Well, here we are at last.
When I started writing The Price of Right over two years ago, the idea that I wanted to express in the book was that, as horrific a president as George W. Bush was, he was not the cause but the ultimate expression of a systematically destructive social, economic and political ideology that was driving our country away from democracy and towards, if not fascism, certainly feudalism.
It is not only Bush, but the system that produced a Bush - conservatism. It is conservatism itself that made the Worst President Ever a reality.
Ever since the 60s, when a consortium of über-wealthy conservative Republican power-brokers decided to wage war on liberals by linking everything bad in society to liberalism, and making ‘liberal’ a pejorative of the worst kind, conventional wisdom laid the blame for all of society’s ills at the feet of liberalism. Even liberals themselves accepted this - Democrats no longer wished to be called ‘liberal’ when that word could lose you an election faster that you could spit - and attempted to define their values along lines that they thought conservatives would agree with. As Republicans moved farther and farther to the right, Democrats moved right with them in an ‘Overton window’ sort of way, until ‘moderate’ Dems were more like Republican-lite, and what was now the Commie-radical far end of the left-wing spectrum would have been considered merely left of center only a couple of years ago.
When I began writing this book, the Dow Jones Industrial Average was approaching 12,000. In April of 2007, it reached 13,ooo, and only three months later, in July 2007, the Dow topped out at 14,000. In what looked to me as a repeat of the Roaring Twenties, when stocks were going wild, thanks to ‘new and creative investment instruments’, and every one was an investor, it seemed to me that the disparity between the dizzying profits at the top of the heap and the reality that average people were becoming poorer, while working longer and harder and struggling more was an indication that this kind of financial hot-rodding was doomed to crash. Next stop - 1932!
If you step back and look at the situation from a macro rather than micro perspective, several things become clear.
1.Working people of all strata were making less money.
With the onslaught of ‘downsizing’ and layoffs, people were being forced into a financial corner not of their own making. Those that were fortunate enough to keep their jobs either had to accept rather drastic pay cuts, or assume the laid-off workers’ jobs without extra pay. Raises to keep up with the cost of living were out of the question. Those that lost their jobs had a difficult time finding another at a comparable salary; many had to take jobs that paid much less, with little or no benefits. And most families needed two working partners just to make ends meet, so there was no ‘safety net’ where a stay-at-home partner could get a job to take up the slack.
2. While income from wages dropped, prices rose.
Prices of essentials, such as housing, energy, food, and transportation, continue to rise as usual, but the money to pay for them did not increase proportionally, but either stayed the same (which is a de-facto decline in real income) or actually declined.
3. Meanwhile, corporate profits soared to record levels.
This would seem to be a good thing for the economy. But much of that profit could be attributed to money saved by laying off workers, and freezing or reducing the salaries of those who still had jobs. Wall Street rewarded the corporations who cut jobs, stole pensions, reduced benefits. And the profits that ensued were often moved off-shore so as to not pay taxes on it, thereby depriving Americans of the tax revenue due to them by creating an environment in which the corporations could make those profits - providing both physical and legal structure for the corporations to utilize, such as roads, communications, power and water, and also a legal system that allowed them to be able to make contracts and conduct business with the assumption that there were laws in place to enforce contracts, and a justice system to make sure that the contracts are enforced.
The corporations did not create these physical and legal infrastructures - they were paid for by taxpayers and were the property of the American people. Yet they considered the profits they reaped theirs alone, and to pay taxes on these profits were regarded as stealing their property.
This is theft, pure and simple.
Theft of our labor - if you ask me to work for you for 12 hours and you pay me $10, you have stolen my labor. There’s no other way to put it. Saying that ‘you can’t afford to pay more’ is not an excuse - you either can afford to hire an employee or not. And paying ten guys $1 an hour instead of one guy $10 an hour is not creating ten jobs!
The Myth of the Free Market is exactly that - a myth. It’s a Utopian model that does not work in real life, because it only works if all things are equal - if the worker, the employer, and the consumer all have equal power and influence. And we know that is not true at all.
So - up to this point, we have: wages falling, prices rising, and profits escalating.
If the profit margin were roughly equal to the wage and price margin, one would assume that the market was working correctly - if there was a downturn that was felt by all, then it would be more or less attributable to forces that were outside of the wage/price/cost/profit structure - perhaps a natural disaster, governmental upheaval, or a failure of some aspect of production.
But if profits are rising for corporations, and growth is rising, and consumers are getting poorer at the same time, the only reasonable explanation is that those profits are coming from somewhere within that system - not wealth creation, but wealth transfer.
