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  Jay Gould, the robber baron of the 19th Century, famously said that, "I can hire one half of the working class to kill the other half." As we live through one of the worst economic collapses in a century, Gould’s wish is coming true. And we must stop Gould’s modern-day robber barons from sowing seeds of dissension among us, for the sake of a decent standard of living for ourselves, our children and the generations to come.

  I have been troubled by this phenomena for some time: workers who don’t have decent wages, decent pensions, decent health care, not to mention a union, are increasingly saying—or being told to say—that those people who do have some semblance of a decent wage, a decent real pension, decent health care and a union, should just give all that up because, well, that’s the way the world is going.

  Here are three examples of many that I have heard or seen up-close in the past few years. Back in December 2005, we had a transit strike in New York City. The union—-Local 100 of the Transport Workers Union—-went out on strike, in defiance of the law and our billionaire mayor, to preserve health care and pensions for its members. The president of the union would end up in jail because of the strike.

  During the strike, a lot of people were inconvenienced—-that’s what effective strikes sometimes do. Some of the voices raised in opposition to the strike had a similar sound: why are those people making my life more difficult by going on strike to protect what they have when I don’t have a pension or health care?

  I felt great sympathy for those who do not have a fair wage and fair benefits but, the fact is the transit workers went out on strike, at great risk to their livelihood, for everyone. They were drawing the line, saying that people have a right in a civilized society—yes, a right—to a real pension and health care.

  More recently, we have the public spectacle of the daily thrashing in the traditional media of autoworkers. I have done a number of television debates with a variety of people who are quick to blame autoworkers for the industry’s troubles.  The rap is roughly: autoworkers should make deep concessions to save the industry because the core of the problem is that autoworkers have "gold-plated" benefits and "generous" pensions.

  Finally, yesterday, I wrote a piecequestioning the moral compass of New York’s governor who, in demanding that workers’ sacrifice to help cope with the state’s fiscal crisis, called for the cutting of workers’ pensions. Some of the feedback to my piece boiled down to: get real, we are in a fiscal crisis, no one has the kind of pensions being given to firefighters, teachers, police officers and other government workers so just stop complaining and sacrifice.

  This is insane. The people who have a little bit more than the have-nots are not the enemy.

  First point: The crisis we face—and make no mistake about it, we are in very deep—is not the making of people who have a decent standard of living—a decent standard that was not handed to them on a silver platter but was fought for and won over a number of generations, something that we too often take for granted.

  We are in the mess we are in because of unbridled greed, incompetence and a blind belief in a failed economic model, the so-called "free market" (and its cousin, so-called "free trade"). The mess is not just the short-term near-collapse of the financial system. It is a mess that has been brewing for more than three decades.

  We entrusted our economic security to a cadre of economists, business people and political leaders who utterly mismanaged the country and the world. The Robert Rubins of the world—-that is a short-hand for the broader class of elite managers, investors and economists—-could not comprehend, or chose to willfully ignore, the obvious: if people do not have decent wages and decent benefits, they will not have money to buy what is produced. They would never actually attain the American Dream. They would simply borrow it—on credit cards and a mountain of debt that would, eventually, come crashing down.

  So, the Robert Rubin class failed in the most basic mission we entrusted to them: provide broad real prosperity. By "real" I mean real wages and real benefits, not a credit-card, debt-driven, monthly, gut-wrenching survival test of how-do-I-make-ends-meet. People have been working their asses off for 30 years and haven’t gotten the fair share of the fruit of their labor—-if wages had matched productivity since the 1970s, the MINIMUM WAGE would be more than $19-an-hour and the median wage would be $20,000 higher.

  On top of the mismanagement, we know about the well-documented greed. The Madoff Malignancy, if you will, was some combination of illegal and legal greed. Enron, Worldcom, Tyco, Madoff...the list of criminals who sat at the corporate helm is quite long. A far longer list, however, would include the names of people who committed legal theft, absconding with a collective pile of hundreds of billions of dollars in pay, pensions and stock options.  Both lists—-the illegal and the legal greed—-reflect a basic common thread: screw the secretaries, clerks, transportation workers, firefighters, assembly line workers, I’m going to take as much as I can for myself.

  This was all done with the cover of the blessing of the so-called "free market".

