May 15, 2014

The Middle Class is not ‘Normal’

By Thom Hartmann

Editor’s Note: I do not normally lift entire opinion columns and reprint them here. However, I find the following to have been so important and compelling that I think it’s worth pushing the limits of fair use. I just don’t want to lose track of the points Thom Hartmann makes here.

Just so you know, we don’t own this column and have not aksed permission to print. Any eyebrow wiggling can be direted to brady @ kiav dot net.

But I think Thom will be cool with it.  —BB

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There’s nothing “normal” about having a middle class. Having a middle class is a choice that a society has to make, and it’s a choice we need to make again in this generation, if we want to stop the destruction of the remnants of the last generation’s middle class. Despite what you might read in the Wall Street Journal or see on Fox News, capitalism is not an economic system that produces a middle class. In fact, if left to its own devices, capitalism tends towards vast levels of inequality and monopoly. The natural and most stable state of capitalism actually looks a lot like the Victorian England depicted in Charles Dickens’ novels. 

At the top there is a very small class of superrich. Below them, there is a slightly larger, but still very small, “middle” class of professionals and mercantilists – doctor, lawyers, shop-owners – who help keep things running for the superrich and supply the working poor with their needs. And at the very bottom there is the great mass of people – typically over 90 percent of the population – who make up the working poor. They have no wealth – in fact they’re typically in debt most of their lives – and can barely survive on what little money they make.

So, for average working people, there is no such thing as a middle class in “normal” capitalism.  Wealth accumulates at the very top among the elites, not among everyday working people. Inequality is the default option. 

You can see this trend today in America.  When we had heavily regulated and taxed capitalism in the post-war era, the largest employer in America was General Motors, and they paid working people what would be, in today’s dollars, about $50 an hour with benefits.  Reagan began deregulating and cutting taxes on capitalism in 1981, and today, with more classical “raw capitalism,” what we call “Reaganomics,” or “supply side economics,” our nation’s largest employer is WalMart and they pay around $10 an hour. 

This is how quickly capitalism reorients itself when the brakes of regulation and taxes are removed – this huge change was done in less than 35 years.  The only ways a working-class “middle class” can come about in a capitalist society are by massive social upheaval – a middle class emerged after the Black Plague in Europe in the 14th century – or by heavily taxing the rich.

French economist Thomas Piketty has talked about this at great length in his groundbreaking new book, Capital in the Twenty-First Century. He argues that the middle class that came about in Western Europe and the United States during the mid-twentieth was the direct result of a peculiar set of historical events. According to Piketty, the post-World War II middle class was created by two major things: the destruction of European inherited wealth during the war and higher taxes on the rich, most of which were rationalized by the war.  This brought wealth and income at the top down, and raised working people up into a middle class. 

Piketty is right, especially about the importance of high marginal tax rates and inheritance taxes being necessary for the creation of a middle class that includes working-class people. Progressive taxation, when done correctly, pushes wages down to working people and reduces the incentives for the very rich to pillage their companies or rip off their workers.  After all, why take another billion when 91 percent of it just going to be paid in taxes?

This is the main reason why, when GM was our largest employer and our working class were also in the middle class, CEOs only took home 30 times what working people did.  The top tax rate for all the time America’s middle class was created was between 74 and 91 percent.  Until, of course, Reagan dropped it to 28 percent and working people moved from the middle class to becoming the working poor.  

Other policies, like protective tariffs and strong labor laws also help build a middle class, but progressive taxation is the most important because it is the most direct way to transfer money from the rich to the working poor, and to create a disincentive to theft or monopoly by those at the top.

History shows how important high taxes on the rich are for creating a strong middle class. If you compare a chart showing the historical top income tax rate over the course of the twentieth century with a chart of income inequality in the United States over roughly the same time period, you’ll see that the period with the highest taxes on the rich – the period between the Roosevelt and Reagan administrations – was also the period with the lowest levels of economic inequality.

You’ll also notice that since marginal tax rates started to plummet during the Reagan years, income inequality has skyrocketed.

Even more striking, during those same 33 years since Reagan took office and started cutting taxes on the rich, income levels for the top 1 percent have ballooned while income levels for everyone else have stayed pretty much flat. Coincidence? I think not.

