Monday, January 3, 2011

Income Disparity Is A Growing Problem

By Manifesto Joe

Socialism for the rich? It looks more and more that way, upon close examination. I remember a job interview (I'm a newspaper journalist) in which the publisher of a medium/small paper talked briefly about competition. "We're all for competition. But not in our particular business. If somebody starts up a paper to compete with us, we're going to do all we can do to beat them and run them out of business."

Fine -- that's the marketplace. You can lose in competition, and the inefficient do. But that points to an inherent contradiction of capitalism. In theory, capitalists laud competition; but in practice, every capitalist wants a monopoly.

But even with that contradiction in mind, the way capitalism is being practiced in America and elsewhere is that many "competitors" are shielded from the rigors of the marketplace. History shows again and again that concentrations of wealth cannot be divorced from political influence: They tend to be parallel. Rich people and giant corporations can afford to hire more and better lobbyists than those who advocate for the poor, labor unions, etc., can ever hope to. It's always been that way, and it probably always will be.

According to journalist David Cay Johnston, over the past 30 or so years, rich people and big corporations have been so lavishly subsidized that they always win. And, subsequently, you, little man and woman, always lose.

Here's a link to articles about Johnston's new book, and to an interview with him.

If you follow the news, it shouldn't be lost on you that cities, counties and states across America are giving subsidies, either in the form of tax breaks or outright payments, to already-rich companies to relocate there, or to expand. What they get in tax breaks, or in flat payments, you have to make up the difference for.

It's reality that a significant number of jobs are generated this way, at least in those localities, as Johnston grants. But the effect on the nation as a whole is nothing short of devastating. The most recent federal deficit figure was $1.3 trillion, a bill we're going to stick future generations with. On the structural deficit, this is the "trickle-up" effect.

Income redistribution doesn't work just one way. The rich are much better at it, and contrary to the prophesy of Karl Marx, history has seemed to be on their side.

The efficiency of the "free market" depends on that which is purely economic functioning independently of political influence. That may have been somewhat possible in Adam Smith's day, but it didn't take long after that for economic power to translate directly into political power. In the halls of Congress or any legislature, money talks; bullshit walks.

How has this affected daily life in the U.S.? Here's another link that illustrates the problem. American workers are vastly more productive than they were in the 1970s, but have gained little in real wages compared to those raking in profits from politically advantageous positions.

So, in practical terms, how can this problem be remedied?

Make the bastards pay

I'm realist enough to know that there's never going to be a real solution to the problem of capitalist success translating directly into political influence. This is one point on which Marx was absolutely correct: There's never going to be any divorce between the two spheres. The only way to address it is to revive the concept of progressive taxation.

There seemed to be a time in America in which many working people more or less understood that capitalism is an insider's game, played with great duplicity. "Traditional" capitalists do plenty of talking about the "free market," but all the while they have Washington and the state capitols overrun with lobbyists seeking all manner of perks. And they get most of them, no matter which major political party is in power. They fare better with Republicans; but Democrats, as we have seen since January 2009, merely talk a better game and usually end up swimming in the same polluted water. Their politicians have to have quid, and plenty of it, to keep their gig going.

Progressive taxation is the only practical answer. Hey, rich guy: You want various governments to subsidize you? Realistically, that's bound to happen. But with that in mind, you must pay commensurately for it, so as to stop shifting the burden down upon those who can least afford to pay.

Let's face the fact that the "free market" is, and has generally always been, a duplicitous sham. The hogs have pretty much always been slopping at the trough, and the biggest ones get the most. It's only when the smaller ones band together that real change is forced upon them.

The people of Dallas-Fort Worth, here in Texas, should be able to see the dilemma quite well. The taxpayers anteed up a pretty penny for Cowboys Stadium in Arlington, subsidizing fabulously wealthy Dallas Cowboys owner Jerry Jones in the bargain. What they got this football season was an NFL team that went 6-10, and that was largely because of Jones' mismanagement, if sports columnists are to be believed. The taxpayers didn't get much of a return on their silly investment.

