American Winter and Liberal Failure

American Winter is a new documentary that is out right now. It’s about how easily families can fall from middle class into poverty, even when they do everything right.

I watched a free screening of it, along with my brother and a friend, at a community-supported theater that closed down years ago as a for-profit movie theater. That community theater seemed like an appropriate venue.

The turnout was fairly impressive as it was almost a full house. I wonder what impact documentaries can have. I put great faith in knowledge, but it is easy to be dismissively cynical about any positive change resulting.

If anything, I see the fact of such documentaries even being made, much less watched, as the result rather than the cause of changes that are already happening (whether or not it is positive, it would be a bit early to say). Just by casual observation, it is clear that public opinion is shifting and that the former consensus has been eroded. What profoundly saddens me, though, is the knowledge that such cold-hearted capitalism/corporatism not too long ago was strongly supported by so many average people. An entire generation of Americans turned their back on those in need, and too many continue to do so.

It wasn’t strangers far away who supported such moral corruption. Conservatives obviously supported it and even many liberals supported it, probably quite a few of the people around me at that theater. Those who got their slice of the pie thought everything was fine and it apparently never occurred to them what would happen when no one baked any more pies and the last slice was taken.

None of this was forced on the American people, although it could be said that the American people forced it on many others, both the struggling in this country and all around the globalized world. American voters bought the rhetoric hook, line and sinker. Meritocracy, trickle down, free markets… the rhetoric sounded so nice, just as long as it was only other people suffering the consequences.

What woke up the American public was their too late realization that they were part of the struggling masses. A refrain by the people interviewed in the documentary was that they never thought that it would happen to them. Only worthless losers, lazy deadbeats, welfare queens, moral failures, social reprobates, criminal leeches and other inferior types ever need or ask for assistance from others… or so goes the unstated rhetoric that these people had come to accept.

Predictably, people love to judge others for their problems until the same thing happens to them. It is such condescending judgment that allowed it all to get so bad. But why does it take immense personal suffering, not to mention near economic collapse, to remind people of basic compassion and common decency? This frustrates me to no end. Why do we have to let problems become so festering and overwhelming before we even allow honest public debate? All of this is as preventable as it is predictable… or rather it should be preventable because it is so predictable.

One of the major points of American Winter is that for these families poverty was preventable. None of this is a mystery or even complicated. All it takes is the collective will to implement what we know has been proven to work.

This point was expanded in an interesting direction. It is cheaper to prevent the problem than to pay for taking care of it after it becomes a problem.

That doesn’t even include all the secondary costs incurred if the poverty becomes established and continues, especially if it creates a permanent underclass of the severely impoverished: permanent unemployment or underemployment, homelessness, psychological stress and related issues, alcoholism and drug abuse, drug dealing, gangs, crime and imprisonment, violence, increase of homicides and suicides, prostitution, unstable families, divorce, single parents, low grades and lower school achievement, dropping out from high school, not going to college, lack of health insurance and quality healthcare, etc. Add to that all the other problems that go with a shrinking middle class, low socioeconomic mobility, and growing economic disparity: food deserts, obesity, diabetes, malnutrition, STDs, teen pregnancy, and on and on and on, ad infinitum.

All of it is preventable and is less expensive than the alternative. What is most interesting about this is that there isn’t a good criticism that can be offered by conservatives of any variety, especially not fiscal conservatives. Only the most hearltess libertarian or the most belligerent Randian objectivist could dismiss both the moral and fiscal reasons for ending and preventing poverty. It isn’t a matter of not being able to afford poverty prevention. Quite the opposite. We can’t afford to do nothing.

Besides, democracies that get too large of economic inequalities inevitably become banana republics. There is no way to have political democracy without economic democracy. Of course, many on the right would claim they don’t want any democracy at all or else as little of it as is possible, but they should be careful what they wish for. They will get it if they continue to push their luck, assuming we aren’t already past the point of no return.

Meritocracy is presented as a close enough approximation to democracy and/or a replacement for democracy. Hard work is the reward we are to accept for allowing ourselves to be politically disempowered. Voting with our dollars is supposedly all that matters, corporate personhood for corporate ‘democracy’ with the corporation that has the most dollar-votes getting to represent us the consumer-citizens, a la Citizens United.

Indeed, the ideal of a meritocracy is an odd thing, specifically as rhetoric meets reality.

In the documentary, one particular person (a guy with a down syndrome son) demonstrated how this oddness plays out on the personal level. He was one of those who never thought it would happen to him. It was clear that he was deeply ashamed. He said that a grown man in his fifties shouldn’t have to ask his father to pay the electricity bill. How I interpreted this was that he thought a mature adult should be an autonomous individual who is dependent on no one, not even on the closest of family during the most difficult of times.

What seems most odd about this is the simple truth that we all are interdependent on one another. It’s just a fact of reality, not something to be ashamed of. The entire planet is one big interdependent biosphere and humans are the most socially interdependent of any of the species. We humans will deny our interdependency to our own peril.

It has been said, “No man is an island.” Well, I’d say that a self-made man is a mystical beast living on an imaginary island. Even the fairies in fairyland have a hard time believing such a thing could exist.

It’s not just that behind every successful man there is a woman or vice versa. Behind every successful man, there is any number of things: a healthy community, well off social connections, a privileged childhood, etc. The strongest determinant of wealth in America right now, as was mentioned in the documentary, is growing up with wealthy parents. This is to say that most wealthy Americans inherited their wealth and/or the conditions of their wealth, rather than having earned it through hardwork and merit alone.

This isn’t the American Dream. We’ve been sold a bill of goods. Or to put it into Gilded Age terms, we’ve been railroaded. Plutocray has been the dream of rich white men for centuries, most of the founding fathers included, but plutocracy has been the nightmare of average Americans since at least when George Washington violently put down the first populist revolt.

With the plutocratic rhetoric of meritocracy, one of the great boogeymen is the welfare queen. It took corporate propaganda sold by an actor-trained president to convincingly sell this hatred of the poor, presented with a kindly-looking smile, but sold it was. In the standard narrative, the welfare queen is a poor black woman (the antithesis to the rich white man) who out of wedlock pumped out the children (slut) to get free government money (whore) so as not to have to do honest work (lazy) and so as to live the high life driving expensive cars (leech).

The poor black woman was the target of rich white men’s lust during the slave era, but now that she is free who knows what she will do in retribution for the sins of the rich white men’s fathers. Although a demented dark fantasy, it does have its own internal logic of sorts, not unlike the logic of portraying Obama as his father’s son come from dark Africa to seek his anti-colonial vengeance upon white man’s Western society. It sounds like a Hollywood blockbuster.

Fearmongering aside, who are the real welfare queens?

A welfare queen takes more than gives, especially those who assume benefits as privileges without attendant social responsibilities. This is anyone who personally benefits from publicly-funded services and whose lifestyle is dependent upon publicly-funded support. This is anyone who accepts any kind of community offering or public good, including public resources taken from the commons, without reciprocation and fairness. This is anyone who takes more than they need when others have greater need, anyone who takes advantage of those less powerful and less fortunate, and anyone who disregards precautions about and investments toward the long-term sustainability of society and the impact on future generations. A welfare queen is defined by their selfishness, greed, and sociopathy.

It is clear that I’ve just described the prototypical modern big business. Nothing surprising about that.  American Winter briefly touches upon an aspect of this, although all too briefly.

A weird form of corporate welfare has developed. The modern transnational corporation isn’t sustainable itself without massive financial support from public funds. What capitalism has perfected is the externalization of costs.

Without welfare and food stamps, without unemployment benefits and public health services, without  public education and state colleges, there would be no functional workforce that could survive on such low wages as offered to most employees. Governments subsidize corporations by paying for what citizens can’t afford with minimum wage. There is something majorly wrong when many if not most of the people receiving government funds and services are those who are employed, yet don’t make a living wage. And when corporations move factories, they leave behind massive unemployment and poverty that is taken care of by the government.

