Destroying the Working Classes

It has become Republican party policy to scream “class warfare” any time Democrats try to blame the rich for our current economic troubles. This is supposed to embarrass those who, according to the code of our time, are reviving socialistic or communistic dogma. The truth, though, is that the wealthy in this country—aided and abetted by the last three Republican administrations (and often enough by Democratic ones as well)—have been waging class warfare since at least the Reagan administration, have succeeded beyond anything they could have imagined, and are still not satisfied. They apparently want to reduce most of us to literal peonage. And the response? Well just think about the difference in the silence here, compared to near-riots in Europe—where Greek and French workers have had massive strikes and taken to the streets to condemn their governments’ proposals to reduce benefits won over years of struggle. Americans, by contrast, simply sit back and take it, or worse, ally themselves with the very people who have done them in.

Consider some facts assembled by Robert Freeman in a recent article (“Rich Declare War on the Middle Class,” Nov. 14, Commondreams.org). He begins with Ronald Reagan’s ‘revered’ administration, which “cut the marginal tax rate on the highest income earners from 75% to 35% while dramatically expanding spending for war.” Result: the national debt quadrupled between 1980 and 1992. But did anyone howl then? No, conservative economists kept saying, debt doesn’t matter; it’s a small percent of GDP. Both Bushes continued the trend, with W getting the prize, reducing the tax rate even more, spending trillions on war, and more than doubling the share of income to the top 1% (40% of his tax cut went to the top 1% of earners), and tripling the share to the top 1/10th of 1%. In dollars, this means that from 1973 till today, real wages for workers dropped, with adjusted income of the bottom fifth falling by about $7000/year, while yearly income for the top 1% increased by no less than $741,000. The figures for wealth held by each class are even starker: the top 1% now holds 34% of the nation’s wealth while the bottom half holds a mere 2.5%. As for the bottom two-fifths, they hold nothing, zero, zilch.

You might think, if you’re one of the working or middle classes—i.e., one of the growing numbers on food stamps (1 out of 8 Americans) or in official poverty (1 out of 5 Americans)—that perhaps this would satisfy the rich. But greed is insatiable. So now we hear from some of those alarmed individuals who have suddenly grown concerned over our national debt—particularly at the Obama adminstration providing a stimulus to create jobs for some of the 25 million unemployed, and also trying to reform the health care system to include more Americans left out of the worst system in the world—that something must be done. Our nation will go broke, they cry. We can’t sustain this kind of spending, they moan. And so we have the recommendations of the National Deficit Commission—to rip off the working classes even more. To allegedly lower the deficit by $4 billion, they propose remedies like this: eliminate the tax deduction for mortgage payments, which will decimate one of the last remaining sources of wealth for most people, their homes. They also propose to cut back the meager benefits provided by Social Security, lowering cost-of-living adjustments, raising the minimum retirement age, and while they’re at it, increasing the co-pays and deductibles for Medicare. And of course, they propose to reduce spending—which always means not cutting the military spending that’s bankrupting the country (recent govt estimates place the cost of keeping one (1) soldier in Afghanistan for a year at $1 million; that’s one soldier!), but the paltry programs that benefit the poor and the indigent.

And the monstrous benefits for the rich? Not a word about that. Or rather, those are slated to be increased! The Commission proposes to lower the maximum tax on the highest income earners from 35% to 24%, while their great buddies, the corporations, also get a drop in their nominal tax rate from 35% to 24% (those who actually pay taxes, that is.)

Amazing. But that’s not all. Into the fray, recently, has come yet another proposal from a front organization calling itself the Bipartisan Policy Center, made up of 19 prominent citizens, ex-legislators, ex-governors, and so on, chaired by retired Senator Pete Domenici of New Mexico and a former budget director, Alice Rivlin. And what do they propose to “solve” our crisis? Why yet another tax holiday, this time a suspension of the Social Security payroll tax for a year or two, cutting and simplifying individual and corporate tax rates, and, get this, instituting a new 6.5% national sales tax. That’s to make up for the huge tax losses from the tax holiday. Now anyone who knows anything about taxation knows that sales taxes (and fees for things like drivers’ licenses, etc.) are regressive: that is, because the tax on purchases constitutes a much larger percentage of disposable income for the poor and working classes than it does for the rich, its impact on the poor is orders of magnitude greater. This is the whole theory behind a graduated income tax: to help make up for the disparity in wealth (and the wealthy always consume more natural resources and public services than their poorer counterparts), the tax on those who earn more should comprise a greater percentage of their earnings. But increasingly in our “everything for the wealthy” nation, progressive taxes are seen as unfairly depriving the wealthy of their just desserts. Tax has become a dirty word—as if any nation or any community could long survive without it. And increasing taxes, why that has become the equivalent of the black plague. So we have more and more proposals for sales taxes to bail out state and local governments, as well as the federal government, from the income tax-deprived holes they’ve dug for themselves.

The question is, why would elected representatives be so inclined to ignore the poor and aid the rich (the cost of the recent bailout of banks and Wall Street has been estimated at $13 trillion, and growing)? Perhaps a recent statistic about members of Congress will help clarify. In an article on Yahoo Finance (“Members of US Congress Get Richer Despite Sour Economy,” Nov. 17, 2010), a study by the Center for Responsive Politics reported this: about half of all members of Congress, 261 of them, were millionaires, one in five being worth at least $10 million, with eight in the $100 million-plus range (Rep. Darrell Issa, Republican of California, led with personal wealth of $303.5 million). Then contrast median household incomes between these mandarins and those they represent: for a House member, it was $765,010 in 2009r, an increase of more than $100,000 from 2008 (senatorial median income rose by a smaller percentage but a comparable dollar amount, ca. $100,000, to $2.38 million/yr), while for average working slobs, median household income dropped 3% at the same time (between 2008 and 2009) to about $50,000 annually. When stock holdings were examined, it should come as no surprise that these “people’s representatives” had most holdings in the “bigs,” like General Electric (which owns CNBC), Bank of America, Cisco Systems, Proctor & Gamble, and Microsoft. Also popular were Goldman Sachs, Wells Fargo, JP Morgan Chase, and Citygroup, all of whom received TARP money. As the report put it:

The most popular investment among congressional members reads as a who's who list of the most powerful corporate political forces in Washington, D.C. -- companies that each spend millions, if not tens of millions of dollars each year lobbying federal officials.

Nice work if you can get it.

So we’re left with this. Unless you’re one of the wealthiest 1% in this country, you’re being taken to the cleaners by the most well-oiled machine ever invented to do the job. They have the money, the legislators, the lobbyists (moving in a revolving door from Congress to lobbying and back again, like the recently elected Senator Dan Coats of Indiana) the propaganda organs at every level, and the stupidity of the public to help. They also have a level of unbridled greed that would make ancient Roman plutocrats blanche with shame. It sort of makes one wonder: how long can this organized theft and thuggery continue? Where is the righteous (and I don’t mean the manipulated Tea Party variety) wrath of “the people?” Are there any “people” left?

Lawrence DiStasi