The Rich Ate All The Pie - Whatcha Going To Do About It?

By Steve Hynd

"The old parties are husks, with no real soul within either, divided on artificial lines, boss-ridden and privilege-controlled, each a jumble of incongruous elements, and neither daring to speak out wisely and fearlessly on what should be said on the vital issues of the day." - Theodore Roosevelt

Nicholas Kristof has no problem describing the United States as the world's biggest banana republic, a place where income inequality is out of control and actively hurting the nation's economy.

The richest 1 percent of Americans now take home almost 24 percent of income, up from almost 9 percent in 1976. As Timothy Noah of Slate noted in an excellent series on inequality, the United States now arguably has a more unequal distribution of wealth than traditional banana republics like Nicaragua, Venezuela and Guyana.

C.E.O.�s of the largest American companies earned an average of 42 times as much as the average worker in 1980, but 531 times as much in 2001. Perhaps the most astounding statistic is this: From 1980 to 2005, more than four-fifths of the total increase in American incomes went to the richest 1 percent.

Kristof cites a study that shows that areas within the nation with the highest earnings gap also have the highest rates of both bankruptcies and divorces. Some kill their business and relationship trying to keep up, others just lose all hope of ever doing so. Yet we all know Obama is going to cave on a measure that would hand a permanent extra $300,000 a year to every single rich fuck, letting the Republicans have their permanent Bush tax cuts for the super-wealthy under the smokescreen of bi-partisan co-operation.

Kristof writes:

that provides only a modest economic stimulus, because the rich are less likely to spend their tax savings.

At a time of 9.6 percent unemployment, wouldn�t it make more sense to finance a jobs program? For example, the money could be used to avoid laying off teachers and undermining American schools.

Likewise, an obvious priority in the worst economic downturn in 70 years should be to extend unemployment insurance benefits, some of which will be curtailed soon unless Congress renews them. Or there�s the Trade Adjustment Assistance program, which helps train and support workers who have lost their jobs because of foreign trade. It will no longer apply to service workers after Jan. 1, unless Congress intervenes.

So we face a choice. Is our economic priority the jobless, or is it zillionaires?

Unfortunately, the answer to that question, for the bi-partisan multi-millionaires on the Hill and in the White House is: "Fuck the jobless!" In 2008, the average net worth of a Senator was almost $14 million. The average net worth of a Congressman was $4.6 million. Every single one stands to gain $3 million from those Bush tax cuts over the next decade. Do you think that might just be a wee, tiny tad of a conflict of interest?

Reaganomics brought us a split in the nation's wealth into what Robert Reich calls America's Big Money economy and the Average Worker economy. Personally, I'd call them the Fat Cat and Average Joe economies, but Reich's point still stands - the former is doing just fine while the latter is doing crappily (h/t Kat).

The Big Money economy is doing well these days. That's partly thanks to Ben Bernanke, whose Fed is keeping interest rates near zero by printing money as fast as it dare. It's essentially free money to America's Big Money economy.

Free money can almost always be put to uses that create more of it. Big corporations are buying back their shares of stock, thereby boosting corporate earnings. They're merging and acquiring other companies.

...So don't worry about America's Big Money economy. According to a Wall Street Journal survey released Thursday, overall compensation in financial services will rise 5 percent this year, and employees in some businesses like asset management will get increases of 15 percent.

The Dow Jones Industrial Average is back to where it was before the Lehman bankruptcy filing triggered the financial collapse. And profits at America's largest corporations are heading upward.

But there's another American economy, and it's not on the mend. Call it the Average Worker economy.

Last Friday's jobs report showed 159,000 new private-sector jobs in October. That's better than previous months. But 125,000 net new jobs are needed just to keep up with the growth of the American labor force. So another way of expressing what happened to jobs in October is to say 24,000 were added over what we need just to stay even.

Yet the American economy has lost 15 million jobs since the start of the Great Recession. And if you add in the growth of the labor force -- including everyone too discouraged to look for a job -- we're down about 22 million.

Or to put it another way, we're still getting nowhere on jobs.

One out of eight breadwinners is still out of work. Most families in the Average Worker economy rely on two breadwinners. So if one out of eight isn't working, chances are high that family incomes are down compared to what they were three years ago.

Does your rich Senator or Congressman - or President - really get this? No. While median wealth in the U.S. plunged 39% during the housing crash, the wealth of the upper 1% dropped less than 12%. The rich aren't hurting nearly as much as the poor and mostly just don't care about our getting to work - the priority for them is debt reduction because it helps safeguard the value of the investments they hold. Those Senators and Congressman - and President - no matter which party political lable is affixed to them, have no fucking idea what it is to be truly poor in America. While you were suffering, they have increased their wealth.

Instead, America is governed by a bi-partisan coalition of asset-strippers, who have become detached from the common people by virtue of their wealth and therefore find it easy to treat the common people and the nation as if they were "the other", just another corporation to be parcelled up and sold off. "Take what isn't nailed down and split, who cares what happens after you're gone." Their only interest is in delaying the day when they must flee the scene, so that they can continue asset-stripping U.S.A. Inc.