  And, while the greed and incompetence were eagerly competing for supremacy, everyone  else was told that, in the name of "competitiveness" and "free trade", we had to accept lower wages and fewer benefits. We were told, for example, that real pensions—meaning, a check you could count on each month—were a thing of the past. Instead, the glory of the "free market" would make everyone’s 401(k)s burst at the seams.

  But, like the rest of the mantra of the "free market", the 401(k) promise was just a clever way of blowing up the promise of an American community, replacing it with a fight of each individual to get his or her piece, all the while siphoning more money from the average worker into the pockets of the elite; after all, in some companies, workers’ money was being used to fund executive pensions and in other companies, the pensions of a few executives exceeds the pensions of the entire rest of the workforce.

  And the fiscal crisis we face is not because of high wages or "generous" pensions. First and foremost, the state cupboards are bare because we systematically obliterated a progressive tax system in virtually every state in the nation. While an elite has been happy to benefit from living in a civilized society, it has been allowed to get that for free—and the elite has been happy not to pay its fair share. Instead, a greater share of the burden is now on the backs of the have-nots.

 What a scam.

  This was not the fault of the autoworker, the firefighter, the teacher or the secretary.

  They did not make poor management decisions, because they didn’t run the companies or the government agencies they worked for. They didn’t loot their companies, emptying the coffers of cash for a few lucky executives. They just came to work, and still come to work, every day.

  Second point: the fight between the have-nots and the have-nots is also about lowered expectations—-thanks to a relentless ideological assault over several decades. Some workers think other workers have it to good. In America today, we have become conditioned to be grateful for whatever the corporate elite throw our way; a few crumbs and we lap them up, just grateful to be the beneficiary of having a job.

  When we hear the story of the "overpaid" union member or the person who abused the system, we have to be courageous enough to understand that these are lies and we have to understand where those lies come from.  

  The lies come from people who have never worked in an auto plant, never crawled through dangerous subway tunnels, never had to carry sixty pounds of equipment into a burning building, or never had to slaughter animals at numb-minding speeds. Work in America shortens peoples’ lives and every day they live at the end of their working days they remember work with every painful arm lift or the searing scream of a balky knee or a shorter breath of air taken by compromised lungs.

  Third point: all this is fixable. But, it doesn’t get fixed by a war between the have-nots and the have-nots.

  You want to save the auto industry? Fine. Autoworkers could work for free and you still wouldn’t do much (since labor is just 10 percent of the industry’s costs). Instead, the have-nots, in unison, should demand that the industry abandon the ideological opposition to "Medicare for All" (single-payer) health care and, presto, instantaneously remove tens of billions of dollars from the balance sheets of the Big Three—not to mention every other industry.

  You want to solve our fiscal crisis, nationally and state-by-state? The have-nots should, in unison, demand that the country return to a more progressive tax system in which 95 percent of the people would get a tax cut and the top five percent would be asked to pay a fairer share to live in a civilized society where we all should pay for the roads, bridges, communications systems and the rest of the benefits we enjoy.

  You want to give people real money to buy stuff? The have-nots should, in unison, call on the elite to channel Henry Ford and let people have decent wages, whether via a combination of broad unionization or a new moral standard that ceases the legalized robbery in the corporate suites or a new trade policy that is not based on the search for the lowest wage possible.

  But bigger than a specific policy, the have-nots need to help build a new culture where we value contributions much differently than the rewards handed out today. The Robert Rubins of the world—the elite corporate class—value themselves so much that they take a gargantuan share of the wealth in our country. In essence, they are saying that their contribution matters far more than the have-nots.

  But, from where I sit, I notice the absence of a Robert Rubin far less than the sanitation worker, the firefighter, the teacher, and the whole gamut of people that make this country really run. Rubin doesn’t have to work for free—-though, he certainly could with all the money he has collected from his failed leadership at Citibank. But, we need a reinvigorated valuation of the contribution of the vast numbers of people who make up the working people in the country.

  We need rock-solid unity on this. There can be no light between those who have just a little bit better lives and those who don’t.

  Our unity is crucial for people like president-elect Obama to be successful. The president-elect will be operating in a system that will do its best to continue the division between the have-nots and the have-nots. We can only get the change we so desperately need by having a united front that has the back of the president-elect and creates the political, and ideological, argument that will bury the spirit of Jay Gould.

Originally posted to Tasini on Thu Dec 18, 2008 at 09:15 AM PST.

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Comment Preferences

  •  Ahh, a classic Tasini rant. (1+ / 0-)
    Recommended by:
    chrome327

    I found it entertaining. If only you could write this in edscan-style prose...

