Class Warfare in America

Gil Villagrán, MSW, Lecturer, School of Social Work, San Jose State University [gvillagran [at] casa.sjsu.edu] has posted this interesting factsheet for Class Warfare in America: a Teach-in for Occupy San Jose, lightly edited here for presentation.

Our nation’s class war began as early as 1607 in Jamestown, Virginia, established by the Virginia Company of London—a charter corporation granted by King James. English, Scot, Irish, Dutch, Polish, German and other European immigrants were recruited as indentured servants, working up to five years to pay off their indenture. Children born to these servants themselves became servants along with their parents in exchange for room and board. Many of the indentured did not live long enough to complete their five years of servitude. But seeking to lower costs and increase profits to the colony owners and managers (the CEOs of the period) by 1619 the first African slaves were imported for heavy work, unpaid, of course.

Descendants of these slaves, along with more recently “acquired” slaves under “privatized construction contracts” built many of the buildings in our nation’s capitol, including the Congress, White House, and Supreme Court.

The Class War in America has never ceased, and when the pernicious abuse of workers by the ruling ownership class becomes even more overwhelming, people have risen up to plead for food, fairness, safe working conditions and sustainable livelihoods. When such pleads are disregarded and people realize their economic masters do not care about fairness, human decency or Democracy, eventually they have armed themselves with more effective weapons (under those circumstances) than the Bill of Rights, the U.S. Constitution, or any moral philosophy or religious teaching of human rights.

The Class War by the ruling ownership class has been won over and over for almost 400 years in America, and in most of the world, by those in control of wealth, natural resources, government at every level who write the laws which are then enforced by courts, police, private mercenary militias, secret police, FBI, DEA, CIA, and countless other police state agencies, and finally when all else fails to subdue the rebellious people—the army attacks its own citizens. In most nations today, national armies are created, funded and used to protect the ruling class from rebellions civilians rather than from attacking armies of other nations.

The economic situation in 2011 America

• The top 1 percent own 51 percent of Wall Street financial instruments—stocks, bonds, and mutual funds
• The top 1 percent of American residents own 34 percent of all wealth, and have even more in financial instruments such are retirement accounts, mortgages, credit card debt, etc
• The other 99 percent share the rest, but do not control most of it.
• The bottom 50 percent of American residents share only 2.5 percent of the wealth
• In the last 20 years CEO pay has risen 298 percent while minimum wage values has declined by 9.3 percent
• Average effective hourly wages have not increased in 50 years!

The increasing chasm between wealthy, middle class and poor Americans

• From 1979 to 2005, the top 1 percent gained $673 billion in combined annual income, an average annual household income gain of $597,000
• The middle class lost an average of $8,600 annually
• The bottom 20 percent suffered a loss of $5,600

The truly rich pay less tax than all other classes

• From 1992 to 2007, the 400 taxpayers with the highest incomes had an average increase in income of 392 percent while their tax rate decreased by 37 percent.
• So, buying Congress is the best investment for the 400 richest Americans!

War on Poverty

President Johnson’s 1960s War on Poverty was lost in the jungles of Vietnam, which cost at least one trillion dollars, and created a generation of disabled, traumatized and thousands of homeless veterans—many living in San Jose.

The economic safety net initiated by the FDR New Deal programs, generally successful in caring for the aged, disabled, widows and children until the 1980 Reagan War on the Poor, is now a tattered net with gaping holes that determined that many Americans are (unlike “banks that are too big to fail”) too sick, too mentally ill, too addicted, too criminal, too “feral” to save from living in the streets, eating out of garbage cans, sleeping in trash bins.

The cruel fraud of so-called Safety Net

There is no national federal minimum wage, most states legislate a statewide minimum wage. In California the wage is $8 per hour. $8 per hour x 40 hours x 52 weeks is an annual wage of $16,640, but the 2011 Federal Poverty Level for a family of three is $18,530. Therefore a full-time parent in a real job earns almost $2,000 less than the poverty level!

