Class Warfare, the Final Chapter
Tuesday 15 March 2011
by: Michael Pirsch, t r u t h o u t | News Analysis
President Barack Obama holds the door while talking to Chief of Staff Bill Daley inside his office in the West Wing of the White House, March 8, 2011. (Photo: Pete Souza / Official White House Photo)
"There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning." -Warren Buffett to The New York Times, November 26, 2006
There is overwhelming evidence that we are entering the final chapter of class warfare in the US. Today, in the "public arena," it is forbidden to say class warfare, and many citizens do not regard themselves as working class. The assault on language comes compliments of the propaganda apparatus, which includes: public relations, marketing, corporate media and the entertainment industry, universities, think tanks and so on. Its purpose is to distract our attention from serious matters so we can focus on trivial matters - usually involving consuming. Edward Bernays, the founder of the modern propaganda industry, described the process:
Those who manipulate the unseen mechanism of society constitute an invisible government. We are governed, our minds molded, our tastes formed, our ideas suggested largely by men we have never heard of ... in almost every act of our lives whether in the sphere of politics or business, in our social conduct or our ethical thinking we are dominated by the relatively small number of persons who understand the mental processes and social patterns of the masses. It is they who pull the wires that control the public mind.
In addition to inventing the propaganda model still in use today, Bernays' model created support for World War I, first in England and then in the US, calling the war to save Morgan's billions the war for "making the world safe for democracy."
We have been overwhelmed by the propaganda apparatus to the point that it controls our thought processes, causing us to become relentless shoppers, even against our own interests. It controls our thinking in the public sphere so that we support the wealthy elite, even against our own interests. Far too many of us have been rendered thoughtless and clueless as to what it means to live in a democratic society. It is not democracy because the government says it is; it is democracy when the masses are informed and act through their delegates to develop policy that promotes the general welfare. Today there are two sovereign nations that exhibit more democratic tendencies than all others: Venezuela and Bolivia. Because of their efforts to build democracy, both sovereign nations have been under attack by the US. In Venezuela, the US sponsored a coup in 2002. In Bolivia, the US government has sponsored a secessionist movement made up of the wealthy elite, whose tactics includes murder of government supporters. The Bolivian government expelled the US ambassador for his role in the destabilization attempt. Both Venezuela and Bolivia have adopted new constitutions which were the result of a process that involved all citizens and especially both countries' indigenous populations, who were previously completely excluded from any role in government. Both countries have improved access to their medical systems, increased literacy and established local spaces where democracy can be practiced. This shift causes the US empire considerable distress, because the empire fears the spread of real democracy more than anything else.
An essential element in a democracy is the development of a critical consciousness that allows us to resist succumbing to the siren call of the propaganda apparatus. Hugo Chavez, in a 2003 interview, spoke of the need to develop critical thinking:
It seems to be part of a larger social defect in the US - that's a society that should really develop some kind of response to the intellectual battering that seems to take place daily. I sincerely hope that one day the US public will develop some kind of critical consciousness, that they will remove the veil from their eyes and see the media powers for what they are. No part of the human community can live entirely on its own planet with its own laws of motion and cut off from the rest of humanity. They must be critical, and make it their personal responsibility to humanity and morality to discover the truth.
Eduardo Galeano, well-known Latin American author and critical thinker, continued in the same vein:
Never have so many been held incommunicado by so few. More and more have the right to hear and see, but fewer and fewer have the privilege of informing, giving their opinion and creating. The dictatorship of the single word and the single image, much more devastating than that of the single party, is imposing a life whose exemplary citizen is a docile consumer and passive spectator. Never before have so few fooled so many.
What better time than now for the wealthy elite to crush any chance of developing any critical thought. A substantial majority in the US have been so overwhelmed by the consumer/celebrity culture that distracts from the real situation that they are now fearful of harboring a critical thought, let alone speaking critically about the surrender of democracy to the wealthy elite. No matter what outrage the wealthy elite throws at us all, every indicator suggests there would be little, if any, resistance to that outrage. In fact, now is the best time for the wealthy elite to finally win the war and put into action all the highly repressive measures passed by Congress this decade. The repression already authorized, if put into full effect, would make the US a recognizably totalitarian state.