This is is just one aspect of externalized costs. Other aspects include social destabilization and undermining of local economies, bailouts and subsidies, pollution and environmental degradation,  and selling below the market value of natural resources from public lands, etc.

The majority of United States citizens would quickly descend into third world conditions if not for the government hiding the consequences slowly destroying American democracy and American communities. As Fran Lebowitz explained it, “In the Soviet Union, capitalism triumphed over communism. In this country, capitalism triumphed over democracy.” Or as the Borg put it, “Existence as you know it is over. We will add your biological and technological distinctiveness to our own…”  and “You will be assimilated. Resistance is futile.”

This sad state of affairs demonstrates a rot at the core of capitalism. This is where American Winter fails to meet the problem beyond emotional appeal.

The documentary lacked a coherent and compelling narrative. I wasn’t inspired because there was nothing offered to be inspired toward. The problems were explained with data and real world examples. I was emotionally moved by human struggle and suffering. But then what? Where is the deeper analysis? Where is the vision?

In watching the documentary, I had an almost passive sense about the portrayal of poverty. It felt like a problem that happened by accident, an unintended consequence of focusing on other things such a decreasing federal spending.

In the documentary, people kept saying that such poverty isn’t what it means to be an American and that such downward mobility isn’t what the American Dream is about. That is fine as far as it goes. There was sadness and desperation, but I sensed no deep outrage. The people were worried about their families, but no one spoke about or was asked about their fears for the fate of America as a country, much less concerns for the suffering and poverty all around the world.

If they had used the middle class family as a jumping off point to get to a larger frame, so much more could have been communicated. As it is, the documentary is a lost opportunity. It isn’t particularly memorable. It is like a hundred other documentaries I’ve seen before. Nothing about it stands out and demands attention.

More importantly, I doubt it would be watched by many who aren’t already aware of the problem and persuaded that it is serious. I can hear in my head how conservatives would dismiss or ignore the view presented. Middle class families as a vague general category don’t make for a powerful symbol that can come close to competing against the dark vision of welfare queens driving Cadillacs, a single poignant image lingering in the collective mind for decades that simultaneously imagines the problem for honest tax-paying Americans and imagines how the cause of the problem is destroying America and the American Dream.

I have a soft place in my heart for liberal do-gooders. Nonetheless, the liberal lack of vision and insight ultimately just depresses me. American Winter is good for what it is, but not good enough for what is needed.

 

 

 

Then they came for the trade unionists…

Here is something that has been quoted many times before, but it deserves being quoted many times more.

First They came… – Pastor Martin Niemöller

First they came for the communists,

and I didn’t speak out because I wasn’t a communist.

Then they came for the trade unionists,

and I didn’t speak out because I wasn’t a trade unionist.

Then they came for the Jews,

and I didn’t speak out because I wasn’t a Jew.

Then they came for me

and there was no one left to speak out for me.

– - –

If only people understood those words, we wouldn’t have all these problems that continue to plague us.

People look around the world and think other people’s problems aren’t their problems. Who cares about the poor who are exploited and oppressed in other countries? Who cares about the working class and the unions? Most people see those who are different as the enemy. To business owners, the workers are the enemy. To non-union workers, union workers are the enemy. To well off whites, poor minorities are the enemy. To poor Americans, immigrants are the enemy. To fundamentalists, social gospel Christians are the enemy. Et Cetera. And history just keeps on repeating.

I was reminded of what Niemhöller wrote because of the recent attacks on unions by Republicans and corporations. Unions have been greatly disempowered since the Taft-Hartley Act and since the Reagan administration, but still even in weakened form they are the only defense the working and middle classes have left in fighting against the ever growing corporatism in America. Of the top 10 campaign contributors, all are corporate PACs besides 3 which are unions. With the unjust elimination of ACORN, the poor and working class need the unions more than ever. Organizations like unions and the former ACORN help inform the public about important issues and help to encourage the poor get to the voting booths.

There is one very important thing to note from the Niemöller quote. The Nazis didn’t go after Jews right from the start. No, they first went after the Communists and unions. The Nazis had to first eliminate the groups that represent average people, the groups that are the pillars of grassroots democracy. Once they are eliminated, any other group can be freely attacked without the possibility of organized resistance. Just look at Wisconsin right now. Besides unions, there is no other group that could organize average Americans to such an extent. Unions are the very last defense. Unions don’t just defend their own workers. Unions, in defending the working class, defend the rights of all.

I was recently reminded of a fact most people don’t know. Check out these maps:

Party Affiliation (2009) & From ’08 to ’10

Many states (such as in the South) that people think of as solidly Republican in reality aren’t that solid at all. In conservative states, a divide exists that doesn’t isn’t found in liberal states. Poor people in conservative states tend to vote Democratic whereas the rich tend to vote Republican (however, both the poor and the rich in liberal states tend to vote Democratic). So, how do Republicans maintain control of states that have populations mixed between the two parties? It’s rather simple. The rich Republicans control the politics, control the media, control the corporate contributions. The organizations that represent the poor are few and getting fewer.

Here is an article about 2006 voting data and a map of unionization:

Want to know why Democrats won the election? Because union members and their families voted for them.

Here’s the breakdown – non union members split evenly according to the CNN exit polls 49% to each party. Union members went 64% Democratic, and 34% Republican.

This actually underestimates the case, because unions are more than half of the Democratic ground game. It’s not just that union members vote Democratic – it’s that union members work for Democratic candidates and against Republican ones. They knock on doors, they organize, they phone pool. Any decent union has a hardened corps of organizers from their day to day work, and around election time those guys fan out. They are tough, experienced, don’t fear rejection and are mostly solidly working class.

If you look at a map of the US by union membership, like the one above, what you’ll see is that it looks awfully familiar – where unions are strong, Dems win. Where they aren’t, they lose or struggle.

The South, in particular, has a long history of disenfranchising the poor and the minorities (both of whom vote Democratic, of course). Most Americans don’t vote because most Americans feel disenfranchised from the entire political process. This perception is partly true and partly false, but the corporate media wants people to believe it because the continued dominance of the rich is dependent on this perception. If this perception of disenfranchisement falters even for a moment, protests and revolutions (or, at least, political upsets) can happen.

I’ve often heard conservatives (including democratically elected politicians) criticize democracy calling it mobocracy (two wolves and a sheep voting on what to have for dinner). Let me break down this criticism. So, who is this ‘mob’? It’s the masses, the general public, the average American, the majority of adults who feel so disenfranchised that they don’t vote. Conservatives are afraid of the majority because they know the majority doesn’t support their views and policies (see: US Demographics & Increasing Progressivism). Conservatives are afraid of grassroots democracy like unions because they know grassroots democracy won’t benefit corporations.

One argument conservatives give is that unions have already served their purpose. Conservatives will initially try to deny what unions have accomplished, but when that fails they’ll argue that there is nothing left for unions to accomplish. However, from my liberal perspective, unions are the only thing stopping our society from returning to 19th century capitalism. So, what exactly was 19th century capitalism like? There are some positive examples like the Shakers (which is a socialist model of capitalism that conservatives don’t like) and there are many negative examples like the following (from my post Anarcho-Capitalism & Stateless Society):

Each mining camp was a feudal dominion, with the company acting as lord and master. Every camp had a marshal, a law enforcement officer paid by the company. The ‘laws’ were the company’s rules. Curfews were imposed, ‘suspicious’ strangers were not allowed to visit the homes, the company store had a monopoly on goods sold in the camp.

The doctor was a company doctor, the schoolteachers hired by the company . . . Political power in Colorado rested in the hands of those who held economic power. This meant that the authority of Colorado Fuel & Iron and other mine operators was virtually supreme . . . Company officials were appointed as election judges. Company-dominated coroners and judges prevented injured employees from collecting damages.
[The Colorado Coal Strike, 1913-14, pp. 9-11]

I personally don’t want to return to a society where such capitalist systems existed. I’m fairly sure most Americans wouldn’t want to return to this either. And it’s good to keep in mind that this kind of capitalism (or similar variations) still exists in other parts of the world where unions don’t exist or don’t have as much political influence. So, I think it would be unwise to dismiss the role unions play in our society. Our grandparents and great grandparents fought and died for the rights we take for granted.

