Over the past several decades, the Right has convinced millions of Americans that Government is the source of all problems, that Corporations must have near-total freedom, and that the Rich must enjoy low taxes. The consequence has been a devastated middle class and fiscal chaos, writes Michael Winship.
By Michael Winship
I ran into my friend Jeff Madrick a few weeks ago. Like a rabbit out of a hat, or so it seemed, he whipped from his coat a copy of his new book, Age of Greed.
He gave the book to me and I’m grateful. It’s a compelling and worthy read. Jeff’s an able journalist; an excellent and cogent storyteller in a field that often defies the straightforward plot or easy explanation, economics.
The book’s subtitle says it all: “The Triumph of Finance and the Decline of America, 1970 to the Present;” an ongoing saga of avarice told through profiles of the men who confidently strode forth and marched us smack into the middle of our current fiscal nightmare.
Milton Friedman, Richard Nixon, Ivan Boesky, Ronald Reagan, Michael Milken, Alan Greenspan, Ken Lay, Walter Wriston of Citicorp and Sandy Weill of Citigroup, Lehman Brothers’ Richard Fuld, they’re all here and more, presidents and economists, CEO’s and masters of the universe, a veritable Murderers’ Row of the rich and frequently reckless.
As Jeff writes in the introduction, the first part of Age of Greed “is mostly a story of business pioneers who fought government regulation or, through innovation, escaped government oversight,” building on fear from punishing inflation in the seventies and a new post-Watergate distrust of government, “all the while diminishing the power of government and reinforcing the changing national attitudes.”
In the second part, “Once government was no longer a counterweight and a new political ideology cleared their path, financiers led the way. Debts more than innovation and technological progress became the economy’s driving force. Financial businesses doubled in size compared to the economy and profits grew still faster. Hundreds of billions of precious American savings were wasted.”
I thought of all this last week when I read a report headlined “Fly on the Wall,” on the website Politico.com:
“Fifty of the most prized donors in national politics, including several hedge-fund billionaires who are among the richest people in the world, schlepped to a Manhattan office or hovered around speakerphones Tuesday afternoon as their host, venture capitalist Ken Langone, a co-founder of The Home Depot, implored New Jersey Gov. Chris Christie to reconsider and seek the GOP presidential nomination.”
Yikes. That prospect alone is enough to make sensible men and women weep. But wait, there’s more.
Among those in attendance were at least three worthy of inclusion on Forbes‘ list of richest Americans, Paul Tudor Jones (hedge funds; $3.3 billion), Stan Druckenmiller (hedge funds; $2.5 billion) and Bernie Marcus (Home Depot; $1.9 billion).
According to Politico, “Several of them said: I’m Republican but I voted for President Obama, because I couldn’t live with Sarah Palin. Many said they were severely disappointed in the president. The biggest complaint was what several called ‘class warfare.’
“They said they didn’t understand what they had done to deserve that: If you want to have a conversation about taxation, have a conversation. But a president shouldn’t attack his constituents, he’s not the president of some people, he’s president of all the people. Someone mentioned Huey Long populism.”
Huey Long populism? Give me a break.
Barack Obama’s about as much like Huey Long as I am Huey Newton of the Black Panthers (or Huey Lewis and the News, come to that).
And as for class warfare, give me a double break. Who the hell started it? “There’s class warfare, all right,” Warren Buffett told The New York Times two years before the 2008 crash, “but it’s my class, the rich class, that’s making war, and we’re winning.”
I’ll say. Which makes the whining of the moneyed, in addition to the winning, all the more annoying.
Especially after the Obama White House has bent over backwards for them, simply remember the concessions on health care and financial reform, for two, and all too often has vassaled itself to the knights of the Fortune 500, kowtowing all the way to the bank where they keep the big campaign contributions.
But I suppose in comparison to the Republicans’ even lower groveling for the corporate table leavings, it’s conceivable the President and his associates might seem to some of those residing in the economic stratosphere like wild-eyed populists.
For one, that National Labor Relations Board of his is being too, too terribly annoying. The NLRB has gone after Boeing, alleging that the aerospace giant decided to move an aircraft plant to South Carolina in retaliation against strikes by workers at its Puget Sound factory outside Seattle.
