For 30 years, political leaders of all stripes have redistributed wealth and power, and the middle class has been the loser
Middle-class and working Americans prospered for a generation after World War II. But during the past 30 years, most Americans experienced meager economic improvements or none at all.
Our economic and political systems awarded major financial benefits to the wealthiest 1 percent of all Americans.
Between 1972 and 2010, the richest one of every 10,000 households increased its average annual earnings from less then $4 million to $35 million, in figures adjusted for inflation.
At the same time, tens of millions of other Americans - under Republican and Democratic leaders -- lost their job security, lost their homes and struggled to pay ballooning health-care costs -- which precipitated more than half the bankruptcies filed in recent years.
Between 2002 and 2008, nearly 40 percent of home equities owned by American families were wiped out.
Today, the United States has higher income inequality than any other industrial nation.
These are among the stark themes of Winner-Take-All Politics: How Washington Made the Rich Richer and Turned Its Back on the Middle Class, a new book by political scientists Jacob S. Hacker and Paul Pierson.
The federal government played a central role in promoting the dramatic rise in income inequality.
Back in 1965, when Lyndon B. Johnson was president, the average chief executive officer at large corporations made 24 times as much as the average employee. By 2007, CEOs were paid 300 times as much.
During Richard Nixon's presidency, between 1969 and 1974, domestic social programs expanded.
Nixon signed numerous regulatory acts, including: the Environmental Protection Act, Mine Safety and Health Act, Occupational Safety and Health Act, and legislation creating the Consumer Product Safety Commission and National Traffic Safety Commission.
Nixon's proposals for health-care reform, Hacker and Pierson write, were significantly more extensive than Obama's 2009 proposals.
Demise of the liberal era
Democrat Jimmy Carter, in the White House between 1977 and 1981, oversaw the beginning of the "liberal era's" demise.
They were "tumultuous years in which the unexpected liberalism of Nixonland turned into the unexpected conservatism of Carterland," Hacker and Pierson write.
Over the next 30 years, federal regulations, many created during Franklin D. Roosevelt's New Deal, were dismantled. Huge deficits and debts began to accumulate.
By the late 1990s, when Democrat Bill Clinton was president, regulations controlling banks descended to pre-New Deal levels.
Gutted laws and regulations made it easier for banks to merge, relaxed restrictions separating commercial banks from high-risk investment banks, removed interest rates ceilings and ended a decades-old separation between banks and insurance companies.
Today, the ability of federal officials to monitor and regulate corporate misdeeds has been gutted.
Unions
Today's politically liberal groups are typically upper middle class. They pay little attention to economic problems, focusing on other significant issues such as environmental protection, women's rights and civil liberties.
With the decline of unions, middle-class and working Americans lost powerful advocates for pocketbook issues to counter those at the top.
In recent decades, White House occupants have done little to help unions, which played a central role in the post-World War II prosperity.
A defining moment came in 1981, when Ronald Reagan broke a strike by the Professional Air Traffic Controllers Association -- a critical defeat for labor.
Allied with Republicans, Democrat Bill Clinton fought hard to win Congressional approval of the North American Free Trade Agreement, over opposition from trade unions and several Democratic members of Congress, such as the late Sen. Robert C. Byrd, D-W.Va.
NAFTA and the Central American Free Trade Agreement empowered U.S. companies to pay foreign workers 10 cents, or less, for every $1 they paid to American workers to do the same jobs, Hacker pointed out in his 2006 book, The Great Risk Shift.
In 1960, 40 percent of all American non-agricultural jobs were in well-paying industries like steel, auto, chemical, aluminum, textiles and mining. By 2002, just 14 percent were still in manufacturing.
For decades, "captains of industry" -- people like Andrew Carnegie, John D. Rockefeller and Henry Ford -- were big financial winners. They smelted steel, drilled for oil and produced automobiles.
Over the past 30 years, "deal makers and financial gamblers" solely focused on making personal profits displaced those captains.
When Barack Obama became president, he quickly abandoned campaign promises to promote passage of the union-backed Employee Free Choice Act, which would make it easier for people in individual workplaces to vote on whether to have unions represent them.
Middle-class and working Americans prospered for a generation after World War II. But during the past 30 years, most Americans experienced meager economic improvements or none at all.
Our economic and political systems awarded major financial benefits to the wealthiest 1 percent of all Americans.
Between 1972 and 2010, the richest one of every 10,000 households increased its average annual earnings from less then $4 million to $35 million, in figures adjusted for inflation.
At the same time, tens of millions of other Americans - under Republican and Democratic leaders -- lost their job security, lost their homes and struggled to pay ballooning health-care costs -- which precipitated more than half the bankruptcies filed in recent years.
Between 2002 and 2008, nearly 40 percent of home equities owned by American families were wiped out.
Today, the United States has higher income inequality than any other industrial nation.
These are among the stark themes of Winner-Take-All Politics: How Washington Made the Rich Richer and Turned Its Back on the Middle Class, a new book by political scientists Jacob S. Hacker and Paul Pierson.
The federal government played a central role in promoting the dramatic rise in income inequality.
Back in 1965, when Lyndon B. Johnson was president, the average chief executive officer at large corporations made 24 times as much as the average employee. By 2007, CEOs were paid 300 times as much.
During Richard Nixon's presidency, between 1969 and 1974, domestic social programs expanded.
Nixon signed numerous regulatory acts, including: the Environmental Protection Act, Mine Safety and Health Act, Occupational Safety and Health Act, and legislation creating the Consumer Product Safety Commission and National Traffic Safety Commission.
