Confessions of a Class Worrier
Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)
he decline of America's middle class can be charted directly. In the three decades after World War II, the median wage (smack in the middle) grew rapidly, right along with productivity gains. Even as late as 1980, the richest 1 percent of Americans received only about 9 percent of the nation's total income.
But starting in the 1980s - and increasingly since then - the economy has made the rich far richer without doing squat for the vast middle. The median hourly wage has barely grown, if you take inflation into account. Indeed, it dropped in the last so-called "recovery" between 2001 and 2007. And health-care and pension benefits have declined; we've gone from defined-benefit pensions to do-it-yourself pensions, while health insurance premiums, deductibles, and co-payments have skyrocketed.
Meanwhile, the rich have been getting a larger and larger portion of total income. From 9 percent in 1980, the top 1 percent's take has increased to 23.5 percent in 2007. CEOs who in the 1970s took home 40 times the compensation of average workers now rake in 350 times. Financiers who forty years ago made only modest fortunes today, even after the Great Recession they helped bring on, routinely earn seven and eight-figures. In 2009, when most of the nation's middle class was deep in recession, the 25 best-paid hedge-fund managers took in an average of $1 billion each. (Their marginal income tax, by the way, was barely over 17 percent, while the typical family paid a marginal tax far higher.)
What happened? It wasn't just greed. It was also the systematic and ever cleverer manipulation of laws and rules by those able to pay lobbyists, legislators, lawyers, accountants to do their bidding. As income and wealth have risen to the top, so has the power to manipulate the system in order to acquire even more money and more influence.
To be sure, globalization and technological change have bestowed gains disproportionately on those with the education and connections to benefit most from them, while burdening Americans without the education and connections most needed.
But instead of enlarging the circle of prosperity so that the vast middle class could come out winners as well - instead of strengthening trade unions, improving public education, deepening public investments, enlarging safety nets, and making the tax system more progressive - the nation took direction from those at the top, and did the opposite.
It is not surprising America's middle class is increasingly frustrated and are venting their anger - at politicians, the leaders of big business and Wall Street, as well as global traders, immigrants, and others who are easy targets of resentment.
A politics of audacious hope has turned into a politics of fear - meaner spirited than at any time in recent memory.
I'm not a class warrior. Call me a class worrier.
Our choice in the years ahead is either demagoguery that turns Americans further against one another and the rest of the world, or genuine reform that enlarges shared prosperity. It is the responsibility of all of us to fight the former and work toward the latter. (Pause for commercial announcement: In my forthcoming book, "Aftershock: The Next Economy and America's Future," I discuss this choice in detail.)
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Robert Reich is Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written twelve books, including "The Work of Nations," "Locked in the Cabinet," and his most recent book, "Supercapitalism." His "Marketplace" commentaries can be found on publicradio.com and iTunes.
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Comments
A great teacher once said something to the effect that we ought to live simply, live with heart, and love and kindness toward one another. Worry not what you shall eat, wear, and have. You can't take all this stuff with you so why burden ourselves with it all? Let the one percent at the top have all the worries. I'm ready to give them a little more that I have left as they have need of it. I do not.
A simple man who is headed to the bottom of the heap and liking it. As someone of no account who has nothing there is little that can be taken from you but your basic sense of self which can be more easily retained with little or nothing to show for it.
Quoting
It's the equivalent of shouting at the top of your voice.
I automatically don't read such shouting.
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Just FYI.
I've heard this "deserve" line before, but I don't buy it. Sure, we have individual responsibility-- I agree with you on that point-- but a functioning democracy requires more than that. We need a system of undistorted information to produce something called "informed decision making." Propaganda is the yoke of a democratic society, and it is the tool of the wealthy-- those with more resources, not those with less-- used against the under privileged. If, statistically speaking, most people can be "persuaded" to adopt a particular point of view in a particular set of circumstances, then it does little good to argue individual responsibility, and stop there, because few will be able to adopt this approach.
William, please do me a favor. Go to Amazon and buy Robert Reich's book called Supercapitalism . After reading Reich's book you might then understand who is truly in charge of of our so called democracy. Reich does once again a super job.
Adam Smith understood, as his modern acolytes apparently do not, that greed and "self-interest" are not the synonyms.
In 1831 Tocqueville put it this way...
"The Americans, on the other hand, are fond of explaining almost all the actions of their lives by the principle of self-interest rightly understood; they show with complacency how an enlightened regard for themselves constantly prompts them to assist one another and inclines them willingly to sacrifice a portion of their time and property to the welfare of the state."
