We are the wealthiest nation the world has ever seen, even in the midst of the worst economic downturn since 1929.
The problem is neither our budget deficit nor our national debt, although both are unacceptable. The problem is class warfare.
When is a country richer, when the disparity between the most and least wealthy is widest, or when all are prosperous? One could, I suppose, argue that a country with wide disparity is equally rich as a country with widespread prosperity. But that would not be a country with justice and democracy. That would be the country we have now, and the situation is rapidly deteriorating.
There has never been such an extreme concentration of wealth at the top end of the economic scale. The very rich now control all the laws about how they make their money, the legislative apparatus, the regulatory apparatus, the judicial apparatus, and most journalistic reporting. Democracy has been subverted, and everyone who isn’t rich is a victim.
And it’s getting worse.
The very wealthy are at present trying to concentrate even more wealth at the top, while at the same time making everyone else pay for the financial disaster created by some of the most wealthy, the “masters of the universe”, the greedy fools who manage Wall Street for their own enrichment. Every governmental body in the country, from federal to local, as well as most of the rest of the world, is battling to regain financial balance because of the financial machinations these people undertook entirely for their own enrichment. In the process of this repair, the most draconian changes are being contemplated. None of these would affect the rich in the slightest. All of them would cause trouble for everyone else, trouble ranging from inconvenience for the more affluent to utter catastrophe for the poor.
Among the worst possibilities that several states are considering are ways to declare bankruptcy. This would allow them to walk away from all financial responsibilities and start over. That would mean that all state funds would be confiscated to pay debts. This would include every fund from the general fund to state retirement funds. Therefore, every retired person would suddenly be without pension. Every worker who has paid into a pension fund, or whose state employer did, would lose all of this money.
Among the second worst possibilities are the dismantling of labor unions and any source of balanced strength for workers. It is blindingly clear that the rich want power all to themselves along with all the money. The only real source of power balance for the rest of us is organization, which in most cases means unions. That is why the rich are working hard to dismantle public worker unions, in a deceptive campaign to balance state budgets. In so doing, everything about the unions is being distorted or simply falsified. Moreover, abolishing public employee unions would have very little effect on state budgets. What it would do is channel yet more money to the wealthy and remove the only source of power available to the workers. It would also put workers at the mercy of their employers’ whims and prejudices.
Are you not angry? Do you have so much money that you don’t care about the rest of us? Are you not outraged at the theft of your future, of democracy and justice, by people who have no need of more of your money?
Let us step back a bit to see if we can gain some perspective on this situation. When World War II ended, virtually every national purse in the world was in shreds. In the US we faced a public debt that was 122% of the gross domestic product, the highest ever. Europe had been bombed to oblivion. Sixty million people had died. A number of Asian cities had been leveled. Everybody’s national budget was a catastrophe. How could we possibly recover?
And yet, the world not only recovered, it did so in record time, and we began an unequaled period of economic plenty that lasted in the United States until Ronald Reagan began the thirty-year process of dismantling it, leading to the present Great Recession. And now we are debating whether to continue and strengthen the same things that brought us to this crisis, and nobody in the world seems to be thinking about how to duplicate the conditions that brought about the post-WWII abundance.
The miracle of conservative politics is that they have been able to convince average people that their policies are right, in spite of the contrary evidence ordinary people feel in their daily lives. Moreover, they are doing it with scurrilous appeals to false feelings of superiority, leading to a marked increase of intolerance. Intolerance for any person who has darker skin, whose first language is not American English, whose culture is not the same, whose religion is not the same, or who is an immigrant.
It is a relatively simple matter to put us on the right fiscal path. After all, we were on that path during the Carter and Clinton administrations, complete with balanced budgets and even surpluses, all of which was destroyed by the recklessness of the Ronald Reagan and George W. Bush administrations.
The fact is, all the money for the functioning of the federal government comes from taxes, and much of that from the personal income tax (whereas corporations are undertaxed, paying just over 1%). Are we overtaxed? No. Our tax revenue, as a percentage of Gross Domestic Product, is about 67% of the European Union’s. We are not overtaxed. Why, then, are we in such trouble?
We are in trouble because income of the average family has remained constant or dropped for thirty years, even as income for the very rich has rocketed skyward, while their taxation has diminished. We are in trouble because the “masters of the universe” created a mess that left an official unemployment rate above 9% that resists cure. (The real rate may be closer to 16%, because the official rate counts only those receiving public assistance. More and more of those people are reaching the limit for unemployment assistance, after which they are not counted, and there are increasing numbers of people who have simply stopped looking for work after several years of depressing failure to find it.)
The stifling unemployment we are experiencing is both the cause of the economic crises and the answer to it. There are only two things that need to be done:
1. Put people back to work.
2. Pay a living wage.
When these two things are done, our economic problems will be resolved, and we can begin paying down the unacceptable national debt.
Neither of these things is rocket science, and both have been accomplished before and can be done again. During the 1930s, the federal government undertook a profusion of projects that provided desperately needed employment for many thousands of people while creating everything from public art to great structures, most of which remain in place to enrich the country still today. The need for such work is even greater today. For example, many thousands of ordinary bridges and highways and other infrastructure are in danger of failure, and must be fixed. But we also have possibilities to enhance the future that were not available at the time of the WPA in the 1930s. Among these possibilities are recycling of everything from common trash to classic homes, public buildings, and industrial sites. We need to build fast rail service, which we are behind on because we have none at all. We need ever-increasing development of technology of all sorts, and this might well mean development of manufacturing methods that can compete on the world market. There are many more such opportunities.
But simply putting people to work on poorly paid jobs will not restore national fiscal health. To do that, we must restore balance. There is no reason for the gross distortion of the national income, with vast wealth at the top, and slowly diminishing fortune for everyone else. As I said above, this is class warfare, and one of the most effective ways to defeat it is the institution of a Living Wage. The citizens of Australia earn a living wage. There are no jobs that do not provide income adequate for ordinary needs. Delivery van drivers can afford a home and have health care. It is clear is that the MacDonald-izing of our workforce, with low wages, part-time work, and no benefits, has crippled us and must end. Honest full-time work must allow every worker a living wage. We must make laws that forbid structuring work and pay solely for the profit of company shareholders.
The irony about the present class warfare is that the very wealthy think that more equitable balance would diminish their wellbeing. This is simply wrong. First, the amount of wealth at the top has no real purpose. It cannot be spent. Additional wealth has no meaning. There are no further things to buy. Second, it is simply false that diverting some part of this fortune for the general welfare would diminish the lives of the wealthy in any way. As President Truman said, “Even the Republicans are better off under the Democrats”. During the post-WWII years, the rising level of wealth raised all boats equally, and we all enjoyed prosperity that has never been equaled.
But restoration of balance will be fiercely resisted by the wealthy, and by conservative Republicans, who are often the same people. All these people believe in two things that are demonstrably false: that we are overtaxed, and that government is too big. As I said above, our taxation is considerably lower than the countries of the EU, and our standard of living is lower as a result. They also believe that we could simply do away with many crucial services of the federal government. They forget that Social Security came about because President Roosevelt was shocked to see elderly women eating out of garbage cans, and they forget that the other agencies of the government provide crucial services that have protected our quality of life. They forget what our water and air were like before the Environmental Protection Agency came into being. They forget that the Cuyahoga River in Cleveland actually caught fire several times, and that Los Angeles was invisible from the air.