– - –

– - –

Ignoring history (which is never a wise thing to do), what can we say about unions in our present society? For example, does allowing teachers unions to have collective bargaining lead to negative impact on the public education system?

– - –

Anyway, how much power do unions actually have? A picture is worth a thousand words. Totals by Sector from OpenSecrets.org:

If money talks, politicians are listening to louder voices than unions.

Even so, unions are more likely to get heard by Democrats.

Top Democratic and Republican Donors in 2010

Top Overall Donors to Republicans:

Elliott Management (a Hedge fund company)
Koch Industries (note: the billioaire who is the main financier of the Teabaggers)
Every Republican is Crucial PAC
Associated Builders & Contractors
(so-called) “Freedom” Project (a Republican PAC)

NOTES: Top Republican supporters are billionaires, contractors, and hedge funds…and keep in mind this applies to the Teabagger movement as well. They are supported by the same billionaires, contractors, and hedge funds.

Top Overall Donors to Democrats:

ActBlue (composite of many, many small, grassroots donations)
Intl Brotherhood of Electrical Workers
Laborers Union
Machinists/Aerospace Workers Union
EMILY’s List (composite of many, many small grassroots donations)
Plumbers/Pipefitters Union
National Assn of Letter Carriers
Ironworkers Union
United Auto Workers
United Transportation Union
American Postal Workers Union
UNITE HERE
AmeriPAC: The Fund for a Greater America

NOTES: Top Democratic supporters are unions and grassroots donors.

Seems to me the contrast is really quite sharp: Billionaires vs. working and middle class.

Where unions are strong, do they make a society better or worse? Here is from a post I wrote comparing the US and Germany:

In this video, there was one particular point about Germany that stood out. Germany is 1/5 the size of the US and yet has the second highest trade surplus in the world (after China). They’ve accomplished this while having higher rate of unionization and higher pay. Interestingly, the US economy was also doing better when unionization and pay was higher in the US.

Unions in the US are considered socialists even though they represent the working class. In Germany, it’s required for worker representation to be half of board members of companies. In Germany, the industrial and financial sectors are highly regulated keeping jobs from being outsourced and ensuring main street benefits rather than just wall street. According to conservative ideology, this kind of socialist practices and union power should destroy the economy and destroy innovation and yet the complete opposite is the result.

This seems to support Noam Chomsky’s arguments. Chomsky thinks the world would be a better place if workers had more power to influence the companies they work for and influence the economy they are a part of. As a socialist liberal, Chomsky genuinely believes it’s good to empower the average person. It would appear Germany has done exactly this and has become immensely successful by doing so.

A major factor I discussed in that US and Germany post was about income inequality. Here is a graph showing both the data of union coverage and inequality:

For what it’s worth, here is a study about unions in three comparable countries:

In particular, unions tend to systematically reduce wage inequality among men, but have little impact on wage inequality for women. We conclude that unionization helps explain a sizable share of cross-country differences in male wage inequality among the three countries. We also conclude that de-unionization explains a substantial part of the growth in male wage inequality in the U.K. and the U.S. since the early 1980s.

- – -

I just responded to some comments from one of my previous blog posts (Liberal Trust vs Conservative Mistrust) which touch upon a central issue in American politics. Here are my two responses:

I agree with you about the misleading notions of American “conservatives”. It would make life easier if they used a different term to label themselves. Looking at the history of Western conservatism, American conservatives don’t seem all that conservative. In Britain, the conservatives are the Tories. In early America, Tories defended Britain against the radical revolutionaries. I find it odd that American conservatives worship the founders who were radicals. Thomas Paine inspired the entire revolution and his writings were as liberal as they get.

I was reading Henry Fairlie’s view on Toryism. I realized that traditional conservatism more closely describes Democrats than Republicans. Democrats are the ones interested in conserving our present system. On the other hand, Republicans attack our present system. And, as you note, their fantasies about the past are actually radical visions that would entirely remake American society. They don’t want to conserve anything. If American conservatives actually wanted to conserve the past, they’d first have to read something other than revisionist history.

My suspicion is that the idiosyncrasy of American conservatism makes a bit more sense when taking into consideration the psychological research done on ideologies. Brain scans show that conservatives tend to have a larger part of the brain that deals with fear. Other research shows that conservatives have a stronger disgust response toward anything unusual or improper (such as rotting fruit).

America is unusual in that the status quo of our society isn’t the power of a particular church or of a royal lineage or of a specific ethnicity. The only status quo we have in this country is that of change. Ever since the first Europeans came here, it has been endless change. At a fundamental level, conservatives hate change and so American conservatives hate the status quo of the society they were raised in. They would like to create a status quo that never changes which, oddly, would require radically changing the present status quo. Conservatives seem like hypocrites because they are conflicted by their own psychological predispositions. In the US, they can’t win for losing. The country was founded on a radical liberal vision and has continued to radically change ever since. To be an American conservative is to hate the founding status quo of America.

(note: I admit ‘hate’ is a strong word. Let us just say conservatives are strongly conflicted by the founding status quo of America.)

I’ve just started a book titled Thomas Paine and the Promise of America by Harvey J. Kaye. It’s very fascinating. It’s odd that I don’t recall having learned much about Paine in my public education or even in various documentaries I’ve watched about early America.

There seems to be a love/hate relationship with Paine. His writings were what inspired the American Revolution and probably what kept it from failing, but his vision was so radically democratic that he fell out of favor with many of the others in the founding generation who just wanted to create a new ruling elite (which essentially is what they did).

It’s very interesting that this radical vision is at the heart of what defines America. Paine wanted to end slavery, wanted Native Americans to keep their land, wanted women, blacks, and the poor to have as much power as rich white men. He wanted America to become an example of genuine freedom that would inspire revolution all over the world. Paine was a bad ass. His vision is radical even by today’s standards.

America would not exist without Paine’s far left democratic vision. He inspired the revolution, inspired people to keep fighting, inspired people to support the fight for independence in all ways. The American people, especially the lower classes, were fighting for Paine’s vision of America. Paine dedicated his whole life to the cause of liberty. He never made any profit from any of his writings. He risked his life many times and even fought hand-to-hand combat. He was a hardcore revolutionary. He didn’t grow up with privilege. Unlike the most of the Founding Fathers, he was born working class and was an immigrant. Paine believed in the American Dream before there was a country called America.

Paine is the reason conservatives are endlessly outraged in America. Like many in the founding generation, conservatives are scared shitless about the vision that Paine proposed and that vision still exists as a seed waiting to sprout. Paine failed because the rich white males of the time were too afraid to embrace a truly free society. The Populists in the late 19th century attempted again to achieve that vision, but once again the ruling elite coopted the revolutionary energy for the purposes of the corporate elite. Now, we once again face the potential of Paine’s vision. People once again begin to remember what inspired the founding of this country in the first place. Those in power and those on the right will do everything they can to squash democracy. Everyone understands that democracy is the most dangerous vision that any human has ever conceived.

Maybe you’re right about liberals tending to focus on freedom from. When considering radical freedom, we can only know the past from which we are trying to free ourselves from. We can’t know where radical freedom will lead. It’s an experiment. Paine explicitly thought of America as an experiment. If you want safety and security, then you can’t have freedom. That is the hypocrisy of what America has become. Paine realized that even the ruling elite could only have as much freedom as everyone was allowed. Paine knew that the only way to have democracy was to have an educated public and the ruling elite knew the only way to control the masses was to keep them ignorant. But control can never lead to freedom.

Even the data proves this. In societies with high economic inequality, there are more social problems (see: ‘Capitalist’ US vs ‘Socialist’ Germany). The rich may be relatively better off than the poor in such a society, but the rich in such a society are relatively worse off than the rich in a society that has more equality. The rich people in an unequal society have, for example, more health problems (probably from the stress of living surrounded by poverty, crime, and social conflict).

