Class Warfare Blog

March 26, 2018

Oh, The Irony!

When the American Experiment in self-governance began, the creators of the government we now possess were significantly concerned that the hoi polloi, the “middling sort,” as they called them, not get too involved in the process. The Founding Fathers were elitists, by design. They felt that only people like them had the education, the perspectives, and experience to lead the government.

One of the fears expressly stated was the fear that if the poor got control of  the government that they would use the government’s powers to strip the wealthy of their wealth. Most of the FFs were quite well-to-do, don’t you know. (Like you I was shocked, shocked, I tell you!)

This fear: that the poor would go after the wealth of the wealthy, has lived on in the hearts of most of the wealthy persons since the later eighteenth century and exists today.

In all of that time, I can only think of one period in which the wealth of the wealthy was effectively restricted and that was due to the New Deal of the quite wealthy President Franklin D. Roosevelt (who was called a “traitor to his class” for his efforts). People often point to the 90% tax bracket introduced during WW2 and kept there after (even under Republican Dwight Eisenhower) as an example of  wealth stripping by “the people.” But this doesn’t hold up. This onerous tax bracket didn’t kick in until one had an annual income in excess of $100,000. Considering that the average worker’s income was around $3000, this was quite a lofty salary. So this 90% tax bracket applied to very few people. Plus SS taxes were quite low in the 1950’s as opposed to now. (Thank you, Ron Reagan!) And one can argue that effective tax rates (the rates people actually pay, not listings in tax tables) are higher now than in the 1950’s, so this does not wash as an example of a time in which the rich were attacked by the poor. The actual slowdown of the accumulation of wealth in the 1950’s was, I believe, caused not so much by policy (some was) but by a feeling of “we are all in this together” due to the war, making it harder to screw your neighbors.

There are, however, more than a few periods, including the one in which we are in now, in which the wealthy have joyfully robbed the poor and middle class. (Oh, the irony!)

If you are unfamiliar with wealth inequality (really it should be termed wealth inequity because really no one is arguing that all should be equally wealthy) you need to educate yourself on this very hot topic. Wealth “inequality” as currently defined is at an all-time high, worse than it was in the Gilded Age or any other period in U.S. history.

The entire process of civilization has been fueled by coercing inexpensive labor out of the masses to benefit the religious and secular elites. Any advantages of civilization that have been gotten down to the poor are the result of trickle down process and we all know how effective those are. Still, a certain amount of this is acceptable but when it gets excessive, as it is now, the torches and pitchforks tend to come out and, well, there are more of us than them.

I think we all need to take a page out of the playbook of the Marjory Stoneman Douglas High School students and establish a single issue voting block. I will no longer vote for any candidate who has an A or B rating from the NRA, in support of their effort. (Vote them out!)

How about a wealth inequality inequity single issue voting block? Establish a few parameters and then VOTE THEM OUT. Unfortunately this will go badly for all Republicans and the corporate Democrats. On second thought, strike the word “unfortunately.”

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December 30, 2017

The Only Way to Less Inequality?

Here is a devastating assessment of the actual cost of the GOP’s recent tax bill. It is by Bill Honig, who I have met and consider to be a smart and honorable man.

http://www.buildingbetterschools.com/2017/12/26/faq-for-gop-trump-tax-bill/

Much of the GOP tax bill has been labeled as “bad news,” so I do not think you will be surprised to find out the news is worse that we thought. I bring this up because a new book has come out that addresses the history of inequality and the only forces that seem to reverse it for even small periods of time. The book is “The Great Leveler” by Walter Scheidel. Here is part of the description of that book (from Amazon.com):

How only violence and catastrophes have consistently reduced inequality throughout world history
Are mass violence and catastrophes the only forces that can seriously decrease economic inequality? To judge by thousands of years of history, the answer is yes. Tracing the global history of inequality from the Stone Age to today, Walter Scheidel shows that inequality never dies peacefully. Inequality declines when carnage and disaster strike and increases when peace and stability return. The Great Leveler is the first book to chart the crucial role of violent shocks in reducing inequality over the full sweep of human history around the world.

Ever since humans began to farm, herd livestock, and pass on their assets to future generations, economic inequality has been a defining feature of civilization. Over thousands of years, only violent events have significantly lessened inequality. The “Four Horsemen” of leveling—mass-mobilization warfare, transformative revolutions, state collapse, and catastrophic plagues—have repeatedly destroyed the fortunes of the rich. Scheidel identifies and examines these processes, from the crises of the earliest civilizations to the cataclysmic world wars and communist revolutions of the twentieth century. Today, the violence that reduced inequality in the past seems to have diminished, and that is a good thing. But it casts serious doubt on the prospects for a more equal future.

