Yes, America, there is a Class War, and you Just Lost It

By Juan Cole | (Informed Comment) | – –

The Republican Party did not just overhaul the tax code and they did not cut “your” taxes. They engineered a coup against the middle and working classes and they threw enormous amounts of public money to private billionaires and multi-millionaires.

Americans do not understand this sort of con game because mostly they don’t understand social class. They often don’t even believe in the latter. But really, not all households in the US are equal. Some have more income than others. Some have more power than others. And as with the Trumps, that wealth and power can be passed on to the next generation.

We’re not all middle class. That would make a mockery of the word “middle,” which implies that there are lower and upper classes. Some of us are working class, some are middle class, some are upper middle class, and some are rich. Policies that help the rich by cutting their taxes do not help the working and middle classes. They actively harm the latter by making less money available for government services and by devaluing the dollar.

The Republican Party mainly represents the rich. It also reaches out to rural people and claims to help them, but it is all lies. It mainly represents the rich.

h/t Pew .

Alabama routinely votes Republican. Alabama is one of the poorest states in the country. The Republicans aren’t actually doing anything for Alabama, except maybe making them feel good about themselves by buttering them up, or indulging them in their weird idea that fundamentalist Christianity should dictate social policy to 320 million Americans, who do not share those values.

The rich in the United States use American highways, and American wifi, and depend on the FBI to keep them from getting kidnapped. But they don’t want to pay for those things. They want you to pay for them even though they use them much more. I get angry when I see those trucks on the highway with the sign that they paid $9277 in tolls and fees last year to be on the highway. Trucks are the ones that tear up the highways and force us to spend hundreds of millions of dollars to rebuild. Their fees and tolls don’t come close to paying for the damage they do. So the costs are offloaded.

Onto us?

Onto us.

There are about 126 million households in the United States. One percent of them would be 1.26 million households. That is about the size of the city of Los Angeles. There are one hundred groups of 1.26 million households in the US, i.e. 100 Los Angeleses worth of households. Those one hundred groups are not equal in wealth. The bottom 100th of American households doesn’t have a pot to pee in.

The Republican Party slavishly serves the top 1.26 million households. That’s who they report to. That’s who sent them to Congress, through their campaign donations. They don’t care about you and they did not just now do you any favors.

The wealthiest one percent owns about 38 percent of the privately held wealth in the United States. In the 1950s, the top 1% only owned about 25 percent of the privately held wealth. A Republican was in the White House, Dwight Eisenhower. He was not a left wing guy. But he worried about corporations combining with government officials to become way more powerful. The last time wealth inequality was this high was just before the Great Depression. Think about that.


h/t Center for Budget & Policy Priorities

Americans’ wealth amounts to about $88 trillion. If you divided up all the privately held wealth equally, every household in the US would be worth $698,000. That is, they’d all have their own home plus substantial investments.

But needless to say, the wealth isn’t divided up equally. The top ten percent of households, 12.6 million households own 76% of the privately held wealth. That is, 10 of our notional 100 Los Angeleses own three-fourths of the wealth.

So just to be clear, of our 100 Los Angeleses worth of households, 90 of them own only 24 percent of the wealth.

So how did the top one percent go from having 25% of the privately held wealth to having 38%?

In some large part, it was tax policy. In the Eisenhower administration the top marginal tax rate was 91%, and the highest bracket of earners paid 90% in income tax. Progressive income tax was intended to keep the society from getting too out of kilter and to prevent wealth from becoming concentrated in a few hands.

h/t Fact and Myth.

There is no evidence, zero, that these tax policies hurt economic growth or hampered job creation.

Eisenhower’s tax policy was repealed over time, especially by Ronald Reagan. Reagan pulled the familiar scam of promising that tax cuts would pay for themselves by encouraging entrepreneurs to invest and to hire.

Instead, the government deficit ballooned (that’s what happens if you cut taxes but leave spending programs in place) .

And not only were all boats not lifted by Reagan’s rising tide, most of them were sunk. The average wage of an average worker is not higher now than it was in 1970.

h/t Bloomberg.com

The economy has grown enormously since 1970. So if workers did not get a share in the newly created wealth, who has it?