Paine understood this centuries ago. The ruling elite at the time dismissed his radical vision. And the ruling elite today continue to dismiss his radical vision. Yet his radical vision remains. The potential of America continues to be wasted because of those who have power don’t have vision and those who have vision don’t have power. Paine began the revolution and the revolution is still happening. The reason America has never stopped changing is because a large segment of American society has always refused to give up on the vision Paine first described.

Many might consider Paine to have been naive for actually believing in freedom. But dammit I wish there were more idealists. The only thing that makes ideals unrealistic is the cynical ruling elite that always stands in the way. Why is democracy considered naive? Why is freedom seen as a threat?

To this day, the conservatives still fear the masses of the poor and minorities. If you look at the demographics of the Southern states, they actually aren’t solidly Republican by a long stretch. If all the poor and minorities voted, Democrats would win by a landslide in the South and all across the coutnry. Conservatives know this and that is why they do what they can to destroy organizations like Acorn and unions that represent the poor and disenfranchised. Most Americans don’t vote because the entire history of America has been about the ruling elite disenfranchising the masses. Even when they do vote, their votes might simply not be counted as happened in Florida. It’s fucked up.

If Paine was here, he’d start a new revolution. Paine was a Marxist revolutionary before there was a Marx. He realized that the fundamental issue is always class war. It was so when immigrants first came to America, many of whom were political dissidents, oppressed poor people, and indentured servants. And it’s still true.

- – -

Let me finish by pointing out a couple of things related to those comments.

First, here is a passage from the book I mentioned above (Thomas Paine and the Promise of America by Harvey J. Kaye, Kindle location 1129):

“in all countries where the freedom of the poor has been taken away, in whole or in part, that the freedom of the rich lost its defence,” he insisted that “freedom must have all or none, and she must have them equally.” Paine was not naïve. He knew freedom could be dangerous, but he pointed out that “if dangerous in the hands of the poor from ignorance, it is at least equally dangerous in the hands of the rich from influence.” Dismissing neither possibility, he suggested ways of addressing them. To prevent ignorance he recommended education. And to prevent political corruption he again demanded democracy: “numerous electors, composed as they naturally will be, of men of all conditions, from rich to poor.”

When people fear mobocracy, what exactly do they fear? Is it fear of the possibility of radical freedom that democracy envisions? Or is it fear that one’s vested interests would be undermined if everyone had equal education and equal opportunity? It’s true that ignorant masses are easier control, but a society can’t simultaneously serve both the realpolitik of control and the ideal of freedom. More importantly, Paine understood that to try to control others meant endangering one’s own freedom. A person can only have what they are willing to offer to others.

Second, the comments above (right before the quote from Kaye’s book) are from a blog post of mine (Liberal Trust vs Conservative Mistrust) that touches upon this same issue of fear and mistrust of democracy. My point in that post is that this conservative response is based on an attitude of not having faith in the average American and not having faith in the strength of democracy. As such, conservatives don’t have faith in the fundamental vision of the American experiment. Here is how I ended that post (and with it I’ll also end this post):

The unions did manage to win in certain ways, but the liberal vision of the working class was integrated into the Federal government. Eventually, the Democrats became the party for unions and for the poor. This altered the dynamic causing the class wars to be less clear, especially as class has been mixed up with race and culture. The Democratic party has done some good things for the working class and so that is why the poor working class is loyal to the Democrats to this very day. The vision of Democrats is that the average person can actually be served by his representatives in Washington. The vision of liberalism is that democracy is strong and not easily destroyed.

Conservatives are less confident. They see democracy as constantly threatened and that is why they are much more partisan in their support of big government. It’s also why conservatives support big military despite claiming to be against big government. Conservatives live in fear of democracy being destroyed. Enemies are everywhere. The enemy threatens both from outside (Russia, Islamic terrorists) and from within (Communist witchhunts, social programs, gun rights). Conservatives don’t trust any governments. They only trust our own state government to the extent it might protect us from foreign state governments, but idealy they’d love to live in a world where state governments didn’t exist at all or else had very little power which means they wish they lived in early America.

My above commentary was inspired by this comment:

http://blog.beliefnet.com/crunchycon/2009/09/i-was-wrong-about-5000-year-le_comments.html

John-in-Exile wrote:

It is fascinating to me to have “The Naked Communist” resurface, even as a second work of fiction by a newly rediscovered author. When I was in high school (1960 to 1963) I listened to a series of radio lectures by (apparently) W. Cleon Skousen which culminated in a pitch for his book, The Naked Communist, which was going to expose the evil plans of the terrifying international communist conspiracy. I bought the book and read it and found myself nagged by one question that stayed with me for years. The core presumption of Soviet communism was that people would work hard for the well-being of the state, even with no personal payoff. That always seemed unlikely to me–in fact so unlikely that I always believed that Soviet communism was destined to fall of its own weight. The communist conspiracies were inconsequential because the system was certain to fail. I was then struck by the odd perception that the people most paranoid about the rise of this doomed ideology were the conservatives who should have been the most confident of the ultimate success of the American economic experiment. They were instead the least confident and the most fearful of being overwhelmed by the Soviet system.

When communism fell at last I was not surprised because it seemed to me always destined to fall. Why was my liberal mind more confident of our system than the conservatives that constantly pronounced us doomed to fall to the evil Soviets?

– - –

Conservatives don’t seem to have much faith in the American people or the American experiment. I understand having doubts and I even understand being pessimistic. But, faith or not, do conservatives care more about their ideology or about real people? I know many conservatives do actually care. So, why do they keep voting for Republican politicians who again and again implement policies that hurt average Americans? What is to be gained by attacking unions that protect the working class, social services that help the needy, and public schools that educate the next generation?

– - –

Real Wages & Wealth Disparity

This post is just my gathering some data and analysis about the changes in wages and various factors related to it. But first I want to put it in the context of wealth disparity.

In some ways, average Americans are better off than in the past, but in many ways they are worse off. It’s hard to know if the good is greater than the bad. What is clear is that an increase of wealth disparity correlates to an increase of social problems. So, the increase in wealth disparity is definitely bad and even worse is that it was intentionally created.

10 States With Ridiculously Low Unemployment — And Why

‘Capitalist’ US vs ‘Socialist’ Germany

Mean Bosses & Inequality

National Debt, Starve the Beast, & Wealth Disparity

Meritocracy? Growing Poor, Shrinking Middle Class

– - –

http://www.huffingtonpost.com/jeffrey-winters/americas-income-defense-i_b_772723.html

The debate over ending the Bush tax cuts for the rich sidesteps a serious problem. The issue is not just whether the wealthiest Americans should be taxed, but can they be taxed?

The ultra rich have extraordinary means to engage in tax avoidance and evasion that ordinary citizens do not. In the first decades after World War II, the richest Americans began paying large fees to armies of professionals whose sole task was to help them avoid taxes.

By the 1960s, an entire Income Defense Industry had arisen to satisfy this demand. It has grown more sophisticated and effective with each passing decade.

The industry lobbies key committees in Congress, quietly inserts provisions in a tax code only top attorneys in the industry comprehend, structures complex partnerships and tax shelters few auditors at the IRS can disentangle, and often uses these instruments to move wealth and income offshore.

All of this is done off the political radar screen and there is no countervailing lobby or parallel income defense industry for the average Joe. The few public interest organizations arguing for “tax justice” on behalf of average citizens are vastly out-staffed and out-funded.

The Senate estimates that the industry helps the wealthiest Americans avoid paying nearly $70 billion in taxes a year through “abusive offshore tax avoidance schemes” alone. The number is much higher if corporations are included.

[ . . . ] The ultra rich who avoid and evade taxes in this way face almost zero legal risk and reap huge savings. No matter how massive the tax fraud perpetrated, the wealthy taxpayer is shielded behind a phalanx of Income Defense Industry professionals paid to devise the schemes.

