The words equality and inequality have been been thrown about so
often that they bring a knee jerk sickening reaction. People just don't
want to hear about it even if they recognize the various abuses and
corporate influence over government policy. Anything that is endlessly
regurgitated for decades, passionately opinionated, and presented by
inappropriate messengers can become ridiculously dull and inspire an
instinctive shrug. This includes pushy religious moralizing babble by
rich adulterous preachers, factional agenda by poorly educated silly
demagogues like Al Sharpton, or appeals to income equality by college
educated white children of the bourgeois. Whenever their mouths open we
want them shut immediately since we understand the background of
hypocricies, corruption, temporary fad following behavior, lack of
education, superstition, and blatant factional interest. Decades of the
passionate babble and counter-babble has trained us to ignore it as an
irritating noise akin to one found on crowded subway platforms.
It
doesn't help that Americans have to live in a hyper ideological great
power that no longer has an ideological great power competitor. Cold war
competition at least allowed for an extreme opposite point of view to
be presented to the world and brought attention to blatantly obvious
problems like race relations. However, the world wasn't faced with a
"fair and balanced presentation". Non-superpowers had to endure decades
of a situation similar to a modern news talk show with two guests
talking over each other (or Jerry Springer). The talking head
equivalents, from Moscow and Washington DC, poured at each other endless
streams of factual data mixed with propaganda. Factual positive
domestic developments and enemy's factual shortcomings were of course
exaggerated. Besides exaggeration, everything was viewed through an
increasingly sharpened and distorting ideological lens. On top of all
these lies, the intelligence agencies of both countries waged endless
information/propaganda warfare directed at the whole globe. After
decades of this full orchestra brainwashing, one society finally
collapsed and started dealing with reality. After hitting rock bottom,
Russians finally started to at least try to be objective when it comes
to actual statistics, numbers, scientific findings, and facts on the
ground. Basing national policy on faith based notions of the Soviet
dream and way of life proved to be destructive. The Russian society
however readily accepted American capitalism (to a higher degree than
Germans or Japanese) since it was easy to replace one rigidly
ideological construct for another. We'll see American gangster finance
live in Eastern Europe long after it declines here.
United States
did not undergo a similar transformation since they didn't have to. The
tired Soviet talking head that Americans were shouting at, finally went
blue in the face and had a heart attack. This was taken as complete
affirmation of years of American propaganda as at least effective if not
totally factual. Major players in the world (India, Japan, Brazil,
Turkey, Poland) stood up and cheered like satisfied Jerry Springer
guests while getting pats on the back for good participation. They
stepped further from central command economic structures and dismissed
concerns formerly brought by socialist theorists.
Obviously it's
impossible to disentangle ideology from empirical evidence. Even
objectivity and scientific agreements are just forms of consensual
intersubjectivity. However, it's always possible to at least try to
approach a situation like a disinterested anthropologist. It is
certainly possible for a rich white British person to study poverty in
India and describe it with relative accuracy without being an emotional
"bleeding heart" or being accused of being in the pocket of the poor
Indian lobby group. An educated American can study the income inequality
in Brazil or Mexico and describe the political situation without being
accused of siding with a particular ideological faction in either of
those countries. It is very possible to be relatively disinterested when
describing observable reality for the purposes of history, empirical
prediction, and research to be used by individual who craft policy.
Americans definitely study and report on other societies like this all
the time and even make predictions.
But what happens when say,
academics in France or China observe the American domestic situation and
conclude that the situation is negative and unhealthy? That's right,
they are immediately considered either darned socialists, know-nothing
bleeding hearts, and/or ideologues with their own anti-American agenda.
Even domestic Americans who give descriptions of unpleasant realities
are scorned and rejected even if they are Ivy League respectable
authorities on the subject (and in many case scorned because of that).
This is analogous to a person with a drinking problem accusing everybody
who mentions it that they have an agenda, that they need a drink as
well, that they don't know anything since they don't live in the
person's house, or that they want the alcoholic to fail.
