[This is the first in a series of articles on the long-term tasks in defining the Democratic Party.]
It used to be “a rising tide lifts all boats,” meaning a growing economy benefits all parts of society. But not anymore. Corporate and government policies have created such inequality of wealth and income that growth no longer trickles down.
[Since 1973 average income has doubled for the top 1%, tripled for the top 1/10 of 1%, while inflation-adjusted income has barely budged for most Americans. Under the Bush Administration it’s been worse. Since 2000 the typical family headed by someone of working age has seen its income drop 5.4% (after adjusting for inflation), a loss of $3,000 in annual income.]
When Alan Greenspan, Treasury Secretary Paulson and Fed Chairman Bernanke warn about the danger of the growing inequality of wealth and income in America, you know something’s wrong.
Their fear: historic economic relationships no longer hold and historic tools for managing the economy no longer work. Hence the economy surging while most Americans are struggling. Greenspan, in particular, fears a backlash against “free market economics” (one can only hope).
This growing inequality in wealth and income is the defining feature of the domestic economy. It unites issues like trade, healthcare, retirement, and minimum wage into a single frame, much as the Republican mantra of ‘smaller government.”
• Why the economic growth of the past several years has failed to benefit most Americans
• Why there is huge economic discontent despite decent headline numbers
• The anxiety that grips middle class families worried about their job, pay, pension, children’s education and healthcare
An Intentional Result of Corporate and Government Policies
But what is missing from the picture so far is recognition that this growth of the “Two Americas” is not an accident or the result of impersonal market forces, but intentional. It is not like the weather. It results from policies Corporate America consciously intended to shift wealth and power.
Under the banner of “free market efficiency” they have gutted the ability of working Americans to have any voice in what happens to their standard of living:
• Globalization – While negotiating thousand-page trade agreements that protect corporate interests, both Democratic and Republican administrations have forced most Americans to compete for their jobs with low-wage workers in the Third World. Nor has this done much to make life more affordable – most of the cost savings has gone to profits, not lower prices.
[A rising and disproportionate share of the economy is going to profits (up 7.8% of total corporate income) at the expense of wages (down 5.4%), a prime reason people whose income comes from work, not investments, no longer share in economic growth.]
• Cheap Domestic Labor – For the jobs they have (not yet) been able to ship overseas they have created a large pool of unemployed, often desperate, workers to compete with employed workers and drive down wages and benefits.
o Workers effectively coerced into this position by cuts in the safety net, welfare reform and jobs shipped overseas
o Legal and illegal immigrants brought into the country to compete for jobs. [Supporters of Kennedy-McCain fail to distinguish between solving the problem of existing illegal immigrants and the new “guest worker” program which would bring in millions of new workers to undermine the existing work force.]
o Stripping millions of minimum wage and 40-hour week protecting while creating a category of sub-minimum wage workers
• Labor Market Flexibility – Taking away anything that permits workers to have any kind of say in what happens to them at the workplace:
o Weakening unions and labor law
o Taking the right to belong to a union from millions of unionized workers
o Weakening workplace safety laws
• Corporate Free Hand in Society – Doing away with regulations protecting consumers and communities from corporate abuse and greed: environmental, health and safety, antifraud, etc.
• Upward Redistribution of Wealth – At every turn raise taxes and lower benefits to the vast majority of working Americans while expanding corporate welfare and lowering taxes for the top 1/10 of 1%.
o The Bush tax cuts are the poster child here, but hardly the only ones
o After using the money paid into Social Security by workers to fund tax cuts for the wealthy, they now propose to lower benefits or do away with Social Security entirely.
o So-called bankruptcy reform
o Protecting drug companies from having their Medicare drugs priced competitively by barring the government from negotiating for lower prices
This growing inequality in wealth, driven by shifts in power, offers the perfect frame for the economy. The problem is that words like ‘inequality’ and ‘fairness’ trigger the common middle class perception that Democrats are dipping their hands into “our” pockets to give money to the poor. As Stan Greenberg has pointed out, voters don’t want redistribution. They want opportunity.
What we need for this frame is language that combines the notion of opportunity with the sense that the deck is stacked against most Americans. Something like:
AN HONEST CHANCE
A FAIR SHOT at the American Dream
They have this in common: Each talks about giving everyone an opportunity (‘chance,’ ‘shot’), not making everyone equal. And each addresses the fact that the game is rigged (‘honest,’ ‘fair’)
Other attempts at articulating this frame: Sherrod Brown’s “Make America Work for the Middle Class” and Jim Webb’s “Economic Fairness” both speak to the issue of inequality as does John Edwards’ “Two Americas.”
We need to find a way to give voice to this fight against growing inequality and its downward effect on people’s living standard and security. Fighting to give Americans a fair chance, say, lets us put a frame around most of our economic issues.