Juan Cole: Labor Day in a Kleptocracy

Where have All the broad Shoulders Gone? Or, Labor Day in a Kleptocracy
By Juan Cole / September 7, 2009

The unemployment rate as I write is inching toward 10 percent nationally, and that is only counting people who were still looking for a job recently. A vast bank robbery by the corrupt on Wall Street has deprived them of the credit that made the economy go. Labor Day was passed by Congress under Grover Cleveland to celebrate not only the individual American laborer but the labor movement– yes, unions, workers’ parades, hard hats and blue jeans (before the youth movement of the 1960s appropriated them, blue jeans were working class clothing, and my working class relatives upbraided me for wearing them as an undergraduate). It is to celebrate all those icons that shills for the barracuda billionaires, such as Glenn Beck, now castigate as “fascist” and “communist.” It is to celebrate what Carl Sandberg did in his poem, “Chicago:”

Hog Butcher for the World,
Tool Maker, Stacker of Wheat,
Player with Railroads and the Nation’s Freight Handler;
Stormy, husky, brawling,
City of the Big Shoulders;

And of course, the home-makers and retail workers who move the manufactured goods and the teachers are all doing the hard foundational work as well.

Who is not working are the Wall Street thieves who have largely gone unpunished or been actively rewarded for their peculation.

Now Americans have convinced themselves that we don’t have a working class. Everybody is middle class, even those who make minimum wage in the fast food industry, or those who are kept as part-timers so that the store (I’m looking at you, Walmart) doesn’t have to enroll them in a health care program. The closest we get to celebrating the workers who built this country is when we talk about “working families,” an odd locution, since aside from the idle rich who defrauded the country into bankruptcy last fall, wouldn’t that be everyone? While we have lots of workers, we no longer have an effective labor movement, because Ronald Reagan by example essentially overturned the mid-20th century traditions that had made it unseemly for employers to fire striking workers and hire scab labor. Even the anti-worker Taft Hartley law of 1947 prohibited companies from firing workers for their union activities. But the penalties for illegal union-busting are so light that companies frequently fire employees who so much as suggest organizing a union.

Damon Silvers convincingly ties our current economic woes to this union-busting. (H/t Jake McIntyre). Fewer effective unions have left American workers at the mercy of predatory company policies. Government has, since Ronald Reagan (who hated organized workers the way the devil hates holy water), also socially-engineered the tax laws so as to throw enormous further wealth at the wealthy. As a result, the average wage of the average worker in the United States has not increased since 1970 (in 2004 the bottom 60% of the population was actually making less in real terms per capita each year than in 1979). In contrast, the top 1% of the population by income now takes home nearly 20% of the country’s annual income. The top 1%, about 3 million persons, has gone from owning 25% of the privately held wealth in the 1950s under Eisenhower to owning over a third today. The top 10 percent of Americans own almost all the country’s privately-held property.

Now, the US has increased its productivity very substantially since 1970, but working Americans have captured very little of the resulting extra wealth. It has been hogged by the rich. William Domhoff notes, “Although [by 2004] overall income had grown by 27% since 1979, 33% of the gains went to the top 1%.” Silver’s graph is eloquent.

Domhoff adds, “As of 2007, income inequality in the United States was at an all-time high for recent history, with the top 0.01% — that’s one-hundredth of one percent — receiving 6% of all U.S. wages, which is double what it was for that tiny slice in 2000; the top 10% received 49.7%, the highest since 1917 (Saez, 2009).”

