Huffington Post

It's a familiar joke: A man falls off a forty-story building; as he passes the t
wentieth floor, a friend yells out the window, "How's it going?" and the faller
screams, "So far, so good!" Now it's become the Republican campaign theme.
The United States is in free fall. The economy is stagnant and shedding good job
s. We've lost our edge in the global marketplace. The middle class is getting sq
ueezed out, as the rich get richer and the poor poorer. We're stuck in an endles
s war in Afghanistan. Horrific problems, such as global climate change, are igno
red. Millions of voters believe the good ship America has lost her way.
Meanwhile Republicans play blame games. Stoke the fires of polarization. Chant:
"So far, so good. Let's shut down the government."
As the US heads into a critical midterm election, the US electorate is more pola
rized than at any time since the Vietnam War. And Republicans view this as an ac
complishment rather than as a problem.
Attitudes about health care reform typify our political division. The latest Kai
ser Foundation Tracking Poll indicates that while support for the bill is increa
sing -- 49 percent of respondents now have a favorable opinion of it versus 40 p
ercent unfavorable -- the opposition has become more entrenched. 26 per cent fee
l the bill should be repealed "as soon as possible." (A Fox News poll shows that
44 percent favor repealing.)
There's a hardcore conservative minority that opposes everything the Obama Admin
istration proposes: economic stimulus, action to spur employment, tax increases
for billionaires, campaign finance reform, repeal of "don't ask, don't tell," ca
p and trade legislation to limit emissions, and on and on. They don't have any s
ubstantive counter proposals; they're united by hatred of Barack Obama.
Recently, the GOP released their Pledge to America. If these were not such serio
us times, the document might be dismissed as political humor, a parody of 1994's
Republican Contract with America. Pledge is best understood as a baroque overtu
re to the Tea Party movement that has its own Contract from America.
These conservative manifestos share three components: First, the belief that pow
er has to be returned to the states, that much of what goes on in Washington is
unconstitutional. (Conservatives believe that, because of the Tenth Amendment to
the Constitution, many Federal laws are unconstitutional because they usurp pow
er from states -- the so-called Tenther movement.) The second component is the d
esire to reign in government spending and cut taxes - although there are few ser
ious proposals on how to do this other than defunding health care. And finally,
conservatives propose to solve the energy crisis by removing all barriers to exp
loration of domestic reserves and operation of US power plants -- regardless of
the environmental consequences or the fact that this won't solve the problem.
Neither the Pledge to America nor the Contract from America consider the United
States' most pressing problems, how to: guarantee good jobs for working American
s, end the war in Afghanistan, ameliorate global climate change, and reduce the
role of moneyed interests in American politics. These are "So far, so good" plan
s that ignore America's real problems and instead appeal to nativism.
Given that the conservative manifestos are not solutions oriented -- they're ran
ts -- why are polarization politics working? Why does the enthusiasm gap favor c
onservatives?
An obvious answer is that it's easier to be against something rather than for it
, particularly in the middle of a depression. Rank-and-file conservatives who we
re outraged by the election of Barack Obama have seized upon difficult economic
times as an excuse to rail against all things Democratic.
But there are two other culprits. Every problem is someone's opportunity. And Am
erica's problems have presented conservative media with a terrific opportunity t
o expand their base. As Barack Obama's numbers have fallen, Glenn Beck and Rush
Limbaugh's have risen.
But let's not forget the free-market capitalists, the power elite who were the r
eal base of the George W. Bush era. Conservative powerbrokers like the Koch brot
hers have seized on inchoate populist anger, molded it into the Tea Party moveme
nt, and harnessed it for their avaricious purposes.
There are unusually high stakes in the November 2nd midterm election. It's about
 more than which Party will control the Senate and the House of Representatives,
which Party will be seen as having momentum going into the 2012 Presidential el
ection.
Conservatives want to shut down the Federal Government. Republican Senator Jim D
eMint brags that his objective is paralyze the Senate in "complete gridlock."
Their plan seems to be working. The United States is in free fall and the radica
l Republican response is, "So far, so good. We want the government to crash."
