Tuesday, March 09, 2004
Gotta Serve Somebody
In this case we're not talking about Bob Dylan's spiritual ultimatum, rather our economic system. Simply put, there is a great conflict between whether the economy and its fruits serve the owning class or the working class, the elite or the vox populi. And despite being a major fault line in worldviews, it has been almost unspeakably taboo to bring it up.
Republicans hurl the accusation of 'class warfare' if Democrats even mention issues of equity and class, and they've done so with great success over the last quarter century. So much so, that we have to get to a point where our economy is this shaky, this dire for average people, that talk of equity and fairness can even be raised, albeit timidly.
The reality of course, is that GOP standard bearers and TeamBush have been waging class warfare very effectively--gutting tax provisions for the wealthiest to the detriment of the common good, providing subsidies and loopholes for those who can afford enough lawyers and accountants to exploit them while increasing IRS scrutiny on families taking the Earned Income Credit, people who earn a step above the poverty line.
Warren Buffett has long railed against such excess, and in his last letter to shareholders he again noted, "Tax breaks for corporations -- and their investors, particularly large ones -- were a major part of the administration's 2002 and 2003 initiatives," Buffett said. "If class warfare is being waged in America, my class is clearly winning."
He went on to note that, "Corporate income taxes in fiscal 2003 accounted for 7.4% of all federal tax receipts, down from a post-war peak of 32% in 1952. With one exception (1983), last year’s percentage is the lowest recorded since data was first published in 1934."
But despite his wealth and influence, Buffett's voice is drowned out by the shouts of those financial managers and corporate CEOs urging us to relax and to buy in to (quite literally) the current system. Each day since February's very disappointing jobs numbers came out Friday I've read rosy analyses about a strong economy and a strong market--as if those two are inexorably linked. Even somewhat neutral articles higlighted positive chestnuts such as this:"If nothing else, the jobs figure shows that companies are keeping costs down, and that'll help earnings," said Peter Dunay, chief market strategist at Wall Street Access. "At least in the near term, corporate profitability will be a key driver in this market."
Note what's really important here: earnings. That people are losing jobs at an incredible rate just doesn't matter to the doyens and benefactors of Wall Street, as long as stock prices are strong. And therein lies the rub of our 'jobless recovery'--labor is hurting but capital (owners) remain strong.
Contrast the above view with that of Peter Kellman, who urges us to begin again to value the words of Abraham Lincoln, who said, "Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never exist if labor did not exist first. Labor is the superior of capital, and deserves much the higher consideration."
Kellman's article is a fine quick synopsis of the crisis facing workers in our country. We have gone so far that we lack even the ability to discuss such issues. He notes that, "It's difficult for people today to think about labor and capital - better understood as wealth - in terms that people did in Lincoln's time. The shadow capital casts is so strong, the juxtaposition of labor and capital has all but disappeared from our language. The influence of that wealth now dominates in the press, in the courts, in the legislatures, and on the campaign trail. Sadly, when a society loses the words to express a concept - such as worker rights - the society loses that concept."
A far more detailed analysis of where we've come from, where we are, and what choices lie in our future can be gleaned from Kevin Phillip's excellent book Wealth and Democracy. The Publishers Weekly offered this review:
"The influence of money on government is now, more then ever, a hot political issue. With a grand historical sweep that covers more than three centuries, Phillips's astute analysis of the effects of wealth and capital upon democracy is both eye-opening and disturbing. While his main thrust is an examination of "the increasing reliance of the American economy on finance," Phillips weaves a far wider, nuanced tapestry. Carefully building his arguments with telling detail (the growth of investment capitalism in Elizabethan England was essentially the result of privateering and piracy) and statistical evidence, he charts a long, exceptionally complicated history of interplay between governance and the accumulation of wealth. Explicating late-20th-century U.S. capitalism, for instance, by drawing comparisons to the technological advances and ensuing changes in commerce in the Renaissance, he also discusses how 18th-century Spanish colonialism is relevant to how "lending power began to erode... broad prosperity" in 1960s and '70s America. Finding detailed correspondence between the giddy greediness of America's Gilded Age (complete with a surprising quote from Walt Whitman "my theory includes riches and the getting of riches") and the "great technology mania and bubble of the 1990s," Phillips (The Cousins' War, etc.), noted NPR political analyst, notes that "the imbalance of wealth and democracy in the United States is unsustainable," as it was in highly nationalistic mid-18th-century Holland and late-19th-century Britain both of which underwent major social and political upheaval from the middle and underclasses. Lucidly written, scrupulously argued and culturally wide-ranging, this is an important and deeply original analysis of U.S. history and economics."
