I'll Stop After This One--Promise!

I’ve gone on for a while now (with a little break on Monday) about Hedrick Smith’s Who Stole the American Dream? because I think the book is important. Updates in events of the past five years are pretty clear on everyone’s radar, I think, so almost everything in this 2012 book continues to be relevant today. Part I and Part II of my musings can be found in previous posts. Also, I would have posted something very different today but am having a problem with the interface between laptop and photo card reader.

Anyway -- the point of reading this book is not to become depressed or hopeless, however; let me make that clear, please. The point is to understand – and then to see what we can do – because if we don’t realize where we got lost, how can we hope to find the road again?

...Money in politics is an old story. 

What's new is that it now the only story. 

- Bill Moyers, "The Soul of Democracy," in Moyers on America: A Journalist and His Times (2005)

It isn’t only class and income range in America that lost its middle: the middle ground has also dropped out of our politics, resulting in a nationally elected legislature terrified of bipartisanship. Consort with “the enemy,” and you may be purged from your party! Moreover, the two divides – the wealth gap and the disappearance of political moderates – have more in common than the words “missing middle.”

Political scientists have documented a link between polarized politics and rising economic inequality. The ever-increasing wealth gap and ever-sharpening partisan divisions go hand in hand. Over the past century, the two trends have moved up and down together.

Correlation does not establish causation, especially of a simple, unidirectional sort, but this particular correlation has a meaningful feel about it, from whatever side you look and however you seek to explain the link. And it got me to thinking about other changes we’ve seen in American society in the same decades. What about the disappearance of civility? Is this a metaphorical middle ground (between, say, street fights and ballroom dancing) that has gone missing? Is its disappearance merely coincidental? Or do we over-generalize about incivility, imagining it worse than it is, based on a small sample of bad actors? Are we not really as nasty to one another as it sometimes seems?

I’ve mentioned earlier (maybe more than once) that I had to keep putting this book aside because I found myself getting too upset to continue reading. “The Rise of the Radical Right” chapter was a continuation of my on-and-off reading mode. Newt Gingrich not only urged Republicans to...

“...nationalize the elections, mobilize the hatred for Congress nationally, and intensify it, and make Congress look so bad to people that they will think, ‘Anyone is better than what we’ve got now.’”

More than strategizing, he approached partisan conflict with revolutionary fervor:

In Gingrich’s mind, the conflict was literally to be a civil war. “This war has to be fought with a scale and a duration and a savagery that is only true of civil wars,” Gingrich caustically declared in 1988.

Peacetime politics fought with “savagery” but not just savagery -- “a savagery that is only true of civil wars”? Strange, isn’t it? How little civility is involved in a civil war?

The partisan divide occurred no more as a natural populist evolution than was the wealth gap shaped by an impersonal, invisible hand. Both were carefully orchestrated from the beginning by individuals and groups of Americans with names. Hedrick Smith’s book is not an invented story. He has not concocted a “conspiracy theory.” Facts, statements, memoranda, bills, dates, etc. are there for historians willing to dig for them.

I’m going to skip Smith’s sections on U.S. military spending and the costs of what he calls “imperial overreach,” not because it isn’t important – it is, vitally – but because the topic would be overreach on my part, even with Smith having covered it so well. I do, however, want to deal further with the issue of taxes. Bill Clinton, Smith tells us, wanted a tax increase in 1993, his first year in office, to cover at least part of the Reagan-Bush budget deficit he inherited. That increase created a budget surplus, the first in years, and stimulated the economic growth of that decade. But Gingrich et al. didn’t like it. They were ideologically opposed to tax increases.

And precisely this, I want to say, is one of the things I find most maddening about today’s immoderate, purist, ideology-driven Republicans. A very influential Republican here in my own county told me once, with an impatient shake of the head and dismissive wave of the hand, that she could never get interested in economics. I was flabbergasted. How can we let politics so fundamentally affecting our national economy and the economic lives of every American be directed by people who don’t care about outcomes, who care only that their ideology reigns supreme?

Well, of course, they care about more than ideology. Revisit that Bill Moyers quote at the beginning of today’s post. Every day’s news seems to bring to light yet another revolving door between government and the private sector, the same people getting rich by laws and policies they and their cronies made. Why, for example, were those responsible for the 2008 Wall Street crash not brought to justice? What was with those little slaps on the hand and tiny fines? Read here to get one pretty convincing answer.

As for the Tea Party, Smith argues that it only looks like a populist movement.