  •  self inflicted wounds, at least partially (0+ / 0-)

    Americans borrow too much, at the personal, corporate and governmental level.   It is easy to blame wall street and greed, and they deserve their share.  The bailout is a joke.

    Who made middle class America pull out home equity to buy a condo in Florida?   Who made middle class America leverage up to afford a BMW?   Who made middle class America regular spa attendees?

    Answer:  Middle class America.

    You could argue that when Greenspan set the fed funds rate at 1%, the rational act was to borrow and not save.  But it has never been rational to consume using borrowed money.  

    Borrowing is easy.  Easier than working and saving.  Deficit spending, whether a national stimulus package or Christmas on the credit card means not saying no...but Americans seem to have forgotten that it means saying YES to debt bondage, and the resultant destruction of the consumer economy.

    We're learning it now, and it won't be pretty.   The Fed still doesn't get it.  They're still trying to trick people into thinking they have more money than they really do by lowering the cost of capital.  But the Fed is merely a bank.  

    If you've got little/no debt, this economic cycle will be bad, but it won't be a time to despair.  If you're deep in debt, you screwed yourself.  

    •  A lot of middle class (8+ / 0-)

      Americans leveraged that equity to pay medical bills and send their kids to college, not to buy BMW's and condos. As Tasini points out, the minimum wage ought to be about $19 an hour. That would have alleviated the need to leverage anything for tens of millions of workers..

      I know personally plenty of people who earn so little that saving is a pipe dream, and the only cushion they have for emergencies like a car breakdown or water heater quitting is their credit card. These people have no equity to leverage. They just hope they'll be able to keep the lights on and heat their homes this winter.

      The consumer economy has been destroyed by those who destroyed the earning power of consumers. Period.

      "All that serves labor serves the nation. All that harms labor is treason. -Abraham Lincoln

      by happy camper on Thu Dec 18, 2008 at 09:43:43 AM PST

      [ Parent ]

      •  I agree... (4+ / 0-)

        Like I posted below, supply side economics is a cruel joke in a consumption based economy. If you think about it then supply side makes no sense at all. If you inject money at the top, the people who already have money, it goes in the bank. If you give the people at the bottom the money it goes right back into the economy. Money never trickles down. It does however trickle up very quickly.

        •  Supply side (1+ / 0-)
          Recommended by:
          chrome327

          is, in the words of George H W Bush, "voodoo economics". The concept was a fraud intended to provide cover for the return of pre-New Deal policies that favor the wealthy at the expense of everyone else.

          "All that serves labor serves the nation. All that harms labor is treason. -Abraham Lincoln

          by happy camper on Thu Dec 18, 2008 at 10:12:50 AM PST

          [ Parent ]

      •  thanks for the reply (0+ / 0-)

        Some points worth considering:

        (1) If minimum wage were $19 per hour, unemployment would go sky high.  Or, inflation would.  But it wouldn't make everyone "richer" in real terms.   Wealth is accumulated through production or saving.  And that's it.

        (2) While some Americans indeed leveraged up to pay for college or medical bills, as many if not more did so to speculate on real estate.   I have a condo in South FL (and live in NY) and I see it all the time with my own eyes in Broward and Dade counties:  homeowners from the northeast hoping to flip a condo they know little about.   Who was the builder?  Don't know.  What else did they build?  Don't know.   Who are the subs?  Don't know.  Amazing, but there they are, trying to get money for nothing.  

        (3) Your acquaintances who earn so little...why?  Are they poorly educated?  Lazy?  of low intelligence?    What fields do they work in?  This is a serious inquiry; I'm not trying to insult them.   It seems though that many people with a college education can have a middle class standard of living without excessive debt.  Maybe I am wrong.

        (4) The consumer economy is a wealth destroying mechanism.   You can't spend yourself rich.   Americans bought in and now it's time to pay the piper.  

        •  How would the minimum wage (3+ / 0-)
          Recommended by:
          EthrDemon, Hens Teeth, chrome327

          reflecting the contribution of a workers productivity cause inflation? In the 70's the minimum wage was sufficient to keep a worker out of poverty. Are you saying that average Americans must accept living in poverty or face a ruined economy?

          as many if not more did so to speculate on real estate.

          And do you have any numbers for that assertion? Anecdotal evidence is not evidence.

