What Classless Society?

The so-called growing rich-poor gap in “classless” America is a euphemism for the existence of an accelerated class struggle against American workers and the poor by a relatively small minority that possesses or has access to great wealth and power.

The Census Bureau reported September 24 that the income differential between rich and poor Americans was greater in 2009 than any time since such records were kept.

Another Census report two weeks earlier revealed that America’s largest year-to-year increase in poverty took place in 2009, although its estimate of 43.6 million people living in poverty is considered a serious undercount based on outmoded measurement criteria. Young workers and children are fast falling to the bottom of the heap. The biggest poverty jump last year was among 18 to 24 year old “less-skilled” adults, and 20% of our children live in poverty.

The Associated Press reported September 28, “The top-earning 20% of Americans — those making more than $100,000 each year — received 49.4% of all income generated in the U.S., compared with the 3.4% earned by those below the poverty line, according to newly released Census figures. That ratio of 14.5-to-1 was an increase from 13.6 in 2008 and nearly double a low of 7.69 in 1968.

A different measure, the international Gini index, found U.S. income inequality at its highest level since the Census Bureau began tracking household income in 1967. The U.S. also has the greatest disparity among Western industrialized nations in the Organization for Economic Cooperation and Development.

Following are some recent statistics and statements that show how wide is the chasm between the upper class and the rest of American society, from the poorest of the poor through the working class and middle class.

(Note in following paragraphs the difference between “income,” meaning what you earn each year, and “wealth,” meaning income plus assets — assets being everything you own, from your house, car and furnishings to all your property, savings, stocks and bonds, yachts, jewelry, etc.

According to the Wall St. Journal, a 2008 study of wealth in the United States found that the richest .01% (that’s one-hundredth of one percent, or 14,000 American families) possess 22.2% of the nation’s wealth. The bottom 90%, or over 133 million families, control just 4% of the nation’s wealth. The remaining top 9.99% made ends meet with what’s left, 73.8%.

David DeGraw also has written that “a recent study done by Capgemini and Merrill Lynch Wealth Management found that a mere 1% of Americans are hoarding $13 trillion in investable wealth…and that doesn’t even factor in all the money they have hidden in offshore accounts.”

A recent report by Ray B. Williams points out that “The U.S. Census Bureau and the World Wealth Report 2010 both report increases for the top 5% of households even during the current recession. Based on Internal Revenue Service figures, the richest 1% have tripled their cut of America’s income pie in one generation. In 1980 the richest 1% of America took 1 of every 15 income dollars. Now they take 3 of every 15 income dollars…. Income inequality has been rising since the late 1970s, and now rests at a level not seen since the Gilded Age (1870 to 1900), a period in U.S. history defined by the contrast between the excesses of the super-rich and the squalor of the poor.”

According to Paul Buchheit of DePaul University “In 1965, the average salary for a CEO of a major U.S. company was 25 times the salary of the average worker. Today, the average CEO’s pay is more than 250 times the average worker’s.” The New York Times reported March 31, 2010, “Top hedge fund managers rode the 2009 stock market rally to record gains, with the highest-paid 25 earning a collective $25.3 billion, according to the survey, beating the old 2007 high by a wide margin.” The annual GDP of nearly 90 UN member nations is lower than what these people took home last year. The highest paid manager on the list was David Tepper of Appaloosa Management, who made $4 billion last year.”

Year 2009 may have been an economic disaster for a record number of Americans, but the U.S. billionaire caste — and millionaires as well, of course — had an excellent year. According to Forbes magazine, 2009 “was a billionaire bonanza,” with Bill Gates profiting by $13 billion (enlarging his wealth to $53 billion), and Warren Buffett getting $10 billion richer (increasing his fortune to $47 billion).

There are 1,011 billionaires in the world (40% are Americans) with an average net worth of $3.6 billion — a relative trifle more than the “wealth” possessed by the bottom half of the entire world population.

Throughout their lives, average Americans are taught by their school, church and corporate mass media that theirs is a classless society, and that the notion of classes, class struggle, or class war is just left wing propaganda.