And now the Teamsters have filed a charge with the labor board that the car company BMW of North America has failed to bargain in good faith, replacing union members by outsourcing a parts distribution center in Ontario, California. (The usual full disclosure: I’m president of a union affiliated with the AFL-CIO.)
In 40 years of union representation, there has never been a labor stoppage at the center; in fact, its employers have received gold medals from BMW for efficiency. Average seniority is 20 years; five workers have been there 30 years or more.
As Michael Hiltzik wrote in the July 3 Los Angeles Times, “These employees exemplified the best qualities of the American worker. They devoted their working lives to BMW, at a time when it was building and solidifying its US beachhead.
“Their wages, with benefits, paid for a reasonable middle-class lifestyle if they managed it carefully. Throw in the job security they were encouraged to expect, and they had the confidence to make sacrifices and investments that contributed to the economy for the long term, like college education for the kids, an addition on the house, a new baby.
“Then one day they were handed a mass pink slip, effective in a matter of weeks.”
You can argue that BMW, world’s largest manufacturer of luxury cars, has the legal right to outsource. Yet by the same token, Hiltzik noted, “American taxpayers had a perfect legal right to tell BMW to drop dead when the firm’s credit arm asked the Federal Reserve for a low-interest $3.6-billion loan during the 2008 financial crisis.
“BMW got the money then because US policymakers saw a larger issue at stake: saving the economy from going over a cliff. Just as there’s a larger issue involved at Ontario, which is saving the American middle class from going over the same cliff.”
Last year, BMW posted profits of $4.7 billion and bumped up shareholder dividends by $950 million. This year, they’re predicting a ten percent increase in revenues. Will they be sharing with their American workers? Don’t bet on it. Will they come running to the government for help next time they’re in trouble? Count on it.
And as if Congress hasn’t done corporate America enough favors, next week House Republicans will try to pass an anti-NLRB bill that will, in the words of California Democratic Congressman George Miller, “eviscerate the rights of workers, help ship more jobs overseas, undermine job creation in this country and kill opportunity for people who are working hard and playing by the rules.”
HR 2587 takes away the NLRB’s authority, says AFL-CIO Government Affairs Director Bill Samuel, “to restore workers to their jobs when companies simply eliminate work in order to eliminate workers who are pro-union or when companies eliminate work in order to avoid their legal obligation to bargain.
“[The bill] will have dire unintended consequences as well. It will make it easier to ship jobs overseas because it legalizes the most despicable form of outsourcing, the illegal kind, by keeping the NLRB from being able to stop it. The bill will remove one of the only tools preventing work from leaving the US.”
And still big business will whine and complain, as per Politico, not understanding what they have done to deserve opprobrium.
Yet all the while, as Jeff Madrick writes in Age of Greed, they take our economy “along an unfortunate, tragic path for their own purposes from which it may not be possible to turn back.”
Michael Winship is senior writing fellow at Demos, president of the Writers Guild of America, East, and former senior writer of “Bill Moyers Journal” on PBS.
The BMW story reminds me of the storyline of GM in the San Fernanado Valley area of Los Angeles where I live.
Up through the ’92 model year, virtually all Camaros and Firebirds (among other models) were built in the GM plant in Van Nuys. And why not? Where else would you build some of the hippest and coolest cars but in the nation’s largest car marketplace? Even Van Nuys Blvd itself was an ode to car culture – as enshrined in the movie “American Graffiti”. It made sense – at least until the end of ’92.
Starting with the re-designed ’93 model year, Camaro and Firebird manufacture was moved to Canada. But the real slap in the face was the T.V. commercial, the one that said something like ‘…from the country that brought you rock ‘n roll’.
Well I understand that rock ‘n roll wasn’t actually born in California, but at least it’s in the same country. With all due respect to Canadian music culture, I think Fats Dominoe and Little Richard would be confounded by GM’s perception of music history. Of course, it’s really just a way to distract attention from yet another production source which we have lost.
Today meanwhile, what used to be GM in Van Nuys is now an outlet mall, and the railroad loading dock next door is just another MetroLink train stop on the way to Lancaster.