How did
it come to this? Well, Americans suffer from the same problem Soviets
did in the 1970s when it comes to living within a rigidly ideological
social bubble. Americans got so used to their own authorities blatantly
using faith based ideological slogans, distorting facts, and being
ridiculously one sided, that they started thinking all world's
authorities do the same. The way a thief thinks everybody else steals,
rigid ideologues are incapable of looking at opposing points of view
without thinking it's not ideology as well. This is best seen in the
fundamentalist religious communities. The clergy had told the faithful
that their lifestyle is moral for so long, that whenever the flock
encounters people who live/think differently, it considers the different
lifestyles as immoral and backed by a sinister agenda.
It is time
to start differentiating between the blatant agenda pushing factional
messengers (ex. Jesse Jackson and Dick Cheney) and milder subconscious
agenda of people trying to be reporters and scientists. To this day,
there are 20% of Russians who vote for the communist party and march in
the streets and talk of how good it was during the slow rot in the
1980s. Similar ideological inertia will happen with the American elderly
in the future after the current system transforms itself to survive in
the modern world. One might laugh at the notion of American propaganda
(of the capitalist American dream) being as extensively imposed as in
the authoritarian Soviet Union. However, before the American version of
glasnost became available with the internet, serious opposing points of
view were heard even less by the general public. One never really heard
national television news stations and radio shows seriously discuss
Scandinavian style welfare, using more money on building real industry
and jobs instead of more aircraft carriers to outspend Moscow, or
creating a better quality of life than the Germans.
We must
remember that serious discussion (on improving American quality of life,
on solidifying socioeconomic standing of an average American, or
creating Japanese level industrial workforce), did not materialize even
after Soviet Union collapsed. Instead the only discussion that briefly
bubbled up concerned the next plan of action for the American military.
It
took a few paragraphs to prepare the reader for discussion about
economic inequality in the United States. Why is the discussion of
inequality even necessary? It's obvious that inequality among men exists
naturally in any system. Western style hybrid capitalism as we know it
is here to stay for years into the future in one form or another.
Inequality found in United States however, stopped being sustainable a
while back and is now the key cause of United States declining into the
21st century relative to rising powers of China and EU. The decline at
this point, is unstoppable and the only discussion is whether it will be
a slow gradual one (similar to Spain in 19th century), or a rapid one
with potential social instability.
Yes, there were also the
crushing economic burdens of being an expansionary ideological power and
the transfer of heavy industry to competitors like China. These burdens
pale compared to the root problem of monstrous inequality that allowed
most of the deeper structural problems and superficial symptoms to
occur. We've heard people throw around rugged unresearched statements
concerning how the top 1% owns half of the wealth and the like.
Simultaneously, we've also heard the counter statements that the richest
pay the biggest share of taxes. When such statements are thrown about,
the discussion becomes another yapping Jerry Springer episode to tune
out of.
There is actual historical data constantly being collected, shown, and ignored by highly skilled people. Lets look at some.
In
April of last year, one of the oldest and most read propaganda
mouthpieces, The Wall Street Journal, decided it was a good idea to
throw a few bones to its readers. The readers of course are the people
who consider themselves financially independent "middle class" and not
just the equivalents of delivery boys for the politically connected
oligarchs. The readers are likely to include newer assimilated ethnic
groups like Irish and Italians trying to catch up and overworking to get
their 60-150 grand a year. The oligarchs themselves would never turn to
WSJ for their news and opinions. Summer of 2007 to summer of 2008 saw
historic rises in gas prices and we saw people like Lou Dobbs throw
daily fits concerning the illegal immigration. Occasional articles began
to appear in nationally circulated media to cater to rising concern
about "middle class" problems. Some of these articles increasingly began
to include deep probing studies about structural and social infirmities
of American civilization.
The source of the example article above
comes from a very interesting Berkley study by Emmanuel Saez, a John
Bates Clark Medal award winner in 2009 (Milton Friedman and Paul Krugman
amongst the past winners), and possible influence on Obama's taxation
thinking. The data in excel format is here:
(elsa.berkeley.edu/~saez/TabFig2006.xls ). We see a ridiculous graph
that shows a few things not readily noticed due to the study's
percentile breakdown of the top 10% of earners. The data shows annual
wealth generation both including and excluding capital gains like
stocks.