The Tea Party looked like a populist movement, but when its profile emerged, it was not a movement of average Americans. The 18 percent who identified themselves in polls as Tea Party followers were predominantly white, male, older, more college-educated, and better off economically than typical Americans, and 63 percent chose Fox News as their primary news source. They were far to the right of average Americans, identifying themselves as “very conservative” and always or usually voting Republican. Some 92 percent wanted smaller government (vs. 50 percent of Americans overall); 73 percent said they would favor cutting domestic programs, including Social Security, Medicare, education, and defense; and while most Americans (by 50 to 42 percent) favored government spending to create jobs, Tea Party supporters were 5 to 1 against that policy. They cared far less about jobs than cutting government and the deficit.

Cutting government programs, I hardly need say, goes hand-in-glove with tax cuts. And yet, Smith says, for all the outrage over taxes, taxes from 2009 to 2012 (the year this book was published) “were already at their lowest level in sixty years—since 1950” and the U.S. “has the third lowest overall tax rates of the twenty-eight most advanced economies in the world.”

Here’s an example of the kind of propaganda used to keep wealth from trickling down, through the government, to programs that might serve the common good. The estate tax. Heard of it? What does it mean to you? Republicans re-named it the “death tax” and campaigned hard against it, giving the general impression that family-accumulated wealth would be stolen at death rather than transferred to heirs.

The truth about the “death tax”? It used to be that only estates of $1 million fell under the estate tax. Then President Bush called for phasing it out altogether and also passed tax cuts for the middle class (the non-millionaires), which President Obama wanted to continue, But in order to get Congress to agree to extending the Bush tax cuts for the middle class, Republicans insisted that Obama raise the exemption on the estate tax to $10 million for couples and cap that at 35 percent. Middle-class voters scared that a “death tax” would impoverish their heirs were hoodwinked.

We’ve all been hoodwinked, over and over, in so many ways. The wealth gap has been the deliberate result of partisan politics favoring predatory capitalism at the expense of ordinary Americans. The same is true of much of the job loss that has come with it and contributed to it; the privatization of so many government services that exacerbate and widen the wealth gap; and deregulation that takes away protection for consumers and workers alike. You think these people on your side? Not unless you’re a billionaire. And then it’s unlikely you’d be reading Books in Northport.

Okay, that’s it. I’ll be back next time with a lighter topic. But really. This stuff is important. In fact, I'm beginning to think that the current President is more of a distraction than anything else. It's the selling of Congressional seats, on a national market, to the biggest spender that needs to stop so that government can once again be responsible to the American people.

And Then I Turned to Total Froth!

Pages bristling!

Who Stole the American Dream? Part I

I was a long time over my reading of Hedrick Smith. Who Stole the American Dream? was hardly (as you might guess from the title) either cheerful or relaxing or dreamy story to get lost in. Instead, in an effort to resist underlining a clean hardcover (albeit used) book, I kept adding Post-It notes to the edges of the pages, until the fore-edges bristled like a hedgehog’s back.

Smith locates the beginning of the current mess we’re in—mess, as in Congressional gridlock; general incivility; job loss and declining real incomes; widespread financial insecurity; increasing social and economic inequality; a widening gap between super-wealthy and poor; and eroding civic trust—in 1978, which he calls “the pivotal year.” It was in 1978 that, as he puts it,

...the corporate political machine went on the offensive and achieved a legislative agenda that would have profound and far-reaching impact. ... Virtually every economic bill that passed in 1978 had a political tilt in favor of business and the wealthy, often at the expense of the middle class... [my emphasis added].

Jimmy Carter, one of my personal heroes, was president in 1978, but even liberal Democrats jumped on the deregulation bandwagon, and there was no way Congress was going to pass Carter’s tax bill, closing corporate loopholes, ending tax breaks for the rich, and giving breaks to families with low incomes. Smith calls the reception to Carter’s bill a “successful mutiny” and a clear signal to business that they could get whatever they wanted.

The corner had been turned.

We’ve all heard, far too many times, the phrase vicious circle. In Smith’s fourth chapter, “Middle-Class Prosperity,” he discusses the concept of a virtuous circle:

Good, steady pay, and job security, they say, are the drivers of strong consumer demand, and strong demand stimulates economic growth. Business is moved to expand production and invest in new plants. Each expansion generates a new round of consumer demand. The virtuous circle keeps on generating growth, unless someone breaks the chain reaction.

Think of trust between people, how trust is built, and what happens when trust is broken. We anticipate future events in light of our experience. Put simply, a vicious circle is a negative feedback loop, a downward spiral, while a virtuous circle, the positive movement, spirals upward.

As Smith sees it, postwar prosperity in the 1950s, 1960s, and 1970s went hand in hand with power shared between American companies and the labor force. What those horrible, very, very unfair taxes on the wealthy? Weren’t they a counter-force holding everything back?

Contrary to claims of anti-tax conservatives today that high taxes are a drag on the economy, the long postwar period from the mid-1940s to the mid-1970s was an era of strong, steady economic growth—much better growth that the past decade with its low tax rates. However plausible it sounds that high taxes on corporations and wealthy individuals cause them to invest less and take fewer risks, several decades of solid growth in the postwar period offer incontrovertible evidence to the contrary.

