So They Want Class Warfare? Let's Have It Then.

Major corporations and financial institutions, and the 1% behind them, have been waging class warfare against the average person for years.  They act in total disregard for the common good and have perverted our democracy into government of industry, by industry, and for industry.  President Eisenhower’s prescient warning against the power of the military/industrial complex has come true.  It is now past time to fight back.

What do you think is the major problem facing the United States today?  If you think it’s unresponsive government, government gridlock, the Democrats, or the Republicans, you are not getting at the underlying problem.  If you think it’s discrimination and bigotry, that’s certainly a big one, but that’s not it either.  

The major problem we face is the control that corporations and financial institutions have over government and our lives.  Whether you are a small farmer, an under-employed former middle class factory worker, a consumer with a huge credit card debt, a person of color living in the ghetto whose children go to schools that aren’t schools, a resident of rural or urban America who sees your life getting worse, not better … the underlying problem is the same.

The problem is that because of the control of corporations and financial institutions, the focus of government is on their needs and interests, not the needs of the people.  They are not the same.  We long ago gave the lie to the saying, “What’s good for General Motors is good for the country.”  Government thus is not meeting its purpose, as stated in the Declaration of Independence, of securing the peoples’ right to life, liberty, and the pursuit of happiness.

Class warfare is a dirty word in the United States.  Whenever someone makes an argument against the power of corporations or the moneyed class, they are stuck with that critical label.  This was certainly the case with Bernie Sanders.  The implication is that class warfare is un-American.  It reeks of Communism or Socialism.

No type of internal warfare, whether with arms or merely verbal, is desirable in a civilized society.  But we have come to the point in the United States where class warfare is necessary if we are to survive as a democracy dedicated to government of the people, by the people, and for the people. There is no other way to reverse the control corporations have amassed.

The United States in 2017 is a land where all real power rests with major corporations and financial institutions.  Through their lobbying and vast donations to campaigns, corporations have taken control of Congress and their interests prevail.

Yes, we the people still vote and elect our representatives and the president.  But even that has been corrupted because corporate-funded political advertising, thanks to Citizens United, now exerts a huge influence on how we vote.  We are bombarded with deceitful messages in support of those who protect corporate interests, and so people have been fooled into voting against their best interests.  As Lincoln is credited as saying, “You can fool some of the people all the time, and all of the people some of the time.”

And so big money has gained effective control of Congress and is now moving on the regulatory process.  This isn’t just a criticism of Republicans.  As I’ve stated in previous posts, while Democrats certainly fight for the interests of the average person and protect the environment, they too are beholden to big money interests.  And so while their legislative agenda is liberal and primarily centered around doing things that benefit the average person, the general good, everything they do is circumscribed by their need to not disturb big money donors too much.  That affected Dodd-Frank, it affected Obamacare, it affected the people President Obama brought in to run the Treasury Department … it affects everything.

Why is it so harmful for big money interests to control Congress?  Why is it that we can’t allow our country’s welfare to rest in the hands of the top 1%?  Many Americans think that powerful, rich people clearly know what they’re doing and so they are the logical people to entrust our welfare to.

The problem is that while they certainly know what they’re doing, it’s all about furthering their own interests.  If that’s at the expense of the interests of the average person, the consumer, the greater good … too bad.  Such is life!

Corporations exist for one reason and one reason only … to make and constantly increase profit for the benefit of shareholders and management.  Today that bottom line focus is worse than ever given the pressure of the stock market’s expectations.  

As for the top 1%, who are usually part of this corporate/financial establishment, they have concern only for themselves.  They are the ultimate poster child of the “me” generation.  

Corporations and people with that kind of money have become so separated from the average person that they just don’t connect anymore.  They have no concern for the needs of the average person or the greater good.  The fact that so many are now multi-national and as a result their prosperity is not tied to the United States economy makes their separation even more pronounced.

