[Peace-discuss] the politics of greed

[ppatton at uiuc.edu]

Losing Our Country
by Paul Krugman
 
Baby boomers like me grew up in a relatively equal society. In
the 1960's America was a place in which very few people were
extremely wealthy, many blue-collar workers earned wages that
placed them comfortably in the middle class, and working
families could expect steadily rising living standards and a
reasonable degree of economic security.

But as The Times's series on class in America reminds us, that
was another country. The middle-class society I grew up in no
longer exists.

Working families have seen little if any progress over the
past 30 years. Adjusted for inflation, the income of the
median family doubled between 1947 and 1973. But it rose only
22 percent from 1973 to 2003, and much of that gain was the
result of wives' entering the paid labor force or working
longer hours, not rising wages.

Meanwhile, economic security is a thing of the past:
year-to-year fluctuations in the incomes of working families
are far larger than they were a generation ago. All it takes
is a bit of bad luck in employment or health to plunge a
family that seems solidly middle-class into poverty.

But the wealthy have done very well indeed. Since 1973 the
average income of the top 1 percent of Americans has doubled,
and the income of the top 0.1 percent has tripled.

Why is this happening? I'll have more to say on that another
day, but for now let me just point out that middle-class
America didn't emerge by accident. It was created by what has
been called the Great Compression of incomes that took place
during World War II, and sustained for a generation by social
norms that favored equality, strong labor unions and
progressive taxation. Since the 1970's, all of those
sustaining forces have lost their power.

Since 1980 in particular, U.S. government policies have
consistently favored the wealthy at the expense of working
families - and under the current administration, that
favoritism has become extreme and relentless. From tax cuts
that favor the rich to bankruptcy "reform" that punishes the
unlucky, almost every domestic policy seems intended to
accelerate our march back to the robber baron era.

It's not a pretty picture - which is why right-wing partisans
try so hard to discredit anyone who tries to explain to the
public what's going on.

These partisans rely in part on obfuscation: shaping, slicing
and selectively presenting data in an attempt to mislead. For
example, it's a plain fact that the Bush tax cuts heavily
favor the rich, especially those who derive most of their
income from inherited wealth. Yet this year's Economic Report
of the President, in a bravura demonstration of how to lie
with statistics, claimed that the cuts "increased the overall
progressivity of the federal tax system."

The partisans also rely in part on scare tactics, insisting
that any attempt to limit inequality would undermine economic
incentives and reduce all of us to shared misery. That claim
ignores the fact of U.S. economic success after World War II.
It also ignores the lesson we should have learned from recent
corporate scandals: sometimes the prospect of great wealth for
those who succeed provides an incentive not for high
performance, but for fraud.

Above all, the partisans engage in name-calling. To suggest
that sustaining programs like Social Security, which protects
working Americans from economic risk, should have priority
over tax cuts for the rich is to practice "class warfare." To
show concern over the growing inequality is to engage in the
"politics of envy."

But the real reasons to worry about the explosion of
inequality since the 1970's have nothing to do with envy. The
fact is that working families aren't sharing in the economy's
growth, and face growing economic insecurity. And there's good
reason to believe that a society in which most people can
reasonably be considered middle class is a better society -
and more likely to be a functioning democracy - than one in
which there are great extremes of wealth and poverty.

Reversing the rise in inequality and economic insecurity won't
be easy: the middle-class society we have lost emerged only
after the country was shaken by depression and war. But we can
make a start by calling attention to the politicians who
systematically make things worse in catering to their
contributors. Never mind that straw man, the politics of envy.
Let's try to do something about the politics of greed.