In class warfare, the wealthy already won

Recession adds to poverty rolls, but the trends were already there

September 19, 2010|By Dan Rodricks, The Baltimore Sun

The 2009 census shows that one in seven Americans now live below the government's laughable poverty line for a family of four: $21,954. (How many more families of four live between $21,955 and, say, $31,954 a year? Are they not impoverished?) More than 20 percent of all children are poor. We have not seen these levels since the 1960s.

Recession and the loss of millions of American jobs in the last three years have been cited as the reasons for the recent rise in poverty. But there's a lot more to it than that.

This day has been coming for a long time.

With the Great Society initiatives dismantled by Reagan Republicans and replaced by their tickle-down fraud, with the crumbs of stagnant wages pressed upon workers for more than two decades by the increasingly wealthy corporate class, with the decline of unionism and the exportation of jobs, with the massive loss of assets by the middle class since the housing bust, no wonder nearly 44 million working-age Americans are poor.

Since Ronald Reagan's election in 1980, most of the money in this country trickled up, not down, and the distance between the wealthiest 5 percent of citizens and the poorest 5 percent only grew wider, even under Democratic presidents.

People in the middle should identify more with those below them than above them; they haven't done much better than the poor.

Earlier this year, the non-partisan Center on Budget and Policy Priorities looked at income tax data collected by the Congressional Budget Office. The CBPP found that the gap in after-tax income between the richest 1 percent of Americans and the middle fifth of the country tripled since about the time of Reagan's election.

"Taken together with prior research," the CBPP said, "the new data suggest greater income concentration at the top of the income scale than at any time since 1928."

That was the year before the Wall Street Crash and the onset of the Great Depression.

Here's another comparison from the CBPP: "Between 1979 and 2007, average after-tax incomes for the top 1 percent rose by 281 percent after adjusting for inflation — an increase in income of $973,100 per household — compared to increases of 25 percent ($11,200 per household) for the middle fifth of households and 16 percent ($2,400 per household) for the bottom fifth."

Tracking income and tax data state by state since the late 1990s, the CBPP found that, overall, average incomes have declined by 2.5 percent among the bottom fifth of American families while increasing by 9.1 percent among the top fifth.

Aside from the issues of fairness and inequality raised by such facts, the most serious implication for the country is the economic one, and the reality we're now seeing: The trickle-up of the country's prosperity over the last three decades left millions of families at the bottom and middle acutely vulnerable in this recession; many families have slipped into poverty because of it.

The poor and the middle continue to get the gooey end of the stick. Meanwhile, corporate executives are richly rewarded for dumping thousands of workers, exacerbating the harm of the recession.

Of course, mention this stuff, and Republicans throw the "class warfare" flag, as if you're playing unfairly by dredging up facts extracted from the reality they created over the last 30 years.

John McCain, who wasn't sure how many houses he owned when asked about it during the 2008 presidential campaign, threw the flag when Barack Obama spoke of taxing households that make more than $250,000 a year to help pay for a health insurance expansion.

And last week House Minority Leader John Boehner did it again, this time with regard to President Obama's plan to keep the Bush-era tax cuts only for middle-class earners, not the wealthy.

Mr. Boehner accused the president of "resorting to tired old class warfare rhetoric, pitting one working American against another." He said it was "bad policy" to exclude the highest-earning Americans from tax relief.

Others, including low- and middle-class citizens who support Republican candidates, accuse Mr. Obama and the Democratic leadership of being "socialists" engaged in the "redistribution of wealth." They don't seem to have a clue that it's already happened, that most of the wealth went up, not down — and largely to people who were already doing well, not to those struggling at or near the bottom.

dan.rodricks@baltsun.com

http://www.twitter.comn/DanRodricks

Dan Rodricks' column appears each Tuesday, Thursday and Sunday. He is the host of Midday on WYPR-FM.

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