In his excellent new book, The Squandering of America: How the Failure of our Politics Undermines our Prosperity, Robert Kuttner writes:
"Between 2000 and 2006, the productivity of American workers increased by 19 percent. But the total increase in the wages paid to all 124 million non-supervisory workers was less than $200 million in six years -- a raise of $1.60 per worker -- not $1.60 per hours but a grand total of one dollar and sixty cents in higher wages per worker over nearly six years! Labor market researcher Andrew Sum of the Northeastern University Center for Labor Market Studies compares the $200 million for workers to the $38 billion paid in bonuses alone by the top five Wall Street firms during the same period." (Kuttner, p. 21)
For many years now scholars and journalists including Robert Kuttner, Kevin Phillips, William Greider, Barbara Ehrenreich, Noami Klein, and others have provided a mountain of data showing that Republican Party rule has produced greater inequality in America, and that Republican class war policies have enriched the few at the expense of the many. With the current economic meltdown millions of Americans might be starting to wake up to the new reality brought on by years of unbridled greed masquerading as economic policy.
Deep inside the engine of our capitalist economy is a powerful incentive for the owners of society's productive forces to do everything in their power to discipline labor and to push workers' wages down as low as possible. This imperative manifests itself in the form of crushing labor unions, outsourcing jobs to low-wage countries, exploiting immigrant workers, slashing social programs that benefit low-income people, and silencing the collective strength of working-class people generally. Beginning with Reaganomics, through Rubinomics, and on to Bush's Kleptonomics, the Republican Party, (and its enablers inside the Clintonite Democratic Leadership Council), have set the economic agenda. They have been gleefully dancing on the heads of working people in this country for decades.
This class warfare directed against the average working American with the aim of holding down wages contradicts the necessity for capitalism to sell goods and services to these same cash-strapped workers. In other words, when capital succeeds in keeping wages low (especially in times of increased labor productivity) it constricts consumption and eventually produces crisis.
"The prices of things that enable Americans to be middle class have been rising far faster than average prices. Official inflation statistics understate the real cost of living. Young Americans are increasingly reliant on the unequal wealth of their families of origin. The time squeeze on families has increased the stress of raising children in an era with two working parents and no new social supports. And, quite apart from incomes stagnating, new forms of economic insecurity have increased, such as dwindling health care and pension coverage. . . . [T]he costs of college education, housing, and medical care have greatly outpaced wages and average prices. It just happens that the prices that have risen most steeply are those of the big items that signal entry into the middle class." (Kuttner, pp. 22-23)
Add to these rising costs for the average working American the shredding of the social safety net, the Department of Labor turned into a union-busting institution, and President George W. Bush's tax cuts for the wealthy and corporations and his vetoing of social legislation such as the S-CHIPS children's health benefit, and we see the Republican class war at its ugliest.
We must also consider the costs of maintaining America's global empire. For example, the state of California's budget deficit, we are told, now stands at about $14 billion. If we diverted one month's spending on the Iraq occupation we could nearly wipe out California's debt. If we dedicated two months spending on Iraq to our most populous state we could provide billions of dollars in investment capital to fuel the development of the new green technologies needed to save the planet from global climate change and create jobs and investment opportunities. Screwing California's public education system is both a penny foolish and a pound foolish. We need the California State University and University of California systems to create the next generation of technological innovation, just as this vital public education system provided the talent that produced the modern computer and Internet age.
With luck, the current economic crisis will force the nation to take a new direction away from perpetual war and the lowering of living standards to a world where we can begin to innovate again and address creatively and energetically our most pressing environmental and social problems.