Nixon's proposals for health-care reform, Hacker and Pierson write, were significantly more extensive than Obama's 2009 proposals.
Demise of the liberal era
Democrat Jimmy Carter, in the White House between 1977 and 1981, oversaw the beginning of the "liberal era's" demise.
They were "tumultuous years in which the unexpected liberalism of Nixonland turned into the unexpected conservatism of Carterland," Hacker and Pierson write.
Over the next 30 years, federal regulations, many created during Franklin D. Roosevelt's New Deal, were dismantled. Huge deficits and debts began to accumulate.
By the late 1990s, when Democrat Bill Clinton was president, regulations controlling banks descended to pre-New Deal levels.
Gutted laws and regulations made it easier for banks to merge, relaxed restrictions separating commercial banks from high-risk investment banks, removed interest rates ceilings and ended a decades-old separation between banks and insurance companies.
Today, the ability of federal officials to monitor and regulate corporate misdeeds has been gutted.
Unions
Today's politically liberal groups are typically upper middle class. They pay little attention to economic problems, focusing on other significant issues such as environmental protection, women's rights and civil liberties.
With the decline of unions, middle-class and working Americans lost powerful advocates for pocketbook issues to counter those at the top.
In recent decades, White House occupants have done little to help unions, which played a central role in the post-World War II prosperity.
A defining moment came in 1981, when Ronald Reagan broke a strike by the Professional Air Traffic Controllers Association -- a critical defeat for labor.
Allied with Republicans, Democrat Bill Clinton fought hard to win Congressional approval of the North American Free Trade Agreement, over opposition from trade unions and several Democratic members of Congress, such as the late Sen. Robert C. Byrd, D-W.Va.
NAFTA and the Central American Free Trade Agreement empowered U.S. companies to pay foreign workers 10 cents, or less, for every $1 they paid to American workers to do the same jobs, Hacker pointed out in his 2006 book, The Great Risk Shift.
In 1960, 40 percent of all American non-agricultural jobs were in well-paying industries like steel, auto, chemical, aluminum, textiles and mining. By 2002, just 14 percent were still in manufacturing.
For decades, "captains of industry" -- people like Andrew Carnegie, John D. Rockefeller and Henry Ford -- were big financial winners. They smelted steel, drilled for oil and produced automobiles.
Over the past 30 years, "deal makers and financial gamblers" solely focused on making personal profits displaced those captains.
When Barack Obama became president, he quickly abandoned campaign promises to promote passage of the union-backed Employee Free Choice Act, which would make it easier for people in individual workplaces to vote on whether to have unions represent them.
Dwight D. Eisenhower, the retired Army general and Republican president between 1953 and 1961, backed the rights of workers to organize.
"Only a handful of reactionaries harbor the ugly thought on breaking unions and depriving working men and women of the right to join the union of their choice," Eisenhower said.
Republicans move right
During the past generation, the Republican Party has moved steadily rightward, Hacker and Pierson argue.
The Reagan era was halfway between the "reluctant New Dealism" of Nixon and the "winner-take-all enthusiasm" of George W. Bush.
Today, our country faces enormous challenges: reforming an increasingly troubled and expensive health-care system, improving schools, dealing with impending financial strains created by an aging population.
Yet most Republicans believe our nation's top priority is to pass, and maintain, "big tax reductions for those at the top."
During the Reagan and Bush II administrations, deficits and debts skyrocketed, despite rhetoric from both presidents about reducing government spending.
In addition to approving massive tax cuts for the wealthy, government leaders have routinely increased military spending without adequate resources to pay for that expansion and new wars.
Renewing equality
We are also witnessing a disturbing decline in public knowledge and awareness about the causes of problems confronting most Americans.
Corporate money plays a major role.
In 2008, Obama set an all-time record for presidential fund-raising. His campaign collected more than $1 billion -- a significant portion from corporate donors like insurance and pharmaceutical companies.
But corporate lobbying dwarfs campaign spending.
In 2009, corporate lobbyists reported spending almost $3.5 billion.
Banks, investment firms, insurance companies and realtors alone hired 940 lobbyists to influence the 535 members of the U.S. Senate and House of Representatives.
The rise of television and Internet sites lead many Americans to neglect real news.
"While the best-informed citizens are better informed than ever," Hacker and Pierson write, "more and more citizens are consuming less and less news."
The news media feels constant pressure to provide entertainment.
Television stations are more likely to focus on scandals, crimes and celebrities, as well as "soft news" like personal health issues.
"Hard news" gets squeezed out, especially news about complex issues that are difficult and time-consuming to explain.
Stories about what caused bank failures routinely attract less public interest than photogenic accounts of highway accidents, fatal floods, cheating spouses and pregnant actresses.
Social interaction and civic culture is also declining.
Between 1955 and 1995, membership in the American Legion dropped by more than 40 percent. Membership in fraternal orders like the Elks, Masons and Eagles also dwindled.
Deceptive reporting of political surveys also plays a negative role. When pointing out how many Americans opposed last year's health-care reforms, media outlets routinely failed to mention one-fourth of those opponents wanted a stronger heath-care bill.
Republicans often use social issues -- such as gun-ownership, school prayer and abortion rights -- to attract millions to vote against their own economic interests.
"Making government responsible to the middle class would not just be a political achievement," Hacker and Pierson conclude. "It would reshape the economy."
Renewing the widespread prosperity of our post-World War II generation cannot be accomplished without major reforms to make our political and economic systems more equal.
Reach Paul J. Nyden at pjny...@wvgazette.com or 304-348-5164.