But these wages are before all the deductions for federal, state, local, SS (wage) taxes, UIB, are taken from the worker. There are also exemptions from the minimum wages for part-time workers, trainees, extra help, restaurant servers, seasonal, farmworkers, children, and of course the undocumented who are easily exploitable. Many of our nation’s 3 million incarcerated prisoners are cajoled into prison labor not unlike the chain gangs of earlier times. There is also the underground economy filled with human trafficked wage and sex slaves.

Most of the poor in America are not poor because they do not work, but rather are poor because they earn their poverty every day they work by such low wages.

Which class do you belong to?

Earnings from work, and not including assets such as property, financial investments—stocks and other income producing assets. 2005 earnings data, Dept of Labor:

• Lower class—25 percent of workers: annual income, $10,000 to $22,500
• Middle class—33 percent of workers (mainly high school educated): $30,000 to $62,000
• Upper middle class—25 percent of workers (mainly college graduates): $77,500 and higher
• Top class—5 percent (graduate or professional) $167,000 and higher
• Megarich class—top 1 percent (CEO top management) $350,000 and more.

Who are the very poor in our society?

• One out of five children live in poverty all of their childhood—their parents’ struggle to provide often ends in failure to self-recrimination
• One out of five seniors will die in poverty
• African Americans, Latinos, Native Americans, Single moms recent immigrants are twice as likely to be poor
• 50 million American live in or on the edge of desperate poverty
• Health care costs are the major cause of home foreclosure and bankruptcy

The American Corporate Plutocracy

The truly rich do not earn their money from labor of any sort, but from earnings on investments. The highest wealth in America is now inherited wealth—that is, based upon who your parents were—like back in the days of the founding of the nation. America is a land with a new kind of aristocracy—a corporate aristocracy based upon wealth amassed from corporate profits.

What are the lower and middle class workers to the megarich class?

We are worker bees, the drones that make or sell and certainly buy the products, who clean the offices and factories, and fight their wars. Also critically, it is the lower class and middle class who build and pay in taxes for the vast infrastructure that enables corporations to function: the transportation, energy, communications networks; the water and sewage systems; and the educational system that trains workers, managers and executives.

We also provide another critical function of society—the police and criminal justice system to keep public safety and prevent lawlessness or even insurrection, and the vast military to ensure the American empire continues to function in the world. Who fills these ranks?

The lower and middle class. Wealthy youth. George W Bush, Mitt Romney, Rand Paul, Michael Bloomberg, etc) never risk their lives as beat cops or rank soldiers, but for the lower class, these are considered good jobs with higher than low wages and the prestige of serving your community and your nation.

American Dream?

Current middle class wages are not enough to afford a middle class lifestyle of owning a home—even if it takes a lifetime to pay for it—sending your children to college, expecting some upward mobility. In the last five years, actual working class wages have remained constant while income for the top 1 percent increased 23 percent. Imagine such a raise in your wages. It is unlikely to happen. The “American Dream” project of the “Change to Win Federation” identifies four elements to the American Dream:

1. a job that pays to support your family
2. affordable health care
3. being able to ensure your children have opportunity to succeed
4. and having a secure and dignified retirement.

How many middle class Americans are certain they can achieve these goals? If we have an endangered middle class, then are we witnessing the eclipse of the American Dream?

This is What a Police State Looks Like

This is What a Police State Looks Like

The Revolution Begins—Capitalist Police Don their Jackboots

The first casualty of war is truth, and the reason is that propaganda supercedes it. The propaganda war against the OWS protesters has started to accompany the first actions of the capitalist jackbooted riot police against the demonstrators.

The police loyally align with the rich man’s state even though they are not rich men themselves. They should join the revolution, or stand aside in support of the 99%. That is democracy!

Apologies for the advert

The Best Protest Sign

This protest sign says it all. Society is grossly unfair. The top 1% get more than anyone can need, while the rest get the American Dream.

