Screwed the Undeclared War Against the Middle Class (13 page)

But the cons—who since the days when John Adams called working people "the rabble"—fought back. A true middle class represented a threat to America's aristocrats and pseudo-aristocrats because a middle class will always create a democracy. The cons would have to give up some of their power, and some of the higher end of their wealth might even be "redistributed"—horror of horrors—for schools, parks, libraries, and other things that support a healthy middle-class society (but not necessarily the rich, who live in a parallel, but separate, world).

When today's cons make
tax
a dirty word, they are really saying they don't care if the middle class gets screwed. As president, Reagan cut the top tax rate for billionaires from 70 percent to 28 percent while effectively raising taxes on working people via the payroll tax; he added insult to injury by allowing inflation to increase a whole range of taxes (sales tax, property tax, vehicle license fees, and so on) on working people. Following in that tradition, the Bush Jr. administration gave, in its first four years, tax cuts totaling almost half a trillion dollars to the best-off 1 percent of Americans.
⁴

Even as taxes on the rich go down, they've gone up on the middle class (in part
because
they've gone down for the rich and
somebody
has to pay the cost of all the commons we use). If you made $75,000 in 2001, you saw only $350 in tax cuts from the federal government. In 2005, 80 percent of Americans got only 32 percent of the total tax-cut pie. That means the wealthiest 20 percent of Americans got 68 percent of the money the government was "giving back to the people." Unless you were making more than $218,000 a year in 2005, you got screwed by Bush's tax cuts.
⁵

It's all part of the cons' undeclared war on the middle class.

A study in 2003 by a researcher at Yale University revealed that more than 50 percent of first-year college students couldn't produce
papers free of grammatical errors—in simple language, they can't write. Eighty percent of graduating high school seniors say they will never again voluntarily read another book. Only one-third of U.S. students are proficient readers; two-thirds lack sufficient reading ability to comprehend novels, textbooks, this book, and other forms of "complicated writing."

Democracy requires an educated middle class for its survival. At its most simple level, alone among political systems, democracy requires citizens to vote for the country's leaders and policies. If you can't read the ballot, if you don't know enough math to understand the economic argument a politician is making, if you don't know the history of the country and our laws, how can you decide how to vote?

Alexis de Tocqueville came to America in 1834 to figure out how Americans were making democracy work. Along the way he met with a pig farmer, just a simple country bumpkin by de Tocqueville's reasoning, and asked him about international politics. And this farmer went into an insightful, knowledgeable rant about French politics. De Tocqueville's conclusion was that a well-educated populace was essential to democracy—and that, unlike France in that era, we had one here.

Jefferson agreed. He advocated a national program of free education up to and including university. In an 1824 letter, he explained why: "This degree of [free] education would. . . . give us a body of yeomanry, too, of substantial information, well prepared to become a firm and steady support to the government."

True to his word, Jefferson started the University of Virginia to provide free higher education to the yeomanry, which is what the middle class was called back in the 1700s. The state university system grew slowly over the years and really picked up under FDR.

But that didn't last long.

Governor Ronald Reagan ended free enrollment at the last state university system to offer it, the University of California, in 1966. Today government funding for higher education is at
minimal levels, particularly compared with Europe and Japan, where in most cases university educations are free or nearly free. Although there are still some educational benefits for GIs, they're hard to accumulate, track, and qualify for (and must be paid for in most cases). Under George W. Bush, even the student loan program has been cut significantly, and eligibility for grants to lowincome students—called Pell Grants—has decreased dramatically; in 2004 alone, for example, Bush cut eighty thousand students off the eligibility list for Pell Grants.

Now the Bush administration wants to privatize K–12 education, as well. Bush advocates replacing free public education with "tuition vouchers" good at private schools, including parochial schools and for-profit schools. His No Child Left Behind Act set up thirty-seven ways public schools could fail. A failing school is sanctioned under the act with a loss of funds—so that schools that need the most help get the least. By September 2004, 36 percent of California's schools had already been put on that list.
⁶
Instead of being a program to improve public education, No Child Left Behind was designed to kill the public school system.

Every generation, it is often said, must relearn the lessons of history. This generation is getting a crash course.

Education for the few rather than the many, tax breaks for the rich but higher taxes for the middle class, a market where the corporations make all the rules—the last time America looked like this was during the Gilded Age, the era of the robber barons.

There's nothing wrong with business making money. I've owned seven businesses, and I'm proud to say that I made money at all but one of them. But there is something wrong when hardworking people like Mrs. Flores can't get a full-time job that pays a living wage. There's something wrong when people with college
educations can't earn enough money to buy a house. There's something wrong when it's nearly impossible to pay for a college education at all. There's something wrong when almost everyone you know feels screwed.

Walking through a park on a sunny summer day in Portland, Oregon, I stumbled across a stunning example of what has happened to the middle class in the cons' America.