The rich won the class war by depriving the middle and lower classes of education: history, civics, political education, and training in how to think critically. As a result, their mouthpieces can spout nonsense and the relatively uneducated voters now swallow it clean.
The antidote, until we get a real education system back again, is for those of use whose eyes are open to educate those around us who cannot see what is going on.
We need to develop simple, factually accurate materials we can hand out to people (or point them to on the web); simple, factually accurate arguments that show the folly of voting tax breaks for the rich etc etc rather than services and benefits for the average family; and so forth.
All that’s required for the rich to win the class war is for the middle and lower classes to do nothing.
I don’t think there ever was a class war in America. According to the OECD fact book it has the highest incarceration rate per capita in the developed world, with Russia at a distant second. A vast majority of those incarcerated are poverty stricken. African Americans make up 14% of the population but 43% of those incarcerated. America has one of the largest disparities in income in the industrialized world. Here are two interesting articles that relate if you have the time. http://www.theruggedgent.com/2011/03/18/state-of-the-union/
http://www.theruggedgent.com/2011/08/01/democracy-and-the-bad-samaritians/
The rich haven’t won the class war, but they have won most of the battles going back to the advent of surpluses and specialization first created by agriculture ten thousand years ago. Battles are won and lost. The war goes on.
“In America today, only the rich have political power.” -Robert Reich (7.21.2011)
We live in a plutocracy – the United Plutocrats of America – where the wealthy control the means of governance. Regrettably, then, to restore the nation to full employment, we must find a way to incentivize the barons of Wall Street to invest in new businesses for the regular folks on Main Street – the American proletariat. I have devised a private-sector free market plan to achieve the goal of returning the U.S. economy to full employment. The plan provides a major (profit-generating) incentive to Wall Street to transfer massive amounts of investment funding to Main Street through the creation of a massive number of new entrepreneurial ventures. My plan effectively “piggy-backs” onto existing financial industry architecture to securitize the entrepreneurial investment process, thus enabling Wall Street to make boatloads of cash in the secondary market (a la the trading associated with the mortgage-backed security and its many many derivatives). The net result of the plan is the massive creation of new jobs to jump-start the U.S. economy back to full employment.
You can read the proposal (“A Modest Proposal to Save the American Economy: Entrepreneurial Blitzkrieg as Job Creation Vehicle”) and its companion piece (“The 75 Percent Solution? A Moral and Economic Imperative to Create Good Jobs NOW!”) here: http://jpbulko.newsvine.com/
Joseph Patrick Bulko, MBA
This article does not live up to its title. It does not describe how the rich won the class war at all, but only documents the fact that they wanted to do so. Which I think is pretty obvious anyway. It would have been much more interesting and constructive if it had addressed the question posed in its title.
when things cannot get any worse, they usually do. when the tide begins to
turn, it is when a new generation rejects, wholesale, the ruling ideas of
the age.
if you think tens of millions of newly un and underemployed college grads
and postgrads, and those of us who once had dreams of some form of middle
class security and are waiting for the next political moment to rise up again and fight fight fight against this insanity called bipartisanship, which is
the evil twin of right wing extremism manifested in the obama-clinton democratic leadership council consensus…….
if you think there is blood in the streets now, as wall street loves to talk about……
wait until post 2012, whoever wins congress and the white house…
revolutions are a product of two fundamental changes: deep elite divisions, usually grounded in generational divides among the elites; and mass insurgency, usually led by a small number of working and radical middle class intellectuals and organizers….
this moment in america is not that far off….my sense is obama’s presidency was the critical tipping point.
if he betrays the masses who want to believe in the democratic party, and the political system more generally, which is what it appears he is committed to doing, for reasons most likely half personal and half strategic, then there is nowhere to go for the democratic party masses but truly to the Left.
no charismatic centrist substitutes, only the Left will fight the Right.
the Center, represented by clinton and obama, has demonstrated power matters more than principle.
and where has that gotten us?
i am excited by the political depression taking place among democrats and progressives. learning is painful. obama has taught liberals and progressives alot in a few years. rhetoric without action means nothing.
and embracing close to 100 percent of the bush agenda on the economy and foreign policy, the backbone of corporate empire, is sign enough that this
centrist democratic alignment cannot last going forward.
the alternative to a new left is to abandon politics to the right, since the democratic center is not interested in fighting for anything or anyone but the right to the perks of office.
