America's Race to the Bottom

By David Michael Green

December 14, 2009 "Information Clearing House" -- I sure hope that there is a full and speedy recovery to the massive recession we are all now suffering under.

But, I'll be honest. I doubt that there will be. Most of the upticks following our latest national downturns have been dismal enough that economists have had to invent a new term for them. The phrase is "jobless recovery", and the implications are as ugly as they sound.

What it means is that GDP rises, but life remains crappy for real people with real jobs. If they're lucky enough to have one, that is.

Where does the money from rising GDP go, then? Funny you should ask. It goes exactly where it's been going for the last three decades. Not to the public, and not to raising the living standards of ordinary folks. But, rather, to the über-class.

My guess is that "The Great Recession" - as some are calling the current disaster (presumably to avoid using the "D" word) - will be followed by what history will record as the "The Tepid and Rather Jobless, Thank You Very Much, Recovery". If that.

And, more importantly, my guess is that this will be the latest and greatest click yet of what is the most massive ratcheting project of the last three decades, perhaps the most wholesale redistribution of wealth in human history.

Consider the numbers...

The ratio of executive salary to the average paycheck during the mid-twentieth century was about thirty to one. In the last decade it has ranged from three hundred to over five hundred to one.

The richest four hundred Americans were worth an average of about $13 million each in the middle of the century, using today's dollars. Now they average over $260 million each.

The top taxpayers in America now pay the same proportion of their income in taxes as those earning less than $75,000 per year. Those taxes on the wealthy went from being more than half of their income fifty years ago to about a sixth today.

In the past three decades, the income of the richest Americans quadrupled, while the income of the lowest ninety percent actually fell. Today, the median wage is lower than it was in the 1970s, even though productivity has grown by nearly fifty percent.

All told, from the 1930s through the 1970s, America produced the biggest and richest middle class in human history. But then many of us made the mistake - as I did - of assuming that this had become, based on a solid society compact, the default status quo for the foreseeable future.

In fact, it was instead an aberration. And it was contingent.

It was an aberration because we are now speedily returning (if we haven't already arrived) to the days prior to the New Deal, when the rich had everything and the middle class was small and insecure. And it was contingent because the good old days depended on a combination of elite satiation and/or a strong progressive defense of an equitable economic order.

But both have disappeared in the Age of Reagan. Today, there are seemingly no bounds conceivable to what the already astonishingly wealthy will do in order to further magnify their holdings. No suffering of the struggling middle class - let alone impoverished brown people inconveniently sitting on top of desirable resources somewhere abroad - represents the slightest impediment to a greed which long ago ceased to have any passing relationship with utility. We are simply talking here about sociopaths - people who cannot fathom a reason to alter their predatory behavior under any circumstances, even when the lives of millions are at stake, and even when another pile of millions of dollars in their investment portfolio does nothing to improve their condition because they are already so rich to begin with.

Okay, well, that's not exactly a new thing. Unless, say, you're a geologist and you happen to think that human beings are a new thing. But what is new is that the other possible protection against the gutting of the middle and working classes - that is, the existence of a progressive bulwark against greed - has all but disappeared. At the level of elites, this has transpired because the Democratic Party has simply joined the GOP in becoming a corporate tool, serving the interests of Goldman Sachs and a few others, with near complete disregard for the public interest. At the mass level, Americans have embraced their own petite bourgeois form of greed, and have become stupider and Republicaner with each passing year.

The result is that the aberration is ending, albeit slowly and somewhat fitfully, and the country is returning to its natural state, where outrageous disparities of wealth are common. So common, in fact, that no serious political movement exists to redress ths injustice. So common that the wealthy go to churches where Jesus the proto-socialist who talked about camels and needles has been morphed instead into the First Coming of Ayn Rand. So common that a guy can run for president incessantly repeating the word "change", invoking the greatest moral struggles of history, and come to office during a time of multiple crises for a deeply stressed American public, only to turn out to be just another Wall Street hack, busy diverting the remaining chunks of the commonwealth to the plutocracy.

It's not exactly a mystery how we ended up here, although there's more obfuscation on this question than there are hypocritical sinners at a GOP family values convention. And that's a lot. Every American government since Reagan has essentially been consumed with the task of denuding the middle and working classes of their paltry share of the national pie, in order to deliver those dollars into the hands of wealthy political benefactors. This includes Democrats as well as Precambrians. Indeed, probably the president least tenacious in pursuing this project, of the five we've been blessed with these last three decades, was George H. W. Bush. That really tells you something, right there, doesn't it?

Yes, it's true that even a mixed economy system practicing both Keynesianist and monetarist countercyclical macro-economic strategies will experience oscillations in growth. (Although, remember when, a decade ago, people were speculating about whether the business cycle had forever been tamed? Remember when people thought Alan Greenspan walked on water? Seems like a lot longer than ten years ago now...) But at the same time, government policies on economic and political issues really do matter, especially when it comes to cutting up the pie.

