The 1% and the 47%

September 30th, 2012

Published on ZNet, by Paul Street, September 23, 2012.

The Narcissism of the Few:

Liberals and others have given Mr. 01 Percent Mitt Romney a well-deserved spanking for his vicious comments on “the 47 percent” at an elite fundraiser earlier this year. I am referring, of course, to the following noxious statement we recently learned the Republican presidential hopeful made to an elite gathering of right wing election investors in the Boca Raton mansion of private equity manager Marc Leder last May:  

  • “There are 47 percent of the [American] people who will vote for the president no matter what….there are 47 percent who are with whom, who are dependent on government, who believe they are victims, who believe that government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you name it….That’s an entitlement. And the government should give it to them. And they will vote for this president no matter what.”
  • “These are people who pay no income tax. 47 percent of Americans pay no income tax. So our message of lower taxes doesn’t connect…my job is not to worry about those people. I’ll never convince them to take personal responsibility and care for their lives”[1] … //

… Failure By Design” in the Best Democracy Money Can Buy:

Why has the income structure shifted so dramatically towards the top, making state and federal governments more and more dependent on the wealthy for revenues?  That, interestingly enough, is largely a matter of government policy on behalf of “the 1%” in America, “the best democracy that money can [and did] buy.” U.S. economic growth since the late 1970s has been slow and unequally distributed thanks to a number of regressive policy choices that have served the rich and powerful at the expense of ordinary working people and nearly everyone else. The problem has not been that that “the economy” has been broken by the supposed “invisible hand of the market” or other forces allegedly beyond human control. The real difficulty is that the “human-made” U.S. economic system has been working precisely as designed to distribute wealth and power upward. This outcome has been achieved with the visible political hand of policy. As Joshua Bivens of the Economic Policy Institute showed last year in his important study Failure By Design: The Story of America’s Broken Economy, the following interrelated, bipartisan, and not-so “public” policies across the neoliberal brought this terrible outcome across the long neoliberal era:

  • Letting the value of the minimum wage be eroded by inflation.
  • Slashing labor standards for overtime, safety, and health.
  • Tilting the laws governing union organizing and collective bargaining strongly in employers’ favor.
  • Weakening the social safety net.
  • Privatizing public services.
  • Accelerating the integration of the U.S. economy with the world economy without adequately protecting workers from global competition.
  • Shredding government oversight of international trade, currency, investment and lending.
  • Deregulating the financial sector and financial markets.
  • Privileging low inflation over full employment and abandoning the latter as a worthy goal of fiscal and economic policy.

These policies increased poverty and suppressed wages at the bottom and concentrated wealth at the top. They culminated in the Great Recession, sparked by the bursting of a housing bubble that resulted from the de-regulation of the financial sector and the reliance of millions of Americans on artificially inflated real estate values and soaring household debt to compensate for poor earnings. Thanks to flat wages and weak social expenditures, the tepid expansion of the early 2000s (the weakest upward business cycle on record)[11] depended on an unsustainable upward climb of home prices. The epic collapse that followed generated millions of foreclosures and devastated savings and net worth across the working and middle classes. It brought an official unemployment rate that reached 10 percent (real unemployment went considerably higher) and the longest recession since before World War II. The crash was foreseen by many, including financial interests who failed to warn households on the dangers of taking out more debt to buy homes. It didn’t have to happen. As Bivens notes:

“Policy makers found plenty of resources to throw at tax cuts aimed disproportionately at corporations and the very rich and at wars abroad. And when partisan politics demanded it, resources were also found to enhance Medicare coverage by adding a prescription drug benefit – but only when bundled with flagrant giveaways to pharmaceutical companies and other corporations. If even a fraction of these resources had found their way into well-targeted interventions to boost the job market, the decade could have been very different, with wage growth supporting living standards instead of debt….”

But faster wage growth would have “threatened the only economic indicators that performed above-trend in the 2000s: growth in corporate profits.”[12] And that was unacceptable to the corporate and financial elites who dominate policy by virtue of their wildly disproportionate wealth and power, regardless of which of the two dominant political organizations holds nominal power in the White House and/or Congress.

Democrats are barely less prone to challenge the basic plutocratic policy mix for a number of reasons, including the ever-skyrocketing cost of elections, which serious candidates cannot hope to meet without massive backing from the filthy rich.

If Romney and their ilk want to know why the rich bear such a large share of the nation’s income tax burden to pay for “big government” these days, they should look at how they influenced big government precisely to serve their interests to concentrate wealth and income in ever fewer hands, to downgrade the middle and working classes, and to expand the ranks of the poor. As the rich never admit, they aren’t really anti-government. They are for big government that serves elite interests and punishes the rest. When their so-called free market medicine – replete with giant doses of corporate welfare (the Pentagon System is a leading example) – impoverishes the rest of us (and enriches the few) so much that we rely on them like never before for the revenue to keep government running, they mock us for thinking (in accord with the quaintly idealistic Universal Declaration of Human Rights) that we are “entitled” to food, shelter, health care, clothing, and economic and social security  We are instructed to stop our “dysfunctional” thinking about “Who Moved My Cheese,”[13] take a whiff of tough-love self-help smeller salts, and scurry on to sniff out new opportunities that don’t actually exist under the rule of the nation’s unelected and interrelated dictatorships of money and empire: “Take ‘personal responsibility’ for your fate in this world we made for you, or starve and die, you bothersome little mice-people![14] You have no right to government assistance – that is reserved for the rich and powerful, like everything else.” It’s a curious command from those who have become ever filthier rich thanks in great part to big government’s role in serving and protecting the already well-off.
(full text).

Links:

Former Chinese Politburo Member Expelled From Party, on Rian.ru, Sept. 28, 2012;

General Strike in Greece Says We Won’t Submit, on ZNet (first on Lbor Notes http://labornotes.org/2012/09/general-strike-greece-says-we-wont-submit), by Lefteris Kretsos, September 27, 2012;

Strikes at Walmart Warehouses Expose Threats in Supply Chain, on ZNet (first on Labor Notes  ), by Jane Slaughter, September 26, 2012.

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