“You only have power over people so long as you don’t take everything away from them. But when you’ve robbed a man of everything he’s no longer in your power — he’s free again.”
Alexander Solzhenitsyn
There-in rests the real dilemma of the rich. The most dangerous people in the world are not the most cunning, well-armed, or even the most ruthless, but rather those who perceive (correctly or incorrectly, it doesn’t matter) themselves as having nothing left to lose. And our society has been grinding them out in the tens-of-thousands every month for a decade. All it will take is a new Huey Long or Roosevelt to unleash that power and lack of inhibition against the haves.
Having lived a long time in the third world I thoroughly agree with your view. The scary thing is when there is no hope there are no deterrents. I was in much more danger than walking through any American city till the near future.
way to many blissfully and willfully ignorant people permeate the landscape of american politics whose main concern is getting that paycheck from their corporate masters. after the last 30-40yrs it is starting to come out in the wash. the right wing has had my country by the thrroat since the reagan myth thanks to american big media, big business, and big military. even another depression wont help because the rightwing will just blame the left and big media will line up behind the right BECAUSE, “lies is truth and truth is lies”, and cowboy capitalism will march on. i despise the rightwing and the long list of hapless democrats since reagan who have enabled them. YOU LISTENING OBAMA!!!!!!!!!!!!!!!
The rich didn’t just win the class war lately, they won it in 1787 when the present conservative constitution replaced the liberal articles. Average folk have always suffered. There was a respite following world war II, because the US went around the world and bombed every competing major industrial centre into oblivion. Even poor folks made money on that deal for the next 30 years. But it is a mistake to imagine that if we could somehow get back to the old days everything would be ok. Nope. We ARE getting back to the old days, when the rich got richer and everyone else died young. If you want out of this mess, go for a multiple party system, base political parties on representing ideas, not geography, then maybe you got a chance. Good luck.
Thanks mulout for a very thought-provoking and concise comment. It is really only in the post-WW2 30 years (“les trente gloieuses”, as they are called here in France), that there was plenty of work rebuilding, productivity of workers increased and they were paid more for it, some social benefits were introduced.
Bravo, agreed. More on that here. http://www.theruggedgent.com/2011/08/01/democracy-and-the-bad-samaritians/
Since the 70’s, we have steadily moved “Back To The Future” with presidents and congresses that bought into the Friedmanite theory of economics and finance. We’ve returned to the decimated middle class that existed before FDR, with inequality rivaling the 1920’s.
This happened for two reasons; ignorance and greed. We have a public devoid of the history of this nation and no longer being taught civics. They are taught the trickle down, supply side economics in Economic schools. Reagan put the final nail in the coffin when he ushered in the Age of Me. From the time of Reagan, the people of this nation have been taught that we are all individuals, with no responsibility to and for each other, no concept of the commons, and that the reason you’re doing bad is because of government and those other folks taking what should be yours. (wink, wink, monorities!)
Since Reagan, we have Republican and Democratic presidents alike touting the successes of the 1980’s. we now have Democrats relying on Reagan in the debt deiling fight. Democrats are saying Reagan raised taxes when he realized his tax cuts were damaging the nation, and they’re right. What they fail to inform the public about is where those tax hikes and fees took place. The majority of the taxes raised by Reagan directly hit the middle class.
So what we have now is a Republican party, who comes into government, and does their damned best to make it as dysfunctional as possible, which puts truth their circular argument that government is bad. And we have a Democratic party, fully aligned with the supply-side, trickle down economics of the day. Obama goes so far as to praise Reagan’s presidency as transformational while ignoring the results of that transformation; the destruction of the manufacturing base, and of the middle class.
How do we win this battle, hell, I don’t know. Thanks to Clinton and the 1996 Telecommunications Act, which handed the medium for informing the public over to the powerful, how do we break through this wall of idiocy that defines our media. If we can solve that problem, I think we are well on our way to changing the direction of this nation. But with Democrats like Obama, who continue with the media mergers and acquisitions by Multi-national corporations, we have one hell of a fight on our hands.