And so, as I’ve argued previously, we need to have a soft revolution in the United States.  The people need to rise up and truly take back government.  Not by electing a Donald Trump who has no intention of giving government back to the people … talk about putting a fox in charge of the hen house! … but by electing representatives who are honestly dedicated to protecting the interests of the average person by restoring and improving the balance that the United States built during its progressive period … roughly the presidency of Teddy Roosevelt through Jimmy Carter, 1901 - 1980.

The United States came to its full maturity and strength (economically and militarily) during the 20th century because it harnessed the potential of both the American people and its corporations.  It did this by creating a balance between private rights, the public good, and government.

Because it’s about restoring this historic American balance, the soft revolution proposed is not about emasculating corporations, about removing the profit incentive, or removing them from positions of influence.  It is not about becoming a Socialist country.  Corporations are very important to the well-being of our country and its citizens, and so they not only deserve a seat at the table, they need to be at the table.  

But this revolution is about limiting their power, reducing the greed that currently drives corporate actions and causes them to disregard even the interests of their consumers, let alone the general public.  Even during our progressive period, there is no shortage of examples of corporations acting against the interests of their consumers and the general public.  The decision-making process in corporations needs to be transformed.  

But it should not be the role of government to micro-manage corporations.  We should not have to resort to regulations.  That is not healthy and it is not efficient.  What we need is the creation of an evolved corporate persona and decision-making process that is not at odds with the interests of their consumers, the greater good, and the environment. 

This will not happen without the aroused involvement of voters across traditional party lines in favor of Congressmen who will truly protect and further their interests, who see it as their prime responsibility to secure the right of all Americans to life, liberty, and the pursuit of happiness.  Who will work with corporations and financial institutions but insure a balance between private rights, the public good, and government.

Hopefully we will prove the truth of the final part of Lincoln’s remark noted above … “But you can’t fool all the people all the time.”  Rise up America.

The Two Ultimate Lessons for Democrats from 2016

Democrats are trying to figure out what to do, what to change in their game plan, to regain Congress in 2018 and the presidency in 2020.   There are various scenarios that people are putting together on how they can turn things around.

I have written after past elections, and I wrote in a post after this one, “The Perennial Search for the Democrat’s Mission,” that Democrats need to drop identity politics and instead come up with an all-inclusive, cohesive vision of America’s future that people will respond to.   They must be clear where they want to take America and how they’re going to get there.  And that path must include a better life for all Americans.

But there is an even larger lesson to be learned; a point that distinguished the Trump campaign from all the others, including most past campaigns as well.  Trump won because he made people believe that he listened to them, to their suffering and questions, and he took up their cause with great vigor, a vengeance, fighting the establishment to right the wrongs.  

His anti-establishment and anti-elite rant was so appealing because many white working class people felt, with good cause, that the establishment had failed them despite having mouthed platitudes to them for decades … rural Americans had hardly been addressed at all.  And the elite who run the establishment were not in touch with their (white Americans’) suffering as opposed to people of color or other minority groups who they perceive as getting lots of attention.

If Democrats want to once again become the majority party, the party of the people, the lesson is not, as some are saying, that they need to listen and respond to the suffering of the white working class.  Yes, they definitely need to do that.  But they need to do that in the context of listening to all the people.  

Democrats need to show that they are there for everyone and that they can deliver for everyone.  They have to show that it doesn’t have to be one group’s interests v another’s.  They need to come up with a cohesive vision that works for all Americans and which all Americans respond to.

That’s why I’ve proposed the following Mission for the Democratic Party:

"To bring to life the promises set forth in our Declaration of Independence.

To build a country of greater opportunity where:

* each and every American has the best chance to experience the promise 

‘that all men are created equal, that they are endowed by their Creator with 

certain unalienable Rights … Life,  Liberty, and the pursuit of Happiness’;

* government meets its responsibility as set forth in the Declaration …  

‘to secure those rights’,  within the constraints of fiscal responsibility; and

* all citizens have a shared responsibility to support the government’s efforts 

 to secure those rights and promote the public good, each according to his ability.”

