From my History in Politics series: The Squeeze
In 1990, when I was the Democratic candidate for U.S. Senate running against the incumbent Republican William Cohen, the main issue I became known for was the need to have Universal Health Care in the United States. My so-called political gurus had warned me against using this theme on the grounds that no one was interested. But I insisted and to my surprise – and no doubt more so to theirs – the exact opposite proved to be true. It lifted what had been deemed my “sacrificial race” into a potentially competitive battle. Then, some in the media began to call me a “one issue” candidate, ignoring all the materials I’d sent them of my views on other issues.
However, I did have a second major concern that I focused on in the latter part of the campaign. I called it “The Middle Class Squeeze.” Even back 24 years ago, the handwriting began appearing on the wall. My staff went ahead without telling me and produced a campaign button on the subject. To my consternation, once I saw it, they had omitted MIDDLE CLASS and printed the utterly baffling motto “STOP THE SQUEEZE.” I felt I would only look silly using such pins. So the Middle Class Squeeze, at least in my campaign, gained no traction.
Be that as it may, my reason for recalling this incident was to show how far back it was evident that what is a front page issue today – the decline of America’s formerly all-ubiquitous middle class – was beginning to rear its ugly head, finally leading to the world’s worst INEQUALITY in a major Capitalist democracy.
Professor Joseph Stiglitz, an American Nobel Lauriat in Economics has produced some interesting and alarming statistics on the progression of this problem in his best-selling book, The Price of Inequality. One that leapt out at me was that white women in the U.S. without a high school diploma – not including Hispanics – had between 1990 and 2008 – lost five years of life expectancy. For white males – not including Hispanics – the corresponding figure was three years lost.
From all corners, we are now receiving news about this dire change of direction on the American economic and social scene. A recent front page story in the New York Times reported about a Robert Marcus, recently installed as president of Time Warner Cable, and how he sold it to Comcast for $41 billio is expected to reap a commission of $80 million after six weeks of work.
But in terms of “golden parachutes,” the Times article pointed out, $80 million is small potatoes and named some of the really big winners. John Welch of General Electric led the pack when he took $417 million with him when he left the company. Lee R. Raymond walked off with $321 million when he departed from Exxon Mobil. William McGuire took home $286 million when he ended running the United Health Corporation. None of these big winners have since become notable for acts of charity.
In Stiglitz’s book, he also underlines the deleterious effect of having well-placed individuals like the above siphoning off such unimaginable sums. One particular harm done is how it slows down Growth. The Club for Growth, the fanatic right wing operation, should take notice and stop its caterwauling call for no taxes on these windfalls of millions. Sweden, for example, says Stiglitz, a very high tax country, has a much better rate of growth than the United States – 2.31% as against 1.85%. The Nobel Lauriat likewise pithily adds : ”America’s middle class has become eviscerated” and that “while more of the money is going to the top, more of the people are going to the bottom.”
Personally, the new distortion of our economy dismays and frightens me. I consider myself a supporter of Capitalism and call myself a Reform Capitalist, just like Franklin Roosevelt who strived mightily to keep the system afloat after it led to the Great Depression. Under the “Let ‘em eat cake” syndrome that has affected some of our leading business figures who are essentially is ending the “American Dream,” causing terrifying consequences already. Witness the near-collapse at the onset of the Bush Recession.
The release of a study started in 1972 in North Carolina, as reported by the New York Times this year, had unexpected results in illustrating the effects of uncontrolled poverty on two populations of babies born poor. One group was given full-time day care up to the age of five, which included “most of their daily meals, talking games and other stimulating activities.” The other group essentially received no services.
The initiators of this study, published in the Journal of Science, expected to see no significant differences between the two populations. To their surprise, the group given care was ” far healthier” with lower rates of high blood pressure, obesity and higher levels of good cholesterol. These group one tots also in later life were four times more likely to have graduated from college. The control group, for which nothing was done to counter the effects of their poverty, had many more health problems, thus causing additional costs whenever they needed public care.
Conservatives have been lambasting the type of ameliorating programs of the type given group one ever since the days of Franklin Roosevelt. They lead to “dependency,” is the smug claim. But without them, it turns out, the right wing do -nothing attitude leads to harmful health and expensive health results.
Leading the charge to create ever more inequality in the United States are two brothers, David and Charles Koch, owners of the Conglomerate Koch Industries, the second largest private company in the country. Not surprisingly, their father, Fred Koch Sr., was a founding member of the John Birch Society, an extremist right wing organization created by a candy maker named Robert Welch in Belmont, Massachusetts. These two guys are out to do away with all government restraint on economic activities, presumably even illegal ones like gross pollution of the environment and insider trading, and do away with all taxes except those on the poor and now also on the middle class.
One of their other brothers, Bill Koch, and I once served on the same board at the National Academy of Sciences. He made a rousing speech to us about keeping the government out of all business activity and extolled the example of the building of the transcontinental railroads by private entrepreneurs after the Civil War. When I challenged him by pointing out that those “robber barons,” had received millions of dollars from the Federal Government in the form of free land on which to lay their tracks and allowing them to sell the leftover lands for development and keep the proceeds, Bill sheepishly conceded I was right.
But that is the mindset among the “robber barons” of today and the amount of diversion of the nation’s wealth into a relatively few pockets has become staggering.
Now back to Professor Stiglitz. In one of his chapters, he refers to Adam Smith, the 18th century guru of Capitalism and foremost cheerleader for the free market in his book The Wealth of Nations. Yet Smith also wrote: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public or in some contrivance to raise prices.”
The right wing hollers the scare words “redistribution of wealth” every time there is an effort to curb today’s excesses.
Yes, “redistribution” is an appropriate word but since the past few decades, it has been REDISTRIBUTION OF AMERICA”S WEALTH UPWARD TO THE VERY, VERY RICH.” These right wingers acclaim a “Trickle Down” theory in which crumbs fall to the masses from the tables of the very rich, except what we have today is a “Flood Up” of wealth going to Haves like the Koch brothers to aid in their efforts to buy elections and cook the political books.
Going back in history, a quote attributed to Jean-Baptiste Colbert, financial advisor to King Louis XIV, seems applicable. “The art of taxation,” he said, consists in so plucking the goose as to obtain the largest amount of feathers with the least amount of hissing.”
In France, there was certainly no hissing from the aristocrats, the 1% who paid no taxes and lived in monarchical splendor themselves. Two Kings later, under Louis XVI, the 99% began hissing loudly. Yet In answer to the plea brought to Queen Marie Antoinette that the “people have no bread,” she apparently lost her head and replied with the utmost cruelty: “Then let them eat cake.” Not long afterward , she did literally lose her head.
Going back even farther in history, there is a description from Sumeria, the oldest of human civilizations, dated 2,400 BCE, that sounds amazingly modern and like the U.S.’s possible destination if we stay on the current track of inequality. Samuel Noah Cramer in his work: The Sumerians, writes:
“The rich, the “big men” and the supervisors were getting richer and richer at the expense of the less fortunate citizens….by forcing them to sell their donkeys and houses at low prices and against their will, The indigent, the poor, the orphaned and the widowed were mistreated and deprived in one way or another of what little they had by men of power and influence.”
Eventually, though, along came a Sumerian FDR who wiped out these conditions in a type of New Deal close to 4,500 years ago.
History has lessons for the Koch brothers and their ilk.