The goal of winning the war is to control all of the wealth and all of the people in the US and in the rest of the world, including, of course, governments. This victory is being accomplished by the combination of the financial services and military-related industries, which, in addition to lobbying for the continuation of several wars in the Middle East (Iraq, Afghanistan, Pakistan, Yemen, Somalia, Palestine, Iran, etcetera) is now also engaged in stealing government benefits from the citizens of Ireland, Spain, Greece, Latvia, England, France and the US. All governments are cooperating with the market (primarily Wall Street and London banks) by terminating long-running programs designed to promote the general welfare. The stolen money is being given by the governments to Wall Street and its felonious partners in European banks - however, large, passionate demonstrations and massive student and worker strikes mark the reaction in Europe.
Our time is coming. Soon, Congress will once again deliver more tax cuts to the wealthiest people on the planet, at a time when perhaps more than 60 percent of the American people is at severe economic risk. This time also marks the beginning of the process of ending Social Security and replacing it with mandated contributions to Wall Street, which - for a fee, and with no guaranteed return - manage individual workers' retirement accounts. Wall Street's management of what used to be Social Security will - through commissions and other fees that are not a cost in the present Social Security system - reap an obscene amount of money, maybe in the hundreds of billions annually.
In addition to depriving the federal budget of the income necessary to provide the most basic services by eliminating taxes for the wealthy elite, we have committed ourselves to conducting "endless war" wherever and whenever it suits the wealthy elite's purpose. The combination of tax cuts and funding for the endless wars during a "jobless" recovery ensures we will have a citizenry best described as desperate and clueless. The "endless" war is one of the greatest frauds perpetrated upon the citizens of the US. A failed trillion dollar intelligence and defense system results in 9/11; then, lies are perpetrated by the president, the Congress, the military and the intelligence apparatus; those lies are, in turn, supported enthusiastically by the propaganda apparatus, and we commit international war crimes by invading Iraq and Afghanistan. The US's empirical bullying has made the world much more dangerous, not safer. The more we terrorize people, the more terrorists we create. Our feeding of the financial services and military industries is sucking the spiritual, economic and physical life out of us - just as Dwight D. Eisenhower predicted.
During the summer of 2009, the Obama administration fired the first volley in the renewed battle led by the wealthy elite to eliminate Social Security. It announced a freeze in the cost-of-living adjustment (COLA) to Social Security recipients for the years 2010 and 2011. This was the first time in 30 years no COLA would be received. Never mind the cost increases in all necessities and the fact that no one was publicly calling for a freeze. The freeze was absolutely unnecessary and cruel. Social Security recipients are also required to pay more each month for basic Medicare coverage. Many elder workers are fired or laid off well in advance of their retirement age. It is cheaper to hire someone to work for less than the eliminated elder worker. The consequences of refusing increases to Social Security, raising the retirement age and lowering benefits is a recipe for eldercide.
Social Security is not a government-funded program. Employees' deductions are matched 100 percent their employers. There is simply no other tax money involved with Social Security. Medicare is something else, although funded with part of the Federal Insurance Contributions Act (FICA) tax. Private insurers and the pharmaceutical industry were allowed to participate in Medicare and could be considered somewhat responsible for the miserable shape it is in.
Obama is setting up this system on behalf of the wealthy elite, who were among his earliest and largest financial backers in 2008. According to the Congressional Budget Office and the Social Security Administration, with no changes whatsoever, Social Security will remain solvent until 2037. That is 27 years from now. Even with unemployment projected to remain at 20 percent or higher - which means FICA receipts will remain low or decrease further - Social Security is not the problem it is made out to be, especially considering all the current crises, such as endless war, global climate change catastrophes, jobless recovery and so on. So, why did Obama propose a two percent cut in FICA for employees? If you earn $1,000 per paycheck, you will receive a $20 "bonus" each payday. However, if Obama's proposal of a federal sales tax passes, that $20 will go right back to the US Treasury. That two-percent cut will definitely speed up the day when Social Security outgo exceeds income. At that time, the entire propaganda apparatus will be let loose to clear the way for Wall Street to take over Social Security. What a deal! You give me about $480 per year (unless there is a federal sales tax) and I give you several trillions of dollars to burn through. This is why critical thinking is so important. The wealthy elite dangle about $40 a month in front of debt-ridden, have-a-job-but-afraid-of-losing-it people, get hundreds of bought members of Congress to shill for it and, bingo, the door to steal Social Security is wide open.
