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.
Kutter writes:
"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.
Clinton and his secretary of treasury Robert Rubin, and Bush, and his former defense secretary Donald Rumsfeld, may use different strategies, but they promote the same globalization agenda in which the benefits go to America's corporate investors - and the costs are paid by ordinary Americans in outsourced jobs, military casualties, and an unsustainable debt.
NAFTA, CAFTA and the WTO and similar "free trade" agreements are really deals that rip up the social contract within our country that allows the benefits of capitalism to be broadly shared. The WTO makes up the constitution of a single global economy that protects just one citizen, the large transnational corporation.
Global corporations with American names are profitable, but the competitiveness of the people, businesses, and communities rooted in the U>S> economy is relentlessly deteriorating America's workers. The illusion of prosperity has been maintained by borrowing. Living standards are dropping. A democratic redesign of globalization is in order.
That painful day of reckoning is here. Globalization is a cover for American imperialism, but the beneficiaries are not the American people but the CEOs at the expense of the working class and poor people where ever they may be - a global class struggle.
Finally someone is taking note and speaking out. I've tried for the past 6 years to explain what was going on. Now the crops are starting to spring forth, you reap what you sow.
All the turmoil of today’s economy can be traced directly back to the 2000 election. The rich got their man in and he has done everything in his power to pay them back for it ten fold. To bad for the rest of us. I guess we can just eat cake.
Dan Ashe
Another outstanding essay/post, a real tell it as it is, the avarice has become an epidemic.
Agape.
I recently priced several electronic things and there wasn't a dimes worth of difference between the manufactors. When I go in markets the price of old American products are fixed high compared to the store brand name.
I see less and less price and product competition.
I hope inflation is the end of globalization.
I find it interesting that when one complains about the corporate elite, they are accused of trying to start a class war. The fact is that they have been conducting a guerilla-style class war against us for generations.
How can anyone be aware of what is in this blog and even a few of the other manifestations of the class war and not be angry? Why is Edwards so often characterized by the MSM as angry. In the debate the other night, any anger he showed was targeted at the corpoate elite, measured and factual. The other candidates were angry but shooting from the hip at each other. I guess it's alright to be angry at each other but not at the corporate owners of the MSM.
cognito ergo populistae
The ONLY reason many of us can still claim middle class status is because we are in credit debt up to our eyeballs or because we were somehow approved for a home loan that takes up far too much of our monthly earnings to finance. People are living way above their actual means because they were born middle class and are desperate to stay there. There is also great pressure in our culture to climb up the social ladder and end up in a wealthier strata than that in which you were born.
Wouldn't it be something if, for just one year, everyone stopped using credit and only bought what they could genuinely afford? What a message that would send.
I am lucky Right now we live on one income and my spouse is earning decent pay. But, one income realistically means one used car, a house in an older and less prestigious community near the city, no vacations, almost no dining out or entertainment, and spending every spare minute doing ourselves what many people pay contractors and professionals to build or repair. And, this is not a possibility for people who earn a little less.
The people need to start sending a message that they can no longer afford the gadgets and entertainment products on which our economy now seems to be so centered. We need to get back to the basics for awhile and live like our grandparents.
It’s too bad ‘you’ fell for the Reagan fantasy, but ‘you’ did. Some part of ‘you’ believed that ‘you’ would be the exception to the financial rule that 99 percent are a lot poorer than the 1 percent. And that is the scorecard since year one of civilization.
There is always someone who is perfectly insatiable who through the fact of that motive will subjugate anyone and everyone he can. Edwards is saying that we should treat corruption in business and politics as a moral outrage. I think we should treat it as treason. Because, there is nothing that could have been done to weaken America more than to take manufacturing and industrial jobs offshore.
Really, we have been studying economics since Adam Smith, for a couple hundred years now. In the same time frame we have invented steam engines, bicycles, automobiles, aircraft, radio, TV, computers, eradicated plague and small pox, cloned sheep and put a few really excited and deserving guys on the moon. We can calculate when the big bang happened down to the 8 nanoseconds where things were really interesting, but we cannot figure out the truth about economies.
After years of watching the parade and twirling a little myself, I conclude that we do not want to know how economies work or the question would be settled by now. So our lives are stuck in a giant Scopes Monkey Trail. The people with the money do not want you to know how it works because the truth is not to their liking.
Newt and his fanatics bankrupt our US government "till they can drowned it a bathtub" as they so gleefully say.
Conservatism is dead, revealing to be anti-life, anti reason, fascist corporatism.
Conservative republicans have been putting cronies above country for decades, and the "mob" be damned.
Is it any coincidence that the mainstream media stopped becoming credible on this issue not long after young people stopped learning "reporting" as a "trade" and started learning "journalism" as a "profession"? The average journalist covers the issues of poor people (when he covers them at all) as if he's analyzing the mating habits of some exotic reptile from Fiji. It's totally alien to him.
As a business owner, I could have told you then and I can tell you now...increased productivity can mean ONLY one of two things.....
1:)Turning THE SAME profit with FEWER workers......
2:) Turning an INCREASED profit with the SAME number of workers
In neither case are the workers likely to benefit at all............................tm
our stature in the world,
our budgets,
our middle class,
our health care,
our higher education,
our housing,
our fiscal and physical security,
and resources for our veteran's well-being
Please,
thrill us with more of your acumen,
...brother repubs!