This piece began as a letter to the North Coast Journal. It was written in response to an interesting article by the publisher Judy Hodgson that appeared in the November 24, 2011 issue of the Journal under the title PUBLISHER’S NOTE: “What’s it all about?” I had been playing around with these thoughts and the article gave me a chance to clarify my thinking on the subject. The letter was rejected for being too long. I have resubmitted a shorter version of what appears below.
In Publisher Hodgson’s essay about the Occupy movement she recalls how in the 1950s and 1960s we had rapid economic growth and a strong middle class. She infers that it was the economic growth that “narrowed” the differences in income and allowed the middle class to grow. It’s not that simple. In the1950s we had a very progressive income tax (A top rate of 90percent then as compared to 36 percent now) and an estate tax that was steeper and affected smaller estates than it does now.
In the 1950s with this progressive tax policy in place the middle class did grow and it was possible to believe that we were moving toward a true meritocracy, that each generation would compete on an even playing field, that government could be organized to promote the greatest good for the greatest number. From these dreams the sixties were born.
Conditions have changed dramatically since then. Congress flattened our tax structure with the Reagan and Bush tax cuts. We were told then, as we are being told now, that lowering taxes on the entrepreneur, the venture capitalist, the banker and his bank, would result in prosperity for us all. That a “rising tide raises all ships.” That wealth generated by the wealthy would “trickle down” to the rest of us. As Hodgson points out that is not what happened. Instead the wealth has trickled up.
A healthy middle class is not a natural byproduct of a free economy strong or weak. Only where wealth is constantly recycled can a large and vibrant middle class emerge and maintain its independence. Without the redistribution of wealth static class divisions develop: a small very rich aristocracy, a large underclass and a small subservient middle class that is dependent on the wealthy for its relative prosperity. History is full of this same old story: landowners and serfs, nobles and peasants, Brahmans and untouchables, masters and slaves.
Since 1980 the trend has been consistent: the rich are getting richer while the rest of us stagnate or become poorer. The United States is on a steady trajectory away from being a middle-class society and toward the traditional rich-poor divide. That the occasional young man drops out of Harvard to become the world’s youngest billionaire, or a young woman goes from singing front of her bathroom mirror to becoming American’s latest idol, only masks the overall trend: most of us are trending downward while wealth is concentrating at the top.
Changing this slide will require enormous political will and a long struggle because, unfortunately, wealth in this country equals political power. In an ideal representative democracy the CEO of a large corporation would have no more influence on his elected representative than the mother who works at McDonalds since each is entitled to one vote. But in the real world the congressperson’s main motivation is to raise money to finance his or her campaign. A member of congress spends about half her time raising money for her and her party’s campaigns. Most of her waking hours are spent with people who have money to give either individually, through a trade group, a corporation or other entity. These are the people she listens to. It is their concerns she hears about and in the end represents. And if the member of Congress is not rich when she arrives in Washington she soon will be. (An article in the November 21st issue of NEWSWEEK on insider trading in Congress reported that since 2008, a period in which the net worth of most Americans has fallen significantly, the net worth of members of Congress has increased by 25 percent.)
A few months ago Congressman Mike Thompson held at town meeting in Eureka on the subject of the deficit. A member of the audience proposed that taxes be increased on persons earning more than $250,000 a year. The Congressman didn’t like the idea. He knew a number of families, he said, earning $250,000 a year who were truly struggling. The Congressman is either astonishingly naïve or astonishingly cynical. Of course families making $250,000 a year are struggling. The bigger the home, the larger the mortgage. Education at a private school costs more than at a public school. Starting a vineyard requires a lot of loot. A yacht really is a hole in the ocean you pour money into. But those struggles are not the same as the struggles of the single mother working at McDonalds or the unemployed husband whose house is under water or the college student whose tuition is ever increasing.
Today in America corporations are persons and publicly financed political campaigns are unconstitutional. Government services are privatized to the considerable profit of some and the detriment of others. Even Obama’s pathetic tax increases go nowhere. We have a government of the rich, by the rich and for the rich. A government where the heart of a Democratic congressman bleeds for the poor family earning only a quarter million dollars a year.