On the other side of the coin, raising the dollar limit upon which FICA is taxable (right now, nothing above $106,000 is taxed) would keep Social Security solvent into the next century. A simple solution to a projected problem, but politically impossible because, although 70 to 80 percent of the population might support this, what counts is what the top one percent wants.
Why all this fuss over something that might pose a problem 27 years from now? The wealthy elite passionately hate Social Security because it represents a major victory by the rest of us during the classic battles of class warfare during the 1920's to the 1940's. It represents fruit from the tree of democracy. People who were in nearly the exact position we find ourselves today - except that they had no safety net at all - organized, agitated for and won a federal jobs program, a mortgage foreclosure moratorium, unemployment insurance, minimum wage and Social Security, among many other benefits they fought for and won. That era represents a major retreat for the wealthy elite in its relentlessly waged class war in the US. The wealthy elite hate democracy unless they can own it.
Another motive just might be the trillions of dollars Wall Street would like to get its hands on. Most private sector defined pension plans have been dumped on the federal pension guaranty corporation (which pays pennies to the dollar on what pensioners previously received). Public pension plans are also being targeted, feeding the insane position that goes something like this: "if I am down, I am going to drag down everybody like me." How else to explain the media and political flacks droning on and on about spoiled, bloated public workers with fat pension plans? Obama's cynical ploy of freezing federal employees' pay is a bow to these tactics. It is amazing how often we hear of the great financial sacrifices made by presidential appointees and how much more they could earn in the private sector. Of course, the benefits accruing from their corrupt behavior while in public office are not factored in. The fate of 401(k) plans and individual retirement accounts must not be discussed as Wall Street awaits its chance to steal from the poorest citizens of the US.
Other crises that seem to be forgotten include: the Savings and Loan rip-off following deregulation by Reagan (cost: over $500 billion); the stock market bubble of the Clinton-Bush years (401(k)s and IRAs wiped out); corporate manufacturing's flight from about 1975 on (and the associated loss of middle-class jobs and status); and the most recent fraud visited upon us, the fraudulent mortgage-backed securities bubble made possible by Clinton administration deregulation (its related losses still unfolding).
Clinton's current financial situation is suggestive. When he left office in 2001, reports had him owing $10-15 million in legal fees. Since then, thanks to speaking fees, a salary from his nonprofit foundation and investments, he can afford to blow $5 million or more on his daughter's wedding. One is left to imagine Obama's hidden retirement plan should he deliver Social Security (after George W. Bush's failure to do so became the "greatest disappointment" of his presidency). All former members of Congress, the president, vice president and cabinet officials should be required to submit detailed financial reports for at least five years after they leave office. If it seems they have become unusually rich (like Clinton), they should be investigated and, if warranted, indicted.
The list of priorities that need to be addressed in the federal budget should not in any way, shape or form include Social Security, unless the real intent is to steal it. Once the deed is done, it is all over.
Tax cuts are vital to the wealthy elite. They hate the federal income tax and have opposed it since its enactment in 1916. Beginning in the Carter era, the wealthy elite have been blasting away at what remains of their meager tax rates (that is, the maximum marginal rate after custom-made individual deductions). Reagan, Bush I, Clinton, Bush II and Obama all have participated in the endgame for progressive taxation. Obama has even gone so far as to reduce the estate tax, which only applies to about 2 percent of taxpayers. Ironically, reducing the estate tax has come to be very important to many who will never inherit an estate that would qualify to be taxed: the power of the propaganda apparatus again.
There was a time when the wealthy elite actually paid substantial taxes. The purpose of taxing the extraordinarily rich is to prevent an aristocracy from developing and to maintain a true democracy, a feat Aristotle recognized as impossible in the face of great income inequalities. Now, after over 35 years of cut, cut, cut for the rich, we have the most powerful aristocracy in history, and they are waging war against the rest of us. If you follow the results of studies that show the disparity of wealth in the US, you will see the flow of money from the bottom 90 percent to the top 1 percent over the 60 years between 1950 and 2010. The statistical evidence of the existence of class war is the direct result of the wealthy elite's ownership of Congress, the executive branch and the courts.
