SOCIETAL AND ECONOMIC STRAINS SINCE THE 80s

 

SOCIETAL AND ECONOMIC STRAINS SINCE THE 80s

My above topic is admittedly too large to treat in a blog, so I will skim off a few high points in this piece.

Sociologist Robert Putnam has documented that Americans in the 80s stopped being a nation of “joiners,” as noted by Robert Reich in the latter’s 2015 book, Saving Capitalism. The forces that gave voice to American pluralism were disappearing and had largely disappeared by the 21^st century. The American Legion’s membership was in freefall; Masonic lodges were having trouble surviving. It seemed as if things were falling apart in Americana, and I detect no improvement as we are moving along in this century. George Orwell seems to have replaced Norman Rockwell.

Such voluntary organizations were no longer very active at local and state levels. This created a social vacuum, one that was filled by national advocacy organizations typically headquartered in Washington. The new “membership” did not involve local advocacy but rather a mere willingness to send in national dues. The mass of people became relatively unengaged in local and state (and inevitably) national affairs. Voting numbers plummeted. Wages became so bad mom had to go to work.

The situation created a ready-made environment for a corporate takeover with Powell’s infamous memo, and that is exactly what happened (or is happening if not yet complete). There was and is no countervailing force to prevent it either societal or economic what with citizen apathy and the virtual death of unions, leaving workers to the tender mercies of stagnant wages, outsourcing, and, as formerly, some consultation with management in making work rules etc.

It was not only workers who felt the wrath of the corporate takeover. There were many instances of where the big corporate fish swallowed up the little fish. Take small business owners and community banks, for instance. Various states have not only enacted so-called right to work laws which discriminate against labor; they have also repealed fair trade laws which had required that wholesalers charge the same price to all retailers. Such repeals were done at the behest of Walmart and other such giant-box retailers, who argued that consumers would get a better deal as a result if such retailers could get a price break at the wholesale level. Result? Walmart in many instances has taken away so much business from Main Street that millions of locally-owned businesses have closed taking their diverse goods and services (some locally produced) and jobs with them.

Further result? After destruction of their competition (thanks, among other things, to repeal of fair trade laws), Walmart and other big retailers can charge as much as they please (aka monopoly pricing), thus blunting their argument in court that with cheaper wholesale prices they could provide cheaper retail prices. Walmart, a corporate venture involved in profit-making for Sam Walton’s heirs (who collectively are richer than the lower 40 percent of Americans put together), lives by the market metaphor – whatever the market will bear. Walmart’s municipal victims, or some of them, look like ghost towns.

A similar problem descended upon community banking. In addition to Clinton’s biggest mistake in office (repeal of the Glass-Steagall Act which had theretofore prevented a mixture of commercial and investment banking), he signed the so-called Interstate Banking and Branching Efficiency Act in 1994, which ended the existence of hundreds of community banks in favor of allowing the big Wall Street  banks with their enormous cash positions (and already too big to fail, it was said) to gobble up local banks in small towns all over America (including JP Morgan Chase, recipient of the largest bailout following Bush’s Great Recession, in my little town here in Michigan where I spend summers).

This legislative gift allowed the big banks to become far bigger while taking over markets from which they had been previously excluded, markets that had previously been served by state and local banks who had theretofore provided sufficient credit to local businesses, with the result that many small local and regional enterprises were cut off from financing as I suspect but cannot prove that the chief purpose of the big Wall Street banks in spreading out all over America was and is to gather deposits to send to their home offices on Wall Street for further distribution to multinational corporations and outsourcing in China and elsewhere rather than serving local loan demand and thereby bolstering demand and employment in our economy.

I am sad to write that during Clinton’s first two years in office (and with a Democratic majority in the Congress) he also signed NAFTA and established the WTO, both items of major import to big business. He also committed himself to reducing the federal budget deficit (an austerity tactic) as insisted upon by Wall Street bond traders, and while he did prevent corporations from taking a deduction for executive pay beyond $1 million, he did allow deductions well beyond that so long as such pay was “performance based.” We all know that story. The corporations paid humongous sums to their executives way past the million dollar cutoff limit for deductibility in the form of stock options and other awards and took every penny in deductions to income (which means that you and I are paying for what they should be paying but for such legislative intervention).

Much of the above and other such excesses were on the advice of Bob Rubin, Clinton’s Treasury Secretary, who came to the cabinet via Goldman Sachs and left to a comfy Citibank job (both big Wall Street banks). He served the Street well while away temporarily but while corporate profits exploded, the stock market surged and CEO compensation went into the stratosphere during Clinton’s heyday of less regulation of Wall Street, guess what? Corporate workers’ wages stagnated and more northern states joined the so-called “right to work” slave column along with those in the reactionary south.

We are told that Clinton brought on an era of prosperity not ever seen before. I have a question: For whom? Nothing happened in the economy in which you and I live. There was no trickle down, there was no general increase in wages, no health care reforms; there was instead a paper shufflers’ deregulated nirvana. Nothing happened in which you and I would be interested. We had no cattle in that stockade.

So how much longer can we withstand the societal and economic strains imposed upon us by the rich and corporate class via their political hirelings? When does this end, or does it? When is it our turn to share in the bounty via substantial wage increases, when we can feel secure enough to go back to membership in the American Legion and take renewed interest in our communities, our fellow workers and indeed our futures and that of our families, as we once did? When does this chronic wage inequality breathe it last? When?      GERALD       E