Thirty or more people were sitting on blankets and lawn chairs under a big oak tree in a semicircle around a middle-aged, suit-wearing woman with a flip chart. Those in the circle wore mostly casual clothes, and the average age seemed to be midforties, although there were a few as young as midtwenties and a few who looked to be in their sixties. Two men in the group—both in their fifties, by appearance—had gone to the trouble of dressing in business suits, although they looked painfully uncomfortable sitting on their lawn chairs in the open park.

As I walked by, I heard the woman extolling the virtues of "cheerfulness" and rhetorically asking her students, "Would
you
want to hire you?"

Welcome to the world of those who have fallen out of America's white-collar middle class and are tapping their IRAs, 401(k)s, and overextended credit cards to pay for workshops like this one to figure out how they can get decent-paying jobs to replace the ones they've lost.

The seminar I heard might help a few of these people—I hope it did—but it won't help America get back on track. The middle class doesn't need a pep talk. Americans are the most dedicated and productive workers in the world. Judging from their appearance, most of the folks in that circle had worked hard and done their best all their lives—and been screwed anyway.

How could the American middle class—the greatest middle class in the world—be in so much trouble?

Consider the biggest pocketbook pincher: health care. Many Americans are falling out of the middle class today because they can't afford health insurance. One bad accident, one serious illness, one really big hospital bill, and that's it—they can't pay the bills, so they lose their car and their home and tumble right out of the middle class.

Back in my dad's day, that wouldn't have happened. Most working people got health care through their employers. The big health-care insurers—Blue Cross and Blue Shield—were nonprofits, which meant that they just passed on the actual cost of health insurance to employers. The government implemented Medicare and Medicaid in the 1960s to take care of all the folks who weren't insured. Although the system worked imperfectly, overall it was pretty decent.

But then Reagan deregulated hospitals and much of the rest of the health-care industry (along with trucking, travel, and a dozen other industries). Within a decade the system had fallen apart for all but the wealthiest Americans. Hospitals, which had been mainly nonprofit, became for-profit and started charging higher rates. Drug companies realized they could raise prices as high as they wanted because they had bought out their competitors
in Reagan's merger-and-acquisition mania and no longer have government looking over their shoulders. Pharmaceutical companies are now the most profitable business in the United States.
¹
Insurance companies got into the act too, going from nonprofit to for-profit. Every player in the system started looking to health care to make a buck. The result was double-digit health-care inflation rates by 2001.
²

Government tried a number of times to rein in these costs, with little success.
³
Bill Clinton proposed a modest /files/03/56/97/f035697/public/private national health-care plan, but such a plan could trim corporate profits, and the cons fought back with a level of deceit and ferocity not seen since the battles against Franklin Roosevelt in the 1930s.

The cons responded to Clinton's plan by asking Americans, over and over again, "Do you want government bureaucrats deciding which doctor you can see?"

As a yes-or-no question, the answer was pretty simple for most Americans: no. But, as is so often the case when the cons try to influence public opinion, the true issue wasn't honestly stated.

The real question was: Do you want government bureaucrats, answerable to elected officials and thus subject to the will of We the People, making decisions about your health care,
or would you rather have corporate bureaucrats, answerable only to their CEOs and working in a profit-driven environment, making decisions about your health care
?

The cons don't believe in We the People. They believe that our economy—and our society—would run better if a few elites at the top made decisions for the rest of us. They really do think we'd be better off if a few corporate CEOs ran health care. When the cons call for smaller government or for less regulation or for "free" markets, what they are really saying is: "Give control of the economy over to a handful of CEOs and let us run the country for you."

What they're really saying is that they don't believe in democracy and don't want a middle class.

When the cons are confronted with the growing gap between the rich and the poor in America, they know exactly what to do: blame us.

That's what Ben Bernanke, the chairman of the Federal Reserve, told Congress in his first appearance before that body in February 2006. When Representative Barney Frank asked Bernanke about income inequality, Bernanke replied that the reason for that inequality is "the increased return to education." That's economists' language for saying, "Americans aren't well enough educated to take the many jobs that would be available to them if they knew more."

New York Times
columnist Paul Krugman said in response, "That's a fundamental misreading of what's happening in American society."
⁴
While college graduates do make more, on average, than those without a BA, it's not true that there are jobs just waiting for Americans who educate themselves. According to Krugman, the "2006 Economic Report of the President" indicates that "the real earnings of college graduates actually fell more than 5 percent between 2000 and 2004." It's just not true that those who are better educated are much better off.

So who
is
better off? Well, between 1972 and 2001, the income of Americans at the 90th percentile of the income distribution—that is, college graduates, white-collar workers, and people at the higher end of the middle class—rose 34 percent, or about 1 percent per year. That's not really enough to keep up with inflation, so where did the money go? Krugman, quoting a Northwestern University research study,
⁵
tells us:

Income at the 99th percentile rose 87 percent.

Income at the 99.9th percentile rose 181 percent.

Income at the 99.99th percentile rose 497 percent.

If you are at the 99.9th percentile, you have an income of at least $1,672,726 per year. Those in the 99.99th percentile have an income well over $6 million. And those are the people who made the most money in America over the past two decades.