In the notorious KPMG case settled in 2007, it was the firm that was fined for the fraudulent “tax products” it provided to ultra rich clients, many of whom had the chutzpah to turn around and sue KPMG for selling them inferior tax shelters after they had to pay hundreds of millions in back taxes and penalties.

Average taxpayers are far more likely to be held criminally liable for tax evasion than ultra rich citizens who have the resources to litigate for years.

They hire lawyers in the same Income Defense Industry to intimidate IRS auditors and legal teams.

The IRS manual instructs staff to weigh the “necessary expense” as well as the “expected hazards of litigating the case” when considering cutting quiet deals out of court with big tax cheats.

Re-imposing the Bush tax cuts on the top 2 percent of income earners creates the mistaken impression that the richest of the rich will finally have to shoulder a fairer share of the tax burden. But those at the very top will not.

The vast majority of Americans in that top 2 percent are what the wealth management industry calls the “mass affluent,” a segment of the market they do not serve because households earning a few hundred thousand a year up to a couple million cannot afford tax letters, shelters, or the costs of restructuring assets and moving income flows offshore.

These are the doctors, lawyers, and other professionals who are not only in the top tax bracket, but actually have to pay the rate of their bracket — something the ultra rich never do.

In 1992, the top 400 income earners paid 85 percent of the published bracket income tax rate. By 2007 their effective tax rate had dropped below 50 percent.

Ironically, many of the mass affluent professionals in the top 2 percent earn their comfortable incomes through fees they get helping the richest 150,000 Americans above them keep tens of billions in unpaid taxes each year.

http://www.nytimes.com/2010/10/16/your-money/16wealth.html?_r=1

Jeffrey Winters, associate professor of political science at Northwestern University, talked of the wealthy in America in terms of oligarchy. And he advanced an argument against what he called the “income defense industry.”

The term referred to the accountants, lawyers and financial advisers employed by the wealthy — and the merely affluent — to manage their financial affairs. Mr. Winters argued that this group was hurting the non-elite by minimizing tax collection. He estimated that $70 billion was lost yearly just from offshore accounts.

There is no denying that members of the elite have a lot of money and would like to hang on to as much of it as they can. But that’s true of most people.

Olivier Godechot, a French academic on the sociology panel, presented research that quantified just how skewed the increase in wealth at the very top has become. Mr. Godechot, a researcher at the National Center for Scientific Research in France, said that two professions — finance and business services — accounted for almost all of the increase in income inequality.

[ . . . ] His concern is what the concentration of wealth means for American society in the future. He said he wondered whether the post-World War II era in America — as defined by prosperity and rising income levels — was a historical anomaly and was coming to an end.

He cited data showing that the United States now had the second-lowest level of intergenerational income mobility in the world, after England.

“If we lose this truly American thing — that you can become anything if you just work at it — then you’re really going to lose what makes America America,” he said. “It already appears that it will take a tremendous amount of time for people to bring their families out of poverty and for the wealthy to fall from the advantages they have.”

http://www.newamerica.net/publications/policy/running_faster_to_stay_in_place

The data we present here reveal that, for the period 1979-2000, married-couple families with children increased their hours worked by 16 percent, or almost 500 annual hours. Yet the data also demonstrate that without the increase in women’s work, middle-quintile families would have experienced an average real income increase of only 5 percent — instead of the actual 24 percent — while families in the bottom two quintiles would have experienced a decrease in real income over that period — by about 14 percent for the bottom quintile and about 5 percent for the second quintile.

These data reveal that the economic engine for middle- and lower-income advancement is in low gear.

Remarkably, this is true even when productivity has grown at a healthy clip. These trends represent a departure from those of the post-War years when median family income doubled — tracking productivity growth. Today, middle- and lower-income families no longer see increasing returns to their hours worked in the same way that the previous generation did. The only way many of these families can keep their total income growing — or not shrinking — is to work harder and harder. For the complete document, please see the attached PDF version.

Attachments

• Running Faster to Stay in Place (PDF, 15 pp.)

http://motherjones.com/kevin-drum/2010/01/vicious-cycle-stagnant-wages

Here’s my capsule view of the great financial meltdown of 2008: For the past couple of decades, the benefits of economic growth have gone almost entirely to the rich. But the middle class still wanted to prosper, so the rich loaned them money to continually improve their lifestyles. That worked for a while. And then it didn’t.

[ . . . ] Growth in a modern mixed economy² is fundamentally based on consumer spending, and middle class consumers can increase their spending in only three ways: (1) real wage growth, (2) borrowing, or (3) drawing down savings. Only the first is sustainable. So if we want the American economy to grow consistently over long periods, we have to focus our economic machinery on median wage growth. We’ve done it before, we can do it again if we’re smart, and the result would be good for everyone: the rich would get richer, the middle class would get richer, and the poor would get less poor. The alternative is booms, busts, and continued social erosion.

http://rortybomb.wordpress.com/2010/01/11/chicago-after-the-crisis/

I do want to point out this section about Raghuram Rajan (whose Saving Capitalism from the Capitalists is a book that I enjoyed and is relevant today). It’s pretty interesting:

In a new book he is working on, entitled “Fault Lines,” Rajan argues that the initial causes of the breakdown were stagnant wages and rising inequality. With the purchasing power of many middle-class households lagging behind the cost of living, there was an urgent demand for credit. The financial industry, with encouragement from the government, responded by supplying home-equity loans, subprime mortgages, and auto loans. (Notwithstanding the government’s involvement, this is ultimately a traditional Chicago argument: in response to changing economic circumstances, the free market provided financial products that people wanted.) The side effects of unrestrained credit growth turned out to be devastating-a possibility that most economists had failed to consider.

I didn’t expect to read that line of thought from Rajan. I’ve talked about this before, both housing equity as the new social contract, as well as the way excessive debt smoothed out the high-risk income-trapped structure of current families. Rather than focusing on how nice of a refrigerator the poorest can buy, it might be worthwhile to look at how inequality has played out in the middle-and-working classes here (which ultimately effects mobility among the poorest too). I’m curious as to the drivers he finds between inequality and a middle-and-working-class squeeze. Spending on housing and education are the obvious ones.

http://www.nytimes.com/2006/08/28/business/28wages.html?_r=1

Multimedia

Chart: Not Sharing in the Gains

That situation is adding to fears among Republicans that the economy will hurt vulnerable incumbents in this year’s midterm elections even though overall growth has been healthy for much of the last five years.

The median hourly wage for American workers has declined 2 percent since 2003, after factoring in inflation. The drop has been especially notable, economists say, because productivity — the amount that an average worker produces in an hour and the basic wellspring of a nation’s living standards — has risen steadily over the same period.

As a result, wages and salaries now make up the lowest share of the nation’s gross domestic product since the government began recording the data in 1947, while corporate profits have climbed to their highest share since the 1960’s. UBS, the investment bank, recently described the current period as “the golden era of profitability.”

Until the last year, stagnating wages were somewhat offset by the rising value of benefits, especially health insurance, which caused overall compensation for most Americans to continue increasing. Since last summer, however, the value of workers’ benefits has also failed to keep pace with inflation, according to government data.

At the very top of the income spectrum, many workers have continued to receive raises that outpace inflation, and the gains have been large enough to keep average income and consumer spending rising.

[ . . . ] Economists offer various reasons for the stagnation of wages. Although the economy continues to add jobs, global trade, immigration, layoffs and technology — as well as the insecurity caused by them — appear to have eroded workers’ bargaining power.

Trade unions are much weaker than they once were, while the buying power of the minimum wage is at a 50-year low. And health care is far more expensive than it was a decade ago, causing companies to spend more on benefits at the expense of wages.

http://www.tax.com/taxcom/taxblog.nsf/Permalink/UBEN-8AGMUZ?OpenDocument

Every 34th wage earner in America in 2008 went all of 2009 without earning a single dollar, new data from the Social Security Administration show. Total wages, median wages, and average wages all declined, but at the very top, salaries grew more than fivefold.

Not a single news organization reported this data when it was released October 15, searches of Google and the Nexis databases show. Nor did any blog, so the citizen journalists and professional economists did no better than the newsroom pros in reporting this basic information about our economy.