Democrats have gotten too cozy with big money, big business, big banks.  You can’t have it both ways.  You can’t please those interests and the people at the same time because unfortunately the goal of big business is all about making money.  Sometimes their interests are not in conflict with the general good, but often they are.  There is no social conscience or social purpose involved in corporate decision making, unless it helps them make money.

And so, in other posts of mine such as, “What Drives Policy Decisions? - The Theory v The Reality” and “Our Failed Economic/Social/Political System,” I urge Democrats to shake up the status quo of how the country is run.  To change it from money/big business-centric to people-centric.  Obama pledged to get rid of the overwhelming influence of lobbyists and big business/banks, but he ended up doing neither.  

Bernie Sanders had the right idea.  His movement should not be allowed to become a mere footnote to this period of Democratic Party policy development.  Instead, it should be the core of a well-thought-through soft revolution that truly puts the country back in the hands of the people rather than big business.  Big business will still have a place at the table as they are an important part of the well-being of our country; but they will not be a controlling force. We must reestablish “government of the people, by the people, and for the people.” 

Trump campaigned on doing just that … putting the country back in the hands of the people.  But his cabinet appointments show clearly that he is doing just the opposite.  He has put the foxes in charge of the hen house.  And the Republican-controlled Senate supported those appointments against almost unanimous Democrat opposition.  Democrats need to label Republicans for the hypocrites they are and remind the American people of this betrayal and its implications on a regular basis.  This cannot be a forgotten moment in history.

Large Corporations Have Gutted Our Economy and Damaged Our Country

Republicans are always touting large corporations as the engine of our economy and argue that we have to have business-friendly policies in order to allow them to grow and create jobs.  And while Democrats might take a more nuanced stance publicly, their actions in Congress certainly show that they, while not in lock step with Republicans on this issue, are also certainly very friendly-disposed to large corporations.

One would be a fool not to agree that the business sector, including large corporations, is critical to the health of our economy.  However, it is one thing to say that we need to have policies that promote the growth of business and another to say that business interests trump all others, such as the public good.

But these statements about the importance of large corporations are just cover.  What it’s really all about is something very base at the core of American politics … the power and influence of money.  

It’s no secret that large corporations and industry groups have, through their largesse in donating money to political campaigns as well as their newer participation in PACS, bought unequaled clout in the halls of Congress.  While there are some clear exceptions, generally, regardless what type of legislation or regulation you look at, whether in the hands of Republicans or Democrats, at the end of the day, big business has either gotten their way or so weakened measures meant to control them and protect the public that the end result is in their favor.

Clearly the growth of big business has benefited those who sit at the top of corporate power and are players on Wall Street ... the new elite, the 1%.  But what about the rest of us?  Has the average American benefited from the growth of big business?  Has our country benefitted?  To answer that question, I will be looking at the impact on jobs, wages, small business, and transportation.

Jobs:  Big business is almost solely to blame  (I say “almost solely” because unions carry a good share of the blame as well), aided and abetted by government tax policies, for the loss of millions of jobs overseas since 1979.  For the transformation of the average American worker from solidly middle class with a good wage, to struggling to hang on at a low wage.  Looking just at manufacturing, employment collapsed from 19.5 million workers in June 1979 to 11.5 million in December 2009.

Corporations have always been greedy.  It’s their nature.  In the first part of the 20th century, workers were typically, not always, viewed almost as an enemy who challenged the corporation’s absolute power and wanted more of the corporate financial pie, rather than as valued workers who were responsible for the quality of the product.  The antagonism between the two forces was very evident.  The passage of Federal labor laws, while not changing this dynamic between management and labor,  helped level the playing field by giving workers real negotiating power.

But at some point, corporations had enough of labor negotiations.  Those in power wanted to retain more of the financial pie for themselves and shareholders.  This provided the motivation to find a way out.

