Who Screwed the Middle Class?

[n2doc]

— By Kevin Drum| Fri Mar. 25, 2011 3:00 AM PDT

I've written several times before about Winner-Take-All Politics, in which Jacob Hacker and Paul Pierson argue that middle-class wage stagnation and growing income inequality are due as much to political decisions over the past 30 years as they are to broad economic trends. I find their arguments persuasive, but there's no question that it's a tough case to make. After all, exactly which political decisions are we talking about? Can we point to specific pieces of legislation or specific agency decisions that have retarded wage growth? In fact, we can—things like tax policy, financial deregulation, the decline of antitrust enforcement, and anti-union rulings by the NLRB all played a role. By themselves, though, these just aren't enough to account for what's happened. So what's the smoking gun when it comes to the impact of politics on wage stagnation and growing income inequality?

I think Lane Kenworthy fingered the right culprit a few weeks ago: the abandonment in recent decades of full employment as even a rhetorical goal of American economic policy:

The post–World War II experiences of the rich democracies suggest three routes to rising working- and middle-class wages. One is an environment in which firms face only moderate competition in product markets and limited pressure from shareholders, allowing them to pass on a significant share of growth to their employees. This characterized the period from the late 1940s through the mid 1970s, but it’s now long gone. The second is strong unions. I see little hope of that in America’s future. The third is full employment.

But full employment is only possible if the Federal Reserve is committed to it, and this is decidedly no longer the case: "Since the late 1970s, independent central banks such as the Fed almost always have prioritized low inflation, rendering low unemployment difficult to achieve. If the Fed isn’t on board, even a workable plan for full employment supported by the American public and our elected officials probably won’t be enough."

more
http://motherjones.com/kevin-drum/2011/03/screwed-fed

[OHdem10]

1. Conservative Economic Fundamentalism is designed to enrich

the rich and Big Business at the expense of the working
class.

Taxcuts Taxcuts Taxcuts empties the coffers of funds which
would support programs which assist the Middle Class and Poor
to grow into upper classes.

Deregulation of Businesses gives the Business Community
and Wall Street free reign to exploit workers.

Making Business only responsible to shareholders, not
workers not even this country benefits one group only
Rich Shareholders.

[liberal N proud]

2. This is what Reaganomics has done for us

[Cassandra]

3. The wealthiest fear inflation...

far more than they do unemployment, particularly the elderly, retired and don't-have-to-work segments of the population.

[Armstead]

4. Monopoly Capitalism, GOP CONservatism and Democratic Inaction

For years (decades) as Huge Corporations either merged or bought up their competition, I and many others thought and said: "Hold it! It isn't right to allow a handfiul of corporations to take over the entire economy! We need to enforce anti-trust and anti-monopoly policies."

And we kept hoping the Democrats (and honest conservatives who actually believe in free enterprise rather than Corporate Monopoly Fascism) would putr the brakes on this -- AND publicly challenge the lies that were being perpetuated by the GOP and Corporate Fast Talkers and Oligarchs. ("Massive layoffs and foreign outsourcing will preserve jobs." "Mergers protect competition.")

But noooooooo...Most Democratic politicians and strategists either ignored it, or actually bought into and promoted these CONservative lies and identified more with the Oligarchs than the common people.

And thus, True Competition and Free Enterprise was dismantled pierce by piece. In its place we saw the emergence of the Corporate State.

As a result, even DISCUSSING concepts like "full employment" is considered too radical too left wing, too socialistic...And the real tragedy is that Monopolistic Corporate Capitalism is now the defacto position of many Democrats -- including our president.

IMPORTANT NOTE: I am not referring to all Democrats and Democratic politicians. There are many great ones in Congress and elsewhere who do "get it" and do stand up for principled liberalism and progressive populism. But the problem is that their message and efforts are overwhelmed by the power of the Corporate Democrats.