If This Be War, Let's Win It
August 28, 2002
By punpirate

Do you know who went missing in action at the Waco Economic Summit? Well, yes, the opposition in general. The assembled coterie, from high-flyin' CEOs to hard-hats to union officials, were all soldiers in Bush's war for wealth, invited because of their views, because they were lovers of less regulation for business and lower taxes for the rich.

But there was one guy who should have been there and wasn't: a Republican, a conservative, a careful observer of the economy and the effects of government policy on the economy. But, he's a traitor to Bush's cause. His name is Kevin Phillips, and he was one of the chief political strategists for Richard Nixon's campaign in 1968. He's got the credentials, he's got the reputation, to be right up front in any economic summit meeting (well, almost any one that weren't a dog-and-pony show). Only one problem - he's the author of the recently published Wealth and Democracy, a scathing indictment of the perverse relationship of the wealthy and government.

Phillips is meticulous with figures, and from them, knows that money has utterly corrupted politics in this country. He says our government is no longer a democracy, but rather, a plutocracy. Strong words from one as closely connected as he to the traditional party of wealth. His analyses of the problem of money in politics force him to register a complaint (several hundred pages' worth) that the situation has gone too far.

In a recent interview with Bill Moyers of PBS' NOW, Moyers asked: "How do you explain that the pro-wealth policies of the right, the conservatives, have endured so much support among working Americans and low income Americans?"

Phillips: "Well, all I can say is if I were a Democratic senator, I would go on and make a speech that might remind Democrats of stuff they haven't heard in a long time...."

And, had I the time, the substance for that speech might fill a book of my own. Perhaps a few chapter outlines might be worth positing, in no particular order. For one, the role of unions in society today might be worth pursuing. We now have had an entire generation of diminishing union influence. The watershed event at the beginning of this decline was Ronald Reagan's firing of striking air traffic controllers in 1981. The situation of the controllers was serious - their jobs were physically and mentally straining, the tools of their trade were then very near to endangering the public, and the union members thought the situation so critical that public notice was necessary, in the form of a strike.

The business community, of course, thought that Reagan's firing of striking workers a bold, necessary move. For them it was, but for the union movement as a whole, Reagan's actions cut the legs out from under unions. What probably went wrong is, in part, the fault of the unions. If every union in the country saw down the road a few miles and years, they would have seen Reagan's actions as a threat to them as well. Every union in the country should have struck in sympathy when the firing notices were issued.

This sort of mass union stand-down occurs frequently enough in Europe that American unions should have been able to see the value in that tactic. And yet, this did not happen. I don't mean this to be blaming the victim, but American unions have become so compromised and co-opted by their leadership that solidarity is now a very relative term. The worst example of this today is the support given to Bush by the Teamsters in the expectation of an inflated and unrealistic number of temporary jobs to be gained from drilling in the ANWR. Why any union would give George W. Bush, the most anti-union president in memory, any support at all is beyond comprehension. And yet, this is the state to which unions have fallen.

It's important to see unions in the context of the distribution of wealth in this country. As Phillips notes in his latest book, the largest direct gains in wealth in the 1950s occurred for the median 60% of the country's people. At that time, approximately 33% of all workers were union members, the principal business of the United States was manufacturing and the United States was a net exporter. As union strength has waned, or has become more constricted by legislation and court rulings, the economic health and the real wealth of the median 60% has suffered.

So, too, has the country. Its manufacturing base has eroded, well-paying union manufacturing jobs have been greatly reduced and the country now has a greater and greater debt load to service because it is a net importer. Trade debt is now over $30 billion per month (this month's trade deficit is estimated to exceed $37 billion). Union membership is now hovering around 11% of workers, and this figure will drop if Bush gets his way in eliminating union membership among Homeland Security staffers. Federal workers represent a substantial portion of that 11% of union members.

That said, the figures strongly intimate that strong unions make for a strong middle class. And the middle class, knowing their roots, are more inclined to spend tax dollars on helping the poor escape poverty.

Another chapter would have to address the legislative drive to impoverish the middle and lower classes. No one likes to think that there has been a profound legislative agenda to take wealth from the bottom 80% and give it to the top 20%, but a strong case can be made that this is so. The most significant and obvious elements of that legislative agenda have been a failure to support a living wage standard through the minimum wage law and the failure of the federal government to fund affordable housing.

The minimum wage of the late `70s and early `80s translates to, in today's dollars, about $8 an hour. Today's minimum wage of $5.15/hr represents a 35% drop in real income, in about twenty years, for the approximately 12 million workers who work at or near minimum wage. Family income has fared better, losing only about 4% of real income since the late `70s, but this is simply because family income today more typically includes two or more wage earners, or one wage earner working multiple jobs.

There's only one reason why the national legislature hasn't addressed this matter. Business doesn't like it. Since business creates, through lobbyists, the national legislative agenda, because business effectively owns the legislature (remember, we're a plutocracy, not a democracy), that wealth goes elsewhere--upwards. Molly Ivins cites in an August 12th column that the average real net worth of the 400 richest individuals in this country grew from $230 million in 1982 to $2.6 billion in 1999 (a 500% increase in constant dollars), while the constant-dollar after-tax income of the middle 60% of Americans declined between 1977 and 1999.

As for affordable housing, Barbara Ehrenreich's recent book, Nickel & Dimed: On (Not) Getting By in America, makes it painfully clear that affordable housing has been utterly neglected by this country's leadership.