Differences in income are acknowledged — but it is claimed that since upward mobility and attainment of the American Dream are available to everyone if they work hard enough, there is only one class despite gradations in wealth. It’s called the middle class, presumably with statistical subsections for the very rich and very poor. But the “dream” and upward mobility have never been available to everyone, and over the last three decades have been substantially reduced for many new generations of working families.

How often do you hear the politicians of the two ruling parties or the government they administer referring to the working class, lower middle class, the lower class or the upper class and the ruling class?

In America, virtually everyone seems to be lumped into the middle class if they are earning between $25,000 and $250,000 a year, which is a preposterous parody of real class relations. Representatives of these two income variants have little to nothing in common except the class to which they appear to have been assigned.

The millions living in poverty are called “the poor” and are in the public mind often blamed for their own plight (lazy, shiftless, ignorant). The very rich are called the “top 1%,” and the simply rich are termed the “top 10%,” and are often admired and thanked because they create the jobs that prevent the inhabitants of the middle class from falling into the ranks of the poor.

For the past three or four decades the upper class and its agents have been accelerating a campaign against the wages and living standards of the working class/lower middle class and more recently the middle class as well, pushing more and more people into the lower classes. One example of this is that wages no longer correlate to productivity increases, as they did in the first three decades after World War II; another is the erosion of progressive taxation.

In addition, the influence of wealth on the White House and Congress has seen to it that hardly any significant social service legislation has come out of Washington for 40 years. President Obama promotes his health care legislation as a major progressive achievement, but this apex of the current administration’s social contribution is to the right of Democrat President Harry Truman’s proposals in 1948 and Republican President Richard Nixon’s program of 1972. Truman and Nixon failed, and there has been such political regress over these decades that Democratic Party programs now emanate from the center/center-right.

The problem isn’t just the disproportion of money in the hands of a small minority while the standards of most American families are eroding, but it is what’s done with all that money. It elects Presidents, governors and mayors in most of the major cities. It elects members of the House and Senate and state legislatures. If you have millions to spend without batting an eye, you have political clout in America, often decisive clout, and it’s principally deployed to further the interests of the “haves,” as opposed to the “have nots.”

This is what is meant by class war, and it seems to be waged these days only by the top 10% (the upper class) that controls 96% of the wealth against the 90% (working class to middle class and lower class) which controls 4%. The bottom 50% by the way accounts for a pathetic 1% of America’s wealth.

Isn’t it time for the “bottom” 90% to stand up, fight back, and claim their share?

Jack A. Smith is editor of the Activist Newsletter and a former editor of the Guardian (US) radical newsweekly. He may be reached at: jacdon@earthlink.net. Read other articles by Jack.

7 comments on this article so far ...

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  1. kalidas said on October 2nd, 2010 at 8:11am #

    Hmmm. The day is fast approaching (actually there never was a day) when the exalted Westerners will no longer be able to lamely say; “well at least we don’t have a caste system, like India.”

    I’ve noticed for the last thirty years, or so, that the only difference between the East and the West is in the depth of denial.

  2. hayate said on October 2nd, 2010 at 9:06am #

    “I’ve noticed for the last thirty years, or so, that the only difference between the East and the West is in the depth of denial.”

    Very true.

  3. bozh said on October 2nd, 2010 at 12:09pm #

    But wasn’t jefferson having free sex therapy! And wasn’t he thousands of times richer than all of his slaves put together? Which means that some rich and very rich americans are getting poorer than jefferson had been.
    And did not US constitution found that not only OK but also sacrosant? The numbers that Smith posited offers no causes for them!
    It is the causes for cancer that all honest and wise people desperately search for and not knowing any numbers about it.
    We knew jefferson, king hussein, Peter the Great, but we did not why we had them? And most people today don’t know why US had jefferson and HOW he became what he became.
    It was caused but ‘educators’ eschew finding the causes. They merely and ad infinitum tell us what we know and not anything we and other people don’t know; which is how-when-why-where of it all!
    Perhaps we may have by now found the cause for most cancers if we spent war moneys and imposition of ignorance-poverty on us if we spent it on finding and eliminating causes for ills that befall us. tnx

  4. Sherman DeBrosse said on October 2nd, 2010 at 6:12pm #

    Back in the 1950s, Americans thought a classless society was a useful goal.
    Of course, it was defined in terms that avoided inviting a close look at income distributions.