The new data hold important lessons for economic growth and tax policy and take on added meaning when examined in light of tax return data back to 1950.

The story the numbers tell is one of a strengthening economic base with income growing fastest at the bottom until, in 1981, we made an abrupt change in tax and economic policy. Since then the base has fared poorly while huge economic gains piled up at the very top, along with much lower tax burdens.

[ . . . ] From 1950 to 1980, the average income of the bottom 90 percent grew tremendously. Not so since then:

1950 1980 Increase % Increase $17,719 $30,941 $13,222 74.6%

1980 2008 Increase % Increase $30,941 $31,244 $303 1%

Had income growth from 1950 to 1980 continued at the same rate for the next 28 years, the average income of the bottom 90 percent in 2008 would have been 68 percent higher, instead of just 1 percent more.

That would have meant an average income for the vast majority of $52,051, or $21,110 more than actual 2008 incomes. How different America would be today if the typical family had $406 more each week — less debt, more savings, and more consumption.

http://www.dailykos.com/story/2009/5/21/733001/-No-Sustained-Economic-Growth-without-Real-Wage-Growth

Wage growth, currently running at about 3% YoY and declining quickly, stinks.  In fact, only twice in the last 45 years has there been real wage growth (i.e., in excess of the inflation rate)for more than a year or so: once, in the post-war economic golden era of the 1960s and early 1970s; and again during the tech boom of the 1990s.  Here is a graph showing that entire 45 years history (as long as the series exists), comparing wages (in orange) with CPI inflation (in blue):

As you can easily see, real wage growth essentially stagnated in 1974, and ever since the Reagan revolution, almost all growth from productivity has been vacuumed up by the very top of the income scale.

Americans have somehow survived despite this stagnation by resorting to a small bag of budgeting tricks. But now, with one possible exception, those tricks aren’t going to work any more.  Simply put, from here on in, we’re not going to have any sustained economic growth until real wages finally grow too.  I’ll show you why, below.

[ . . . ] In other words,  since 1980, facing stagnated real wages, the only way American consumers have been able to significantly improve their lifestyles is either:
- to take on more debt, using assets which have appreciated in value as collateral (stock investments, housing), or
- to refinance their existing debt at lower interest rates.

When consumers were unable to do either of those things, they cut back on spending, triggering consumer-led recessions.  Since 1980, this confluence of negative factors had only happened twice: in the deep Reagan recession of 1981-82, and again briefly from July 1990 to March 1991.

As of 2007, household income was still below 1999 levels.  Interest rates had not receded to their 2003 levels, so refinancing activity could not increase.  House prices were already in marked decline.  Consumers were already starting to cut back, albeit not yet that significantly on debt.  Only stock prices, by the barest of margins (.02%), were positive.  I concluded then that “In order to avoid a recession, house price declines must stop, stock market gains must accelerate, or household income must increase significantly.  Failing at least one these three things, if households have continued to cut back on debt, as appears likely, America will probably enter (or may already have entered) only its 3rd consumer recession since 1980.”

That last conclusion was certainly proven correct!  With a declining 401k value, crashing house prices, increasing Oil-fed inflation, and paltry wage gains, the recession started just a few months later in December 2007.

http://rortybomb.wordpress.com/2010/01/13/stagnant-wages-and-the-financial-bubble/

[ . . . ] is this one of those “your wages won’t increase but Wal-mart has very cheap goods so feel rich” arguments? If you are like me and view money as something that buys both consumption goods and autonomy in a liberal capitalist democracy, then the consumption good deflator only covers half the reason of why a worker values getting a dollar after a day of work.

II: Wage Growth

As for the increase in household median income from the late 1970s to 1999, I’m under the impression from many sources that the majority of it is simply households working more hours, particularly by getting a second worker into the workforce. That’s right, right? Here’s Steve Ross who is quoted as an excellent source in the critique for middle-class numbers:

It is true that much (but not all)* of household income gain can be attributed to wives working more, but neopopulists see the increased female workload in an entirely negative context and as a burden on women and families. We suspect many working women want to work….* If the working hours of wives are held constant at 1979 levels, median incomes at the 50th percentile for prime-age couple households would still have risen by 9 percent in real dollars from 1979 to 2004. For households at the 70th percentile, the increase would be 22 percent.

I’m happy many more women are in the workforce. But if the real driver of household wage growth is simply that households are working more hours, then that isn’t exactly wage growth. “I want to make more money so I doubled my shifts” isn’t really the same statement as “they are paying me more money.” Winship points out male wages have increased around 8% over a 35 year period, for an annual growth rate of 0.23%. Something eventually had to give: maxed out at capacity, both in the number of hours in a day and the line of credit approved – if this was a firm, would you want to invest?

http://www.zerohedge.com/article/guest-post-its-impossible-get-us

I also wish to note that my analysis didn’t include real estate taxes and numerous other expenses that most folks have to pay. So even if you are extremely frugal and careful with your money, it is impossible to “get by” in the US without using credit cards, home equity lines of credit or burning through savings. The cost of living is simply TOO high relative to incomes.

This is why there simply cannot be a sustainable recovery in the US economy. Because we outsourced our jobs, incomes fell. Because incomes fell and savers were punished (thanks to abysmal returns on savings rates) we pulled future demand forward by splurging on credit. Because we splurged on credit, prices in every asset under the sun rose in value. Because prices rose while incomes fell, we had to use more credit to cover our costs, which in turn meant taking on more debt (a net drag on incomes).

http://www.dailykos.com/story/2009/1/6/85124/90803/713/680687

Basically, the basic bargain was roughly this–if you worked hard and became more productive, you would see that sweat of the brow in your wages. And from the post-war era until the 1970s, that deal basically held–as you can see from the lines that are basically close together until the 1970s.

Then, the lines diverge–dramatically. You can see it yourself. If the lines had continued to track closely together as they did prior to the 1970s, the MINIMUM WAGE would be more than $19 an hour. THE MINIMUM WAGE!!!

So, in short: people had no money coming in in their paychecks so they were forced to pay for their lives through credit–either plastic or drawing down equity from their homes. There are lots of reasons that this happened–greed, the attack against unions, de-regulation, dumb trade deals.

But, the point is: we will never fix the economic crisis, whether through short-term economic stimulus and certainly not through tax cuts, until paychecks are re-inflated. Dramatically.

I outlined a whole set of solutions to bailout American workers but the main one is simple: raise wages. Dramatically. And end–and I know some people cringe at the term–the class warfare that has been underway for the past three decades.

MSNBC w/ Cenk: Reich – Middle Class & Wages

This video reminded me of why it doesn’t help the economy to give tax cuts to the rich and generally increase the wealth of rich while leaving behind everyone who isn’t part of the ruling elite. From just an economic perspective, there are three problems:

1) Increasing the wealth of the wealthy doesn’t necessarily increase investment. At some point, a person becomes so wealthy that further wealth becomes meaningless. This leads the super rich to gamble with their excess wealth which was one of the contributing factors to our recent economic crash. Financial gambling doesn’t make for a stable economy nor does it have any social value. So, if the government genuinely wants an economy that grows with stability rather than constantly crashing, they should create regulation and taxation that helps decrease wealth disparity so that excess wealth isn’t concentrated at the very top.

2) Most new jobs are created by small businesses, but the tax cuts for the rich mostly only help big businesses. Also, the bailouts help Wall Street while leaving Main Street to suffer. Why help the rich who helped break the economy while sacrificing the working and middle classes which are simply trying to get by? A lot of the working and middle class was in debt for the reason that wages were stagnating even as the rich were getting richer. So, if the government genuinely wants to stimulate job growth, they should ensure that wages grow as the economy grows and they should give bailouts to small businesses while breaking up corporations that are too big to fail.