Not everyone was prosperous in the postwar decades, but the bottom and top of the income scale were closer together than they had ever been before or have been since.

Why did we turn the corner and go in the direction of increased inequality? Why did Congress decide to give tax breaks to the wealthy and deregulate banking and other key businesses? What is the source of today’s relentless push to “privatization” of essential services—education, prisons, even the military? Can business “do it better” and save money for all of us? Is this all for our own good? If so, why does it feel so bad?

*  *  *

No Post-It notes!

After finishing this book (which took me quite a while, as adrenaline surges mandated frequent breaks), I turned to a very modern novel, The Rosie Project, by Graeme Simsion. It was like a little vacation, reading light fiction on the porch for a couple of evenings, but I have not done telling you about the Hedrick Smith book. Be forewarned: There will be more coming about that!

P.S. 7/14 Next installment up now here. 

No WORDS!!!

What Does It Take to Crack Open a Heart?

Some people, it seems, grow older without much change. With an unchanging personality, there is no epiphany along the way. Others change by hardening up and growing a shell. Chuck Collins belongs in neither group. His heart has been cracked open more than once, and new growth results every time. Born on Third Base is much more than his personal life story—we don’t even get his whole life story, but that’s all right. Chuck’s raison d’être has become working to reduce wealth inequality in America, and he makes his case in this book.

The great-grandson of Oscar Meyer was born into what we have begun to call the “one percent,” the wealthiest Americans. Thomas Piketty, author of Capital in the Twenty-First Century, calls a society governed by huge inherited wealth and power “patrimonial capitalism,” and Collins openly acknowledges that he had to do nothing personally to be wealthy. He quotes Edgar Bronfman, Seagrams heir, who said, “To turn $100 into $110 is work. To turn $100 million into $110 million is inevitable.”

At age 26, Collins made the decision to give away his inheritance but acknowledges that he still had the advantages of American citizenship, education, freedom from debt, white privilege, and a supportive family.

Touring the country in 2003 with billionaire Bill Gates to clarify the federal estate tax and why the wealthy should pay it gratefully, Collins and Gates told their audiences that even first-generation American entrepreneurs are not “self-made” because they had the benefits of our economic system, laws, roads, other transportation and communication systems, education systems, public libraries, and public investment in new technology. Collins gives the key moment of one talk to Gates, who spins a tale in which God’s heavenly treasury is running low, and She [this is the way Gates told the story; I am not editorializing] came up with a plan: the next two spirits to be born could bid on the country in which they would be born. The winner of the auction would be born in the United States, the loser “in an impoverished nation in the global south.” Gates then asked the audience what it had been worth, to them, to be born in the United States—and, so, how much of their net worth they were willing to pledge to leave behind for the common good.

Paying the estate tax (which applies only to households with wealth of $10.8 million and so has little or nothing to do with small family farms, though lobbyists and advertising against the tax would have the public believe otherwise), Collins and Gates proposed to their audiences, is a way of showing gratitude for social benefits received. It is a way to pass benefits they received along to future generations.

Booksellers, authors, and others are often asked, from one administration to the next, “If you could have the president read just one book, which one would it be?” Born on Third Base is my answer to the question today. Hmmm. I wonder if I could get our new U.S. Representative to Congress to read it? That would be a start....

But this is a book for every American, rich or poor, influential or left behind, for a couple of important reasons.

Why should you read this book?

First, one change of heart Collins had involved the language of class warfare, the “bottom-up antagonism expressed in rhetorical attacks against the rich....” He had used it himself in his early campaigns for social justice, but no one, Collins realized, likes to be hated,  and hating the wealthy will never turn them into allies. So it’s a losing game. He goes further in the other direction. In the same way he invites the rich to get to know their financially less fortunate fellow citizens, Collins invites members of the “99 percent” to reach out to the wealthy—not with a hand out but with the empathy and respect every individual deserves. A lot of rich people, he says, are very isolated socially, and they, too, whether they should or not, have financial fears. Empathy is a theme that runs through every chapter of the book.

Second, this is not just another book telling you what’s wrong in our country and the world and how it got to be wrong, because another important theme is change. Collins tells stories, gives examples, and offers concrete, specific suggestions. If you’ve been downhearted lately about the unleashing, once again, of predatory, extractive capitalism, this is the book you need to read. You’ll find in it steps you can take, beyond protest, to help bring about the changes you want to see.

Empathy and change. Change begins with empathy. We’re all in this together. Yes, we can!!!

Born on Third Base: A One Percenter Makes the Case for Tackling Inequality, Bringing Wealth Home, and Committing to the Common Good

by Chuck Collins

Chelsea Green, softcover, 267pp w/ index

$17.95