    Since the seventies, there has been a very successful propaganda campaign waged by corporate America to define greed as good and to convince people that most can become rich. In revisiting Social Darwinism, we are told that any discussion of income inequities is classs warfare. Most Americans believe this, and out progressive politicians avoid the subject.

    Of course, sharp income inequities create all sorts of economic problems. Never mind, the conventional wisdom on economics had gone back to the days of the robber barons.

    Warren Buffett, one of America’s richest, just said thac the rich have waged class warfare against the rest of society for three decades. Don’t look for our commentariat to take up the subject.

    So, we have a conventional wisdom that blends Social Darwinism, unrestrained capitalism, and American exceptionalism, a doctrine that covers an aggressive foreign policy.

    Now we are facing a multitude of crises, and frightened people seek emotional solace by clinginging to the conventional wisdom. It is a survivalist attitgudd. Anthropologists might call it a revitalization movement– the Tea Bagger movement.

    The way was paved for it by three decades of appeals to Right Wing Populism, with an emphasis on appeals to evangelical Christianity. Scholars used to think this sort of thing only lasted a few years, but right-wing academics have figured out how to extend it. Preccupied with values and ethnocultural issues, ordinary Americans turn against one another and do not worry about what the rich are doing. Indeed, those on the Right see them as benefactors.

    Now we have the survivalist impulse of Tea Baggerism or political fundamentalism. populism in its quest for total and easy solutions. It differs in that there is more than a tinge of right wing anarchism, as seem in the threats to take up arms and the frequent use of Confederate era states right arguments. Political fundamentalism also differs somewhat from right wing populism in that it tends toward what Daniel Jonah Goldhagen called “exclusionism.” There was some right wing populism in the Nazis, but there was a lot more of political fundamentalism, extreme nationalism, xenophobia, and racism.

    Right wing populism and political fundamentalism are now so powerful that readoned discourse here is impossible. Together, they make continual resort to the Big Lie technique possible and politically profitable.

    As the author wrote, economic inequities here are growing and there is no reason to see this tendency abate. People do not want to believe that their childrfen cannot enjoy the American Dream, so they will continue to seek solace in these extremist and crazy ideologies.

    The t5ragedy is that progressive operatives and writers are preoccupied with what ought to be and what mistakes Obama hass made. They should be studying the techniques the Right has used to build up this great head of steam.

    There are signs that our economy might rebound a bit in the next months, but the GOP will be posed to take credit, even though it has only offered extreme austerity for the masses and largess for the rich and the war machine.

  5. bozh said on October 2nd, 2010 at 6:56pm #

    Sherman, i am impressed,
    I enjoyed ur post and not only because i think that way also, but because of clarity of ur writing as well.
    Americans need to hear this and the language in which u enounciated it. It is a good thing u don’t blame the two unicorns: ‘zionism’ [theft of land by twelve nutty 'jews'] and capitalism and thus me since i am also a capitalist!
    But then who doesn’t steal– only the very insane don’t. I take that back: i shldn’t blacken the best people among us. tnx

