Productivity, Wage Growth and the American Economy
During times of wealth, prosperity and upward mobility within the United States, racial tension, resentment and conscious awareness of the social caste system are limited. Once American citizens basic needs are met, they are less willing to project their own struggles onto others with different skin colors or cultural identities, and less susceptible to charlatans, tyrants and demagogues who preach and pretend to possess all of the answers.
From World War 2 until 1981, a period known as the Great American Prosperity- or the Golden Age of the United States- American social and economic systems were set up to benefit society as a whole to provide every individual the opportunity to succeed. Wealth was spread across the country, economic inequality was limited and the American economy was experiencing its most productive period in its history. Republican President Dwight Eisenhower implemented a top tax rate of 91 percent on the highest earners. Median wages increased by 91 percent in 25 years from World War 2 until 1979. During the period of the Great Prosperity, productivity and workers wages grew together; labor unions were strong; the government protected American citizens from predatory financial behavior from banks and powerful corporations.
The 1980s, however, saw the beginning of a major shift from American prosperity to predatory banking and corporate power, welfare, profit and protection of financial institutions over the general welfare of the public. The government became a tool for major corporations to dismantle the pillars of American Democracy. Socioeconomic mobility was stifled with government policies that cut labor standards, eliminated wage growth and productivity requirements, dismantled workers unions and collective bargaining rights, favored extreme financial deregulation, favorable tax laws for the rich, heavier taxing of the poor and middle classes, tax cuts for corporations and the dismantling of social programs that benefit poor and middle class families.
Between 1979 and 2013 productivity grew 65 percent while hourly pay grew just eight percent; since 1979, the median wage for Americans has risen only nine percent, while todays national minimum wage of $7.25 remains 25 percent below the peak median wage in 1968 (adjusted for inflation). In 1965, the top 350 CEO’s earned 20 times as much as the average worker; by 2014, top CEO’s now earn 300 times as much as the average worker. This extreme economic disparity has little to do with the dogged labor of CEO’s when understanding the corruption, meticulous ingenuity and manipulation and the financial system by politicians and corporations.
One corrupt manipulation of the political and financial system is the Citizens United Supreme Court decision of 2010, which allows unlimited campaign contributions to politicians during elections through Political Action Committees (Super PAC’s). These Super PAC’s represent slush funds of dark, anonymous and unregulated money created for the purpose of soliciting favors, corrupting politicians and influencing elections to such a degree that poor and middle class Americans lose whatever voice they had left.
The 2016 Presidential and Congressional elections cost $6.5 billion; with $2.4 billion going directly into the Presidential campaign to support and influence the two most despised candidates in American political history. What role can the average American play in a democracy when an insignificant vote means little compared to billions of dollars in corrupt campaign donations?
Decisions like Citizens United pay off for politicians; between 1984 and 2009, the median net worth of Congress members increased from $280,000 to $725,000; the average income of Americans dropped from $20,600 to $20,500 during this same time.
The United States government ignores the domestic quarrels and suffering of the public by sweeping relevant and beneficial political policies under the rug; and by stuffing the tired closet of democracy with endless social issues in which the general public demands politicians to address. The government engages in the subtle abandonment of these political policies that benefit the public- i.e. universal healthcare; environmental protection; regulation of the financial industry; gun control legislation- under the guise that the policies are too costly and too time consuming to implement.
American politicians feign action; they claim to stand for American rights and freedoms; claim to hold the public’s health and safety above all else; but under the surface, behind closed doors, these politicians stand for their own ego-centered self-interest in their protection of corporations and the steady stream of income which these corporations provide through political bribes, which prevent politicians from admitting- or even acknowledging- that corporations shape and morph their political beliefs in accordance with the the amount of money that these corporations cough up to escape taxes, regulation, accountability.
With the rise to power and prominence of multinational corporations, big business, Wall-Street, special interests and lobbyists, politicians intelligence and understanding about objective reality became less important. Large corporations now needed mindless puppets, sheep and sycophants in Congress to pass their political agenda; people willing to take bribes and abandon morals and integrity in favor of money. Determined free thinkers that question authority have no place in modern politics. These people are paid to obey, not to understand.
In order to compete with the Republican parties free-market capitalism and pro-globalization policies of the 1980’s, the Democratic Party adopted Neoliberal policies in the 1990’s. Neoliberal politics are defined by laissez-faire policies, autonomous free-market trade, cuts to social spending, social and financial deregulation, non-government interference in the private sector and free-enterprise. These final decades of the twentieth-century provided the foundation for massive tax cuts in the early 2000’s, which lead to the global financial collapse in 2008. When the American and world economy crashed in 2008 due to predatory lending, financial deregulation and the manipulation of finance laws, no one responsible for the crash went to jail; instead, the American tax payer bailed out the largest banks, who are bigger now than in 2008, controlling 70 percent of the country’s wealth, while most American families struggle everyday to repair the damage left from the theft of our democracy. Americas two-tier social and economic system means rugged capitalism for the poor and socialism for the rich.
Oligarchy and Plutocracy
After the financial collapse in 2008, wages for the top one percent of Americans rose 20 percent by 2012, while wages for the bottom 99 percent of Americans increased by only one percent. Fifty-eight percent of the economic gains after the financial collapse in 2008, the period from 2009-2014, went to the top one percent. Without wage growth, American’s are left with stagnant wages, inflated healthcare, education and housing costs and a greater share of the tax burden due to a transfer of wealth to the richest Americans, which inevitably leads to a slow deterioration of the standard of living for a majority of the country, as purchasing power decreases and economic mobility slows.
This decades long shift towards American Oligarchy, where power and control are in the hands of a few persons in the elite dominator class, and towards plutocracy, a society governed by the rich, leaves the majority of Americans feeling a sense of apathy, indifference and lethargy towards a government that once protected the social and financial interests of all citizens. The political narrative is twisted by politicians and the mainstream media and is directed at minorities in order to distract from their own corruption. Anti-government hysteria increases and conspiracy theories take greater hold over the collective consciousness of the country.
Americans have lost their sense of identity; they do not know who they are as individuals, so they identify themselves with a larger rigid social and hierarchical structure based on inconsistent ideological and dogmatic agendas that comes to define the individual as a cog in the machine of a mindless societal organism that suppresses individuality and coopts the nature, feelings, morals and understanding of single individuals in favor of a sycophantic worldview that prevents any sort of meaningful debate, compromise or unity from overcoming our primal thoughts, feelings and emotions. It is up to the society of well-educated, informed and insightful individuals to carry democracy forward and prevent it from slipping further away into the hands of an exploitative government, which uses the media to suppress and oppress intellectual dissent and spreads disinformation as a means to confuse and distort logical reason and the nature of objective reality.