Social Question

ETpro's avatar

The 99% vs.1% thing isn't the right metaphor. How should we talk about the REAL Class Warfare?

Asked by ETpro (34581points) January 24th, 2012

Hats off to the Occupy Wall Street movement for getting the issue of growing income and wealth inequality on the national agenda, but I don’t think the 1% thing is a fair charge. I also know that OWS is not committing class warfare when they try to talk about what is a real and festering cancer on the American political and economic system—rapidly growing wealth disparity between 99% of us at the bottom and the 1% at the top. This is no flash in the pan. It’s been going on for 32 years now since Ronald Reagan sold the nation on trickle-down economics.

There is a class war going on, all right, and the 99% who are being accused of class warfare are not the ones doing all the shooting and looting. It isn’t even many among the 1%. It is a small group of billionaires, all members of the top one one-hundredth of 1% of America’s and the world’s wealthiest people, who in league with the CEOs of some of the largest multinational corporations and trade groups that represent them, bribe legislatures to shift policy so as to give them ever more of the wealth of the nations. Even many of our billionaires, particularly those that made their wealth through their own efforts and creativity, are not the looters.

Let’s review some facts that show class warfare has been declared against the 99%. When FDR took office in 1933, it was the depth of the Great Recession brought on by years of unregulated casino capitalism on Wall Street and growing income inequality. The top 1% had garnered for themselves about 40% of the financial wealth of the entire nation just before the 1929 crash. Their share of the wealth dropped to about 25% due to the crash and held pretty steady at that level through recovery from the Great Depression, WWII, and the post-war boom. From 1933 to 1980, we built the world’s first powerful middle class. If you graph income and wealth growth for each economic segment from the working poor to the top 1%, for nearly 5 decades, they all grew in lockstep. Then in 1980 Ronald Reagan won election and ushered in the Conservative Revolution and the trickle-down theory dubbed Voodoo economics.

What that actually did is now clear. Reagan slashed taxes for the wealthiest taxpayers by 70%. All that extra cash in the pockets of the wealthy generated a brief flurry of job growth, but exploded the national debt which we had been steadily retiring since WWII. Reagan holds the distinction of being the only president to tipple the national debt in 8 peacetime years. And the lockstep growth of all economic sectors suddenly came to a screeching halt. In inflation adjusted dollars, the bottom 20% actually lost ground over the next 32 years. The next 20% saw their income remain flat. The third quintile grew a bit, the top 20% gained about 30% over the 32 years, and the top 1% enjoyed nearly 300% growth in income. CEO pay went from 25 times the average worker they supervised to a mind boggling 475 times the worker’s pay.
And the top 1% went from their former 25% of the nations wealth to holding 42% today—more than they held back in 1929 when the economy crashed. Over that same 32 years, the strong middle class we had built declined from 65% of the US population in 1970 to just 44% today, and the middle class losses went not into the 1%, which always remains the 1%, but mostly into the ranks of the working poor and the truly impoverished. If we stay on this track, America is headed for an economy similar to that of Haiti and other banana republics, and the rich oligarchs that sucked it dry will move on to feast elsewhere. They are, after all, multinationals. They own chalets in the world’s most desirable spots and private jets to whisk them there.

None of this happened because the 1% caused it. Most wealthy Americans favor higher taxes on millionaires. Trickle down economics and the deconstruction of the safety net was financed by the cartel listed in this discussion, a tiny handful of billionaires and corporatists multinationals controlling a huge pool of wealth with which to buy think-tank ideas, PR, and lawmakers. They paid to have the playing field tilted so all the money runs to them. I would guess they actually want the growing income and wealth disparity to crash the world’s economy. That just means more wealth and property available to be snatched up at fire sale prices. This time, they won’t make the mistake of 1929, having their own money at risk when they collapse the world’s financial system.

So just slamming the top 1% doesn’t work. Vulture capitalists, extraction capitalists, these phrases may come closer to the mark. Greedy Oligarch Pigs is pretty exact, but too few in the electorate even know what an oligarch is. How can we talk about this so we blow a hole right through the Big Lie claim that anyone complaining about being looted by these Greedy Oligarch Pigs is a class warrior trying to divide an otherwise peaceful and happy America (or whatever country you care to consider, if it’s on this path)?