3) Even ignoring all that, giving more wealth to the wealthy doesn’t stimulate the economy for some simple reasons. Assuming they don’t gamble it, the other choice the rich could do with excess wealth is simply to put it into savings. The middle and working classes, however, will spend any extra money they have which invests back into the economy. For good or ill, the US economy is based on consumerism and consumerism is based on working and middle classes that have money to spend. Let me explain why. A rich person spends several hundred or even several thousand on a pair of shoes. For the same amount of money, hundreds of working and middle class people could buy shoes. The purchase of hundreds of shoes stimulates the economy more than buying one pair of shoes even if it’s the same amount of money. So, if government genuinely wants to stimulate the economy, they should give tax cuts to the working and middle classes.

All of this assumes that those in power actually care about the economy as a whole and actually care about the average American. I suspect that this is a false assumption. It’s hard for me to believe that after all these decades intelligent people (including Democrats like Obama apparently) think that trickle down economics actually works. I think these people know that it just makes the rich richer. That is why they do what they do. Politicians are of the rich and have campaigns funded by the rich. Why would they help the lower classes? So, what if the economy collapses? The rich will always maintain their wealth. If the country gets bad enough, they’ll just move to a pleasant tropical island and take their wealth with them.

Here is another video that relates, but it’s from more of a libertarian perspective:

The author interviewed, Thomas E. Woods Jr, is criticizing the US military-industrial complex. Besides the moral argument, he mentions that military is not a very good investment. When we invest in military that is less that can be invested in other things such as education or infrastructure. Also, funding goes to defense research which uses up public tax money and wastes the most brilliant minds on discovering more efficient ways to kill people. Those same dollars and those same brilliant minds could be used for research to cure cancer or research into alternative energy.

Once again, the only people who benefit from the military-industrial complex are the defense contractors and the wealthy investors in these companies. Certainly, the average American who pays for these wars and dies in these wars aren’t benefiting. The only reason we have any interest in the Middle East in the first place is because of the oil that is there and those most interested in that oil is of course the big oil companies seeking profit from a dwindling resurce.

There were some comments below that last video which gave me some hope. Here is one from a user going by the name capitalist4life:

“I am a recovering neocon. I was converted through Dr. Paul’s gentle suggestion that our foreign entanglements may cause some foreigners to want to kill us. I found that reasonable and I became more anti-war as I saw Hannity and Limbaugh vicously attack that reasonable idea. The one thing that didn’t convince me was strong anti-war rhetoric. I had to be eased into it. Just keep that in mind. Don’t be aggressive and extreme. Gently ease our “conservative” friends into the anti-war way of thinking.”

But let me end with a different quote. One of the last truly moral Republican leaders was Dwight D. Eisenhower who, of course, is famous for warning about the military-industrial complex. He was far from being a pacifist liberal and for that reason his words are all that more important. He seemed to genuinely believe that politicians should serve all Americans and not just the wealthy. Here is what he said in a 1953 speech:

“Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. This is not a way of life at all in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron.”

Middle Class vs Working Class

I’ve noticed something strange about how politicians and pundits use ‘working class’ and ‘middle class’. I don’t hear the working class referred to much in the media, especially not by conservatives. Being working class has become considered a bad thing. Everyone wants to be middle class.

What bothers me about this is that the middle class is shrinking even as the poor increasingly become the target of those on the right. For instance, the Tea Party protesters are mostly older whites of the upper middle class and above (i.e., not the average American). These old white conservatives grew up during a time when there was much more opportunity of upward mobility. But since the beginning of Reaganomics, the wealth disparity has been increasing and so the numbers of the poor have been increasing.

One recent survey showed that most white Tea Party supporters don’t believe minorities are intelligent, hardworking or trustworthy. This is a new class war. As the middle class shrinks, the upper middle class sides with the rich and sees the poor as the enemy.

I don’t know if this will start to reverse again, but I don’t think these affluent conservatives want it to reverse because it was conservative policies that were a major contributing factor towards this concentration of power and wealth. Of course, they’d love to blame it on the liberals (such as how Hannity tried to interpret the documentary Generation Zero). The problem isn’t the evil government and even the Tea Party supporters don’t actually blame the government. Most of them are on Medicare and of course they support Medicare even though it’s one of the biggest government expenditures. Studies show that conservatives love big government when Republicans are in power. Even Tea Party protesters fondly remember George W. Bush and yet offer little support to Ron Paul who is a real small government fiscal conservative.

What the Tea Party protesters don’t want is a government headed by a Democrat president. The reason they give is ‘socialism’ which is simply a codeword for helping the poor and needy. It’s class war, pure and simple. It was funny when Glenn Beck came to realize the working class was the socialist enemy while listening carefully for the first time Bruce Springsteen’s “Born in the USA”. Interestingly, the only voice the working class has in the mainstream right now is Michael Moore who is a radical leftwing social justice Christian (or ‘commie’ for short).

It’s very odd because the Republican party used to side with the working class (the Reagan campaign even tried to usurp Bruce Springsteen’s message despite Springsteen himself being an ardent liberal). However, now that the working class has become a part of the growing poor, the affluent conservatives are trying to distance themselves from the working class even as they try to portray the Tea Party as working class populism. This means the real working class doesn’t have any direct political voice… which might be why, despite the conservative propaganda, the poorest of the working class tends to vote Democrat. So, the Tea Party is pretending to be working class which it isn’t while simultaneously pretending not to be Republican which it is.

I wish there was a real working class populist movement that would shake up politics. Even real libertarians can’t get a movement started without it being taken over by Republican operatives.

The worst part is that the mainstream media (especially Fox News) creates such a distorted picture of reality that the average person has a hard time telling which way is up. The poorest of the poor who lean towards Democrat are also the demographic that feels the most disenfranchised from the whole process and so rarely votes. For this reason, it’s in the interest of affluent conservatives to keep the poor disenfranchised. I saw a news report recently which was about a corporate memo stating in blatant terms that democracy of civic participation wasn’t beneficial to their profits. When Wall Street gives billions of dollars to all politicians on both sides, how can there be even the slightest hope for a real democracy that represents the average person much less those below the average.

The Tea Party protests the loudest, but it’s not the Tea Party supporters who have been hit the worse by the economic downturn. The hardest hit are the minorities, the poor, and the blue collar workers. Once upon a time, the working class fought hard to have a collective say in our society. It was from the battles with the wealthy elite that workers unions formed, but the conservative movement fought back and destroyed the power unions used to hold. Conservatives have the audacity to blame unions for helping to destroy the economy when it’s blue collar workers who are the ones who have lost their jobs more than anyone. Their jobs got sent overseas. but somehow the poor working class trying to feed their families is seen as the enemy of the affluent rightwingers.

I just don’t get it. The world would be a better place if the upper middle class whites combined their forces with the poor instead of sucking up to the wealthy elite hoping to get some scraps from the table. Since the middle class is shrinking and the economy is so uncertain, wouldn’t it make sense to make nice with the poor. Many poor working class people once thought of themselves as middle class as well, but times have changed. I remember hearing an interview of a woman who recently became unemployed. She said that she always thought the unemployed were just lazy, but she admitted that she had failed to understand how hard it can be when your job is taken away.

It’s a sad state of affairs. The poor are blamed for being poor. The unemployed are blamed for being unemployed. But oddly the conservatives blame all of the problems of Wall Street on the government which means blaming it on Obama and the Democrats. Why is it in the conservative mind everyone is to blame for their own misfortune accept wealthy capitalists? Why does the Tea Party criticize everyone from ‘socialists’ to immigrants and yet they’ve never protested Wall Street? Why?

 - – -

Note (5/27/10) – I just wanted to add one further observation that fits in with the concluding paragraph.

Why does a so-called “Libertarian” such as Rand Paul immediately defend BP even thought the irresponsible actions of BP will destroy many small businesses? I understand that Rand Paul is a rich white doctor and so doesn’t necessarily have much in common with the working class that comprise many family-owned fishing businesses, but I don’t understand why he would jump so quickly to defend BP when the average American has a very negative view of such mega-corporations.

