CLASS IS IN SESSION
SIXTEEN YEARS AGO, WITH ALL OF HIS SNARKY WISDOM, Ross Perot articulated what was to become a classic line in Presidential politics. “That giant sucking sound,” he said with characteristic good-ole-boy charm, “is the sound of jobs going to Mexico.” He was talking about NAFTA — the North American Free Trade Act, and his words came to symbolize and represent everything that has gone wrong for the Middle Class in America over the past 20 years. In 1992, Perot earned 18.9% of the popular vote, making him the most successful third-party presidential candidate since Theodore Roosevelt in 1912.
Long ago and far away, the Middle Class built America as we know it now. When my Dad finally retired in the 1980s, he was given a modest pension in return for his 27 years of service. It made it possible for him to support seven children, to own his own home, enjoy decent healthcare, and to live with a modicum of dignity until his death in 2007. Today, it’s 401(k)s and “best of luck to you” as you roll the dice and pray that con artists aren’t in control of your retirement accounts. In today’s market, that’s not exactly a solemn-clad guarantee.
During this political “silly season” we hear a lot about Liberals and Conservatives. We hear a lot about “liberals who want to raise your taxes,” and “small government.” But we don’t hear much about how to fix the nightmare that has befallen our middle class — and we sure as hell don’t hear about how to restore what made America great: the ability to own a home, to empower the majority, and give them back the security they once had in their grasp.
So for all who rail that all government protections against fraud run contrary to the free market system, and for those who equate all government programs as “socialism,” well, perhaps New York Times Finance reporter Gretchen Morgensen said it best on Bill Moyers Journal this past Friday. “I can only imagine what the right wing would be saying if a liberal Democrat had decided to nationalize the biggest insurance company in America.”
Imagine, ah yes. . .and then grasp how imperfect the idea of free-market-at-all-costs has become.
The ugly thing about this, Morgensen states, is that the $1 trillion bailout is testimony to the fact that we privatize the financial industry in the “good times,” ala Gordon Gekko from the film "Wall Street" — and then we socialize it (through the forced use of our tax dollars), when times are bad. . .times like now. “Greed is good,” was the famous line from Michael Douglas’ character in Wall Street, and that mantra is alive and well today.
For in modern times, that greed comes complete with a golden parachute worth tens of millions of dollars for the very people guilty of ripping off the middle class in the first place. “When things are going well, management makes out, shareholders make out. . .the private sector people do well. But when something goes wrong — when decisions are made that turn out to be bad decisions, the U.S. taxpayer has to take on the problem,” says Gretchensen.
This hypocrisy in endemic in corporate America, which, since the Reagan years, has demanded de-regulation and the removal of any government oversight within the financial sector. It is true with Big Pharma, which receives corporate welfare in the tens of billions of dollars annually, and it is true elsewhere, as this week has proven.
The shadowy financial markets, which created “products” like the murky world of derivitives (for example, oil speculators who “predict” what the price of oil will be on any given day, thereby affecting its price) — and the mass sell-off of sub-prime mortgages to a crazy-quilt of faceless entities, these events betray the folly of our ways. This is the dark underworld of American capitalism, circa 2008, a place where rules don't apply to the kingmakers. When Federal Reserve chief Alan Greenspan adamantly fought for no regulation on this new brand of capitalism, small and moderate investors were literally forced to take more risk without ever knowing it, throwing good money after bad, into a cesspool of conjecture and greed.
So the middle class, more vulnerable now than at any time since World War II, gets hit both ways: they no longer have the pensions that promised a modest return for retirement, and they have no choice but to make riskier investments through 401(k)s. . .and hope for the best. In other words, middle class society is more dependent on the financial markets than at any time since the “Greatest Generation,” and that, my friends, has proven to be a very sobering reality indeed.
It is “the greatest story never told,” says author Kevin Phillips, who also appeared with Moyers. As he explains, 21% of our GDP in now directly tied to the financial services sector. Since the 1980s, we have rescued the financial industries time and again. It began with the Savings & Loan scandal — one that engulfed Senator McCain and four other Senators. It continued in 1987 when there was another financial sector crash-and-grab phase, only to be bailed out by taxpayers. From 1986 – 2006, in fact, Alan Greenspan, Congress and others have approved turning on the spigots for some $46 TRILLION of our hard-earned money to bail out those who held all the keys to the Temple.
And for what? Justice? Equality? Financial security for the masses?
We did so only to resurrect Gordon Gekko. . .and burden the middle class with his debt.
IF I COULD ASK ONE QUESTION of either Mssrs. McCain or Obama at one of those “town hall meetings,” it would surely be the following: “Senator, if elected, do you commit — here and now — to rebuild bridges, roads, and ports using the labor of middle class and poor Americans — the very people you profess to care so much about?"
Some might view that as a rather “socialist” question, one that undercuts the free market system and its ability to do its work unfettered. I, however, see it though a different lens. If we are ever to rebuild the middle class and restore our true wealth as a nation, we must first stop the “giant sucking sound" emanating from the financial markets. . .and we must provide Americans with the ability to protect themselves outside of the reckless whims and greed of Wall Street. It is, after all, our money and our personal sovereignty at stake.
As Ross Perot might say, "Y'know what I mean?"