptable practice of knowingly targeting your own troops as a legitimate tactic for targeting the enemy, when both are mixed together on the battlefield. Think “Braveheart”, when the English Edward I, during his 13 century invasions of Scotland, orders his archers to fire into the hand-to-hand combat before him: a courtier objects to the inevitable English losses, and Longshanks replies dismissively: “we have reserves”. The closest match is “collateral damage”, but that typically applies to civilian casualties. And “friendly fire” is the phrase for troop casualties inflicted in error, not willingly accepted in pursuit of a desired “kill ratio”, the phrase invented by the media during the VietNam War. Even the frontal-assault leadership abuses of both sides in the Civil War, and, later, of the English in WWI, were instances of generals sending infantry in exposed slow motion formations against massed small-arms and artillery fire from the enemy, not instances of actually targeting your own troops. There’s no civilian label for the practice, either, which explains why the current near-zero interest rate Federal Reserve strategy for “Keynesian stimulus” is used to describe only the supposed economic-activity beneficiaries, and never the actual draftees conscripted unknowingly but presumably unwillingly (if they knew) to pay for it.

There’s a “shared sacrifice” label being stuck on the wall here and there, but actual practice differs markedly from political slogans. Like the Civil War draft, when candidates in the upper socio-economic quintiles, North and South, were exempted by favoritism or purchase, and only the lower quintiles saw actual service, the present low-interest-rate policy knowingly targets only those economic quintiles whose savings are in interest-sensitive investments. That’s not so much the lowest quintile, which has, for practical purposes, no savings at all, and not the top three quintiles, whose savings/investments are largely in media which keep up with inflation irrespective of interest rates (see the recent stock market charts for proof) it’s disproportionately the lower-middle-income quintile, as these stats from the 2007 Survey of Consumer Finances show. The lowest, Quintile 1, has its meager savings 5.5% in stocks. Quintile 2, 7.8%. Quintile 3, 14%. Quintile 4, 23,2%. And the top Quintile 5, 39%. Just like the hapless English infantry, unaware until it happened that their leader was quite willing to target them in pursuit of a higher goal, today’s lower-middle-class (working-class) households were never told that they’d pay, with returns on their bank savings and CD’s reduced from about 5 or 6% to near zero, for the Leftist-Keynesian goal of making money cheaper for the movers and shakers in the economy. Longshanks probably had his barons and earls tell their troops that the King loved them, just as Prez 44 has had his concerns for the middle-class verbalized by his Congressional supporters and, although less specifically, by Fed Chairman Bernanke.

Holders of CD’s and bank savings know, of course, what they’re (not) getting in their supposedly interest-bearing accounts, which instead are stagnating (if you look at them in terms of nominal dollar value) and, more accurately shrinking (when you look at them, as you should, in terms of the Fed-orchestrated 2% annual decline in purchasing power of the dollars) in real value. But they know it even though high-level advice on the subject has been conspicuously absent. Consider, for example, this quote from a 2009 Web-available report of the Urban Institute, a Left-leaning think tank:

“High socio-economic groups will be the most affected by the stock market collapse because they are more likely than the low socio-economic groups to have retirement accounts and financial assets invested in the stock market”.

That’s from “The Retirement Policy Program”. But the Urban Institute’s professed constituency isn’t top-two-quintile upper-income earners/savers/investors; supposedly it’s the lower three quintiles. But nothing in that analysis, unless you work at finding it, serves to advise their demographic-of-political-concern of the damage being done to household-security and upward-mobility efforts of just that group by present Washington policy which the Urban Institute chooses never to mention: the deliberate policy of driving of saver interest rates to near zero, willingly accepting troop losses in that respect in order to, supposedly, capture the objective of making interest costs just as low for the more important national economy. If the Urban Institute’s curious decision not to see the low-interest-for-savers-phenomenon can be explained on concern-for-political-favor grounds, a similar willful myopia on the part of The Wall Street Journal is less explicable. In a nearly-full-page piece in the 13 July issue, headlined “Budget Solution: Squeeze the Middle” and jump-headed “Deficit Cutting is Likely to Ding the Middle Class” not a single column-inch is devoted to the zero-interest-rates-for-savers phenomenon, and all the rest is devoted to the various tax exemptions, from mortgage-interest to employer health-care, which would be cut if tax codes are simplified and deductions removed.

History does not record whether the English infantry resented being targeted, for the greater good of the Kingdom, by the arrows of their comrades-in-arms; but we do know that less than a century later they and their peers were sufficiently disenchanted with the whole king-barons-earls-priests hierarchy which, under the feudal system, they alone supported, that they rose in a series of rebellions (the Peasants Uprising of 1381 was first of a sequence) and by the 19 century the English monarchy, reduced to a symbolic presence, wasn’t much like the power structure Longshanks once controlled. Nor does history yet know how the American middle- and lower-middle-class will eventually respond to this governmental (silent and unspoken) targeting of their savings and independence. It just might happen in the next election.

Critics might well ask what relevance all the above has to the modern Vermont socio-economic structure. After all, with out-migration in search of jobs, Quintiles 2 and 3 have been shrinking while, with in-migration in search of ambience, Quintiles 4 and 5 (in actual wealth, if not always in fully-declared income) have been growing; retirees and trust-funders, don’cha know. So there’s fewer, proportionately, than ever before in State history, of those damaged by low-interest policy targeting once-reliable savings, and more than ever before of those whose more sophisticated investments are armored against the arrows of Fed policy. And the critics are right: not much. But isn’t the modern Vermont the self-declared “social-justice” State?