Poverty 101

Sophie Tucker who was known as ‘Last of the Red Hot Mommas’ for her style and wit, was both a sexy chanteuse and a practical philosopher. One of her most famous quotes is “I’ve been rich and I’ve been poor; Rich is better”.

Boy was she right! As the wealthiest people in America have been gaining control over an ever increasingly large share of the American economic pie; the 98% of Americans who make up the rest of the population have been getting poorer. The current figures show the number of Americans living below the poverty level has grown larger than it has been in well over a generation. The number of working poor is growing and the middle class is shrinking too. And it’s not just the current persistent recession that cause the uptick in the numbers; American wages have been stagnant or declining in real purchasing power for decades.

For the rich, on the other hand, things have been going their way at an accelerated pace. Executive wages have grown from an average of 40 times that of worker’s 40 years ago, to about 400 times a worker’s average salary today. Much of this income gain came from constantly higher worker productivity which was not compensated for by higher wages; resulting in increased profits, which in turn were paid to executives or owners.

How did the people in the executive suites get away with it? Easily. The outsourcing of American worker’s jobs overseas and the threat thereof, kept American workers and their unions from having the membership and barraging power they once had. With much of the toolkit of collective worker bargaining, which was for most of the 20th century used effectively to allow workers to gain a share of their increased productivity through higher wages, now gone; American workers kept slipping down the economic ladder.

But despite the outsourcing to slave labor countries like China, which have the added benefit for manufacturers of no OSHA or the EPA; the increased productivity of American workers has kept manufacturing in this country almost competitive with outsourcing. A company can still make a substantial profit producing things here; but not as much as making the same thing in China. Add to this the in-sourcing of cheaper illegal and legal foreign labor, and there is another cause of decreased American jobs and wages; resulting in higher profits for the people at the top of the economic food chain. But all these way of increasing profits and executive compensation comes at the cost of both the wages and jobs of Americans.

To top it off, while American wages have stayed low and lower; the percentage of the tax burden for workers has increased. The constant pushing of the onus of implementation of services and the taxes required to fund them, from the Federal to the state and from the state to the local community, has forced wage earning Americans to pay a growing part of their earnings in total taxes. The rich however are not being asked to pony up an increased amount to pay for the costs of these community needs. In fact they have had Congress create many dodges, schemes and scams to help the uber-rich avoid paying their fair share of the American total tax burden, if they pay anything at all.

Outsourcing, illegal labor and an increased percentage of the tax burden have all combined to reduce the wages, buying power and disposable income of the majority American workers. That created greater consumer debt. This fed into the housing market implosion created by the gangsters on Wall St. That in turn produced the retirement & pension loss and the fear and uncertainty of the 2008 economic collapse and ensuing recession. That resulted in diminished consumer demand for goods and services; which inevitably resulted in a dearth of jobs being created. All this, in turn, has resulted in the ever growing level of real poverty in America.

While the causes may, with hindsight aided analysis, be easy to delineate; the solution may seem to be remarkably elusive. But in truth, once you know the cause of something, it’s often pretty obvious how to remediate the situation; eliminate or undo the cause(s). In the case of growing American poverty the solution may be easily identified and stated, but extremely hard to do. The reason is that the entities responsible for the situation are also the entities in control of the means to redress it. As the rich have gotten richer, they have also gotten more powerful. Not that the wealthy haven’t always tried to manipulate and control the political process in this country; but there have always been intervening factors that have kept the power of the wealthy few in some degree of check.

In the early 20th century Teddy Roosevelt’s personal charisma couple with his message of his Republican brand of populism carried enough clout with the voters to allow him to become the Trust Buster who saved America from enslavement by the Robber Barons. In the middle of the century FDR’s personality, drive and popular support allowed him create the New Deal and limit the previously unregulated adventurism of Wall St. Reagan’s attempt at giving the powerful the opportunities they sought, by decreased regulation and decreased taxation responsibility, allowed private enterprise to grow rich through greed; but it created unsustainable debt. This debt eventually required Reagan and his successors, Bush the First and Clinton, to increase revenue through increased taxes in order to re-balance the budget.

But the powerful wouldn’t take “No” for an answer and they used their wealth to put Bush the Second in the White House with one of their own, Cheney, close enough to tell him what to do. The result was unprecedented undoing of important regulations in the areas of environmental protection, relaxation or non enforcement of many of the rules for banks and government sanctioned entities like Fannie and Freddie, the outsourcing of military supply and services to companies such as Cheney’s former firm of Halliburton. And at the same time the wealthy’s choice of White House CEO reduced the taxes they had to pay. The results of these and other actions was; the contamination of air and water supplies all over the country and in the Gulf by the petrochemical conglomerates; the complete mismanagement of government backed mortgage policy and the concomitant super grand theft through the creation phony securities based on the bad loans; the embezzlement of tens (perhaps hundreds) of billions of dollars by Halliburton, their subsidiaries and fellow travelers in our foreign wars ,at the expense and even lives of America’s bravest and best military personnel.

The excessive greed and large scale corruption of the past decade has done more than all the mistakes and evil plans of the previous century to make a severely injured nation of the once strong and free United States. The US was, until recently, a country whose Federal Congress knew and drew a reasonable line between right and wrong and whose leaders made a principled and determined attempt to stop the most powerful few from thwarting our democratic ideals of freedom and equality. For a hundred years, leaders of both major parties successfully guided this country through extreme and challenging events. T. Roosevelt busted the trusts and supported the unions; FDR saved us from economic implosion as well as both Fascism and Communism; Truman integrated the military; Eisenhower warned us against the military/industrial complex; Kennedy made us believe and act in our own best national interest; Nixon tested our democracy and it and we won; Clinton tried to position the US to face a growing economic conflict with the developing world. Then in the 21st century the small but extremely powerful band of multinational brigands gained control of the White House & Congress and just a few short years turned a 200+ year democracy spiraling toward a 21st century form of feudalism.

At this present point in time the forces of real representative democracy, in which everyone has some seat at the table, are in a struggle with those who would limit and even eliminate the freedom of every American to have a say in their future. The battle can go either way; toward an America with a few powerful overlords and their petty overseers and the vast majority of us as serfs or worse; or toward an America with a renewed spirit of egalitarianism were everyone gets a chance and our ability to progress and thrive as a nation is unlimited. Since most of us have no chance to jump the economic divide which grows bigger every day and join the rich and selfish even if we wanted to; I think the smart move would be to throw in with each other and really take our country back by restoring and securing its economic foundation of equal opportunity which has for over 200 years kept our nation prosperous and enabled us to get and kept ourselves and help to bring our fellow citizens, up from the depths of poverty.

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