The 1%?

The 1%.

Think about tax policy as a snowblower aimed a a single point. Snow builds up at the point where the snowblower is facing. If you keep aiming at that point as you clean the snow, you’ll get an enormous hill of snow. There will be no snow to speak of on the driveway. There will just be an artificial mountain.

————————————————————————————
Boston Snow Removal Snow Plowing Contractor Builds Giant Snow Mountain

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So that is what the Republican Congress just did. They revved up the snowblower and they pointed it at a small mountain of already-accumulated snow, so that they will make the mountain larger.

This tax bill won’t create jobs, won’t spur investment, and won’t bring companies back home. It will make the 1.26 million households even more fabulously wealthy than they already are, and ensure that the rest of us get poorer.

When you cut taxes, you are cutting government services. There will be less money for the things the government does– education, funding science, dealing with national health crises, road building, dealing with interstate crime, etc.

And the super-wealthy who bought the politicians and made them pass this law? They just got ‘way richer and have every reason to be jubilant.

28 Responses

  1. You are right about money being the essence of the ‘class’ system and its much the same over here in the UK. However, we do have a peculiar class who are at the top and they are almost a race in their own right. They even have their own ‘cultured’ accent and are mostly rich and associated with Royalty, Lords and Ladies, Knights and those in high office etc. They are a veritable living chess board and needless to say, they represent the white chess pieces. You mention the snow mountain in your blog, professor, but you forgot one class of people who get even more of the public purse than even the super rich individuals. This is of course, the military who devour trillion of dollars every year and their take is ever growing. The world could be a paradise if only the people would lay down their arms, put aside their religious and political dogma and work together to make mother earth a haven of beauty and contentment. They won’t of course, man is too greedy for that kind of vision. So, instead of the earth being a jewel in the cosmos it will be just another barren planet or a man made shyte hole.

  2. Thank you again, so very much, Juan, your work is so very important — and this particular contribution of yours is, like, “over the top.”

    It’s frankly been a very busy and fairly lousy holiday season so far around here, yet hopefully the daily crises will abate and my contribution will be coming soon.

    FWIW. i have thousands of words of my thoughts on this Republican Party selfishness, nonsense and spite at my site (search my screen name if you care) .

  3. I’ve been reading an interesting book, called “Democracy in Chains”, the author argues that the Republicans are using an updated version of John C. Calhoon’s rhetoric. (minus the pro-slavery arguments)

    They’ve convinced enough people that those who have the gold should make all of the rules and laws. It’s not likely the human race will recover from this error.

  4. All of this is a feature not a bug. The point of this bill was and is patent for anyone to see: balloon the deficit to go after Social Security, Medicare, Medicaid, and anything else perceived by Ayn Rand as helping “inferior” people (her book Atlas Shrugged is required reading among congressional Republicans and that is no story or joke).

    In the process there will be more money for the 1% to spend in efforts to further corrupt and capture national and state legislative bodies, and national and local media (as Sinclair Media, for all intents and purposes a media wing of the current administration, infects local news markets like a cancer).

    As for Alabama and those who vote against their own interests, at this late date it is hard for me to get worked up over it. As Rabbi Hillel said over 2000 years ago, “If I am not for myself, who will be?” On the other hand, years of teaching ancient history make me very uneasy about wealth inequality – people will only take so much before social and political instability take hold, and ancient Athens and Rome are prime exemplars.

    We have seen four decades plus of socially regressive policies in this country with only limited victories – when, I wonder, will we bottom out?

    And as always:

    pars republicana delenda est!

  5. Under Reagan, the tax cuts created deficits, as you stated. To help reduce the deficits, though, he took one trillion from the SS Fund and taxed SS income. That happened around 1982.

  6. From everything I’m getting of what’s in this new tax bill the average American won’t be getting as much of a tax cut, as they will be getting what they pay for with the reduced tax burden. Scaling back appears to be cutting subsidies and (what they call) entitlements. Also, between environmental concerns and healthcare needs, the cuts are coming. Again you get what you pay for.

