Class Warfare

(Cross-posted at The Blue Herald)


(Marie Antoinette)

A Republican and a Democrat are sitting in bar, when Bill Gates walks in. “Yippie, I’m rich!” cries the Republican.

“What are you talking about?” says the Democrat.

“Well,” explains the Republican with some annoyance, “Bill Gates is worth 50 billion, right? Counting him, there are ten people in this bar. That means, the average wealth in this bar is 5 billion per person! I’m rich!”

“What are you talking about? Just because Bill Gates walked in the bar doesn’t mean you get 5 billion!”

The Republican rolls his eyes and says, “I see you’re still preaching discredited ideas about class warfare.”

One of the most hilarious, hypocritical, utter bullshit talking points you’ll hear from conservative pundits is that liberals pushing for some sort of equity or social justice are practicing class warfare. Bill Gates actually gives a phenomenal amount of money to charity, but needless to say, he’s not the norm. Class warfare waged by the rich and powerful against the poor and middle class is not only a current reality, it’s been the general rule for several millennia. That’s hardly a secret, although most of the chattering class apparently think it terribly uncivil to mention. The gross and growing disparity of wealth is a serious problem — unless you’re one of the rich and powerful.

You’d really think the super-wealthy who practice class warfare would have the “civility” and “class” to shut up, back off, and let the rest of us live our lives and pursue some modest prosperity of our own versus them stealing yet another piece of the pie when they already own a massively disproportionate portion. I’m not as much concerned about the rich and indifferent. I’m concerned about a handful of families, eighteen to be exact, actively working to make an already horribly unequal distribution of wealth in America even worse, the good of the country and the world be damned.

There is no major socialist party in America. There are no major figures in America urging the people to rise up and seize the monetary assets of Paris Hilton and re-distribute them to the masses. Under even the most taxing of progressive tax codes, say the 92% or so on the top bracket we had in the 1950s, the super-wealthy will remain super-wealthy. Barring mind-blowing stupidity and/or criminal acts on her part, Paris Hilton will never be poor. I know several rich couples, Republicans no less, who give significant amounts of money to charity every Christmas, bless ‘em. The rich are not inherently evil. But neither are they inherently virtuous, and that line about camels and needles comes to mind. Someone inheriting great wealth may or may not be a kind person, but they did not gain their wealth through inherent merit. There is virtually no situation anyone can face where being rich is not an advantage over being poor. Certain kidnapping-hostage situations, perhaps. And if you happen to be an aristocrat living in France in 1789, you’re probably pretty screwed. But apart from that, if you’re rich and/or powerful, you’re sitting quite pretty, you’ve been sitting even prettier thanks to Reagan and both Bushes, and your ass is about to get an even fluffier cushion.

I thought it would be useful to collect some relevant articles on the subject in one place. Don’t feel you have to read the whole thing, but I find these articles make for useful references.

While I’d take issue with some of his other charges in this piece (as Pauline Kael said, there’s a difference between what people want and what they’re willing to settle for), the guts of this Matt Taibbi piece are great:

[Senator Bernie] Sanders's office came up with some interesting numbers here. If the Estate Tax were to be repealed completely, the estimated savings to just one family -- the Walton family, the heirs to the Wal-Mart fortune -- would be about $32.7 billion dollars over the next ten years.

The proposed reductions to Medicaid over the same time frame? $28 billion.

Or how about this: if the Estate Tax goes, the heirs to the Mars candy corporation -- some of the world's evilest scumbags, incidentally, routinely ripped by human rights organizations for trafficking in child labor to work cocoa farms in places like Cote D'Ivoire -- if the estate tax goes, those assholes will receive about $11.7 billion in tax breaks. That's more than three times the amount Bush wants to cut from the VA budget ($3.4 billion) over the same time period.

Some other notable estimate estate tax breaks, versus corresponding cuts:

• Cox family (Cox cable TV) receives $9.7 billion tax break while education would get $1.5 billion in cuts

• Nordstrom family (Nordstrom dept. stores) receives $826.5 million tax break while Community Service Block Grants would be eliminated, a $630 million cut

• Ernest Gallo family (shitty wines) receives a $468.4 million cut while LIHEAP (heating oil to poor) would get a $420 million cut

And so on and so on. Sanders additionally pointed out that the family of former Exxon/Mobil CEO Lee Raymond, who received a $400 million retirement package, would receive about $164 million in tax breaks.

Compare that to the Commodity Supplemental Food Program, which Bush proposes be completely eliminated, at a savings of $108 million over ten years. The program sent one bag of groceries per month to 480,000 seniors, mothers and newborn children.