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14 Answers

gailcalled's avatar

You’re able to type this with only one working eye? Got help us when the patch comes off.

Why so strident? After all, Romney did pay $3.2 million in taxes on his $21 plus million income in 2011.

wundayatta's avatar

Why so strident?Let me offer another metaphor that might help explain why this is so important.

All for one and one for all!

If a team is going to be cohesive, then they have to stick together, no matter what. But for a team to be cohesive, they have to all see themselves as being in the same situation. It might be being in the same boat. It might be all having the same enemy. It might be all belonging to the same company.

For people to want to stick together and to be cohesive, they must see themselves as the same. When the distinctions between team members grow to large, they can no longer see themselves as being on the same team. Their interests are no longer the same. They stop being willing to support each other under all circumstances.

Countries are teams, and a lot of times nationalism can bring together people of widely disparate interests. But in this country, it is arguable that the distance between the poor and the wealthy has grown too far. The wealthy are now more loyal towards their wealth than they are to their country. They may no longer belong to a country. Indeed, they may own politicians in many countries, now.

When they are so distanced from their fellow countrymen, they don’t care what happens to them. When people stop caring, the team disintegrates. There is no longer any cohesiveness in this country and that means that it is possible for internecine war to break out. It means it is possible for resentments to grow without let up.

Right now, people might blame the President for their plight. But if the regime changes and the economy does not, people will become more convinced that all politicians are corrupt and it doesn’t matter who is in power. And they may start pointing their fingers at the wealthy for real.

If this ever does happen, the wealthy will leave, taking their wealth with them. They will pick up where they left off in a nation that wants them—for the moment.

It would be better for all of us if the wealthy decided to try to show more support for the overall society. They should pay more taxes. They should market themselves as supporting the nation. They should make a commitment to one for all and all for one. They will do better as a result, but so will the 99%, and that will keep things calm… for a while.

fluxflow's avatar

There is no 1%. It’s more like 0.01%

Top 1% = $368,238 (20.9% of income)
Top 0.5% = $558,726 (16.8% of income)
Top 0.1% = $1,695,136 (10.3% of income)
Top 0.01% = $9,141,190 (5% of income)

There is no 99%. It’s more like 48% who illegitimately claim to represent everyone.

A progressive tax is class warfare. It requires the rich to pay at a higher rate than the poor. The rich pay 35% (income tax) & the poor only pay 10% (before deductions and exemptions) or pay nothing at all.

Claiming to be victim of looting in a capitalist system is a lie since all trades between buyers and sellers occur without coercion. Hence one has only him/herself to blame for any undesirable outcomes.

Wealth disparity is a result of innate abilities. Someone who is uneducated or unskilled, will not be valued by the market as someone who is. Wise investing would be another reason.

The sentiment for an undesirable welfare-regulatory state is not limited to the 0.01%. There are a lot of Americans who share the same sentiment.

flutherother's avatar

The discrepencies in income are increasing and becoming quite glaring. It is not healthy and in a proper democracy it shouldn’t happen. There is an interesting article about this on the BBC website

fluxflow's avatar

The birth rate for women receiving welfare is 3X higher then those who don’t receive any, so overtime society gets overrunned with welfare recipients, hence the growing income disparity.

Scholars like Charles Darwin, Herbert Spencer, and Francis Galton predicted such would be the consequences of a welfare system.

CaptainHarley's avatar

“TURNING and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.”

- William Butler Yeats

America has, like most empires, divided into classes and regionalities, and has begun to fracture. With the growing destruction of the middle class, we can carry Yeats’ “the center cannot hold” one step further to “the center no longer exists.”

ETpro's avatar

@gailcalled I’ve still got two good hands; :-)

As to Romney’s taxes, yes, he paid a large amount of money in taxes. But he paid a far lower percentage than you did if you worked last year. Let me paraphrase an answer I gave to this question about Romney paying a lot of money, so what’s the problem.

