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Stephan A. Schwartz

Stephan A. Schwartz

Posted: October 30, 2010 12:20 PM

Benjamin Franklin saw America as a democratic society: middle class, largely urban, technologically sophisticated, family centered, joyful, and upwardly mobile. The America we try to present to the world was largely Franklin's vision. But recently we have been oriented more towards Ayn Rand than Benjamin Franklin. And we have been that way long enough that on the basis of data and not ideology we can evaluate how these anti-Franklinian policies have performed. What has been their success at nuturing and perpetuating the vital democratic middle class that has been America's greatest strength -- as important as its military prowess? There are many factors one might use to make this evaluation. Here are seven chosen across a broad spectrum of American society:

Tax Cuts:

Just as they did in 2000, the Republicans are running on an economic platform centered on tax cuts, and proposing that the Bush cuts be made permanent for the richest Americans. The 2008 income tax data are now in, so we can assess what their economic theory is worth, and how it fulfilled its promise that tax cuts would produce widespread prosperity by looking at all the years of the George W. Bush presidency. This is the analysis David Cay Johnston on the faculty of Syracuse University College of Law and Whitman School of Management, and Pulitzer Prize winning tax analyst has done for us, based on the IRS data:

"Total income was $2.74 trillion less during the eight Bush years than if incomes had stayed at 2000 levels (all figures are in 2008 dollars). In only two years was total income up, but even when those years are combined they exceed the declines in only one of the other six years.

"Even if we limit the analysis by starting in 2003, when the dividend and capital gains tax cuts began, through the peak year of 2007, the result is still less income than at the 2000 level. Total income was down $951 billion during those four years.

Average incomes fell. Average taxpayer income was down $3,512, or 5.7 percent, in 2008 compared with 2000, President Bush's own benchmark year for his promises of prosperity through tax cuts. Had incomes stayed at 2000 levels, the average taxpayer would have earned almost $21,000 more over those eight years. That's almost $50 per week. Just measuring the second through seventh years we find that total income was still nearly $2 trillion lower than if 2000 level income continued."

If you are a middle class American, you are voting against your own self-interest, and the health and security of your family, if your choice is a politician rattling on about the Bush Tax cuts.

Poverty Rate:

That same US Census data also described what has happened to the nation's standard of living, comparing just the latest time period -- 2008 data with that of 2009. Here are some of the highlights:

"1) Some 43.6 million people were living in poverty last year - the highest number since 1959, five years before President Lyndon Johnson declared his War on Poverty. The poverty rate was 14.3 percent, up from 13.2 percent in 2008 and the highest level since 1994. Hispanic households took the hardest hit: Their poverty rate rose 2.1 percent from 2008's level, compared with a 1.1 percent jump in the rate for blacks and whites. (The US government considers an annual income of $21,756 to be the poverty line for a family of four.)

"2) A record number of Americans, 50.7 million, were not covered by health-care insurance in 2009. At the same time the survey was being taken, Congress passed President Obama's contentious health-care reform law."

Moving in:

From the 50s until about five years ago, one of the strongest American familial trends was for children to grow up and move away. It was a central part of the nuclear family ethos. That is now reversing thanks to the grinding down of the middle class through unemployment, job loss, and reduction in income even when a person is employed.

From 2005 to 2009, family households added about 3.8 million extended family members, from adult siblings and in-laws to cousins and nephews. Extended family members now make up 8.2% of family households, up from 6.9% in 2005, according to Census data released in September 2010.

"Clearly, a big part of that is the economic recession and housing costs," says Stephanie Coontz, co-chair of the Council on Contemporary Families, a non-profit research association. 'We're seeing a shift away from the 1950s and 1960s mentality against extended families,' when 'modern' women did not take in aging parents for fear of hurting their marriage."

And this shift involves far more than blood relations. "For the first time in more than a century, more than half of people aged 25 to 34 have never been married. The number of people in non-family households -- those whose members are not related -- grew 4.4% from 2005 to 2009, faster than the 3.4% growth for family households."

Prison Population:

According to the Pew Research Center's Economic Mobility Project, the US prison population has more than quadrupled since 1980, from 500,000 to 2.3 million.

The American Gulag is now larger than the 35 largest European countries combined. The incarceration rate in the US -- 753 inmates per 100,000 -- is five times that of the UK -- itself an anomaly at 151 prisoners per 100,000. France, which is next, stands at 96, with Germany at 88. This means more than one in 100 Americans is in prison, and one in every 28 children in the US has a parent behind bars -- up from one in 125 just 25 years ago.

It probably won't surprise you to learn that a family with a parent in prison on average earns 22 percent less the year after the incarceration than it did the year before. After all, who wants to hire an ex-con in a tight labor market? And children with parents in prison are significantly likelier to be expelled from school than others; 23 percent of students with jailed parents are expelled, compared to 4 percent for the general population.

"Both education and parental income are strong indicators of children's future economic mobility," the survey notes. "With millions of prison and jail inmates a year returning to their communities, it is important to identify policies that address the impact of incarceration on the economic mobility of former inmates and their children."

In all, 2.7 million US children have parents behind bars, and "two-thirds of these children's parents were incarcerated for non-violent offenses," the study notes.

And when you break the statistics down by race it just gets nastier. There are large disparities. Among black children, fully one in nine, or 11.4 percent, have a parent in jail. For Hispanics, the number is one in 28, and for white children it's one in 57.

I hope Marijuana law reform passes in California, because this alone could help reverse these trends, simply by reducing the 858,000 arrests in the United States in 2010 for marijuana. That's marginally down from the 2007 peak of 872,000. It is notable that more than 50 per cent of these arrests are nonviolent violations involving marijuana.

The cost to states of this human warehousing now exceeds $50 billion per year, or one in every 15 state dollars expended. What is worse, a growing number of small towns and cities now look to the Gulag for their economic well-being. Like something from an Orwell novel, it is a complete cycle: One group of Americans lives on the incarceration of another group of Americans. And although it would appear illogical, it goes on even though it is well-known that the children of incarcerated parents face a much harder struggle in life. The Gulag which incarcerates their parents, in the process, often condemns the next generation also to a life in jail. It is almost as if we set up a situation which grooms children, particularly children of color, to become spigots through whose incarceration public money can be siphoned off. Maintaining the Gulag requires a form of Willful Ignorance on the part of politicians and citizens alike.

If this was the whole story -- Tax Cuts, Poverty, Moving In, or the American Gulag -- I think it would be enough to conclude that Franklin's vision and the American middle class were not served by these policies. Sadly though, this is just the beginning.

 

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