Somehow, to me, that's the worst one on the list. Here you have the former CEO of a company that scored record profits even as it gouged consumers, with gas prices rising more than 70 percent since January of 2001. There is a direct correlation between the avarice of oil company executives and the increased demand for federal aid for heating oil programs like LIHEAP, and yet the federal government wants to reward these same executives for raising prices on the backs of consumers.

[...]

That's not only bad government, it's bad capitalism. It makes legalized bribery and political connections more important factors than performance and competition in the corporate marketplace.

Digby linked the same article, and also links this 4/25/06 Think Progress post, which reports (emphasis mine):

The 10-year effort to repeal the estate tax (aka the Paris Hilton Tax) on heirs of the super wealthy has been financed and coordinated by just 18 families, according to a new report by Public Citizen and United for a Fair Economy.

The families include “the candy magnate Mars family, Waltons of Wal-Mart fame, Kochs of Koch Industries and Dorrance family of the Campbell’s Soup Co.” Together, they are worth a total of $185.5 billion. The estate tax repeal would “collectively net them a windfall of $71.6 billion.”

[...]

Americans are about four times as likely to be hit by lightning than to have to pay estate taxes on small businesses or farms.

But keep buying them lotto tickets, with similar odds! Repeal the estate tax, ‘cause you might get really rich too!

In fact, as Think Progress notes, a majority of the public want to reform the estate tax or or just leave it alone (57%, while only 23% back repealing it), but the Republicans keep pushing to eliminate it. They always have, and they always will. Back in April 2005, Atrios, and Attaturk at Rising Hegemon in "The Paris Hilton Tax Relief Act" linked a Washington Post article, ”Erosion of Estate Tax Is a Lesson in Politics” that reported:

In 1992, when heirs to the Mars Inc. fortune joined a few other wealthy families to hire the law firm Patton Boggs LLP to lobby for estate tax repeal, the joke on K Street was that few Washington sightseers had paid so much for a fruitless tour of the Capitol.

Today, the House is expected to vote to permanently repeal the estate tax, moving the Mars candy, Gallo wine and Campbell soup fortunes one step closer to a goal that once seemed quixotic at best: ending all taxation on inheritances.

[...]

Last month, Graetz and Yale political scientist Ian Shapiro published "Death By A Thousand Cuts," chronicling the estate tax repeal movement as "a mystery about politics and persuasion."

"For almost a century, the estate tax affected only the richest 1 or 2 percent of citizens, encouraged charity, and placed no burden on the vast majority of Americans," they wrote. "A law that constituted the blandest kind of common sense for most of the twentieth century was transformed, in the space of little more than a decade, into the supposed enemy of hardworking citizens all over this country."

The best propaganda money can buy! For the past two or three decades at least, Republicans have aggressively worked for the super-wealthy and rich corporations at the expense of average citizens. As candidate George W. Bush told his patrons at a $800 per plate dinner back in October 2000, "This is an impressive crowd - the haves and the have-mores. Some people call you the elites; I call you my base.” Check out any conservative think tank for dubious studies and unfounded assertions that raising the minimum wage, funding free pre-school and Medicare or asking the super-wealthy to pay their fair share of taxes will cause the fall of Western civilization. Meanwhile, The General delves into the bread-and-circuses-distract-the-masses angle of economic coverage.

Paul Krugman wrote a fantastic piece for Rolling Stone named "The Great Wealth Transfer":

The number of Americans in poverty has risen even in the face of an official economic recovery, as has the number of Americans without health insurance. Most Americans are little, if any, better off than they were last year and definitely worse off than they were in 2000.

But how is this possible? The economic pie is getting bigger -- how can it be true that most Americans are getting smaller slices? The answer, of course, is that a few people are getting much, much bigger slices. Although wages have stagnated since Bush took office, corporate profits have doubled. The gap between the nation's CEOs and average workers is now ten times greater than it was a generation ago. And while Bush's tax cuts shaved only a few hundred dollars off the tax bills of most Americans, they saved the richest one percent more than $44,000 on average. In fact, once all of Bush's tax cuts take effect, it is estimated that those with incomes of more than $200,000 a year -- the richest five percent of the population -- will pocket almost half of the money. Those who make less than $75,000 a year -- eighty percent of America -- will receive barely a quarter of the cuts. In the Bush era, economic inequality is on the rise.

[...]

The widening gulf between workers and executives is part of a stunning increase in inequality throughout the U.S. economy during the past thirty years. To get a sense of just how dramatic that shift has been, imagine a line of 1,000 people who represent the entire population of America. They are standing in ascending order of income, with the poorest person on the left and the richest person on the right. And their height is proportional to their income -- the richer they are, the taller they are.