“People aren’t upset that Romney paid $6 million in taxes over the last two years. People are concerned that a guy who made $42,500,000 over two years paid just 13.9% in taxes. If you or I make $50,000 a year we will pay around 25 to 30% in taxes. This guy makes $50,000 a day. We’d have to work 365 years to make what he earns in one year. And he pays a tax rate less than half what we do. And he’s running for president so he can reduce his tax rate even more. He wants those making the lower incomes to pay a little more, but people like him to pay less. It isn’t fair, and it isn’t good for America.

Look at what @wundayatta said, and factor the various Republican candidates’ tax plans into it. If Gingrich manages to avoid self destructing and wins, he wants to increase taxes on the working poor even more, and he wants to eliminate all taxes for guys in Romney’s class. They invest in business that benefit from the roads and bridges and hydroelectric plants we build and maintain for them. They hire workers trained in schools we pay for.. But the Republican ideal is once they make it into the top 0.006% where Romney is, they shouldn’t lift a finger to pay for the infrastructure they use to get rich. It’s the working poor whose job it is to supply that. Now you tell me who’s guilty of class warfare.

ETpro's avatar

@fluxflow There is a top 1% in every society. No sensible person begrudges people being able to make it to the top. We all hope to do that, even the lowly janitor who buys a Big Game lottery ticket.

The notion that only ability accounts for the explosion in wealth inequity is preposterous though. For 204 years this wasn’t happening. It suddenly started when Reagan slashed taxes for the wealthiest Americans by 70% and instituted “trickle-down” economics. Flat tax is NOT a conservative value, it is a radical revolutionary idea. Flat taxes absent of socialism bring about a banana republic in very short order. That is why the US has always had a progressive tax system. Conservatism is abnout preserving existing institutions, not tearing them down and instead trying totally untested ideas.

In the last 3 decades, we have made our tax system much more regressive, and the result has been an explosion of wealth disparity and mounting national debt. This did NOT happen because 99% of Americans suddenly became stupid and lazy when Reagan was elected, it happened because of policies he instituted and Republicans continue to expand upon in their quest to serve their billionaire masters.

@flutherother Is quite right about the explosion in inequity, and you are again spouting nonsense that indicates a complete lack of knowledge of history, or wilfull ignorance when you try to blame that on welfare moms. We had masses of poor in 18th century America. Immigrants from all over the world flocked here and worked for bare subsistence wages. They had high birth rates. We had slavery. Slaves had high birth rates. The good old free-market days were anything but good. Read Upton Sinclair’s The Jungle. Take a look at this for historical context on how lovel;y the free-booting free market days of the 1800s were. .

@CaptainHarley If enough of us who remember the Greatest Generation, where rich and poor alike rolled up their sleeves and sacrificed to keep this nation’s liberty intact, then it isn’t time to write our obituary just yet.

fluxflow's avatar

Do you know what the gilded age was? In 1865–1893, the United States economy grew at the fastest rate in its history. You actually had real wages, wealth, GDP and capital formation which increased quick and at the same time. By 1901, per capita income and industrial production in the United States led the world, with per capital incomes double that of Germany or France, and 50% higher than Britain.

Taxes, regulations, and welfare were nearly non-existent (was a pure market). Even the progressive era didn’t attempt to mess with the system. However, that attitude started to change in the 1893 with the panic.

See, when times were good, no one complained about disparities or anything else, but when people started taking a hit, they quickly cried out to the government for help, and around the 1920’s all the welfare and regulations started to take effect instead of letting the market solve the problem more efficiently and with real value.

Actually, you’re lying again. It wasn’t poor people having high birth rates. The poor were not poor. In the gilded age, they lived better lives then the richest kings that lived 50 years before them and even during at that time across the world. They actually lived out the maximum that was available and far greater then the rest of the world. It’s the welfare moms in our welfare era that are propagating the earth with more welfare recipients. Slavery ended in 1865. Shortly after that same year, the gilded era began.

Correlation is not causation. Just because taxes were cut by Regan does not mean disparity is the result of it. Far from it. It’s due to innate abilities, market investments, fractional reserve banking such as easy credit policies, regulations, and welfare moms breeding.

