Screwed the Undeclared War Against the Middle Class (14 page)

America's income inequality is not because Americans aren't smart enough. America has income inequality because a small elite group of corporate aristocrats have decided that they deserve to make more money than the rest of us. And they justify their greed and questionable business practices by saying that the market knows best.

One con, Michael Powell, said as much. In an NPR
Morning Edition
report on May 28, 2003, Rick Carr reported: "Current FCC Chair Michael Powell says he has faith the market will provide. What's more, he says, he'd rather have the market decide than government." Powell was reciting the cons' mantra. Misconstruing Adam Smith, who in 1776 warned about the dangers of the invisible hand in the marketplace trampling the rights and the needs of the people, the cons suggest that business always knows best.

In the cons' brave new world, corporations are more suited to governance than are the unpredictable rabble of the citizenry. Corporations should control politics, control the commons, control health care, control our airwaves, control the "free" market, and even control our schools.

Although corporations can't vote, the cons claim they should have human rights, like privacy from government inspections of their political activities and the free-speech right to lie to politicians and citizens in PR and advertising.

Although corporations don't need to breathe fresh air or drink pure water, the cons would hand over to them the power to self-regulate their poisonous emissions into our air and water.

Corporations and their CEOs are America's new feudal lords, and the lower-level cons are their obliging servants and mouthpieces. Instead of a landed aristocracy, we increasingly have a corporate aristocracy. Call it
corporatocracy.

America was not conceived of as a feudal state,
feudalism
being broadly defined as rule by the superrich. Our nation was created in large part in reaction
against
centuries of European feudalism. As Ralph Waldo Emerson said in his lecture titled "The Fortune of the Republic," delivered on December 1, 1863, "We began with freedom. America was opened after the feudal mischief was spent. No inquisitions here, no kings, no nobles, no dominant church."

The founding idea of America was that our country would not be ruled by a handful of very powerful, very rich men. America was founded as a country ruled by We the People, and for democracy to work there had to be a strong and broad-based middle class.

Even at our country's founding, there were some who couldn't quite shake the idea that aristocracy was the way to go. As Jefferson warned in an 1826 letter to William B. Giles, there were those even then who

look to a single and splendid government of an aristocracy, founded on banking institutions, and moneyed incorporations under the guise and cloak of their favored branches of manufactures, commerce and navigation, riding and ruling over the plundered ploughman and beggared yeomanry. This will be to them a next best blessing to the monarchy of their first aim, and perhaps the surest steppingstone to it.

The aristocracy Jefferson feared first rose during the Gilded Age in the 1880s, when just a few companies seized control of much of America, including many of our elected officials. The major form of transportation and communication in those days was the railroad—and the railroads were owned by the Vanderbilts. The major form of energy then as today was oil, monopolized by John D. Rockefeller's Standard Oil Trust. And the major form of trade was in manufactured goods, which required factories, which in turn required steel—monopolized by Andrew Carnegie and his Carnegie Steel Company. These monopolists required
ways to retain their hold on their money, so they turned to financiers like Jay Gould and John Pierpont Morgan, who set up large trusts for them.

The Progressive Movement and then FDR beat back these monopolists with the Sherman Antitrust Act, the National Labor Relations Act (Wagner Act), and other laws that regulated the game of business. Then Ronald Reagan, George Bush Sr., Bill Clinton, and George Bush Jr. came along and turned back the clock. Reagan fought the labor laws, Bush Sr. pushed for fast-track trade authority for the president, Clinton finally took down trade protections, and Bush Jr. put corporate executives into the driver's seat on government legislation.

We've entered a new Robber Baron Era.

Today the major form of communication is by phone and the Internet, an area increasingly monopolized by the new AT&T (formerly SBC/Cingular/AT&T). The major form of energy—oil—is controlled by just a handful of companies. Today's economic driver is the computer; its software is monopolized by Microsoft, and its hardware is manufactured by a handful of oligarchs.

Today, as in the Gilded Age, the rich are richer than ever. Forbes crows that in 2005 the "rich got richer" as "the collective net worth of the United States' wealthiest climbed $125 billion, to $1.13 trillion."
⁶
That's greater than the gross domestic product of Spain or Canada. Bill Gates alone is worth $51 billion. Five Walton family members—the owners of Wal-Mart—made it into the top 10.

Meanwhile, the median household income fell for the fifth year in a row to $44,389 in 2004—down from $46,129 in 1999, adjusting for inflation.
⁷
In 1972 the median income for a person with a high school diploma was the equivalent of $42,630 in today's dollars. In 2002, the last year for which the National Center for Education Statistics compiled such numbers, a person with a high school diploma has a median income of $29,647.
⁸
As the rich got richer, the rest of us got poorer—particularly what used to be our middle class.

The hallmark of the corporatocracy is monopoly—fewer people holding more of the wealth, fewer companies owning more of the commons. The very competition that the cons claim to embrace is destroyed by the unrestrained growth of corporate interests. Big fish eat little fish, over and over, until there are no little fish left. Then they eat the middle-sized fish until they're gone, too.

Look at the thoroughfares of any American city and ask yourself how many of the businesses there are locally owned. Instead of cash circulating within a local economy, at midnight every night a button is pushed and the local money from all over America is vacuumed away to Little Rock or Chicago or New York.

And the corporate lords want more.