That transfer of wealth has been from the bottom to the top.
This is the natural progression of conservatism.
It’s like holding a big juicy steak in front of a starving man who only has 50¢ in his pocket, and offering to sell it to him on credit for $50, after which the poor man is excoriated for “buying something he couldn’t afford”. What the hell do you think that man was supposed to do? Say “No, I can’t afford that steak - I think I’ll just crawl off over in a corner and die”?
I (and many others) could see this week’s financial meltdown coming years ago. We knew that the economy was unbalanced. As I’ve said before, the problem with impoverishing workers to fatten your bottom line is that eventually you run out of consumers. If workers are not paid enough to meet their basic needs and have spome left over for discretionary spending, there will be no discretionary spending! Yet, conservative economic theory insists that the way to prosperity is to make the already-prosperous more prosperous, even at the expense of the majority of the workforce. So, when we actually ran out of money a few years ago, the solution to keep the masses spending and keep the economy afloat, was to dangle credit in front of us, and force us into spending money we didn’t have after taking all the money we did have.
Why is this a conservative problem?
Because of one of the deep frames of conservative cognition - the metaphor that says “Wealth=Morality”
I truly believe that this deep-rooted conviction is at the heart of the conservative mindset, and it transfers to every aspect of conservatism. It is responsible for the conservative Christian ‘Prosperity Gospel’ which says that God shows His approval by bestowing earthly wealth on those who obey His wishes, and whom He favors - and therefore, the wealthier you are, the more moral you are. It is also responsible for the assumption that, because you are rich, you are hard-working, honest, smart, responsible, strong, self-reliant and deserving - whether you are any one of those or not. The corollary is that people who are hard-working, honest, smart, responsible, strong, self-reliant and deserving should be the people in charge!
This is the core of conservatism. This is also why even poor conservatives support the rule by the rich - because they really believe, deep down - whether they are conscious of it or not - that “wealth=morality”.
So, this is the mentality that is driving us over the cliff. And this is why conservatism itself is doomed to fail if we truly want an America that works on (small d) democratic principles.
The United States was formed to escape that mentality altogether - the mindset that says the Golden Rule is “He who has the gold makes the rules.” Conservatism, when followed to its logical conclusion, leads to feudalism - a large, poor, overworked, under-educated, powerless underclass supporting a small, powerful, wealthy, leisured ruling class.
There can be no other outcome.
I wrote about just this sort of thing two years ago, when the Dow was popping like a cracked-out Orville Redenbacher. This magical belief that tax cuts plus borrowing plus war spending equals a sound economy was never challenged because of the irrational certainty that if the wealthy get wealthier, that all will be well.
The equivalence of money and morality is a key component of the fatally flawed philosophy that is conservatism, and we are living with the results now. This is the common thread that binds together big-business Republicans and right-wing evangelicals.
Of course, you can still see the influence of this belief in the approach of Paulson to this crisis - that the perpetrators of this debacle will pay no price for their perfidy and theft. The idea of ‘too big to fail’ also means ‘too big to punish’, and ‘too big to hold accountable’. Punishment and accountability are only for the little guy. Adamantly opposed to helping the people who these policies have damaged, and instead dumping the bill for their own destruction upon the victims, while the perpetrators sail off unscathed, their stolen booty intact, thus adding insult to injury, the people in charge of ‘fixing the problem’ will instead continue the policies that have brought us to this disaster.
Just like John McCain’s idea of a cure for the havoc that the Bush tax cuts for the wealthy have wreaked upon us are - more tax cuts!
They simply do not get that if you kill the golden goose, you get no more golden eggs.
If you make it impossible for consumers to spend, the economy will screech to a halt. You can tell that they still don’t get it when they talk about ‘unfreezing credit’ so that people can spend again. In other words, the only way that people can spend is by going into debt! What about the notion that people could be paid enough to spend money without going into debt? That’s a novel concept, isn’t it?
This irrational idea is simply too strong and deep-seated to be changed by those who subscribe to it. Those of us who are not hostage to the idea that both wealth and poverty are meted out to those who deserve it need to start connecting the dots, and understand that it is this conservative belief system that has led to the destruction of the middle class, and that there are other values besides profit and money - the liberal American values of liberty and justice for all, and the liberal idea that we as Americans have a responsibility to all other Americans whose very lives are being decimated by this childish, selfish, destructive philosophy.
We cannot afford The Price of Right one more minute.