And they found one readily available ... the South and it’s “Right to Work” laws.  Many manufacturing firms moved south to take advantage of these state laws which made it very difficult to unionize, and thus wages were significantly lower.  Job losses thus started occurring long before globalization.  

So, for example, I grew up in Reading, PA.  One of the largest employers was Berkshire Knitting, at the time the largest knitting mill in the world.   But within a few years, the vast mills were all empty.  After being sold to Vanity Fair, the jobs moved south and thousands of workers in Reading were out of work.  The same scenario played out in many cities throughout the northeast as light manufacturing relocated to the South.

But it was the advent of the global economy, “globalization,” that nailed the lid on the coffin of the American blue collar worker.  Again, solely because of corporate greed ... wanting to increase the bottom line regardless at whose expense ... (and often against the background of union intransigence) manufacturing as well as many other types of jobs moved en masse to lower cost locations, mainly Mexico and Asia.  The result was a literal hemorrhaging of jobs and the decimation of America’s middle class.

For example, U.S. Dept. of Commerce data show that “U.S. multinational corporations cut their work force in the U.S. by 2.9 million during the 2000s while increasing employment overseas by 2.4 million.”  In the two years following the 2008 Wall Street crisis, large American corporations cut U.S. payrolls by a net of 500,000 jobs.  At the same time, they hired 729,000 workers overseas. Corporations were hiring, just not in the U.S.

Corporate spokesmen and their political apologists say that this move off-shore was necessary in order to keep “American” business competitive.  Nonsense.  It was to keep corporate profits and thus CEO and shareholder pockets flush.  They always had the option to cut prices, but that would have meant lowering profits, which is anathema in corporate America.  Protecting American jobs was obviously nowhere on their list of goals.  (Unfortunately, unions were also often unrealistic and refused to countenance pay or benefit cuts in return for job security.)  

The poster child for this off-shore movement, General Electric’s then-CEO Jack Welsh, argued that public corporations owed their primary allegiance to stockholders, not employees.  Nor, although this was unspoken, to the country that spawned them.  Therefore, Welsh said, companies should seek to lower costs and maximize profits by moving operations wherever is cheapest.

And so they moved their operations and the jobs were lost.  These are no longer “American” companies in any sense other than headquarters. 

Yes, it’s true that many new jobs have been created in the United States, including since the recent recession.  But those jobs have overwhelmingly been lower-paying service industry jobs and often part-time jobs.  So people hired for these new jobs are working for less money and their standard of living is far below what it was previously.

Wages:  It’s no secret that American workers’ wages have stagnated over the past few decades.  The reason is also clear … the loss of middle class living-wage jobs overseas and the creation of low-paying jobs here.  And for those who still have their formerly good jobs, their pay has at best remained stagnant or they have had to take a significant cut in pay in order to keep the corporation from moving the jobs overseas.  

Again, all to protect the corporate bottom line.  And so we see that while CEOs today make astronomical sums, a 937% increase, inflation adjusted, in their total compensation package between 1978 and 2013, a typical workers’ income in inflation-adjusted dollars rose only 10% during that same period.  

If corporate profits have risen approximately 3% per year during this period (or 105% … yes, I was surprised, far less than the rise in CEO pay), why haven’t their workers benefited?  Because workers no longer have any clout.  With so many jobs lost overseas, companies, whether unionized or not, don’t have to worry that their employees will leave if they don’t get raises.   They know that workers have nowhere else to go.  And it is a rare corporation that will raise wages because it is fitting to do so.  Obviously, CEOs do have clout.

Small Business:  Politicians of both parties love to talk about the importance of small business to the American economy and cite government efforts to help small business.  Yet these same politicians curry the favor of the very forces … large corporations … that have brought doom to small (and often not so small) local businesses across the country.