Creating a middle class is always a choice, and by embracing Reaganomics and cutting taxes on the rich, we decided back in 1980 not to have a middle class within a generation or two.  George H.W. Bush saw this, and correctly called it “Voodoo Economics.”  And we’re still in the era of Reaganomics – as President Obama recently pointed out, Reagan was a successful revolutionary. 

This, of course, is exactly what conservatives always push for. When wealth is spread more equally among all parts of society, people start to expect more from society and start demanding more rights.  That leads to social instability, which is feared and hated by conservatives, even though revolutionaries and liberals like Thomas Jefferson welcome it. 

And, as Kirk and Buckley predicted back in the 1950s, this is exactly what happened in the 1960s and ’70s when taxes on the rich were at their highest. The Civil Rights movement, the women’s movement, the consumer movement, the anti-war movement, and the environmental movement – social movements that grew out of the wealth and rising expectations of the post-World War II era’s middle class – these all terrified conservatives.  Which is why ever since they took power in 1980, they’ve made gutting working people out of the middle class their number one goal.

We now have a choice in this country. We can either continue going down the road to oligarchy, the road we’ve been on since the Reagan years, or we can choose to go on the road to a more pluralistic society with working class people able to make it into the middle class.  We can’t have both.  

And if we want to go down the road to letting working people back into the middle class, it all starts with taxing the rich. The time is long past due for us to roll back the Reagan tax cuts.  

Visit thomhartmann.com and please, listen to The Thom Hartmann Program every chance you get. 

Filed Under: Thom Hartmann
April 15, 2010

Thom Hartmann Deconstructs the Boston Tea Party

By Brady Bonk

Filed Under: Thom Hartmann
October 28, 2009

Holy Crap

By Brady Bonk

Thom Hartmann has just pointed out to me one great advantage to pushing “Medicare for Everyone” instead of the “Public Option.”

“Medicare Part E” could more easily qualify for the reconciliation process.

He did qualify it with “I’m not the Senate Parliamentarian,” of course. But a bill that seeks to expand an existing entitlement would be more strictly relevant to the budget process than any other proposal I can think of.

Der.

July 20, 2009

Hi. This Is Sal Governale.

By Brady Bonk

There is an essential idea that is often discussed on The Thom Hartmann Show that I find a valuable touchstone—in fact, he’s just discussed it now. What is wealth, as in, the wealth a nation creates? Hartmann maintains that wealth is only actually created in manufacturing, when you collect resources, apply a process to the resources, and turn it into something else, preferably something that holds more value than the original batch of resources. An economy that is as apparently eager as is ours to ship our manufacturing industry elsewhere is actually ridding itself of its own wealth-building infrastructure, he often argues. Just a thought.

Anyway. The issue of the day of course is health care policy. But I’d like to talk about a cracker dumbass.

On or about July 8, on a television program called Fox & Friends, they were talking about some study that indicated that people in relationships suffered less demornna. Demmoopoo. Dem…um…dementia. I guess the study was done in Sweden. Because it caused host Brian Kilmead to say:

We keep marrying other species and other ethnics…The problem is the Swedes have pure genes. They marry other Swedes, ’cause that’s the rule. Finns marry other Finns; so they have a pure society. In America we marry everybody. We will marry Italians and Irish. So this study does not apply to us.

I’m serious. This actually happened.

Remember. This cracker dumbass said “species.” “Species.” He has basically opened up a little piece of his soul to you, explaining to you without solicitation that, at his most base level, this is a man who firmly believes and is dying to espouse the most basic tenets of eugenics. Considering that, I think his apology is more wimpy and foolish than that of Stern show idiot Sal Governale.

I made comments that were offensive to many people. That was not my intention, and looking back at those comments I realize they were inappropriate. For that I sincerely apologize. America [is a] huge melting pot, and that is what makes us such a great country…

In fact, it reads a lot like Sal’s, doesn’t it?

No, any “apology” that doesn’t include the phrase “I am a cracker dumbass” won’t hit the mark in this case.

July 16, 2009

NO NO NO NO NO NO NO NO NO NO NO.

