Massive Inequality Didn't Just Happen—It Was Engineered by Conservative Government Policies

[xchrom]

http://www.alternet.org/massive-inequality-didnt-just-happen-it-was-engineered-conservative-government-policies



In his speech on inequality earlier this month, President Obama proclaimed that the government could not be a bystander in the effort to reduce inequality, which he described as the defining moral issue of our time. This left millions convinced that Obama would do nothing to lessen inequality.

The problem is that President Obama wants the public to believe that inequality is something that just happened. It turns out that the forces of technology, globalization, and whatever else simply made some people very rich and left others working for low wages or out of work altogether. The president and other like-minded people feel a moral compulsion to reverse the resulting inequality. This story is 180 degrees at odds with the reality. Inequality did not just happen, it was deliberately engineered through a whole range of policies intended to redistribute income upward.

Trade is probably the best place to start just because it is so obvious. Trade deals like NAFTA were quite explicitly designed to place our manufacturing workers in direct competition with the lowest paid workers in the world. The text was written after consulting with top executives at major companies like General Electric. Our negotiators asked these executives what changes in Mexico's law would make it easier for them to set up factories in Mexico. The text was written accordingly.

When we saw factory workers losing their jobs to imports from Mexico and other developing countries, this was not an accident. In economic theory, the gains from these trade deals are the result of getting lower priced products due to lower cost labor. The loss of jobs in the United States and the downward pressure on the jobs that remain is a predicted outcome of the deal.

[cantbeserious]

1. Who Stole The American Dream - Video - Book - Powell Memo

"The promise of a prosperous middle-class life with decent work, rising living standards, and the potential for a better future has long been the foundation of the American dream. But as America continues to struggle to recover from the Great Recession, it has become clear that the middle class is in jeopardy -- and many of the policies of the last 40 years are to blame.

Examining the political, legislative, and corporate choices that have pushed the middle class to the brink, Pulitzer Prize- and Emmy Award-winning journalist, producer, and bestselling author Hedrick Smith details the story of this demise. In his new book, Who Stole the American Dream?, Mr. Smith analyzes how "pro-business" policies dismantled the previous American social contract and tells the stories of the people who have been left behind. ..."

The Book - Who Stole The American Dream

http://www.amazon.com/Stole-American-Dream-Hedrick-Smith/dp/1400069661

See the Powell Manifesto Here.

http://www.thwink.org/sustain/articles/017_PowellMemo/PowellMemoReproduction.pdf

Commentary Here.

http://www.thwink.org/sustain/articles/017_PowellMemo/

[Scuba]

2. Kick.

[fasttense]

3. How convenient that Mr. Obama let government off the hook

for creating most of the inequality.

All those F**king trade deals just rip open the belly of the middle class and ensured their wealth would go to the uber rich.

"Trade deals like NAFTA were quite explicitly designed to place our manufacturing workers in direct competition with the lowest paid workers in the world......

When we saw factory workers losing their jobs to imports from Mexico and other developing countries, this was not an accident. In economic theory, the gains from these trade deals are the result of getting lower priced products due to lower cost labor. The loss of jobs in the United States and the downward pressure on the jobs that remain is a predicted outcome of the deal.

There is nothing about the globalization process that necessitated this result. Doctors work for much less money in Mexico and elsewhere in the developing world than in the United States. In fact, they work for much less money in Europe and Canada than in the United States. If we had structured the trade deals to facilitate the entry of qualified foreign doctors into the country it would have placed downward pressure on the wages of doctors (many of whom are in the top one percent of the income distribution), while saving consumers tens of billions a year in health care costs.

In other words, the government quite deliberately structured our trade to put downward pressure on the wages of much of the labor force, while protecting doctors and other highly paid professionals from similar competition......"

And NOW Mr. Obama has the biggest, most all destructive, NAFTA on steroids trade agreement in the history of America that he is pushing. The TPP will ensure that fascism and inequality stays firmly in place in the US and puts the nail in the coffin of the middle class.

[greymattermom]

4. Doctors are next

There's no reason to think that doctors are protected. Health care costs need to decrease, and all it takes is an increase in the number of residency slots (not places in medical schools) to bring in thousands of new Indian doctors who can afford to work for less because they don't have expensive loans to pay off. This will happen.

[HoosierCowboy]

5. It started with Reagan....

....as someone that witnessed the decline of the American Middle Class from the beginning, I can say that xchrom isn't on a crazy rant. The election of the Gipper was a green light to beat up working families and unions.

The working class have no one to blame for their predicament except themselves, who tacitly approved their own decline by choosing style over substance. I should know I watched election night when droves of Union communities all over the country voted Reagan into office to their peril. In a few more years those communities would be blighted.