          Only one third of all the jobs in America require a college education. What about the other 2/3? These are people in retail, service, nonunion manufacturing jobs, construction, bus drivers, you know--the people who do the real work in this country. The ones you seem to think ought to be able to save and simultaneuosly make ends meet on $12 an hour.

          Getting a college degree may be a solution for an individual (or not. Plenty of college grads are waiting tables), but someone will always be needed to fill that other 2/3. So, are you saying that the majority of U.S. citizens must resign themselves to a life of just getting by, with no pension or affordable medical care? I for one reject that shortsighted solution. The economy must work for all of us, not just those who can afford a winter residence in Florida.

          "All that serves labor serves the nation. All that harms labor is treason. -Abraham Lincoln

          by happy camper on Thu Dec 18, 2008 at 10:29:31 AM PST

          [ Parent ]

          •  hmmm (0+ / 0-)

            If a minimum wage of $19 were enacted, where would all the money to pay those workers currently earning under $19 come from?  Either productivity would have to skyrocket (no idea how this would happen) or the supply of money would have to skyrocket (inflation).   Raising the minimum wage reduces the number of jobs.

            I confess to not having data on the number of Americans extracting home equity for college tuition vs. speculation.   I am confident though that home equity extraction for specualtion was a common phenomenon.

            Where I think we are in strongest disagreement is regarding

            people in retail, service, nonunion manufacturing jobs, construction, bus drivers

            These people did not get put there by the Commissar of Jobs.  There is nothing saying that a bus driver cannot enter a higher-paying profession, or that a retail manager cannot learn, say, chemistry and work in a higher-paying job.  When I was a teenager I worked at a supermarket.  It suited my education level.  Today I have two degrees in Mathematics, and my job suits my education.

            Why can't other people do this?  

            •  Or possibly (1+ / 0-)
              Recommended by:
              Hens Teeth

              business profits, which are at all time highs, could be used to pay those who produce wealth rather than enriching managers and shareholders. Productivity has already skyrocketed, with no corresponding increase in wages. Minimum wage increase have been shown to increase economic activity, with little if any effect on employment levels. Note that nobody is suggesting raising the minimum to $19. That's a strawman.

              You ignored the main point of my reply

              Getting a college degree may be a solution for an individual (or not. Plenty of college grads are waiting tables), but someone will always be needed to fill that other 2/3. So, are you saying that the majority of U.S. citizens must resign themselves to a life of just getting by, with no pension or affordable medical care? I for one reject that shortsighted solution. The economy must work for all of us, not just those who can afford a winter residence in Florida.

              but I knew you would. Living costs have increased far more than wages in the last 30 years. Why not wages?

              Again, let's hear a solution that works for the 2/3 of Americans who work in jobs that do not require a four year degree. Or are college graduates the only ones who deserve to enjoy a decent lifestyle?

              "All that serves labor serves the nation. All that harms labor is treason. -Abraham Lincoln

              by happy camper on Thu Dec 18, 2008 at 03:11:29 PM PST

              [ Parent ]

              •  hmmm 2 (0+ / 0-)

                Thanks for taking the time to continue this.  

                Business profits are not at an all time high.  Over the past few years, they were, and your point has some merit there.  However, I believe that when the economic history of the USA is written, this recent period of ultra-high profits will be anomalous.  Indeed, for most businesses, even the oil companies, profits are way down.  And banking profits,so high for the past few years are non-existent.  

                The issue of compensation is a thorny one.  Did wise strategic leadership in the C-suite lead to outsized profits as work was performed more efficiently?   Did quantitative analysis lead to a focus on high value activities and elimination of waste?  I don't know the answers, but I think we should ask as many questions as we can.

                This period I believe is one of transition.   Globalization has lowered the cost of labor and hurt the American worker, but the American consumer has made Wal-Mart our nation's biggest private employer, so clearly the nation does not decry globalization.   I believe that as this recession worsens and credit goes away, Americans' cost of living, and largely, standard of living, will drop.  

                Now, as to your question:  I was not ignoring you.  Perhaps my reply was incomplete, so I will try again.

                Again, let's hear a solution that works for the 2/3 of Americans who work in jobs that do not require a four year degree. Or are college graduates the only ones who deserve to enjoy a decent lifestyle?

                I don't believe anyone deserves a decent lifestyle.  Indeed, what we consider a decent lifestyle exceeds in many ways the lifestyle of a King 100 years ago.   Even concepts like pensions or retirement are very new concepts, and the idea that most of the population should benefit from them is very new and did not exist for literally thousands of years of human history.  