By Brady Bonk

It was weird. One moment, I’m listening to Thom Hartmann debate a backwater preacher fellow of some sort about hate crimes legislation. The next, I’m hearing Air America’s Nicole Whatshername. She’s pleasant enough, so I keep listening; what the hey.

Then she walks into one of my favorite rakes.

The caller was saying that the reason we’ll not get single-payer health care is because of all of the munny that goes from the insurance industry to legislators. Whatshername says yes, that’s right, and we’ll not get substantial health care reform until munny is extracted from politics. So far, so good.

Then she says maybe we need term limits.

Thank you for playing.

That’s a terrible idea. Horrible. Awful. Hideous. It is, absolutely, the wrong solution, one that does far more harm than good. All it achieves is to further dilute the power of the vote.

Why on Earth would anyone advocate for something that takes power out of their own hands and makes elected officials even less accountable to the people than they are now? Why in the wide wide world of sports would someone support something that shifts power from elected representatives to paid professional staffers, lobbyists, and other non-elected brokers in Washington? Why why why?

There are other, more reasoned solutions to the problem of munny in our national politics than that of term limits. There is, for instance, the reform of “clean elections.” Here’s the Wiki. Enjoy.

There is, also, the notion of “instant runoff voting,” a reform that wouldn’t just address the issue of corporate and other interests shoving munny into the pockets of our legislators, but would also give genuine momentum to third-party political movements in these Untied States of America. Here’s the Wiki. Enjoy.

Why in blazes do people instantly reach for the absolute worst answer to this question? ARGH.

April 13, 2009

Rendering History As So Much Gibberish

By Brady Bonk

Am knee-deep in The Thom Hartmann Show today. He’s addressing good stuff, specifically the outlandish shenanigans the Conservabots are performing with regards to American history. Glenn Beck, apparently, has now co-opted the memory of one Thomas Paine:

Do we really think that Paine ever said “we’re mad as hell?” Thom Paine was that century’s Howard Beale? Really?

Hartmann has also pointed out the intellectual disingenuous of these crappy tea parties, considering that the original Tea Party was in part a protest of the occupying government’s favoring one corporate interest over another. It was in part waged over the issue of fair trade, but I betcha the idea of protecting our markets these days would go over like a led balloon at these parties. More popularly, of course, The Tea Party was about “taxation without representation.” Which is utterly more stupid because there’s only one corner of the country that can legitimately claim that malady…that would be the locale that George Clinton used to call “Chocolate City…” Hmmm… You reckon a lot of the disenfranchised of Washington, D.C. will be showing up at these parties?

March 11, 2009

I Finally Get It

By Brady Bonk

I have been trying to wrap my head around the Employee Free Choice Act. Now I get it.

There are two ways to form a union. You can vote, or a majority of the bargaining unit can sign a piece of paper.

As it stands now, though, an employer can tell you and your signed pieces of paper to screw.

The Employee Free Choice Act says they have to recognize your signed pieces of paper, too.

Thanks, Wiki!

One of my favorite brief explanations of employer attitudes regarding unions is from, yes, Thom Hartmann: Workplaces are not democracies. Workplaces are kingdoms. Unions are democracies. And democracies tend to make kingdoms nervous…

February 18, 2009

Sweet Merciful Crap!

By Brady Bonk

So, NovaM Radio, home to Randi Rhodes and Mad Mike Malloy, has not only (allegedly) failed financially, but there’s a little bit of batshit crazy going on over there, allegedly. LTR has the scoop, as usual, in the form of a letter from Rhodes’ attorney. They’ve gone bankrupt. They stopped paying people two weeks ago. And Sheldon Drobny has had a nervous breakdown and has tried to off himself. (Allegedly.) Holy shit.

I mean, I’ve stopped being such a faithful Randi listener. I’m more inclined these days to aspire to hear Stephanie Miller, Ed Schultz, Thom Hartmann, and Ron Kuby. Rachel’s radio show is essentially no longer and she’s better on the TV machine anyways. Randi can be one of the best in-depth folks on an issue, but she’s often not, not these days. I am utterly sorry she’s apparently on the fall because that broad taught me a lot. This blog wishes her and Mr. Drobny well.