That is the nature of the self-interest on which the United States was founded. It seems that those who now call themselves "conservatives" have forgotten that founding principle.
Increase taxes--ON THE RICH, not Middle Class!--and/or Decrease spending...And brace for Greece-style riots when the Gravy Train for the leeches dries up!
It'll make the LA Riots seem completely quaint and peaceful by comparison!
And then there are the Soros types who seem to be trying to bring down the country and turn it into his idea of a socialistic/communistic place.
What bothers me the most is the idea that somehow has taken hold that the super rich want to hurt the rest of us. That is nothing but propaganda.
Why don't Americans say "Look how rich some of us have become since the 80s! Isn't it great? Isn't this a wonderful country?"
There are a lot of poor people out there for whom the wealth creation of 1980's did nothing. Real income has stagnated or declined for most Americans for decades. In fact, it is now becoming apparent that this "wealth" was largely due to an economic and environmental mortgage on the future. Our grandchildren will not thank us.
A nation is doomed when those who DO NOT work discover they can get money just for existing, and those who DO work are taxed ever harder to pay for a greater and greater number of freeloaders.
Plus, the Lure of the Leeching Lifestyle encourages many former workers to switch sides, and become lazy and "Entitled"!
Worse, it invites ingrates from OTHER COUNTRIES to come here and see how much they can mooch, then wonder why people don't like them!
I disagree that there is a Leeching Lifestyle. The problem is a lack of jobs due to outsourcing and automation of jobs. Our system of taxation encourages outsourcing.
Those who have become rich since the 80's pay less in taxes and use that money to persuade the rest of us that it's okay.
To EPGAH I say, IF the world were as clear cut as you make it sound, you would be correct, but it is not. The "welfare" system of the past does not exist. Those you malign as "freeloaders" are real people with real problems not caricatures.
I know many, many people who are out of work, unable to find a job and accepting the very meager benefits being given in an attempt to hang on until the economy turns around & they can again get a job. I do not deny that there are a few people who "leech" off the system, but they are few and far between.
The overwhelming majority of your "freeloaders" have serious mental problems. Many others are like a former neighbor whose husband died of cancer at age 36, leaving her with two children under 4 to care for and no job skills.
Be nice.
To be blunt, Deficit=Taxes-Spending.
I don't know about you, but when I got laid off my second job (I.e., reduced INCOME), I had to cut SPENDING.
But Americans are loathe to do that, AND loathe to give more of their dwindling money to the Government--even State or City Level--so cities are actiually shutting down roads, streetlights, even SCHOOLS, in the Name of Cost-Cutting!
So we may GET anarchy whether we want it or not!
In the most polite & simple terms possible I answer: "The hell it ain't, Buddy!" If not "greed", what else is it when one (individual or group) already possesses more wealth than he can ever use . . . and continues to amass more and more without sharing the gains with those below him in the production process? Hummm? Maybe "obscene". Yeah. That would work, too.
Am I the only one who sees that Reich's article dovetails directly with the weakness attributed by Karl Marx to Capitalism?
As for your take on the situation, Bonnie: Amassing super wealth without sharing with those WITHOUT WHOM IT COULD NOT HAVE BEEN AMASSED is like an 800 pound gorilla sitting in a public room . . . and selfishly sucking up all of the oxygen for himself.
Nobody - but NOBODY - ever "made it" on his or her own! NOBODY! Not in any sense of the word.
If millions of Americans weren't unemployed/underemployed, losing their homes, bankrupt because they got sick and lost their health care and if all American children were becoming well educated, if all Americans could afford to eat healthy foods, then I could say that this is a great country in which some of us have become rich.
For each Bill Gates there are at least 20, who use the money in a negative way. Also we should ALL be able to make good wages and have health care, that doesn't send us to the poor house. And for your information middle class people do a lot of important things. They even give to charity
We don't need or want a few wealthy people who will dole out charity as they see fit.
We want to be able to send our children to good schools and universities, (without losing our home) so they will be able to have a good life. It is a bit degrading to have to accept charity. We all want to do for our selves.
What kind of world do you live in?? You sound awfully patronizing.