The 30 Year War Against The American Dream: Henry Schoenberger

Henry Schoenberger, the author of How We Got Swindled By Wall Street Godfathers, Greed and Financial Darwinism, subtitled The 30 Year War Against The American Dream, points out that the OWS protests simply display the plethora of anger around in the USA. The level of poverty is now at its highest level ever—the poor are angry. The successful elderly planning on retirement after a lifetime of hard work are being hit—elderly retirers are angry. Young entrepreneurs, the foundation of our future economy, and those in their prime, whose enterprise should be creating new jobs to give a living to ordinary folk and a first step to the young—even many of those are angry.

Capitalism, as an economic philosophy, is only 200 years old, based as it is on the book by Adam Smith (1723-1790), the title of which is always given now as The Wealth of Nations, published in 1776. The United States declared its independence that same year.

Since then, the abuse and misuse of Capitalism has paralleled the use and abuse of Democracy.

Henry Schoenberger

Smith is often presented by right wing libertarians, Republicans, neoliberals, and assorted conservatives as the model entrepreneurial hero. Yet, he first held the chair of logic at Glasgow University, and then in 1752 became its chair of moral philosophy. So he was really one of those timeserving wasters lolling around a university with students and living off someone else's hard earned income! That, at least is how the right wing regard university teachers and research workers.

In 1759, he wrote the Theory of Moral Sentiments about the standards of conduct that hold society together, explaining how benevolent human motives and activities lead to a society beneficial for all, and thereafter a virtuous circle. Adam Smith had a lifelong interest in the value of morality for the public good. In his book, The Wealth of Nations, he expressed a belief that allowing the entrepreneur to pursue his own interest essentially unfettered would lead to the betterment of all because it would lead to the better use of resources, including time. He never imagined that his theories could be so distorted by the ultra rich cornering one particular resource to the detriment of most of the rest of us—money!

Darwin published his book on the Origin of Species 85 years after The Wealth of Nations, and, although most Protestant pastors in the USA and their theologians who run the Republican Party cannot now abide the thought of evolution, for the first century of so they loved it. The survival of the fittest was a perfect expression of capitalism. So Darwin's theory applied even within human society. It was not restricted only to the wild.

This extension of Darwinism into society was dubbed “Social Darwinism”. It even made it respectable for the protestant churches to abandon Christianity—Christ blessed the poor and damned the rich—but now Social Darwinism made it clear, they thought, that God meant the rich were blessed and the poor were damned! It was a creed that was soon attacked by social scientists, and began to fall into disrepute. Reaganomics and deregulation revived it.

We all need to know a little about economic theories to understand the fallacious arguments advanced today for unfettered greed. For thirty years after WWII, the rate of growth of the incomes of rich and poor were broadly the same. John Maynard Keynes, before the War had shown how economies can be controlled by regulation, such as using taxation to slow down growth when the economy was overheating, and feeding back into feeble economies some of the tax take to boost spending during recessions. It worked wonderfully well.

Controlling self interest worked for decades in the aftermath of the Great Depression. The top tax bracket went up to 90% and still the ultra rich survived, but so did our middle class and our society was not demoralized. There was enough concern on both sides of the aisle to pass Civil Rights legislation and CEOs did not earn more than 40 times the average wage in their industry.

Henry Schoenberger

Interestingly, it was a closer match to Adam Smith's teaching than libertarian capitalists like to admit. Smith knew that regulation was sometimes necessary, and did not pretend otherwise. He believed that once the boundaries were suitably set, and the operators accepted them, then they would work to better themselves and society as a whole through the so called “invisible hand”. The trouble is, when things work well, smug, greedy people always want to try their luck at extending the conditions to their advantage.