Reagan-Cheney between 1980 and 2008 created a new American aristocracy, a small sliver of super-rich, who buy and sell legislators, create whole “news networks” to present far rightwing fantasies as “news,” have their lackeys invade and occupy whole countries, hold themselves above the law, falsify financial statements, and suffer little or no punishment for stealing billions from the pensions of “working families” (i.e. those of us about whom P.T. Barnum remarked, “one is born every minute”.) The Republican Party has come to represent these super-rich. Since .1% of the population couldn’t actually win elections, they ally with other groups in society. About two-thirds of evangelicals have joined up with them, about a third of Latinos, significant numbers of midwestern rural families, and obviously large numbers of white southerners. In some cases these are lower middle class people on the make, who want to hitch their wagons to the brightest stars in the sky. In others, they share with the super-rich various resentments of the federal government. This alliance of odd bedfellows (think of Paris Hilton married to Joe Sixpack) is what produces the wackiness of Republican Party politics and media. They can’t come out and say that they want the country run for the benefit of 300,000 multi-millionaires and billionaires (almost all of them white), so they say they are all in favor of guns, apple pie, Jay-sus and the Confederacy. Sometimes, as with Rudy Giuliani and Mitt Romney, the pretense is so forced as to be implausible even to their minions. Clearly, racism and fear-mongering are also key irrational talking points for the plutocrats seeking support from the white lower middle class (though this route can backfire, as it did in 2008 when Republican fear-mongering about Latino immigration alienated most Latino voters and drove them into the arms of the Democrats.)

The unbalanced and unhealthy distribution of wealth in the United States, which Cheney’s tax cuts accelerated, explains why the Democratic Party faces such difficulties whenever it is allowed into power. It represents the poor schmucks who make up the 80 percent of the population that has been reduced to peasants by our new dukes, viscounts and princesses who have captured the lion’s share of the country’s wealth and income. Obviously, elements in the top 20% (and even moreso in the top 1%) are not happy about any outbreak of democracy. They have been given by tax breaks and union-busting the wherewithal to purchase legislators (including Democratic ones), buy crowds, and put weeping rednecks on their corporate media waxing hysterical about the prospect of a black president being allowed in their childrens’ schoolrooms. It is the unscrupulous super-rich who don’t want universal health care. They think you only get to be super-rich by refusing to pay for the government services you use (via e.g. off-shore registration) and finding ways to make the middle class pay for essential government services to the poor. And they think it helps to be heartless if you want to be super-rich, you have to say of the poor, if they get sick and can’t afford health care, they should just die. (There is nothing wrong with being rich or super-rich in and of itself; Warren Buffett is admirable; it is just that over-concentration of wealth creates temptations for persons in that class that only the principled can resist). And since the middle classes know that many among the rich will try to make them pay for any increased services for the poor, many of them oppose such progressive legislation. If we repealed the law making corporations a person and if we constrained all corporations that do the bulk of their business in the US to pay taxes here, there would be plenty of money to provide health care to everyone.

The ultra-concentration of wealth in so few hands has damaged American democracy because democracy implies equality of rights, and the super-rich have more rights than the rest of us (there are now people on the FBI’s no-fly list who are simple peaceful dissidents from the super-rich program of ‘globalization’).

Many of our corporations are essentially using us as garbage dumps for their unhealthy corporate food, creating a crisis of obesity that in turn is causing our bulging bellies to devour our brains and for men, to make it impossible for them to get it up. A government genuinely concerned with our welfare would outlaw anything but diet sodas. The unwillingness of our government to regulate this assault on our brain mass via our bellies is owed directly to the power of corporate lobbies that shape and even outright author legislation on such issues. (This paragraph is not meant to hurt the feelings of the victims of these policies; I’m saying you are victims– you have a right to expect your food to be healthy, and your government to care if it isn’t.) The super-rich are fattening us up, not for the kill, but for imbecility and impotence. At least we won’t remember to miss the fun.

Not to mention that if the government cared about the people, cigarettes would have been banned as soon as it became clear that they cause lung cancer. Cigarette manufacturers would have been forbidden to spray extra nicotine (yes) on the leaves to hook people. I think it is still the case that if any third world country, whose citizens the US is mowing down with its poisonous weed export, tried to ban the heinous stuff, the US congress would accuse it of unfair trade practices. (In contrast, the US is trying hard to stop Afghan farmers from raising opium poppies, which are also highly addictive but differ from tobacco in not being guaranteed to kill the consumers; questions of what tobacco farmers should raise instead could equally be raised in the case of the poppy farmers; but then they haven’t yet organized a powerful lobby on the Hill.)