I don't see an end to such nonsense anytime soon. But I'd like to see Jerry's taxes, and those of others like him, raised dramatically, for all the "little people" to settle up for the price of Jerryworld.

I've got a couple more links that more or less address this subject. Sen. Bernie Sanders, I-Vt., was a dissenter in the Senate on the recent Obama compromise on taxes. Here's some of what he had to say on the subject.

Here's more of what Bernie said, courtesy of Truthout. It's pretty astonishing that the American people are still taking it up the keester so happily while ExxonMobil rakes in $19 billion in profits, and not only pays no income tax, but gets back a $156 million refund from the IRS.

Bernie is an avowed socialist, the only one now in Congress, to my knowledge. I'm sorry to disappoint some out there, but I'm not a true-believing socialist, and therefore I don't think there's ever going to be a way to effectively stop big corporations and wealthy campaign contributors from twisting the arms of lawmakers. I'd say that's especially true since our Supreme Court recently struck down limitations on campaign finance.

The only answer is what can be done to wake people up. A political groundswell is the sole solution, and it's got to start soon. The sole reason for optimism here is that once people start really being hit in their pocketbooks, that's when they actually do something. The best time for that was in 1985, but it still may not be too late.

Manifesto Joe Is An Underground Writer Living In Texas.


Jack Jodell said...

Great post, Manifesto Joe! I think the ONLY way to combat big corporations is through the emergence of a newly revitalized labor union movement, and I, for one, would heartily welcome such a trend!

Grung_e_Gene said...

American Capitalism is Socialism for the Rich.

The Republican Party has been groomed for one purpose in America, to defend the Plutocratic controllers of the Nation. To grind Americans (and the world) down for the enrichment of the Elites who craft policy, gin up wars and divide America. The Republicans have for years employed both crude and insidious techniques to deceive their voting base into sacrificing themselves on the Altar of the Rich. And they continue to do so today.

Manifesto Joe said...

Hi, Jack: One big problem is that U.S. labor law is so weak that an employer can fire someone deemed a union "agitator" and seldom face any consequences. But it's going to take a far different Congress to toughen labor law. The Democrats controlled the 111th Congress, but there were so many Blue Dogs and DINOs that such legislation couldn't go anywhere. It looks like it's going to be a question of when enough people become uncomfortable enough to realize what needs to be done. It happened in the 1930s, and it may take a time that grim to make it happen again.

Hi, Gene: The Republicans seem to have devolved into sort of a closet fascist party. And, their propaganda apparatus is formidable. But, who would have predicted that the Soviet empire would collapse the way it did 1989-91? I'm hoping for something similar in America, this time with enough people finally getting fed up with the right wing. But, sadly, I think things will have to get pretty grim before some brainwashed people will start to wake up.

Anonymous said...

I too am watching the forming of only 2 classes in the US. It is happening very quickly. It is blatant. Here in NYC we have the billionaire mayor hiring an ex-publishing CEO with no education experience as the next education chancellor. Funny how CEO's can move freely from corporation to corporation with no experience, yet the rest of us need to have done the exact job we are applying for. I know, I experience it daily, I am unemployed. Most people I know feel overwhelmed by what is going on, so overwhelmed that they are paralized. Therefore I agree, it will take everyone being hurt, deeply, before the general public takes any action.
Great blog BTW. My friends blog linked to yours...Wil

Manifesto Joe said...

Thanks for stopping by, Anon:

I've been getting a lot of negative comments from pessimists, and I can very deeply understand the reasons for pessimism. But if there is no hope that some kind of grassroots groundswell can make things better, why should any of us even do this? If we despair thusly, we should just fold up these blogs and quit.

I intend to keep going, and I hope hundreds and thousands of others will, too. Perhaps one day we can even get Mayor Bloomberg to listen.

Anonymous said...

Maybe I can get the ball rolling, I'm trying to get into the IBEW 58 and Millwright 1102 unions in the next six months. Can't wait to get paid what I'm worth, actual benefits, and a pension plan for providing better skilled labor than hack contractors and their illegal workforce.


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