September 26, 2011

• Class Warfare

  Most Americans don't like to think or talk about our class system - when we do we tend to think of ourselves as "Middle Class", whatever that means. Actually our social class system is pretty well defined and fits generally into a four-six step structure:
  Real Upper Class - The multi-generational Super Rich. This group - about one or two percent of the population - controls almost half the personal wealth of the nation.
  Semi-upper, Upper Middle Class - The professional and business leaders. This group of those with advanced university degrees and solid job security make up about 20% of the population.
  Middle Class - Upper working class - This group - many of whom have college training - make up middle management and skilled workers. This group was probably the largest social class group and has been hit hardest by the economic changes of the past decade, seeing its real income either stagnant or decreasing.
  Working Class - Semi-skilled and industrial workers - Many members of this large group has seen their comfortable "middle-class" lifestyle disappear as the US has moved from an industrial to a technological world economy. Members of this group are mostly HS grads. Those who have individual skills or technical training in those areas of the economy that are growing (personal services, medical services, etc) are generally doing OK but have seen their real income decrease in recent years.
  Lower Class - the seldom - or chronically unemployed. This class - many of whom are minorities- have been hit hardest by the current "Great Recession" Many of them have taken two hits - no jobs and receding unemployment benefits.

  This description of the existing American class structure is over-simplified and many sociologists have recently come up with their own alternative groupings, but all, or most of them, seem to be based on real family income, educational attainment, and group attitudes.

  Historically, the rise of a large American middle Class seems to be tied to the New Deal politics which prevailed after the Great Depression of 1929- 47. This deliberate attempt to use government-financed programs to lift the Working Class and fading agricultural Classes into a more affluent Middle Class included the introduction of Social Security, federally financed mortgages [FHA], the National Labor Relations Act, The National Recovery Act, and ultimately the GI Bill educational benefits for veterans.

  All of these programs made real class mobility possible, and despite the rather high income tax rates that accompanied them, led to an exceptional rise in real income for all social classes - including most notably the Upper Class. As a result of those government-led programs, the US became the most powerful nation on Earth; helped of course by the destruction of Europe during World War II. Curiously enough, US efforts to revive the world economies by distributing American tax monies (The Marshall Plan) to rebuild the world's economies further increased the US GNP and led to even greater prosperity.

  The decline of the American "Middle Class "apparently began with the political shift away from government led economic programs starting with the "Reagan Revolution"in the 1980s. The idea that government was "…the problem not the solution…" in an age of increasing world economic pressures and competition was a popular one - if somewhat misguided. The collapse of the US middle class majority can be linked to that shift in government policy. Even though this concept has been prevalent for over thirty years, this has not stopped the government from increasing the federal deficit several fold - mostly by lowering the income tax rates and thus reducing government income while at the same time greatly increasing government military spending. Payments on the debt this caused has further decreased the limited amount available for social programs

  Attempts to lower this deficit recently have led to further cutting of those federal benefits which many of the lower middle class depend upon and increasing the pressure on state and local governments.

  The housing/financial bubble collapse of 2008 led to a general world-wide financial collapse with the resulting economic ruin to the lives and hopes of many Americans in the "Middle Class". The upper classes generally benefitted from this downturn. Their investments were soon either guaranteed by the government [the famous "Wall Street Bailout"or they were able to move financially into areas which were positively affected.

  The rich got richer and the poor got poorer - pretty quickly.

  A general return to higher tax rates - especially for the upper income groups [That, after all, is where the money is] could allow the federal Government once again to lead the US into economic prosperity by enabling the federal Government to develop and encourage those policies which enabled US economic growth in the past. At the most basic level these policies should include massive investment in education, retraining, and infrastructure. These investments will inevitably lead to over-all economic growth . The increased taxed on the "Super-rich"will be a very good investment for them. Historically, in every case increased taxes have led to income increases for them far in excess to any taxes they paid.

  • 2:17 pm
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