There is no evidence that Soros wants to "bring down the country and turn it into ... a socialist/communist place." You are exaggerating and, it sounds to me, parroting the histrionics heard on right-wing radio. Think about it, what incentive would he have to do it? He could not continue to be rich if that happened. What he wants is a fairer distribution of income based on how the amount of work a person does and the value of that work, not just in narrow economic terms, but in terms of the entire benefit the work provides to the community. An example - a medical doctor earns upwards of $125K a year, a garbage collector about $50K, but in fact the garbage collector does more to improve the general health of the community than the doctor does.
Most of the "super rich" don't WANT to hurt us. I suspect most of them don't even consider us and some don't care who gets hurt as long as they get what they want.
Rich people don't put their money in a sock under the mattress. They hire people, and they invest. That money is being used, now.
(second half of posted comment a moment ago).
I favor a solution whereby we introduce more democratic controls into our economic structures-- call it socialism or economic democracy or parecon or what have you.
You’re missing a fundamental point. The author never said that rich people were evil, or that making a lot of money was a bad thing. The point he’s making is that, since the late 70’s, business profits that used to be ‘shared’ between the workers on the production floor and management have since been removed from the pockets of the production floor worker, and placed in the pockets of upper management. This has been an ongoing trend since the 70’s. So, to comment on your post; if a person makes 100,000,000 dollars a year that can, and often DOES take money away from someone else; if you compare it to the way business profits were historically shared.
You don't sound like you actually *are* one of the super-rich, which means you have swallowed the propaganda artfully sold by the wealth lobby to the masses to keep them complacent and looking to illegal immigrants to blame for their financial woes.
Of course making a lot of money does not make someone a bad person. But it does alter their worldview; they only socialize with other super-rich people, only spend time in comfortable, wealthy places, only encounter not-so-rich people in service roles, and hear complaints all day from their rich friends about how much taxes are hurting them so that lazy poor people can sit around all day and do nothing. For every Bill Gates or Warren Buffett, there are a hundred other billionaires who simply invest their money to make ever more money.
(cont'd)
And the money supply is in fact finite. And no, rich people don't put their money in a sock under the mattress, but neither can they possibly spend it all (and thereby put it into circulation); they invest it in stocks (i.e., trade it to other rich people for financial securities). It's a comforting fairy tale that rich people use their money to hire and (productively) invest; America has legions of angel investors scouring the country for someplace more lucrative to invest their money than the stock market, and corporations today are sitting on billions of dollars they are not using to hire people. Capital will only hire someone if there is money to be made from that person's employ, and that requires the rest of us to have money to spend. If people like you and me aren't spending because the top 10% have amassed 83% of the finite money supply, then Joe Capitalist will not hire us simply out of the goodness of his heart, just because he has money sitting around.
If politicians are going to be beholden to their funders, those funders should be the taxpayers. And at $5 per taxpayer per year it would be a bargain. Even at 100 times that. We MUST lobby our senators and representative to co-sponsor the bill at:
http://www.fairelectionsnow.org/more/summary
Jack Lohman
http://MoneyedPoliticians.net
Remember, that in the "three decades following WWII", that productivity was LINKED to wages, but illegals allowed a way to undercut that, to increase productivity WITHOUT increasing wages, which left many Americans out in the cold!
BUT rather than unionize and stand with other workers, we have different groups of illegals offering to undercut EACH OTHER, as well as the Americans, then turning around and bitching that they're being "exploited"
Our good wages weren't a Gift From God, Americans had to FIGHT for them. Unions now may be worthless, but they originally served that purpose!
As to wars, we're fighting because it's profitable for SOMEONE, but not the oil. American wars are more expensive than most because we worry about "collateral damage" AND we help the enemies rebuild afterward. From Mexico to Japan, we always PAY the LOSERS and help them rebuild! In Iraq, we're making the incredibly STUPID mistake of rebuilding DURING the fighting. The terrorists move into a building, we have to destroy it, then we "have" to rebuild it--and as to the oil, China snaked that out from under us, without wasting a Yen or a life on the war effort itself! We do all the work, THEY get the profit!
What is "Middle Class"?
Robert Reich is right. Americans have lost a lot of ground economically, but we need to be honest and label our means of measure appropriately. It seems the "new" definition of "Middle Class" is anyone not on welfare up to a given level of income.
What in your life makes you "Middle Class"?
Is it what you purchase, vacations you take, donations you make, the garden you plant, the car you drive, the work you do for your income,or just the amount of your income?
What remains of the working middle class are next in line for the elevator down to ghetto-ville.
Too bad the working middle class sold out the poor, they'll be neighbors soon enough.