If you adopt policies that decimates unions, you're gonna wind up decimating unions. Never particularly high in America, and peaking historically at about thirty-five percent, the share of workers who are organized in this country is now down to about seven percent. Guess what sort of effect that is going to have on worker negotiating power over wages, benefits, safety, general treatment and respect?

If you adopt trade policies that undermine labor at every turn, you're gonna wind up with a lot of unemployed Americans competing against low-wage Mexican, Chinese and Indian workers overseas. This wasn't exactly hard to see coming as NAFTA and the WTO were being negotiated, two of the biggest priorities of the Clinton administration. It was even less hard to see when Republicans created tax incentives for companies to ship jobs outside America, and when John Kerry was either too stupid or too fully coopted to turn that slam-dunk issue into the Willie Horton of the 2004 presidential campaign.

If you adopt policies that slash taxes on the already wealthy, guess what that's going to do to the distribution of wealth in the country? Guess what impact it will have on the federal government's revenues and debt? Guess who will be stuck, in the future, paying for the loans to finance the share of revenue that the wealthy are excused from today? Plus interest, of course.

And guess what that will mean for social needs spending as the government grows so deeply indebted that its creditors force it to make cuts in outlays, like some banana republic getting the whip hand from the IMF? Will those cuts be on the military, or on healthcare? Wars or food stamps? We know they won't be on service to the debt. That interest we now pay on the $12 trillion or so we've already borrowed is currently one of the biggest single items in the federal budget, and cannot be defaulted upon without producing disaster. We already know from the Clinton administration the answer to these questions about spending priorities. Even in the flushest of times, this supposed Democratic president slashed welfare spending.

So how shocking is it, when you add it all together, to find that anti-American labor, trade, tax and spending policies turn out to hurt the middle and working classes?!?! The only thing really shocking about the entire affair is that voters have been swallowing whole that baited hook for thirty years now. And that they will likely do so again, in 2010 and 2012, as they perceive the failure of Democratic Party ‘liberalism', and knee-jerk their way into a reign of repeated GOP pillaging, after just rejecting it in deserved disgust only a year or two ago.

Of course, new Republican governments won't be any more successful at generating public prosperity than Democrats, not least because neither has much interest in doing so, except perhaps incidentally. What the Grand Old Pricks might be able to pull off, however, is some more raghead slaughtering, fag bashing, or terror traumatizing in order to keep the hoi polloi focused on anything and everything but the emptying of their wallets.

Ultimately, the game will end, and we'll wind up looking like the British following the Second World War - a great empire bled dry, all its people running around with bad teeth. Right now, Republicans and Democrats are essentially competing, as in a game of musical chairs, to avoid being the party in charge when the fictions of our economic condition can absolutely no longer be sustained. Kinda like what you see in California, the once great state. Looks to me like the Democrats lost. Now there's a shocker, huh? - the party of Obambi getting reamed by the party of Tom "The Hammer" DeLay.

Politicians continue to play the same old cards about resurrecting the same old prosperity. No one will say the truth about how the US standard of living will probably never be restored for the bottom ninety-eight percent, while elites now have the kind of wealth that European kings once had to conquer entire continents in order to acquire. In fact, none of our courageous politicians will even tell you that you can't afford to have tax cuts and full governmental services at the same time. They're too busy borrowing it all from their kids and ours. Well, really just ours. Anyhow, isn't responsibility kinda boring? Isn't that whole honesty thing so twentieth century?

The simple and sad fact is that greedy elites will always use their power to acquire unseemly quantities of wealth, unless one or both of two conditions obtain. The first is that they are socialized to be slightly less greedy, slightly more patriotic, and remotely compassionate about those who have nothing. They may also recognize, as Henry Ford did, that their long-term prospects are rather heavily tied to those of all the rest of us.

The other option is that we, acting through genuinely progressive politics, distribute the cash more fairly. Even if we do this, the wealthy will still have ridiculous amounts of absolute wealth, of course, and truly sickening amounts of relative wealth. It's just that the rest of us will be a bit less impoverished. Perhaps all full-time workers would be guaranteed a living wage, for example. What a concept, eh? Perhaps if we throw all-in with our subversive little Bolshevist revolution, we'll go so far as to even join the rest of the world's developed countries in supplying our people with healthcare. Radical, man.

We got part of the way to a more just society during the middle chunk of the twentieth century, though it was a minor miracle that we did. And it probably really required the Great Depression to do it, along with the twin legislative forces of nature more commonly known as Franklin Roosevelt and Lyndon Johnson.

We may actually get there again.

Though if I had to guess, I suspect instead that the next stop is Palinism.

Whether we'd have the brains subsequently to ever transcend that disaster for a moderately equitable American economic order is a real question.

Whether we even could at that point is quite another.