Mar 2, 2014

March 3, 2014: Assault on the Middle Class, State-Sanctioned Greed, Don't Agonize...Organize

Senator Corker is not alone in this headlong assault on the middle class.  Everywhere, across the country, diligent Rescumlicans are about the business of conducting a headlong assault on both the New Deal and organized labor rolling back a century of progress.  There’s Scott Walker in Wisconsin waging war on the public employee unions, Rick Snyder, a former hedge fund tycoon, turning Michigan into a ‘right to starve’ state further solidifying it’s position as the Alabama of the Midwest.  Then there’s John Kasich of Ohio, previous congressman best known for leading the impeachment crusade against Bill Clinton while in the House, now as governor of Ohio he first led a battle to savage public employee unions and, after the voters overturned the law by public referendum we now find him leading the fight to keep as many voters away from the polls as indeceny will allow.  Across America we see a concerted effort to wage war on the workers of this country, first by seeking to limit the ability of workers to organize, second by seeking to roll back worker’s hard earned gaines by , as Corker demonstrated, using real or imagined crises to wring draconian concessions from the working class, and lastly by seeking to protect their political backsides from an associated political cost by restricting access to the ballot box.  The result is that, as the aforementioned graph demonstrates, the percentage of the national wealth held by the middle class of this country is on the decline.

Bill Moyers featured as a guest on his PBS program last season former Secretary of Labor Robert Reich.  Reich, now economics professor at Berkley, has recently published a book dealing with the state of the economy in the post-Bush era.  It transpires that the top 1% made off with 95% of the economic gains made since the crash of ’07.  Below is a graph illustrating the relative gains by each of the 5 economic groupings in recent years. 

If one were to further break down this income distribution, one would find that most of the gains within the top 5% went to the highest 1%, with the lion’s share going to the top one half of one per cent.  Meanwhile, as this graph so aptly demonstrates, the bottom 80% are falling behind. 

To see the impact of the state-sanctioned greed let’s look at what has happened to median income in recent years, but first a word of explanation for those unfamiliar with the arcane ways of the statistician.  Conservatives gloss over what is happening to the middle class by using income averages.  The average household income and the mean household income are not the same standards of measure because averages can, in this case, be misleading.  For instance you could put Bill Gates in a room with 40 homeless people and the average wealth of everyone in the room would be well over a Billion dollars. But if you measure by Median wealth and you would get a quite different and quite startling answer, for Median wealth would approach, in this example, near zero. For such measurements real wealth or yearly household incomes are measured by the median and by deviations from the median known to the statistically obtuse as “standard deviations”.  Think of the median as the true middle, like the median on the road.  Here, in this statistic, one can measure the relative position, success or the struggles of the ‘average’ american—that is the American Middle Class. 

As you can see, since 2007 the “average” or median household income has gone down by roughly $4,000.00 per year. The Middle Class has lost, in the wake of the recession, 7.8 or roughly 8% of its purchasing power.  So while the top one percent has made off with 95% of the economic gains since the last recession the middle class has lost nearly 8% of it’s income. Only belatedly has this administration begun to address this problem.
The consequences of allowing these trends to continue unabated is amply illustrated in the graph below.
The graph clearly shows that the percentage of the national wealth held by the middle class, adjusted for inflation to 2012 dollars, reached its peak in 1968. A whole host of problems and issues arose in the 1970s from the election of Richard Outhouse Nixon to the Arab Oil Boycott, to the introduction into the labor force of the Baby Boomers (otherwise known as the ‘generation of swine’), which set the stage for the downward decent of the purchasing power of Main Street America.  What has been so troubling has been the governmental response, or rather lack of response to this trend.  In fact governance has mostly involved creating new and novel means to accelerate the trend either by nearly eliminating any semblance of ‘progressivism’ in the tax code, shifting taxation so that work is now taxed at a much higher rate than wealth, and by turning a blind eye when we are not turning back the clock on regulations (principally financial regulations) and anti-trust.  Here we see that administrations, be they Democratic or Republican have not altered the general shape of the curve, giving damning testament to the growing dominance to the now near dictatorship of Capital. 
 There is a solution to this, one that is best expressed by an old adage “don’t agonize…organize”
If you're part of the middle class, thank a union.

March 2, 2014: Mantra of the Swine, Quite Beneath Them, Genuflecting before the Angry Gods of Greed

In the summer of 2011 I was doing some work for a client in Athens, Georgia, a property management company specializing in rental properties in this university town.  Jim and I got into a discussion about the auto bail-outs.  I made the point that the Obama Administration should have met with the corporate boards of GM and Chrysler and made it clear that as a condition of providing the required financial aid that not only would the top executives have to go, without a golden parachute, and that the production facilities built overseas and the jobs that went with them would have to return to the territorial United States.  Jim heartily agreed with that.  Then I said that these jobs would, as a requirement for Federal assistance, be unionized.  That’s where we parted company.  “Oh no” was the response, “we don’t need unions”. 

 This has been, by and large, the mantra of the generation of swine.  I cannot relate how many times I’ve engaged in similar conversations with my peers over the years and elicited the same response.  For reasons having to do with the prosperity into which we were born, the shameless education we received, and the collective greed and ignorance we have brought to bear, the Swine have, almost to a man, repeated the mantra of their collective corporate paymasters when it comes to issues surrounding the work place.  My response to Jim was, as it has always been, a polite variant of the question “What have you got against the middle class”? 

 It is not often taught in the schools anymore, in this sanitized version of our collective history organized as it is around performance testing; but today’s post-industrial middle class is a product of a combination of political will and organizing the labor force in the work place.  As the old middle class, founded on the family farm, was fading into history, the New Deal consciously replaced it with a new industrial middle class by not only instituting a far more progressive tax code, establishing the 40 hour work week, creating unemployment insurance but by also making it easier, with the Fair Labor Standards Act, to organize the work place.  Granted the power, instead of facing the opposition of government to bargain Americans by the millions joined unions creating higher wages, safer working conditions, vacations, pension programs and a relatively secure purchase on the growing American Middle Class.   

 No more.  In the last 40 years union membership has continued to decline as a percentage of the workforce.  Boomers, bidding a farewell to the stigmata of the “blue collar”, thinking that such collective associations too “working class” and quite beneath them, shunned the very idea of walking into a union hall.  This is America, they declaimed, where the individual stands alone.  Here one makes it with one’s own grit, determination, and character, it was proclaimed.  Here we stand or fall on our own merits.  And so, by the end of the century, the great American Middle Class, shorn of its collective voice and standing naked and alone before the angry gods of greed, finds itself under assault and driven to the point of looming extinction.

 Here is a graph, compliments of MSNBC’s “The Ed Show”, and published by the center for American Progress, showing the relationship between the decline of Union membership and the decline in the share of the national wealth held by the Middle Class:  Corker knew what he was doing when he stood on the Senate floor and demanded the diminution of the benefits of organizing the workplace.  He was simply genuflecting to his corporate paymasters, the angry gods of greed.