Even though Libertarians like to portray themselves as representing the average American, it is obvious that many (most?) Libertarians and Libertarian think tanks don’t represent the average American. Certainly, Rupert Murdoch who is a self-identified Libertarian doesn’t represent the average American or average anything else for that matter. When push comes to shove, the Libertarians will side with big business… because often they own or work for big business.

Income Inequality: Krugman & Dalai Lama

I thought it interesting to hear two different views on income inequality.

Political Jiu Jitsu

I liked the last point made in the video below.

Various corporations, media & political groups are constantly trying to control the narrative. The narrative that would be most financially beneficial to powerful corporations is that of voter apathy & disenfranchisement. Riling people up & then misdirecting them away from real problems inevitably leads to a sense of helplessness. If this is repeated enough, the entire lower class develops an attitude of learned helplessness where they just give up entirely.

Combine this with the slow destruction of the middle class then you a combination punch. In the US, the middle class always aspired to be part of the upper class. This aspiration has caused many Americans to identify with the wealthy class. We like to watch rich people live their lives on tv and the middle class will fight for tax cuts for the rich (even though it personally harms their own class). Instead, middle class anger gets directed at the working class (i.e., worker unions), the working class anger gets directed at the poor, and the poor class anger gets directed at everyone who is at the very bottom (welfare receipients, homelesss, immigrants, etc).

Meritocracy? Growing Poor, Shrinking Middle Class

Let me give some context to why I’m posting all of this. 

I heard two different people talk about why some social liberals vote Republican.  The stated reason of these people is that they aspire to climb the ladder of socio-economic success, and they think Republican policies will favor the middle class and the striving business entrepreneur.  This, of course, isn’t based on the reality as the middle class has been shrinking and the government growing ever since Reagan’s administration.  The tax cuts that Republican politicians preach about mostly only favor the rich.  These middle class Republican voters may dream of becoming rich, but this American Dream of meritocracy is a fool’s dream.

I think this is similar to the reason why the poor white working class votes the way they do.  They have more in common with poor minorities and immigrants, but they see these other poor people as their enemy.  So, they vote for the Republican party with it’s policies that favor the rich.  Democratic policies, on the other hand, tend to be more beneficial to the poor which is why the minorities and immigrants vote Democrat. 

A difference with the poor white working class is that they’re not as poor as many minorities and immigrants.  Looking down on the even poorer gives them a sense of superiority and this breeds a lot of racial hatred.  It’s no accident that the conservative movement has promoted the superiority of “white culture” for decades and many conservatives still openly promote it without any sense of shame.

The middle class is shrinking even as more people are trying to identify themselves as middle class.  The conservative movment has preyed upon the class wars and mixed it with the culture wars.  This “middle class” perceives themselves as hard working real Americans.  Conservative politicians and pundits tell this “middle class” that their meritocratic aspirations are threatened by the socialism of the liberal elites and the moral depravity of poor minorities.  Meanwhile, the true wealthy elite (with it’s corporatism and military-industrial complex) increasingly takes over our country… wrapping itself in the American flag.

‘No Labor Market Recession For America’s Affluent,’ Low-Wage Workers Hit Hardest: STUDY
By Ryan McCarthy

Though the national unemployment rate dipped slightly in January to 9.7 percent, a new study suggests that not only have low-income workers been the hardest hit by the jobs crisis — but, shockingly, there has been “no labor market recession for America’s affluent.”

The study from Andrew Sum, Ishwar Khatiwada and Sheila Palma at Northeastern University’s Center for Labor Market Studies suggests that the unemployment problem is largely a problem for low-wage workers (hat tip to the Curious Capitalist).

Our Polarized Society
With no middle ground, we are always on opposing sides.
By Ken Eisold, PhD

Here is where real, underlying social issues come into play, the second reason for our increasing polarization. The gap between the rich and the poor has been growing. This is reflected in one way by the growing disparity between workers salaries and the lavish compensation packages of top executives, but more generally in the increasing erosion and fragmentation of the middle class. As a result, two increasingly distinct and identifiable interest groups are emerging.

This is not simply the rich versus the poor, of course, those who have and those who don’t. If that were so, the rich would not stand much of chance. It is a matter of identification and aspiration, those who do not want their opportunities diluted by taxes to provide social safety nets for the poor, those who emphasize the importance of sacrifice and discipline in getting ahead, who are convinced they will succeed and are motivated by the achievements of others, the stories of hyper-successful geeks and those who have worked their way up the ranks.

On the other hand, there are those at the margins of our national prosperity who tend to be left out, those sinking in status, and those troubled by our unequal access to security and protection against suffering. Many also don’t like the picture that is emerging and want a more equal society, but they, too, increasingly have no choice but to side with the underdogs.

Lulled by the celebritariat
By Toby Young

Michael disapproved of meritocracy because he saw it as a way of legitimising inequality. After all, if everyone starts out on a level playing field, then the resulting allocation of rewards—however unequal—seems fair. Those at the very pinnacle of our society might not inherit their privileged position, as their forebears had done, but its pyramid-like shape would be preserved. Indeed, once this hierarchical structure became legitimised, as it would in a meritocratic society, it was likely that power and wealth would become concentrated in even fewer hands.  [...]  Analysts of the broader sweep of social mobility are divided on how much it has slowed down (see David Goodhart’s previous article), but there is some consensus that there has been a falling off since the time my father wrote Meritocracy.

[...]  Writing in the 1960s, the sociologist WG Runciman, author of Relative Deprivation and Social Justice, argued that ordinary people tolerate high levels of inequality because they don’t compare themselves with those at the top, but with people like themselves. By that measure, they are far better off than they were 50 years ago, even if their incomes have grown by a smaller percentage than the top earners.

However, this argument doesn’t seem plausible any longer. Mark Pearson, the head of the OECD’s social policy division, has identified something he calls the “Hello! magazine effect” whereby people now compare themselves with the most successful members of society, thereby increasing their insecurity and sense of deprivation. This appears to be tied up with the decline of deference. A person’s social background may still affect their life chances, but it no longer plays such an important role in determining their attitudes and aspirations, particularly towards those higher up—and lower down—the food chain

[...]  As Ferdinand Mount notes in Mind the Gap: “The old class markers have become taboo… The manners of classlessness have become de rigueur.” To put it another way: a profound increase in economic inequality has been accompanied by a dramatic increase in social and cultural equality. We can see this most clearly in changing attitudes to popular culture. It is a cliché to point out that the distinction between high and low culture has all but disappeared in the past 25 years or so. In this free-for-all it is high culture that has been the loser, with most educated people under 45 embracing popular culture almost exclusively.  [...]  The rich and the poor no longer live in two nations, at least not socially. Economic divisions may be more pronounced than ever, but we support the same football teams, watch the same television programmes, go to the same movies. Mass culture is for everyone, not just the masses.

[...]  If this is the case, I believe it is largely due to the emergence of a new class that my father didn’t anticipate and which, for want of a better word, I shall call the “celebritariat.” [...] the premier league footballers and their wives, pop stars, movie stars, soap stars and the like.  [...]  If the celebritariat really does play a role in legitimising economic inequality, it is also because ordinary people imagine that they, too, could become members. A YouGov poll of nearly 800 16-19-year-olds conducted on behalf of the Learning and Skills Council in 2006 revealed that 11 per cent said they were “waiting to be discovered.”

Some commentators believe that the preponderance of reality shows and their casts of freaks and wannabes—the lumpen celebritariat—have devalued the whole notion of stardom. Yet the YouGov survey discovered that appearing on a reality television programme was a popular career option among teenagers, and another poll found 26 per cent of 16 to 19 year olds believe it is easy to secure a career in sports, entertainment or the media. If the existence of the celebrity class does play a role in securing people’s consent to our winner-takes-all society, then the fact that the entry requirements are so low helps this process along. If people believe there is a genuine chance they might be catapulted to the top, they’re more likely to endorse a system in which success is so highly rewarded. To paraphrase the advertising slogan for the National Lottery, it could be them. As with the lottery, people may know that the actual chances of winning are low but the selection mechanism itself is fair—a level playing field. After that, their “specialness” will take care of the rest.