It's not going to get any better. Like Humpty Dumpty the American working class took a great fall, and all the Kings men can't put it back together again. Too many changes, like automation and trade agreements have sealed the fate of Trailer Park Bubba and marginalized his future to minimum wage jobs with no benefits.

Bubba, in response, continues to politically support the forces that enslave him. In that respect should we even care what future he has?

[Coyotl]

6. Before Reagan, homes were built for nearly anyone with a job.

During Reagan, homes were built for the very rich only. Apartments were built for ordinary workers.

[Egalitarian Thug]

9. The groundwork was laid before, but reagan pushed the button.

Happy Holiday!

[stevenleser]

15. Yep. AND he and his cronies effectively sold the idea that supply side works. nt

[ProSense]

7. Where

"The problem is that President Obama wants the public to believe that inequality is something that just happened."

...on earth did this come from?

Obama's inequality speech: telling the progressive story of American history

by Ian Reifowitz

Barack Obama knows how to tell a story. One of his great strengths is his ability to craft a narrative of our history that resonates with Americans and advances a progressive understanding of who we are as a people. Obama's telling of that history always features both progress as well as our failure to live up to the ideals of equality we lay down at the country's founding. His American history narratives have long centered on two purposes.

The first is to encourage Americans across every possible group line to recognize one another as being part of a single community of Americans based on our shared membership in the civic nation. The President's placing of Seneca Falls, Selma, and Stonewall among the pantheon of the great events in our history is perhaps the best known example of this, among countless other occasions where he has done so throughout his career.

The second, one that featured prominently in yesterday's speech on economic inequality, is to emphasize the long-standing roots—as well as the moral superiority and greater effectiveness—of a common good-centered, progressive economic philosophy. I've never heard President Obama do this better than he did yesterday. He told the story of our country as one in which we moved closer and closer to being a society built around equal opportunity and a notion of the common good that provided a basic safety net for those of us who faced hard times.

Until, that is, we inaugurated President Ronald Reagan. Obama also rightly noted the impact of globalization on our economy, but then specifically highlighted the crucial role of right-wing economic thinking—calling out Reaganite "trickle-down ideology" on taxes and on the lack of commitment to invest in our country's resources—in moving us away from the path on which we'd been traveling for over a century thanks to progressives in both parties.

This is the kind of historical narrative that people can connect with. It is a story that has a clear good guy and a clear villain, the kind of story that, in raw political terms, helps frame the debate in a highly effective way. More broadly, the speech provided an exceptionally strong philosophical and factual underpinning for the progressive ideals we hold dear.

Below the fold is the excerpt of the speech in which the President lays out his narrative of our history.

Now, the premise that we’re all created equal is the opening line in the American story. And while we don’t promise equal outcomes, we have strived to deliver equal opportunity -- the idea that success doesn’t depend on being born into wealth or privilege, it depends on effort and merit. And with every chapter we’ve added to that story, we’ve worked hard to put those words into practice.

It was Abraham Lincoln, a self-described “poor man’s son,” who started a system of land grant colleges all over this country so that any poor man’s son could go learn something new.

When farms gave way to factories, a rich man’s son named Teddy Roosevelt fought for an eight-hour workday, protections for workers, and busted monopolies that kept prices high and wages low.

When millions lived in poverty, FDR fought for Social Security, and insurance for the unemployed, and a minimum wage.

When millions died without health insurance, LBJ fought for Medicare and Medicaid.

Together, we forged a New Deal, declared a War on Poverty in a great society. We built a ladder of opportunity to climb, and stretched out a safety net beneath so that if we fell, it wouldn’t be too far, and we could bounce back. And as a result, America built the largest middle class the world has ever known. And for the three decades after World War II, it was the engine of our prosperity.

Now, we can’t look at the past through rose-colored glasses. The economy didn’t always work for everyone. Racial discrimination locked millions out of poverty -- or out of opportunity. Women were too often confined to a handful of often poorly paid professions. And it was only through painstaking struggle that more women, and minorities, and Americans with disabilities began to win the right to more fairly and fully participate in the economy.

Nevertheless, during the post-World War II years, the economic ground felt stable and secure for most Americans, and the future looked brighter than the past. And for some, that meant following in your old man’s footsteps at the local plant, and you knew that a blue-collar job would let you buy a home, and a car, maybe a vacation once in a while, health care, a reliable pension. For others, it meant going to college -- in some cases, maybe the first in your family to go to college. And it meant graduating without taking on loads of debt, and being able to count on advancement through a vibrant job market.

Now, it’s true that those at the top, even in those years, claimed a much larger share of income than the rest: The top 10 percent consistently took home about one-third of our national income. But that kind of inequality took place in a dynamic market economy where everyone’s wages and incomes were growing. And because of upward mobility, the guy on the factory floor could picture his kid running the company some day.

