You know the statistics. Income inequality in the United States has not been this pronounced in over a century. The top 10 percent has 50 percent of the country’s income, and the upper 1 percent has 20 percent of the country’s income. A quarter of American workers struggle on wages of less than $10 an hour, putting them below the poverty line, while the income of the average CEO of a major corporation is more than 300 times the pay of his or her average worker, a massive increase given that in the 1950s the average CEO made 20 times what his or her worker made. This income inequality is global. The richest 1 percent of the world’s population controls 40 percent of the world’s wealth. And it is getting worse.
The richest 1 percent of the world’s population controls 40 percent of the world’s wealth. And it is getting worse.
What will the consequences of this inequality be economically and politically? How much worse will it get with the imposition of austerity programs and a new tax code that slashes rates for corporations, allowing companies to hoard money or buy back their own stock rather than invest in the economy? How will we endure as health care insurance premiums steadily rise and social and public welfare programs such as Medicaid, Pell Grants and food stamps are cut? And under the tax code revision signed by President Trump in December, rates will increase over the long term for the working class. Over the next decade, the revision will cost the nation roughly $1.5 trillion. Where will this end?
We live in a new feudalism. We have been stripped of political power. Workers are trapped in menial jobs, forced into crippling debt and paid stagnant or declining wages. Chronic poverty and exploitative working conditions in many parts of the world, and increasingly in the United States, replicate the hell endured by industrial workers at the end of the 19th century. The complete capture of ruling institutions by corporations and their oligarchic elites, including the two dominant political parties, the courts and the press, means there is no mechanism left by which we can reform the system or protect ourselves from mounting abuse. We will revolt or become 21st-century serfs, forced to live in misery and brutally oppressed by militarized police and the most sophisticated security and surveillance system in human history while the ruling oligarchs continue to wallow in unimagined wealth and opulence.
“The new tax code is explosive excess,” the economist Richard Wolff said when we spoke in New York. “We’ve had 30 or 40 years where corporations paid less taxes than they ever did. They made more money than they ever did. They have been able to keep wages stagnant while the productivity of labor rose. This is the last moment historically they need another big gift, let alone at the expense of the very people whose wages have been stagnant. To give them a tax bust of this sort, basically reducing from 35 percent to 20 percent, is a 40 percent cut. This kind of crazy excess reminds you of the [kings] of France before the French Revolution when the level of excess reached an explosive social dimension. That’s where we are.”
When capitalism collapsed in the 1930s, the response of the working class was to form unions, strike and protest. The workers pitted power against power. They forced the oligarchs to respond with the New Deal, which created 12 million government-funded jobs, Social Security, the minimum wage and unemployment compensation. The country’s infrastructure was modernized and maintained. The Civilian Conservation Corps (CCC) alone employed 300,000 workers to form and maintain national parks.
“The message of the organized working class was unequivocal,” Wolff said. “Either you help us through this Depression or there will be a revolution.”
The New Deal programs were paid for by taxing the rich. Even in the 1950s, during the Eisenhower presidency, the top marginal rate was 91 percent.
The rich, enraged, mounted a war to undo these programs and restore the social inequality that makes them wealthy at our expense. We have come full circle. Dissidents, radicals and critics of capitalism are once again branded as agents of foreign powers and purged from universities and the airwaves. The labor movement has been dismantled, including through so-called right-to-work laws that prohibit agreements between unions and employers. The last remaining regulations to thwart corporate pillage and pollution are removed. Although government is the only mechanism we have to protect ourselves from predatory oligarchs and corporations, the rich tell us that government is the problem, not the solution. Austerity and a bloated and out-of-control military budget, along with the privatization of public services and institutions such as utilities and public education, we are assured, are the way to economic growth. And presiding over this assault and unchecked kleptocracy are the con artist in chief and his billionaire friends from the fossil fuel and war industries and elsewhere on Wall Street.
“We’ve given a free pass to a capitalist system because we’ve been afraid to debate it.”
The elites cook statistics to lie about a recovery from the 2008 global financial crash. To gather unemployment statistics, for example, government agents ask people two questions: Are you working? If they answer “yes” they are counted as employed even if they have a temporary job in which they work only an hour a week. If they say “no” they are asked if they have been looking for work. If they have not looked for work in the last four weeks they are magically erased from the unemployment rolls. And then there is the long list of those not counted as unemployed, such as prisoners, the retired, stay-at-home spouses and high school and college students who want jobs. Alternative facts did not begin with Donald Trump.
“You don’t have to be a statistical genius to understand that over the last 10 years, a significant number of people gave up looking because it’s too disgusting,” Wolff said. “The jobs they were offered were inferior to what they had before or so insecure that it made their family life impossible. They went back to school, went into the illegal economy or began to live off their friends, relatives and neighbors.”