Matt Taibi, channeled by Tristero, (h/t Kat) gets the housing "bailout" exactly right:

We paid for this instead of a generation of health insurance, or an alternative energy grid, or a brand-new system of roads and highways. With the $13-plus trillion we are estimated to ultimately spend on the bailouts, We could not only have bought and paid off every single subprime mortgage in the country (that would only have cost $1.4 trillion), we could have paid off every remaining mortgage of any kind in this country-and still have had enough money left over to buy a new house for every American who does not already have one.

... a country whose citizens purport to be mad as hell about growing government influence has still said little to nothing about that bizarre sequence of events in which the entire economy was rebuilt via this series of back-alley state-brokered mergers, which left fInancial power in America in the hands of just a few mostly unaccountable actors on Wall Street. We still know very little about what really went on during this period, who was calling whom, what bank was promised what. We need to see phone records, e-mails, correspondence, the minutes of meetings to know what the likes of Paulson and Geithner and Bernanke were doing during those key stretches of 2008.

But we probably never will,because the country increasingly is forgetting that any of this took place. The ability of its citizens to lose focus so quickly and to be distracted by everything from Lebronamania to the immigration debate is part of what makes America so ripe for this particular type of corporate crime. We have voters who don't pay attention, a news !media that ignores key subjects or willfully misunderstands them, and a regulatory environment that bends easily to lobbying and campaign financing efforts, And we�ve got a superpower�s worth of accumulated wealth for the taking,You put that all together, and what you get is a thieves� paradise-a Griftopia.

 And Tristero adds that for Taibbi "there�s a bait and switch being pulled...the real action is not the social issues - it never is - but rather the money. The looting of America by the Biggest, Ballsiest Crooks Ever is the only genuinely important story."

And remember that the Democratic Party's leadership are just as much Fat Cats as the Republicans, just as intimately involved in that $13 trillion corporate giveaway. The rich as a class and their poorer political and media shills are the bi-partisan problem that the common people must contend against. America's political system has been honed down by them until the common voters electoral choice is between two sets of asset-strippers, bought and paid for by corporations. And yes, Aunt Matilda, that includes the Tea Party's leadership.

But we do have another choice. Chris Hedges:

Hope in this age of bankrupt capitalism will come with the return of the language of class conflict. It does not mean we have to agree with Karl Marx, who advocated violence and whose worship of the state as a utopian mechanism led to another form of enslavement of the working class, but we have to speak in the vocabulary Marx employed. We have to grasp, as Marx did, that corporations are not concerned with the common good.

...even as Wall Street steals billions of taxpayer dollars and the Gulf of Mexico is turned into a toxic swamp, we do not know what to do or say. We decry the excesses of capitalism without demanding a dismantling of the corporate state. The liberal class has a misguided loyalty, illustrated by environmental groups that have refused to excoriate the Obama White House over the ecological catastrophe in the Gulf of Mexico. Liberals bow before a Democratic Party that ignores them and does the bidding of corporations. The reflexive deference to the Democrats by the liberal class is the result of cowardice and fear. It is also the result of an infantile understanding of the mechanisms of power. The divide is not between Republican and Democrat. It is a divide between the corporate state and the citizen. It is a divide between capitalists and workers. And, for all the failings of the communists, they got it.

And again:

The loss of a radical left in American politics has been catastrophic. The left once harbored militant anarchist and communist labor unions, an independent, alternative press, social movements and politicians not tethered to corporate benefactors. But its disappearance, the result of long witch hunts for communists, post-industrialization and the silencing of those who did not sign on for the utopian vision of globalization, means that there is no counterforce to halt our slide into corporate neofeudalism.

...Wall Street�s looting of the Treasury, the curtailing of our civil liberties, the millions of fraudulent foreclosures, the long-term unemployment, the bankruptcies from medical bills, the endless wars in the Middle East and the amassing of trillions in debt that can never be repaid are pushing us toward a Hobbesian world of internal collapse. Being nice and moderate will not help. These are corporate forces that are intent on reconfiguring the United States into a system of neofeudalism. These corporate forces will not be halted by funny signs, comics dressed up like Captain America or nice words.

It's important to realise that the current electorate is not the same as the potential electorate. By American standards the turnout for the 2004 Presidential election was high, for example - yet by the standards of other Western democracies it was woefully low. Chris Bowers at MyDD researched who didn't turn out to vote and came up with some interesting findings. In 2004, for example, the national median income was $35,100 p.a. yet the median income of the electorate was $55,300 - a difference of 57.5%.

In other words, it is mostly the poorest segment of society who don't vote. Consider that although a presidential election winner might gain 52% of the electorate, he'd still only win 34% of all the possible votes. There is a huge potential constituency out there, between 25% and 30% of the potential electorate, who simply don't vote - and they don't vote simply because neither major party have policies that address their concerns!

Only a true Labor movement, a "big tent" party, can alter the current status quo. I've been banging this drum since 2005, making arguments for a coalition of the Left (by which I mean the true constituency of the Left - all of those who are poor and working class). Over the years, I've become more and more cynical - I now do not see the Democratic Party as any possible part of the solution, because they are inextricably part of the problem. I'm not arguing that the Republicans are in any way a better alternative than the Democrats. I'm are simply arguing that Democrats' actions leave me feeling that they are not worth the Left's time, money and loyalty. They are well aware that the current system makes them one of only two big fish and that their core agenda is moderate, middle-class and corporate. Thus the perpetual circular arguments against any such grouping - essentially that since a true broadbased party of the poor and working class doesn't exist it cannot get elected and since it cannot get elected it should not exist.