Not content with their hold over the private sector, they want to take over the public sector, too. When Jeb Bush cut a deal with Enron to privatize the Everglades, it diminished the power of the Florida government to protect a natural resource and enhanced the power and the profitability of Enron. Similarly, when politicians argue for harsher sentencing guidelines and also advocate more corporate-owned prisons, they're enhancing the power and the profits of one of America's fastest-growing and most profitable remaining domestic industries: privately owned prisons.

The cons look at the government's pollution controls and see regulations that get in the way of their profits. They look at single-payer health care and see a threat to the pharmaceutical industry's practice of price-gouging Americans. They look at Social Security and see an opportunity for more big bonuses for more Wall Street fat cats. In these and other areas, the government still holds the keys to the riches of the commons held in trust for us all—riches the corporations want to convert into profits no matter if it destroys America's middle class and kills off our democracy.

The cons confuse efficiency and cost. They suggest that big corporations can perform public services at a lower total cost than government can, while ignoring the corporate need to pad the bill
with dividends to stockholders, inflated CEO salaries, corporate jets and headquarters, advertising, millions in campaign contributions, and cash set-asides for growth and expansion. They frame corporate ownership as the solution of the "free" market and talk about entrepreneurs and small businesses filling up the holes left when government lets go of public property.

But these are straw man arguments. When the cons say that government is the enemy, they disguise their real agenda. The government of the United States is
us
. It was designed to be a government of, by, and for We the People. It's not an enemy to be destroyed; it's a means by which we administer and preserve the commons that we collectively own. When the cons try to "drown government in a bathtub," what they are really doing is replacing democracy with corporate rule, a feudal state controlled exclusively by the largest of the corporations. They are calling for nothing less than the destruction of the middle class—and thus democracy—in the United States of America.

A cornerstone of the cons' movement to consolidate power in the hands of a wealthy corporate elite is the campaign to end corporate income taxes altogether—and leave the rest of us to pick up the entire tab for corporate use of our institutions and corporate despoliation of our commons.

Corporations are taxed because they use public services; they are therefore expected to help pay for them—sort of like the example in
chapter 2
of the Hershey bar in the 7-Eleven store.

Corporations make use of a workforce educated in public schools that are paid for with tax dollars. They use roads and highways paid for with tax dollars. They use water, sewer, power, and communications rights of way paid for and maintained with taxes. They demand the same protection from fire and police departments
as everybody else, and they enjoy the benefits of national sovereignty and the stability provided by the military and institutions like the United Nations and the North Atlantic Treaty Organization (NATO), the same as all residents of democratic nations.

In fact, corporations are
heavier
users of taxpayer-provided services and institutions than are average citizens. Taxes pay for our court systems, which are most heavily used by corporations to enforce contracts. Taxes pay for our Treasury Department and other government institutions that maintain a stable currency essential to corporate activity. Taxes pay for our regulation of corporate activity, from ensuring safety in the workplace and a pure food and drug supply to limiting toxic emissions in our air and water.

Under George W. Bush, the burden of cleaning up toxic wastes produced by corporate activity has largely shifted from the original polluter-funded Superfund and other programs to taxpayer-funded cleanups (as he did in Texas as governor there before becoming president).

Every year millions of cases of cancer, emphysema, neurological disorders, and other conditions caused by corporate pollution—cases like my dad's—are paid for in whole or in part by government-funded programs. From Medicare and Medicaid to government subsidies of hospitals, universities, and research institutions, these programs are funded by tax dollars through the National Institutes of Health (NIH) and the National Institute of Mental Health (NIMH). Most drugs marketed in the United States were first discovered by taxpayer-funded research at universities.

Because it's well understood that corporations use our tax-funded institutions at least as heavily as citizens do, they've traditionally been taxed at similar rates. For example, the top corporate tax rate in the United States was 48 percent during the Carter administration, down from a peak of 53 percent during the Eisenhower and Kennedy years.

Today it stands at 35 percent despite a May 2001 suggestion by Bush administration Treasury secretary Paul O'Neill that there
should be no corporate income tax whatsoever. This was the opening salvo in a very real war to have working people bear
all
the costs of the commons and of governance while the wealthy corporate elite derive most of its benefits.

In a feudal state, historian Ernest Bloch reminds us, "The nobles need not pay taxes."

This is anti-democratic feudalism in its most raw and naked form, just as the kings and the nobles of old sucked dry the resources of the people they claimed to own. It's the face of wealth and privilege, of what Jefferson called a "pseudo-aristocracy," that works to its own gain and enrichment regardless of the harm done to the nation, the commons, and We the People.

It is, in its most complete form, the face that would "drown government in a bathtub"; that sneers at the First Amendment by putting up "free-speech zones" for protesters against corporate shills in government; that openly and harshly suggests that those who are poor, unemployed, or underemployed are suffering from character defects. The cons say that China and India are taking our jobs because we are lazy, undereducated, can't compete, and don't try hard enough. The cons work hard to protect the corporate interest but are happy to ignore the public interest.

In the early twentieth century, a famous politician defined the kind of society the cons are creating. This politician advocated "a system of government that exercises a dictatorship of the extreme right, typically through the merging of state and business leadership, together with belligerent nationalism." The politician was Benito Mussolini. The word was
fascism
.
⁹

Fascism, feudalism, corporatocracy
—call it what you will; corporate-embracing cons are not working for what's best for America or for the interests of the middle class who compose the "We the People" in our democracy. The corporate-run state
they embrace might appear "free" and even allow elections, but these are only elections among candidates funded and approved by corporate powers, held on voting machines owned by those corporate powers, and marketed in media controlled by those corporate powers.