The greatest theft in world history happened right under our noses.
After 1945, all Americans got better off as the economy grew. But in 1972 Lewis Powell argued that conservatives should play a more radical role in politics. He was appointed to the Supreme Court. Corporations began to invest in political corruption (sorry, “lobbying”). In 1976 the Supreme Court ruled that money was speech. If you thought that speech flowed out of mouths, you were mistaken. It flows out of bank accounts.
This ruling fed the idea of “supply-side economics” whereby diverting America’s resources to the top 1 percent was supposed to create exponentially more wealth, which would “trickle down” to the other 99 percent. This idea took off under President Ronald Reagan.
Instead of benefiting everyone, however, it produced the greatest redistribution of wealth in history. The wealth created by economic growth went to suppliers of capital, not to suppliers of labor. Billions of dollars that should have flowed to everyone flowed to America’s aristocracy alone. Never in the field of economic activity was so much taken from so many by so few (paraphrasing Winston Churchill). It happened in broad daylight and was perfectly legal.
In his meticulously researched book Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super-Rich — And Cheat Everyone Else, Pulitzer Prize winner David Cay Johnston describes the result as not a trickle down but a “Niagara upwards.” How it happened is simple. Rigging the tax code to suit the top 1 percent is ridiculously easy. Who understands economic policy?
Johnston says, “Our government’s own documents reveal how our tax system today redistributes income from the middle class and upper class to the super-rich.” Hence, “Income growth has become concentrated at the very top of the income ladder.” Countless other researchers have confirmed Johnston’s findings. The Right has never challenged the data. Conservatives have never tried to prove that “trickle-down economics” makes everyone richer.
Why is there no outrage at this economic burglary? There are many reasons. American politics is notably corrupt. And the Fairness Doctrine used to ensure accuracy in broadcasting. Reagan killed that rule, allowing propaganda to pass unchecked. Highly paid liars now occupy D.C. and the conservative-dominated media.
These liars convince you that policies which impoverish you are for your own benefit. They manufacture lies with an expertise that one can only admire with open mouth. They convince voters that the super-rich must not be properly taxed because they are “job creators” and will reduce employment if we make them pay their fair share of running America.
Secondly, these liars attack trade unions. If labor costs more, less will be used, right? No. Wrong.
Business magazines write a lot about people called “customers” and how to get them to spend money. But they never mention how customers get their money. Somewhat obviously, it comes from their wages. But millions of customers earn less than their ancestors did 40 years ago (adjusting for inflation). Hence, they spend less, businesses grow less, America’s economy grows less, wages grow less and employment grows less — even as productivity soars.
Last month’s employment numbers hardly budged, baffling “experts” in the media (irony alert). They should read last month’s meticulously researched study by the Economic Policy Institute. Private sector union membership has declined from 34 percent in 1979 to a mere 6.7 percent today. The study calculated the effect of this decline.
It showed that if unions were stronger, wages would be higher for both union members and non-union members. The typical full-time worker in the private sector, not in a union, would be earning more if unions had more bargaining power. Republicans have been successful in getting non-union workers to think that higher wages for union workers come at their expense. The exact opposite is true. Here are some salient conclusions:
- The decline in union power costs non-union workers $133 billion annually in lost wages.
- Non-union men without high school diplomas are earning $3,200 less a year than in1979.
- Non-union men without college degrees are earning $2,700 less a year than in 1979.
These wage losses result from the weakening of unions’ negotiating power. Decent wages are not granted miraculously by God. They are fought for here on earth. Other losses were not included, such as from wage theft, no overtime pay, declining minimum wage, automation and “free trade.”
To make America great again, we shall have to make unions great again, rein in the Supreme Court (as FDR tried to do) and fix the tax code. Sadly, this is easier said than done. And it will be harder than buying caps made in China from an expert liar posing as a “job creator.”