Wealth is the value of everything you own minus debt.
Disparity of Wealth
In 1933, the wealthiest one percent of the population held 33.3 percent of the wealth. In 1974, the wealthiest one percent held 19.9 percent of the wealth.
In 2007, the wealthiest one percent held 65.4 percent of the wealth.
In 1933, the bottom 90 percent held 66.7 percent of the wealth.
In 1974, the bottom 90 percent held 80.1 percent of the wealth.
In 2007, the bottom 90 percent held 34.6 percent of the wealth.
Federal Tax Rates (after custom-made individual deductions)
1974 Capital gains tax rate: 35 percent
1950 Highest marginal tax rate: 90 percent
2005 Capital gains tax rate: 15 percent
2005 Highest marginal tax rate: 34 percent
Average Real Income Change 1973-2000
Average real income of bottom 90 percent: -7 percent
Average real income of top 1 percent: + 148 percent
Average real income of top 0.1 percent: + 343 percent
Average Amount of Wealth Held by Persons: 2009 Census
Single Black Women: $100
Single Hispanic Women: $120
All White Men: $43,800
All White Women: $41,500
All Black Men: $7,900
Amount of Wealth Held by Families: 2009 Census
1986 Black Family Wealth: $2,000
2009 Black Family Wealth: $5,000
1986 White Family Wealth: $22,000
2009 White Family Wealth: $100,000
Full-Time Minimum Wage, Adjusted for Inflation
There is a common thread running through these statistics: the events that have eroded our quality and quantity of life have been controlled and orchestrated by the wealthy elite, and they are not finished yet. The picture is one dominated by racism, militarism and corporate control of government - three vital ingredients of fascism. Post-racism, indeed.
The story of class warfare would not be complete without a look at the behemoth military-security apparatus. A bipartisan Congress has passed draconian legislation during the past nine years that essentially leaves our Constitution with rights intact - at least, the right to own guns, and the unlimited corporate right to influence elections. All totalitarian repressive tactics such as unchecked surveillance, imprisonment without charge, summary execution, the right to a lawyer, the right to know the charges brought against you and confront your accuser, and so on, have been destroyed by legislation and presidential fiat. In addition, the military and military tactics and equipment have been inserted into local law enforcement, with the purpose of shutting off avenues of dissent and/or dealing with dissent by the use of overwhelming force (think Pittsburg G-20). We live inside a nation that has already built the legal and physical infrastructure (the latter partly contracted to Halliburton) so that hundreds of thousands can be pulled off the street in a single day, imprisoned without charge and denied access to contact with family and legal representation.
When Obama announced his creation of the deficit commission, he suggested all military and domestic security spending were off limits for discussion. If a candidate proposes serious reductions in military and domestic security spending, that candidate is toast. The pols whimper that it is political suicide to propose serious cuts in military and domestic security spending; not doing so guarantees the slaughter of millions - as we have seen in the Middle East and every other place our war-happy generals practice their craft.
The US empire has expanded to include over 800 overseas military facilities, ranging from city-sized bases to single building outposts in 63 countries - not counting the bases in Israel, Iraq, Afghanistan, Uzbekistan and Kazakhstan. The US empire military budget including cost of war (which is not included in the annual defense budget) is over $1 billion, slightly less than one-half (46.4 percent) of what all other countries on the planet combined spend.
The power the US military wields is felt in every country on the planet. The US military is "supported," with hardly any dissent, not only by the Democrat and Republican members of Congress, but also, presumably, by over 90 percent of the electorate, if you count total votes in each Democrat versus Republican race for House, Senate and president. This one-party/war-party system has produced unconditional love of war and expansion of empire. Thus, a vote for Democrats or Republicans is an endorsement of empire. There is no question that the one-party system has consistently supported military expansion across the globe. While many of the people who voted for Democrats may be offended by a claim that their votes endorsed empire, that is the result, if not the intent, of their votes. Meanwhile, polls show that more than half of those polled do not support an American empire. Count one more success for the propaganda apparatus.