Is the new "Middle Class" the old "Lower Class"? Has the phrase "Lower Class" disappeared from the economic vocabulary since it is not a "nice" term and implies a negative judgment?
Is a $250,000 family income really the ceiling of "Middle Class" or just a number pulled out of thin air?
My father was still "Middle Class" in the early 70s earning $75,000. What does that translate to now after inflation? $500,000, $750,000 or $1,000,000? I don't believe it is as low as $250,000.
Is the new "Middle Class" the old "Lower Class"? Has the phrase "Lower Class" disappeared from the economic vocabulary since it is not a "nice" term and implies a negative judgment?
Probably yes, actually, we call a Depression "recession", some call illegals "undocumented", and welfare is "Entitlements", as if they are Entitled to a share of our wealth just for existing--and the Upper Crust can be VERY generous...With Someone Else's Money!
Lower wages and higher prices are slowly turning us ALL into the Lower Class. We're working harder and getting less to show for it. My parents tell me myths of this alternate universe called the "50s" where ONE income could support a family of four, and you pay your OWN healthcare instead of pay insurance to maybe or maybe not pay it for you!
Can you imagine such a world?
Capital class: those who make their living through money that makes money.
Professional class: those who make money through ideas, negotiation, and specialized professional skills.
Working class: those who make money through physical labor and manual dexterity.
One of my brothers is a carpenter who makes far more money than I do as a college teacher. But he has far more "working class" attitudes and beliefs than I do. So it's less about income and more about how that income is gained.
So the people we're really talking about when we speak of "the rich" are really those of the capital class -- people who make money because they already have money, via investments. (And no, they AREN'T investing that in hiring professionals or workers... at least not lately.)
Instead, we have more and more Americans out of jobs, for a "humanitarian" hiring of Third Worlders, who later come to realize they are being "exploited" (But never realize they put the yoke on their OWN neck, it's always the Evil Americans)
For some reason, the American Worker is always cast as the Greedy Villain of the story, instead of illegals unionizing like Americans had to do a century and a half ago...
To refute that, someone will have to show me ANY prices that have come DOWN in the last 10 years!
As to military bases, Obama closed 120 military bases, costing countless jobs, but only saving .6% of our military budget. When you divide it out, that's .005% of the budget. That's not CHANGE, that's POCKET LINT!
·No cars flipped over
·No buildings torched
·No rocks hurled
·Not even VERBAL EPITHETS hurled!
Yet somehow, these brave marchers are lambasted as the greatest threat to the country since Jefferson Davis!
Not La Raza, not the Mexica Movement, not the Brown Berets, not the Black Panthers, not any of these ACTUAL divisive, racist groups, Our Fellow Americans are the threat!
Would someone explain that to me?
The above is a gross misconception of reality and a technically false statement. The "PIE" is the overall money supply (M1).
Our general ignorance about how banking and finance truly operate in this country is at the root of our current economic woes.
"We are completely dependent on the commercial banks. Someone has to borrow every dollar we have in circulation. If the banks create ample synthetic money, we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is."
-Robert Hemphill, former Credit Manager, Federal Reserve Bank of Atlanta (in testimony before the Senate)
I love your new word, a cross between "refuse" and "repudiate"!
A) pay them 100,000 each and keep the same for myself, or
B) I can pay them 10,000 and keep 910,000 for myself.
I think Reich has given you the figures to understand that Corporate America and our government have chosen 'B'.
And if they could pay us nothing at all, they would chose that over plan B. It's called greed and it needs to be ferociously policed. Something neither party wants to do.
The worst part of that is, no matter how little you pay someone, THEY HAVE A JOB, and are manifestly better off than the ones that DON'T have a job, so they'll keep casting around for a "new" labor-force that doesn't demand as much money or respect as us "greedy" American workers...Never mind that America is the 13th most expensive nation in the world to live, if we demand more than our Third World competition, we're automatically greedy!
I worked full time as an adjunct professor for 2 public colleges. My wages were so bad I lost my heat and hot water and nearly my cheap little apartment.
And if I wanted to stay in those schools, I would have had to sign a 9 month contract. By refusing to return for those wages I saved thousands of dollars in traveling expenses and I was free to do something else (however little there is to do these days).
Sometimes, you just have to say 'no' to miserable work conditions, because they don't help, they make things worse.
I'm fortunate, I had saved up, not spent foolishly, and could hold out for a good job, but not all have that "luxury"!
