Class warfare is real; we're losing
St. Cloud (MN) Times
July 6, 2011
Americans don’t like to talk about class. If pressed, the vast majority of us will identify as “middle class” and simply label those who are visibly more wealthy as “rich” and those who struggle to meet basic needs as “poor.”
Certainly very few Americans would accept the notion that we are somehow involved in class warfare. But in truth we are deeply engaged in an ongoing struggle between classes that pits the very wealthy against essentially everyone else.
The social contract that binds our common interests has, sadly, fallen apart. That is evident to some members of the upper class, including investment guru Warren Buffett, who in 2006 admitted “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”
In the wake of the Great Recession, it’s actually surprising that more people aren’t talking about it. The impacts of the recession fell hardest upon working families. About 30 million people remain unemployed or underemployed despite the official declaration that the recession ended in 2010.
But in 2008, the year the Dow fell 38 percent, the richest 400 American taxpayers reported an average of $153 million in capital gains. Due to the lower tax rate on capital gains, these wealthy Americans paid a 15 percent rate on their millions while members of the “middle class,” who reported most of their income as wages, typically paid effective tax rates of 20 percent or more. During the Great Recession, the median wealth of American families dropped by 36 percent, while the wealth of the top 1 percent fell just 11 percent.
Teddy Roosevelt
A century ago, the 1912 presidential election was marked by open class conflict. Conservative Republican incumbent William Howard Taft was challenged not only by Democrat Woodrow Wilson, but by socialist Eugene Debs to his left. Theodore Roosevelt, unhappy with Taft’s abandonment of the progressive reforms that marked TR’s presidency, formed a fourth party. Roosevelt’s Progressive or “Bull Moose” Party platform included calls to establish a national health service, a program of social insurance to support the elderly and disabled, unemployment insurance, a minimum wage for women, workers’ compensation, new estate and income taxes, and the eight-hour workday.
In this case the middle class voted its interests; the Republican incumbent won only eight electoral votes that year and as we know most of the Progressive reforms were eventually adopted under Wilson’s Democratic administration.
Representing “us”?
The fact that power flows from wealth should be of no surprise. The cost of running today’s political campaigns — and the access to influential people that comes with money — means very few members of the “middle class” are elected to federal office any longer.
In 2009, when the unemployment rate exceeded 10 percent, one study found there were 261 millionaires in Congress. That these millionaires and the people they associate with favor policies that enhance their fortunes is not that shocking. One might expect a millionaires’ club to promote policies that focus on limiting inflation rather than job creation, prioritize debt reduction over providing public services, or favor tax cuts for themselves instead of investments in education, infrastructure, or the environment. What is surprising that the lack of outrage in response.
The puzzle today is not that the wealthy are organized to protect their own interests, or even that they have largely succeeded. Is is that the rest of us — the 99 percent who are not hedge fund managers, CEOs, or bank presidents — are not outraged. Both major parties are complicit. Our political debates have come down to not what can be done to help the middle class, but how we can best protect tax cuts for the very rich. The government of our state was shut down over that very issue. The Republican majority in Congress is pushing the country toward default on its debts for the same reason.
Why do we accept accusations of “class warfare” when someone suggests raising taxes on the wealthy, but are silent when policies punish the majority of Americans who make up the middle class as a matter of routine business?
Certainly Teddy Roosevelt would want to know.
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