This neglect began in earnest in the 1980s when Samuel R. Pierce headed Housing and Urban Development. In 1988, the Low-Income Housing Information Service, a non-profit group tracking housing for the poor, reported that the shortage of affordable housing units had doubled to over four million units from 1980 to 1988. Under Pierce, HUD actively lobbied Congress, successfully, to reduce its budget. Under Jimmy Carter's last budget in 1980, HUD's appropriations were $33.5 billion. By 1988, that figure had dropped to $15.1 billion. And, an independent prosecutor found "a widespread pattern of corruption at HUD during Pierce's tenure." Even that amount of money was ill-spent by Pierce and HUD. The situation has only gotten worse since then.

Congress could have and should have rectified this problem, but in the Reagan spirit of making government smaller, and the desire of business to avoid taxation, little to nothing has been done. The mantra of "market forces" prevailed and the situation is now worse than ever. Today's developers have no interest in affordable housing--the profit per unit is far too small, especially when there are enough people in the top 20% who can afford, or stretch their budgets to afford, "McMansions" in the $700K-$1 million price range, which are inordinately profitable for builders. With such market forces in action, the only entity capable of influencing the affordable housing market is the federal government, which has exerted less and less influence in that regard over time.

Yet another chapter would have to concern the issue of campaign financing. Both major parties have played a role in structuring law to their advantage, rather than solving the problem once and for all. As Kevin Phillips said in his interview with Bill Moyers, "When you start developing philosophies in which giving a check is a First Amendment right. That's incredible.... It's produced the fusion of money and government. And that is plutocracy."

Many see efforts by Congress to manipulate campaign finance law as self-serving and self-preserving attempts to protect the current legislators' positions. There is an element of truth in this, but the larger purposes are to maintain a steady flow of funds from the rich and to eliminate any interference from the economically disenfranchised.

It is quite true that voters tend to vote their pocketbooks, but only the wealthy vote with their pocketbooks. They know that the returns they receive from Congress greatly exceed the price of admission to the legislative process. And, since the wealthy are the ones controlling the agenda, they also need to control who is on the ballot, and that is done with money, as well, often through PACs directed to state political parties and national election committees. Increasingly, parties create an unofficial vetting process by how these monies are distributed to primary candidates. (Wouldn't want an upstart to sneak in who was against silly wars and in favor of government for all the people.) Even when state fair election finance laws work well (such as Maine's is now doing), there's no recognition of that fact by the two major parties, and there are some efforts to thwart them (see, for example, the Massachusetts Legislature's attempts to defund fair election law in that state).

Perhaps it's reductive to ask plainly, but if the Congress had all the people's interests at heart, why does the greatest percentage of the tax code pertain to business and the wealthy? Why is it that Congress would craft legislation to crucify the middle and lower classes during bankruptcy and yet provide neat loopholes in that legislation for the wealthy, and virtually avoid any of the problems associated with corporate bankruptcy? Why is that, after September 11th, airlines received huge government bailouts with minimal discussion, but there was heated debate about extending unemployment benefits for the people laid off as a result of September 11th? Why is repeal of the inheritance tax so damned important when the relatives of 80% of taxpayers won't pay a nickel of inheritance tax under existing law?

Why is it that, in a time of impending deficits, Congress would pass some of the most blatantly biased tax relief on behalf of the wealthy, and is now, at the president's suggestion, contemplating even more tax relief for the wealthy? Why is it that corporate tax relief is high on the agenda, when actual tax payments by corporations are already at an all-time low? (The Center for Tax Justice says that corporate tax payments in the coming Bush administration tax years will be around 1.3-1.4% of GDP, the lowest post-WWII percentage ever. By contrast, during WWII, corporate tax payments were as high as 7.1% of GDP.)

Why is it that Congress has willingly voted to hand over all its trade treaty negotiation authority to the president, when the treaties made are good for neither the ordinary person in this country nor the ordinary person in other countries (anyone who doubts this needs to look long and hard at recent WTO, NAFTA and proposed FTAA treaty language which expands the rights of corporations to sue a government at any level if regulation interferes with their profitability, and to language which greatly increases the likelihood of privatization of essentials such as water)?

And, perhaps, there should also be a chapter investigating why the disenfranchised do not vote. Both Candidate A and Candidate B would vote for even more wealth and even more power for the wealthy, and then say, "but, we've got to get the economy going." The average Joe doesn't even know that Candidates C and D are running, because the media has ignored them, or has actively stifled their campaigns as irrelevant or faintly communistic if one or the other is predominantly favoring "the people's interests." It also might be that the disenfranchised know, explicitly or intuitively, that their vote for candidates hand-picked by the powerful only perpetuates a system which now favors the wealthy, and that the campaigns of today are no longer about the people's issues.

With luck, though, third parties with purer motives and less connection to the rich and powerful will gain some ground, and they can do so by identifying the means by which the wealthy and powerful have controlled the legislative agenda at the national and state levels, and by making it clear to that huge bloc of disenfranchised voters that they can force the change necessary to wrench political power out of the plutocrats' hands. To do that, those emerging "people's parties" will have to make a powerful case against the folk wisdom embodied in "I don't vote for any politician - it only encourages `em."

I don't want to be entirely disparaging to the Democratic Party in this (there are a few exemplary citizens' representatives in both the Senate and the House), but the DNC apparently doesn't seem to realize that imitation is the sincerest form of flattery, and they've been flattering the Republicans and the wealthy for far, far too long (maybe too long to ever recover from that particular form of political mental illness).

The common complaint of the rich these days, whenever someone asserts that the wealthy don't deserve exceptional treatment by government, is "that's class warfare!" Well, it damned sure is, except that it's them waging war on us, and they've been aided and abetted in that by their government, the very same one they've been making installment payments on for decades. It's been class warfare for the last twenty years, so it's high time for all of us to pop up out of our foxholes and recognize that the war is going worse than it ever was, to roll up our sleeves, and then win it.

punpirate is a New Mexico writer who has already enlisted in that war, with his vote, and his pen, and a few bucks. But, it will probably take more than that.