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April 22, 2014

My followers know that I have written extensively in the past about Dickensian England in Victorian times and how the capitalists of that era mistreated the working class of the day, including child labor as portrayed in Oliver and kindred books penned by Charles Dickens. Capitalists of that day and age were even more brutal and selfish than they are today, and that’s saying something, because they are today just as oblivious to their environment (both human and natural) as they were then, and perhaps even greedier. Today in the name of free enterprise such capitalists trash our environment, fight any attempt to regulate their unethical conduct in carrying on their businesses (see bailouts of Wall Street banks and near world-wide depression as recent results), and, as in Victorian England, are in favor of re-feudalizing the labor market (result – an accelerating rate of wage inequality that is on the verge of systematizing near-recession as the economic norm with further and quickening decline in aggregate demand).
With the vast majority of the nation’s money in their coffers and their control of the political process well in hand today, a betting pragmatist would have to bet that they will succeed in bringing back capitalist control of everything a la the Dickensian days of the 19th century (especially with recent Supreme Court decisions solidifying their political hold via equating corporations as people and money as speech). Given such puny attempts to raise the minimum wage to $10.10 an hour over the next few years when the minimum wage should be at least $12 an hour (and today – not years from now), we are already acquiescing to the complaints of capitalists. More such costs, of course, cut into their operating profits, we are told, and are socialistic. They neglect to tell us that their credit card interest, banking fees and other such monopolistic weapons they carry in the name of free market enterprise cut into our meager wages, too. Their greed is obvious in numerous contrasts I could draw but for space constraints.
The foregoing is prelude, both grim and headed the wrong way. What are we the people going to do about our game with the oligarchs when we know the dice are loaded in their favor? The literature suggests two ways to counter this approaching disaster of systemic recession: either raise taxes on the rich and investment class or adopt policies leading to enlargement of the middle class. (I favor both; I see no need to be constricted to an either/or choice in view of the emergency at our door.) Either or both require political accommodation, so our first task is to remove those representatives and senators from office who are opposed to such policies-to-be. Our primary effort in rescuing our middle class from the oblivion to which it is now headed is political. Let’s take a quick look at the history of the middle class generally and the middle class in this country before Reagan’s tax cuts set it on the path to ruin.
Capitalism as a system does not produce a middle class. Left to its own devices (as it is now with little regulation and scant taxation), it tends to monopoly and inequality and wealth rapidly accumulates to the few at the top. Underregulated and undertaxed capitalism likewise does not tolerate formation of a middle class, and if (as when Reagan took office) a middle class already exists, it is soon unraveled by underregulation and undertaxation – as we can all now bear witness. When we had heavily taxed and regulated capitalism following WW II, we had a rapidly building middle class and GM (our biggest employer then) was paying its workers $50 dollars an hour and perks (in today’s dollars); now after Reagan’s deregulation and tax-cutting antics, our biggest employer (Wal-Mart) pays $10 an hour on average (in today’s dollars) while the Dow enjoys stratospheric numbers. Why? See Part II. GERALD E


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