As thousands of demonstrators marched in European capitals on Wednesday to prote
st recent austerity measures, officials in Brussels proposed stiffening sanction
s for governments that fail to cut their budget deficits and debt swiftly enough
. ("Workers In Europe Protest Austerity Measures", New York Times, 9/30/2010)
Oh, do the super-rich hate the sound of "class struggle." Dare to utter the word
s and they'll reach for their red-baiting paint guns and spray you silly with in
vective. It's un-American. It's socialistic. It's an insult to democracy and fre
edom.
But try as they might, they can't paint over the reality, which the new Fortune
400 listings make so clear: Wall Street billionaires have more money than they'l
l ever be able to use--at a time when more than 29 million of us don't have that
most basic necessity, a full-time job. A hidden class war got us to this point.
It's not hidden anymore.
Once upon a time there was a tangible connection between the plutocrats and the
rest of us. Carnegie, Mellon and Rockefeller built sprawling enterprises that em
ployed tens of thousands of workers (even if they did treat them brutally). But
today's billionaire financiers, about 100 of whom are on the Fortune 400 list, h
ave a tough time explaining how their money-making schemes produce any jobs at a
ll. Very few of us have a clue about how they even make their money.
But we are clued in to the way our society is splitting apart. What's good for t
he Wall Street tycoons is not good for America. The wealthy may loathe hearing a
bout "class struggle," but we're in the middle of one -- and it's a doozy.
Back in the 1800s (and onward), "class struggle" meant the economic conflict bet
ween the interests of working people and those who owned "the means of productio
n." But that construct proved too rigid to describe a complex modern economy. Co
mpanies are often run by managers who aren't owners. Most middle managers and su
pervisors also are workers, not owners, though they may identify with upper mana
gement. In glamor industries like Hollywood and sports, some workers are far ric
her and more powerful than the managers and owners. And many workers are "owners
" through stock purchases made individually and through their pension funds.
"Class struggle" also doesn't capture the symbiotic relationship between workers
, managers and owners. Yes, we fight over everything from plant shutdowns to job
safety and health care benefits. But we also have common interests - workers wa
nt to keep their jobs, and for that they are dependent upon "owners." Instead of
class struggle, we often see workers lobbying alongside owners for policies tha
t might keep their industry afloat. This worker-boss connection is often much st
ronger than any sense of broad class solidarity among workers across the country
. Most of us define ourselves as middle class, not working class, and we don't s
ee ourselves at war with the business owners.
Until now. The financial crisis is squaring up a new class struggle: The handful
of financial elites versus the rest of us. Where's our common interest? What's
good for them (a $10 trillion bailout) costs us jobs and public services, and de
epens the public debt. Financial elites have effectively hijacked our economy an
d there will be hell to pay to get it back.
Beginning in the mid-1970s the twin policies of financial deregulation and tax c
uts for the super-rich laid the groundwork for the rise of financial industry bi
llionaires. We were told these policies would fuel an enormous investment boom t
hat would cause all boats to rise. Not quite. Income certainly gushed to the top
fraction of one percent. But then we entered the financial industry Twilight Zo
ne: The super-rich accumulated so much money that they literally ran out of inve
stments in normal industries that produced real goods and services. Wall Street,
now a deregulated Wild West, rode to the rescue by creating all manner of new p
aper investment opportunities. Instead of buying a piece of a factory or company
 through stocks and bonds, you bought derivatives. Or you gave your money to hed
ge funds where you could "earn" outsized returns with little risk -- just what t
he super-rich craved. Unfortunately, the entire enterprise was built upon layer
after layer of leverage. The result was an unstable upside-down pyramid of "stru
ctured finance" balancing on a very narrow base of real tangible assets.
All of this worked just fine until it didn't. You know the rest of the story. Wh
en housing prices stopped rising, these paper assets - the CDOs and all the rest
- went up in smoke, incinerating the rest of the economy in the process. (Pleas
e see The Looting of America for an easy-to-read account.)
On their long way up, financial industry billionaires grabbed our economy by the
cojones-- and they're not letting go. Here are a few of the indicators:
Financial sector profits dramatically increased in the past several decades, pea
king at over 40 percent of all corporate profits just before the economic collap
se. Now the industry's profits are chugging back up again.