We have become a nation that, certainly from a retailing perspective, lacks virtually any individual character from place to place.  Everywhere you go, you will find shopping malls with exactly the same stores.  You will find roads lined with exactly the same collection of fast-food outlets.  You will find a proliferation of Starbucks coffee shops.  And of course, you will find a Walmart, a Lowes or Home Depot, and a Staples or Office Depot.  As a consequence, local stores offering the same services have been put out of business whether because they couldn’t compete with volume pricing or corporate marketing or couldn’t offer the same selection.

These large corporations have thrived, not just because of the business acumen and ambition of their management … which of course is critically important … but because of government policies and actions, including the enabling if not encouraging of the suburbanization of America.

Let me again look at Reading, PA as an example.  In the 50s, downtown Reading was a thriving place with a vibrant local retail scene and cultural life.  But as highways were built that encouraged the creation of suburban development, a new type of business entered the mix … national and regional retail corporations … that found their home not downtown but in new suburban malls.  As this development increased, people living in the suburbs, which now overshadowed the city-dweller in both numbers and economic purchasing power, no longer needed to go downtown to shop, or eat, or go to the movies.  And so despite all sorts of measures by Reading officials, downtown Reading died and is nothing more than a memory, replaced now by an office culture.

Transportation:  Why is America a nation which, more than any other, is so dependent on the automobile?  Why do we have such a weak national or regional passenger railroad system?  Why, with a few large city exceptions, do we have such weak local public transportation networks?

The answer is unambiguous … for almost a century, the automobile industry was the most powerful industrial force in the country.  The saying, “What’s good for GM is good for the country,” was said in all seriousness.  And its influence was not surprisingly felt in Congress as well as in state and local government.

Prior to WWII,  although cars had become an essential element in American transportation, the railroad and mass transit were equally essential.  But after WWII, the federal government, under President Eisenhower, began a massive investment in creating the interstate highway system and expressways that bypass and go through major urban areas … all to make it easier for automobile and truck traffic to get from place to place.  

The official reasoning for this huge expenditure was improving our defense and response to nuclear attack.  But what really lay behind this decision was the power and influence of the automobile industry, together with a desire to increase economic growth through new highway and housing construction.

Just as the coming of the railroad brought about the creation of new towns and cities in its day, so too did the new highway systems (together with the new availability of low down-payment long-term mortgages) bring about the proliferation of suburban development, not just outside major cities but virtually all cities. Over the next few decades, what began as an experiment in changing the basic nature of American everyday life turned into the default mode, urged on by a confluence of powerful business interests and people’s desire to own a home and some property (what became “the American dream”) as well as the white flight from cities.

This government action amounted to a huge subsidy of the automobile industry which had no counterpart in the railroad industry and only a faint counterpart for local mass transit.  Since automobiles were deemed by government to be the transportation of choice, virtually no new mass transit or light rail systems were built in the United States for several decades after WWII. 

But the automobile industry wasn’t satisfied with the benefits flowing from this government action.  They also brought about the actual dismantling of existing light rail systems, most well-known is the Los Angeles system, and the obstruction of new mass transit lines.

The result of this influence (together with the other factors noted) was an increasingly car-dependent society, the deterioration of railroads, and the stagnation of mass transit systems.  Only in the last few decades, since the mid-70s, have new and expanded mass transit systems been built in various cities to accommodate an inescapable need.  

For example, in the San Francisco area, “after dismantling the existing electric streetcar and suburban train system in the 1950s in favor of highway travel using automobiles and buses, given the explosive growth of expressway construction,” the modern BART system began limited operation in 1972 and was expanded over the following decade.

Now, one could certainly argue that the American public revels in and treasures its ability to go where and when it wants to based on the automobile.  After decades of mass marketing campaigns, this has indeed become a major feature of our culture.  And so the average American would not say that they have been short-changed by this development; quite the contrary.

But looked at objectively, would the average American and the country as a whole have been better off with the post-WWII development of a more balanced transportation network … one that included a viable, modern national and regional railroad system, more comprehensive mass transit systems in major cities, and light rail systems in other cities, together with an improved network of roads.  The answer is certainly yes.   And it would have left us better prepared to adjust to an era where the use of fossil fuels must be reduced. 