First, lets analyze the top 1% of the earners without
looking at additional wealth they get through capital investments. The
reported real income (adjusted for inflation) of richest 0.01% of the
working population (14,000 oligarch households making an average of
$16.5 million a year with at least $6.5 million annual income to be part
of the group), grew 22% from 2000 to 2006. Average real incomes of the
richest 0.1% of households (133,000 oligarch households making an
average of $3 million annually and needing to make from $1.4 million up
to $6.5 million annually to be part of the group), grew 8.5%. To be
included in the richest 1%, a household had to just pass the measly
threshold of $376,000 dollars a year. There were 1,333,249 households
that made up most of the top 1%, were above 99% of American workers, but
paled compared to 0.1% of the population. Many were the professional
elites and not necessarily financial wizards and money changers.
This
means that 10% of 10% of 1% of the richest households (1 out of every
10,000 households), were able to almost triple their annual earnings
compared to 1,500,000 households who are also in the richest 1%. This is
with capital gains EXCLUDED from earnings estimates. It is very telling
that the elite professional and managerial class numbering over a
million (represented by nationalist democratic capitalist faction) was
not able to politically outspend less than 150,000 oligarch households
in the last few elections. The attractiveness of financial capitalism
allowed many nationalist democratic petty millionaires to be co-opted.
We
can see how capital gains begin to matter exponentially once you start
getting into 5% of the population. Capital gains only added 95 billion
dollars in wealth for 90% of the population (split between over 130
million households) but they added 678 billion dollars to richest 10%.
Incomes of the non-professional elite oligarch class, of those 0.1%+
jumped 60%. Capital gains only increased income of bottom 90% by just
2.3%. Republican leadership effectively convinced a large portion of
50-100 grand a year white collar demographic that they're working in
their interest and that capital gains will actually unburden them
financially. It was remarkable that the same tactic always used on
poorly educated religious blue collar demographic also worked on petty
white collar. Even the petty millionaires, tied to expensive property
bubble speculation, got politically seduced sufficiently to throw their
financial support to the internationalist super rich.
In 2003,
something historic happened. For the first time since 1928, the top 1%
of the population surpassed bottom 99% when it comes to rate of wealth
generation. Rate of wealth generation is a good indicator of the overall
political power of a faction when it comes to dividing the limited
resources of a nation.
Recently, government of Brazil has declared
major success in reduction of poverty by citing that the top 10% went
from owning 49.47% of annual national income in March 2002 to owning
46.31% in October 2008. Obviously we don't know to what degree the stock
crash and capital gains reduction in fall of 2008 played into that. The
fact of the matter is that Brazilian leadership, presiding over one of
the most economically unequal societies on the planet, cited rise in
share of bottom 10% and decline in share of top 90% as a measure of
progress. In United States however, the richest 10% began to earn 49.3%
of national annual income in 2006. The GINI index of inequality shows
that US has been becoming more like Brazil for the last 30 years. US gap
between the poorest and richest started off roughly in same category as
other Western nations (even Norway) in the 1960s, and is now surpassing
some South American nations in width.
CONCLUSION:
Political
scientists consider extreme levels of socioeconomic inequality to be
socially destabilizing in terms of factional infighting, violence, and
authoritarian control of government organs by the elites for self
enrichment. United States seems to have escaped social instability due
to its great power status and most of its population living in an
ideological bubble (and most people never traveling outside of the
country). Only in relatively recent times, did the top 30% of the
population begin to get exposed to other hybrid systems through
increased international travel.
The peak of American civilization
seems to have occurred in 1968-1973 period. Data points to 1973 as being
the furthest extent of American industrial capitalism and real physical
influence for most of its population. This strength even existed after
being partially drained through resources devoted to colonial
occupation.
The richest 1% expanded their share of wealth far less
than the bottom 99%. The rise in prices briefly corresponded to real
incomes. American workers were able to save and better their condition
without constantly being a few steps behind either inflation or
oligarchal factions. The country had historically high degree of
economic equality, the burden of natural resource imports was only in
its infant stages, and American workers were at the peak of their
political and purchasing power. This allowed them sufficient leverage to
effectively compete with oligarch factions for influence over the
federal government. Federal government was prompted to engage in a
number of nationalist measures that benefited all instead of some.
The
health of the American society caused a multitude of reversals for
socialist causes in the imperial periphery of Western Europe.