Start with 1973. If you assume that a height of six feet represents the average income in that year, the person on the far left side of the line -- representing those Americans living in extreme poverty -- is only sixteen inches tall. By the time you get to the guy at the extreme right, he towers over the line at more than 113 feet.

Now take 2005. The average height has grown from six feet to eight feet, reflecting the modest growth in average incomes over the past generation. And the poorest people on the left side of the line have grown at about the same rate as those near the middle -- the gap between the middle class and the poor, in other words, hasn't changed. But people to the right must have been taking some kind of extreme steroids: The guy at the end of the line is now 560 feet tall, almost five times taller than his 1973 counterpart.

Meanwhile, in “Live At Your Own Risk,” David Moberg reviews several books on economics, and writes:

In All Together Now, Jared Bernstein, a senior economist at the Economic Policy Institute, offers a trenchant critique of the economic, political and moral shortcomings of conservative social and economic policy that he dubs YOYO, or “you’re on your own.” He wittily contrasts them a progressive strategy that recognizes that “we’re in this together,”: WITT.

(Yet again, a hat tip to The Old Hippie's Groovy Blog, and Mike's Blog Round-Up for the Krugman and Moberg pieces.)

Ezra Klein brings up the issue of ”The Death of Fordism”:

David Leonhardt has a good piece in today's Times on the death of Fordism -- that oh-so-comforting economic philosophy that productive workers should be paid expansive wages and the middle class should drive the country's economic growth. As he notes, what we've seen is a shift towards what I'll call Hiltonism -- that the economy should be driven by growth at the top, and the middle class should be squeezed so the rich can amass ever more riches. This is trickle down economics, it started with Reagan, it continues today. It's why we pass things like the dividend tax cut:

Americans with annual incomes of $1 million or more, about one-tenth of 1 percent all taxpayers, reaped 43 percent of all the savings on investment taxes in 2003....The analyses show that more than 70 percent of the tax savings on investment income went to the top 2 percent, about 2.6 million taxpayers.

By contrast, few taxpayers with modest incomes benefited because most of them who own stocks held them in retirement accounts, which are not eligible for the investment income tax cuts. Money in these accounts is not taxed until withdrawal, when the higher rates on wages apply.

On the world front, United Nations University has a study published on 12/5/06, “The World Distribution of Household Wealth,” which found that the richest 2% in the world own half the world’s wealth.

A U.S. News & World Report from 2/21/00 called ”The Rich Get Richer” stated:

...Over the last two decades, an income gap in an absolute sense between the rich and the poor has risen significantly. In 1970, the average income of the richest 5% of Americans was 10 times greater than the average income of families in the bottom 20% bracket. By 1980, the ratio had increased to 16 to 1, and in 1999, it became 19 to 1. In terms of household wealth, in 1976, the wealthiest 1% of Americans possessed 19% of total household wealth, whereas at the turn of the twenty-first century, the same 1% enjoy 40% of all wealth. The inequity of income and wealth distribution in America is the highest among industrialized countries. In the past, the inequity of income was manifested in terms of an urban ghetto. In the year 2000, this inequity is reflected by the gated or walled residential communities of the rich.

Bringing this back to the November 2006 midterm elections, in ”Embracing Populism,” David Sirota quotes an op-ed by Jim Webb:

The most important—and unfortunately the least debated—issue in politics today is our society’s steady drift toward a class-based system, the likes of which we have not seen since the 19th century. America’s top tier has grown infinitely richer and more removed over the past 25 years. … The top 1 percent now takes in an astounding 16 percent of national income, up from 8 percent in 1980. The tax codes protect them, just as they protect corporate America, through a vast system of loopholes.

Still, Bill Moyers might have put it the most pointedly in his great keynote speech, ”This is the Fight of Our Lives,” at The Inequality Matters Forum at New York University on 6/3/04:

The middle class and working poor are told that what's happening to them is the consequence of Adam Smith's 'Invisible Hand.' This is a lie. What's happening to them is the direct consequence of corporate activism, intellectual propaganda, the rise of a religious orthodoxy that in its hunger for government subsidies has made an idol of power, and a string of political decisions favoring the powerful and the privileged who bought the political system right out from under us."

Class warfare is a reality, but despite a classic maneuver of conservative projection, misdirection, and deception, it ain’t occurring in the direction they claim. Of course, why should anyone worry their pretty little head over such matters when the masses have plenty of cake to eat? Still, the next time a conservative squawks about “class warfare,” throw some stats his way — or ask him to buy you a drink out of his 5 billion.



Update: Fixed a few typos.