That is what Reagan in the USA and Thatcher in the UK tried in the 1980s. In what was imagined as an economic “Big Bang”, a bonfire of the regulations was arranged on both sides of the Atlantic, neoliberalism became the watchword, and Social Darwinism was born again. Survival of the fittest became survival of the richest. In the last thirty years, the workers and even some middle class have lost income, the better off middle classes have maintained theirs, and the rich have multiplied their riches several fold!

In 1776, Adam Smith could not have seen that unregulated Wall Street financiers enjoying tariff free transfer of money anywhere in the world could manipulate markets and the rewards they had from them to the advantage of themselves as a new Brahman class in the supposedly classless western societies. Greed became endemic. Like the living dead they sucked the economic life blood—money—from the middle and working classes. The insatiable greed and selfishness of the rich has killed millions and millions of jobs, people's savings, their livelihoods and increasingly their lives, quite contrary to the ideas of the capitalists' holy book, The Wealth of Nations, by their innocent prophet, Adam Smith. Henry Schoenberger sums up:

Wall Street is a problem because for 30 years it has practiced innovative financial investment at the expense of our economy. Wall Street has turned away from real investment based on innovation for capital formation to create jobs to benefit our economy. Wall Street Trojan megabanks are a major part of the problem.

Government ought not to be the problem because it is the role of government to regulate, to ensure that the balance of society and its economy are right. Our governments neither guard the public good nor the public. The politicians lack all morality themselves, themselves infected with the zombie infection endemic among the rich and aspirants to riches, with the taste for more and more blood, salivating at the thought of more victims, us, and more dollars, ours.

Schoenberger points out that Goldman has inveigled the government at the highest level for three decades. The OWS movement should demand the removal of any Wall Street executive from any important government post, and equally that government servants should be banned from transferring their allegiance to Wall Street until 10 years after leaving government. Consulting and “Atlantic Bridge” style “charities” and think tanks should be illegal as soon as they get near to government in any direct way, or even indirectly, if the influence can amount to bribery, or any similar illegal approach. That applies too to lobbying, nothing more than approved bribery.

High Street deposit banks must be severed from the high risk investment banks. Bonuses should be illegal. As compensation they must be treated as pay and seriously taxed. Taxes must reflect the reality that 1 percent has 40 percent, so that taxation is at least fair by percentage, and preferably progressive, so that richer people should pay a higher percentage. If a rich man faced with a 60% tax rate gets a rise of $1 million, are we seriously to believe he would refuse to work rather than receive $400,000 after tax.

Schoenberger concludes it “is the time for a movement to kick out all members of congress who vote against jobs! And stop wall street godfathers from taking advantage of the 99% who do not practice unbridled greed!”

Forbes’ CEO Readership must Rethink OWS

“Will I be the next Gaddafi?”, is the sort of question that some corporate CEOs are beginning to wonder, according to Forbes’s Dov Seidman. The Arab Spring followed by the invasion of Libya, and the murder of the Libyan despot by rebels, and the movement now to protest all over the world against corporate greed and the demolition of society as a consequence has forced the question on to executives convinced until now that they could do no wrong because greed was the modern motivator.

CEOs of a multinational companies are worried that employees or consumers will organize against them, grab their ill-gotten gains and throw their corpses into a ditch.

Seidman points out that OWS demonstrators are demanding freedom from the current system. Employees that join the movement want less slave driving and more made of their creativity and collaborative spirit at work. The protesters have initiated an overdue discussion ignored by business and political leaders for too long. The protesters’ conversation may touch upon issues of fairness and justice, but it is fundamentally about freedom. They do not want a free ride, but the freedom to pursue a meaningful life and build a sustainable career. Our current economic system does not provide that freedom.

The world is hyper-connected and interdependent, so that instability is no longer localized. We rise and fall together. A banker anywhere can lose his company billions of dollars, force the resignation of his CEO and send shock waves throughout global finance. A vegetable market trader in Egypt can trigger the fall of Mubarak, which in turn offers the US and Nato an excuse to unseat Gaddafi to deny China access to Libyan oil, and dole it out to the allies on behalf of the über rich. General dissatisfaction can become specific. If a company mistreats a customer, a wave of protest might sweep him out of his office, or close down the corporation.