  6. Mulga Mumblebrain said on October 3rd, 2010 at 7:18am #

    Sherman, I remember years ago, reading,in the ‘Financial Review’ no less, the newspaper of Australia’ financial kleptocracy, that California’s Proposition 13 of 1978, signalled the onset of a Rightwing onslaught. An onslaught not just against socialism, and the New Cold Warwas launched by Carter and Brzezinski almost simultaneously, not just against the poor world, and the ‘debt crisis’ of the 1980s which the IMF and World Bank, the US’s financial Gestapo, used to destroy decades of progress in the poor world was just around the corner, but against the US population as well.
    People seem not to appreciate the totalism of the Right’s neo-feudal project. The Right viscerally detested every social advance for the many, and the more psychopathic elements refused to even acknowledge its utility in keeping the serfs quiescent while Communism was relentlessly attacked. As is now abundantly clear, every single social advance of the last 100 years was only granted by the masters temporarily and reluctantly, and once Gorbachev surrendered in the face of the very real threat of nuclear annihilation at the hands of the deranged apocalypticists of the Reagan pathocracy, the masters returned to their eternal project of driving the rest of humanity into the mud while enriching themselves insatiably.
    The 20 years since Gorbachev’s surrender has seen elite rapacity go through the roof. Trillions have been transferred from the rest of humanity to a tiny parasitic elite. While rationalised as necessary to keep the ‘animal spirits’ of the kleptocracy buoyant, that was manifest, primarily, not in productive investment as was promised, but in runaway military expenditure, ceaseless genocidal aggression, conspicuous consumption of luxuries and endless financial speculation and asset bubble inflating. One collapse of a financial bubble characterised by fraud and larceny followed another, but the thoroughly corrupt Western politicians, owned totally by the kleptocrats, not only refused to prosecute the thieves, but enabled further depredations by altering the law to facilitate ever greater larceny.
    Meanwhile trade unions were destroyed, in the West by legal and legislative thuggery, and in the poor world, where many jobs were out-sourced to take advantage of slave wages, by murder and ‘disappearances’. And all the while the planet’s ecology was swiftly collapsing and resource limits approaching, both of which the parasite rulers ‘addressed’ by financing gigantic denialist industries of lies and disinformation, and by leaning on their political stooges to do nothing. Indeed so suicidal is their denialism in the face of overwhelming scientific evidence, that one must reach the conclusion that they desire just such a global collapse, for inexplicable reasons.
    The Global Financial Collapse, deliberately engineered to steal trillions and bankrupt entire nations, is now being utilised, with careful precision, to destroy, utterly, what is left of the social advances of 100 years. The parasites and their political stooges are driving the Irish, Greeks, middle-class Americans, (let alone the swelling ranks of the poor), and their fellows in the UK, into the mire, without mercy, indeed with every sign that they are enjoying their class revenge immensely.
    In the end one must ask, why do they act in this way? Of course they think themselves immune to revolt, so thoroughly brainwashed are the serfs, and so certain the elites are of the efficiency of their repressive forces. You can be sure, that, unlike the authorities in Eastern Europe, if widespread rebellion breaks out in the West, it will be met with withering violence and force. After all these are the people who destroyed Gaza, Beirut, Fallujah, Dresden and Hiroshima-they are merciless.
    Is there any hope of redemption? I doubt it, and have done so for years. The system is too powerful, and its psychopathic rulers too merciless, too contemptuous of the lives of others, to be overthrown other than by a hideous bloodbath. Internal reform is a sick joke, the system following a seemingly inexorable process of unnatural evolution into more and more violent, pitiless forms. After all, would you have imagined that anyone would have invented and used with increasing frequency a weapon as hellish as depleted uranium, even in the dark years after WW2? We are for the high jump, I’m afraid.

  7. bateleur said on October 3rd, 2010 at 8:09am #

    I totally agree with your sentiments, Mulga. It is hard to imagine how we are going to make any meaningful changes in the face of the glaring ignorance of the general populace and the overwhelming power and resources of the ruling elite. I suspect that environmental catastrophe fits in nicely with their plans, since it would allow more control of the general populace through restricted access to potable water, food and energy.

    Who can survive without these basic resources? We would be ripe for the picking. As serfs we would be forced to labour, in malnourished misery; on their private lands; serving their selfish and depraved needs; which would almost certainly include rape, torture and murder. They are too greedy for power to see that they would ultimately ruin the planet for themselves too. I am sure that they could rationalize it by calling any eventual calamity, “an act of God”.