At The Crossroads

The Democratic Party (once again) tries to engage with the realities of ordinary Americans
by Richard McLachlan

Inequality is on the agenda in the US. Socialism, that ideology that dare not speak its name in this country, has just walked in the back door and taken a seat at the table. Venues are being rebooked to accommodate the thousands of people coming to listen to Vermont Senator, avowed socialist, and presidential aspirant Bernie Sanders talk about the redistribution of wealth. Just last night, to an audience of full of middle aged Brooklynites, Lucinda Williams shouted out to cheers from the crowd, “Oh yes, and Bernie Sanders rocks!”

By January this year Thomas Piketty’s Capital in the 21st Century had sold 1.5 million copies in five languages. It is so mainstream now that Time magazine a year ago ran an article that questioned head-on the fundamental premise of American social organization – “Piketty has finally put to death, with data, the fallacies of trickle down economics and the Laffer curve, as well as the increasingly fantastical notion that we can all just bootstrap our way to the Forbes 400 list.”

Pre-eminent Democratic candidate Hillary Clinton can respond to questions about Piketty – she has not read the book but has “read long essays about it”. She acknowledges the corrosive effects of inequality (how could you not? It’s now, more than ever for most people, the water we swim in) but so far has little to offer in the way of policy initiatives. She does however agree with Piketty on the threat to democracy – “Now the relative wealth is much higher, but the disparity makes people believe that they’re stuck. They no longer believe that things are going to get any better, no matter how hard they work. People have lost trust in each other and the political system and I think that’s very threatening to democracy.”

Truth is, between 2000 and 2012; wages remained flat or declined for the bottom 60 percent of the wage distribution. Over that period, productivity grew by almost 25 percent and its benefits found a home elsewhere.

People don’t ‘believe’ they are stuck – they ARE stuck. As I pointed out in an earlier article on the ‘precariat’, 62 percent of jobs in the US pay less than $20 an hour, and 42 percent less than $15. Put that together with the need to own a car in most places just to get to work, the ever-present out-of-pocket health costs, and all the other costs of survival – and being stuck is not just an impression gained from seeing rich people walking their poodles.

The real difference between those who have a job and those who do not is an increasingly fine one, but is reinforced and exploited by politicians on the Right. It is the workers, the strivers who win approval – without any reference to the economic and social context of who gets a job and who doesn’t. As Joe Bageant puts it in his biography of blue-collar, white America, Deer Hunting with Jesus, “The distinction between poor and working poor may well be a meaningless moral distinction shaped by the Protestant work ethic. Poor is poor, whether you have to work for your poverty or not.”

Clinton has referred to Piketty’s conclusions about the relative returns on passive investment versus productive activity as evidence that we are undermining the value of work. Whether or not this is an acceptable gloss on Piketty’s conclusions, she is right in another very real sense. Work for a great many people has become a low-paid, physically destructive affront to human dignity. The anger generated by this experience of being at the bottom of the heap, “the daily insults they suffer from their employers, from their government, and from more educated fellow Americans – the doctors, lawyers, journalists, academicians, and others who quietly disdain working folks”, has been skillfully tapped, according to Bageant, by the Republican Right. People have voted against their own interests because a well-organized and locally engaged Republican party has fed them a deceptive story about why their lives are so hard.

He considers this a missed opportunity for a political left that for years has had almost no contact with the working class people he grew up with. He describes the people he went to school with working shifts at the local Rubbermaid factory for twenty years pulling plastic dish racks out of injection molds while listening through headphones to non-stop, toxic and ill-informed talk radio. Rubbermaid is considered a ‘good employer’ – but the management are virulently anti-union and pro-Republican, and staff become aware from the outset the subjects of conversation acceptable to those who sign their paychecks.

The author of a recent NY Times op-ed, Why Don’t the Poor Rise Up? suggests that the core reason for an unleavened proletariat is America’s ideology of individualism. The unfortunate counterpoint to increased focus on individual rights and freedoms has been an ever-increasing exposure to risk and the need to make choices in these risk environments. Competitive pressures have eroded solidarity and a sense of community. German sociologist Ulrich Beck, cited in the article, writes that previous colleagues and allies have become competitors, and when “a shared background still exists, community is dissolved in the acid bath of competition (resulting in) the isolation of individuals within homogeneous social groups.”

