Saving the Middle Class: A Real-Not Rhetorical-Plan

By David Kelly
August 25, 2007

This is the fifth in a series of articles on the Edwards and Kucinich campaigns.

This is the first of a two-part series on the economic platform of presidential candidate Rep. Dennis Kucinich. This part outlines the challenges facing the nation: an unbalanced tax system, growing wealth disparity and the “war on the middle class.” The second part will discuss what Rep. Kucinich proposes to do to meet these challenges.

The suffering American middle class deserves straight answers and real programs from its presidential candidates. Rep. Dennis Kucinich offers those answers and plans. The middle class has learned what a town without pity, Washington D.C., can do. Wages, savings and wealth are withering while casino capitalists are thriving. But more than a group of fellow citizens is at risk. As the purchasing power of the middle class shrinks, consumer-based capitalism and our democracy itself are imperiled as the U.S. slides towards banana republic disparities in wealth and income. This is the first generation of Americans whose children may not enjoy the fruits of a prospering America.

Fortunately, the American Dream and the middle class have been resuscitated before. All it takes is your vote and commitment to choose a president like Franklin D. Roosevelt who puts people before profits, his country before corporations.

The Culture of Greed

All the candidates know that the middle class is being systematically dismantled and destroyed by the greed of casino capitalists, with the active aid of Congress. This un-American, avaricious group sneers at the entire concept of “We, the people…” They coldly look at the drownings in New Orleans as an acceptable consequence of their efforts to drown all government programs that help people.

Thom Hartman provides vivid examples and the causes in “Screwed: The Undeclared War Against the Middle Class – and What We Can Do About It” as does Lou Dobbs in “War on the Middle Class: How the Government, Big Business, and Special Interest Groups Are Waging War on the American Dream and How to Fight Back.” Falling wages, savings rates and wealth coupled with rising costs for credit cards, tuition, mortgages, health care and energy seem inexplicable in the face of soaring corporate profits and executive salaries and productivity gains. That is until one looks behind the matrix of modern politics and studies the moneyed interests with so much to protect and so many weapons (politicians, corporate-fed think tanks and the corporate media) at their disposal.

The Myth of “Strengthening” the Middle Class

Those other candidates for president who call for “strengthening” the middle class are either clueless about the problems or have no intentions of instituting real change. It is similar to recommending vitamins when someone needs food. The middle class will not be saved with cosmetic treatments. Instead, it will take bold steps like those taken by a crippled president with vision and courage: Franklin Delano Roosevelt. Too many candidates offer rhetorical solace to the middle class while reaping hundreds of millions from the “contributor class.”

So much is at stake. The rapacious greed of the “contributor class”--those who elect and control our politicians--will destroy more than the lives and health of tens of millions and our democracy; it will also kill the golden goose of capitalism. Only a candidate with the courage to cut those financial ropes that bind politicians can restore the middle class and preserve capitalism. It is truly time for America to reject its detour towards fear and greed. Time to again reward honest work. Time to again place families ahead of corporation and contributors. To place people over profit.

The Threat to Capitalism

The “economic royalists”--as President Roosevelt called them in the 1930s--almost killed capitalism during the Great Depression. Then, as now, the middle class was paid too little to make our consumer economy run efficiently. Paul Krugman, Princeton economist and New York Times columnist, details some of the possible liquidity traps in his prescient “The Return of Depression Economics.”

The Worst Attacks: The Bush Tax Cuts

The most devastating attacks on the middle class were the administration tax cuts for the rich. Keep in mind the government borrowed money, including over a trillion dollars from the Social Security Trust Fund and trillions more from foreign countries, as they “hollowed out” America to give the most privileged the lion’s share of tax cuts. The facts are that the top 1%--who average $1.26 million a year in income--were given more in tax cuts than the bottom 80%--all those earning less than $80,000 a year. That is hardly good for consumer capitalism and hardly good for families. The president’s recent statement that most of the tax cuts went to those at the bottom is as true as his statement that Iraq is central in the war on terror.

The Warnings From 10 Nobel Laureates

It was no secret that the purpose of the tax cuts was a “permanent change in the tax structure and not the creation of jobs and growth in the near-term.” Ten Nobel Prize winners in economics and hundreds of other economists said exactly that in an open letter in 2003 warning as well that:

“Passing these tax cuts will worsen the long-term budget outlook, adding to the nation’s projected chronic deficits. This fiscal deterioration will reduce the capacity of the government to finance Social Security and Medicare benefits as well as investments in schools, health, infrastructure, and basic research. Moreover, the proposed tax cuts will generate further inequalities in after-tax income.” (emphasis added)

The 10 Nobel laureates were right. The administration statements that they were focused on creating jobs were as disingenuous as their statements about a projected shortfall in Social Security. They knew full well that the tax cuts for those earning over $418,000 a year were nearly double the shortfall for Social Security projected into eternity. They knew there was plenty of money for Social Security if those who profit so much from our magnificent economic engine were just more inclined to share. Of course, they never offered that easy alternative to stabilize Social Security.

Class Warfare by the Rich

As billionaire Warren Buffett has said: “If class warfare is being conducted, my class is winning.” After all, last year he only paid 17.7% of his $45 million in income in taxes while his secretary paid some 30% on her $60,000 salary. Of course, the fact that someone cleaning bedpans or finishing concrete pays a higher tax rate than a billionaire sitting next to a pool collecting dividend checks is only part of the war on the middle class.

The Main Problem: Lousy Wages

Unfair wages for work is the main problem. Today, we have the casino capitalists who rake in for one year what it would take the average American over 36,000 years to earn. And then we add insult to injury and have them pay an even lower tax rate, 15%, than our teachers and engineers. As David Cay Johnston, the tax reporter for the New York Times has detailed in his book, “Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rick – And Cheat Everybody Else,” the richest 13,400 households in the U.S. have more yearly income than the bottom 96 million Americans.

How Much Can They Eat?

Pause for a second and consider the real consequences of that preposterous sounding statistic. Imagine a heaping plate of food. On one side is one of those households and on the other are 7,164 people sharing the other half-plate of food. That’s what the 13,400 households versus the 96 million amounts to. When you also factor in that the tax rate for much of that income is 15% for their windfall gains from stocks, bonds, hedge funds and other assets, you will likely end up with more than 8,000 Americans sharing half the plate of food while the “pigs at the trough” as Ariana Huffington calls them, share the other half. Recently, a New York columnist told of a student’s reaction of disbelief when told by a teacher of four people spending $500 on a meal: “How much can they eat?”

The answer is: nearly everything.

(End of Part 1)

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In This Section:

Saving the Middle Class: A Real-Not Rhetorical-Plan

By David Kelly
August 25, 2007

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In This Section:

Saving the Middle Class: A Real-Not Rhetorical-Plan

By David Kelly August 25, 2007

By David Kelly
August 25, 2007