There are other dimensions of the crisis. Since for most non-super-rich Americans, the bulk of their wealth is tied up in their homes, the mortgage crisis is the biggest imaginable blow to ordinary people in the United States. And the crisis of health care costs (which are now about 18% of national income, due to double in the next 10 years) has a direct implication for middle class well-being:

Using a conservative definition, 62.1% of all bankruptcies in 2007 were medical; 92% of these medical debtors had medical debts over $5000, or 10% of pretax family income. The rest met criteria for medical bankruptcy because they had lost significant income due to illness or mortgaged a home to pay medical bills. Most medical debtors were well educated, owned homes, and had middle-class occupations. Three quarters had health insurance. Using identical definitions in 2001 and 2007, the share of bankruptcies attributable to medical problems rose by 49.6%. In logistic regression analysis controlling for demographic factors, the odds that a bankruptcy had a medical cause was 2.38-fold higher in 2007 than in 2001. [Himmelstein, D, E., et al, “Medical Bankruptcy in the United States, 2007: Results of a National Study, American Journal of Medicine, May 2009.]”

If this is the situation for middle class families who have health care, imagine the plight of the tens of millions who don’t.

I cannot entirely explain why the American super-rich are so much more heartless and stupid than their counterparts in Europe. In fact, they behave politically much more like Afghan and Pakistani big landlords, who pay their peasants a dollar a day and call in the army to put down any organized protests. In part, they have been offered an irresistible temptation by the destruction of organized labor; French workers wouldn’t put up with a tenth of the insults visited upon us by our overlords. But it is a dead end, even for the uber-rich. Healthy, educated workers will be key to American economic competition in the world in the coming century. Our super-rich and our politicians are hollowing the country out with their ponzi schemes and their Sparta strategy of projecting military force even as the country’s economic base in manufacturing and productivity sinks in comparison to rivals.

As we barbecue on imported grills and watch sports on our foreign-made LCD televisions and lament the bad economy, we should take a moment Monday to celebrate not just the individual worker but what is left of the American labor movement, since only if it is strengthened is our country likely to succeed in stepping back from the abyss. Aristotle warned us that each form of legitimate government is subject to decay. Aristocracies too easily become juntas. And democracies too easily become demogoguery and mob rule. The first eight years of the twenty-first century took us perilously close to both at once.

I celebrate today the organized workers, the ones who can push back against the crooks in pinstripe:

Building, breaking, rebuilding,
Under the smoke, dust all over his mouth, laughing with
white teeth,
Under the terrible burden of destiny laughing as a young
man laughs,
Laughing even as an ignorant fighter laughs who has
never lost a battle,
Bragging and laughing that under his wrist is the pulse.
and under his ribs the heart of the people,

Source / Informed Comment

The Rag Blog

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2 Responses to Juan Cole: Labor Day in a Kleptocracy

  1. Richard says:

    Thank you so much Juan, of course you could have made your article so much shorter by simply writing: “On this Labor Day Capitalism is working perfectly.”

    HURRAH FOR ANARCHY! – Adolph Fischer.

  2. Anonymous says:

    Be discouraged, be very discouraged. There are people out there that have more than you do – damn those evil ‘haves’. Waaahhh, waahhh, wahhhh, some people have lots of money but not me, waaahhh, waaahhhh. Throughout history human civilization has included those who have and those who have less. Even with radical changes to equalize society (i.e. communism) these things existed (party bosses riding around in their limo’s). GET OVER IT.

    When examining income disparity, be sure to look at educational achivement (40% of students don’t even graduate high school). Also don’t forget what our fine unions have done to American industry (auto, clothing, shoe, airline, etc. etc.), industry that USED to provide good jobs – now those jobs are somewhere else where unions don’t exist.

    Want to be more successful? Stay in school, don’t have kids you can’t afford, work hard and don’t depend on the government to ‘fix’ things for you.

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