And meanwhile, Third Worlders will complain, but they'll work in ANY conditions for half or less what an American would accept, so why should our Corporate Masters give us more money, or even respect?
This gives me a bad feeling that we're returning to the Robber Baron era...
1.) Not everyone can AFFORD to say no, lest their "strike" become a HUNGER strike involuntarily!
2.) All it takes is ONE person to say "Yes" while the rest are saying no, to undercut any potential gains the others are negotiating for!
3.) People from countries calibrated to lower wages than the Civilized World will ALWAYS say "Yes" if they get more than they deserve, but less than their Civilized World counterparts!
4.) 1-3 allow the Corporate Masters to "Keep Us In Our Place", so they don't have to give in to our silly demands for a living wage and benefits, or even respect, for that matter!
Take the banks that made stupid loans--PLEASE! They claimed to be Only Following Orders from Clinton, so Obama was "morally obligated" to bail them out.
Normally,when you run out of money, you have to declare bankruptcy, not get more "free" money.
That was even one of Reagan's promises of Deregulation: THE INCOMPETENT WOULD BE ALLOWED TO FAIL, and new ones spring up in their place!
Instead, they got a God Mode, and the rest of us got the bill!
Mussolini is commonly accepted as the (re)inventor of Fascism, and he defined it as Corporate Will backed by the Might of the State...Look around, people, Obama isn't STOPPING Fascism, he's MAKING it!
Case in point- both Democrats and Republicans are two factions of the same party; the business party. And that's the driving message of this article. The "systematic and ever cleverer manipulation of laws and rules by those able to pay lobbyists, legislators, lawyers, accountants to do their bidding." Our government has been taken over by high power business interests and that's how much of the wealth has moved upwards; away from the middle class, and into the upper class's offshore, tax exempt bank accounts...
Did they just not want to be known as the Party of No?
And I agree, Democrat and Republican are two fingers of the same hand reaching ever deeper into the Middle Class's pockets, or two heads of the same monster, if you prefer.
We need a Third Party President to really enact change. We haven't had a Third Party President since 1865, and no STRONG President since Wilson!
No unions, no decent pay across the board. No unions more hours worked for less income.
Does Republican = Fascist?
Read and think for yourself:
Fascism, ...authoritarian nationalist political ideology. Fascists seek to organize a nation according to **corporatist perspectives, values, and systems, including the political system and the economy. Scholars...consider fascism to be...far right of the conventional left-right political spectrum. Fascists believe that a nation...requires strong leadership, singular collective identity, and the will and ability to commit violence and wage war... They...reject individualism. Fascists reject ...cultural or ethnic groups...unable to be assimilated. They consider ...such...as...a threat to the nation. They identify violence and war as actions that create national regeneration, spirit and vitality.
*corporatism - Control of a state or organization by large interest groups
**corporatist - A supporter of corporatism
Source:http://www.wordwebonline.com/search.pl?ww=5&w=facist
NONE OF THE POLITICIANS CAN GET INTO OFFICE WITHOUT MONEY. UNFORTUNATELY THAT MEANS THE DEMOCRATS HAVE TO COMPROMISE. WE HATE IT; BUT FACE IT TILL WE HAVE PUBLIC FINANCING......THAT'S THE REALITY
I think his prescription (working for reform) fails to recognize how many people have been doing just this how hard for how long, while the juggernaut rolls on.
My advice as a "card-carrying economist" (stole the phrase from Dean Baker) is to learn how to survive without a job, and with the rest of the infrastructure crumbling about your ears. Learn entrepreneurshi p, not to promote yourself or to sell yuppie food and clothes, but to meet basic local and regional needs, for trade instead of money if possible, and you will be more likely to survive when things REALLY begin to come unstuck, as they surely will and soon.
Unfortunately what I have learned through the past few years is that the situation here in the U.S.A.is hopeless.
It truly is. With an institutionaliz ed system that promotes a corporatocracy-(or better yet is run by corporate interests)-there is no hope. The only solution to remedy the hopelessness is no corporate money in elections (public financed) and an educated citizenry. I don't know about you folks but I exist down here in lower middle class America. I may have a few chosen progressive friends, however, I have noticed that most everyone else I meet or am acquainted with (fellow parents from my son's school or sports teams) are know nothing ditto heads. It seems to me the majority have no political opinions of substance with the exception of what is best for them. Seems that most couldn't define or explain what conservative or liberal means if their lives depended on it.
Josie
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