Reagan had the right approach by cutting off all this crap. His error though, is that he didn’t actually cut any spending. He cut taxes, but not spending, hence the massive debt accumulation. Had he cut the programs to accommodate the tax cuts we wouldn’t be in such a mess.

Now, your question is about class warfare, and you want to expose the “big lie”. Yet at the same time you’re the one who is lying by ignoring the fact that progressive taxation is class warfare, and you support it.

What does conservative values have anything to do with class warfare? A flat tax is the opposite of warfare. It means everyone pays a fair share, equally. No exceptions. The poor are not to be exempt because they’re poor. It’s a shity excuse that holds no water. They expect government protection without paying anything in? That is the definition of a freeloader.

fluxflow's avatar

Also, it always boils down to innate abilities that cause wealth disparity because it is the persons innate abilities that determines survival and prosperity despite the conditions of the environment. Either you survive and prosper, or you die, or live a life of poverty.

Again, there is no 99%. It’s 47–48%, hence the birth of the 53% who are intolerant of the 48%. The 48% are the only one’s complaining about wealth disparity, but not everyone shares that sentiment. The poor always complain, its nothing new. You still have 53% of the population that follows the philosophy of Ayn Rand (including the 0.01%).

It’s undesirable to sacrifice the individual for the collective. That is not a healthy society. A healthy society enhances and protects the individual for a healthy society.

fluxflow's avatar

I forgot to send you this study that proves redistribution of wealth (progressive taxation) does not end income inequality.

Does Progressive Taxation Redistribute Income?

ETpro's avatar

I’m actually quite familiar with the Gilded Age. In 2009 dollars, the real GDP per capita rose from $4,000 in 1865 to $7,500 in 1900. So the GDP nearly doubled in that 35 year period. There were a lot of factors that drove that expansion. After the Civil War, there was much to rebuild, just as there was after WWII. In fact, the period from 1935 to 1970 also saw an actual doubling of the US GDP. So your contention that financial growth in the Gilded Age was unparalleled is false. In both instances, the US benefited from the explosion in construction and rebuilding.

The Gilded Age had these unique things driving economic growth. Westward expansion added new settled territory and arable lands. So wheat, corn and other grain production grew rapidly. There were many new inventions like the telegraph, the telephone, electric lighting, the horseless carriage and the typewriter. New resources were discovered, from massive coal deposits in Appalachia to oil in Pennsylvania and iron ore in the Great Lakes region.

The railroads were expanded massively, and heavier gage tracks were developed to carry larger freight cars and locomotives. Engineers designed stronger bridges capable of carrying these heavy engines with their loads. Refrigeration cars were invented, allowing the first transport of perishable goods over great distances. The horseless carriage began to replace horse drawn carts, leading to the need for road construction and auto manufacturing. The age was called the “second industrial revolution”. I fail to see how any of these things would suddenly happen again today if only the government would get out of the way.

While this growth spurt was were very good for the growing nation, all was not as rosy as you wish to believe. The Gilded Age was the age of tycoons. Men like John D. Rockefeller, Jay Gould, J. P. Morgan, Andrew W. Mellon, Andrew Carnegie, Henry Flagler, Henry H. Rogers, Cornelius Vanderbilt of the Vanderbilt family and the Astor family accounted for much of the total rise in per capita income. There was massive poverty. The robber barons, as they were dubbed, used their wealth to bribe government, and to ruthlessly acquire ever more for themselves. Have you ever heard of wage slavery? That was a popular strategy the robber barons used to further line their pockets. During the railroad strike of 1886, Gould hired strike breakers and put the wage slaves back in their place. Gould afterward boasted “I can hire one-half of the working class to kill the other half.” Charming man.

Also look at the lovely work of the Pinkerton Detective Agency in the “West Virginia Coal Wars”: They sent in hired thugs to lynch and gun down unarmed union leaders who were only asking for minimal workplace safety rules in the dangerous business of bringing black gold up from the ground. The US Army had to be sent in to stop the Robber Barons killing people for profit.