After the inevitable crash, the financial sector and its investors had all the p
olitical clout they needed to ensure their swift rescue by the government. Inste
ad of paying a hefty price for wrecking the economy with their bad bets as dicta
ted by free market principles, they got bailed out at taxpayer expense.
The 2010 financial reform bill did not break up financial institutions that were
too big to fail or too interconnected to fail. It also didn't rebuild the Glass
-Steagall Act's wall between investment banks and depository banks. The six larg
est banks are now bigger than ever.
Congress rejected our calls for a windfall profits tax or financial transaction
tax to help pay for the financial sector's catastrophic damage to our economy. I
nstead Wall Street elites are again reaping enormous profits, leaving 29 million
unemployed and underemployed people in the dust.
To pay for our rising public debt we're being told to tighten our belts so that
they don't have to tighten theirs.
Economists assure us that the financial sector's role is to prudently move exces
s savings into investment. But that's not how Goldman Sachs, JP Morgan Chase, Mo
rgan Stanley, the largest private equity funds and the largest hedge funds are r
aking in their billions. Their real cash cow is their secretive daily practice o
f "proprietary trading" -- the equivalent of gambling in a rigged casino. This h
as nothing to do with investing in industries that might put our people to work.
So our paltry economic growth is generating financial industry booty, not jobs.
Our billionaires might want us to think of them as great statesmen working to he
lp our nation prosper and grow. But in reality, they're busily siphoning off our
nation's wealth -- and blocking all efforts to regulate or tax their destructiv
e behavior.
Wall Street's class warfare doesn't just target workers. While many top multinat
ional corporate CEOs are in league with the big financiers, most of the medium a
nd small business owners now struggling to find the capital to stay alive have f
ew friends on Wall Street. Workers, supervisors and middle managers alike now li
ve in fear that they'll lose their jobs -- and it's all because of the financial
shenanigans on Wall Street. You don't have to be a Marxist to know that we bail
ed out the very people who wrecked our economy. You'll find precious few defende
rs of Wall Street anywhere in America.
This new class struggle will soon begin playing out on some new battlefields. Th
e weight of the U.S.'s massive debt (created by the financial crisis and our fai
lure to tax the super-rich the way we used to) will be put on our backs. The fin
ancial elites, along with their richly funded think tanks and compliant politica
l hacks, will tell us to privatize Social Security, reduce its benefits and exte
nd the retirement age. We'll be told we must cut funding for schools and health
care services. We'll have to live with a crumbling infrastructure and a deterior
ating environment -- because, well, the money just isn't there.
But if we call for raising taxes on the super-rich to prevent these dire develop
ments, they'll bring out their paint guns and scream "socialism!" -- and threate
n us with more economic catastrophe. Of course, they can fly their private jets
over our collapsing infrastructure and send their kids to private schools. And t
hey have no worries about jobs, health care or retirement, since they and their
families have more money than they could spend in a hundred lifetimes. Talk abou
t a class struggle!
The Wall Street billionaires utterly refuse to accept any blame for our economic
woes. They simply can't believe that their billions came from fatal flaws in ou
r system rather than from their own genius. They'll fight to the end to convince
us and themselves that they are indeed God's gift to our economy. (Wouldn't you
if you had a billion dollars?)
It's time to make them pay their fair share for the damage they've done. That wi
ll help finance the massive jobs programs we need to put our people back to work
. Of course, the super-wealthy can afford to pay. Only their pride will suffer.
In truth most of us would prefer to duck this fight. We just want to find a job,
or keep the one we have, be with our families and cope with what life throws at
us while enjoying as much of it as we can. We don't want to go to war with the
richest people in the world, even though we greatly outnumber them. But we can't
avoid this battle--it's coming to our doorsteps. The Dow may hit 12,000 but une
mployment will haunt us for a decade to come. We can't afford the brutal cuts to
retiree benefits, healthcare or education that they're pushing on us.
It will take a lot of time and effort to figure out how to fight back and win. B
ut don't despair. As the old union song suggests, the toughest question always i
s "Which side are you on?" In the new class struggle, that decision has already
been made for us.
Les Leopold is the author of The Looting of America: How Wall Street's Game of F
antasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do A
bout It Chelsea Green Publishing, June 2009.
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