Perhaps you might remember the $12 billion "lost" in Iraq in 2002. The money was shipped from the US to the Green Zone in Baghdad. The money arrived shrink-wrapped on pallets and disappeared. No real investigation took place, but why investigate what was already known? The scandal didn't get much play in the media either. A lack of media play creates a lack of concern by the masses. That $12 billion could certainly fill a lot of holes in a budget whose deficit is tirelessly evoked, alongside a "perception managed" campaign against Social Security, in one of the last gambits in the 160-year-long class war. But promoting the general welfare is not one of the wealthy elite's concerns.
That the wealthy elite hate democracy is beyond question. The WikiLeaks of State Department cables exposed that hatred over and over again. All governments are expected to do the bidding of the US empire, especially when those demands are contrary to the actions and thoughts of that government's own citizens. Specific examples of the hatred of democracy include: the 2000 vote in Florida; the kidnapping , during a US-backed coup in Venezuela, of President Chavez in 2002; the 1992 and 2004 kidnapping of Haitian President Jean-Bertrand Aristide (Aristide won the 2002 election with over 92 percent of the vote); the allowing of the criminalization of Aristide's political party, Famni Lavalas; the support for the ouster of Honduras President Manuel Zelaya and for the resultant coup government; the support for Israel's policies of overturning the most democratic election in Arab history in Palestine by jailing victorious Hamas legislators and exacting severe collective punishments against the Palestinians in Gaza by blockade, and, later, by a massacre.
Another example of elite disgust with democracy was offered during September 2008, when Congress was ordered to bail out the wealthy elite's bankers. Prior to the first vote, I called over 120 Congresspeople at their Washington offices. After the House rejected the bailout, I called about 20 Senators. The calls to the House revealed that each member's office was receiving a torrent of phone calls. These calls were not part of an organized effort, but came out of genuine and passionate opposition. I was informed by the staff of various members that over 90 percent of the callers opposed the bailout. After a few phone calls to Senate members, it became apparent that the senators would not listen to the people and would follow the orders of the wealthy and bail out the banks.
Rep. Brad Sherman, a Democrat from California's 27th District (comprising Sherman Oaks and Northridge) spoke on the House floor during the second attempt to pass the bailout. He revealed that more than one House member was told that martial law would be declared if the House failed to pass the bailout. The obscene wealth of the elite was threatened by democratic activity of the nation's citizens. The bailout and how it was executed remains one of many examples that our wealthy elite hates democracy.
We really have very little space in our lives to practice democracy as it is meant to be practiced. The union movement has engaged in sporadic dances with democracy, but those were finished with the creation of mega-size "local" unions. Nearly all of the successes by the rest of us in this class warfare have been due in no small part to the extent that democracy still exists in the unions. Now, there are still a few locals that practice real democracy internally, and they are the most successful unions today. Our greatest achievement in the class struggle took place during the staggering increase in union membership that took place between 1933 and 1947. Our long slide to the bottom began with the anti-solidarity Taft-Hartley legislation that severely limited freedom of association and expression for all citizens except the wealthy elite. It continued with the Red Scare, which drove some of the most dedicated, compassionate organizers in the US out of jobs and careers - a brilliant tactic by their adversaries because it also effectively disappeared from our knowledge the notion of organizing for positive social change. The legacy of the Red Scare continues today as dissidents are conflated with terrorists. Fear and more fear keeps us under control.
Union members did not reject democracy. Rather, following the New Deal and World War II, an all-out attack was waged against union activists, with the assistance of Congress of Industrial Organizations (CIO)-affiliated leaders. This turnabout involved a self-cleaning of the CIO on behalf of the wealthy elite. Unions were kicked out of the CIO for being deemed too radical, and some of the radical unions changed their philosophy to get along. Union democracy has been the main victim, since union members are more radical than their leaders and allowing democratic decisions to be made would disrupt the leaders' cozy relationship with the wealthy elite.
So, today, we are left with no place to learn about and practice democracy except in our neighborhoods (the physical, not the virtual, ones). The rest of us cannot begin to compete with the wealthy elite for access to the media; we cannot compete with the wealthy elite in the ability to control the propaganda apparatus and the wealthy elite cannot compete with us in our neighborhoods.
A vital instrument in the propaganda apparatus' control of our thinking and thought processes is the television. More than 80 percent of the funds spent in the 2010 election were spent in the realm of television. Imagine what would happen if we didn't watch it. Billions of dollars would be wasted because the voters did their own research and, through discussions with their neighbors, decided on the candidate with the best program, not the best television ads. An achievable dream, as long as there is unfettered access to a neutral Internet?
