“One thing, I don’t know why
It doesn’t even matter how hard you try
Keep that in mind, I designed this rhyme
To remind myself how I tried so hard”
“In the End” — Linkin Park

The fourth single released from their Hybrid Theory debut album in 2000, “In the End” became one of Linkin Park’s most successful and most recognizable songs. It also enjoyed the best reception of any of Linkin Park’s songs, peaking at the second spot in Billboard’s Hot 100.

Over the entire decade of the 2000s, Billboard noted the song as the No. 2 song in rock music in radio airplay. The single has sold more than four million units.

The song discusses a relationship that has reached the point of breakup, and the writer laments the efforts put forth to “save” the relationship that still ended up failing, in the end.

Right now, our economy feels like the relationship Chester Bennington was singing about in the song.

The Federal Reserve Board, widely known as the Fed, has the authority to adjust the interest rates on government bonds.

Those rates tend to drive the interest rates that you and I pay to borrow money. When the economy is well, the government pays out less on bonds and interest rates are lower.

When the economy is struggling to avoid a recession/depression, the Fed will bump up interest rates to make money more valuable and encourage actual spending (or investing) rather than borrowing.

It’s a long-standing tactic of the agency, but it has recently come under greater scrutiny, as the government is attempting to pull the economy out of the skid, but none of the bumps in rates have seemed to do that.

It’s not working because our economy has evolved to not allow it to work, and that’s tremendously affected the working class more than any other group in the county.

At the worst point of the depression in the 1930s, the average worker made a rate that would equate to roughly $4,500 per year in gross income. The issue is that the economy was based on a different model at the time, so even those with “secure” jobs, in areas like construction or manufacturing, would face elongated periods of having no work as a standard business practice.

That left the average take-home pay that a wage (hourly) worker made in the mid-1930s at roughly $1,500.

Using money value inflation calculators, that is a take-home pay in today’s dollars of more than $33,000 - and a potential gross pay of just north of $101,000.

Immediately many are feeling broke, just based on those numbers, but let’s examine a couple of things beyond that.

In the early points of the Franklin D. Roosevelt administration, companies were encouraged to change their manufacturing processes. The goal was to ensure the full-time worker was employed with work to do consistently, and that meant manufacturing would need to make its widgets on a consistent schedule throughout the year.

That focus allowed net income to nearly double in a decade, even with World War II affecting the economy. The average gross income barely rose in that time, meaning a wage worker was accessing more of a potential full-time salary at the wage indicated, rather than spending notable amounts of time effectively unemployed, despite truly holding a full-time job.

The minimum wage came into effect at this time, as did significant changes in worker benefits, including vacation and health insurance.

That took us into the 1960s when the second major shift of the economy began.

Economist Milton Friedman began to speak openly in the ‘60s about how the role of a company is not to serve the community or take care of employees, but instead, the focus of EVERY business should be to maximize profits for shareholders.

His rhetoric did not catch on at first, but when the United States hit a significant inflationary period in the latter half of the 1970s, Friedman’s ideas began to be spread much wider.

Those ideas won him the 1976 Nobel Prize for Economics, and when the economy became a significant tactic to use to push Ronald Reagan into office in 1980, Reagan did it on the back of the most widely-known economist in America at the time, Friedman.

That led to two decades of economic policy decisions heavily influenced by Friedman’s theory, economic policies which put significant economic power in Wall Street, and therefore, put the decision-makers of companies in the spotlight - and on a compensation rocket ship.

The notable issue that has been proven against Friedman’s theory is that there is a point of diminished returns in his work that he never allowed for in his discussions. That diminished returns point comes when a middle class no longer exists in the country, and the difference between the financially elite and the poor in the country changes from a dip to an insurmountable canyon.

Lo and behold, the exact people that Friedman’s policies enhanced, CEOs, have seen their pay escalate from 9-10 times the average wage worker salary in the 1930s to 12-20 times the average wage worker after the first wave of economic changes coming out of the Great Depression. Now, CEOs of companies earn between 90 and 150 times the average salary of a wage worker - and that’s starting CEO salary. The bigger the company, the bigger the salary and the farther out that goes.

Quite frankly, a large amount of those who reminisce about the 1950s as “peak America,” long for an economic bracket that no longer exists because of economic decisions made by both parties to please their Wall Street donors - not to mention their own investment portfolios.

So, while the average gross salary, based on natural growth from the deepest pit of the Depression, should be better than six figures, the average wage worker in 2022 earned a little more than $54,000, meaning the average wage earner is earning roughly half of what inflation would say that he/she should earn with natural growth over the decades.

Meanwhile, the average CEO earned roughly $40,000-45,000 during the Depression, equating to between $900,000 and $1,000,000 today. Except that average CEO salary is now in the range of $4.85 million, quadruple what natural inflation would say it should be.

The amount of people around the average has significantly changed as well. In 1933, nearly 70% of households fell within 25% of either side of the average wage earner's salary, with the final 30% of wage earners falling at either the top or bottom of the natural bell curve.

That curve is now significantly flattened as, for the first time in recorded history, 2020 marked reporting with less than 50% of the country’s wage earners falling within that middle 50% of the curve (25% on either side of the average wage). The growth has been to both ends of the scale, meaning wage earners are earning far below and far above that average at a much more frequent rate, with roughly 35% of workers falling below that middle 50% and around 15% earning above that rate.

Of course, that would all be well and good if average costs had remained at similar levels to earnings, but the cost of major purchases went up significantly as well.

The average new home in 1933 was $3,900, which was roughly 2.5 times the average net income in the country. A new car was $860, roughly a half-year’s wages.

In 2023, that average home is $350,000 nationally, which would equate to roughly seven years’ wages. The average new car is $48,000, just barely less than an average full year’s wages.

So, not only have wages not kept up with inflation rates from depression salaries, costs on essential items such as a home or a car have outpaced inflation relative to income.

Yet, no one is looking at the fact that we still serve the master of Wall Street in our economy as a driving force behind why we have the economic disparity and turmoil that we do?

I suppose that it makes it much easier to blame a group that has minimal effect on the economy (immigrants are taking all our jobs!) or a particular President (Biden’s gas prices are outlandish!) or even a particular industry (the auto industry’s push for electric vehicles is making all other vehicles too expensive!), understanding that the foundation of the economy that benefits those who are in power was put in place more than 40 years ago and has only progressively gotten worse since - precisely because those in power have no incentive to change it!

Next time I’m rolling some pennies for gas, I’ll thank my Congressmen and Congresswomen over the past 40 years for not having the willingness to change that economic tide. And it takes a lot more pennies than it used to…