But starting in the late ‘70s, this social compact began to unravel. Technology made it easier for companies to do more with less, eliminating certain job occupations. A more competitive world lets companies ship jobs anywhere. And as good manufacturing jobs automated or headed offshore, workers lost their leverage, jobs paid less and offered fewer benefits.

As values of community broke down, and competitive pressure increased, businesses lobbied Washington to weaken unions and the value of the minimum wage. As a trickle-down ideology became more prominent, taxes were slashed for the wealthiest, while investments in things that make us all richer, like schools and infrastructure, were allowed to wither. And for a certain period of time, we could ignore this weakening economic foundation, in part because more families were relying on two earners as women entered the workforce. We took on more debt financed by a juiced-up housing market. But when the music stopped, and the crisis hit, millions of families were stripped of whatever cushion they had left.

And the result is an economy that’s become profoundly unequal, and families that are more insecure. I’ll just give you a few statistics. Since 1979, when I graduated from high school, our productivity is up by more than 90 percent, but the income of the typical family has increased by less than eight percent. Since 1979, our economy has more than doubled in size, but most of that growth has flowed to a fortunate few.

The top 10 percent no longer takes in one-third of our income -- it now takes half. Whereas in the past, the average CEO made about 20 to 30 times the income of the average worker, today’s CEO now makes 273 times more. And meanwhile, a family in the top 1 percent has a net worth 288 times higher than the typical family, which is a record for this country.

So the basic bargain at the heart of our economy has frayed. In fact, this trend towards growing inequality is not unique to America’s market economy. Across the developed world, inequality has increased. Some of you may have seen just last week, the Pope himself spoke about this at eloquent length. “How can it be,” he wrote, “that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points?”

But this increasing inequality is most pronounced in our country, and it challenges the very essence of who we are as a people. Understand we’ve never begrudged success in America. We aspire to it. We admire folks who start new businesses, create jobs, and invent the products that enrich our lives. And we expect them to be rewarded handsomely for it. In fact, we've often accepted more income inequality than many other nations for one big reason -- because we were convinced that America is a place where even if you’re born with nothing, with a little hard work you can improve your own situation over time and build something better to leave your kids. As Lincoln once said, “While we do not propose any war upon capital, we do wish to allow the humblest man an equal chance to get rich with everybody else.”

The problem is that alongside increased inequality, we’ve seen diminished levels of upward mobility in recent years. A child born in the top 20 percent has about a 2-in-3 chance of staying at or near the top. A child born into the bottom 20 percent has a less than 1-in-20 shot at making it to the top. He’s 10 times likelier to stay where he is. In fact, statistics show not only that our levels of income inequality rank near countries like Jamaica and Argentina, but that it is harder today for a child born here in America to improve her station in life than it is for children in most of our wealthy allies -- countries like Canada or Germany or France. They have greater mobility than we do, not less.

The idea that so many children are born into poverty in the wealthiest nation on Earth is heartbreaking enough. But the idea that a child may never be able to escape that poverty because she lacks a decent education or health care, or a community that views her future as their own, that should offend all of us and it should compel us to action. We are a better country than this.

http://www.dailykos.com/story/2013/12/05/1260417/-Obama-s-inequality-speech-telling-the-progressive-story-of-American-history

[bvar22]

8. DURec... because things like this do NOT happen by accident.

Billionaire wealth doubles since financial crisis
http://www.upi.com/blog/2013/11/12/Billionaire-wealth-doubles-since-financial-crisis/5011384268135/?spt=hts&or=12


Rates of unemployment for families earning less than $20,000 - have topped 21 percent
http://hosted.ap.org/dynamic/stories/U/US_JOBS_GAP_RICH_AND_POOR?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-09-16-08-11-23

Study: "Trade" Deal Would Mean a Pay Cut for 90% of U.S. Workers
http://citizen.typepad.com/eyesontrade/2013/09/the-verdict-is-in-the-trans-pacific-partnership-tpp-a-sweeping-free-trade-deal-under-negotiation-with-11-pacific-rim-coun.html

Obama Appoints Bain Capital Consultant Jeff Ziets to Top Post
http://www.democraticunderground.com/10023662209

Obama selects former Monsanto lobbyist to be his TPP chief agriculture negotiator
http://www.democraticunderground.com/10023662210

The Totally Unfair And Bitterly Uneven 'Recovery,' In 12 Charts – HuffPo
http://www.democraticunderground.com/10023662029

Larry Summers Gets 'Full-Throated Defense' From Obama In Capitol Hill Meeting
http://www.democraticunderground.com/1014553343#post1

Wall Street will get away with massive wave of criminality of 2008 - Statute of Limitations
http://www.democraticunderground.com/10022516719