Typically, in difficult times, it is neighbors who come to offer assistance. When floodwaters threaten your home and the military has come, not to help, but to provide "security." Our Internet and other long-distance friends will not be able to help in the wonderful way of neighbors who cooperate to help each other. We can organize in our neighborhoods to deal with our common struggles, and, from that, democracy will grow and grow, until it engulfs the whole nation.
Becoming informed, educating each other, agitating on issues and organizing can create a sustainable economy through ideas such as Gardens Not Lawns, Food Not Bombs, community radio, free health clinics (many doctors would be happy to volunteer), free legal clinics, transportation cooperatives - the list is as boundless as our collective imagination. Beginning in our neighborhoods, it is possible to form an organic, progressive political movement to sweep the land.
The question remains: will we allow the story to be "Class Warfare: The Final Chapter," or will we create the alternative by beginning the class struggle? The base of the wealthy elite has always been led by the House of Morgan (J. Pierpont Morgan) which lives as a corporate person in the forms of Morgan Stanley and Morgan Chase, preeminent leaders in the world's financial markets. Yes, the very markets that are "nervous" and "jittery" (real human traits) about countries that owe them money. Plagued by nerves and jitters, the markets are busy raiding old-age pensions, family assistance programs and the like all over Europe - the same prescription followed for years in the so-called third world and in the US right now.
"Power concedes nothing without a demand - it never has and it never will...." These are still powerful words spoken by one of our greatest Americans, Frederick Douglass. The sad truth is that we have not made any demands since the Civil Rights struggle and the anti-Vietnam War struggle during the 1950-1970's. We are at the fork in the road: to the right is class warfare - the final chapter - and to the left, the class struggle begins.
A grassroots-based movement, as opposed to the billionaire-controlled, top-down Tea Party, will be able to effect progressive rather than regressive programs. It is ironic that the wealthy elite recognize the value of neighborhood organizing while the left ignores this base. The Koch brothers-sponsored Tea Party was using tactics advocated by Saul Alinsky, one of our greatest radical neighborhood organizers. They used the tactics; what they did not do was hand out Alinsky's book, "Reveille For Radicals." If they had, the Tea Party could have transformed itself into a truly progressive force.
Finally, it is our right and our duty to replace the corrupted government with one that works for the public welfare, ensuring that the wealthy elite never again endanger all life on this planet or destroy our collective humanity. We are "endowed by our Creator with certain unalienable rights ... among these are life, liberty and the pursuit of happiness." We must recognize our government has become destructive of those ends and reform it. The Declaration of Independence goes on to say, "mankind are more disposed to suffer while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuse and usurpations ... reduce them under absolute despotism... " we must then accomplish wholesale change. Have you suffered enough, or do you want more?
 Sandy Leon Vest: "Consumers Are Sleeping With the Enemy - and Paying For It," Common Dreams, February 26, 2010.
 Mark Weisbrot: "Interviewing Chavez," North American Congress on Latin America (NACLA); February 12, 2003.
 Media in the Americas; (date unknown); NACLA Report on the Americas, page 14; (Ibid).
 Julie Hollar: "Wealth Gap Yawns and So Do Media: Little Interest in Study of Massive Race/Gender Disparities," EXTRA!, a publication of Fairness & Accuracy In Reporting (FAIR); February 6, 2010.
 Jules Dufour: "The Worldwide Network of US Military Bases: The Global Deployment of US Military Personnel," January 7, 2007; Global Research.ca/Centre For Research on Globalization.
Randy Stoecker: Defending Community: The struggle for alternative redevelopment in Cedar-Riverside; Temple University Press, Philadelphia, Pennsylvania, 1994.
P.A. Payutto: Buddhist Economics: A Middle Way For the Marketplace; Buddhadhamma Foundation, Bangkok,Thailand.
E.F. Schumacher: Small Is Beautiful: Economics As If People Mattered; Blond&Buggs Ltd., London, 1973.
Saul Alinsky: "Reveille For Radicals" and "Rules For Radicals," Vintage Books, division of Random House, Inc. New York, New York.
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