In this case we're not talking about Bob Dylan's spiritual ultimatum, rather our economic system. Simply put, there is a great conflict between whether the economy and its fruits serve the owning class or the working class, the elite or the vox populi. And despite being a major fault line in worldviews, it has been almost unspeakably taboo to bring it up.
Republicans hurl the accusation of 'class warfare' if Democrats even mention issues of equity and class, and they've done so with great success over the last quarter century. So much so, that we have to get to a point where our economy is this shaky, this dire for average people, that talk of equity and fairness can even be raised, albeit timidly.
The reality of course, is that GOP standard bearers and TeamBush have been waging class warfare very effectively--gutting tax provisions for the wealthiest to the detriment of the common good, providing subsidies and loopholes for those who can afford enough lawyers and accountants to exploit them while increasing IRS scrutiny on families taking the Earned Income Credit, people who earn a step above the poverty line.
Warren Buffett has long railed against such excess, and in his last letter to shareholders he again noted, "Tax breaks for corporations -- and their investors, particularly large ones -- were a major part of the administration's 2002 and 2003 initiatives," Buffett said. "If class warfare is being waged in America, my class is clearly winning."
He went on to note that, "Corporate income taxes in fiscal 2003 accounted for 7.4% of all federal tax receipts, down from a post-war peak of 32% in 1952. With one exception (1983), last year’s percentage is the lowest recorded since data was first published in 1934."
But despite his wealth and influence, Buffett's voice is drowned out by the shouts of those financial managers and corporate CEOs urging us to relax and to buy in to (quite literally) the current system. Each day since February's very disappointing jobs numbers came out Friday I've read rosy analyses about a strong economy and a strong market--as if those two are inexorably linked. Even somewhat neutral articles higlighted positive chestnuts such as this:"If nothing else, the jobs figure shows that companies are keeping costs down, and that'll help earnings," said Peter Dunay, chief market strategist at Wall Street Access. "At least in the near term, corporate profitability will be a key driver in this market."
Note what's really important here: earnings. That people are losing jobs at an incredible rate just doesn't matter to the doyens and benefactors of Wall Street, as long as stock prices are strong. And therein lies the rub of our 'jobless recovery'--labor is hurting but capital (owners) remain strong.
Contrast the above view with that of Peter Kellman, who urges us to begin again to value the words of Abraham Lincoln, who said, "Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never exist if labor did not exist first. Labor is the superior of capital, and deserves much the higher consideration."
Kellman's article is a fine quick synopsis of the crisis facing workers in our country. We have gone so far that we lack even the ability to discuss such issues. He notes that, "It's difficult for people today to think about labor and capital - better understood as wealth - in terms that people did in Lincoln's time. The shadow capital casts is so strong, the juxtaposition of labor and capital has all but disappeared from our language. The influence of that wealth now dominates in the press, in the courts, in the legislatures, and on the campaign trail. Sadly, when a society loses the words to express a concept - such as worker rights - the society loses that concept."
A far more detailed analysis of where we've come from, where we are, and what choices lie in our future can be gleaned from Kevin Phillip's excellent book Wealth and Democracy. The Publishers Weekly offered this review:
"The influence of money on government is now, more then ever, a hot political issue. With a grand historical sweep that covers more than three centuries, Phillips's astute analysis of the effects of wealth and capital upon democracy is both eye-opening and disturbing. While his main thrust is an examination of "the increasing reliance of the American economy on finance," Phillips weaves a far wider, nuanced tapestry. Carefully building his arguments with telling detail (the growth of investment capitalism in Elizabethan England was essentially the result of privateering and piracy) and statistical evidence, he charts a long, exceptionally complicated history of interplay between governance and the accumulation of wealth. Explicating late-20th-century U.S. capitalism, for instance, by drawing comparisons to the technological advances and ensuing changes in commerce in the Renaissance, he also discusses how 18th-century Spanish colonialism is relevant to how "lending power began to erode... broad prosperity" in 1960s and '70s America. Finding detailed correspondence between the giddy greediness of America's Gilded Age (complete with a surprising quote from Walt Whitman "my theory includes riches and the getting of riches") and the "great technology mania and bubble of the 1990s," Phillips (The Cousins' War, etc.), noted NPR political analyst, notes that "the imbalance of wealth and democracy in the United States is unsustainable," as it was in highly nationalistic mid-18th-century Holland and late-19th-century Britain both of which underwent major social and political upheaval from the middle and underclasses. Lucidly written, scrupulously argued and culturally wide-ranging, this is an important and deeply original analysis of U.S. history and economics."
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