Employees are beginning to reject hierarchical structures, control processes, and performance based rewards and punishments. Seidman cites The HOW Report, commissioned by his own company and reported in The Economist, which show self governing organizations get more of what they want and less of what they don’t want. They:

1. yield five times more innovation
2. have three times the employee loyalty
3. give nine times the customer satisfaction
4. perform significantly better financially
5. are more likely to expose unethical conduct

than normal top down corporations. The command structures of the Industrial Age are no longer effective. People work to eat, that is obvious, but it has also been known for a century that, given that they will be paid adequately, people want to feel part of a communal effort to do something to be proud of. If money is the only incentive for work, then any employee will move for a better paycheck. If price is the only reason for a purchase, in hard times, they will go for the cheapest. Once consumers feel the pinch, business will fall into depression, so the intelligent CEO must favour fairness in society.

Unemployment is high and must be solved, but many of the OWS protesters have jobs. They are people, though, who see what too many CEOs do not, that corporate and class greed will wreck their own jobs and careers. Already many recent college graduates cannot find suitable employment for their ambitions, and to pay the cost of their education. The cornering of much of the money supply and stashing it in emerging economies by the 1% of über rich and the banks that manage their wealth, leaves too little in circulation here, forcing cuts in jobs and prices, cuts that eventually will sorely affect us all.

The banks must write off much of the debt they have imposed on the world, so that ordinary consumers will feel able to consume again. The über rich will take the hit, but they can afford it, and by so doing the values of their stocks have a chance of remaining buoyant, ensuring the recovery of upper class wealth in the longer term. Failure to do it leads to the Gaddafi scenario of rebellion, bloodshed and carnage, which the fascism state can only stop for a while, never for long, as modern dictatorships prove.

Arab Spring? Bring on a Bleak Winter for Rich Kleptomaniacs

The western media portray the political uprisings in the Middle East as motivated and led by technology savvy young people. Glen Rangwala, a lecturer in the Department of Politics and International Studies (POLIS), says that people in Arab countries have different reasons for supporting it.

POLIS has conducted surveys with pollsters, YouGov, of popular opinion across 18 Arab countries throughout 2011. The poll uses a mix of internet polling and “door to door” questioning. Political priorities ranged widely across the region:

1. the aspiration for civic equality—Bahrain
2. the freedoms of speech and of association—Syria—but barely at all in other Arab countries
3. personal security—Tunisia and Egypt
4. declining personal incomes—Yemen
5. anticipated increases in personal incomes—most Arab countries
6. concern over unemployment—countries still free of protests.

What is interesting about this list is that it applies to us Westerners just as much as it does to the Arabs. All of them will be of concern to someone or another of the OWS protesters, and some of them to Tea Partiers in the USA. If anything this rather gash survey serves to show that we are all interested in the same things—social justice.

Rangwala says the uprisings were not unified in their aims, being caused by different grievances and involving different types of people with distinct political aspirations:

What appears to unite them is the very idea of the Arab Spring, within which supporters, activists and even opponents of political reform contextualise the protests they see in their own countries. If people identify their national protest movements with the broader region wide phenomenon of the Arab Spring, the perceived success of a civic uprising in one country will reinforce the estimations of the likelihood of similar achievements at home.

The same thing seems true of the remarkable spread of the protests beginning with OWS. What is needed now is a Western Winter in which we shall freeze the nuts off the one percent of über rich fat cats with all our assets, crush and scatter them to the winds, leaving them impoverished, squealing and wishing they’d had more compassion when they had control. Of course, it is not just the assets we want returning, the control of our destiny is much more important.

Frances Fox Piven at OWS

“I Am Not Moving.” The Shameful Hypocrisy of our Leaders

A brilliant little film which brings out the hypocrisy of our leaders when it comes to issues of rights.

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