threat by the sinister trio

Concentrated Wealth - Ah you should be safe in here - cartoon of someone hiding money

In his book Aftershock: The Next Economy and America’s Future, Robert Reich reviews features in our society that undermine democracy – particularly concentrated wealth. And the off-shoot, lobbyists in effect bribing representatives and senators, vulnerable because they must raise money for their ever more expensive campaigns. The successful ones, when they leave office, with very nice self-voted retirement benefits, often go to work for the lobbying firms or corporations that previously had been lobbying them and for whom they, likely, had sponsored legislation or other favors… or attached profitable hidden amendments to bills.

The average starting pay for retired politicians who take the lobbying route is about $500,000. So alluring is the game that even senators such as Richard Gephardt, who railed against oil baron and lobbyist corruption while running for president in 1988, succumbed, heading up a lobbying firm with Goldman Sachs as a client and chairing an organization that worked against one of his previous pet issues, national health care.

Aftershock: The Next Economy and America's Future by Robert ReichTax policy too favors the wealthy, thanks to this same corruption. George Bush I. expanded the amount one can inherit tax-free from one million to $3.5 million which obviously only serves the wealthy. Clinton extended the policy and Obama then generously allowed the wealthy to tranfer $10 million to their children, tax free.

All this means either equivalent cuts in services or increases on middle class taxes. The servicing of the wealthy by our politicians can hardly be completely hidden, though right wing radio and Faux News work mightily to obscure it, to blame the resulting malaise on immigrants, minorities the poor or some other soft target. Reich warns that this creates fertile ground for demagoguery (written before the rise of Trump, Reich’s analysis goes some way toward explaining it).

But the writer’s main theme revolves around how the transfer of wealth toward the 1% has reduced middle class consumption. After World War II. until about 1975, a more equalitarian situation had evolved where substantial numbers of ordinary citizens were able to earn a decent living. This consumption drove the economy and that drive wavered as greed-driven policies (see above) shipped jobs over seas, well-paid with good benefits, good prospects for retirement, replacing them with fewer and lower paying “service” jobs with little or no benefits or security. Reich claims that the middle class responded with three strategies to maintain their “lifestyle”: working multiple jobs; spouses joining the work force; and credit card debt. When there were no more extra hours to work in a week, for both spouses, when the credit cards were maxed out, the piper fell due.

An interesting story Reich relates to illustrate his theory brings up an important figure in the Roosevelt Administration who I had never heard of. Marriner Eccles chaired the Federal Reserve Board from 1934 to 1948. Eccles was a multi-millionare tycoon whose fortune survived the 1929 crash but not his faith in the established order.

While other members of the 1% took the position that nothing needed to be done, viewing the market as self-correcting, Eccles arrived at a different conclusion. He recognized that the rich have disproportionate influence on government policies, pushing programs that benefitted them, not the more general population. He basically came to the conclusion that middle class consumption was essential to a healthy economy. He despaired of doing anything about it though he did share his ideas by writing about them and testifying before congress. This led to his hiring as advisor to the new president and a year later, appointment to the Federal Reserve where the idea of doing nothing to benefit the general population was set aside in favor of what became Roosevelt’s New Deal. Roosevelt was reluctant to try Eccles’ ideas but was persuaded. This laid the foundation for the 1975 – 1980 period of prosperity, according to Reich. These policies were bitterly opposed by conservatives at the time and they awaited their moment to return to the pre-Roosevelt philosophy which finally arrived when they hired the actor Ronald Reagan to play the part of president.

Explaining the voting behavior of the U.S. citizenry, as Reich does, by shifts in the economy and erosion of consumptive power probably has some validity but overlooks what Jane Mayer (in her book Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right), Chomsky and others have pointed out: there is sophisticated and deliberate manipulation by a powerful propaganda system, financed by political activists among the 1%, figures like the Koch brothers, Bradley foundation and others. They make full use of the campaign-finance vulnerability of those seeking political office but they go far beyond that. As Mayer has pointed out, for example, the Kochs have created a political organization pushing their agenda (basically a return to feudalism) that is larger, and better funded, than the Republican Party.

Reich argues that when wealth is concentrated there is far less consumption driving the economy. So his complaint is not about fairness or justice, the more traditional left argument, but about the efficient workings of the economy. There is quite a bit to gloss over in this point of view. Reich does mention the inequities of class and racial bigotry, how an intentional transfer of wealth occurred starting, with a vengeance, as said above, at Reagan’s ascendency, and continuing steadily up to the 2008 crash. He points out that a television set made in Taiwan doesn’t sell here for less than one made in the U.S. The greater profits made from cheaper labor go to the top and the loss, of course, goes to the bottom,… or middle. But he doesn’t dwell there.

So far as I can tell, he’s right, hell, I remember!, that things were fairer, we (some of us) were better off during that post WW II. period. It could have been vastly improved and we should work to remake our society. But I see no recognition in his position of the fact that endless consumption is not environmentally sustainable, nor does it produce well-being. In the hierarchy of needs put forth by Abraham Maslow, who Reich acknowledges, once basic needs are met, more of the same does not satisfy. Reich’s position is radical, in the context of our current 1% dominated political environment, but it is inadequate to address the crisis, not just of the malaise and anome of the victims of greed, but of the threat posed to our species, our civilization, perhaps life on earth, by the sinister trio of pollution, nuclear war and over-population.

What would a society look like that did adequately address the crisis facing humanity? I would venture that answering that question would involve this one: how can we create a society that provides food, clothing, shelter, education and health care for all world citizens in a way that does not trash the life system or crowd out other species? The complete answer is not on the tip of my tongue but it is something we best be about, and soon. The four years (minimum) that we are losing with the disastrous and discouraging Trump administration may bring us to or over the tipping point but as Bernie Sanders points out, our survival is too important, we do not have the RIGHT to give up now.

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Image: the feature illustration is by the author, Tom Ferguson.
Tom Ferguson

Tom Ferguson

Tom is a painter, a cartoonist, a musician, a thinker and more. View some of his web sites:

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