    The Corporate Tax Cuts, are an effort to bring money back to America from their Offshore Tax Heavens, as this is a gift to keep the rich honest. So while the lower classes get reduced taxes and lose benefits, the rich get a benefit for avoiding what they should have paid for in the first place.

    I did read where this new tax bill will reward the taxpayer the most, is where if you own ‘Commercial Real Estate’…hmmmm. Now with that ask yourself, who owns a lovely huge amount of terrific commercial real estate, like the kind you’ve never seen before?

  7. They are courting revolution. My aunt’s father was a member of the Canadian cabinet in the 1930’s. She told me that he once remarked that his government didn’t implement social programs like old age pensions and unemployment insurance because they liked poor people. They did it because they were terrified of them.

    The Republicans are knocking away the props that hold up the capitalist system. When the arrangements between the workers and the owners are back to the conditions Marx observed in England, back to the unfettered, unmoderated, pure system in which no concessions are made anymore to keep the workers from starving and dying- the system may no longer be acceptable to 300 million people.

    300 million heavily armed people.

    • 300 million heavily armed people with no system of command and control count for nothing, even if they could agree on what they wanted or did not want.

      • There is a system of command and control. It’s called the conservative movement. Media, churches, and their little acolytes spreading their lies. It is not very different than the way that the plantation owners stayed on top of their heavily armed neighbors and even got them to march to their deaths in a civil war against hopeless odds for “state’s rights” that never benefited them.

        All you need is to have the biggest armed faction and everyone else will back down… or learn guerrilla warfare.

  8. I just hope that when the company towns and plantations come back, my grandkids will at least have indoor plumbing.

    • That’s called the American Legislative and Executive Council. Look it up. It already writes many of your laws, rubberstamped by state legislatures in bulk.

  9. And what about the top one-millionth of one percent (1/
    1,000,000%); namely, Bill Gates, Warren Buffett, and Jeff Bezos? Between the three they are alleged to have as much health as the entire bottom fifty percent (50%) of the entire U.S. population!

  10. The Republican Party mainly represents the rich. [….] Alabama routinely votes Republican. Alabama is one of the poorest states in the country. [….] The Republican Party slavishly serves the top 1.26 million households.
    May I slightly edit your text and say
    The Republican Party represents the rich and the poor. Think Alabama, one of the poorest states. [….], but the Republican Party slavishly serves the rich. Compare for instance the average Fox News viewer and Rupert Murdoch.
    “When you cut taxes, you are cutting government services.” Then users, typically poor people, get convinced to privatize these services. And the owner installs a pay-per-skiing system on the snow mountain. Might it be turned in a Christmas story ?

  11. GOP transfer of income to the top trumps federal funding for infrastructure needs. When we already have unacceptable levels of transfer of income and wealth to a tiny cabal of the .0001% wealthy at the very top, Republicans further decrease taxes for the very wealthy which increases this preposterous transfer. The budget deficits created will supposedly prove that the federal government itself will no longer be able to afford infrastructure repairs, public education, Social Security, Medicare, Medicaid and other social service and public health programs, thus making necessary further slashing of their budgets, transfer of funding responsibility to the local level, and the privatization of most federal programs & systems . The strategy is effectively the same as any conservative effort to sabotage the public sector: defund government programs/starve the beast so that it is less effective and then use that ineffectiveness to argue for further privatization. Using this standard technique of privatization of defunded government services, also make sure things don’t work and that people get angry. ¡Voilà! the need to hand it over to private capital is proven, fulfilling a decades long conservative dream of ending all federal New Deal type progressive programs, health, public health and social services.

  12. Shouldn’t the Dems have used the past couple of months to explain and promote the tax policy that they would enact if they were in power?

    • Fox news, and the rest of the main stream media, ignore Democratic tax policy arguments, in order to support the cut in corporate taxes from 35% to 21%. Verdict: success!

  13. Juan,

    I think you are right that most Americans have weak awareness of class identity and relations in any detail. But most polls show this tax bill to be very unpopular, with most people accurately identifying the vast maJority of the cuts going to the wealthiest upper crust.