Reactionary forces in Europe were able to stabilize their societies
since American workers demonstrated that American way of life is more
effective than the socialist one. Many European states elaborated on
JFK/Lyndon Johnson's great society promises to solidify state
capitalism.
In United States itself, the oligarchs took a number
of years to reorganize and stage a comeback. The last nationalist
president, who really tried to preserve American way of life and appeal
to all Americans instead of some, was Jimmy Carter. He tried to improve
efficiency of American capitalism through deregulation, improvement of
workers' rights, new energy policy, and actually leading imperial
periphery through ideological example. He had the misfortune of being in
control of the nation right after its civilizational peak. Oligarchs
effectively destroyed Carter's reputation and created a reactionary wave
that relied on formerly apolitical religious rural population. Wedge
issues, militarism, racial tensions, and rural resentment against the
cities were exploited to put an appealing puppet (a former actor) in
power. It took a few years to dismantle previous nationalist policies of
Johnson and Carter. Once dismantled, the oligarchs began rapid
expansion of their income in late 1980s that just accelerated to the
present day. In the first half of the 20th century, many oligarchs were
rooted to the American soil since travel on propeller aircraft was
dangerous and ships/trains took a long time. That led to many early
oligarchs to have nationalist tendencies, improve value of nearby land,
and to focus on real industry. With increased globalization, the
oligarchs of 1980s now looked at the whole world as their playground and
their cosmopolitan sentiments had little allegiance to United States.
Physical decline of US and the debt were irreversible and mass looting
began in the form of moving factories and personal material wealth
abroad to other growing societies.
The fall of Soviet Union
accelerated the process and allowed the looting to go on longer.
American dollar could now be pushed onto hundreds of millions of new
people and the national debt could be expanded. The Bush administration
was the most blatant show of force by the top 1% and this period saw the
peak of illusionary oligarchal finance capitalism. In 2008, millions of
elite professionals and petty millionaires were finally able to
outspend and wrestle away control from oligarchs. They were not making
as much money from property speculation and energy prices made their
businesses less profitable and lifestyles more expensive. Even then, the
poorest of top 5% were only able to take power due to successful
mobilization of college educated and blacks in sufficient numbers,
financial capitalism declining for a few years, and occupational
reversals in the Middle East. The resilience of the oligarchal faction
is demonstrated by the fact their candidate only lost by less than 10%
during the biggest economic crash since 1929.
Regardless of change
in leadership, the petty millionaires now in charge, will only advance
their own interests. Interests of the bottom 90% will only be satisfied
if they are congruent with the nationalist industrial interests of
democratic power elites. Socioeconomic inequality created over the last
30 years has become self perpetuating and can only be reduced through
decades of top down effort combined with growing industrial economy
producing tangible exports. Efforts in that direction are unlikely until
United States hits economic rock bottom with corresponding social
destabilization. Today the top 1% live in a country within a country.
The
fragmented elite America (that John Edwards liked to talk about until
the character assassination) is more advanced and freer than any country
in Western Europe and with access to better medicine/education, cheaper
land/energy, and more political control over their governance. US is
structurally a more advanced South American society. The average citizen
thinks there is progress due to modern expensive cars, clothing, and
housing mingling with the rest. The old Anglo ruling ethnic group has
learned during the gilded age to not make the extent of their material
wealth obvious. In that, they followed their South American
counterparts.
The newer assimilated ethnic groups of
Irish/Italians/Slavs/Jews are more blunt with demonstrations of their
material possessions. The consumeristic efforts of newer whites to fit
in and catch up have infected all Americans. The poorest least educated
people are encouraged to spend a month's paycheck on a new gadget or
brand name clothing. This is no different than a Soviet worker spending 2
months worth of salary to buy blue Western jeans from a black market in
the 1980s. The only difference between Soviet Union's black market and
gigantic electronics stores in today's America, is that the latter is
legal. However, the electronics and clothing stores are similarly
dominated by goods made in foreign factories and operated by oligarchs
exploiting cracks in ability of American industrial capitalism to
provide for people's needs. This system is even less sustainable than
the Russian one since it combines the Soviet infrastructural stagnation
of 1980s with Yeltsin's gangster capitalism and economic inequalities of
1990s. Only rapid industrial/technological breakthroughs can make
national decline safe and gradual.
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