Income gap widest ever: 95 Percent of Recovery Income Gains Have Gone to the Top 1 Percent
http://www.slate.com/blogs/moneybox/2013/09/10/one_percent_recovery_95_percent_of_gains_have_gone_to_the_top_one_percent.html

Older Workers:.Set Back by Recession, and Shut Out of Rebound
http://www.nytimes.com/2013/08/27/booming/for-laid-off-older-workers-age-bias-is-pervasive.html?smid=tw-share&_r=3&

New Rule (Passed by Congress and signed by President Obama) signals Kiss of Death for Pensions
http://www.cnbc.com/id/100694955


Corporate Profits Have Grown By 171 Percent Under Obama -- Highest Rate Since 1900
http://www.alternet.org/news-amp-politics/corporate-profits-have-grown-171-percent-under-obama-highest-rate-1900

Wealthy win lion's share of major tax breaks
http://www.boston.com/business/news/2013/05/29/wealthy-win-lion-share-major-tax-breaks/Ua0UyYle21EUXub7g1suCI/story.html

THIS ^ does NOT happen by accident.
This is the result of carefully planned and implemented Economic Policy.
It requires careful preparation, marketing, buying the right politicians, message control, courts packed with Conservative Corporate Rights Judges, and the marginalization and suppression of any opposition.


DURec!

[xchrom]

10. +1

[El_Johns]

11. K&R. Yes, deliberate & planned.

[Quantess]

12. Obviously

but sometimes it bears repeating.

[JHB]

13. From 1992:

For those people in Washington who write the complex tangle of rules by which the economy operates have, over the last twenty years, rigged the game-by design and default-to favor the privileged, the powerful and the influential. At the expense of everyone else.

Seizing on that opportunity, an army of business buccaneers began buying, selling and trading companies the way most Americans buy, sell and trade knickknacks at a yard sale. They borrowed money to destroy, not to build. They constructed financial houses of cards, then vanished before they collapsed.

Caught between the lawmakers in Washington and the dealmakers on Wall Street have been millions of American workers forced to move from jobs that once paid $15 an hour into jobs that now pay $7. If, that is, they aren't already the victims of mass layoffs, production halts, shuttered factories and owners who enrich themselves by doing that damage and then walking away.

As a result, the already rich are richer than ever; there has been an explosion in overnight new rich; life for the working class is deteriorating, and those at the bottom are trapped. For the first time in this century, members of a generation entering adulthood will find it impossible to achieve a better lifestyle than their parents. Most will be unable even to match their parents' middle-class status.

Indeed, the growth of the middle class-one of the underpinnings of democracy in this country-has been reversed. By government action. Taken as a whole, these are results of the rules that govern the game:

They have created a tax system that is firmly weighted against the middle class.

They have enabled companies to trim or cancel health-care and pension benefits for employees.

They have granted subsidies to businesses that create low-wage jobs that are eroding living standards.

They have undermined longtime stable businesses and communities.

They have rewarded companies that transfer jobs abroad and eliminate jobs in this country.

They have placed home ownership out of reach of a growing number of
Americans and made the financing of a college education impossible without incurring a hefty debt.

Look upon it as the dismantling of the middle class. And understand that, barring some unexpected intervention by the federal government, the worst is yet to come. For we are in the midst of the largest transfer of wealth in the nation's history. It is a transfer from the middle class to the rich, and from the middle class to the poor-courtesy of the people in Washington who rewrote the rules.

From the prologue of America: What Went Wrong by Donald L. Bartlett and James B. Steele, a book which expanded their 1991 article series in The Philadelphia Enquirer (i.e., pre-Clinton). It was one of the first systematic overviews of the real effects of the neoliberal "trickle-down" economy on regular working people.

Things didn't get better for people outside the financial wheeler-dealer circles.
http://americawhatwentwrong.org/

[bhikkhu]

14. Massive inequality is the inevitable result of capitalism+time

and in any well-constructed society, government acts as a balance to counter that strong tendency. Most European governments do very well, and many Asian governments do very well.

We've done well from time to time, but Reaganism was a turning point, where the foundations of that balance were undermined and even denigrated. A bit like a Mao-style re-education campaign...I suppose the OP is a decent piece of writing in intent, but the "blame game" aspect of it missed the real point. The president has had reducing inequality as a priority throughout his presidency, but government has to work, at the legislative level, to accomplish that.

[openfield]

16. Corporate Media is also big in either promoting these Randian policies directly

Or in the case of "liberal for profit" media, like msnbc, promoting the same policies by opposing them, however offering little or weak alternatives to them. Corporations aren't in the business of the what the people really need, as we well know. Many blogs, I will add, sadly use the same profit formula, report what rush limba says as news, etc. What the left, and the majority of Americans need, same thing really, are solutions, plans for solutions, and good news. Let us celebrate our victories and not just be lame observers, consumers of social engineering by the toxic entertainment/media industry of this country.