This book supports my view that the fundamental purpose of civilization is to create inequality of income, wealth, and opportunity, for the benefit of the elites, both secular and religious, with the costs to be born by everyone else. And I have advocated, sometimes tongue in cheek, that it was time to get out the pitchforks and torches, but if this author is correct only “mass-mobilization warfare, transformative revolutions, state collapse, and catastrophic plagues—have repeatedly destroyed the fortunes of the rich” we are in quite dire straights. We have been making war on other countries for over 200 years of our existence, and it is a very rare occasion for war to intrude on our shores, and a “mass mobilization” for war means the war has to be very, very large indeed. That is a path, in this age of nuclear weapons, I do not wish to take. State collapse and catastrophic plagues aren’t appealing, so that leaves “transformative revolutions” to us. Such revolutions can be non-violent (rare) or violent and considering the polarization of the U.S. and our massive personal stockpiles of weaponry, it looks like a peaceful revolution will be a very good trick to pull off, indeed.

I do note, however, that the only way to avoid the toxic effects of wealth is to make sure great amounts of it either do not occur or are reduced when they occur. This means that a major function of a democracy is to … wait for it … wait … redistribute wealth away from the wealthy. Unfortunately, our governments have been captured by the wealthy who have been busy redistributing wealth to the wealthy for the past 40 years.

My only hope to avoid large scale violence is that the GOP’s paymasters will so overplay their hand that there will be a quasi-socialist revolution that will give power back to the people and defang the wealthy elites now running the show. My preference is for new political parties (two at least) as the ones we have have failed miserably and have too much baggage to carry into the future.

March 3, 2017

The Utter Failure of Economics and Politics to Prevent the Ravaging of the Rich

I ran across this rather incredible graph recently:

20-year-annualized-productivty-growth-in-the-uk

The data are from the UK so I looked to see if I could find any similarities to data from the US, and yes, they are there.

The graph shows the growth of worker productivity from the years 1800 to 2010. Since all of the values are positive, productivity has trended upward in general. But you can see four distinct trends on this graph: first there is a strong increase in productivity from 1800 to about 1870, then a general decline in the rate from 1870 to about 1900 (while still being positive, the amount of increase dropped period by period). Then there is another long period of productivity increase improvements from roughly 1900 to the mid 1970’s, followed by another decline in the rate of increase from 1970’s to the present.

What do these periods in which productivity changes steadily decline in magnitude correlate with? Ah, the period 1870-1900 is often referred to as the “Gilded Age.” And the mid-1970’s to the present started with Reganism/Thatcherism and is the second great period of wealth transference to the few in this entire time period.

We have been told over and over that the accumulation of wealth by the few in our society is a good thing. The wealthy are the “job creators,” the movers and shakers who get things done. But the reality is exactly the opposite. The people who have been telling us that wealth inequality is a standard feature of capitalism and a “good thing” are just the PR men for the wealthy, trying to avoid pitchforks and torches showing up in the gated communities of their rich paymasters. That so many of these flacks are economists should be appalling to the intellectual community. (Maybe we should disbar them and transfer academic economic departments to become part of the marketing programs of schools of business.)

All of the data show that periods of extreme wealth accumulation by the few devastate economies instead of facilitating them. The steepest upward portion of this graph takes place between the end of World War 2 and the arrival of Reganism/Thatcherism and anti-unionism. Productivity grows the fastest when the wealth is shared more fairly.

Please note that there were rich people during this post-war period. There were many people getting rich for the first time. They weren’t, however, getting filthy rich by distorting the political systems in their favor. Becoming rich through your own skills is one thing. Becoming obscenely rich by hook or crook, though, hurts all of us.

December 11, 2013

Are We Becoming the 1%’s Servants?

Here is a link to an eye-opening article by economist David Cay Johnson “Is Service Work Today Worse Than Being A Household Servant?

As a teaser here is an interesting comparison from the piece comparing a live-in cook with a fast-food cook:

“Consider the family cook. Many family cooks now work at family restaurants and fast-food joints. This means that instead of having to meet a weekly payroll, families can hire a cook only as needed.

“A household cook typically earned $10 a week in 1910, century-old books on the etiquette of hiring servants show. That is $235 per week in today’s money, while the federal minimum wage for 40 hours comes to $290 a week.

“At first blush, that looks like a real raise of $55 a week, or nearly a 25 percent increase in pay. But in fact, the 2013 minimum-wage cook is much worse off than the 1910 cook. Here’s why:
· The 1910 cook earned tax-free pay, while 2013 cook pays 7.65 percent of his or her income in Social Security taxes as well as income taxes on more than a third of his pay, assuming full-time work every week of the year. For a single person, that’s about $29 of that $55 raise deducted for taxes.
· Unless he can walk to work, today’s outsourced family cook must cover commuting costs. A monthly transit pass costs $75 in Los Angeles, $95 in Atlanta and $122 in New York City, so bus fare alone runs $17 to $27 a week, eating up a third to almost half of the seeming increase in pay, making the apparent raise pretty much vanish.
· The 1910 cook got room and board, while the 2013 cook must provide his or her own living space and food.”

No matter how many people in the family, a fast food worker’s room and board is a sizable cost per month. The conclusion: many live-in servants in the Gilded Age were way better off than today’s outsourced servants, er, workers.

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