By looking at these major areas … jobs, wages, small business, and transportation … we see that the power of big business has had a major negative impact on the average American worker as well as on various aspects of our society.  

Not to be forgotten is the broader economic impact of the decimation of the American middle class … the middle class was the backbone of our consumer-driven economy with consumer spending accounting for 70% of GDP (some argue 52%).  Only the emergence of the ubiquitous credit card has saved the economy, but at the cost of massive household debt … an average of $15,593, a total of $880 billion.   Not a good thing.  Many things that have happened because of the power of big business cannot be reversed; however, many can.

Large corporations have consistently shown themselves to be amoral.   As defined by the dictionary, that means that they have no moral standards, restraints, or principles; are unaware of or indifferent to questions of right or wrong.  They have only one guiding principle … improving their bottom line. 

For the good of our country, this cannot be allowed to continue free of restraint.  The public and government must break from this stranglehold of big business and fight for a more egalitarian society.   

In every society, there will always be those who are better off, even rich, and those who are not as well off.  But there is no excuse in a society as rich as ours for the egregious disparity in incomes, for the decimation of a strong middle class, for children to go to bed hungry, for people to be homeless, and for the pollution of the air we breathe and the water that sustains us, which pollution threatens not just our health but our very way of life and possibly the viability of planet Earth.

The Socialism Canard

Every time Democrats propose having the government provide assistance to those in need or regulate business, the Republicans scream, with their throat veins bulging, “This is Socialism.”  And a large segment of the public, like a hypnotized subject, nods their head and agrees that this is terrible.  It’s only one step away from Communism.  It is against what makes America great.

To listen to the Republicans, one would think that they were against any government spending or action that helps others or in any way interferes with the market place.  That, however, is not the case.

Republicans are very supportive of the billions of dollars that the government spends, either in the form of direct payments or beneficial tax laws, that provide American corporations, especially big business, with government subsidies.  They are also very supportive of government regulation/interference that supports corporations, such as elements of the farm bill.  NOTE: Almost all government farm subsidies go to large corporate farms.  The embattled family farmer benefits hardly at all.

The only difference between the spending and regulation they support and the ones they don’t support is that the former benefit big business while the latter either benefit the average American or protects him by restricting the unfettered ability of big business to act as it wills.

This is hypocrisy.  But the immorality of their stance is even worse. To argue against measures that protect the average American or helps those in need while supporting spending and other measures that help those who are not in need is to take a stand which is immoral.

“Ah,” they say, “but cutting back on such spending or measures will harm American business on which the economy depends and will result in the loss of jobs.”  Any attempts to cut back on these items, or imposing new costs on business, are labeled, “job killers,” by Republicans.

But that is not true.  What is true is that if such subsidies are cut back or new costs imposed, corporate profits will be reduced (unless they raise prices) and thus shareholders will be impacted by lower stock market prices for their shares. 

I am not against corporations making a profit and benefitting their shareholders.  But many of these companies have profits at such high levels that the benefit to the larger society of cutbacks or new regulation/costs far outweighs the reduced profits to industry.  For example, many of our largest, most profitable corporations pay almost no taxes through the loopholes that they enjoy.

The cost to the American taxpayer of these corporate subsidies is unconscionable, especially at a time when the American middle class and the poor are being asked to make sacrifices in order to reduce the government deficit.  It is obscene that our middle class and poor are asked to shoulder the costs of providing subsidies to those who typically already have more money than they know what to do with, other than spend it on more luxury.

The American social contract has traditionally (since the early 20th century) required all aspects of our society to support the greater good, each to its ability.  That concept of fairness and the greater good has been so denigrated over the course of the last few decades by the Republican Party that Republicans in government should hang their heads in shame.

Government and business both have their place in American society and in our economy.  It is past time, however, to correct the balance between the two.