Aside from a small cotire of shop owners and skilled craftsmen, there was no middle class. Masses of immigrants flooded to America to find respite from intolerable conditions in Europe, or to build new lives in the New World. They were exploited horribly. New York developed vast immigrant neighborhoods where ethnic prejudices ran deep. Immigrants were given dangerous jobs doing backbreaking labor that left little time to sleep for a pay that barely let them survive.

Before refrigeration, milk for the growing city was originally brought in on horse drawn carts. As the urban sprawl increased the distance milk had to travel, it often arrived spoiled.

Entrepreneurs solved this problem when they discovered you could feed milk cattle the leftover mash from beer and whisky making. Cow farms sprang up next to each distillery making cheap whisky to keep the immigrant population happy. Used mash lacks the nutrients to provide good milk, though. The milk was thin. The distillery owners solved this problem by mixing in flour, plaster or whatever other white substance was handy. Thousands of immigrant children died from this “swill milk.” But bought off city officials, who knew exactly what was going on, did nothing because they were just dirty ferigners anyway. It took the publication of Upton Sinclair’s blockbuster expose, “_The Jungle_”: describing the filth in the Chicago Meat Packing Industry to wake Americans to the fact that unregulated capitalists will often put profits before people’;s very lives. Nothing matters to them but their growing wealth.

It all sounds familiar, doesn’t it? Pure laissez-faire capitalism with no regulation, union busting. The Greedy Oligarch Party wants to take us right back to wage slavery of the 19th century so their Greedy Oligarch Pig overlords can have everything save a subsistence wage for the masses, the wage slaves.

It is far from my ignorance of history that makes wary of your trust in free-market freebooters. It is my understanding of history outside the revisionist spin of the GOP servants of today’s would-be robber barons that tells me this is a terrible, unpatriotic idea. I have no interest in going back to the 19th century. Rather, I suggest that those that yearn for a freebooter economy book the next flight to Somalia. There will be no troublesome government there to regulate your wealth acquisition. There are no taxes. So if you really believe in those values, bon voyage and enjoy the Somalian paradise..

And your study does not supersede facts. Right wing think tanks crank Big Lie junk studies out like it’s going out of style. Progressive taxation worked beautifully from 1933 to 1970 when the tax code was made far more regressive. It is regressive taxation that doesn’t work. Bush proved it. He cut the Capital gains tax by nearly 50% and slashed taxes for the wealthy. He had the worst job creation record since Herbert Hoover. Clinton made taxes more progressive, balanced the budget, and had the best job creation record of any president.

wundayatta's avatar

And just watch. Things are turning around because of Obama’s policies. If he gets reelected, we’ll see a boom that might even be bigger than the Clintonian boom.

One thing I forgot that the SOTU speech reminded me of. Getting out of Iraq has freed up billions of dollars that can go to deficit reduction or, hopefully, economic stimulus.

I have my own informal economic indicator at work. It’s my parking lot indicator. When things were going well in the economy, I had to go farther and farther up to find a free parking place. Last semester, I had my pick of parking places on the third and sometimes even the second level.

This semester? All of a sudden, I’m up on the 5th level! The students are back and they are willing to shell out for off street parking again.

ETpro's avatar

@wundayatta Yes, I can feel that boom coming as well. I;m speculating, gazing into my notoriously inaccurate crystal ball. If anybody knows where I can get it recalibrated, I’m all ears. But foggy as the view it supplies may be, I see technology breakthroughs in clean, renewable energy driving the next great boom. But if Republicans take the Senate and White House, they will slash spending in research, education and infrastructure. That will snuff out any hope of a boom and instead usher in a new season of decline.

At the rate The Party of No Personal Responsibility, aka GOP, learns (still taking no responsibility for the Great Depression, the two savings and loan bailouts, and the Great Recession under Bush; they may have to experiment with their supply-side fixes to a demand side problem for many decades before they run out of scapegoats to blame for its repeated failure.

I still haven’t heard a single good metaphor to capture the thoughts playing out in this discussion, though. I certainly don’t have one. But I am sure it can be captured in pithy form by someone, and will be before the Novermer election.

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