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Thursday, Jan. 19, 2006 01:00 am

Take back the country

Growing inequality demands a progressive response

America is becoming a two-class society. Not since the age of the robber barons has the distribution of wealth and power been so polarized in America, and never in our history have average citizens been less important in the political progress. The class war that began with the Reagan revolution in 1980 has been brought to a victorious end by George W. Bush. The rules have been rewritten, society has been restructured, and a new age of plutocracy has begun. The right tells us that inequality is the result of market forces, poor education, technological change, and globalization. Life is uncertain, and only those who embrace change will succeed. Workers need to keep their faith in the system, tighten their belts, and adapt. This is part of the American rags-to-riches myth, our version of social Darwinism. It’s a lie. Inequality is the result of political decisions. Politicians have created laws to favor shareholders over wage-earners, adopted tax policies that burden paychecks instead of capital gains, and approved global trade agreements that encourage an economic, social, and environmental race to the bottom. The numbers are stunning: From 1979 to 2000, the after-tax income of the wealthiest 1 percent of Americans increased by 200 percent; that of the bottom fifth rose by just 9 percent. In 1975, the pay gap between CEOs and workers was 41:1; by 2000, it was 419:1. In 2003, the average pay of a CEO in this country was $8.1 million and that of production workers $26,899 ($3,894 an hour vs. $12.92). Seven million Americans now live in some 30,000 gated communities with private schools, parks, and security. There are literally pages of similar statistics, all showing that over the last two decades the wealthiest members of our society have essentially cashed in and seceded from the Union. The Republican Party has pursued several strategies to transfer wealth from the bottom to the top of society. The Bush administration’s tax cuts have, for the most part, been on capital gains, supposedly to help the “broad investor class.” The reality is that only 50 percent of American households own any stock at all, and the wealthiest 1 percent of households owns 45 percent of all stocks. Most of the rest are owned by the extremely wealthy instead of the obscenely wealthy. What the corporate press refers to as “tax cuts” are in reality a tax shift from federal to state and local taxes. The more locally a tax is collected, the more “regressive” (that is, the more the tax is a burden on the nonrich instead of the rich) it becomes. State and local governments rely on wage, property, and consumption taxes, which affect workers far more than they do people who live off income from stocks and assets. Another method of moving wealth and power to the top is union-busting. Unionization is a proven vehicle for creating a more equitable society. American corporations are now allowed remarkable leeway in breaking unions and hindering union drives. As a result, union membership in this country has gone from 35 percent of workers in the 1950s to just 13 percent (including government workers). Perhaps the most ominous tactic for weakening the working class has been the creation of free-trade agreements such as NAFTA. By removing barriers to trade with countries that have weaker health and safety laws, lower wages, lax environmental protection, and, at least in the case of China, prison labor, American business is able to engage in a global race to the bottom that only benefits the superwealthy. America cannot and should not compete with countries with lower standards. Unless we are willing to drastically reduce our standard of living and wreck our environment, there will never be a time when workers in the First World can compete with Third World labor. The Republican noise machine claims that economic polarization doesn’t matter because poor people in America are only relatively poor. Most Americans have cars, TVs, and enough high-calorie processed food to be generally overweight. This argument assumes that a nation of deeply indebted citizens leading stressful, precarious lives can form a decent society. A more important question is whether average citizens can lead satisfying and thoughtful lives, exert influence in their democracy, and create a better world for their children. In this sense, America is getting worse with each year. Working-class America’s ability to influence elected officials through the ballot box appears to be gone, at least until serious reform takes place. There are an infinite number of ways in which a society can be structured; there is nothing inevitable about the economic system we have at the moment. The Progressive movement of the 1890s rose in response to similar trends and helped create a more democratic and enlightened society. Americans in the past have taken back government from wealthy interests and created a better nation. The same can be done today.
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