    • But we each have to decide which things in our lives take priority over others. If we’re trained to be scared of Moslems and gays, then we will tolerate economic injustice carried out by those who scream that they are the only ones who will punish Those People. If we’re brainwashed to believe that our “race”, “civlization”, “faith”, et al. are being eradicated by a conspiracy, we will sacrifice our material wealth, our children’s future, and our freedom to destroy the conspirators. We can convince ourselves that after we “win”, those other necessary sacrifices will be repaired, since our exterminated enemies were surely what was holding back our God-ordained prosperity.

      • While The Other is one of the salients of the moment used to distract and deceive the too busy and the too overwhelmed, the plutocrats have always built their arguments on the now ancient fundamental U.S. cultural norm of hatred of government. This hatred is common not only on the right, but also on the left. In short, there is in the U.S. an overwhelmingly common belief that government is always, and must always be, a frack-up and the only thing that can really be done about it is to find good, decent, human saviors who will enter government and guide it to justice and so rescue us from something that is, as if by some physical law, immutably unimprovable. Churchill summarized and reinforced this defeatist sentiment with his oft repeated quip that goes something like, “Democracy [meaning the set of institutions typical of today’s so-called Western liberal democracies] is the worst possible form of government except for all the rest.” Bingo! Government is bad, cannot be improved beyond what it is today, so trust to the Great Man to save us from iniquity.

  14. Most Americans do not seem to understand that there is only so much money and if a few people have billions many people will have less. This is not rocket science.

    • Saw tis the other day where someone actually figured it out. If all the wealth in the country were divided equally, every family would have about $660,000 in wealth. The problem is not lack of wealth, but mal-distribution.

  15. The BRUTISH GREED and H8 which summarizes the current GOP tax plan will be in full force when DEEP CUTS in Medicare and Medicaid take effect. Innocent American citizens will be forced to needlessly SUFFER so corporations making record profits can buy more of their own stock and greedy people who already hold more money than anyone could spend can grab MORE money and POWER.

    Is the wealth offset controversy merely a diversion for what the super-wealthy are actually gaining – the power and authority to direct our futures and safety without protections of government and laws?

  16. You are dead right. As a American who spends one half of the year in Europe, I have witnessed a more responsive treatment of average citizens. Every time I return I think of a line I have heard in movies, but which applies so much to how the government here treats their citizens. And I just want to shake someone by the shoulders and shout out: “The government is screwing you and you’re so dumb you don’t know you’ve been screwed!”

  17. The seeds of class war and a national debt were planted in America by the Rothschild empire and the Bank of England during America’s War of 1812 with England and the 1861 Civil War. “Nathan Rothschild ordered the War of 1812 after the charter for the First National Bank (Colonies) was not renewed in 1811.

    When Ben Franklin was asked why are the Colonies so prosperous, he replied, “In the Colonies we issue our own money. It is called Colonial Scrip. We issue it in proper proportion to make the products pass easily from the producers to the consumers. In this manner, creating ourselves our own paper money, we control its purchasing power, and we have no interest to pay to no one.”

    link to michaeljournal.org

    Thus, my suggestions to eliminate or reduce class war, poverty, unemployment, depressions and recessions, working like slaves, driving like idiots at 70 to 80 mph and tailgating on freeways, etc:

    1. Slow down economic growth, population increase, spending beyond needs, fighting useless wars, paying such high salaries to doctors, lawyers, politicians, actors, professional athletes, etc. But, this goes against the rich and corporations. Slow down. Slow down. And live.

    2. Prohibit millionaires and those with a family total yearly income (salaries, corporation income, stocks, investments, land, etc) of more than $500,000 from holding any public office, elected or appointed: federal, state, county and city. Of course you would also have to include a maximum wealth say of one million. The figures are rough guesses. A large portion of the rich, I don’t know how large, support the rich republican party and/or legislation that makes the rich richer. Getting such legislation through Congress will be very difficult. America needs a Patrick Henry, “Give me liberty or death.”

    We need a real President and politicians that will represent the average American……

    America is imploding

  18. Future history: “In 2017 the Republicans finally, after 30 years, were able to install their economic agenda, only to have it totally and completely reversed when the Democrats swept the House and Senate in the 2018 elections.”

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