The extent to which the details of this analysis apply in rural American communities and workplaces is unclear, but the competitive and individualist ‘theology’ is certainly present. The added combination of vehement anti-unionism in the workplace and all-pervasive Republican propaganda suggests that revolution may yet be some way off.

However, the conventional assumptions of what does and does not work are now under closer examination. In his review of Inequality: What can be Done? by British economist Anthony Atkinson, Thomas Piketty praises his series of far-reaching proposals for redistribution in the United Kingdom. Atkinson is clear, he says, that the dramatic drop in upper level income tax rates “has sharply contributed to the rise of inequality since the 1980s, without bringing adequate corresponding benefits to society at large.”

Following the cuts in top tax rates by the Thatcher (and Reagan) regimes, keeping those rates at less than fifty percent – and often a lot lower – has become an article of ideological faith. Atkinson proposes significant increases to social benefits financed by a return to progressive taxation in a move to reduce British inequality and poverty from American levels to European ones. Increased tax rates would “finance a significant expansion of the British social security and income redistribution system, notably with a sharp increase in family benefits (doubling and even quadrupling them in one of the variants proposed), as well as a rise in retirement and unemployment benefits for people with lower resources.” He also argues for guaranteed public-sector jobs at a minimum wage for the unemployed, and democratization of access to property ownership via an innovative national savings system, with guaranteed returns for the depositors.

When Clinton opened her campaign this past month, on Roosevelt Island in New York’s East River, she put inequality at the front of her agenda, criticizing Wall Street for its greed and inordinate share of the ‘pie’. While the speech was light on policy details, she promised prescriptions that would “reward businesses who invest in long-term value rather than the quick buck—because that leads to higher growth for the economy, higher wages for workers, and yes, bigger profits, everybody will have a better time.” In other words, the tired adherence to an outmoded set of assumptions best summed up as ‘the rising tide that lifts all yachts’. Clinton promised to restore “America’s basic bargain: If you do your part you ought to be able to get ahead.” Everything I have read suggests this is now, and may have always been, wishful thinking and, as such, an irresponsible promise to make to anyone.

NYC’s progressive Mayor Bill de Blasio was not buying it. He declined to endorse Clinton – “I’m waiting to hear, as I’ve said, her larger vision for addressing income inequality,” the mayor said recently. “I’ve always liked what I heard from Bernie Sanders.” Any plan to reduce inequalities is going to involve a cost to someone and there is only so far you can push the wealthy elites who will be contributing to the Clinton war chest. Any plan, said de Blasio, “has to include increases in wages and benefits. It has to include the willingness to tax the wealthy so we can invest in infrastructure, so we can invest in education.” And now we all know now where the benefits of a 25 percent increase in productivity have ended up.

The experience of recent decades shows little evidence of a business community inspired to invest in Hillary’s ‘long-term value rather than the quick buck’. As if we need proof after the behavior of Wall Street over the Global Financial Crisis, in 2012 scientists from UC Berkeley produced a paper entitled Higher social class predicts increased unethical behavior.

Their experiments showed that the wealthiest upper-class citizens “were more likely to exhibit unethical decision-making tendencies, take valued goods from others, lie in a negotiation, cheat to increase their chances of winning a prize, and endorse unethical behavior at work, than were lower class individuals” The summary finishes with a (maybe unintentionally) droll summary – “Mediator and moderator data demonstrated that upper-class individuals’ unethical tendencies are accounted for, in part, by their more favorable attitudes toward greed.”

But it seems the poor are getting the picture. In response to the question “Do you think our government should or should not redistribute wealth by heavy taxes on the rich?” Americans, according to Gallup, have steadily travelled left in this respect in the years from 1940 to 2015. From 54-35 against heavily taxing the rich in 1940, they had shifted to 51-45 in favor in 1999. By 2015, those prepared to tax the rich heavily had become the majority, at 52 percent.