                In any case, we are born with the inalienable right to the Pursuit of Happiness, not an inalienable right to happiness.   The difference is not mere semantics.  

                I believe that it is an individual's responsibility to create the lifestyle they desire, and that the government must protect the individual's ability to do this, and hinder it as little as possible.  

                There ain't no magic bullet to make everyone comfortable.

                •  The concept of (0+ / 0-)

                  personal freedom is a new concept too. So are other notions such as the rights of children, or the idea that minorities-in any society-are deserving of equal protection of the law.

                  I happen to believe, as do many others, that everyone deserves a decent lifestyle. I believe that work has dignity, and that those who perform work that is necessary to the function of society deserve compensation that allows them to participate in that society, irregardless of how much "value" they add to some product. People should not have to choose between poverty or working until they keel over dead. Poverty is morally wrong.

                  The free market zealots who pushed wholesale deregulation and globalism on the world have been proven wrong. Their theology has nearly ruined our economy. We've been subjected to this crap since Reagan, and we are much worse off for it.

                  Walmart does well because of their predatory business practices and the fact that too many people have no choice but to buy the crappy goods they sell, because they don't earn enough to do otherwise. Fuck Walmart.

                  "All that serves labor serves the nation. All that harms labor is treason. -Abraham Lincoln

                  by happy camper on Thu Dec 18, 2008 at 06:38:11 PM PST

                  [ Parent ]

                  •  hmmm, 3 (0+ / 0-)

                    You can say "fuck walmart", but the bottom line is that regardless of their unsavory business practices and Chinese sweatshops and whatever else, Americans patronize Wal-Mart like no other store.   American consumers made them what they are, not unsavory practices.  Wal-Mart's success is the will of the people, more plainly stated than Obama's election.  I don't have to shop there, so I don't, but on occasions where I have found myself in a store, it is packed.      It's absurd to say people are "coerced" into shopping there; only the truly poor consume at a needs-only level.    Much of what is spent at Wal-Mart is discretionary spending.

                    Free market zealots?  Nah.  What we have is socialism for the rich.  It's disgusting, but it's as un-free-market as Communism.    A free market would never permit, for example, a monopoly on banking as has been granted in our country.  I can present, as can you I am sure, numerous other examples of how the USA has not been a free market economy perhaps ever.  

                    To call the recent and ongoin debacle a failure of the free market is incorrect.  Yet it is an easy sound bite and has political value to those who are dispossessed.

                    What we have seen instead is plutocracy.   It didn't start with Reagan.   (Moster deficit spending and an explosion in the money supply did).   Plutocracy aims above all else to preserve accumulated capital among whomever owns it, and since increases in efficiency of production created the idea of "excess" capital, laws have sought to protect it.  

                    If someone deserves a decent standard of living, what do we say to the person who must by necessity be infringed upon to provide it?  

    •  People With Vacation Condos and BMWs... (5+ / 0-)

      are not the "have-nots".

      The fact that some folks over-extended themselves financially is a contributor to our current economic woes, but it has little to do with the heart of this diary.

      This is CLASS WAR, and the other side is winning.

      by Mr X on Thu Dec 18, 2008 at 09:59:52 AM PST

      [ Parent ]

  •  Reminds me of... (4+ / 0-)

    This reminds me of the head ache I would get watching financial news over the last year or two. Mostly centered around a raise in the minimum wage. There would be two economists and the anchor talking about how raising the minimum wage would ruin the economy and how the "market" should set wages. Then in the same breath they would move on to executive compensation and defend CEO's making millions as their "fair wage" and the CEO's pay being "market driven". Ignoring the fact that most CEO's sit on other CEO's boards that make the decision on how much they're going to get paid.

    This is a common theme in the media, driven by the haves and the have mores. We workers, the people who do all the work which allows a company to make a product or perform a service, are greedy and should just take whatever is left after the CEO and other execs get their over-inflated compensation packages.

    Republicans use the same illogical nonsense to justify "supply side" economics. Even as a teenager I could never understand how "supply side" economics made any sense in an economy that is consumption based and doesn't really supply, I.E produce, anything.

  •  Super diary! You put (3+ / 0-)
    Recommended by:
    Tasini, Hens Teeth, chrome327

    into words what I've been feeling about this whole Big 3 crisis.  Thank you!

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