"Wage repression" and "plutocracy" explained by Bill Moyers

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"Wage repression" and "plutocracy" explained by Bill Moyers

In polite circles, among our political and financial classes, this is known as “the free market at work.” No, it’s “wage repression,” and it’s been happening in our country since around 1980. I must invoke some statistics here, knowing that statistics can glaze the eyes; but if indeed it’s the mark of a truly educated person to be deeply moved by statistics, as I once read, surely this truly educated audience will be moved by the recent analysis of tax data by the economists Thomas Piketty and Emmanuel Saez. They found that from 1950 through 1980, the share of all income in America going to everyone but the rich increased from 64 percent to 65 percent. Because the nation’s economy was growing handsomely, the average income for 9 out of l0 Americans was growing, too – from $17,719 to $30,941. That’s a 75 percent increase in income in constant 2008 dollars.

But then it stopped. Since 1980 the economy has also continued to grow handsomely, but only a fraction at the top have benefitted. The line flattens for the bottom 90% of Americans. Average income went from that $30,941 in 1980 to $31,244 in 2008. Think about that: the average income of Americans increased just $303 dollars in 28 years.

That’s wage repression.

There are a number of other excellent observations at the source, which is the text of a speech Moyers gave at B.U. last month. Some additional excerpts:

That’s how financial capitalism works today: Conserving cash rather than bolstering hiring and production; investing in their own shares to prop up their share prices and make their stock more attractive to Wall Street. To hell with everyone else...

Late in August I clipped another story from the Wall Street Journal. Above an op-ed piece by Robert Frank the headline asked: “Do the Rich Need the Rest of America?”... the article went on to describe how the super-rich earn their fortunes with overseas labor, selling to overseas consumers and managing financial transactions that have little to do with the rest of America, “while relying entirely or almost entirely on immigrant servants at one of several homes around the country.”...

So the answer to the question: “Do the Rich Need the Rest of America?” is as stark as it is ominous: Many don’t. As they form their own financial culture increasingly separated from the fate of everyone else, it is “hardly surprising,” Frank and Lind concluded, “ that so many of them should be so hostile to paying taxes to support the infrastructure and the social programs that help the majority of the American people.”...

Now, most people know what plutocracy is: the rule of the rich, political power controlled by the wealthy. Plutocracy is not an American word and wasn’t meant to become an American phenomenon – some of our founders deplored what they called “the veneration of wealth.” But plutocracy is here, and a pumped up Citigroup even boasted of coining a variation on the word— “plutonomy”, which describes an economic system where the privileged few make sure the rich get richer and that government helps them do it...

I’ll repeat that: “The dynamics of plutonomy are still intact.” That was the case before the Great Collapse of 2008, and it’s the case today, two years after the catastrophe. But the plutonomists are doing just fine. Even better in some cases, thanks to our bailout of the big banks...

Socrates said to understand a thing, you must first name it. The name for what’s happening to our political system is corruption – a deep, systemic corruption. I urge you to seek out the recent edition of Harper’s Magazine. The former editor Roger D. Hodge brilliantly dissects how democracy has gone on sale in America. Ideally, he writes, our ballots purport to be expressions of political will, which we hope and pray will be translated into legislative and executive action by our pretended representatives. But voting is the beginning of civil virtue, not its end, and the focus of real power is elsewhere. Voters still “matter” of course, but only as raw material to be shaped by the actual form of political influence – money...

The Gilded Age returned with a vengeance in our time. It slipped in quietly at first, back in the early 1980s, when Ronald Reagan began a “massive decades-long transfer of national wealth to the rich.” As Roger Hodge makes clear, under Bill Clinton the transfer was even more dramatic, as the top 10 percent captured an ever-growing share of national income. The trend continued under George W. Bush – those huge tax cuts for the rich, remember, which are now about to be extended because both parties have been bought off by the wealthy – and by 2007 the wealthiest 10% of Americans were taking in 50% of the national income. Today, a fraction of people at the top today earn more than the bottom 120 million Americans.

You will hear it said, “Come on, this is the way the world works.” No, it’s the way the world is made to work. This vast inequality is not the result of Adam Smith’s invisible hand; it did not just happen; it was no accident. As Hodge drives home, it is the result of a long series of policy decisions “about industry and trade, taxation and military spending, by flesh-and-blood humans sitting in concrete-and-steel buildings.” And those policy decisions were paid for by the less than one percent who participate in our capitalist democracy political contributions. Over the past 30 years, with the complicity of Republicans and Democrats alike, the plutocrats, or plutonomists (choose your own poison) have used their vastly increased wealth to assure that government does their bidding...

The plutocrats who soaked up all the money now say the deficits require putting Social Security and other public services on the chopping block. You might think that Mr. Bush today would regret having invaded Iraq on false pretences at a cost of more than a trillion dollars and counting, but no, just last week he said that his biggest regret was his failure to privatize Social Security. With over l00 Republicans of the House having signed a pledge to do just that when the new Congress convenes, Mr. Bush’s vision may yet be realized...

Here we are now, on the verge of the biggest commercial transaction in the history of American elections. Once again the plutocracy is buying off the system. Nearly $4 billion is being spent on the congressional races that will be decided next week, including multi millions coming from independent tax-exempt organizations that can collect unlimited amounts without revealing the sources...

Rove, other conservative groups and the Chamber of Commerce have in fact created a “shadow party” determined to be the real power in Washington just like Rome’s Opus Dei in Dan Brown’s “The DaVinci Code.” In this shadow party the plutocrats reign. We have reached what the new chairman of Common Cause and former Labor Secretary Robert Reich calls “the perfect storm that threatens American democracy: an unprecedented concentration of income and wealth at the top; a record amount of secret money, flooding our democracy; and a public becoming increasingly angry and cynical about a government that’s raising its taxes, reducing its services, and unable to get it back to work. We’re losing our democracy to a different system. It’s called plutocracy.”...

Come now and let’s visit Washington’s red light district, headquarters of the U.S. Chamber of Commerce, the front group for the plutocracy’s prostitution of politics. The Chamber boasts it represents more than three million businesses and approximately 300,000 members. But in reality it has almost nothing to do with the shops and stores along your local streets. The Chamber’s branding, as the economics journalist Zach Carter recently wrote, “allows them to disguise their political agenda as a coalition of local businesses while it does dirty work for corporate titans.”...

Why isn’t government working for them? Because it’s been bought off. It’s as simple as that. And until we get clean money we’re not going to get clean elections, and until we get clean elections, you can kiss goodbye government of, by, and for the people. Welcome to the plutocracy.

I've excerpted quite a bit, but it's only a small portion of the essay, which is extensive and pulls no punches. I greatly admire Bill Moyers for his knowledge and insight, and for his willingness to speak truth to power. See my posts here and here. But most importantly,