So why are the mainstream candidates ignoring their constituents? Again from NYT’s Why Don’t the Poor Rise Up? – “The answer is that those bearing the most severe costs of inequality are irrelevant to the agenda-setters in both parties. They are political orphans in the new order. They may have a voice in urban politics, but on the national scene they no longer fit into the schema of the left or the right. They are pushed to the periphery except for a brief moment on Election Day when one party wants their votes counted, and the other doesn’t.”

It is a global phenomenon.

On 17 December 2010, twenty-six-year-old Mohamed Bouazizi set himself alight outside the provincial headquarters of Sidi Bouzid in Tunisia. He was the sole income earner for a family of 8. Police had confiscated his vegetable cart and its produce. In his efforts to resolve the situation he was struck in the face and his dead father insulted. Enraged citizenry subsequently overthrew the Tunisian government. Obviously there was a more comprehensive back-story of impoverishment and repression.

On 17 July 2014, police confronted Eric Garner on Staten Island for his suspected sale of loose cigarettes. “Every time you see me, you want to mess with me. I’m tired of it. It stops today,” he said, shortly before being pulled to the ground by several cops and choked to death. Widespread active protests, and further killings by police, followed. Obviously there was a more comprehensive back-story of impoverishment and repression. The outpouring of love and forgiveness that followed the racist attack in Charleston recently, and the relative restraint of the African American population when faced with unremitting persecution by police and municipal authorities, should not imply an endless supply of patience. Something substantive needs to come of this election. There is a vast and growing underclass, of all skin colors, political opinions, and degrees of restraint – people who are fast running out of options.

Neither the discredited economic policies – and hawkish foreign policies – of Hillary Clinton ( or who-ever the Republican Party belches up as a candidate) is going to do anything meaningful to address the fundamental nature of the problems America faces right now. But then neither, I suspect, will a popular uprising in a country so deeply divided, mutually uncomprehending, and out of touch with its own origins.

Might the plutocracy come to the rescue? This weekend’s New York Times features an article on billionaires challenging inequality and raising the specter of revolution if it is not addressed. Private equity investor Paul Tudor Jones II, said to be ‘worth’ 5 billion, says the current one percent/99 percent gap “cannot and will not persist”. He pointed out that such divides have historically been resolved by ‘taxes, or war, or revolution’. Another ex-Wall Street commentator, skeptical of commitment by the super-rich to systemic change, clarified the ongoing risk from the current inequality – “the have-nots might finally lose patience and turn upon the haves” The real danger, he said, is “this little thing called the French Revolution.”

Personally, I find the prospect of revolution or mass uprisings in the USA terrifying. There are just too many guns here for a start. Having seen phalanxes of Seattle police in full riot gear and bristling with ‘non-lethal’ weaponry, practically goose-stepping down 1st Avenue, with protesters cowering on the pavement – and of course the heavily militarized response to protests in Ferguson – I want a negotiated solution.

As I write this, Greece is in arrears on its national debt, its banks have been closed for a week, and the people have voted ‘No’ to the EU bailout. It is not possible to know just yet how the turmoil in Europe will affect the economy here in the US. The media is not dismissing Bernie Sanders as a political force, but the Times today published some of the more intemperate (in their opinion) pronouncements of his youth – possibly a sign that he is rattling cages somewhere. We cannot let the forced choices of American politics – Republican resentments and fear of economic commonsense on one hand; glib reassurances about everyone having a better time if profits go up on the other – drive us toward Woody Allen’s mordant take on the future –

“More than at any other time in history mankind faces a cross-roads. One path leads to despair and utter hopelessness, the other to total extinction. Let us pray we have the wisdom to choose correctly.”

Can Bernie Sanders do more than just push Hillary Clinton a bit to the left in the run up to the primaries? Could he start ‘the conversation’? Force a substantive break with the neo-liberal daydream? Could his focus on human wellbeing, redistribution of wealth, and his charisma shift the way people start to talk to each other about economics? Here in the land of Wall Street – the engine-room that currently harms us most – it seems to be working on the Mayor of New York City.